Moylan v City of South Perth

[2006] WASC 262

MOYLAN -v- CITY OF SOUTH PERTH [2006] WASC 262

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2006] WASC 262
Case No:	CIV:1494/2006	Heard:	10 OCTOBER 2006
Coram:	TEMPLEMAN J	Delivered:	23/11/06
No of pages:	25	Judgment Part:	1 of 1
Result:	Plaintiff's application dismissed Defendant's application dismissed
Category:	B
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Parties:	DAVID LEITH MOYLAN CITY OF SOUTH PERTH
Catchwords:	Practice and procedure Plaintiff's application to set aside summary judgment No appearance by plaintiff at summary judgment Plaintiff's assumption hearing would not occur Whether reasonable explanation Court proceedings subsequent to final decision of Full Bench of Industrial Relations Commission Res judicata Issue estoppel Inevitability of summary judgment Statutes Operation and effect Defendant's application for declaration that plaintiff vexatious litigant Plaintiff mostly unsuccessful against defendant Solicitors acting for plaintiff in those proceedings Whether plaintiff's claim instituted or pursued without reasonable ground
Legislation:	Vexatious Proceedings Restriction Act 2002 (WA), s 4(1)(c), s 4(1)(d), s 4(2)(c)(i)
Case References:	Allesch v Maunz (2000) 203 CLR 172 Blair v Curran (1939) 62 CLR 464 Concut Pty Ltd v Worrell (2000) 103 IR 160 Granich Partners v Yap Cheng See [2003] WASC 206 Henderson v Henderson (1843) 3 Hare 100 Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 05874 Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 06727 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 Attorney General v Michael [1999] WASCA 181 Bednall v Wesley College [2005] WASC 101 Jackson v Goldsmith (1950) 81 CLR 446

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : MOYLAN -v- CITY OF SOUTH PERTH [2006] WASC 262 CORAM : TEMPLEMAN J HEARD : 10 OCTOBER 2006 DELIVERED : 23 NOVEMBER 2006 FILE NO/S : CIV 1494 of 2006 BETWEEN : DAVID LEITH MOYLAN

Plaintiff

AND

CITY OF SOUTH PERTH
Defendant

FILE NO/S : CIV 1635 of 2006 BETWEEN : CITY OF SOUTH PERTH

Plaintiff

AND

DAVID LEITH MOYLAN
Defendant

Catchwords:

Practice and procedure - Plaintiff's application to set aside summary judgment - No appearance by plaintiff at summary judgment - Plaintiff's assumption hearing would not occur - Whether reasonable explanation - Court proceedings subsequent to final decision of Full Bench of Industrial Relations Commission - Res judicata - Issue estoppel - Inevitability of summary judgment

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Statutes - Operation and effect - Defendant's application for declaration that plaintiff vexatious litigant - Plaintiff mostly unsuccessful against defendant - Solicitors acting for plaintiff in those proceedings - Whether plaintiff's claim instituted or pursued without reasonable ground

Legislation:

Vexatious Proceedings Restriction Act 2002 (WA), s 4(1)(c), s 4(1)(d), s 4(2)(c)(i)

Result:

Plaintiff's application dismissed

Defendant's application dismissed

Category: B

Representation:

CIV 1494 of 2006

Counsel:

Plaintiff : In person
Defendant : Mr A J Musikanth

Solicitors:

Plaintiff : In person
Defendant : Corrs Chambers Westgarth

CIV 1635 of 2006

Counsel:

Plaintiff : Mr A J Musikanth
Defendant : In person

Solicitors:

Plaintiff : Corrs Chambers Westgarth
Defendant : In person

(Page 3)

Case(s) referred to in judgment(s):

Allesch v Maunz (2000) 203 CLR 172
Blair v Curran (1939) 62 CLR 464
Concut Pty Ltd v Worrell (2000) 103 IR 160
Granich Partners v Yap Cheng See [2003] WASC 206
Henderson v Henderson (1843) 3 Hare 100
Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 05874
Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 06727
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359

Case(s) also cited:

Attorney General v Michael [1999] WASCA 181
Bednall v Wesley College [2005] WASC 101
Jackson v Goldsmith (1950) 81 CLR 446

(Page 4)

1 TEMPLEMAN J: In these reasons I deal with two applications:

(1) an application by the plaintiff in action CIV 1494 of 2006 to set aside an order for summary judgment obtained against him by the defendant in his absence; and

(2) an application by the defendant by Originating Summons CIV 1635 of 2006 to have leave to seek orders against the plaintiff pursuant to the Vexatious Proceedings Restriction Act 2002 (WA).

Action CIV 1494 of 2006

2 The plaintiff, David Leith Moylan ("Mr Moylan") was the Chief Executive Officer of the City of South Perth ("the City") from 1 June 2000 until he was dismissed from that office on 4 April 2001.

3 By a writ issued on 15 May 2006, Mr Moylan claimed damages against the City for the allegedly wrongful termination of his employment.

4 On 19 June 2006, the City applied for summary judgment against Mr Moylan pursuant to O 16 of the Rules of the Supreme Court 1971 (WA).

5 The summary judgment application was served on Mr Moylan on 19 June 2006, together with an application made against him by the City pursuant to s 4(1)(c) and s 4(1)(d) of the Vexatious Proceedings Restriction Act. In that application, the City sought orders staying Mr Moylan's action and prohibiting him from instituting further proceedings without the leave of the Court.

6 The summary judgment application was returnable before Master Sanderson on 6 July 2006, whereas the application made pursuant to the Vexatious Proceedings Restriction Act was returnable before a Judge in Chambers on 19 July.

7 On 6 July, the City appeared on its summary judgment application before Master Sanderson. However, Mr Moylan did not appear either in person or by counsel. It may be noted that at all material times, Mr Moylan has been unrepresented in these proceedings.

8 There is no transcript of the hearing before Master Sanderson. However, I am told by counsel for the City who appeared on the application that the Master expressed himself to be satisfied by the affidavit evidence which had been filed on behalf of the City that its

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application should succeed. The Master accordingly dismissed Mr Moylan's claim.

9 Mr Moylan subsequently sought to appeal against the decision of Master Sanderson. For that purpose, he filed a notice of appeal dated 16 July 2006.

10 On 19 July, the City's application in CIV 1635 of 2006 came before me. Mr Moylan appeared in person. He informed me that he wanted to appeal against the order made by Master Sanderson, on the basis that it had been made in his absence.

11 I directed that Mr Moylan's notice of appeal was to be treated as an application to set aside the decision of Master Sanderson. I directed Mr Moylan to file and serve an affidavit explaining why he had not appeared before the Master on 6 July: and I gave directions for the filing of affidavits in both applications which I adjourned to a date to be fixed when they would be heard together.

12 I heard both applications on 10 October. I deal with each in turn.

Mr Moylan's application to set aside the orders made by Master Sanderson

13 It is well settled that a party who seeks to set aside an order made in his absence must:

(1) provide a reasonable explanation for his failure to attend the relevant hearing; and

(2) demonstrate that had he appeared, the result might have been different.

See Allesch v Maunz (2000) 203 CLR 172 at [27] - [28] and [48].

14 Mr Moylan's explanation for his non-attendance before the Master is set out in an affidavit sworn 21 July 2006. Mr Moylan says he was "made aware" on 11 July of the orders which had been made by Master Sanderson on 6 July. He then says:

"3. I immediately telephoned the Listings Co coordinator of the Supreme Court, and explained that I was of the belief that this hearing was to have been vacated, and that together with a further Application made by the Defendant on the same date (19^th June 2006) which sought a stay of proceedings in accordance with Section 4

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of the Vexatious Proceedings Act 2002, had been set down for hearing before a Judge on the 19^th of July 2006.

4. As the two matters listed to be heard are inextricably linked or duplicated, it was believed both matters would be considered together. Accordingly, I relied upon the Summons requiring attendance before a Judge on the 19^th of July 2006, and the earlier hearing before Master Sanderson had been vacated."

15 Mr Moylan's belief that the summary judgment application had been in some way subsumed in the City's application under the Vexatious Proceedings Restriction Act is not challenged by the City. What is said against him, however, is that his belief was unreasonable.

16 At the hearing on 10 October, I gave Mr Moylan an opportunity to enlarge upon his explanation (albeit, from the bar table). He told me he had made a mistake:

"complicated and compounded by the confusion of the two issues. It seemed to duplicate one another and I could not understand that."

17 I told Mr Moylan that I thought the issue was whether it was reasonable for him to have assumed, without checking, that there was not to be a hearing before the Master. Mr Moylan's explanation was that he believed that the City's application under the Vexatious Proceedings Restriction Act "had by amalgamation taken in the first issue"; that is, the summary judgment application. Mr Moylan said his belief was reinforced by the fact that the later application was listed to be heard before a Judge "and not just a Master".

18 I can understand that a litigant who does not have the benefit of legal advice and who is faced with applications in related matters which are to be heard on different days - one before a Judge and the other before a Master - might be confused as to the procedures to be followed. However, with all respect to Mr Moylan, I do not think it was reasonable simply to assume that the two applications would be heard together when each clearly had their own return dates.

19 In my view, a reasonable person (especially, one who had been the Chief Executive Officer of a large organisation) would not rely on that assumption without checking. There was ample time for Mr Moylan to have made a telephone call either to the City's solicitors or to the Court in

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order to clarify the position. I note that in Mr Moylan's affidavit he says that when he learned that orders had been made against him on 6 July, he immediately telephoned the listings coordinator at the Supreme Court and explained his belief that the hearing before the Master was to have been vacated.

20 That, I think, is a telephone call which a reasonable person would have made before the hearing on 6 July. I therefore consider that Mr Moylan has not provided a reasonable explanation for his failure to appear before Master Sanderson, with the result that his application should be dismissed. However, in case I am wrong in that view, I will deal with the second limb of his application.

Might the summary judgment application have failed, if Mr Moylan had appeared?

21 In order to answer this question it is necessary to consider Mr Moylan's case against the City, and its response.

22 Mr Moylan's writ was indorsed with a statement of claim in which he referred to the City's resolution of 29 May 2000 to appoint him as Chief Executive Officer and the contract entered into subsequently, pursuant to s 5.39 of the Local Government Act 1995 (WA) confirming his tenure for a period of three years commencing 1 June 2000. The statement of claim then pleads:

"On the 4^th day of April 2001, the City of South Perth terminated the abovementioned contract without notice.

The Plaintiff maintains that he met all the conditions of employment required of him, and that the termination without notice was a breach of the employment contract."

23 Mr Moylan went on to claim for "Denied Contractual Entitlements" for the period from 4 April 2000 to 3 April 2003, totalling $311,778. In addition, Mr Moylan claimed:

• 12 months' "paid notice for termination of the contract totalling $144,599.00";

• damages to compensate for the loss of future earning capacity;

(Page 8)

• the cost of past and ongoing medical treatment and medication;

• interest.

24 The City filed a defence in which it admitted that Mr Moylan had been an employee of the City and that his employment had been terminated on or about 4 April 2001.

25 The City went on to plead that the termination of Mr Moylan's employment was justified by reason of his "gross misconduct" while in the employment of the City, such misconduct "having been reflected in a range of adverse findings made against Mr Moylan in a report of the Inquiry into the City of South Perth conducted by Mr Gregory McIntyre, pursuant to s 8.16 of the Local Government Act."

26 The City went on to rely on the finding of the Western Australian Industrial Relations Commission on or about 28 June 2002, that the termination of Mr Moylan's employment was not harsh, oppressive or unfair.

27 Thirdly, the City relied on the fact that on or about 28 February 2006, following a trial in the District Court, Mr Moylan had been convicted of an offence under s 409(1)(c) of the Criminal Code (WA) namely, that with intent to defraud, by deceit or fraudulent means, he had gained a benefit, namely the opportunity to apply for the position of the City's Chief Executive Officer.

28 In its chamber summons of 16 June, the City sought summary judgment against Mr Moylan pursuant to O 16 r 1 of the Rules of the Supreme Court on the grounds that:

"(a) the action is frivolous or vexatious;

(b) the [City] has a good defence on the merits;

(c) the action should be disposed of summarily."

29 The City sought, in the alternative, to have Mr Moylan's action dismissed or stayed permanently, pursuant to the inherent jurisdiction of the Court. In the further alternative, the City sought to have Mr Moylan's statement of claim struck out. In the event, Master Sanderson made his order pursuant to O 16 r 1. It is therefore unnecessary to consider the alternative grounds raised by the City's summons.

(Page 9)

30 The City's application was supported by a substantial affidavit sworn by Alexander Clifford Frewing on 16 June 2006. Mr Frewing, who is now the City's Chief Executive Officer, set out the history of the matter in some detail.

31 Mr Moylan responded to Mr Frewing's affidavit in an affidavit of his own, sworn on 18 July 2006. This was, of course, after Master Sanderson had given summary judgment against Mr Moylan. However, for present purposes, I will assume that the Master would have had regard to Mr Moylan's affidavit.

32 It is clear from the affidavits of Mr Frewing and Mr Moylan that there is no dispute about the relevant events and their chronology. It will therefore be convenient to refer to these matters before turning to the rival contentions.

33 Mr Moylan commenced employment with the City in about January 1995 as the Executive Manager, Business Services Division. At the time, Lyn Metcalf was the City's Chief Executive Officer.

34 In about May 2000, Mr Metcalf took a redundancy payment from the City and Mr Moylan was appointed Chief Executive Officer in his place. In a letter dated 30 May 2000, the Mayor of the City, Mrs Suzanne Pierce, offered Mr Moylan the position of Chief Executive Officer, commencing on 1 June. His appointment was to be subject to the terms and conditions set out in the letter which would be included in a formal Contract of Employment. They were:

"• Negotiated Redundancy Settlement of the position of General Manager
• Remuneration, Superannuation and other benefits
• Duties and hours of work
• Use of the City's facilities and exclusive services
• Expenses
• Entitlement Accruals
• Termination of Agreement and Waiver"

35 It is not clear whether any formal contract of employment ever came into existence. Mr Moylan contends that the terms and conditions of his contract were governed by a job description and performance criteria provided by the City. They are part of annexure A to his affidavit.

36 In an affidavit sworn on 1 August 2006 in response to Mr Moylan's affidavit, Mr Frewing did not admit (inter alia) the allegations contained

(Page 10)

in pars 1 to 7 inclusive of Mr Moylan's affidavit. Paragraph 5 of the affidavit contains Mr Moylan's assertion that his terms and conditions were as summarised above. I take it, therefore, that Mr Frewing, on behalf of the City, does not admit that Mr Moylan was subject to those terms and conditions. However, for present purposes, I will accept that Mr Moylan is correct.

37 On 6 July 2000, Gary Martin, who is apparently an officer of the Department of Local Government, commenced an inquiry into matters concerning the City, pursuant to s 8.13 of the Local Government Act.

38 On 22 November 2000, Mr Martin reported to the Executive Director of the Department of Local Government. His report is exhibit ACF1 to Mr Frewing's affidavit.

39 Mr Martin said in his report (par 4) that the inquiry had been authorised after the Department of Local Government had received "several allegations and concerns regarding the process undertaken by the council in respect of the appointment of a new CEO and associated issues". The matters covered by the inquiry (par 18) were said to relate to:

• the termination of Mr Metcalf's employment, the redundancy payments for Mr Metcalf and Mr Moylan as General Manager and the appointment of Mr Moylan as the new Chief Executive Officer;

• matters arising from the appointment of Mr Moylan to that position;

• the taxation liability associated with Mr Moylan's redundancy payment as General Manager, his salary package and a second car.

40 Mr Martin conducted his inquiry using documents and records obtained from the City and by interviewing elected members, employees and people associated with the matters investigated (par 5). He said that apart from the hearing process, "natural justice/procedural fairness was provided by the provision of substantial parts of the draft report to the people affected to enable [sic] them the opportunity to respond. The report had been finalised after considering the responses received" (par 6).

41 Mr Martin set out in some detail the history of Mr Metcalf's redundancy, Mr Moylan's appointment as General Manager and

(Page 11)

subsequently as Chief Executive Officer; the various payments made in relation to these matters; and an arrangement by which the City provided Mr Moylan with a second vehicle for private use.

42 Mr Martin's conclusion in relation to these matters was that:

"Mr Moylan's conduct has been improper in several areas and he is unsuitable to hold the position of CEO. His appointment to that position was inappropriate. The City is now faced with the consequences of that decision. In particular, it is the view of the inquiry that Mr Moylan cannot be entrusted with the task of restructuring the administration and operations and there is some considerable risk that the City will be left with an unworkable structure. An experienced, competent person will be required to review the current situation and provide the council with the guidance required to implement an appropriate management structure for the City." (par 67)

43 According to Mr Frewing, Mr Moylan was suspended from his duties on 30 November 2000 "in consequence of the Martin Report", following a resolution of the City. That evidence has not been challenged by Mr Moylan and I accept it.

44 Subsequently, the Minister for Local Government, acting on Mr Martin's recommendation, suspended the City's council and appointed three Commissioners in its place.

45 On 3 April 2001, the Chairman of Commissioners wrote to Mr Moylan to inform him that following a special council meeting held that day, the council had resolved to terminate his employment with the City with effect from 4 April 2001 "for gross misconduct". The reasons for termination were said to be:

"1. Your wilful refusal to obey lawful directions of the City.

2. Various and repeated breaches of the City of South Perth Code of Conduct. These breaches of the Code relate to recent public communications to the media, the Office of the Minister for Local Government, the Premier, the Chairman of Commissioners, and to officers of the City.

3. Your actions since the meeting of Council of 27 March 2001 have led to an irreparable breakdown of a

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sustainable employer-employee relationship leaving the City with no other available alternative action."

46 The reasons for Mr Moylan's dismissal were set out in the schedule to the City's Notice of Answer and Counter Proposal (exhibit ACF6 to Mr Frewing's affidavit). The reasons fell into two broad categories: Mr Moylan's conduct as found by Mr Martin in the course of his inquiry, and secondly, Mr Moylan's conduct following his suspension. The schedule included the following:

"The City notes that Mr Moylan is seeking reinstatement to his job as CEO. For the various reasons described above, the City regards reinstatement as totally impracticable. Further, an acting CEO has been appointed by the Commissioners and is performing that role.

…

The City denies that there are any outstanding contractual entitlements due to Mr Moylan."

47 On 19 April 2001, by an amendment to an application commenced on 5 April, solicitors acting for Mr Moylan applied on his behalf to the Industrial Relations Commission for an order pursuant to s 29(b) of the Industrial Relations Act 1979 (WA):

"For reinstatement alternatively if reinstatement is deemed impracticable for payment in lieu of notice of termination and compensation to the claimant for loss or injury caused by the dismissal."

The grounds on which the application was made were that the City, in terminating Mr Moylan's employment "acted in a manner that was harsh, oppressive and unfair."

48 The City responded to Mr Moylan's amended application by a Notice of Answer and Counter Proposal dated 7 May 2001.

49 It is Mr Frewing's evidence that in the Industrial Relations Commission, between 8 and 10 October 2001, Commissioner Gregor heard evidence about the circumstances of Mr Moylan's dismissal. Mr Frewing says that the evidence and the reasons given for the dismissal were confined to Mr Moylan's conduct while he was under suspension (Mr Frewing's affidavit, pars 22 - 24). Mr Frewing's evidence has not been challenged by Mr Moylan and I accept it.

(Page 13)

50 It is common ground that on either 19 October (according to Mr Frewing) or 26 October (according to Mr Moylan) Commissioner Gregor held that Mr Moylan had been dismissed unfairly and published his reasons for that decision.

51 Commissioner Gregor's reasons of October 2001 have not been supplied to me. However, the Commissioner set out some relevant extracts, in reasons published on 28 June 2002 to which I shall refer below. These included the following:

"It is common ground that there are matters relating to the employment relationship between [Mr Moylan] and the City which have not been or are not capable of being examined in these proceedings. Those are the subject of an enquiry constituted under the provisions of section 8.13 of the Local Government Act 1995 … into matters concerning the City … and later by a Panel Enquiry, which enquiries are ongoing. The enquiries by this Commission relating to this application are limited to events commencing circa 10 April 2000 up until the date of termination on 3 April 2001."

52 In the June 2002 reasons, the Commissioner said of the first hearing in October 2001 that:

"Ultimately the Commission concluded that the dismissal of [Mr Moylan] in the circumstances which then existed for gross misconduct was unfair. The Commission observed that was not to say that [Mr Moylan's] conduct might not have justified the City … in bringing the relationship to termination in a normal manner, but that was not what was before the Commission. It eventually concluded that the City did not meet the onus of proof to establish the evidentiary basis for the dismissal, because in important areas it 'confused the intention to act with an act'. In short, the dismissal was unfair for procedural reasons."

53 The parties appeared before Commissioner Gregor on 26 October 2001 for the purpose of considering the appropriate orders to be made at that stage. As Commissioner Gregor noted in his later reasons, it was decided that in the circumstances there was no need for any order to be issued. The Commissioner referred also to a statement made by Mr Moylan's then legal representative who raised the question of contractual benefits. He said:
(Page 14)

"… that perhaps is best left to another day. I mean we have ample time in relation to denied contractual benefits. We don't have a 28 day limit. We've got six years in which to deal with it. … We can file again or we can just leave that bit and ultimately an order can issue in relation to the unfair dismissal aspect."

54 In relation to this aspect of the matter, Mr Moylan says in his affidavit of 18 July 2006 (pars 10 - 12):

"It was made clear to all parties concerned, and acknowledged by the [Industrial Relations Commission] that the remedy sought by myself was limited to reinstatement and reinstatement only.

The issue of payment of compensation and denied contractual entitlements was partitioned intentionally Without Prejudice pending the proceedings relating to reinstatement.

It was accepted by all parties concerned that the better interests of the organisation, being the [City] that the remedy of reinstatement should be delayed in consideration until a government appointed panel enquiry was concluded, that being the Macintyre [sic] Inquiry."

55 On 17 October 2001, Mr G M G McIntyre, a barrister, was appointed by the Minister for Local Government pursuant to s 8.16 of the Local Government Act to conduct an inquiry into the operations and affairs of the City between 1 January and 28 November 2000.

56 In March 2002, Mr McIntyre delivered his Report of the Inquiry into the City of South Perth. This document, known as the McIntyre Report, is exhibit ACF7 to Mr Frewing's affidavit.

57 Mr McIntyre set out the terms of the Inquiry in his report (Mr Frewing's affidavit, page 203). He was required to:

• have regard to Mr Martin's report of 22 November 2000;

• inquire into matters arising between 1 January and 28 November 2000 concerning (inter alia) the conduct of Mr Moylan in respect to his dealings with the Council as a body, the Mayor and individual Counsellors.

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58 A little later in the report, Mr McIntyre noted that his was an administrative inquiry to which the rules of natural justice, or procedural fairness, apply. He said:

"In general terms, procedural fairness requires that the Inquiry be free of bias or pre-judgment and those against whom there might be adverse findings or comments have an opportunity to be heard in relation to such findings or comments and to know what is being taken into account in arriving at any such conclusion."

59 Mr McIntyre did make adverse findings against Mr Moylan. Before doing so, and for the purpose of discharging his procedural fairness obligations, Mr McIntyre gave notice to Mr Moylan of his tentative findings. Mr Moylan told me that this was by way of a draft report (TS 14). Mr Moylan responded by producing a substantial submission in which he set out in detail his account of the various matters and events the subject of the inquiry. The submission is annexure B1 to Mr Moylan's affidavit at pages 28 - 68.

60 As Mr Moylan acknowledged in the hearing before me (TS 15), his submissions were not accepted by Mr McIntyre who went on to make a number of adverse findings against him in the final report.

61 Broadly, those adverse findings fell within three categories:

• Mr Moylan's inappropriate conduct in relation to the termination of Mr Metcalf's employment as the City's Chief Executive Officer, the receipt by Mr Moylan of a redundancy payment when his position as General Manager ceased to exist and his own appointment as Chief Executive Officer;

• Mr Moylan's failure to provide correct instructions to the City's solicitors who, having been instructed to advise the City in relation to the termination of Mr Metcalf's employment as Chief Executive Officer, wrote a letter to the Mayor in which they set out their understanding of their instructions in a way which was clearly wrong;

• Mr Moylan's conduct in relation to the payment to him of a redundancy package in relation to his former position as General Manager and in the transfer to him, without payment, of a motor vehicle.

(Page 16)

62 The McIntyre Report was published on 16 April 2002. This prompted the City (then under management by the three Commissioners) to apply to the Industrial Relations Commission to, in effect, withdraw the finding made by Commissioner Gregor on 19 October 2001 that Mr Moylan had been dismissed unfairly and to substitute a finding that he had been fairly dismissed. That application was based on the adverse findings made against Mr Moylan in the McIntyre Report (which the City sought to have received into evidence) and affidavits of the Commissioners. Each Commissioner swore that had he or she been aware of Mr McIntyre's findings on 3 April 2001 (when Mr Moylan was dismissed) he or she would either have proposed or supported a resolution by the City to dismiss Mr Moylan in any event, because of the gravity of misconduct as set out in the McIntyre Report, irrespective of his conduct while under suspension.

63 On 28 June 2002 Mr Moylan's application came before Commissioner Gregor for further consideration. As appears from the Commissioner's reasons (Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 05874) there was a dispute as to whether the McIntyre Report should be received into evidence. Counsel for Mr Moylan submitted that the admission of the report into evidence would, in effect, contravene s 20 of the Royal Commissions Act 1968 (WA) which provides (inter alia) that a statement or disclosure made by a witness in answer to any question put to him by a Commission should not be admissible in evidence against him in any civil or criminal proceedings in any court in the State. Counsel submitted in the alternative, that if the report was admitted, it should be given no weight. This was because it was "fatally flawed", there being doubts about the efficacy of the findings made by Mr McIntyre having regard to Mr Moylan's contention that he did not receive a fair hearing before the inquiry. The Commissioner understood that this was because Mr Moylan was not represented throughout the course of the inquiry due to a lack of funding.

64 The Commissioner decided to receive the McIntyre Report. He held that this would not involve a contravention of s 20 of the Royal Commissions Act. He said further:

"In any event it would be strange now if the document was not allowed to become information before the Commission because this proceeding has been delayed since at least 19^th October 2001 by consent of the parties awaiting the outcome of the McIntyre Inquiry. It seems that [Mr Moylan's] position regarding the efficacy of its presentation to the Commission has

(Page 17)

changed following its publication. That might well be because of its contents."

65 The Commissioner noted that the application before him gave rise to the question "Whether the City was entitled to a genuine belief based on reasonable grounds that [Mr Moylan] was guilty of misconduct". In that context, the Commissioner referred to the legal principle "that such a belief could be generated even though the misconduct was unknown at the time of the termination": Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 373; Concut Pty Ltd v Worrell (2000) 103 IR 160.

66 The Commissioner went on to say that it was necessary for him to examine the McIntyre Report:

"Not for the purpose of reviewing the findings of Mr McIntyre themselves but to form an opinion about whether it was reasonable for the City to rely upon the report and to deal with the complaints raised by [counsel for Mr Moylan] concerning the weight the report should attract. This is necessary because it is not for the Commission to substitute its own views for those of the employer … It is not the province of the Commission to take over the functions of the employer in relation to selection and retention of employees. It will only intervene to protect an employee against an unfair and unjust exercise of an employer's right of dismissal …"

67 Having reviewed the McIntyre Report, the Commissioner said that the findings made by Mr McIntyre:

"include conduct which in my opinion when reviewed by the City could have led it to conclude that conduct was incompatible with [Mr Moylan's] fulfilment of his duty, involving opposition or conflict between his interest and that of his employer and contained actual repugnance between his acts and his relationship."

68 The Commissioner went on to hold that not only had it been open to the City to reach those conclusions, the City had actually done so:

"It formed the belief that [Mr Moylan's] conduct was incompatible with his continued employment in that he owed the City a fundamental contractual and statutory duty which he had breached. His conduct was destructive of trust and confidence, he failed to avoid conflicts of interests and so

(Page 18)

therefore breached his fiduciary duties. He breached his obligations under the City's code of conduct and there was general repugnance between his acts and his employment relationship with the [City]. I find that on the balance of probability it was reasonable for the City to reach all of these conclusions.

What an employer has to do is make a reasonable inquiry into the alleged misconduct of an employee and satisfy itself on reasonable grounds that he is guilty of misconduct.

In doing so the employer is not required to conduct an investigation as if it were a police officer or a lawyer, what it must do is take reasonable steps to ascertain that the conduct complained of actually occurred. In this instance I conclude that far more than reasonable steps an employer might normally take to ascertain whether misconduct occurred were taken. What the City had to rely on was the product of an Inquiry with the powers of a Royal Commission conducted over a period of three months, an Inquiry conducted in accordance with the rules of natural justice by a person appointed with the confidence of the Minister to conduct such an inquiry."

69 For these reasons, the Commissioner concluded that Mr Moylan's dismissal by the City was not unfair. Mr Moylan's application was therefore dismissed.

70 The Commissioner said "there is no live issue before the Commission relating to contractual benefits and no orders relating to benefits will be made." That, I think, is a reference to the fact that Mr Moylan's claims for contractual benefits had been removed from the ambit of the proceedings. The claims would have been dealt with subsequently if the finding of unfair dismissal had not been reversed in the light of the McIntyre Report. However, the claims could no longer be pursued once it was found that Mr Moylan's dismissal was justified.

71 It is important to note that in considering the matter and reaching his conclusions, the Commissioner had before him only the evidence of the three Commissioners relating to Mr McIntyre's findings. There was no evidence from Mr Moylan.

72 Mr Moylan appealed against the Commissioner's decision. The appeal was heard on 23 September 2002 and dismissed on the same day, with reasons to follow. In those reasons, published on 8 October 2002

(Page 19)

(Moylan v Chairman of Commissioners City of South Perth Council [2002] WAIRC 06727) the President, with whom the other members of the Full Bench agreed, said:

"I should say that it is an important fact which overshadows the grounds of appeal in this matter, but [sic, that] no evidence was adduced at first instance on behalf of Mr Moylan in relation to the matter which eventually decided the application when there was affidavit evidence adduced on behalf of the [City] Council."

73 Mr Moylan's evidence in support of his application to set aside Master Sanderson's judgment contains a copy of the submission he made to Mr McIntyre and submissions he made to the Minister for Local Government and to members of the Legislative Council (annexures B1, B2 and B3 to his affidavit). The last two mentioned submissions were made after the publication of the McIntyre Report and contain a number of criticisms about the way in which Mr McIntyre had conducted the inquiry, both generally, and specifically in relation to Mr Moylan himself. Mr Moylan considers that Mr McIntyre was unfair, biased against him and had prejudged matters relating to him.

74 At the hearing before me, Mr Moylan said the reason he had not made any submissions to the Industrial Relations Commission in support of his contention that the McIntyre Report was flawed, was that "there was little point in pursuing it". That was because the hearing before the Commission:

"was limited to reinstatement only. The only time that the McIntyre Report becomes relevant is in relation to the performance under my contract. That issue has yet to be argued. That's the only issue that I see as having relevance. That's the opportunity for me to provide whatever information or whatever responses are necessary where issues have been raised in relation to the performance under my contract." (TS 19 - 20) (my emphasis)

Mr Moylan went on to explain that the McIntyre Inquiry had not been conducted for the purposes of determining his contract, but that it related to the good governance of the City:

"Singular issues as they may relate to me as an employee were never the focus of that inquiry."

(Page 20)

75 Mr Moylan's position is that the City has made no effort to investigate allegations made against him in the McIntyre Report which, in Mr Moylan's opinion:

"are so broad as to be non-specific and in my view useless for the purposes of determining whether or not I performed my obligations under my contract of employment." (TS 20)

Mr Moylan contends that having received the McIntyre Report, the City was obliged to consider his response as an employee to an employer, so as to investigate whether he had breached any of the terms of his contract.

76 At page 84 of his affidavit, Mr Moylan exhibited a letter dated 1 August 2002 he wrote to the City's Commissioners. In it, he referred to a letter dated 23 May 2002 he had received from the City's solicitors informing him that the City had accepted several serious findings about his conduct contained within the McIntyre Report which justified a decision to dismiss him summarily. He said:

"… it is unclear what specific breaches are being cited for summary dismissal. The letter suggests that the 'concerns' of the City … would be detailed some time in the future.

…

Accordingly, please provide specific details of the alleged breaches of my terms of employment, which are being relied upon by the City … for seeking my Summary Dismissal.

I would ask that these issues are considered including my testimony given to the Inquiry and if necessary details provided of issues not adequately answered by myself. If issues exist outside of questions put to me and answers provided in the Inquiry proceedings, I request the opportunity to respond to same.

Immediately upon receiving these particulars, I will provide a submission in response as required for the consideration of Commissioners."

77 Mr Moylan said that in August 2002, he was "still hopeful that a relationship could be sustainable" (TS 22). Mr Moylan considers that the relationship became untenable, as he put it, following the restructuring of the City's organisation consequent upon the McIntyre Report.

(Page 21)

78 As I have noted above, Mr Moylan exhibited to his affidavit documents setting out the performance criteria and job description for the position of the Chief Executive Officer of the City. He contends that he met all the relevant criteria: and that if the City contends he did not, it should provide him with details of any alleged shortcomings so that he can answer them.

79 In my view, Mr Moylan's position is untenable. Accepting, for the purposes of the argument, that Mr Moylan satisfied all the performance criteria relating to his employment, the fact remains that findings were made in the McIntyre inquiry (and in the previous Martin inquiry) which, in essence, were so damaging to his integrity that the City was justified in dismissing him. That finding was made by Commissioner Gregor and upheld on appeal. I do not accept that Mr McIntyre's findings were relevant only to Mr Moylan's performance, as he contended in the course of his submissions to which I referred above.

80 The City's decision to dismiss Mr Moylan was justified further by the fact that he was convicted at trial of an offence of gaining the opportunity to apply for the position of Chief Executive Officer by deceit or fraudulent means, with intent to defraud. I am told that the conviction is under appeal: but unless and until it is quashed, the City is entitled to have regard to it. Although the conviction arose from events which preceded Mr Moylan's employment as Chief Executive Officer, it undermined the basis for that employment.

81 Section 34(4) of the Industrial Relations Act reads:

"Except as provided by this Act, no award, order, declaration, finding, or proceeding of the … Full Bench, or the Commission shall be liable to be challenged, appealed against, reviewed, quashed, or called in question by any court -

(a) on any ground relating to jurisdiction; or

(b) on any other ground."

82 Although the issue before the Industrial Relations Commission was whether Mr Moylan had been dismissed unfairly, that issue is fundamental to his claim for compensation. If the City was entitled to dismiss Mr Moylan for misconduct of the kind identified in the McIntyre inquiry, it would be under no obligation to pay him any compensation, no matter how well he had performed as Chief Executive Officer.

(Page 22)

83 Apart from s 34(4) of the Industrial Relations Act, the principles of res judicata and issue estoppel would, in any event, prohibit Mr Moylan from re-litigating the issue which was closed by the decision of the Industrial Relations Commission.

84 As to res judicata; in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598, Gibbs CJ, Mason and Aickin JJ applied the principle expressed by Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 100 at 115 in the following terms:

"where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

85 Mr Moylan's decision not to adduce evidence in the hearing before the Industrial Relations Commission was a considered decision, but he must now accept its consequences.

86 The application of the principle of issue estoppel produces the same result in this case. As Dixon J held in Blair v Curran (1939) 62 CLR 464 at 531:

"A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared."

(Page 23)

That is the case here. The Industrial Relations Commission held that Mr Moylan had not been dismissed unfairly. In this action, he seeks compensation. However, as noted above, he cannot maintain that claim unless he demonstrates that he was dismissed unfairly. And he is precluded from taking that course by the decision of the Industrial Relations Commission.

87 For these reasons, I think it is clear that if Mr Moylan had appeared before Master Sanderson on the City's application for summary judgment, the result would have been no different: the City would have been successful in any event.

88 Mr Moylan's application must therefore be dismissed.

The City's application in CIV 1635 of 2006 pursuant to the Vexatious Proceedings Restriction Act 2002

89 The City seeks leave under s 4(2)(c)(i) of the Vexatious Proceedings Restriction Act to apply for orders against Mr Moylan in accordance with s 4(1)(c) and s 4(1)(d), to stay his action CIV 1494 of 2006 and to prohibit him, either directly or indirectly, from instituting proceedings against the City or any current or former officer, employee, solicitor, servant or agent of the City, without the leave of the Court or Tribunal in which any such proceedings would be instituted.

90 On any view, an order staying action CIV 1494 of 2006 would be inappropriate because the action has been brought to an end by the City's success in its summary judgment application. The question is, therefore, whether Mr Moylan should be prohibited from bringing any further proceedings against the City etc.

91 The jurisdiction to make an order such as that sought by the City arises if the Court is satisfied that a person has instituted or conducted "vexatious proceedings". These are defined in the Vexatious Proceedings Restriction Act to mean proceedings:

"(a) which are an abuse of the process of a court or a tribunal;

(b) instituted to harass or annoy, to cause delay or detriment, or for any other wrongful purpose;

(c) instituted or pursued without reasonable ground; or

(Page 24)

(d) conducted in a manner so as to harass or annoy, cause delay or detriment, or achieve any other wrongful purpose."

92 In this case, the City relies only on par (c) of the above definition. The City contends, for the reasons advanced in its summary judgment application, that Mr Moylan's claim in action CIV 1494 of 2006 is without any merit and has been pursued without reasonable ground.

93 The lack of merit is not, of course, an element of the definition. I therefore take the submission to mean that because Mr Moylan's claim is without merit, it must have been instituted or pursued without reasonable ground.

94 In Granich Partners v Yap Cheng See [2003] WASC 206, E M Heenan J held at [34]:

"… the need for leave to be granted to a private applicant will be satisfied if it is shown that the applicant is seeking the statutory relief primarily for the alleviation of an unjustifiable or exceptional burden which the litigation brought or pursued by the respondent has caused and not just as an additional means of preventing that applicant from having to answer before the courts at the suit of a person seeking to obtain relief at law from some real or imagined wrong, even if it should turn out that the claimant's case will probably fail. In other words, this is not a remedy intended or available to achieve a stay or to prevent the institution of the ordinary run of litigation rather, it is an extreme remedy reserved for instances where quite hopeless claims are brought, or persisted with, to a degree which causes substantial disruption for the target of the claims and for the administration of justice."

95 In my view, it cannot be said that the pursuit by Mr Moylan of action CIV 1494 of 2006 has imposed an unjustifiable or exceptional burden on the City. Clearly, the City has been required to instruct its solicitors in order to defend the action: and it has incurred costs in so doing and in mounting its summary judgment application. However, unless there are circumstances about which I have not yet been informed relevant to an award of costs, the City can expect to recover its costs from Mr Moylan. Further, the procedures available under the Rules of the Supreme Court have enabled the City to bring the action to a conclusion relatively rapidly.

(Page 25)

96 The City relies, in addition, on the fact that Mr Moylan has instituted three other sets of proceedings against it. These are the proceedings in the Industrial Relations Commission, being Mr Moylan's application of 5 April 2001 and his appeal instituted on 16 July 2002. There is a further proceeding said to have been commenced on 9 December 2003. However, I have been provided with no details of that matter.

97 In my view, it is inappropriate to place any weight on the lack of success of Mr Moylan's three applications to the Industrial Relations Commission in the context of this application. That is because, as I understand it, Mr Moylan had solicitors acting for him at the material times: and those solicitors would have been well aware of their professional obligations when instituting the proceedings on Mr Moylan's behalf. They would not have pursued matters which were unarguable.

98 Mr Moylan pursued action 1494 of 2006 apparently in ignorance of s 34(4) of the Industrial Relations Act and the principles of res judicata and issue estoppel. However, given that these are somewhat esoteric matters, I do not think it would be fair to categorise him, in effect, as a vexatious litigant.

99 I therefore decline to grant leave to the City to make an application under the Vexatious Proceedings Restriction Act against Mr Moylan. The City's application will be dismissed.