McDonald v State of South Australia

[2011] FCA 1251

FEDERAL COURT OF AUSTRALIA

McDonald v State of South Australia [2011] FCA 1251

Citation:		McDonald v State of South Australia [2011] FCA 1251
Appeal from:		Application for leave to appeal: McDonald v State of South Australia [2011] FCA 297
Parties:		FRANCIS THOMAS MCDONALD v THE STATE OF SOUTH AUSTRALIA, KEVIN BOADEN, NANCY SCHUPELIUS, MAUREEN COCHRAM, PETER MITCHELL and SUE HYDE
File number:		SAD 76 of 2011
Judge:		LANDER J
Date of judgment:		7 November 2011
Catchwords:		PRACTICE AND PROCEDURE – application for leave to appeal against order dismissing proceeding – judge dismissed proceeding on the basis of res judicata, issue estoppel, Anshun estoppel, and abuse of process by relitigation – whether decision attended by sufficient doubt to justify grant of leave – no error demonstrated – claims substantially the same as claims dismissed by Full Court of the South Australian Supreme Court – application for leave to appeal dismissed
Legislation:		Federal Court Rules 1976 O 52 r 10 Workers Rehabilitation and Compensation Act 1986 (SA) s 30, s 54(1)
Cases cited:		Décor Corporation Pty Ltd v Dart Industries Inc. (1991) 33 FCR 397 cited
Date of hearing:	25 July 2011, 18 August 2011, 10 October 2011
Place:	Adelaide
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	65
Counsel for the Applicant:	The Applicant appeared in person
Counsel for the Respondents:	Mr T Golding
Solicitor for the Respondents:	Crown Solicitor (SA)

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 76 of 2011

BETWEEN:

FRANCIS THOMAS MCDONALD
Applicant

AND:

THE STATE OF SOUTH AUSTRALIA
First Respondent

KEVIN BOADEN
Second Respondent

NANCY SCHUPELIUS
Third Respondent

MAUREEN COCHRAM
Fourth Respondent

PETER MITCHELL
Fifth Respondent

SUE HYDE
Sixth Respondent

JUDGE:	LANDER J
DATE OF ORDER:	7 NOVEMBER 2011
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1.The application for leave to appeal be dismissed.

2.The applicant pay the respondents’ costs.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	SAD 76 of 2011

BETWEEN:

FRANCIS THOMAS MCDONALD
Applicant

AND:

THE STATE OF SOUTH AUSTRALIA
First Respondent

KEVIN BOADEN
Second Respondent

NANCY SCHUPELIUS
Third Respondent

MAUREEN COCHRAM
Fourth Respondent

PETER MITCHELL
Fifth Respondent

SUE HYDE
Sixth Respondent

JUDGE:	LANDER J
DATE:	7 NOVEMBER 2011
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. This is an application for leave to appeal from an order of a judge of this Court made on 31 March 2011.  The application for leave to appeal was made on 20 April 2011.  This was outside the time prescribed by O 52 r 10 of the Federal Court Rules 1976, which required that an application be made within seven days after the date on which the interlocutory judgment was pronounced.

2. The respondent accepted that if I were of the opinion that leave should be granted then I should at the same time extend the time within which the applicant had to apply for leave to appeal from the interlocutory judgment to 20 April 2011.

3. However, for the reasons that follow, I am of the opinion that the application for leave to appeal should be dismissed.

   Background Facts

4. Prior to commencing the proceeding in this Court, which was dismissed by the primary judge on 31 March 2011, the applicant had brought an action in the Supreme Court of South Australia in relation to the subject matter of the proceeding brought in this Court.

5. I turn now to consider the facts underlying the proceedings in this Court and the Supreme Court.

6. In 1990 the applicant was employed as a teacher with the South Australian Department of Education and Children’s Services (DECS).  In 1996 he was appointed to Mount Barker High School, where in addition to his teaching load he was asked to manage that school’s computing systems.

7. The applicant experienced difficulties in carrying out his normal and extra duties, and he complained to the Director of Personnel of DECS about those difficulties.

8. In 1997 the applicant was transferred to Brighton High School to teach mathematics in Year 11, computing in Year 12, and to become the Coordinator of Information Technology.  His duties at Brighton High School were similar to those he had carried out at Mount Barker, and included the extra duties to which I have referred.

9. In April 1997 he was appointed Acting Coordinator of Information Technology across the curriculum and was confirmed in that position in January 1998 for a period of five years.  That appointment resulted in a reduction of his teaching hours.  However, the applicant continued to find the management of his workload difficult.  His workload was further reduced, and an assistant was appointed to assist him in 1998 and 1999.  During that period the applicant’s son also assisted him on a part-time basis.

10. In 2000 a new network was installed at Brighton High School, and a number of secondhand computers were purchased.  These computers required considerable work to adapt them for the school’s use.  The applicant undertook that task but found it time consuming.  In late 2000 a further person was employed to assist the applicant with the task.  The Principal at Brighton High School offered to reduce his teaching hours further, but the applicant refused that offer.

11. In January 2001 the applicant, because he feared he would not be reappointed as Coordinator in January 2003, wrote to the Principal at Brighton High School resigning from his employment on the basis of his “impossible work situation”.

12. That letter was not acted upon by DECS.  Instead a meeting was held on 29 January 2001 between the applicant, the Principal at Brighton High School, and the District Superintendent where the persons present discussed the applicant’s grievances with the Principal, including his workload, his difficulties with another staff member, and the situation relating to information technology.

13. A further meeting was held on 7 February 2001.  At that meeting it was agreed that the applicant would no longer provide technical support for a computing network at Brighton High School.  Instead he would concentrate on his role as Coordinator.

14. During both of those meetings between the applicant and the Principal the applicant raised the issue of his tenure at Brighton High School.  The Principal indicated that she thought the applicant had a 10-year tenure, but was unsure.  That observation was never followed up by the Principal because she left the school shortly after that time.

15. Apparently no arrangements were made to change the applicant’s role as agreed, nor were the applicant’s grievances followed up by the District Superintendent.  In addition, the Acting Principal was not informed of the agreement which had been reached on 7 February 2001.

16. Accordingly, other members of staff continued to ask the applicant for his assistance in relation to matters which were no longer his responsibility.  He raised this matter with the Acting Principal, but nothing was done to resolve the issue.  He also complained about bullying, victimisation and harassment by other members of the staff.

17. In July 2001 a new Principal was appointed to Brighton High School, and in October 2001 the applicant wrote to him about the continuing responsibility of the computer network and about his problems with other staff.

18. A meeting was held shortly after that letter was written at which the Principal, the applicant and other staff were present.  At that meeting the applicant became extremely angry.  Subsequently it was made clear to the applicant, to his satisfaction, that he was not responsible for other computing staff.  It seems that the harassment ceased soon after in October 2001.

19. In May 2002 the applicant’s position as Coordinator was reviewed, and the position was subsequently redefined in a way that made it unlikely that the applicant could be the successful applicant.  The redefined position was advertised, and was to be taken up in January 2003.  The applicant applied for the position.  However, a panel comprising the then Principal and two other persons elected not to interview the applicant for the position.  In June 2002 the applicant was informed that he was not going to be interviewed, and as a result he complained to the District Superintendent.

20. Between July and September 2002 the applicant took sick leave on the basis that he was suffering from a “stress/anxiety disorder”.  He returned to work in September 2002.  At that time the Principal told him that he was obliged to complete a DECS placement form for appointment to another position.  The applicant refused to complete the form on the ground that he had a 10-year appointment at Brighton High School.  The Principal completed the form on his behalf.

21. In October 2002 the applicant sent a written grievance to the District Superintendent, who forwarded it to the Legal Department within DECS.  No action was taken in relation to the applicant’s grievance.

22. Between October and December 2002 the applicant was absent on sick leave, again for a stress/anxiety disorder.  He has never returned to Brighton High School, or any other school, since that time.

23. On 18 December 2002 he made an application for compensation under the Workers Rehabilitation and Compensation Act 1986 (SA) (WRC Act). In response to that claim he was offered rehabilitation services by DECS, and two positions were offered to him in other schools, but he withdrew his claim for compensation before the rehabilitation offer could be assessed.

24. In April 2003 he wrote to DECS, the Premier of South Australia, and the Director-General of Education informing them that he was treating himself as dismissed from his employment.

    Proceedings in the Supreme Court

25. In 2004 the applicant brought an action in the Supreme Court of South Australia nominating DECS as a defendant. In August 2004 the State of South Australia was substituted for DECS as the defendant. The Department is not a legal entity. The State of South Australia was substituted, presumably pursuant to s 5 of the Crown Proceedings Act 1992 (SA).

26. On 25 July 2007 a Master of the Supreme Court struck out a number of paragraphs of the applicant’s statement of claim on the basis that they disclosed no cause of action under the Trade Practices Act 1974 (Cth) (TP Act), under which they were brought, because DECS was not a body corporate but a body politic as defined in s 22 of the Acts Interpretation Act 1901 (Cth). The applicant’s claim for general damages for pain and suffering (non-economic loss) was struck out on the ground that no claim was maintainable because of the provisions of s 54(1) of the WRC Act, which provides that an employer is not liable for a compensable disability, subject to the exceptions in s 54 itself under that Act. “Compensable disability” is defined in the WRC Act as a disability that is compensable by virtue of s 30 of the Act. In turn, s 30 provides that a disability is compensable if it arises from employment. The Master reasoned that because the defendant was the plaintiff’s employer he was barred by s 54(1) from maintaining any claim for physical or mental injury arising out of his employment. The Master also struck out a claim by the applicant under s 55A of the Occupational Health, Safety and Welfare Act 1986 (SA) (OHSW Act), and some aspects of the applicant’s claim in deceit.

27. Lastly, paragraphs of the statement of claim which purported to bring a claim for harassment in common law were also struck out.

28. In late 2007 the applicant’s claim as it then was after the Master’s decision and orders proceeded to trial.  At a directions hearing prior to the trial, the trial judge told the applicant that if he wished to challenge the Master’s decision he would need to file an appeal.  No appeal was ever filed.

29. The causes of action remaining at that stage were in contract, estoppel, and the remainder of a claim in deceit.  During the course of the trial the applicant applied for permission to amend his statement of claim to reintroduce a claim for damages for non-economic loss for pain and suffering, loss of dignity and reputation, and loss of enjoyment of lifestyle, and for psychiatric injury.  The trial judge refused that application.

30. The trial judge found that the defendant in the proceeding was in breach of implied terms in the contract of employment, and that the applicant had been constructively dismissed.  He dismissed the applicant’s claim in deceit.  He did not deal with the issue of estoppel.  He rejected the applicant’s claim for aggravated and exemplary damages.  However, he awarded the applicant damages in the amount of $392,850 for loss of earning capacity, superannuation and long service leave entitlements.

31. The State of South Australia appealed against the trial judge’s decision, and the applicant cross-appealed.  The Full Court allowed the appeal finding that there were no implied terms requiring the State not to damage seriously or destroy the applicant’s relationship of mutual trust and confidence with his employer.  The Full Court also found that even if there was such a term, it had not been breached in a repudiatory way because of the availability of a grievance resolution process to the applicant.

32. The Full Court dismissed the complaint that the trial judge had wrongly refused to allow him to amend the pleading to include a claim for damages for non-economic loss, pain and suffering, loss of dignity and reputation, and loss of enjoyment of lifestyle, and for psychiatric injury.

33. During the course of the appeal the applicant sought to bring a negligence claim against five employees of DECS.  They are the second to sixth respondents in the proceeding in this Court.  The applicant claimed that the prohibition in s 54 of the WRC Act did not apply in an action for negligence against fellow employees.  That application was refused by the Full Court.

34. The applicant applied for special leave to appeal to the High Court from the Full Court’s order allowing the appeal, but special leave was refused.

35. The applicant then brought proceedings in this Court.

    Proceedings in this Court

36. The proceeding that the primary judge dismissed was brought against the State of South Australia and five individual respondents, all of whom were employed by DECS or the Minister for Education.  The second respondent was the Assistant Director of Personnel with DECS with whom the applicant spoke in 1996 when employed at Mount Barker High School.  The third respondent was the first Principal at Brighton High School, who was Principal between 1997 and 2001.  The fourth respondent was the District Superintendent who was present at the meeting held on 29 January 2001.  The fifth respondent was the person appointed Principal at Brighton High School in July 2001.  The sixth respondent was the District Superintendent to whom the applicant complained in late June 2002.

37. The primary judge identified the cause of action against the respondents as being breaches of implied terms of the contract of employment, breaches of a duty of care in tort, breaches or contraventions of the TP Act, breaches of the Workplace Relations Act 1996 (Cth) (WR Act), and an action under the WRC Act. In respect of the lastmentioned matter, that proceeding was against not only the State, but also the second to sixth respondents. The applicant alleged that the second to sixth respondents committed acts that caused him damage, and that these acts were outside the course of their employment because they were “serious and wilful acts of misconduct” for the purpose of the WRC Act. On this basis he alleged that a claim against them was maintainable.

38. The matter came before the primary judge on an application by the first respondent for orders setting aside the originating process, or dismissing or staying the proceeding.  The respondent relied upon the findings of the trial judge in the Supreme Court of South Australia, and of the Full Court of the Supreme Court, and claimed that as a result the applicant was precluded from maintaining the proceeding in this Court because of the principles of res judicata, issue estoppel, Anshun estoppel, and abuse of process by relitigation.  It also submitted that the applicant’s claims were so obviously untenable that the pursuit of the claim was vexatious and amounted to an abuse of process.

39. There is no point in outlining his Honour’s identification of principles because there is no complaint on this application that his Honour erred in his statement of the principles in relation to those matters.  His Honour applied those principles to the causes of action that he identified in the statement of claim.  He found that the claims for breach of implied contractual terms and a duty of care had been determined in the Supreme Court, and that the doctrine of res judicata precluded any further proceeding based on those claims.  Insofar as the applicant claimed that the implied terms were somewhat different from what he had claimed in the Supreme Court, he found that aspect of the applicant’s claim was precluded by Anshun estoppel.

40. In respect of the claim for a breach of duty of care his Honour relied, as had the Full Court, on s 54(1) of the WRC Act finding that the claim was not maintainable. He agreed with the decision of the Full Court about the operation of s 54(1). However, he did not decide that aspect of the application on that ground, but rather on the ground that the claims were precluded by res judicata, issue estoppel, and Anshun estoppel.

41. He found that the claims under the TP Act were an abuse of process by relitigation, and that, in any event, they were “obviously untenable”.

42. The primary judge noted that the claim under the WR Act had not been part of the applicant’s claim in the Supreme Court, but he pointed out that the trial judge’s reasons disclosed that the applicant had submitted during the trial that the defendant had contravened that Act.  The trial judge rejected that submission.  The primary judge agreed with the Full Court, which had found that the applicant’s employment had been regulated by an Award, and that s 607 of the WR Act had no part to play.  In any event, the primary judge found that the doctrine of res judicata applied and that, in addition, the claim was “obviously untenable”.

43. He found that the claim under the WRC Act was not maintainable because of the provisions of s 54(1) of the WRC Act.

44. He noted that the applicant had referred to the Equal Opportunity Act 1984 (SA), the OHSW Act, and the Education Act 1972 (SA), but had not pleaded a cause of action in respect of those Acts.

45. His Honour discussed the applicant’s claim that his employer was the Director-General of Education or DECS. The applicant had argued that the Minister of Education was vicariously liable for their conduct, and that an action against the Minister was not precluded by s 54(1) of the WRC Act because the Minister was not his employer.

46. The primary judge noted that the Full Court had found that the applicant was appointed to the position of officer in the teaching service by the Minister, and that it was unnecessary for it to determine whether his employment contract was with the Minister or the Crown.

47. In any event, the primary judge found that for the purpose of res judicata, the applicant’s employer was the Crown or the State of South Australia.

48. Lastly, his Honour addressed the claims against the individual respondents who were not parties to the proceedings in the Supreme Court action, although all five were called as witnesses in that action.

49. His Honour said at [67]-[68]:

    ^[67]It seems to me that the claim against the individual respondents is an abuse of process by relitigation. I do not need to consider whether the claim is in fact precluded by the Anshun extension to issue estoppel even though the individual respondents were not parties to the Supreme Court action (see the discussion in Heydon J D, Cross on Evidence (8^th Australian ed, LexisNexis Butterworths, 2010) at pages 260-263 and the cases in footnote 210). Nor do I need to consider whether there is any argument that the individual respondents are privies of the State of South Australia for the purposes of the doctrine of res judicata. I have reached the firm conclusion that the proposed claims against the individual respondents are an abuse of process by relitigation having regard to the relevant principles identified in cases such as Rippon, Stenhouse and Spalla.

    ^[68]The conduct of the individual respondents formed the basis or at least a basis of the claim of a breach of the contractual duty of care in the Supreme Court action. As I have said, the contractual duty of care had a similar content to a tortious duty of care (Full Court at 399 [279]). The Full Court found that there was no breach of the contractual duty of care (416 [387]). The applicant tried to raise a claim against the individual respondents, but the Full Court said that it was too late to do that in the Supreme Court action (at 419 [415]). Extensive findings were made about the role played by each of the individual respondents in the relevant events. There is no suggestion of fresh evidence. All of the individual respondents except for Mr Mitchell have the benefit of s 74 of the Public Sector Management Act 1995 (SA) and are not liable for an act or omission in the exercise or purported exercise of official powers or functions, and all, including Mr Mitchell have the benefit of s 54(4a) of the Workers Rehabilitation and Compensation Act which gives them immunity unless their negligence arose from, or in the course of, serious and wilful misconduct.

1. His Honour concluded that the proceeding was an abuse of process and made an order dismissing the proceeding.

2. The notice of motion seeking leave to appeal was accompanied by an affidavit sworn on 11 April 2011 to which was exhibited a notice of appeal some 60 pages in length.  The issues that are said to be raised in the notice of appeal are essentially factual and relate to the dispute between the applicant and his employer.

3. The notice of appeal purports to raise other issues, but they are irrelevant to a consideration of whether the applicant should be allowed to appeal.  For example, one matter raised by the applicant is whether he had appealed from an order made by the Master of the Supreme Court or not, a matter no doubt important to the applicant but irrelevant in this Court.

4. In support of this application the applicant filed written submissions, which were 45 pages long.  He also filed reply submissions that were 13 pages in length.

5. After the hearing of the application was concluded he provided my chambers with a document headed “Oral Submissions”, which were 61 pages in length and incorporated some of his oral submissions.

6. The application was heard in two stages.

7. The applicant and the State of South Australia and the Minister for Education and DECS have been involved in a long-running dispute for a number of years.  There is currently a claim before the Workers’ Compensation Tribunal for worker’s compensation arising out of the matters to which I have already referred.

8. After the applicant had addressed me on the first occasion and completed his submissions, which took about two and a half hours, and during the course of the respondent’s submissions, it appeared that there was some prospect that the parties could resolve all of the issues between them.  The matter was adjourned to allow the parties to attend a settlement conference or mediation in the Workers’ Compensation Tribunal.

9. No settlement was achieved and the matter resumed.  On the resumption of the hearing the applicant addressed me at length again for nearly 3 hours on matters which were, unfortunately from the applicant’s point of view, irrelevant to this application.

10. I pointed out to the applicant on the second occasion that he had to demonstrate that the primary judge’s decision was attended by sufficient doubt to justify the grant of leave and that the applicant would suffer an injustice or substantial injustice if leave was not granted: Décor Corporation Pty Ltd v Dart Industries Inc. (1991) 33 FCR 397.

11. The applicant was unable to identify any error on the part of the primary judge.

12. I have no doubt that the applicant has suffered very badly as a result of his dispute with DECS.  Unfortunately, as the decision of the Full Court has already demonstrated, he has no remedy, or at least has not demonstrated any cause of action which would lead to a remedy in relation to that dispute.

13. It is clear from the notice of appeal, the oral submissions, and the very lengthy written submissions that the applicant wishes to relitigate in this Court matters which he brought in the Supreme Court, and which were dismissed in that Court after an appeal to the Full Court of the Supreme Court.

14. The law, for the reasons given by the primary judge, does not allow such a course of action.

15. The applicant’s application must be dismissed on the ground that he has not demonstrated any error by the primary judge in reaching his conclusion that the proceeding must be dismissed.

16. The application is dismissed.  The applicant must pay the respondents’ costs.

I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate:

Dated:       7 November 2011