Ou Yang v Dahua Group Melbourne Number 1 Pty Ltd
[2023] FedCFamC2G 1231
•15 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Ou Yang v Dahua Group Melbourne Number 1 Pty Ltd [2023] FedCFamC2G 1231
File number: MLG 23 of 2023 Judgment of: JUDGE FORBES Date of judgment: 15 December 2023 Catchwords: PRACTICE AND PROCEDURE – application for leave to file further amended statement of claim – civil penalty proceedings – allegations of contraventions of Fair Work Act 2009 (Cth) - degree of specificity required in pleadings – overarching purpose of civil procedure considered – whether costs of application should be paid by applicant – s 570 of Fair Work Act considered – costs of application reserved Legislation: Fair Work Act 2009 (Cth) s 360, 570
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190-192
Cases cited: Arnett-Somerville v Monash Health [2016] FCA 1451
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298
Dare v Pulham (1982) 148 CLR 658
Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234
Fair Work Ombudsman v Eastern Colour Pty Ltd (2001) 209 IR 263
H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242
Ryan v Primesafe (No. 2) (2015) 323 ALR 107
Sabapathy v Jetstar Airways [2021] FCAFC 25
Tucker v The State of Victoria (No. 2) [2021] VSCA 182
Wride v Schultz [2004] FCAFC 216
Division: Division 2 General Federal Law Number of paragraphs: 24 Date of hearing: 15 December 2023 Place: Melbourne Counsel for the Applicant: Mr Felman KC Solicitor for the Applicant: Jewell Hancock Employment Lawyers Counsel for the Respondent: Mr Rinaldi Solicitor for the Respondent: Moray & Agnew ORDERS
MLG 23 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: TING OU YANG
Applicant
AND: DAHUA GROUP MELBOURNE NUMBER 1 PTY LTD
Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
15 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Applicant is granted leave to file and serve a Further Amended Statement of Claim.
2.On or before 4.00pm, Monday, 18 December 2023, the Applicant shall file and serve a Further Amended Statement of Claim in the form of the draft dated 6 December 2023.
3.The costs of the amendment and this application shall be reserved.
4.The parties confer and propose consent orders regarding preparation of the matter for trial.
5.Liberty to apply and costs reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
(revised from transcript)JUDGE FORBES
In the substantive proceeding the applicant alleges, inter alia, that the respondent, her former employer, took adverse action against her in contravention of the Fair Work Act 2009 (Cth) (the FW Act). The applicant seeks relief against the respondent for those contraventions and other ancillary causes of action.
It is not presently necessary to articulate the full gamut of allegations made by the applicant. Suffice to say, the allegations are extensive, complex and are the subject of a lengthy statement of claim.
The respondent has raised concerns about the statement of claim, alleging among other things that it fails to plead material facts sufficient to found a cause of action. A number of those concerns have merit, which the applicant has sought to address by amendment. Notwithstanding amendment, the respondent maintains that the pleading remains deficient and liable to be struck out in whole or part.
By way of an application dated 17 November 2023, the applicant now seeks leave to amend her amended statement of claim dated 25 August 2023 and also her Form 2 application. Since the commencement of this application, the applicant has proposed a Further Amended Statement of Claim (FASOC) in the form of a draft dated 6 December 2023. The respondent opposes the grant of leave to file that amended pleading.
Mr Felman KC prosecuted the application on behalf of the applicant. Mr Rinaldi of counsel appeared for the respondent. Each of the parties filed written outlines of submissions and developed them orally at the hearing. I have read and considered the parties’ submissions and considered relevant authorities to which I was taken.
Pleadings must disclose a reasonable cause of action against a party against whom the proceeding is brought. A pleading must state the material facts necessary to establish that the cause of action and the relief sought have a reasonable prospect of success. A material fact is one the proof of which is essential to the existence of the cause of action or defence a party wishes to advance[1].
[1] Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 246-247 per Wilson J
It is well-established that a reasonable cause of action is one that has some chance of success if regard is had only to the allegations and the pleadings relied upon[2]. A proper pleading must contain those facts that are necessary for formulating a complete cause of action[3].
[2] Wride v Schultz [2004] FCAFC 216 at [25]
[3] H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242 at 246
A respondent is entitled to understand the case they must meet before a matter goes to trial[4]. The authorities make clear that in proceedings of this kind, which are civil penalty proceedings under the FW Act, it is especially important for the party accused of the contravention to know precisely the case that is made against them[5]. Pleadings must be sufficient to meet that purpose. A pleading which is unduly vague or ambiguous or is evasive or has potential to cause prejudice or embarrassment or delay in a proceeding or fails to disclose a reasonable cause of action is one that is liable to be struck out[6].
[4] Dare v Pulham (1982) 148 CLR 658 at 664; Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286
[5] Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298 at [63] per Logan, Bromberg and Katzmann JJ
[6] Rule 16.02(1) of the Federal Court Rules 2011 (Cth); Fair Work Ombudsman v Eastern Colour Pty Ltd (2001) 209 IR 263 at [18] per Collier J
A number of defects have been raised by the respondent in relation to the proposed pleading, including whether certain alleged causes of action can in fact succeed. It is not necessary to set those out but they were addressed in the written submissions and were the subject of argument during the application. It may well be that ultimately at trial after all the evidence has been heard the respondent will be successful in relation to some of issues it raises. But if the question of leave is to be approached from the perspective of whether the pleading is amenable to being struck out, the Court must always proceed cautiously.
The question has been raised about the extent to which the Court should - or should not -concern itself with the niceties of pleadings. Whilst this Court is not a court of strict pleadings, it is conventional in adverse action cases for the Court to require pleadings which are sufficient to enable a respondent to be on notice of the case it is to meet and the way in which that case is to be put by the applicant. The statutory presumption in s 360 of the FW Act, the onus on the respondent to disprove the alleged prohibited reason for its conduct and the risk of civil penalties are good enough reasons for the claim to be properly pleaded and particularised[7].
[7] Sabapathy v Jetstar Airways [2021] FCAFC 25 per Logan and Katzmann JJ at [36]-[42]
But there is a certain degree of latitude which is allowed in this Court when one has regard, as I must, to the nature of the overarching purpose of civil practice and procedure which governs all proceedings in the Court and determinations of the Court, including applications of this kind.
Sections 190 to 192 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) set out the overarching purpose of civil practice and procedure provisions. The overarching purpose of civil practice and procedure in this Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible[8]. That includes seeking to attain a number of important objectives, including the efficient use of the judicial and administrative resources of the Court, efficient disposal of the Court's overall caseload, disposal of all proceedings in a timely manner and the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. Where possible, the Court and the parties should avoid matters of legal technicality unless those are necessary to avoid injustice being done or where it is necessary, as I say, to ensure that a respondent is on notice of the case they have to meet.
[8] See also rule 1.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)
Having considered the amendments in the applicant's FASOC, I am satisfied that each of them does raise an arguable case. I say nothing about the strength of that case other than it is not unarguable nor is it without some prospects of success. At the end of the day, it seems to me that the issues which have been the subject of debate today are ones that cannot be determined at an interlocutory stage - they are dependent upon the evidence as it falls out at trial.
The decision of Jessup J in Arnett-Somerville v Monash Health [2016] FCA 1451 (Monash Health) assumed some prominence in the debate between the parties today. In that case his Honour made a number of observations about whether an employee’s subjective feelings in response to the conduct of an employer are capable of constituting adverse action. The respondent here says many of the applicant’s allegations in the FASOC assert a subjective response and are therefore doomed to failure.
It is to be recalled that Jessup J made findings after a full contested trial. It was not a pleading dispute. What his Honour found was that the subjective response of the applicant in that particular case was not such as to give rise to or cross the threshold of adverse action. However, his Honour made that finding after hearing all the evidence at trial and having observed all the witnesses. The context of what was said and done is all important.
Many of the complaints raised by the applicant in this case which are asserted to be instances of adverse action may fall into a similar category as those considered by Jessup J in Monash Health. However, whether the pleaded facts of the various instances of bullying and its consequences for the applicant amounts to or does not amount to an adverse action or injury in her employment is not a matter I can determine on the pleadings. Those are matters for trial.
I am satisfied that there is sufficient particularisation in the pleading to put the respondent on notice as to the way in which the case is going to be put and the evidence that is going to be adduced in support of those allegations. For that reason, I will grant leave to allow the FASOC in the form of the draft as at 6 December 2023 to be filed.
I will briefly now turn to the question of costs of this application. The respondent seeks its costs on the basis that the grant of leave to the applicant establishes the deficiency in its earlier pleading. The respondent says that it will be put to additional costs in repleading its defence and that certain costs incurred to date will be thrown away. The respondent also says that the applicant failed to respond to informal offers to amend its pleadings, such that the current application was brought unnecessarily.
I have decided to reserve the costs of this application for the following reason. The nature of adverse action cases under the FW Act can vary greatly, but many are complex and involve multiple allegations of complaints and adverse action for sometimes multiple prohibited reasons. It seems to me that it is routine rather than exceptional for complex cases to end up in pleadings disputes of this kind. The pleading dispute that resulted in this application seems to me to be an inevitable consequence of a complex claim.
I am required to apply section 570 of the FW Act in determining this costs question. The Court only has jurisdiction to award costs if one of the limbs of s 570(2) are satisfied. There is ample authority, including Tucker v The State of Victoria (No. 2) [2021] VSCA 182, which addresses the approach the Court should take in relation to the application of s 570(2)(b). My approach is guided by the considerations in that matter.
Moreover, in Ryan v Primesafe (No. 2) (2015) 323 ALR 107 Mortimer J (as her Honour then was) spoke to the policy considerations relevant to the operation of s 570. As has commonly been said, the policy behind s 570 is to ensure that the spectre of costs being awarded against an unsuccessful claimant does not loom so large in the mind of potential applicants that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. It is designed to ensure respondents are equally free to pursue arguable legal and factual responses to the claims made against them.
I am informed that the respondent made an offer to consider the amended statement of claim if the applicant agreed to pay its costs thrown away. A failure to accept an offer of compromise is, of course, capable of constituting an unreasonable act or omission for the purposes of s 570(2) of the Act. However, in the circumstances I do not see the applicant’s rejection of that offer as unreasonable. As Mr Felman KC said, the way in which the offer was expressed conveyed a demand to pay costs in consideration for which the respondent offered to consider the proposed amendment. It was not unreasonable for that applicant not to agree, as the payment of costs would not necessarily have avoided this application.
Whilst section 570 weighs in favour of me making no order for costs in relation to this application, I am minded to reserve the costs in light of the fact that it may well be, in due course, that the causes of action pleaded in the FASOC are unsuccessful for the reasons articulated by Mr Rinaldi. In the event that those pleaded causes of action do not succeed, particularly if they are found not to have a proper legal basis, the respondent will no doubt remind me of this day. In the meantime, I propose to reserve the costs of this application and they will be dealt with at final hearing.
The parties should otherwise confer and provide consent orders for this matter to be prepared for trial.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 15 January 2024
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