Ng v Yanjian Group (Australia) Pty Limited
[2013] FCCA 2349
•17 May 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NG v YANJIAN GROUP (AUSTRALIA) PTY LIMITED | [2013] FCCA 2349 |
| Catchwords: INDUSTRIAL LAW – Practice & Procedure – stay of proceedings – multiple proceedings – related proceedings in Supreme Court of Queensland – abuse of process. |
| Legislation: Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (Cth), reg.1.03 Federal Court of Australia Act 1976 (Cth), s.32 |
| Blair v Curran (1939) 62 CLR 464 Oswal v Burrup Fertilisers Pty Ltd (2011) 85 ACSR 531 |
| Applicant: | MARCUS NG |
| Respondent: | YANJIAN GROUP (AUSTRALIA) PTY LIMITED T/A YANJIAN GROUP |
| File Number: | BRG 1063 of 2012 |
| Judgment of: | Judge Burnett |
| Hearing date: | 15 May 2013 |
| Date of Last Submission: | 15 May 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 17 May 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. Hastie |
| Solicitors for the Applicant: | Clarke Kann Lawyers |
| Senior counsel for the Respondent: Junior counsel for the Respondent: | Mr K. Barlow SC Mr M. Amerena |
| Solicitors for the Respondent: | MacDonnells Law |
ORDERS
That the Applicant has leave to amend these proceedings to incorporate into these proceedings claims made in proceeding BS10108 of 2012 in the Supreme Court of Queensland.
That the Applicant file an amended claim and statement of claim on or before 4pm 1 June 2013.
Alternatively the Applicant make application for cross-vesting of the Supreme Court proceeding BS10108 of 2012 to the Federal Court of Australia on or before 4pm 1 June 2013.
That upon the Applicant either filing an amended claim and statement of claim in these proceedings or making application for an order for cross-vesting following the application in terms of paragraph 2 or 3 herein (respectively), these proceedings be transferred to the Federal Court of Australia.
That in default of the Applicant filing an amended claim and statement of claim or making application for an order for cross-vesting, these proceedings be stayed pending the outcome of the proceedings BS10108 of 2012 in the Supreme Court of Queensland.
That costs of the interim application filed on 6 May 2013 be reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 1063 of 2012
| MARCUS NG |
Applicant
And
| YANJIAN GROUP (AUSTRALIA) PTY LIMITED T/A YANJIAN GROUP |
Respondent
REASONS FOR JUDGMENT
(Ex tempore)
This case illustrates the difficulties that can arise when tactical decisions concerning the forum in which litigation is to be conducted are undertaken without first embarking upon the necessary strategic overview to inform the tactical decisions. There are two proceedings on foot; both concern the same parties, and in each they have the same role. The separate proceedings are inextricably related. They arose out of an employment relationship that existed between Mr Marcus Ng (“the employee”) and Yanjian Group (Australia) Pty Ltd trading as Yanjian Group (“the employer”).
That relationship between them commenced on 1 November 2009 and concluded on 13 September 2012 when Mr Ng was made redundant. I will detail the proceedings in a moment. The employee seeks to litigate in this court in respect of rights he claims pursuant to the Fair Work Act 2009 (Cth) (“FW Act”). He separately seeks to litigate in the Supreme Court of Queensland common law rights that he alleges arise from the contract of employment. The Fair Work claim is for a sum of approximately $210,000, and the common law claim is for a sum of approximately $1.2 million.
The Supreme Court proceedings were commenced first by filing on 30 October 2012. Presumably the employee was concurrently engaged in the conciliation process at the Fair Work Commission in respect of his rights under the FW Act, for he only received his s.370 certificate on 3 December 2012. He was unable to commence proceedings here until that time. Accepting that the processes involved before the Fair Work Commission would have taken a little time, it is not unreasonable to infer that at the same time as he was instituting proceedings in the Supreme Court he was also before the Commission.
As I have noted, on 3 December he received his certificate and was then able to commence proceedings in this court. In broad terms, the respective proceedings are these. In this court the claim comprises three elements:
a)An adverse action claim. Mr Ng alleges that his employment was terminated because he sought to assert a workplace right, namely, to make a complaint or inquiry in relation to his employment. He thereby seeks compensation, a pecuniary penalty and interest. The compensation is particularised as comprising 12 months’ salary, superannuation and allowances in lieu of notice of termination, totalling about $143,000, as well as a bonus of $40,000.
b)Untaken but accrued annual leave quantified in an amount of approximately $18,600.
c)Redundancy pay in a sum of about $10,000. I note the employer’s contention that that claim sits uncomfortably with the adverse action claim.
In the Supreme Court claim, Mr Ng agitates for a declaration for an account of profits, an order for payment of amounts due and/or damages for breach of contract.
At the heart of that proceeding is an alleged oral agreement said to comprise Mr Ng’s contract of employment between Yanjian Group and himself. That contract was allegedly made in or about November 2012 between him and Mr Bo Tang, a director of Yanjian’s Chinese holding company, on behalf of Yanjian, which was not then incorporated. The terms of the alleged oral agreement are the foundation of both the expressed and implied terms in Mr Ng’s alleged contract of employment and of his purported entitlement to a share of 15 per cent of the after-tax profits of Yanjian’s ‘Midtown’ project, quantified by Mr Ng at $1.2 million.
It is noted in the employer’s submission that issues arising from the pleadings include:
a)The position was Mr Ng employed in – was he a managing director or merely a resident director holding the rank of Vice General Manager?
b)Was he entitled to be paid a bonus of $40,000 annually as part of his employment contract? Or was that sum advanced to him by way of a loan annually as a dividend pre-payment in anticipation of, but contingent upon, the Midtown project making a requisite after-tax profit and, if that contingency did not eventuate, repayable as alleged in the counterclaim?
c)What were the circumstances of the termination of Mr Ng’s employment by Yanjian and his removal as a director?
d)What, if any, loss did he suffer as a result of the termination?
The employer submits that those issues will inevitably involve a consideration of the legal force and effect of a conversation between the parties in November 2009, a stock trust agreement dated 16 August 2010 and the related stock incentive agreement bearing the same date. Further, it is alleged in the Supreme Court proceedings that the employee’s removal, presumably as a director, and his termination of employment were in breach of implied terms of the employment contract, itself alleged to be found in the oral agreement pleaded in paragraph 1 of the Statement of Claim.
The employee uses this as a foundation to claim, in the alternative, an account of profits for breach of contract with damages in the order of $1.2 million, to which the employer responds by alleging, in substance, a genuine redundancy consistent with the response in these proceedings. It is also important to note that there is a live issue in the Supreme Court proceedings as to whether the Midtown project will in fact make any after-tax profit at all.
Both proceedings have been progressing in parallel. However, on 6 May 2013 the employer made this application for a stay of this court’s proceedings. In the application the employer sought orders:
“1. That, pursuant to Rule 13.10 of the Federal Circuit Court Rules 2001 and further and alternatively to the implied statutory jurisdiction of the Federal Circuit Court, this proceeding be stayed pending the determination of Supreme Court of Queensland proceeding number 10108 of 2012 on such conditions, if any which the Court thinks fit.
2. Such other further orders or directions which the Court thinks fit.
3. That costs be reserved.”
There is no question that the court has a statutory power to grant a stay of the type sought by the employer (see s.85(b) Federal Circuit Court of Australia Act 1999 (Cth) and rule 13.10 Federal Circuit Court Rules 2001 (Cth)). However, at the outset I think it is appropriate to state that I do not consider the proceedings to be frivolous or vexatious, nor, for reasons that will follow, do they constitute an abuse of process. The proceedings in this court arise under s.87(2) and s.119(2) of the FW Act. The alleged breaches of each of those provisions, which make up part of the National Employment Standards, if established they constitute a contravention of the FW Act pursuant to s.44(1) and, accordingly, are civil remedy provisions.
The jurisdiction to prosecute claims in respect of civil remedy provisions is provided for under the FW Act to include the Federal Court, the Federal Circuit Court, or an “eligible State or Territory court” (s.545). The civil remedy provision permits imposition of a penalty and ancillary powers to award compensation.
It is important to note that an “eligible State or Territory court” is defined in s.12 of the FW Act to mean one of the following courts:
“(a) a District, County or Local court;
(b) a magistrates court;
(c) the Industrial Relations Court of South Australia;
(ca) the Industrial Court of New South Wales;
(d) any other State or Territory court that is prescribed by the regulations.”
Upon the commencement of the FW Act provision was made for making of regulations: see s.796. Regulations were made and they commenced on 1 July 2009.[1] Regulation 1.03 provides:
““eligible State or Territory court” has the meaning given by section 12 of the FW Act.”
[1] Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (Cth).
It follows that this court has jurisdiction to deal with the matters raised, but the fact remains that the Supreme Court does not. It is not suggested that the claim lacks bona fides or that the claim is not credible. It follows that the claims in this court cannot be reasonably characterised as vexatious, frivolous or an abuse of process. They cannot be prosecuted in the Supreme Court because that court is not an eligible court as defined.
The proceedings in this court seek, as I earlier noted, distinct remedies from those sought in the Supreme Court proceedings, as they are remedies only available in a court provided for under the FW Act, i.e. not the Supreme Court of Queensland. In the course of debate I was referred by both counsel to the decision in Oswal v Burrup Fertilisers Pty Ltd (2011) 85 ACSR 531 in order to address this issue. There are some observations in Oswal which ought be referred to in dealing with the question of abuse of process. Commencing at [92], their Honours dealt with abuse of process in the context of the action then before them.
In some respects, Oswal is materially distinguishable from this case, however the observations of the majority commencing at [92] are helpful on the point of whether these proceedings constitute an abuse of process. The principle point of distinction between Oswal and here is that here the employee has commenced two separate actions in respect of differing rights. One set of rights arises under a statute which identifies an appropriate forum, and the other arises under common law. Prima facie, that right can only be commenced in a common law jurisdiction such as the Supreme Court.
As was canvassed with counsel during the course of submissions, no consideration had been given to the accrued jurisdiction of this court and/or the Federal Court pursuant to either s.18 Federal Circuit Court of Australia Act 1999 (Cth) or s.32 Federal Court of Australia Act 1976 (Cth). Had the employee done so, then perhaps proceedings could have been commenced in either this court or the Federal Court in respect of both claims as the employee is the applicant in both instances. In Oswal, the receivers commenced proceedings in Victoria while Oswal did likewise in the Federal Court in Western Australia. There were common issues and it was strongly argued that the matters raised in the West Australian proceedings could have been addressed in the Victorian proceedings. That much was accepted. In that regard, their Honours noted at [93]:
“In our view, each of the Victorian action and the WA action was properly instituted. It cannot be said that there was an abuse of process by the receivers in commencing the WA action.”
However, in that case, as here, there was some criticism of the parties for failing to find common ground in what ought to have been a matter dictated by common sense. Ultimately, the trial judge in Oswal resolved the issue by reason of convenience; Western Australia was the most appropriate geographic location for the conduct of the proceeding; that matter mitigated strongly in favour of the determination to refuse a stay. In so doing, however, the majority accepted that the trial judge understood the principles applicable following the decision of Henry v Henry (1996) 185 CLR 571, and which were addressed at [100] and [101] of the majority’s reasons.
In particular, I am mindful of the observations made by the majority in Henry v Henry quoted at [100] of the decision in Oswal, where the High Court majority noted:
“It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive …”
Their Honours plainly recognised that not every case need fall into a well-defined category. Both Oswal and this case are examples of that principle. Here, the fact of the differing jurisdictions governing the different types of claims is one which sets this case aside in a strict sense from the principles that ordinarily apply, and, on that basis, it would seem to me that the second action commenced in this court is not an abuse of process.
The employer contends that even if this proceeding is not covered by rule 13.10 (which I accept as correct) the court has an identical and a necessary implied power which it ought exercise. I accept that the court does have such a power, and I proceed then to consider whether the relief ought be granted, having regard to it. The discretionary power requires a consideration of a number of elements, but ultimately requires the court to exercise, in a judicial manner, a discretion.
The relevant considerations generally include:
a)which proceeding was commenced first;
b)whether different jurisdictions were involved;
c)the undesirability of having two courts compete to see which of them determines common facts first;
d)the undesirability of the substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues;
e)that the law should strive against permitting multiplicity of proceedings in relation to similar issues;
f)whether issues of fact and relief are the same;
g)the work required to be done in preparing two separate matters saved if only one matter were to be determined;
h)how far the proceedings have been progressed in each court, including whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted;
i)circumstances relating to witnesses; and
j)generally balancing the advantages and disadvantages to each party, and the public interest.
The employer contends that these facts support the exercise of the discretion in its favour. In particular, it identifies a number of matters which, it submits, support the argument for a stay. In terms of the two jurisdictions involved, the Supreme Court of Queensland is a court having a superior status to this court, and that factor alone is a distinguishing feature in the contest between jurisdictions. Secondly, the same parties are exclusively involved in both proceedings. Thirdly, the employee is the moving party in both proceedings.
The Supreme Court proceeding was the first in time. Although reference is made to that fact in Oswal as a supporting matter, when one has regard to the underlying proceedings which would have been instigated in the Fair Work Commission, it does not have as much significance as perhaps might be the case if one was simply comparing the commencement date of two proceedings.
Fifthly, the circumstances in which the employee’s conduct was agreed, the terms of that agreement, the circumstances of his removal as a director, the termination of his employment and whether he is owed or owes the alleged bonus of $40,000 and other loans will all be facts relevant and common in both proceedings, notwithstanding the different relief sought in each proceeding.
It was contended that if the Federal Circuit Court proceeding was decided first, difficult questions involving issue estoppel are likely to arise as one attempts to discriminate between the evidential facts and ultimate facts for the purpose of the doctrine in Blair v Curran (1939) 62 CLR 464. There is, in my view, some merit in that submission.
I do not accept that there is any other real basis for distinction. While it was submitted that this court is, prima facie, a non‑pleading court, that is not the case. Differences of process between the courts (such as the requirement in this court to file statements) are unlikely to have any significant bearing upon the outcome of the matter.
It seems to me that both matters will proceed similarly except in respect of that issue. Questions of estoppel will arise either way. Consequently, the real question is where the fundamental issues of this case will be best decided. For reasons which are dealt with in the employer’s submissions, I accept that it is preferable that these matters be decided in the court that determines the breach of contract action, rather than the contravention action.
There is also the submission that the resolution of the Supreme Court proceeding is more likely to impact the resolution of the Federal Court proceeding than the contrary. I accept this submission, as it follows the greater range of issues in the Supreme Court and the considerably greater quantum of monetary claim and loss.
Most, but not all, of the evidential issues in the Federal Circuit Court proceeding are, at Mr Ng’s own instigation, live issues in the Supreme Court proceeding. Those issues which are not live in those proceedings are of considerably smaller financial and evidentiary significance.
In particular, public interest dictates that the Supreme Court proceeding would be the best vehicle to determine the matter, because it will not only resolve most of the important contentions in this court but also the far greater part of the entire field of controversy between the parties. The Supreme Court is likely to get a better and more reliable view of the whole of the dealings between these parties, which will tend to assist the court in more reliably resolving the controversial matters which overlap with the proceedings in this court.
Given the international nature of this application, I acknowledge that the Supreme Court is more experienced and better equipped to deal with questions of foreign law. I note also that it has greater resources available, should they be required.
I am cognisant of another matter addressed by the employer in its submissions, and that is that a number of the witnesses in this case are resident in China, which means that there will be a need for interpreters and, no doubt, that will require additional resourcing. That factor echoes the issues that arose in Oswal. There, geography was seen to be important to forum. Here it seems that the prospective need to recall witnesses is going to be somewhat more significant.
Finally, and notwithstanding the debate which has occurred, I am satisfied that both proceedings have generally progressed with reasonable expedition. There were complaints made by each party about the prospects of one proceeding being delayed in preference to another. However, it seems from the material relied upon by the parties that the proceedings are generally being advanced in a satisfactory manner, and that there is no particular advantage of one court over the other in terms of process.
That consideration extends to the availability of court dates. Those observations apply with equal measure to resourcing and availability of judicial time in this court. As I indicated at the hearing, my initial inclination was that the stay ought be granted. Having considered the matter overnight, my view on that matter has not altered.
I am mindful that in this case, as in Oswal, it is apparent that a strategic approach has not been adopted to the litigation as a whole, and the parties have not endeavoured to canvass these issues. I note that this afternoon, immediately prior to my returning to court to deliver judgement, material was filed which attempts to canvass these issues raised over the last 24 hours.
However, I acknowledge also that, in a practical sense, 24 hours was probably insufficient time to permit the parties to engage in meaningful negotiation, particularly given that the employer’s parent company is a Chinese entity controlled by native directors, and that there would be both geographic and language difficulties involved in obtaining instructions.
Some attempt was made by me at the hearing to have the employer considered consolidation by bringing the subject matter of the Supreme Court proceeding into this proceeding consistent with this court’s accrued jurisdiction under s.18 Federal Circuit Court of Australia Act 1999 (Cth). I am particularly mindful of not only the cost to the parties, but also the call upon resources of the various courts.
It provides no comfort to submit that the resolution of one proceeding will necessarily resolve the other. While that proposition may at first instance seem logical, other issues may arise that would gainsay that outcome, despite the best intentions of the parties. I think that the actions are so closely connected that they ought proceed together. I note that neither party disputed this as an ideal objective when the matter was raised in debate at the hearing. It is with those matters in mind that I will make orders in the terms I propose, subject to any refinement that might be submitted by the parties.
In making these orders, I have considered the submissions made concerning the prospect of trial dates generally in the respective courts, and the contention that filing costs in the Federal Court registry are said to be higher, as well as general allegations in respect of delay made against each of the parties.
In the context of a claim for $1.2 million involving overseas witnesses and interpreters, I am not dissuaded from my initial view that the actions should proceed in a jurisdiction where they can both be disposed of concurrently.
However, to some extent the election to consolidate remains open to the applicant dependent upon his response to the orders. If he opts not to consolidate, then this proceeding shall be stayed until the Supreme Court action is determined.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Burnett
Date: 29 January 2014
Key Legal Topics
Areas of Law
-
Civil Procedure
-
Contract Law
-
Employment Law
Legal Concepts
-
Appeal
-
Breach
-
Contract Formation
-
Costs
-
Jurisdiction
-
Stay of Proceedings
0
3
6