Salsano v Cemento Group Pty Ltd
[2019] FCCA 2728
•27 September 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SALSANO v CEMENTO GROUP PTY LTD | [2019] FCCA 2728 |
| Catchwords: INDUSTRIAL LAW – PRACTICE AND PROCEDURE – Application to dismiss summarily proceeding in which applicant claims unpaid wages on the grounds the Federal Circuit Court of Australia has no jurisdiction to hear claim, the applicant commenced proceedings when an undischarged bankrupt, and statement of claim as pleaded discloses no reasonable cause of action – Federal Circuit Court of Australia has jurisdiction – applicant’s claim for wages is not “property” that vested in trustee in bankruptcy – statement of claim sufficiently pleads arguable causes of action – application for summary dismissal dismissed. |
| Legislation: Bankruptcy Act 1966 (Cth), ss.58, 116, 139J(a), 139L, 139P, 139U |
| Cases cited: Re Gillies; Ex parte Official Trustee v Gillies (1993) 42 FCR 571 |
| Applicant: | BIANCO PAUL SALSANO |
| Respondent: | CEMENTO GROUP PTY LTD |
| File Number: | SYG 1853 of 2019 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 18 September 2019 |
| Date of Last Submission: | 18 September 2019 |
| Delivered at: | Sydney |
| Delivered on: | 27 September 2019 |
REPRESENTATION
| Applicant in person |
| Solicitors for the Respondent: | Ms U Zafiris of Urania Zafiris Solicitors |
THE COURT ORDERS THAT
The respondent’s application to summarily dismiss the proceeding is dismissed.
E & S Projects Pty Ltd is substituted for Cemento Group Pty Ltd as the respondent.
By 25 October 2019 the applicant file and serve an affidavit made by him, all other affidavits, and other documents on which he intends to rely.
THE COURT NOTES THAT
In his affidavit the applicant is required to file and serve pursuant to order 3, the applicant should do the following:
(a)Set out the evidence the applicant will submit constitutes the agreement pursuant to which the applicant commenced the employment alleged in paragraph 5 of the statement of claim. If the agreement is said to have been made, or partly made, in a conversation or in conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversation or conversations occurred, the place at which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the agreement is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(b)Set out the evidence the applicant will submit constitutes the agreement to pay alleged in paragraph 6 of the statement of claim. If the agreement is said to have been made, or partly made, in a conversation or conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversation or conversations occurred, the place at which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the agreement is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(c)Describe the work identified in paragraph 7 of the statement of claim by reference to the date on which and place at which the applicant worked, the nature of the work the applicant performed, and the time over which the applicant performed the work.
(d)Set out the means by which the applicant demanded wages, as alleged in the third dot point of the particulars to paragraph 8 of the statement of claim. If the demand is said to have been made, or partly made, in a conversation or in conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversation or conversations occurred, the place at which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the demand is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(e)Set out the means by which the applicant says he was dismissed, as alleged in paragraph 9 of the statement of claim. If the dismissal is said to have been made, or partly made, in a conversation or conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversation or conversations occurred, the date or dates on which the conversations occurred, the place at which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the dismissal is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(f)Set out the evidence the applicant will submit constitutes the agreement alleged in paragraph 17 of the statement of claim. If the agreement is said to have been made, or partly made, in a conversation or in conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the agreement is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(g)Set out evidence in relation to the payments alleged in paragraph 18, including evidence of any conversations in relation to those payments and documents evidencing the payments.
(h)Identify each of the discussions alleged in paragraph 21 of the statement of claim and, in relation to each discussion, identify the persons who participated in the discussion, the date on which the discussion occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the discussion is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
(i)Set out the evidence the applicant will submit constitutes the agreement pursuant to which the applicant commenced the employment alleged in paragraph 23 of the statement of claim. If the agreement is said to have been made, or partly made, in a conversation or in conversations, the affidavit should identify the persons who participated in the conversation or conversations, the date or dates on which the conversations occurred, the place at which the conversation or conversations occurred, and set out in direct speech the effect of the words spoken. To the extent the applicant alleges the agreement is in writing or partly in writing, the affidavit should describe the contents of the writing and, if in the applicant’s possession, the writing should be annexed to the affidavit.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1853 of 2019
| BIANCO PAUL SALSANO |
Applicant
And
| CEMENTO GROUP PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
On 19 July 2019 the applicant, Mr Salsano, filed an application and a statement of claim in which he claims the respondent (Cemento) failed to pay to him wages for work Mr Salsano performed as an employee of Cemento.
The matter came before me on a first court date on 13 August 2019. Mr Salsano, who is not legally represented, appeared on his own behalf, but there was no appearance by or on behalf of Cemento. I adjourned the matter for directions on 3 September 2019.
On 2 September 2019 Cemento filed a “Reply” in which it contended that at no time was Mr Salsano an employee of Cemento or of E & S Projects Pty Ltd; that the proceeding Mr Salsano brought is vexatious, and Mr Salsano’s “pleadings are defective pursuant to section 116” of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act). In the particulars to this last contention it is claimed that at the time Mr Salsano commenced the proceeding he was an undischarged bankrupt, and he commenced the proceeding without the consent of his trustee in bankruptcy.[1]
[1] Cemento also filed an affidavit made by Mr Salsano’s father, Mr Enzo John Salsano.
At the directions hearing on 3 September 2019 Mr Salsano appeared on his own behalf and Mr Pappas appeared for Cemento. I explained to Mr Salsano that Cemento intended to apply to dismiss the proceeding. I also informed him that he might wish to consider whether he has sued the correct respondent. I set the matter down on 18 September 2019 for the hearing of an application by Cemento to summarily dismiss the proceeding. I also directed the parties file and serve all affidavits on which they each intend to rely.
Pursuant to the directions I made on 3 September 2019 Mr Salsano filed an affidavit to which he annexes a large volume of documents. In that affidavit he described the respondent as “E & S Projects Pty Ltd” (ESP) and, in paragraph 1 of his affidavit, Mr Salsano requests that Cemento be removed as the respondent and replaced by ESP. Mr Salsano also filed an affidavit made by his uncle, Mr Donato Peter Salsano. Cemento did not file any affidavits but instead filed a document titled “Outline of Submissions on Behalf of the Respondent”.
At the hearing on 18 September 2019 Salsano confirmed he intended that ESP, rather than Cemento, be the respondent. Ms Zafiris, who appeared for Cemento, did not oppose my making an order substituting ESP for Cemento as the respondent. I indicated that I would make the appropriate order when I make orders in relation to Cemento’s application for summary dismissal of Mr Salsano’s claims.
In these reasons for judgment I consider whether, on the grounds submitted by Cemento at the hearing before me on 18 September 2019, the proceeding Mr Salsano commenced should be summarily dismissed. Before I consider those grounds, it would be useful to set out the claims Mr Salsano makes in his statement of claim.
Claims made in statement of claim
In his statement of claim Mr Salsano alleges as follows:
a)On 20 September 2017 Mr Salsano commenced employment with “the director Enzo Salsano of Cemento Group Pty Ltd at Rosebury”.[2]
b)Mr Salsano agreed with Enzo Salsano and his mother, Tina Salsano (who is also a director of Cemento), that Mr Salsano’s pay of $1,586.46 a week would be “proportionately saved by Enzo Salsano” into a bank account.[3]
c)Between 20 September 2017 and 28 September 2018, while employed by Cemento, Mr Salsano had been actively involved in many areas which are identified. These include as a building and construction hand, a building supervisor, an “IT Website development”, and an office administrator.[4]
d)On 25 September 2018 Mr Salsano demanded his wages.[5]
e)On 28 September 2018 Mr Salsano was dismissed from his employment.[6]
f)On 6 March 2019 Mr Salsano departed Sydney for Italy after “the employer had agreed to a settlement and compensation as a lump sum” of €200,000.[7]
g)Payments of $5,000 were made “by the employer’s account” on each of 27 Mach 2019, 29 April 2019 and 14 May 2019, and a payment of $3,000 was made “by the employer’s account” on 3 June 2019.[8]
h)Mr Salsano had many discussions with “the employer . . . regarding the agreed arrangement”, but these “ended resulting in upsetting the applicant”.[9]
i)After he returned from Europe on 10 June 2019 Mr Salsano again commenced employment during which he promptly raised the question of payment of wages.[10]
[2] Statement of claim, [5]
[3] Statement of claim, [6]
[4] Statement of claim, [7]
[5] Statement of claim, [8]
[6] Statement of claim, [9]
[7] Statement of claim, [17]
[8] Statement of claim, [18]
[9] Statement of claim, [21]
[10] Statement of claim, [23]
Cemento’s submissions
In its written submissions Cemento submits as follows:
a)Mr Salsano failed to disclose in his application that he is an undisclosed bankrupt. Cemento refers to s.139U of the Bankruptcy Act and submits Mr Salsano failed to disclose to his trustee in bankruptcy the income he claims in this proceeding he has not been paid.
b)Mr Salsano, in his application and statement of claim, raises many matters and complaints that do not come within this Court’s jurisdiction.
c)Mr Salsano’s claim manifests “a family dispute cloaked as an employment matter, in circumstances where an adult son is seeking financial support from his parents”.
d)Mr Salsano “has failed to establish in these proceedings that there was an employment contract between him and the Respondent, the terms of such alleged contract, the declaration of such alleged employment and income to his Bankruptcy Trustee in accordance with his statutory obligations and proof of his entitlement to Level 8, CW/ECW Fair Work Award Rates”.
At the hearing before me Ms Zafiris confirmed that Cemento’s application for summary dismissal was based on the statement of claim as currently pleaded. She did not invite me to consider the affidavits Mr Salsano filed.
Jurisdiction
Mr Salsano’s claim, as currently pleaded, is a claim for the payment of wages he alleges accrued for work he performed under a contract of employment he originally alleges he entered into with Cemento but now wishes to allege he entered into with ESP. Although in one paragraph of the statement of claim Mr Salsano alleges he exercised a workplace right, Mr Salsano does not allege any contravention of the Fair Work Act 2009 (Cth) (FW Act). That does not necessarily mean, however, that this Court does not have jurisdiction to hear Mr Salsano’s claims. This Court also has jurisdiction in relation to a matter arising under the FW Act where an applicant, being a “national system employer or a national system employee”, applies under s.543 of the FW Act to this Court “to enforce an entitlement of the employer or employee arising under subsection 542(1)”. Section 542 of the FW Act provides:
(1) For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force from time to time, also has effect as an entitlement of the employer or employee under this Act.
(2) The entitlement has effect under this Act subject to any modifications, by a law of the Commonwealth (including this Act or a fair work instrument), a State or a Territory, of the safety net contractual entitlement.
The expression “safety net contractual entitlement” is defined in s.12 of the FW Act as “an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in” the NES and modern awards. In other words, “if a provision of a contract of employment replicates, or improves upon, the NES or a modern award in relation to matters such as wages, leave entitlements or notice of termination, it can be treated as a safety net contractual entitlement”.[11]
[11] Creighton & Stewart’s Labour Law, sixth edition, 2016, page 618, [19.26]
The effect of s.543 of the FW Act, then, is to confer, where it applies, power on this Court to award any remedies that could be sought at common law for breach of contract where the breach that is alleged is the failure by an employer to pay wages.
That there is a family relationship between Mr Salsano and the directors of Cemento, and Mr Salsano’s claim occurs in the context of a family dispute between him and directors, does not by itself deny Mr Salsano’s claims as a claim for the payment of wages under an alleged contract of employment. Nor does the fact that Mr Salsano’s claims include a claim under an alleged settlement of a claim for wages necessarily deny Mr Salsano’s claims the character of a claim for wages.
I am satisfied this Court has jurisdiction to consider Mr Salsano’s claims.
Relevance of Mr Salsano’s bankruptcy
It is common ground that Mr Salsano was made bankrupt on 15 June 2017, which is before the day on which Mr Salsano in his statement of claim alleges he commenced employment. The relevance of that fact is that if, as Mr Salsano alleges, he entered into a contract of employment and performed work under that contract, any income to which he may be entitled under the contract would not vest in his trustee of bankruptcy under s.58 of the Bankruptcy Act, and would, therefore, not be “property” divisible among Mr Salsano’s creditors under s.116 of the Bankruptcy Act. Income that a bankrupt derives after he or she becomes bankrupt does not vest in the trustee in bankruptcy, but is regulated by the provisions contained in of Div. 4B of Part VI of the Bankruptcy Act. One of the objects of Div. 4B is to “require a bankrupt who derives income during the bankruptcy to pay contribution towards the bankrupt’s estate”.[12] A central provision is s.139P of the Bankruptcy Act which provides:
(1)Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment exceeds the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is liable to pay to the trustee a contribution in respect of that period.
(2)Subject to section 139Q, if the income that a bankrupt is likely to derive during a contribution assessment period as assessed by the trustee under an original assessment does not exceed the actual income threshold amount applicable in relation to the bankrupt when that assessment is made, the bankrupt is not liable to, but may if he or she so wishes, pay to the trustee a contribution in respect of that period.
[12] Bankruptcy Act, s.139J(a)
In Re Gillies; Ex parte Official Trustee v Gillies, [13] French J (as his Honour then was) held that any after acquired property that is “income” within the meaning of s.139L of the Bankruptcy Act is excluded from the operation of s.58 and s.116 of the Act, and is instead subject to the provisions Div.4B of Part VI of the Bankruptcy Act. His Honour said:[14]
It is true that the after-acquired property to which ss.58 and 116 apply is defined widely enough to encompass income. However, in my opinion, the legislative scheme now in place is quite inconsistent with the application of those provisions to after-acquired income. This follows from the comprehensive scheme embodied in Division 4B which approaches a code for dealing with after-acquired income of the bankrupt. There is nothing in the extrinsic material to support a change in the approach to after-acquired income which would bring it within after-acquired property vesting in the trustee. In my opinion such income does not vest in the trustee.
[13] (1993) 42 FCR 571
[14] (1993) 42 FCR 571, at page 577
It follows that Mr Salsano was not obliged to seek his trustee’s permission to sue for wages to which he claims he became entitled under an employment contract he claims he made after he became bankrupt; and the statement of claim is not liable to be struck out because it does not allege Mr Salsano obtained his trustee’s consent to commence the proceedings.
It is also common ground that Mr Salsano has not informed his trustee of bankruptcy of his claim for wages. That, however, has no bearing to on Mr Salsano’s tile to maintain a claim for wages. It may be that if Mr Salsano succeeds in his claims, and he is paid compensation for the wages he claimed he earned but which have not been paid, he would have to disclose that to the trustee. But Cemento denies it or ESP ever employed Mr Salsano; and for that reason, there would appear to be no obligation by Mr Salsano to disclose his claim to his trustee.
The statement of claim
Mr Salsano is not legally represented, and the statement of claim reflects that fact. That, however, does not necessarily mean it does not plead material facts that disclose a reasonable cause of action. In my opinion, the statement of claim sufficiently pleads the elements of a cause of action for a breach of contract based on the failure to pay wages. It alleges an employment contract, an agreement to pay at least $1,586.46 per week, and the failure by Cemento to pay that amount. If the applicant were to prove the matters alleged in the statement of claim, he would have reasonable prospects of obtaining some relief.
It is the case, however, that the statement of claim lacks particularity. It does not, for example, allege how the contract of employment came into being – whether it is express or implied, or whether to the extent it is express it was made orally or in writing. It does not clearly allege the term of that employment contract relating to the wages it is alleged Cemento agreed it would pay to Mr Salsano. And it does not describe with any particularity the work Mr Salsano claims he performed.
In these circumstances, it would be open to me to strike out all or part of the statement of claim, and permit Ms Salsano to file an amended statement of claim, or to require Mr Salsano provide further and better particulars. Given that Mr Salsano is not legally represented, the prospects of Mr Salsano being able to plead his case properly or provide particulars to the standard of a competent lawyer would not be great. In my opinion, the most convenient course would be to require Mr Salsano file all his evidence on which he intends to rely and to give ESP an opportunity to consider whether, given the evidence on which Mr Salsano intends to rely, it should apply for summary dismissal.
Conclusion and disposition
I propose to order that Cemento’s application to summarily dismiss the proceeding be dismissed, ESP be substituted for Cemento as the respondent and Mr Salsano file within four weeks all evidence on which he intends to rely. Because Mr Salsano is not legally represented, I propose to include a note in the orders I propose to make of the matters Mr Salsano should address in his affidavit. I will also set the matter down for further directions at a time and date convenient to the parties.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 27 September 2019
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