Scott v Steritech Pty Ltd

Case [2024] FCA 933

FEDERAL COURT OF AUSTRALIA

Scott v Steritech Pty Ltd [2024] FCA 933

Application for leave to appeal from: Scott v Steritech Pty Ltd [2023] FCA 1401
File number: QUD 524 of 2023
Judgment of: KENNETT J
Date of judgment: 21 August 2024
Catchwords:  PRACTICE AND PROCEDURE – application for leave to appeal – where primary judge struck out applicant’s statement of claim under r 16.21(f) of Federal Court Rules 2011 (Cth) (Rules) – where primary judge summarily dismissed applicant’s proceeding under r 26.01(1)(d) of Rules – where primary judge’s decision practically determined the rights of the parties – whether arguable that primary judge erred in finding that the applicant’s claim under the Fair Work Act 2009 (Cth) was an abuse of process because it was barred by a deed of release – whether arguable that primary judge erred in finding that the Federal Court had no jurisdiction to decide the claim for common law damages because the claim was “colourable” in the sense described in Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 276 CLR 216
Legislation:

Constitution s 76

Fair Work Act 2009 (Cth) s 45, 50, 340, 545, 546, 570

Federal Court of Australia Act 1976 (Cth) s 24

Federal Court Rules 2011 (Cth) r 16.21, r 26.01

Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 237
Cases cited:

Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212

Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 276 CLR 216

Grant v John Grant and Sons Pty Ltd (1954) 91 CLR 112

Hastwell v Kott Gunning [2021] FCAFC 70

Protheroe v Protheroe [2023] NSWCA 328

Rana v Google Inc [2017] FCAFC 156

Sarina v Fairfax Media Publications Pty Ltd [2018] FCAFC 190; 365 ALR 15

Scott v Steritech Pty Ltd [2023] FCA 1401

Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507

Wilson v State of Victoria [2023] FCAFC 204
Division: Fair Work Division
Registry: Queensland
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 38
Date of last submission: 8 May 2024
Date of hearing: Determined on the papers
Counsel for the Applicant: M Black
Solicitor for the Applicant: Queensland Workplace & Workplace Injury Law
Counsel for the Respondent: S Mackie
Solicitor for the Respondent: Ai Group Workplace Lawyers

 

ORDERS

QUD 524 of 2023
BETWEEN:

MICHAEL SHANE SCOTT

Applicant
AND:

STERITECH PTY LTD

Respondent

ORDER MADE BY:

KENNETT J

DATE OF ORDER:

21 AUGUST 2024

THE COURT ORDERS THAT:

1.The applicant have leave to appeal from the orders in Proceeding No QUD236/2022 pronounced on 14 November 2023.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

KENNETT J:

  1. This is an application for leave to appeal from the judgment in Scott v Steritech Pty Ltd [2023] FCA 1401 (primary judgment or J). The applicant applied for compensation under s 545 of the Fair Work Act 2009 (Cth) (

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AGLC
Scott v Steritech Pty Ltd [2024] FCA 933
Case
[2024] FCA 933
Decision Date

CaseChat Overview and Summary

The applicant, who was formerly employed by the respondent, applied for leave to appeal against the primary judgment of the Federal Court of Australia. The primary judge had struck out the applicant's statement of claim under r 16.21(f) of the Federal Court Rules 2011 and summarily dismissed the proceeding under r 26.01(1)(d). The applicant's claim was that his employment had been terminated because of his exercise of workplace rights, contrary to the Fair Work Act 2009 (Cth) (FW Act). The primary judge found that the claim was barred by a deed of release entered into between the parties and that the Court lacked jurisdiction to hear the applicant's common law claim because the FW Act claim was "colourable" in the sense described in Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 276 CLR 216. The applicant argued that there was a serious prospect that the primary judge erred in her interpretation of the release clause, and that the Court's jurisdiction was properly invoked to hear his common law claim. The parties consented to the matter being resolved on the papers.

The applicant's first proposed ground of appeal was that the primary judge erred in finding that the claim under the FW Act was barred by the deed of release. The applicant submitted that the release clause was broad and the circumstances of its execution should be considered. The primary judge had not considered the context in which the deed was agreed, nor the possibility that the respondent should be restrained from relying on its literal language. The respondent submitted that the applicant could have led evidence on the interlocutory application, but the primary judge's timetabling orders did not provide for the filing of evidence. There is therefore substance in the applicant's submission that the matter was not appropriately decided on a strike-out and summary dismissal application. The applicant's second proposed ground of appeal was that the primary judge misapplied the concept of a "colourable" claim or wrongly found that the claim was "colourable". The Court found that there was a serious prospect that the primary judge erred in her interpretation of the release clause and that the Court's jurisdiction was properly invoked to hear the applicant's common law claim.

The applicant has leave to appeal from the orders in Proceeding No QUD236/2022 pronounced on 14 November 2023. The parties jointly contacted the Court to indicate that they had consented to this matter being resolved on the papers.

Orders

Orders of the court

1. The applicant have leave to appeal from the orders in Proceeding No QUD236/2022 pronounced on 14 November 2023.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

On 1 June 2024, the parties jointly contacted my Chambers to indicate that they had consented to this matter being resolved on the papers.BACKGROUND The primary judgment contains a summary of the facts and the procedural history of this matter (J[5]-J[15]). What follows is a brief and high-level summary of those facts for the purposes of deciding this application. The applicant was employed by the respondent between 1 April 2003 and 7 August 2018, when the respondent terminated his employment, purportedly because his position was redundant. On 8 July 2019 the applicant sued the respondent in what was then the Federal Circuit Court (the Circuit Court proceeding). His claims were articulated in a statement of claim which was filed on 22 November 2019. He alleged that the decision to terminate his employment:(a)contravened various clauses of an applicable award and therefore contravened s 45 of the FW Act;(b)breached an implied term of his employment contract; and(c)contravened s 340 of the FW Act in that his employment was terminated because of his exercise of workplace rights; The applicant sought compensation under s 545(2)(b) of the FW Act, or by way of damages in contract, in the sum of $414,544.00; pecuniary penalties under s 546 of the FW Act; and declarations. The applicant and the respondent settled the proceeding by entering into a deed of release on 21 May 2020 (deed). The deed obliged the respondent to pay the applicant $52,500 and treat that payment as an “eligible redundancy payment”. In exchange, the applicant provided the following release at cl 3(a):The Employee hereby releases and forever discharges the Company, its directors, officers, employees, servants, agents, related bodies corporate, predecessor companies and any of them from all actions, suits, claims, demands, rights, costs, complaints and other liabilities of any nature which the Employee now has or at any time may have, or but for the execution of this Deed, could or might have had against the Company, its directors, officers, servants, agents, related bodies corporate or any of them, whether known, unknown, or incapable of being known at the time of execution of this Deed, arising out of or in connection with the:(i) Employment Period; and(ii) Termination; and(iii) Proceedings; andany other matter whether or not referred to or concerning the same subject matter as that referred to in the Recitals to this Deed and whether arising at common law or in equity or under statute or otherwise as a result of any subsequent change in that law, including but not limited to any alleged breach of anti-discrimination legislation or anti-bullying legislation, save for any claims made under workers’ compensation or superannuation law. Clause 7(a) of the deed barred future proceedings by the applicant against the respondent in similar terms:Save by way of enforcement of this Deed, this Deed operates as an absolute bar to all actions, causes of actions [sic], proceedings, claims, accounts, demands, costs and expenses (including legal costs and expenses) threatened or brought or attempted to be brought by or in the name of the Employee against the Company, its directors, officers, servants, agents, related bodies corporate, or any of them arising out of or in connection with the:(i) Employment Period; and(ii) Termination; and(iii) Proceedings; andany other matter whether or not referred to or concerning the same subject matter as that referred to in the Recitals to this Deed and whether arising at common law or in equity or under statute, anti-discrimination law, anti-bullying law or otherwise or as a result of any subsequent change in that law, save for any claims made under workers’ compensation or superannuation law.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

This is an application for leave to appeal from the judgment in Scott v Steritech Pty Ltd [2023] FCA 1401 (primary judgment or J). The applicant applied for compensation under s 545 of the Fair Work Act 2009 (Cth) (FW Act) or, alternatively, damages for negligence. The primary judge struck out the applicant’s statement of claim under r 16.21(1)(f) of the Federal Court Rules 2011 (Cth) (Rules) and summarily dismissed the applicant’s proceeding under r 26.01(1)(d) of the Rules. In short, her Honour’s reasons were:(a)the claim under the FW Act was an abuse of process. The claim had been brought two years prior in the Federal Circuit Court of Australia and had been settled, which settlement included entry into a binding deed of release that barred future proceedings on the issues referred to therein; and(b)the Court had no jurisdiction to decide the applicant’s claim for common law damages because the claim brought under the FW Act was “colourable” (in the sense described in Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 276 CLR 216 (Citta Hobart)) and was therefore not capable of supporting the accrued jurisdiction necessary to bring the common law claim in this Court. Such decisions cannot be appealed without leave: s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act). That section confers a discretion on the Court to decide whether to grant leave to appeal. The applicant submits that his proposed grounds of appeal raise issues worthy of consideration by a Full Court, and that he will suffer injustice if he cannot appeal because the primary judgment has the practical effect of determining his rights. His solicitor swore an affidavit annexing a draft notice of appeal containing the following proposed grounds:1.The Court erred in finding that the Appellant’s claim under the Fair Work Act 2009 was barred by a Deed of Release dated 21 May 2020, because no such finding could or should have been made on a summary basis without a hearing of the relevant evidence.2.Further and alternatively, the Court erred in finding that the Court did not have jurisdiction to hear the Appellant’s common law claim as pleaded in the statement of claim because:a.The Court misapplied the concept of a “colourable” claim or wrongly found that the Appellant’s claim was “colourable”.b.The Court wrongly found that the Appellant’s common law claim was “invalid”.c.The Court’s jurisdiction was properly invoked and it had jurisdiction to hear and determine the Appellant’s common law claim even if the Fair Work Act 2009 claim was struck out. On 1 June 2024, the parties jointly contacted my Chambers to indicate that they had consented to this matter being resolved on the papers.BACKGROUND The primary judgment contains a summary of the facts and the procedural history of this matter (J[5]-J[15]). What follows is a brief and high-level summary of those facts for the purposes of deciding this application. The applicant was employed by the respondent between 1 April 2003 and 7 August 2018, when the respondent terminated his employment, purportedly because his position was redundant. On 8 July 2019 the applicant sued the respondent in what was then the Federal Circuit Court (the Circuit Court proceeding).

Ratio Decidendi

Legal Principle Established

These comments are relevant because the orders from which the applicant seeks leave to appeal brought his proceeding to an end. He submitted that the primary judgment “has the practical operation of finally determining the rights of the parties”. The respondent did not submit otherwise. The question whether there is sufficient doubt as to the correctness of the primary judgment to justify a grant of leave must, as the Court observed in Hastwell, be addressed in that context. CONSIDERATIONProposed ground 1 The release clause in the deed, which has been set out above, was expressed very broadly. Aside from the exemption relating to workers’ compensation law, it is clear that, read literally, it captured the present case. However, broadly expressed language in a release clause is to be construed in the light of the recitals that precede it and the “circumstances to which the instrument must have intended to apply” (in particular the dispute which existed between the parties): Sarina v Fairfax Media Publications Pty Ltd [2018] FCAFC 190; 365 ALR 15 at [20] (Sarina). In addition, circumstances can arise in which reliance on wide and general words in a deed of release is liable to be restrained in equity. These principles were enunciated in Grant v John Grant and Sons Pty Ltd (1954) 91 CLR 112 at 123-125; see also, more recently, Sarina at [20]-[21] and Protheroe v Protheroe [2023] NSWCA 328 at [38] (Meagher JA). The primary judge set out the relevant passage in Sarina (at [23]) but appears then to have relied on the full breadth of the release clause read according to its terms, without any canvassing of how (if at all) its meaning might be narrowed by matters arising from the context in which the deed was agreed (at [24]). This very likely reflects the fact that the applicant had led no evidence on the respondent’s interlocutory application. The affidavit of Mr Robertson, filed by the respondent in support of its application, merely recorded that there had been a mediation at which an in-principle agreement had been reached, followed by correspondence between the parties’ solicitors concerning the terms of the deed. Evidence concerning the discussions that led to the formulation and execution of the deed had the potential to affect the construction of the release clause or to raise questions as to whether the respondent should be restrained from relying on its literal language. Whether that is a serious prospect is difficult to assess without knowing what the evidence might be. There is therefore substance in the applicant’s submission that this was not an appropriate issue for determination on a strike-out and summary dismissal application. The respondent submits that it was open to the applicant to file any evidence on which he wanted to rely in response to that application. However, the timetabling orders made by the primary judge (on 5 August 2022 and 5 September 2022) made no provision for the filing of evidence on the interlocutory application. Even if they had done so, there is scope for argument that factual issues of central importance (involving potentially conflicting evidence of conversations) should not have been decided on an interlocutory application.