Lewis v Sunnyhaven Ltd
[2011] FMCA 745
•29 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LEWIS v SUNNYHAVEN LTD | [2011] FMCA 745 |
| INDUSTRIAL LAW – PRACTICE AND PROCEDURE – Application in a Case – whether the matter is within the accrued or associated jurisdiction of the Court – Application in a Case dismissed. |
| Fair Work Act 2009 (Cth) s.570 Corporations Act 2001 (Cth) s.1317H Federal Court of Australia Act 1976 (Cth) s.32(1) Federal Magistrates Act 1999 ss.3, 14,18 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Industrial Relations Act 1996 (NSW) ss. 10, 11, 12, 15, 356, 364, 365, 369, 376 Workplace Relations Amendment (Workchoices) Act 2005 (Cth) Workplace Relations Act 1966 (Cth) s.4, 16, 178, 208(1) Workplace Relations Regulations 2006 reg.2.1.2(2) |
| Fencott and Others v Muller and Another (1983) 152 CLR 570 Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564; [2000] FCA 1572 Maclean Corporation Pty Ltd v Pantzer [2006] FMCA 332 Mahmoud v Owners Corporation Strata Plan No.811(No.2) [2007] FMCA 474 New South Wales Department of Housing v Moskalev (2007) 158 FCR 206; [2007] FCA 353 PCS Operations Pty Ltd v Maritime Union of Australia (1998) 153 ALR 520 Philip Morris Inc v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Re Wakim; Ex parte McNally and Another; Re Wakim; Ex parte Darvall; Re Brown and Others; Ex parte Amann and Another; Spinks and Others v Prentice (1999) 198 CLR 511 Trainor v BMW Melbourne Pty Ltd & Ors [2003] FMCA 7 Turner v Owen (1990) 26 FCR 366 Welsh v Allblend Holdings Pty Ltd [2010] FMCA 281 Welsh v Allblend Holdings Pty Ltd (No.2) [2010] FMCA 377 |
| Applicant: | BRONWEN LEWIS |
| Respondent: | SUNNYHAVEN LTD |
| File Number: | SYG 2017 of 2009 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 2 September 2010 |
| Delivered at: | Sydney |
| Delivered on: | 29 September 2011 |
REPRESENTATION
| Counsel for the Applicant: | E .W. Young |
| Solicitors for the Applicant: | Michelle Walsh of Turner Freeman Lawyers |
| Counsel for the Respondent: | G. Boyce |
ORDERS
The Application in a Case filed 28 July 2010 is dismissed.
Costs reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG2017 of 2009
| BRONWEN LEWIS |
Applicant
And
| SUNNYHAVEN LTD |
Respondent
REASONS FOR JUDGMENT
Background
This is an Application brought under the Fair Work Act 2009 (Cth) relating to alleged breaches by the Respondent in relation to the payment of wages to the Applicant. The Applicant was employed by Sunnyhaven Limited (“Sunnyhaven”) as a Direct Support Worker from 18 November 2000 to 6 April 2002 when she was promoted to the position of Team Leader. On 15 January 2005, the title of her position was changed to Unit Coordinator.
The Applicant’s held the position of Unit Coordinator of the Respite Unit which involved working Friday through to Monday on a 38 hour per week roster, with an additional 6 hours of overtime per week on an hourly rate of $19.78 per hour. The Applicant also received penalty rates for overtime and weekend shifts. The Applicant’s employment was covered by the Social & Community Services Employees (NSW) State Award (NAPSA). At all material times the Applicant was paid as a Grade 2 Community Services Worker under this award.
In March and April of 2009 Sunnyhaven made organisational changes to the workplace. The changes included that the Unit Coordinator positions would be restructured with the requirement that all existing Unit Coordinators would have to lodge an expression of interest for the position of ‘Team Leader’. The Team Leader role was being offered as a twelve-month contract. If existing Unit Coordinator staff did not lodge an expression of interest for the new Team Leader roles, they would be reallocated to the position of Direct Support Worker.
In circumstances that remain to be argued in the substantial proceedings, the Applicant did not lodge an expression of interest for the Team Leader position and was subsequently stood down to the position of Direct Support Worker. The Applicant commenced working as a Direct Support Worker on 2 May 2009 and alleges that as a result of the organisational restructure, she has suffered a significant demotion and reduction in her income. The Applicant alleges that her previous position of Unit Coordinator had been abolished due to such organisational restructuring. Further, in the Points of Claim filed with the Originating Application, the Applicant relevantly claims:
Breaches of the Award
15. The Respondents breached section 20 of the Award by paying the Applicant as a Community Services Worker Grade 2, when the duties performed by the Applicant in her role as Team Leader and then Unit Coordinator were duties of a Community Services Worker Grade 3.
16. The Respondents breached section 50.1(3) of the Award by failing to pay the Applicant severance pay in circumstances where her role of the Unit Coordinator has been abolished and the Applicant has not been paid any severance or redundancy benefits.
Loss and Damage
17. As a result of the matter aforesaid the Applicant has sustained loss and damage and claims compensation/redress/damages for:
(a) Back pay at the Grade 3 rate from 6 April 2002 - $42,183.35;
(b) Severance payment in accordance with clause 50.1(3)(b) of the Award equating to 20 weeks’ pay;
(c) Interest;
(d) Costs;
(e) Such other orders as this Honourable Court thinks fit.
The interlocutory proceedings
The preliminary matter presently to be decided relates to an Application in a Case filed by the Respondent on 28 July 2010 which seeks the following:
1. An order that the Application filed 21 August 2009 be set aside or struck-out insofar as it makes or purports to make any claim for underpayment of wages or back-pay (howsoever described) prior to 27 March 2006.
2. In the alternative, a declaration that the Court has no jurisdiction in respect of the subject matter of the proceedings insofar as it relates or purports to relate to any claim for underpayment of wages or back-pay (howsoever described) prior to 27 March 2006.
3. The Applicant pay the Respondent’s costs of this Application.
4. Any orders as the Court deems fit.
Submissions on behalf of Sunnyhaven Ltd
It is acknowledged between the parties that Mr Lewis does not press any part of her claim relating to the period six years before the claim was lodged, i.e. prior to 21 August 2003. The Industrial Relations Act 1996 (NSW), Division 1 deals with Awards. Section 10 provides that the Industrial Relations Commission of New South Wales can make awards in accordance with the Act setting conditions of employment. Section 11 deals with when an award is made, s.12 indicates persons bound by that award and s.15 is in relation to commencement of awards. They are the operative provisions of the statute which create an industrial instrument and these instruments are created pursuant to statute. In Chapter 7, Part II, recovery of remuneration and other amounts, s.364 is an express statutory provision which deals with definitions about amounts payable under an instrument, being remuneration payable for work done where the industrial instrument fixes a rate, or amount of remuneration, being a State Award.
An Industrial Court is also defined in Part II as being the commission in Court session, or for small claims, the State Commission or a Local Court constituted specifically for the purposes of that part by an industrial magistrate sitting alone. Section 365 covers orders for the recovery of remuneration or other amounts payable under an industrial instrument. An Industrial Court as defined in the Act is able to make orders in relation to payments under an industrial instrument.
Section 369 addresses an application for order under Part II for the payment of monies and to whom the money is payable. Section 376 sets out alternative proceedings for debt recovery from other Courts and persons entitled to apply for an order for the payment of monies under Part II.
Mr Boyce indicated to the Court that the matter as currently pleaded does not satisfy the requirements of the above legislative regime. Consequently, he indicated he was moving on the pleadings and the Application in a Case on 28 July 2010 as currently set out and noted that at this stage in the proceedings there was no application to amend. Mr Boyce submits that Sunnyhaven is not asserting in its Application in a Case that there is no entitlement to make a claim, but merely on the terms of the initiating Application filed on 21 August 2009 that there is no jurisdiction on those pleadings. On 27 March 2006 the Workplace Relations Amendment (Workchoices) Act 2005 substantially amended the (now repealed) Workplace Relations Act 1966 (“the WR Act”) (reform commencement).
Section 16 Workplace Relations Amendment (Workchoices) Act 2005 ensures that the WR Act operated (from reform commencement) to the exclusion of State and Territory industrial regimes in their application to employers and employees who fall within the general constitutional coverage of the WR Act. Exceptions to the operation of s.16 were set out in Chapter 2, Division 2 of the Workplace Relations Regulations 2006 (“WR Regulations”). Relevantly reg.2.1.2(2) states:
(2) Subsection 16 (1) does not apply to a law of a State or Territory (including a law relating to appeals) to the extent to which it relates to compliance with an obligation:
(a) under:
(i) that law; or
(ii) another law of a State or Territory;
which would otherwise be excluded by subsection 16 (1) of the Act; and
(b) in respect of an act or omission which occurred prior to the reform commencement.
(Emphasis added)
Schedule 8, Part 3 of the WR Act provides that:
a)A notional agreement preserving State awards (NAPSA) comes into operation upon reform commencement (Schedule 8, cl.31). Subject to the instrument content and interaction rules set out in Schedule 8, Part 3 of the WR Act, a NAPSA essentially replaces a former State award that was in place immediately before reform commencement;
b)None of the terms or conditions of a NAPSA are enforceable under the law of a State or Territory (Schedule 8, cl.38(3));
c)A NAPSA is enforced under the WR Act as if it were a ‘collective agreement’ (Schedule 8, cl.43), i.e. in accordance with and pursuant to Part 14 of the WR Act.
Neither Schedule 8, Part 3, nor Part 14 of the WR Act provide for the enforcement of any State award terms and conditions that were applicable or in place (or in existence) prior to the reform commencement.
An “Australian Pay and Classification Scale” (APCS) is defined in s.178 of the WR Act as a “Preserved APCS” or a “New APCS”. Section 178 of the WR Act defines “Preserved APCS” as having the meaning given by s.208(1) of the WR Act which states that a preserved APCS is derived from a “pre-reform wage instrument”. The term “pre-reform wage instrument” is defined in s.178 of the WR Act to include a “pre-reform non-Federal wage instrument” which in turn is defined to mean a “pre-reform State wage instrument”, which includes “a state award”(as defined in s.4(1) of the WR Act) being a State award as in force immediately before reform commencement. Neither Part 7, Division 2, nor Part 14 of the WR Act provide for the enforcement of any wage rates that were applicable or in place (or in existence) prior to the reform commencement.
Mr Boyce submits that in applying the relevant legislative provisions to the claim made by Ms Lewis for underpayment of wages prior to reform commencement (i.e. prior to 27 March 2006), and in reference to the affidavit of Senaka Mendis sworn 27 July 2010, Sunnyhaven Ltd submits that:
a)There is nothing under the WR Act or the WR Regulations providing for such a claim to be made before the Federal Magistrates Court;
b)There is nothing under the Fair Work Act 2009 or the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 providing for such claims to be made in the Federal Magistrates Court;
c)The Federal Magistrates Court is not an ‘Industrial Court’ within the meaning of s.356 of the Industrial Relations Act 1996 (NSW) and/or is not a Court upon which jurisdiction has been conferred by any legislation for the period prior to 27 March 2006;
d)Claims for underpayment of wages prior to 27 March 2006 is not a ‘matter’ or ‘matters’, arising under the WR Act;
e)Claims of underpayment of wages prior to 27 March 2006 are not extinguished by s.16 of the WR Act, rather, they can only be brought in the relevant jurisdiction that ordinarily entertains them prior to reform commencement (which was not, or did not include, the Federal Magistrates Court);
f)It cannot be said that the associated jurisdiction of the Federal Magistrates Court is of assistance to Ms Lewis: Welsh v Allblend Holdings Pty Ltd [2010] FMCA 281; Welsh v Allblend Holdings Pty Ltd (No.2) [2010] FMCA 377. Claims for the underpayment of wages prior to the reform commencement cannot be said to arise from the same facts and circumstances as those claimed that are made on and from 27 March 2006 by reference to a NAPSA. Further, claims for underpayment of wages by reference to a State industrial instrument obviously do not arise from contract. They therefore have no relevant nexus to any claim properly before the Federal Magistrates Court made pursuant to a NAPSA.
g)In Johnson Tiles v Esso Australia [2000] FCA 1572 at [94] – [95] the Court sets out the jurisdiction of the Court including accrued jurisdiction which is national, in the following terms:
[94] The national nature of that jurisdiction is reinforced in this, as in many cases involving non-federal claims by the fact that the non-federal claim relies upon the common law. That law does not belong to any particular State. It is the common law of Australia - Lipohar v R (1999) 168 ALR 8; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 564; Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 112 and see other cases and references in Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491 at 496-498.
[95] The question whether the common law claim should continue in this Court or should be stayed on the basis that it be pursued in the Supreme Court of Victoria is to be decided by determining whether or not this Court should decline to exercise its jurisdiction properly invoked in this matter. There can be no doubt that the Supreme Court of the State of Victoria is as well equipped as this Court to deal with a claim in negligence and the associated cross-claims. The action for negligence is one which could well have been commenced in the State Supreme Court. Nevertheless, the Applicants having commenced their proceedings in this Court and having properly invoked federal jurisdiction, there would need to be demonstrated some reason for this Court declining to fulfil what would ordinarily be its obligation to exercise its jurisdiction. While the claim is a non-federal claim it is based not upon a statute peculiar to Victoria but upon the common law of Australia, albeit the question of liability may turn in part upon at least one Act of the Victorian Parliament, namely the Gas Industry Act 1994 (Vic) and the Victorian Gas Customer Service Code which is incorporated into the terms of gas retail licences issued under the Act.
Mr Boyce submits that in Johnson Tiles v Esso Australia (supra) the Court makes a distinction between a common law claim that may attract accrued jurisdiction, and a claim where an Applicant seeks to rely on State legislation. Mr Boyce submits that this cannot be done and that is because the State legislation is a code other than s.376 which allows for alternative proceeding in debt recoveries to be undertaken in another Court. It excludes the ability of other Courts who aren’t Industrial Courts as defined under s.364 from exercising jurisdiction in relation to those State awards. Mr Boyce contends that there are jurisdictions available where all the matters raised in the Application filed on 21 August 2009, could be dealt with in a single proceedings. However, Ms Lewis’ legal representatives have chosen not to do so and have sought to proceed with the matter in this Court.
Submissions on behalf of Ms Lewis
Mr Young submits that Sunnyhaven’s Application in a Case seeks to rail against over half a century of settled law. Sunnyhaven accepts that the jurisdiction of this Court has been validly invoked for most of its claim however, they seek to differentiate between that part of the claim which they accept is properly filed in this Court and the part of which they say ought not to be here because of the effect of certain Federal legislation. Nothing has been put to the Court that goes to any of the issues that provides in case law the basis upon which it could be found to be not part of the true jurisdiction of this Court or the associated jurisdiction of this Court.
Mr Young submits that nothing has been put to the Court that supports the claim that the substratum of facts is substantially different in this matter. There is no question that all Federal Courts have such an accrued jurisdiction. In Philip Morris Inc v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 475, the High Court stated:
It is settled doctrine in Australia that when a court which can exercise federal jurisdiction has its jurisdiction attracted in relation to a matter, that jurisdiction extends to the resolution of the whole matter.
Mr Young submits that this position has been repeated and reiterated over the decades. The latter case of Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (supra) makes the same proposition at para.[85] where it states:
[85] Jurisdiction conferred on a Federal Court in respect of a matter authorises the Court to determine all the claims, federal and non-federal, which are involved in the controversy.
Mr Young contends that there is no suggestion that something that is not common law is somehow excluded as it is quite a plain and straightforward statement of well established legal principles. Also in para.85 it states:
That the federal claim is determined adversely to the Applicant does not thereby deprive the Court of jurisdiction to deal with the non-federal claims. They are all part of the federal jurisdiction conferred upon the Court. Nor does it matter to the scope of that jurisdiction whether the federal claim is defeated on a question of law or fact.
Mr Young contends that the only issue that arises for consideration by this Court is whether or not this Court has accrued or associated jurisdiction. No authority has been tendered on behalf of Sunnyhaven to support the proposition that a non-common law matter cannot be part of this Court’s accrued and associated jurisdiction.
Mr Young submits that the strike-out Application is fundamentally flawed for the following reasons:
a)There is no dispute that the issues to be determined all arise from the same substratum of facts, Ms Lewis’ claim unequivocally falls within the associated or accrued jurisdiction of the Court, including pursuant to ss. 14 and 18 of the Federal Magistrates Act1999, and the relevant case law;
b)It cannot be said that Ms Lewis’ claim prior to 27 March 2006 is separate and disparate from the claim for which Sunnyhaven accepts that this Court has jurisdiction;
c)The arguments submitted on behalf of Sunnyhaven fall within the incidental jurisdiction of the Court to interpret the effect of legislation it relies upon and this is properly a matter for final hearing;
d)It is inappropriate to attempt to deprive Ms Lewis of a hearing of a matter on its merits by pre-emptively dismissing the proceedings without the benefit of all evidence that may affect all of the issues of the quantum of the amount that the Court has jurisdiction to order, including its associated and accrued jurisdiction.
Mr Young made the following submissions on the associated and accrued jurisdiction of the Federal Magistrates Court. Section 18 of the Federal Magistrates Act 1999 makes clear that this Court can determine matters associated with the matters for which it has jurisdiction. In addition, s.14 of the Federal Magistrates Act 1999 emphasises that the Court is to grant “all remedies” for “any legal or equitable claim” so that all matters in controversy are completely and finally determined and to avoid a multiplicity of proceedings. The approach submitted on behalf of Sunnyhaven is contrary to s.14 of the Federal Magistrates Act 1999 as it seeks the Court to generate a multiplicity of proceedings despite the factual basis of Ms Lewis’ claim being identical for the period to and after 27 March 2006 – Ms Lewis says that she was working in a particular position at a grade higher than that for which she was being paid both prior to and after 27 March 2006.
The suggested approach advanced on behalf of Sunnyhaven Ltd would have the Court require Ms Lewis to run a case in this Court, and run the same case in the Chief Industrial Magistrates Court of NSW, differing only as to the date of her work and underpayment claim. This would not only defeat the express purpose of s.14 of the Federal Magistrates Act 1999, but could give rise to inconsistent findings of fact, which is contrary to the public policy and against which Courts tend to strain. Ms Lewis’ Points of Claim make clear that the same substratum of facts is relied from 6 April 2002 to 14 August 2009. Sunnyhaven Ltd does not challenge this.
Instead, Sunnyhaven Ltd attempts a technical distinction based upon an argument for a particular interpretation of legislation, and in particular, relies upon the commencement of certain legislation on the 27 March 2006. At best, this is merely different basis of law upon which the Ms Lewis’ claim is made, not a different substratum of facts. The argument advanced on behalf of Ms Lewis is that Sunnyhaven’s interpretation of the legislation is wrong, however for the purposes of determining Sunnyhaven’s Application, it does not matter. Sunnyhaven accepts that the Court has jurisdiction to determine part of Ms Lewis’ claim and the Court consequently has the associated and accrued jurisdiction to determine the balance of Ms Lewis’ claim arising out of substantially (and this case wholly) the same substratum of facts (i.e. the duties that she performed in the same role prior to and after 27 March 2006). The nature and basis of accrued and associated jurisdiction of Federal Courts is well established, and has a wide reach: Philip Morris Inc. v Adam P. Brown Male Fashion Pty Ltd (supra); PCS Operations Pty Ltd v Maritime Union of Australia (1998) 153 ALR 520; Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564.
Mr Young submits that in order to succeed, Sunnyhaven needs to not only prove that Ms Lewis’ claim for underpayment of wages is “an entirely disparate claim” from her claim for the underpayment of wages (and therefore there is no accrued jurisdiction) but also that has no association with the claim that Sunnyhaven admits jurisdiction (associated jurisdiction). Sunnyhaven has done neither. It cannot do so because the substratum of facts is identical in all the relevant respects (save for the dates for which underpayment is claimed).
Mr Young submits that the Court may decline as a matter of discretion, to exercise its accrued jurisdiction, however “there would need to be a very good reason why a Court that could resolve the whole matter, should refuse or fail to do so”: Philip Morris (supra) at 475. The Court has no discretion to not exercise its associated jurisdiction: Turner v Owen (1990) 26 FCR 366 and s.18 of the Federal Magistrates Act 1999. Mr Young submits that Welsh v Allblend Holdings Pty Ltd (supra) relied upon by Sunnyhaven does not assist them. Indeed those two cases are against Sunnyhaven. In Welsh v Allblend Holdings Pty Ltd (supra) the attempt to prevent this Court from hearing matters by way of cross-claim that were associated with the original claim was rejected and the cross-claim invoking the associated jurisdiction of the Court was allowed.
Mr Young made the following submissions in respect to incidental jurisdiction. The argument by Sunnyhaven itself invokes the incidental jurisdiction of the Court to make orders (in this case a declaration) which are incidental to its express powers. The orders sought in para.2 of the strike-out application is inaptly brought as an Application in a Case; rather, it is in the nature of a cross-claim.
The arguments raised by Sunnyhaven rely upon an assertion as to the legal effect of certain legislation, including legislation that amends and repeals then existing legislation. Ms Lewis disputes Sunnyhaven’s asserted interpretation of the effect of such legislation. In short, Ms Lewis says that the relevant NAPSA carries forward rights accrued and that those rights can be enforced as right under the NAPSA (i.e. in this Court or the Federal Court of Australia). Accordingly, there is a substantive dispute which is properly the subject of determination and a final hearing, not in an interlocutory application.
Doing so at an interlocutory hearing will simply involve a duplication of costs. This is particularly relevant having regard to s.3 of the Federal Magistrates Act 1999 which emphasises a streamline procedure in its management of cases rather than taking of technical points in interlocutory proceedings which cause delay and expense, and s.570 of the Fair Work Act 2009 which limits the availability of costs. Ms Lewis is an individual with extremely limited financial means and who has suffered significant financial detriment due to the action of Sunnyhaven. There will have to be a final hearing on that part of Ms Lewis’ claim for which Sunnyhaven accepts that this Court has jurisdiction in any event. The substantive argument brought by Sunnyhaven is properly determined there and will involve little, if any, extra cost due to the essential facts relied upon by Ms Lewis (namely the duty she performed) being essentially the same for the whole period of her employment.
Consideration
The associated jurisdiction of the Federal Magistrates Court arises pursuant to s.18 of the Federal Magistrates Act 1999 (Cth) which provides:
To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.
That section is almost identical to s.32(1) of the Federal Court of Australia Act 1976 (Cth) which has been considered by the High Court in Philip Morris Inc v Adam P. Brown Male Fashions Pty Ltd (supra) per Mason J at p.506 where his Honour referred to s.32 of the Federal Court legislation and stated:
Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are “associated with matters in which the jurisdiction of the Court is invoked”. The expression “To the extent that the Constitution permits” suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under State or other non-federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of s 32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws.
In the same case, his Honour Mason J at p.512 referred to severability of a claim as follows:
Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction.
In New South Wales Department of Housing v Moskalev (2007) 158 FCR 206; [2007] FCA 353 the Federal Court dealt with the associated jurisdiction of the Federal Magistrates Court. His Honour Cowdroy J at [26] – [33] set out the law concerning the law on the Court’s associated jurisdiction as follows:
[26] In Philip Morris Incorporated and Another v Adam P Brown Male Fashions Proprietary Limited; United States Surgical Corporation v Hospital Products International Proprietary Limited and Others (1981) 148 CLR 457 at 474, Barwick CJ said of the application of s 32 of the Federal Court Act:
Thus, there may be circumstances in which the matter does not in substance itself attract federal jurisdiction, though that which attracts federal jurisdiction must in some way relate to the matter. Once federal jurisdiction is attracted, it is not lost because the claim or assertion which attracted it has not been substantiated or has been displaced by some countervailing fact. Once attracted, by whatever path attracted, the jurisdiction persists to enable the Court to resolve the matter.
Since s 18 of the FMA is in virtually identical terms to s 32 of the Federal Court Act, his Honour’s observations are pertinent to the associated jurisdiction of the FMC.
[27] There are however, limits to the type of matter which can properly be described as ‘associated’ with the jurisdiction of a federal court. Barwick CJ expressed the following caution at 474:
But the jurisdiction will not extend to any other matter, though that other matter might in some sense be an allied or associated matter. To be outside the accrued jurisdiction, however, the other matter must be separate and disparate from the matter in relation to or in connexion with which federal jurisdiction has been attracted.
[28] Gibbs J (as he then was) said of the extent of the jurisdiction of the Court to deal with matters, other than federal claims at 499:
The cases to which I have referred show that if a party claims relief on two different legal grounds, but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination.
[29] Gibbs J made similar observations in Fencott and Others v Muller and Another (1983) 152 CLR 570 at 591:
It is now established by Philip Morris v Brown that once a federal court is invested with jurisdiction with respect to a matter, it may determine all the questions which form part of that matter, even though they are questions which it would have no jurisdiction to entertain if they arose in separate proceedings.
At 593 his Honour continued:
The question whether one claim is inseverable from another, so that both are part of one matter, is a question of fact and degree. The Constitution, however, makes it clear that the attached claim must be part of the matter that attracts jurisdiction; closeness of association is not enough.
[30] In Re Wakim; Ex parte McNally and Another; Re Wakim; Ex parte Darvall; Re Brown and Others; Ex parte Amann and Another; Spinks and Others v Prentice (1999) 198 CLR 511 at 585 Gummow and Hayne JJ said of the associated jurisdiction:
So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other (377), as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are “completely disparate” (378), “completely separate and distinct” (379) or “distinct and unrelated’ (380) are not part of the same matter.
These authorities confirm that to enliven the associated jurisdiction of a court invested with federal jurisdiction, the facts must be common to each matter and the relief sought must be substantially the same.
[31] Section 18 of the FMA provides a source of jurisdiction in associated ‘matters’. A ‘matter’ must be a justiciable dispute and not merely a legal proceeding. In In Re the Judiciary Act 1903–1920 and In Re The Navigation Act 1912–1920 (1921) 29 CLR 257 at 265 the majority, having considered an argument that the word ‘matter’ in s 76 of the Constitution referred only to a legal proceeding, said:
We do not accept this contention; we do not think that the word “ matter” in sec 76 means a legal proceedings, but rather the subject matter for determination in a legal proceedings. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court.
See also: R v Kirby and Others; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 272–274; R v The Trade Practices Tribunal and Others; Ex parte Tasmanian Breweries Proprietary Limited (1970) 123 CLR 361 per Kitto J at 374; Re Wakim; Ex parte McNally198 CLR [10].
[32] Two observations may be made. First, the facts and evidence relating to the claim of the Moskalevs’ alleging discrimination are different to those relating to the administrative review of the Department’s decision pursuant to its Priority Housing Policy and are not ‘inseverable’ (see: Gibbs J in Fencott v Muller 152 CLR 593). The Court accepts the submission of the Department that there was no requirement for it to adduce evidence of its procedures relating to the operation of the Housing Appeals Committee in view of the only matter before Driver FM, namely the claim of discrimination. The order requires the Department to undertake a merits review of its determination in relation to the Moskalevs’ application for priority housing when such question did not arise either as a federal or as an associated matter.
[33] Second, the request of the Moskalevs’ to be placed on the priority housing list did not constitute a separate ‘matter’ for the exercise of the Court’s jurisdiction. The claim for such order was ancillary to the claim of discrimination under the HREOC Act. Accordingly s 18 of the FMA cannot be used as a source of jurisdiction to justify the order.
In Welsh v Allblend Holdings Pty Ltd (supra) his Honour Lucev FM discusses the associated jurisdiction of the Federal Magistrates Court in relation to matters under the Workplace Relations Act 1996. In that case, his Honour applied the reasoning in Moskalev (supra). A further discussion of the associated and accrued jurisdiction is contained in Welsh v Allblend Holdings Pty Ltd (No.2) (supra) which involved a claim by an Applicant for monies said to be payable at the time of the termination of employment. The Respondent filed a defence and cross-claim seeking payment of monies, accounting and order for compensation pursuant to s.1317H of the Corporations Act 2001 (Cth). One of the issues to be decided was weather the claims made in the Amended Defence and Cross-Claim were within the Fair Work Division of the Court. At para.[45] of the judgment his Honour Lucev FM Sates:
[45]Consistent with the legislative intention, the Fair Work Division of this court has been created to deal specifically with industrial law jurisdiction, but that does not impede the ability of this court to exercise its associated jurisdiction in the Fair Work Division, as it did generally prior to the FW (Transitional) Act amendments, and as the Federal Court did in its former Industrial Division under almost identical statutory provisions, with respect to the full range of associated matters.
The Court has had cause to consider both its associated jurisdiction under statute: Trainor v BMW Melbourne Pty Ltd & Ors [2003] FMCA 7 per Phipps FM at [22] – [27] as well as its accrued jurisdiction under judicial doctrine which holds that the Court may consider a matter where it is annexed to another matter which is within its jurisdiction: Maclean Corporation Pty Ltd v Pantzer [2006] FMCA 332 per Raphael FM at [5]; Mahmoud v Owners Corporation Strata Plan No.811(No.2) [2007] FMCA 474 where his Honour Lucev FM dealt with issues of the approach to determining whether a matter was within the associated jurisdiction of the Court under s.18 of the Federal Magistrates Act 1999 at paras.[51] – [56]:
[51] Whether or not a matter is within the associated jurisdiction of the Court was recently dealt with by the Federal Court in New South Wales Department of Housing v Moskalev.70 At first instance in this Court an application under s 46PO of the Human Rights and Equal Opportunities Act 1986 (Cth) claiming discrimination in the provision of accommodation was dismissed, but notwithstanding the dismissal, the Court ordered the Department of Housing to reassess eligibility for priority housing under the Department of Housing Priority Housing Philosophy. The issue for the Federal Court was whether this Court’s order for reassessment of priority was beyond power.71 Ultimately, the answer to the issue depended upon whether the ability to make the order sought to be impugned was within this Court’s associated jurisdiction under s 18 of the FM Act.72
[52] In Moskalev the Federal Court set out the law concerning this Court’s associated jurisdiction as follows:
In Philip Morris Incorporated and Another v Adam P Brown Male Fashions Proprietary Limited ; United States Surgical Corporation v Hospital Products International Proprietary Limited and Others (1981) 148 CLR 457 at 474, Barwick CJ said of the application of s 32 of the Federal Court Act:
Thus, there may be circumstances in which the matter does not in substance itself attract federal jurisdiction, though that which attracts federal jurisdiction must in some way relate to the matter. Once federal jurisdiction is attracted, it is not lost because the claim or assertion which attracted it has not been substantiated or has been displaced by some countervailing fact. Once attracted, by whatever path attracted, the jurisdiction persists to enable the Court to resolve the matter.
Since s 18 of the FMA is in virtually identical terms to s 32 of the Federal Court Act, his Honour’s observations are pertinent to the associated jurisdiction of the FMC.
There are however, limits to the type of matter which can properly be described as ‘associated’ with the jurisdiction of a federal court. Barwick CJ expressed the following caution at 474:
But the jurisdiction will not extend to any other matter, though that other matter might in some sense be an allied or associated matter. To be outside the accrued jurisdiction, however, the other matter must be separate and disparate from the matter in relation to or in connexion with which federal jurisdiction has been attracted.
Gibbs J (as he then was) said of the extent of the jurisdiction of the Court to deal with matters, other than federal claims at 499:
The cases to which I have referred show that if a party claims relief on two different legal grounds, but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination.
Gibbs J made similar observations in Fencott and Others v Muller and Another (1983) 152 CLR 570 at 591:
It is now established by Philip Morris v Brown that once a federal court is invested with jurisdiction with respect to a matter, it may determine all the questions which form part of that matter, even though they are questions which it would have no jurisdiction to entertain if they arose in separate proceedings.
At 593 his Honour continued:
The question whether one claim is inseverable from another, so that both are part of one matter, is a question of fact and degree. The Constitution, however, makes it clear that the attached claim must be part of the matter that attracts jurisdiction; closeness of association is not enough.
In Re Wakim; Ex parte McNally and Another; Re Wakim; Ex parte Darvall; Re Brown and Others; Ex parte Amann and Another; Spinks and Others v Prentice (1999) 198 CLR 511 at 585 Gummow and Hayne JJ said of the associated jurisdiction:
So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other (377), as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are "completely disparate" (378), "completely separate and distinct" (379) or "distinct and unrelated’ (380) are not part of the same matter.’
These authorities confirm that to enliven the associated jurisdiction of a court invested with federal jurisdiction, the facts must be common to each matter and the relief sought must be substantially the same.
Section 18 of the FMA provides a source of jurisdiction in associated ‘matters’. A ‘matter’ must be a justiciable dispute and not merely a legal proceeding. In In Re the Judiciary Act 1903–1920 and In Re The Navigation Act 1912–1920 (1921) 29 CLR 257 at 265 the majority, having considered an argument that the word ‘matter’ in s 76 of the Constitution referred only to a legal proceeding, said:
We do not accept this contention; we do not think that the word " matter" in sec 76 means a legal proceedings, but rather the subject matter for determination in a legal proceedings. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court.’73
See also: The Queen v Kirby and Others; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 272–274; The Queen v The Trade Practices Tribunal and Others; Ex parte Tasmanian Breweries Proprietary Limited (1970) 123 CLR 361 per Kitto J at 374; Re Wakim; Ex parte McNally 198 CLR [10].
Two observations may be made. First, the facts and evidence relating to the claim of the Moskalevs’ alleging discrimination are different to those relating to the administrative review of the Department’s decision pursuant to its Priority Housing Policy and are not ‘inseverable’ (see: Gibbs J in Fencott v Muller 152 CLR 593). The Court accepts the submission of the Department that there was no requirement for it to adduce evidence of its procedures relating to the operation of the Housing Appeals Committee in view of the only matter before Driver FM, namely the claim of discrimination. The order requires the Department to undertake a merits review of its determination in relation to the Moskalevs’ application for priority housing when such question did not arise either as a federal or as an associated matter.
Second, the request of the Moskalevs’ to be placed on the priority housing list did not constitute a separate ‘matter’ for the exercise of the Court’s jurisdiction. The claim for such order was ancillary to the claim of discrimination under the HREOC Act. Accordingly s 18 of the FMA cannot be used as a source of jurisdiction to justify the order.”74
[53] In Re Wakim ex parte McNally and Another it was said:
What is a single controversy “depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct in relationships”. There is but a single matter if different claims arise out of a “common transactions and facts” or a “common substratum of facts”, notwithstanding that the facts upon which the claims depend “do not wholly co-incide”.
…
Often, the conclusion that, if proceedings were tried in different Courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.”75
[54] In Trainor v BMW Melbourne Pty Ltd and Others76 this Court applied the passage cited from Re Wakim immediately above to hold that a claim under s 51AB of the Trade Practices Act 1974 (Cth)77 alleging unconscionable conduct was part of a single controversy which included a claim under s 52 of the TP Act which alleged misleading and deceptive conduct.
[55] In Fox v Robinson & Anor,78 this Court considered s 18 of the FM Act and said as follows:
Section 18 of the FM Act is almost identical to s 32(1) of the Federal Court of Australia Act 1976. That section was considered by the High Court in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. In that case Mason J stated in relation to that section which applied to the Federal Court the following:
Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are ‘associated’ with matters in which the jurisdiction of the Court is invoked. The expression ‘To the extent that the Constitution permits’ suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under State or other non-federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of s 32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws.
In the Philip Morris case Mason J further states at p 512,
Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction”.
[56] In Fox the Court held that a claim for breach of contract was a claim within the associated jurisdiction in a matter also alleging breach of s 52 of the TP Act.
70 [2007] FCA 353 (“Moskalev”).71 Moskalev at para 3 per Cowdroy J.72 Moskalev at para 25 per Cowdroy J.73 The preceding quote is an accurate quote of the text of Moskalev at para 31 per Cowdroy J. However, the original text of In Re the Judiciary Act 1903–1920 and In Re the Navigation Act 1912–1920 (1921) 29 CLR 257 at 265 has “proceeding” rather than “proceedings” in both places where it appears in the preceding quote.74 Moskalev at paras 26–33 per Cowdroy J.75 (1999) 198 CLR 511 at 585 per Gummow and Hayne JJ (“Re Wakim ”).76 [2003] FMCA 7.77 “TP Act”.78 [2003] FMCA 107 (“Fox”).
Clearly, the initial threshold question is whether, the before the Court’s associated jurisdiction would arise, it is necessary for the Court to have before it a properly constituted federal matter which engages the Court’s original federal jurisdiction. Ms Lewis commenced her employment with Sunnyhaven on the 18 November 2000 and terminated her employment by resignation on 14 August 2009. The parties are in agreement that Ms Lewis does not press any part of her claim relating to the period commencing immediately prior to the six years before the date that the claim was lodged which is the 21 August 2003. For the period from 21 August 2003 Ms Lewis was covered by a New South Wales award, being the Social and Community Services Employees (State) Award up until 27 March 2006 when the Workplace Relations Amendment (Workchoices) Act 2005 commenced and Ms Lewis’ employment became subject to the Notional Agreement Preserving the Social and Community Services Employees (State) Award. Consequently, from 27 March 2006, Ms Lewis fell within the jurisdiction of the Federal Court of Australia or the Federal Magistrates Court in respect of any applications made under the WR Act. On 26 May 2009, the previous legislative regime was replaced by the Australian Fair Work Act 2009 with the jurisdiction similarly held by the Federal Court of Australia and the Federal Magistrates Court of Australia.
In line with the authorities set out above, and in the words of his Honour Gibbs J in Fencott and Others v Muller and Another (1983) 152 CLR 570 it is established by Philip Morris v Brown (supra) that “once the Federal Court is vested with jurisdiction with respect to a matter, it may determine all of the questions that form part of that matter, even though they are questions which it would not have jurisdiction to entertain if they arose in separate proceedings”. I am satisfied that the matter currently before this Court clearly falls within those guidelines and the period prior to 27 March 2006 can be addressed by the Court’s associated jurisdiction.
A Statement of Facts is set out in the Points of Claim at para.[15] which states:
The Respondent breached s.20 of the Award by paying the Applicant as a Service Worker Grade 2, when the duties performed by the Applicant in her role as Team Leader and then Unit Coordinator were duties of a Community Service Worker Grade 3.
Ms Lewis was promoted to the role of Team Leader on 6 April 2002 which is well before the period which is relevant to these proceedings which is commencing on 21 August 2003. The alleged breach is consistent throughout the period. It is noted that on 2 June 2010 I granted leave for Sunnyhaven to amend its Points of Defence which was to be filed and served by 9 July 2010. In the amended Points of Defence in reply to prayer 15 of the Applicant’s points of claim, the Respondent stated:
15. The Respondent rejects that the Court does not have jurisdiction to determine those parts of the application that relate to the period prior to 26 March 2006 (‘The period”) by reason that the Federal Magistrates Court is not an ‘Industrial court” within the meaning of s.356 of the Industrial Relation Act 1996 (NSW) and/or is not a court for which jurisdiction has been conferred by any legislation for that period.
In the Reply filed on 23 June 2010 in respect of para.15 is states:
The Applicant was employed pursuant to the Notional Agreement Preserving the Social and Community Services Employees (NSW) State Award 2006, commonly referred to as the “NAPSA”, being a Federal industrial instrument under the Workplace Relations Act of 1996 (Cth), and is entitled to bring these proceedings in this Court due to her entitlements the subject of claim in these proceedings being enforceable pursuant to Schedule 8 of the Workplace Relations Act 1996 (Cth) and the transitional legislation (particularly the Fair Work (Transitional Provisions and Consequential Amendment Act (Cth)) in turn preserving the entitlements that were enforceable under the Workplace Relations Act 1996 (Cth).
Nothing within these two documents filed in these proceedings in any way disturbs the substratum of facts contained in the initiating application. In support of this position, I refer to the comments made by Chief Justice Murray Gleeson at the Judicial Conference of Australia in Yulara on 7 April 2001 where his Honour stated:
The Federal Magistrates procedures are less complex than those of the Federal Court and this is consistent with the reasons for the Court’s existence as a lower level Court dealing with the high volume of applications hopefully at a lower cost.
I note particularly the comments of their Honours Gummow and Hayne JJ in Re Wakim (supra) at [141] and [142]
[141] Often, the conclusion that, if proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.
[142] Here, the three proceedings could have been joined in one. The fact that those advising Mr Wakim chose to issue separate proceedings at different times does not mean that the scope of the controversy is limited to the matters raised in the first proceeding. Had the Official Trustee brought a cross-claim against both the solicitors and Mr Darvall immediately after Mr Wakim commenced his proceeding against it and if Mr Wakim had then joined the cross-Respondents as Respondents to his principal claim, the existence of a single controversy involving several parties would be more apparent than it may be in the present circumstances. But neither the differences in the present procedural history nor the absence of any claim by the Official Trustee against the solicitors and Mr Darvall determines the question whether there is a single controversy.
I believe that principle applies in the circumstances of this matter and that there is no justification for the Court making orders either refusing to consider issues before 27 March 2006 or rejecting the proceedings as a whole. Consequently, I dismiss the Application in a Case filed on 28 July 2010.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Associate:
Date: 29 September 2011
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