Meade v PW Glass Services Pty Ltd
[2016] FCCA 829
•14 April 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MEADE v PW GLASS SERVICES PTY LTD & ANOR | [2016] FCCA 829 |
| Catchwords: INDUSTRIAL RELATIONS – interlocutory application for claim to be dismissed on the grounds of Anshun estoppel – whether the facts of the present proceeding (concerning overtime and meal allowance throughout six years of employment) are so closely related to the earlier proceeding (concerning redundancy entitlements upon termination of employment) that the applicant should have brought the present claims in the earlier proceeding – whether the applicant’s financial circumstances justified not bringing the present claims in the earlier proceedings. |
| Legislation: Fair Work Act 2009 (Cth) |
| Cases cited: Gibbs & McAllion Lloyd Pty Ltd v Kinna [1999] 2 VR 19; [1998] VSCA 52 |
| Applicant: | DEAN MEADE |
| First Respondent: | PW GLASS SERVICES PTY LTD (ABN 93 073 336 320) |
| Second Respondent: | PETER WALKER |
| File number: | MLG 2469 of 2015 |
| Judgment of: | Judge Riley |
| Hearing date: | 23 March 2016 |
| Date of last submission: | 23 March 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 14 April 2016 |
REPRESENTATION
| Counsel for the applicant: | Mark Rinaldi |
| Solicitors for the applicant: | Kliger Partners |
| Counsel for the first respondent: | No appearance |
| Solicitors for the first respondent: | King & Wood Mallesons |
| Counsel for the second respondent: | Nicholas Harrington |
| Solicitors for the second respondent: | Mills Oakley Lawyers |
ORDERS
The application in a case filed on 8 March 2016 is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2469 of 2015
| DEAN MEADE |
Applicant
And
| PW GLASS SERVICES PTY LTD (ABN 93 073 336 320) |
First respondent
And
| PETER WALKER |
Second respondent
REASONS FOR JUDGMENT
Introduction
The substantive application in this matter concerns various alleged breaches of the Fair Work Act 2009 (“the Act”). The applicant was an employee of the first respondent. The proceeding against the first respondent has been stayed because it is in liquidation. The second respondent was the sole director, secretary and shareholder of the first respondent. He is said to have accessorial liability for the alleged contraventions by the first respondent.
The matter that is presently before the court is an application in case filed by the second respondent on 8 March 2016. In that application, the second respondent sought orders:
a)transferring the matter to the Federal Court;
b)in the alternative, permanently staying the claim of accessorial liability against the second respondent;
c)in the alternative, dismissing the claim of accessorial liability against the second respondent; and
d)in the alternative, dismissing the applicant’s claims for tool and meal allowances.
The application to transfer the matter to the Federal Court was refused for reasons given orally on 23 March 2016. The applicant before the court on 23 March 2016 verbally withdrew his application for tool allowance. The remaining orders sought by the second respondent were based on the principles of Anshun estoppel and abuse of process.
Background
On 21 August 2014, the applicant filed proceedings in the Federal Court (“the FCA proceedings”) against the first respondent, alleging various breaches of the Act relating to the termination of his employment. In the FCA proceedings, the applicant sought termination and redundancy benefits under two, consecutive industrial instruments, and penalties and compensation arising from the circumstances of the termination of his employment.
At a directions hearing on 6 February 2015 in the FCA proceedings, Tracey J made an order that the applicant file and serve any amended application and statement of claim on or before 27 February 2015. The applicant did not file and serve any such amended documents.
On 24 February 2015, the trial of the FCA proceedings was set down on 27 October 2015 for three days.
On 13 October 2015, the applicant filed an interlocutory application in the FCA proceedings seeking:
a)to join the second respondent in the present proceedings as the second respondent in the FCA proceedings; and
b)to amend the statement of claim to allege breaches of the Act during the six years of his employment relating to overtime and meal and tool allowances.
The interlocutory application was heard by Tracey J on 16 October 2015. His Honour allowed the joinder of the second respondent but did not allow the amendment of the statement of claim. It was common ground in the present proceeding that his Honour’s reasons for that decision were based on case management principles as elucidated in AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; (2009) 258 ALR 14; (2009) 83 ALJR 951; [2009] HCA 27.
On 23 October 2015, the parties to the FCA proceeding reached a confidential settlement. It included terms as follows:
3. Release
…
3.2 Meade hereby releases and forever discharges all the persons named in clause 3.1 against all liabilities relating to, arising out of or in connection with the Employment and the Cessation (other than those liabilities excepted under this Deed and arising pursuant to any workers’ compensation legislation and any claim for an overtime payment under an industrial instrument).
…
5. Reserved positions
5.1.1Each party reserves unconditionally its position on any claim Meade might make for allegedly unpaid overtime to Meade during the Employment.
5.1.2PW Glass and Walker, separately and together, reserve unconditionally any right to plead and advance any submission in opposition to any such unpaid overtime claim by Meade, including but not limited to:
5.1.2.1raising with and court Anshun estoppel to defeat any such claim; and
5.1.2.2raising with any court an abuse of process submission to permanently stay or strike out any such claim.
On 5 November 2015, the applicant issued the present proceedings against the first and second respondents. The claim was essentially for:
a)unpaid overtime of $295,062.56;
b)unpaid meal allowance of $7,206.00; and
c)unpaid tool allowance of $2,054.
On 13 November 2015, the first respondent was placed into voluntary administration.
A directions hearing was conducted in this court on 10 December 2015. On that day, counsel for the second respondent told the court that his client claimed the privilege against penalty. Orders were made for the applicant to clarify his case by filing and serving an amended statement of claim and by filing and serving any further affidavit he wished to rely upon. Orders were also made referring the matter for mediation, if the second respondent was willing to participate in view of his privilege against penalty. The mediation has not taken place.
In an affidavit filed on 8 March 2016, the second respondent’s solicitor stated that he was no longer instructed by the second respondent to claim the privilege against penalty.
Authorities
The second respondent referred to Whelan Kartaway Pty Ltd v Donnelly & Anor [2012] VSC 45 (“Whelan Kartaway”), where
Davies J, then of the Supreme Court of Victoria, reviewed the authorities and said the following at [21]-[24]:
[21] Anshun estoppel will arise in circumstances where a party to a subsequent proceeding seeks to litigate a claim or defence “which could and should have been litigated in the earlier proceedings”.[24] The estoppel is an “analogical extension” of the doctrines of res judicata and issue estoppel[25] and operates to preclude a litigant from bringing a particular claim where it was “unreasonable” for the litigant not to have brought that claim, or rely on that claim as a defence, in an earlier concluded proceeding.[26] If the litigant was unable to raise the claim or defence in the earlier proceeding, no Anshun estoppel will arise.[27] Equally, the fact that the litigant could have raised the claim or defence in the earlier proceeding does not mean that the estoppel will arise. The test is “based on the reasonableness … of the conduct of a litigant in earlier proceedings”.[28] The mere fact that the matter could have been raised does not mean that it should have been raised for the operation of the estoppel.[29] The “unreasonableness” criterion involves an evaluative element based upon what a litigant could reasonably have been expected to do in the earlier proceeding. In Port of Melbourne Authority v Anshun Pty Ltd, Gibbs CJ, Mason J and Aickin J stated:
there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding.[30]
Although the estoppel was expressed in reference to the failure to raise a defence, the principle equally applies with respect to a claim. The question is whether the claim was “so relevant” to the earlier litigation that it was “unreasonable” not to have raised it.[31]
[22] Whether a claim was “so relevant” to the earlier litigation that it was “unreasonable” not to have raised it requires consideration of all the circumstances bearing upon unreasonableness in the particular matter, not simply identifying common facts in, or subject matter of, both proceedings.[32] In Port of Melbourne Authority v Anshun Pty Ltd, Gibbs CJ, Mason J and Aickin J explained that:
there are a variety of circumstances … why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.[33]
[24] Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598.
[25] Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 (Unreported, French J, 20 December 2004) [59]; Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33 (Unreported, Allsop P, Giles JA, Handley AJA, 16 March 2010) [39].
[26] Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; (1981) 147 CLR 589, 602.
[27] Spassked Pty Ltd v Commissioner of Taxation[2007] FCAFC 205 (Spender, Dowsett and Edmonds JJ, 21 December 2007) [78].
[28] Meriton Apartments Pty Ltd v Industrial Court of New South Wales[2009] NSWCA 434, [60] cited with approval in Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33, [39].
[29] Champerslife Pty Ltd v Manojlovski[2010] NSWCA 33, [4]; Aon Risk Services Pty Ltd v Australia National University [2009] HCA 27; (2009) 239 CLR 175, 193-5 (French CJ).
[30] Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; (1981) 147 CLR 589, 602.
[31] Champerslife Pty Ltd v Manojlovski [2010] NSWCA 33, [4].
[32] Champerslife Pty Ltd v Manojlovski[2010] NSWCA 33, [52].
[33] Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; (1981) 147 CLR 589, 603.
Circumstances bearing on “unreasonableness” include, but are not confined to[34], the potential for the judgment in the later proceeding to “conflict”[35] with the judgment in the earlier proceeding.
[23] The authorities establish that a finding of Anshun estoppel should not be made lightly and a consideration of all the relevant facts bearing on the question of “unreasonableness” is required. This may include the character of the previous proceeding, the scope of any pleadings, the length and complexity of any trial, any real or reasonably perceived difficulties in raising the relevant claim earlier, and any other explanation for the failure to raise the claim previously.[36]
[34] Gibbs v Kinna[1998] VSCA 52; [1999] 2 VR 19, [28] (Kenny JA).
[35] Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; (1981) 147 CLR 589, 603.
[36] Gibbs v Kinna[1998] VSCA 52; [1999] 2 VR 19 [28] (Kenny JA).
Decision
[24] In my view, the Senior Member was wrong in law to hold that the principle of Anshun estoppel had no application because the earlier proceeding was compromised. There are a number of cases in which it has been held that Anshun estoppel may apply where the earlier proceeding was settled without adjudication.[37] In Johnson v Gore Wood & Co (a firm)[38] Lord Bingham explained that:
An important purpose of the rule is to protect a defendant against the harassment necessarily involved in repeated actions concerning the same subject matter. A second action is not the less harassing because the defendant has been driven or thought it prudent to settle the first; often, indeed, that outcome would make a second action the more harassing.[39]
The underlying public interest is the same: that there should be finality in litigation and a party should not be vexed twice in the same matter.[40] A later action may amount to an abuse of process if the claim should have been raised in the earlier compromised proceedings, if it was to be raised.[41] But as Corboy J observed in Rojanasaroj v Rachan (No 2),[42] the possibility that a party can be prevented from pursuing a claim in an action because the claim ought to have been made in an earlier proceeding that was compromised adds to the complexity of findings that must be made in determining what was truly disposed of by the settlement.
[37] Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1; Rojanasaroj v Rachan (No 2) [2011] WASC 271 [39] (Corboy J); R&J Lyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232 (Bryson AJ); Seidler v The University of New South Wales[2011] FCA 640 (Cowdroy J); Snowy Mountains Organic Dairy Products Pty Ltd v Wholefoods Pty Ltd[2008] VSC 405; (2008) 21 VR 43 (Beach J); Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd and Ors[2001] NSWSC 431 [36] (Palmer J).
[38] [2002] 2 AC 1.
[39] [2002] AC 1, 32-33.
[40] [2002] 2 AC 1, 31.
[41] Lord Bingham of Cornhill, cited with approval in Aon Risk Services Australia Ltd v Australian National University[2009] HCA 27; (2009) 239 CLR 175, 194 [34] (French CJ).
[42] [2011] WASC 271 [39].
The applicant referred the court to the case of Gibbs & McAllion Lloyd Pty Ltd v Kinna [1999] 2 VR 19; [1998] VSCA 52 (“Kinna”).
In Kinna, the applicant brought an application in the Industrial Relations Court of Australia alleging that his former employer had breached various industrial instruments by terminating his employment. He was awarded some compensation. Twenty-one days later, he brought proceedings in the Magistrates Court against his former employer seeking damages for breach of contract of employment and for misleading and deceptive conduct. A Magistrate dismissed that claim on Anshun grounds. That dismissal was overturned on appeal and the appeal decision was upheld by the Court of Appeal. Kenny JA (with whom the other members of the court agreed) said:
[23]Whether or not it is unreasonable for a party asserting a cause of action in a later proceeding not to have done so in an earlier proceeding depends almost entirely on the particular circumstances. It seems, however, that there are two matters which must first be established before it can be said that the failure to raise a cause of action earlier might be said to have been unreasonable. The first is that the cause of action must be one that could have been raised in the previous proceeding. … Secondly, it must appear that the same or substantially the same facts will arise for consideration in the second as in the first proceeding.
…
[28]Whilst the likelihood of inconsistent judgments would, generally speaking, satisfy the criterion of unreasonableness, I assume for the purposes of this case that the criterion may be satisfied even when no such likelihood arises. If this be correct, then, in cases where there is no risk of inconsistent judgments, to decide whether or not it was unreasonable for a plaintiff not to litigate closely related issues in the one proceeding requires consideration of all the relevant facts, including the character of the previous proceeding, the scope of any pleadings, the length and complexity of any trial, any real or reasonably perceived difficulties in raising the relevant claim earlier, and any other explanation for the failure to raise the claim previously. As the majority said in Anshun's Case, at 603:
... there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few.
…
[33] Accordingly, for the reasons set out above, I am not persuaded that the judge below erred in result. It should, I think, be borne in mind that whilst the principle discussed in Anshun's Case is designed to foster public and private interests by encouraging parties to advance all their related claims or defences at the one time, thereby diminishing unnecessary duplication of curial and other effort, it seeks to meet these objectives by terminating a litigant's right to have a court adjudicate upon the merits of a claim. It is, I think, on this account that the principle is to be applied only in the clearest of cases.
The applicant also noted that in R & JLyons Family Settlement Pty Ltd v 155 Macquarie Street Pty Ltd [2008] NSWSC 232, Bryson AJ said:
[23] In my opinion a finding that it was unreasonable not to bring a claim in some earlier litigation is not a finding to be made lightly. In this context unreasonableness is a severe test, to be distinguished from a test of inconvenience, even severe inconvenience. Consideration starts at the point that there is free access to courts and that it is not compulsory to bring forward all claims on related subjects at the same time.
Consideration
The question before the court is whether the applicant could and should have brought in the FCA proceedings the overtime and meal allowance claims now sought to be raised, having regard to all the circumstances of the case.
It is abundantly clear from Whelan Kartaway and the authorities cited therein that it is immaterial that the matter which it is said should have been brought in the earlier proceeding is a claim, as here, rather than a defence, as in Anshun. It is also abundantly clear from Whelan Kartaway that it is not determinative that the earlier claim was settled rather than adjudicated upon, as in both the present case and Whelan Kartaway itself.
The question of whether the applicant could have brought the overtime and meals allowance claim in the Federal Court proceeding depends on whether it was legally possible to have brought the claim, not whether it would have been convenient or expeditious. The second respondent said that the applicant clearly could have brought the overtime and meals allowance claim in the FCA proceedings, because he was given leave to amend to that effect in February 2015. The applicant said he could not have, because he was refused leave to amend to that effect in October 2015. In my view, the applicant could have brought his overtime and meals allowance claims in the FCA proceedings, if he had done so in a timely manner. That requirement is accordingly satisfied.
The question then is whether the applicant should have brought the overtime and meals allowance claims in the FCA proceeding. The second respondent argued that the claim that the applicant now seeks to bring against him was “so closely related” to the earlier claim, that it was unreasonable not to have brought it in the earlier proceeding, and, in that sense, the applicant should have brought it in the FCA proceeding. The second respondent said that the two claims involved the same parties, the same employment relationship, the same industrial instruments, alleged breaches of the same statute and the imposition of penalties.
However, accepting all that, there are significant differences between the two claims. The FCA proceedings only concerned the termination of the applicant’s employment and the circumstances surrounding that termination. The present proceedings concern overtime and meal allowances during the whole six years of the applicant’s employment. Although reference must be made in both cases to the same industrial instruments, the relevant clauses of those instruments are quite different in the two cases. Obviously, it is the same Act that applies in both cases, because the Act governs employment relationships. But different provisions of the Act apply in both cases, and the basis for any penalty is different in both cases. The facts in issue in the FCA proceeding concerned whether the applicant met the requirements for a redundancy payment. The facts in issue in the overtime and meals allowance claim concern the hours the applicant worked during the six years of his employment. Consequently, it cannot be said that there is the same “factual matrix” in both cases.
In addition, the applicant said it could not be said that he should have brought the overtime and meals allowance claims in February 2015 because he did not have the financial capacity to run that argument at that time. In Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; (1981) 36 ALR 3; (1981) 55 ALJR 621; [1981] HCA 45, Gibbs CJ, Mason and Aiken said at [37]:
… we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. (emphasis added)
The applicant provided affidavit evidence as to his financial difficulties. The second respondent suggested that the applicant’s claim of financial incapacity should not be believed because it was not raised previously. In earlier affidavits, the applicant merely said that he preferred to focus on the termination claims. His counsel explained to the court on 23 March 2016 that the reason for that focus was financial incapacity.
The second respondent said that, in June 2015, the first respondent admitted various breaches and paid the applicant about $50,000 net of tax. The implication was that such an amount of money was sufficient for the applicant to have brought the claim for overtime and meals allowance. Clearly, it would have been well after the time limit given by Tracey J in February 2015, but well before the application to amend was actually brought in October 2015.
It was common ground that the applicant’s employment was terminated on 23 January 2014. It was not disputed that, in about April 2014, the applicant found a job in Mulwala in New South Wales. His wife and children remained in Strathmore in Victoria. Until August 2014, the applicant went to Mulwala on Sundays and returned to Strathmore on Friday nights. In August 2014, the applicant’s wife and children moved to Mulwala with him, and they leased out their house in Strathmore. In about March 2015, the applicant commenced his own glazing business. The income from that business was initially minimal.
The $50,000 he received in June 2015 would have offset his lack of income when he was unemployed between January and April 2014 and would have made the business he established in March 2015 more viable.
I also accept that the overtime and meal allowance claims would have substantially increased the time of the hearing in the FCA proceeding, such that the expense of those proceedings would have been substantially greater.
In these circumstances, I accept that financial incapacity was a legitimate reason for the applicant not attempting to bring the overtime and meal allowances claim before October 2015.
The second respondent argued that it was unreasonable of the applicant to have not taken the opportunity he was given in February 2015 to amend the application and statement of claim in the FCA proceedings to include the claims now sought to be raised. However, the issue about the applicant’s financial hardship answers that point.
The applicant argued that one part of the rationale for Anshun estoppel has no application to this case, being the notion that litigants should not be vexed twice in the same cause. The applicant said that the first respondent would not be vexed in the current proceeding because it had gone into liquidation. The applicant said that the second respondent was only a party to the FCA proceeding for a few days, between his joinder on 16 October 2015 and the settlement on 23 October 2015. That is one week. Moreover, there was no trial, which must be one of the most vexing parts of litigation. In these circumstances, it seems to me that, to the extent that it could be said that the second respondent might be vexed twice in the same cause, it is at the very minor end of the spectrum.
The applicant also noted that Tracey J, at the directions hearing on
16 October 2015, said that the applicant could bring his overtime and meal allowance claim in other proceedings, on proper evidence. However, the point was not fully argued before Tracey J, so I do not consider that anything can be read into his Honour’s statements in that regard.
Taking into account all of the circumstances of this case, I do not consider that the applicant should have brought the overtime and meal allowance claims in the FCA proceedings, in the sense that it was unreasonable for him not to do so. It seems to me that there is not a sufficient commonality of facts in dispute to warrant that conclusion. Moreover, the applicant’s financial difficulties provide a justification for not bringing the overtime and meal allowance claims earlier. It does not appear to me that this is “the clearest of cases”, such that the Anshun principle could properly be applied. It does not seem to me that there has been an abuse of process by the applicant in seeking to bring the present proceedings. For these reasons, the application in a case will be dismissed.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Date: 14 April 2016
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