Simpson v Carroll Resources Pty Ltd
[2016] FCCA 2430
•20 September 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SIMPSON v CARROLL RESOURCES PTY LTD | [2016] FCCA 2430 |
| Catchwords: PRACTICE AND PROCEDURE – application to join a witness as a respondent – application made by the respondent – application made on the fourth day of a four-day trial – only one witness concluded when application made – unfair prejudice to the applicant if joinder granted. PRACTICE AND PROCEDURE – whether by refusing the joinder application an Anshun estoppel would arise – whether by refusing the joinder application a res judicata point would preclude any later bringing of an identical claim against the proposed new respondent. |
| Legislation: Fair Work Act 2009, ss.539, 545, 550 |
| Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 |
| Applicant: | STACEY SIMPSON |
| Respondent: | CARROLL RESOURCES PTY LTD (ACN 133 124 562) |
| File Number: | MLG 1800 of 2015 |
| Judgment of: | Judge Wilson |
| Hearing date: | 1 September 2016 |
| Date of Last Submission: | 1 September 2016 |
| Delivered at: | Melbourne |
| Orders pronounced: | 1 September 2016 |
| Reasons delivered on: | 20 September 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr M. Irving |
| Solicitors for the Applicant: | McDonald Murholme |
| Counsel for the Respondent: | Mr A. Alexsov |
| Solicitors for the Respondent: | MST Lawyers |
ORDERS
The application in a case filed by the respondent on 31 August 2016 is dismissed.
The matter is adjourned part-heard as follows:
(a)on 6 October 2016 at 10.00 a.m. with an estimated hearing time of two (2) days; and
(b)on 11 October 2016 at 2.15 p.m. with an estimated hearing time of half a day.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1800 of 2015
| STACEY SIMPSON |
Applicant
And
| CARROLL RESOURCES PTY LTD (ACN 133 124 562) |
Respondent
REASONS FOR JUDGMENT
This ruling
These are my reasons for dismissing the application in a case made by Carroll Resources Pty Ltd (“the respondent”) on 31 August 2016 to join Mr Paul Grixti as the second respondent to this proceeding.
Introduction
Shortly after 10.00 a.m. on the third day of the four days allocated for the trial of this proceeding, counsel for the respondent announced that his client needed to join a party not already involved in this litigation and that the trial could not proceed unless that party was joined.
To that point, despite the case being at an advanced point in terms of its estimated duration, only one witness, Ms Stacey Simpson
(“the applicant”), had completed her evidence. Both parties had provided detailed openings. A witness whose name was Mr Paul Grixti was giving evidence-in-chief in answer to questions put to him by counsel for the applicant.
By the end of the second day of the trial, Mr Grixti had given evidence about the circumstances in which a particular letter came into existence. That letter was of special significance in this litigation as it was the formal letter by which the termination of the employment of the applicant with the respondent was effected.[1]
[1] Affidavit of Stacey Simpson filed 29 April 2016 at Annexure “SS-28”.
Mr Grixti had been the general manager of the respondent at all relevant times, especially during the key events said to ground the adverse action claimed in this litigation. The ultimate controlling mind of the respondent was its single shareholder, Ms Anna Kasman.
Mr Grixti was answerable to Ms Kasman. The evidence revealed that Mr Grixti occupied a senior position within the operations of the respondent and that only Ms Kasman, as owner and controller of the respondent, was superior to him.
At the end of the second day of the trial, Mr Grixti had given evidence that a letter dated 23 June 2015 under his name and signature had been given to the applicant.[2] That letter was the basis of one of the applicant’s contentions about her termination. Mr Grixti was questioned about the circumstances in which that letter came into existence.
[2] Ibid.
The following questions were put to Mr Grixti in response to which he said the following -
About a month later, in November, did you have a conversation with Ms Kasman about Stacey Simpson whilst you were on leave?‑‑‑Correct. Yes, I did.
Approximately when was the conversation?‑‑‑It was – I – I believe it was around the week of 17 November because I was on annual leave moving house and I happened to be at the new house at the time, so it was about that time.
And did you call her or did she call you?‑‑‑She called me.
Okay. And what did she say: how did it commence?‑‑‑Well, just because she rang me late – you know, it was after 7 o’clock, and being in the new house where we live, getting phone reception was quite difficult so I was actually standing on the back veranda trying to get good reception. And it was all small talk initially and then I, basically, said, “What’s the problem?” And she said, “Oh, what’s your thoughts about Stacey Simpson?” I said, “I don’t know what you mean,” I said, “because she’s quite a good worker and I’m very happy with her performance.” And she says, “Oh, I just feel that she’s a bit of a troublemaker and I think she needs to – we need to get rid of her.” And I said, “No, I think you got that wrong.” And I said, “If – I don’t know what you mean by ‘troublemaker’, but,” I said, “if anyone is to go,” I said, “Sally Simpson – Sally Bennett would be the one to go.” And she said, “Why?” I said, “Because I – I honestly believe that if Stacey comes forward with any sort of complaints or information with regards to the team, I believe that Sally would be poking and prodding her and egging her along, so being her direct manager she has got to speak up for her.” So I said, “And plus, Sally, being the last one in, she would have to be the first one to go.”
…
Could I ask you about the meeting of 13 May 2015 …
…
This is a note of a meeting between yourself, Ms Phung-Lan, Mei Tru Gat and Stacey Simpson on 13 May 2015?‑‑‑Yes.
…
Right. Have you had any involvement in the creation of this document?‑‑‑No.
…
Were you aware that there have been redundancies at the company in the previous 24 hours?‑‑‑After the event, yes.
Okay. When you say “after the event”, when did you find out about the redundancies for the first time?‑‑‑After they were made redundant and gone from the premises.
And in terms of your involvement in the decision-making process leading up to that, or the proposal to make them redundant, what was your involvement?‑‑‑None, zero. I was not made aware at all.
…
And when did you cease employment there?‑‑‑Three months to the date after this one – after this meeting happened.
…
Other than in that email and in the conversation that I’ve just taken you to, did you make any direction to Ms Simpson in the two or three weeks leading up to this letter that, “You have to deal with this customer complaint, or customer complaints in general.”?‑‑‑No.
…
What direction, if any, was given to you by Ms Kasman to direct Ms Simpson to perform her duties and carry out customer complaints and council inspection duties?‑‑‑None.
If I take you to the next paragraph. On or about 9 June 2015, what direction, if any, were you given by Ms Kasman to engage the respondent’s solicitors to try and resolve the dispute with Ms Simpson?‑‑‑It wasn’t about resolving. It was about giving her a warning letter in order to manage her out of the business at that stage.
And by managing her out of the business, what do you mean by that?‑‑‑Finding excuses in order to eventually sack her.
…
And the phrase has gone from my mind. But I go back. Paragraph 27 – around 12 June 2015, what direction, if any, did you receive from Ms Kasman to work with the respondent’s solicitors to try and resolve the dispute with Ms Simpson?‑‑‑There was – there was no direction in resolving it. It was to get rid of her. I don’t believe – between 12 June and 22 June, I don’t even believe Ms Simpson was even working at that stage, if my memory serves me correctly. So I – I couldn’t be giving direction to perform those duties if she’s not there. So I don’t know where the – how that direction could come about.
…
Just dealing with that for a moment, on page 273 of the court book, was that the letter of dismissal?‑‑‑Yes, it was.
…
Is that signed by you?‑‑‑Yes, it is.
…
What was the real reason that Ms Simpson was dismissed?‑‑‑I don’t believe I actually know that – the answer to that question. I – I can’t answer for Ms Kasman.
…
Could I direct your attention to paragraph 11 of Ms Kasman’s affidavit, which is page 1369. And I think you might have touched on this or dealt with this answer broadly previously, but I just wanted to ask, at any time, on or around 9 June 2015, did Ms Kasman explain what outcome she was seeking in relation to Ms Simpson?‑‑‑She wasn’t referring to what outcome she wanted other than – I can’t – I can’t speak for what outcome she was trying to seek. But at the end of the day, what was being transcribed to me was she has to go.
And that was being conveyed by Ms Kasman?‑‑‑Yes.
Yes.
HIS HONOUR: Did you ever challenge Ms Kasman about the wisdom of that course?‑‑‑I had conversations with her. We had to be careful in the way we handled it. Yes.
…
Did you ever pursue with Ms Kasman the wisdom or otherwise of terminating what seems to be a good employee who was quite senior?‑‑‑Yes.
What did you say?‑‑‑That this department, and in particular, Ms Simpson, was a very valuable asset to the – to the company. And she just said, “I can’t have people like this working for my company.”
Like what?‑‑‑Speaking out.[3]
[3] Transcript of Proceedings, 30 August 2016 at pp.139-159.
It emerged, albeit fleetingly, that the letter dated 23 June 2015 had been drafted by the respondent’s solicitors, MST Lawyers, and was expressed in highly legal language even though it had been prepared under Mr Grixti’s name and was intended to be signed by him. Counsel for the respondent objected to questions that went to an exploration of the circumstances in which the respondent sought and obtained legal advice, complaining that any such questioning transgressed legal professional privilege. Mr Aleksov gave advanced warning that he wanted to debate the application of legal privilege to the line of questioning then being pursued by Mr Irving with Mr Grixti.
A little after 4.00 p.m. on the second day of the trial, it became apparent that both parties wanted to address me on the application of legal privilege to the evidence then being given by Mr Grixti about the circumstances in which the letter written by the respondent’s solicitors and dated 23 June 2015 had come into existence.
To put that debate into context, it is necessary to go back, chronologically, to a directions hearing I convened on 19 August 2016, approximately two weeks prior to the commencement of the trial of this proceeding. I called that directions hearing, rather than the parties asking for it, as a matter of prudent case management because I was concerned about the five-day estimate the parties had given for the duration of this case. During that directions hearing the parties said the trial would take four, not five, days. They flagged the existence of a dispute between them in relation to legal professional privilege.
Mr Aleksov submitted that it was not proper for me to hear that argument and then later for me to sit as the trial judge as I would in the process learn of the privileged information, so he said. I acceded to that request and requested Registrar David Ryan to hear and determine the privilege argument. With commendable speed, Registrar Ryan accommodated the parties by fixing the hearing of the privilege argument on the first available date that the Registrar was able to provide, 29 August 2016. As it happened, that date coincided with the morning of the first day of the trial in this proceeding. In view of the last-minute notification of that privilege issue, this Court did exceedingly well to accommodate the parties and to adjust to, then recalibrate from, the inconvenience occasioned by the last-minute notification of that privilege argument.
The debate on privilege was heard. Registrar Ryan ordered as follows –
1. The respondent produce to the applicant is (sic) Item 12 in Exhibit CN-1 to the Affidavit of Mr Ni affirmed 26 August 2016.
2. The Application filed on 16 August 2016 is otherwise dismissed.
3. No order as to costs.[4]
[4] Order of Registrar David Ryan dated 29 August 2016.
Returning to the close of the second day of the trial, it seemed as if the same privilege point was being agitated for a second time. I pursued with Mr Irving why he was exploring issues that had been the subject of a ruling about privilege. Mr Irving told me it was important for him to do so. Mr Aleksov persisted in his objection. At the close of the second day of the trial, I expected that in the morning of the third day
a detailed debate would unfold about issues relating to legal professional privilege.
Instead, immediately after this case was called on for the resumption of the trial, Mr Aleksov informed me that the evidence given by Mr Grixti the day earlier put him in such a position that the trial could not proceed. That seemed to me to be a rather dramatic overstatement of the position. The proposition given the day earlier by Mr Aleksov had indicated that a different skirmish was to be entertained, namely a privilege argument.
Upon probing with Mr Aleksov the details of his request, he told me that Mr Grixti had given evidence that could render Mr Grixti liable under accessorial liability principles of industrial law. Mr Aleksov submitted that it was essential for Mr Grixti to be joined as the
second respondent. I asked Mr Aleksov how he saw the proposed joinder affecting the further hearing of the trial. Candidly, Mr Aleksov conceded that any joinder of Mr Grixti would cause the trial to be adjourned so as to enable –
a)documents to be served upon Mr Grixti;
b)Mr Grixti to get advice;
c)Mr Grixti to file a response; and
d)Mr Grixti to prepare his defence to the joinder.
That suggested a delay in the resumption of this trial of several weeks, if not months, assuming my Court calendar permitted a resumed hearing during this calendar year.
Mr Aleksov made submissions without there being any formal application before the Court and without any affidavit material in support. He conceded that the shortness of time between his receipt of instructions and the commencement of the third day of the trial meant that he had not formulated in precise terms the proposed joinder application nor had he investigated in detail the importance of
Mr Grixti as a party as that issue had not been apparent prior to the resumption of the third day of the trial.
Mr Aleksov said he needed time to place on affidavit Mr Grixti’s significance at an evidentiary level. However, in debate I raised how the evidence then stood to that point, untested in cross-examination.
It was that Mr Grixti had given viva voce evidence to the effect that he was not involved at all in the decision to make the applicant redundant. He also gave viva voce evidence to the effect that he did not know why the applicant was dismissed and that he had no discussions with
Ms Kasman about the applicant beyond Ms Kasman’s instructions to get rid of the applicant.
Mr Aleksov submitted that such evidence was the opposite to the position expressed by Mr Grixti in his 10 June 2015 letter[5] and also the 23 June 2015 letter.
[5] Affidavit of Stacey Simpson filed 29 April 2016 at Annexure “SS-20”.
Mr Grixti gave evidence that he attended Court in response to a subpoena issued by the applicant as well as one issued by the respondent. He had not sworn an affidavit in the proceeding. Mr Grixti said he ceased employment with the respondent three months to the day following the 13 May 2015 meeting.
Mr Aleksov told me he had no formal warning that Mr Grixti would or even might have given the evidence he did, especially having regard to the likelihood that Mr Grixti had been involved in the decision to terminate the applicant’s employment in view of the contents of the letters dated 10 June 2015 and 23 June 2015.
Mr Aleksov sought a short time to enable him to properly prepare so as to bring and then argue the joinder application.
Unsurprisingly, Mr Irving opposed any delay to the trial.
He complained of the late making of the application to join Mr Grixti. Mr Irving submitted that Ms Simpson’s resources to run the trial were extremely tight. He submitted that liability attached for acts of the employer and on the viva voce evidence of Mr Grixti, Mr Grixti was nevertheless employed at the relevant time as the respondent’s
general manager so any liability could only attach if he aided and abetted, counselled or procured the impugned conduct of the employer. Mr Irving pointed to the self-evident unfairness that would flow from orders granting the joinder, particularly as the application was advanced on the third of a four-day trial, that the case would be placed on hold for some considerable time and that the applicant would be prejudiced by that delay in circumstances where she was blameless.
Close to midday on the third day of the trial, after having heard both counsel, I made orders requiring Mr Aleksov to file and serve an application in a case together with all supporting affidavit material including the form of the proposed joinder so that a proper debate could commence at 10.00 a.m. on the fourth day of the trial.[6]
[6] Order made by his Honour Judge Wilson on 31 August 2016.
It will at once be observed that by the fourth day of the four days allocated for the trial of this proceeding, the likely duration having been debated at length at the directions hearing held prior to the trial, one witness only had been completed, the applicant. The first half-day had been taken up with the privilege argument, the balance of the
first day had been taken up with openings, the applicant took less than a day and Mr Grixti took a little over an hour before his evidence was interrupted. The estimated duration of the trial was wildly inaccurate.
Between the time the proceeding was adjourned on the third day and the commencement of the fourth day (that ought to have been the final day of the whole trial) the respondent’s legal representatives prepared –
a)a proposed further amended response incorporating the proposed new allegations against Mr Grixti;
b)the affidavit of Mr James Sanders affirmed 31 August 2016;
c)the affidavit of Mr Chao Ni affirmed 31 August 2016;
d)the affidavit of Ms Anna Kasman affirmed 31 August 2016;
e)written submissions in support of the respondent’s application in a case to add Mr Grixti as a respondent;[7]
f)further submissions in support of the respondent’s application in the case to add Mr Grixti as a respondent;[8] and
g)
the respondent’s application in a case seeking an order that
“Mr Paul Grixti be joined as a second respondent to this proceeding pursuant to r 11.01 of the Federal Circuit Court Rule(sic) 2001 (Cth)”.[9]
[7] Submissions in support of application in a case to add Paul Grixti as a respondent dated 1 September 2016.
[8][9] Application in a case filed 31 August 2016 at p.2.
Court rules governing this joinder application
The respondent brought the joinder application under r.11.01 of the Federal Circuit Court Rules 2001 (Cth). In Mr Aleksov’s written submissions, he relied instead on r.11.02(2) of the Federal Circuit Court Rules. That rule permits an applicant or a respondent to apply to add a party but stipulates that leave of the court is required before doing so if the application is made after the first return date, as was the case here. However, that rule is silent on the criteria to be applied when determining whether leave should be granted or refused.
Mr Aleksov called in aid the equivalent provision of the
Federal Court Rules 2011(Cth). Rule 9.05 of the Federal Court Rules relates to joining parties. To that extent, it is similar to r.11.02 of the Federal Circuit Court Rules. However, r.9.05 of the Federal Court Rules differs markedly to r.11.02 of the Federal Circuit Court Rules. Rule 9.05 of the Federal Court Rules provides as follows –
Joinder of parties by Court order
(1)A party may apply to the Court for an order that a person be joined as a party to the proceeding if the person:
(a)ought to have been joined as a party to the proceeding; or
(b) is a person:
(i) whose cooperation might be required to enforce a judgment; or
(ii) whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined; or
(iii) who should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings.
(2)A person must not be added as an applicant without the person's consent.
(3)If a person is joined as a party under this rule, the start date of the proceeding for the person is the date on which the order is made.
(4)An application under subrule (1) need not be served on any person who was not served with a copy of the originating application.
Note The Court may make an order for any of the following:
(a)service of the order and any other document in the proceeding;
(b) amendment of a document in the proceeding;
(c) the filing of a notice of address for service by a party.
Where in a particular case the Federal Circuit Court Rules are insufficient or inappropriate, r.1.05 of the Federal Circuit Court Rules confers power on a judge of the Federal Circuit Court (me in this case) to apply the Federal Court Rules in whole or in part as necessary.
In this case, the provisions of r.11.02(2) of the Federal Circuit Court Rules are insufficient (as that word appears in r.1.05 of the
Federal Circuit Court Rules) because r.11.02 merely provides for the addition of a party but not the basis for the grant of such an order. In my view, r.9.05 of the Federal Court Rules addresses the question of joinder in a manner that is of greater sufficiency and appropriateness (to use the words of r.1.05 of the Federal Circuit Court Rules) than is the operative provision of r.11.02(2) and so I have applied the criteria of r.9.05 of the Federal Court Rules in this application.
Relevantly paraphrased, r.9.05(1)(b) of the Federal Court Rules permits a party in the shoes of the respondent in this case to apply that a person (here, Mr Grixti) be joined as a party to the proceeding if that person
(Mr Grixti) is a person whose joinder is necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined or is a person who should be joined as a party to enable the determination of a related dispute and, as result, would avoid multiplicity of proceedings.
Of the two grounds referred to in the rule, r.9.05(1)(b)(ii) of the
Federal Court Rules is the more relevant, namely, ensuring that each issue in dispute in the proceeding can be heard and finally disposed of.
The “issue in dispute” that the respondent sought to agitate was helpfully recorded by Mr Aleksov in the proposed further amended response.[10] In that proposed response, 41 additional paragraphs were proposed to be added. In his reply submission on the hearing of the application before me on the fourth day of the trial, Mr Aleksov abandoned paragraph 80 that read “Grixti did not know what were the reasons for Simpson’s dismissal”.[11]
[10] Affidavit of James Sanders filed 31 August 2016 at Annexure “JS-4”.
[11] Ibid.
Lengthy as the proposed further amended response was, it is important to record precisely how the respondent cast its case against Mr Grixti if granted leave to do so. Below, I have set out the proposed further amended response in terms –
ALLEGATIONS AGAINST GRIXTI
If, contrary to the denials of the First Respondent, the Court finds that the First Respondent took adverse action against the applicant for any of the alleged prohibited reasons, the
First Respondent says:
77.Mr Paul Grixti was first employed by the
First Respondent in around 2004 as the General Manager.
78.Grixti reported to Kasman in the performance of his duties.
79. Grixti did not have authority to dismiss Simpson.
80.Grixti did not know what were the reasons for Simpson’s dismissal.81.Grixti approached Kasman on or about 9 June 2015 to report to Kasman that Simpson had, inter alia, refused to perform Council Inspection duties and
Customer Complaints duties.
82.Kasman and Grixti telephoned Mr Chao Ni, the
First Respondent ‘s solicitor, to seek assistance in persuading Simpson to return to performing
Council Inspection duties and Customer Complaints duties.
83.On or around 9 June 2105, Grixti decided to convene a performance management meeting with Simpson to be conducted on 10 June 2015.
84.Grixti convened a performance management meeting with the Applicant scheduled for 10 June 2015.
85.On 9 June 2015, Grixti telephoned Ni at 5.10pm and had a conversation with Ni between 5.10pm and
5.17 pm.
86.In this telephone conversation with Ni, Grixti told Ni that:
(a) Grixti believed that the Applicant:
i.had not been attending stores to undertake her required duties; and
ii.had been leaving work early
(b) Grixti requested that Ni attend the performance management meeting scheduled for 3:00pm on 10 June 2015 between Mr Grixti;
(c) Grixti wanted Ni’s assistance to prepare a letter to be handed to the Applicant during the meeting to confirm the matters raised at the meeting.
87.At 6.14pm on 9 June 2015, Grixti sent an email to Ni with instructions as to the contents of the letter
(which became the Warning Letter)
88.At 11:15am on 10 June 2015, Grixti sent an email to Ni, forwarding an email sent by the Applicant to the First Respondent on 25 May 2015 advising that her team will not be able to manage the customer complaints or council inspections any longer.
89.At 11:27am on 10 June 2016, Grixti emailed Ni with further instructions on the timing of when the Applicant had arrived and left various stores between 25 May 2015 and 29 May 2015.
90.Ni drafted the Warning Letter on the basis of the instructions received from Grixti.
91.The instructions given to Ni in the Warning Letter reflected the matters of concern that Grixti had reported to Kasman on 9 June 2015.
92. Grixti signed the Warning Letter.
93. Grixti sent the Warning Letter to the applicant.
94.The performance management meeting took place on 10 June 2015.
95.Grixti attempted to give the Warning Letter to the applicant at the performance management meeting on 10 June 2015.
96.Grixti was advised by Ni to issue the Allegations Letter in response to the applicant’s conduct at the performance management meeting on 10 June 2015.
97. Grixti signed the Allegations Letter.
98. Grixti sent the Allegations Letter to the applicant.
99. Kasman was copied into the emails mentioned above.
100.Shortly after the performance management meeting on 10 June 2015, with the precise date and time unknown, Grixti telephoned Kasman and told Kasman of the events of the performance management meeting.
101.Upon the receipt of the First Solicitor Letter from the applicant, Grixti sent an email to Ni, copying Kasman, in which Grixti provided a response to the First Solicitor Letter as follows: “I believe with the information provided below (sic) gives a strong case for termination of her employment. Please call me to discuss before finalising your reply to
McDonald Murholme.”
102.The information provided below concerned Customer Complaints duties and Council Inspection duties.
103.At 7.14pm on 18 June 2015, Ni sent an email to Kasman and Grixti enclosing a draft letter in response to the First Solicitor Letter containing two options:
(a) Terminate Simpson’s employment.
(b) Provide her with a further opportunity to respond to the allegations against her.
104.At 12.28 am on 19 June 2015 Kasman replied to Ni’s email of 18 June 2015 stating “We need someone to actually do this job/role …Customers health and safety are very important to us … attending council inspections are very important which she refused to do…”.
105.In the email mentioned in the immediately preceding paragraph, Kasman asks Ni “what sort of response are we expecting from her?”
106.Kasman decided to give Simpson a further opportunity to respond.
107.On 22 June 2015, Grixti telephoned Ni telling Ni that Simpson had been looking for another job,
and discussing options of offering Simpson a payout.
108.On 23 June 2015, the first respondent received the Second Solicitor Letter.
109.At 4.13pm on 23 June 2015, Ni sent an email to Kasman and Grixti advising that Simpson continued to refuse to perform the Council Inspection and
Customer Complaints Duties.
110.At 4.57pm on 23 June 2015, Kasman sent an email to Ni telling him to proceed with the termination.
In the premises above:
111.The employment dispute between the applicant and the First Respondent arose because of Grixti’s report to Kasman in relation to Simpson not performing Council Inspection and Customer Complaints Duties.
112.Kasman relied on the report and advice of Grixti in deciding to commence a performance management process in relation to the applicant.
113.But for the report and advice of Grixti, Kasman would not have commenced a performance management process in relation to the applicant.
114.If there has been any contravention of a civil remedy provision by the First Respondent with respect to the Warning Letter, Grixti was involved in that contravention in that he procured, induced or was knowingly concerned in that contravention.
115.If there has been any contravention of a civil remedy provision by the First Respondent with respect to the Allegations Letter, Grixti was involved in that contravention in that he procured, induced or was knowingly concerned in that contravention.
116.If there has been any contravention of a civil remedy provision by the First Respondent with respect to the Second Allegations Letter, Grixti was involved in that contravention in that he procured, induced or was knowingly concerned in that contravention.
117.If there has been any contravention of a civil remedy provision by the First Respondent with respect to the Dismissal, Grixti was involved in that contravention in that he procured, induced or was knowingly concerned in that contravention.
118.If the applicant is entitled to any compensation by reason of any contravention of a civil remedy provision by the first respondent, it is appropriate that Grixti pay all or some of that amount.[12]
[12] Affidavit of James Sanders filed 31 August 2016 at Annexure “JS-4”.
Mr Grixti’s so-called change of position
Before turning to the way the case would have been cast had leave been granted, it is necessary to examine whether the respondent’s principal assertion that Mr Grixti for the first time in the afternoon of the second day of the trial raised a proposition that was inconsistent with the position he had adopted up to that point in time.
The gravamen of Mr Grixti’s viva voce evidence was to the effect that he had no involvement in the decision to terminate the employment of the applicant with the respondent, that the direction given by
Ms Kasman was to get rid of the applicant and that there was no discussion between he and Ms Kasman on the subject.
Mr Aleksov endeavoured to demonstrate that Mr Grixti’s position in the litigation, up to his evidence in the afternoon of the second day had at all times consistently pointed in one direction only, namely, that as general manager of the respondent he had in fact been involved in the termination of the employment of the applicant. So Mr Aleksov contended, when Mr Grixti gave a diametrically opposite version during his evidence-in-chief, not only did that raise fertile matters for Mr Aleksov’s cross-examination of Mr Grixti but it enlivened
Mr Grixti’s personal accessorial liability. That is how Mr Aleksov couched the submission, in any event.
It therefore became necessary to examine whether the evidence given by Mr Grixti was properly characterised as a change of his position.
It was necessary to undertake that task before any consideration was given to the question of the course that should be adopted next, assuming I concluded that Mr Grixti did in fact change his position when giving his viva voce evidence.
At the risk of stating the obvious, prior to his entering the witness box and giving his viva voce evidence, Mr Grixti had not previously given evidence in this case. He had not sworn any affidavit in this litigation. True, he had written correspondence that was exhibited to affidavits of other deponents. In addition, certain witnesses deposed to conversations involving Mr Grixti. As well, there was a document entitled “Summary of evidence of Paul Grixti”, the opening lines of which read “the applicant intends to adduce the following evidence from Paul Grixti, former General Manager of the Respondent”[13] yet
Mr Grixti had not been taken to specific paragraphs in that document and it was common ground that Mr Grixti’s attendance at Court had been secured by his compliance with subpoenas issued by the applicant as well as by the respondent.
[13] Summary of evidence of Paul Grixti filed by the applicant on 29 April 2016.
In addition, the respondent filed a summary of evidence it proposed to lead from Mr Grixti. That summary was in a single paragraph that read “[h]e was carrying out the instructions of Ms Anna Kasman in issuing the Warning Letter, the Allegations Letter, and the Termination Letter”.[14]
[14] Summary of evidence from Paul Grixti filed by the respondent on 19 August 2016.
Accordingly, the respondent sought to demonstrate that the position adopted by Mr Grixti prior to his giving evidence in this trial was of a particular nature. To that end, the respondent relied on the affidavits of Mr Ni, Ms Kasman and Mr Sanders, the swearing details of which have been set out above. As agreed by Mr Irving and Mr Aleksov,
I receive those affidavits limited to the determination of the joinder application and not beyond.
From the affidavit of Mr Sanders, the following evidence emerged –
a)on 16 August 2016 Mr Grixti declined to discuss this litigation with Mr Sanders; and
b)on 26 August 2016 Mr Grixti declined to discuss this litigation with Mr Sanders.
From the affidavit of Mr Ni, the following evidence emerged –
a)he was the solicitor at the firm retained by the respondent and he represented the respondent in this litigation;
b)on 9 June 2015 Mr Grixti and Ms Kasman telephoned Mr Ni about the applicant with their instructions about the applicant’s performance in her role with the respondent;
c)Mr Grixti sought Mr Ni’s assistance formulating a letter to go to the applicant at a meeting scheduled for 10 June 2015;
d)
Mr Ni requested instructions from Mr Grixti rather than from
Ms Kasman because Mr Grixti was familiar with Ms Simpson’s conduct;
e)after sending emails back and forth on 10 June 2015, Mr Ni settled the document that became what was called in this case “the first warning letter”;
f)
Mr Grixti, the applicant and Mr Ni met at 3.00 p.m. on
10 June 2015 for 45 minutes;
g)Mr Grixti, on advice from Mr Ni, instructed Mr Ni to draft what came to be known in this litigation as “the second warning letter”;[15]
[15] Affidavit of Stacey Simpson filed 29 April 2016 at Annexure “SS-24”.
h)
Mr Grixti, Ms Kasman and Mr Ni conferred over a letter dated
16 June 2015 from the applicant’s solicitors;
i)Ms Kasman instructed Mr Ni that she wanted to terminate the applicant’s employment;
j)Ms Kasman instructed Mr Ni to prepare the termination letter;
k)
Ms Kasman instructed Mr Ni to give the applicant until
22 June 2015 to provide a response to certain correspondence; and
l)Ms Kasman gave Mr Ni instructions to terminate the employment of the applicant with the respondent.
So far as Ms Kasman’s evidence was concerned on the hearing of this application, she affirmed that she was the sole shareholder of the respondent and was its “controlling mind”.[16] The following additional matters emerged from her affidavit –
a)Mr Grixti identified and reported issues about customer complaints and Ms Kasman acted on the information Mr Grixti gave her;
b)Ms Kasman made the decision to dismiss the applicant; and
c)Mr Grixti presented information to Ms Kasman that led to the giving of the document that came to be known in this litigation as the warning letter, the allegations letter, the second allegations letter and the termination letter.
[16] Affidavit of Anna Kasman filed 31 August 2016 at [3].
In her affidavit, Ms Kasman made a collection of legal submissions dressed up as matters in respect of which she had received legal advice, none of which I found helpful through a lay witness, including submissions about –
a)the possibility of the role of Mr Grixti being dealt with by me as a preliminary point;
b)case management principles; and
c)a proposal for the provision of security for costs.
In debate with Mr Aleksov, I put to him that at least one construction of events that was open on the evidence was that –
a)Ms Kasman was the owner and controller of the respondent;
b)Mr Grixti was one of the respondent’s employees;
c)Mr Grixti occupied a particular role in the workings of the respondent;
d)Ms Kasman as the controlling mind of the respondent made ultimate decisions on such matters as terminating the employment of employees such as the applicant; and
e)Mr Grixti was a functionary who implemented and gave effect to Ms Kasman’s decisions.
Construed in that way, I raised with Mr Aleksov that there was no inconsistency in the viva voce evidence Mr Grixti gave with the other evidence in the case, especially from Ms Kasman who said that in her capacity as the controlling mind of the respondent, she made the decision to terminate the employment of the respondent.
I was not persuaded that the so-called surprising evidence that
Mr Grixti gave viva voce was inconsistent with the respondent’s other evidence, especially the evidence from the respondent’s controlling mind, Ms Kasman.
Mr Aleksov urged me to consider the consequences to the respondent should I find that Mr Grixti’s viva voce evidence was in fact inconsistent with the position he had adopted until the giving of his viva voce evidence. Mr Aleksov submitted that the respondent would be denied the opportunity of apportioning against Mr Grixti any monetary sum ordered against it. The respondent contended that unless Mr Grixti was joined as a respondent, the current respondent would not be able to take advantage of advancing a case that Mr Grixti induced or procured any adverse action found against a respondent.
If compensation were to be ordered, the respondent argued that without the joinder of Mr Grixti, the respondent would be denied the opportunity of contending that all, much or some of any amount of compensation ordered should be paid by Mr Grixti.
This application was made far too late
Mr Aleksov submitted that his client applied promptly for the joinder of Mr Grixti, as soon as it learned of Mr Grixti’s viva voce evidence. That much was true. As soon as Mr Grixti gave evidence,
at approximately 2.45 p.m. on the second day of the trial, Mr Aleksov alerted me to the proposed making of the joinder application. There can be no doubt that Mr Aleksov moved with commendable speed. However, if the question of the potential of Mr Grixti’s liability had been known before the second day of the trial, then the respondent had waited far too long to raise the issue. But even if on its proper construction Mr Grixti did in fact raise inconsistent evidence for the first time on the second day of the trial, the speed with which the application for joinder was brought is but one of a collection of issues for my consideration not the least of which is the prejudice to
the applicant occasioned by the joinder.
In the end, I am not satisfied that Mr Grixti did in fact give inconsistent evidence on the second day of the trial. It follows that if the respondent had been minded to join Mr Grixti, the respondent could have but failed to apply to join him at any stage after this proceeding had been commenced right up to trial.
Mr Aleksov pressed forcefully that at no stage earlier than when
Mr Grixti gave his viva voce evidence could the respondent have applied to join Mr Grixti. That seems to acknowledge that no basis existed for the joinder up to the second day of the trial where Mr Grixti gave viva voce evidence. On that analysis, the critical issue was whether Mr Grixti’s viva voce evidence represented changed, new and inconsistent evidence to that on which the respondent had run its case up to that point. For reasons already given, in my view Mr Grixti’s evidence when given from the witness box was entirely consistent with other aspects of the respondent’s evidence involving Mr Grixti in the lead up to the termination of the applicant’s employment. That being the case, the relevant question was why the application was brought on the second day of the trial. It was far too late to raise the matter of the bringing of the application on the second day of the trial.
Prejudice
Granting the application to join Mr Grixti would inflict real prejudice to the applicant. She has waited for her case to be heard since it was filed in this Court in August 2015. Judging by the state of the preparation of the affidavits, pleadings and court book, it is a fair assessment to say that her costs have been significant to date.
The applicant was the only witness to have completed her evidence by the end of the fourth day of the trial, being the totality of the days the parties agreed would be involved in the trial of this proceeding. Two and a half extra days of court time have been allocated to continue with this case. But whether the case will in fact conclude even with the allocation of two and a half extra days remains to be seen.
The delay in resuming the trial of this proceeding would be enormous if I were to make an order for the joinder of Mr Grixti. He would need to be served with all documents filed to date and adduced in evidence, including the transcript. Mr Grixti would need time to give instructions and obtain legal advice. Then he would have to file his own response. Mr Grixti would need to give discovery and to get discovery from the respondent and from the applicant. He would need time to consider those documents in view of the claim advanced against him. The delay in resuming the trial would be enlarged by any discovery skirmishes. Then Mr Grixti would need to prepare his own affidavit material.
That would take considerable time.
All that activity would be undertaken while the applicant was forced to sit on the sidelines watching as the gap in time increased between the date when her counsel opened the case and the resumption of the trial of the case. She was not responsible for the case coming to a halt.
The applicant was blameless on that. Her evidence was given very efficiently. She should not be penalised by being forced to wait while skirmishes between respondents are at full pitch.
Then, there is the undesirability of late amendments. The High Court has warned against them in Aon Risk Services Australia Ltd v Australian National University.[17] Aside from the hardship late amendments cause the parties, this Court is seriously inconvenienced as well. The implore I gave to the parties at the directions hearing conducted a couple of weeks prior to the trial fell on deaf ears.
The applicant should not have to suffer at the hands of the respondent keen on tactical manoeuvring.
[17] (2009) 239 CLR 175.
Futile, hopeless or arguable?
I am then required to consider whether the point the respondent seeks to advance is so compelling that questions of prejudice are to be put to one side. In my view the proposition that the respondent seeks to advance is not strong and while I am unwilling to call it hopeless, whatever merit it possesses does not outweigh the prejudice to the applicant if I were minded to accede to the respondent’s application.
I am not so minded.
Mr Irving submitted that the proposed further amended response did not contain a claim for contribution from Mr Grixti. He submitted that even if such a claim were advanced, no cause of action for contribution is recognised in the Federal Court of AustraliaAct 1976 (Cth),
the Federal Circuit Court of Australia Act1999 (Cth) or in the
Fair Work Act 2009(Cth) (“the Act”). Mr Irving submitted that nowhere had the respondent articulated how a civil penalty could be the subject of a claim to contribution.
Next, Mr Irving submitted that on a particular construction of the facts of this case, Mr Grixti may have been involved in a contravention for the purposes of s.550(2) of the Act. He submitted that on that scenario, another person must have committed the primary wrong in which
Mr Grixti was “involved”. Mr Irving contended that for the purposes
of s.539 of the Act, the only relevant item was Part 3-1
General Protections, Item 11. Under that Item a “person affected by the contravention” is given the power to apply to the Federal Court of Australia or to the Federal Circuit Court of Australia for the imposition of up to 60 penalty units. Mr Irving submitted that in order for the respondent to contend that Mr Grixti was an accessory, the respondent must have been the party in respect of whose conduct Mr Grixti was the accessory. Mr Irving submitted that Item 11 of s.539 of the Act speaks of a person affected by the contravention, not a person “engaged” in the contravention. The person affected by the contravention may apply to the court. That is the wording of s.539(2) of the Act. Mr Irving submitted that under no construction of s.539(2) and Item 11 of Part 3-1 could be said that the respondent was a “person affected by the contravention”.
I agree.
The respondent may be found to have “engaged” in the contravention, however. I will only know that after hearing all of the evidence in this case.
Mr Irving submitted that s.545(1) of the Act empowers the court to make an order once satisfied that a person has contravened or proposes to contravene a civil remedy provision, relevantly here, s.539 of the Act. He submitted that the contravener could only ever be the respondent on the facts of this case.
Section 545(1) of the Act is silent on the issue of the person entitled to apply for the relevant order under s.545(2) of the Act. That said,
it would be a peculiar construction of s.545 if an order made under s.545(2) against a respondent was made upon the court being satisfied under s.545(1) that the person (here, the respondent) had contravened a civil remedy provision under s.539(1) or under Item 11 of s.539(2) of the Act and the application for the order was made by the respondent as a “person affected by the contravention”.
Mr Irving submitted that no authority of which he was aware had a factual parallel to the position urged by Mr Aleksov. That may be because none exists. As Sir Wilfred Fullagar said in the High Court decision of Re KL Tractors Ltd (in liq)[18] –
It may seem curious that there is so little in the books bearing directly on the argument now raised. But a not uncommon reason for dearth of direct authority on a point is that there has been a general consensus of opinion that the point is not tenable.[19]
[18] (1961) 106 CLR 318.
[19] (1961) 106 CLR 318, 388.
Next, Mr Irving submitted that in order to make good any accessorial liability against Mr Grixti, it will need to be proved that Mr Grixti engaged in some act or conduct that implicated or involved him in the contraventions so that there had to be a practical connection between Mr Grixti and the contravention. As to the “practical connection” between the alleged accessory and the contravention, so much has been held by the Full Court of the Federal Court of Australia in Construction, Forestry, Mining and Energy Union v Clarke.[20]
To similar effect was the decision in Qantas Airways Ltd v Transport Workers’ Union of Australia[21] as well as the decision of White J in
Fair Work Ombudsman v Devine Marine Group Pty Ltd.[22] In view of Mr Grixti’s evidence thus far, Mr Irving submitted that his practical connection between the alleged contravention and Mr Grixti’s role in it was remote.
[20] [2007] FCAFC 87.
[21] [2011] FCA 470.
[22] [2014] FCA 1365 at [178].
There is real force in that submission.
In debate, I raised with Mr Irving the practical consequences of an order refusing the application to join Mr Grixti. Specifically I raised whether if this application were to be refused, the respondent would be shut out thereafter from bringing a claim against Mr Grixit if it were minded to do so. Mr Irving submitted that no estoppel arose of the sort propounded by the High Court of Australia in Port of Melbourne Authority v Anshun Pty Ltd.[23] That was because the parties to any such later litigation were different to those in this proceeding. For similar reasons, he submitted that no matter of res judicata would arise. To my mind that accords with logic and is a reason why the refusal of this application does not inflict unfair hardship upon the respondent.
[23] (1981) 147 CLR 589.
Mr Irving described the basis of the claim to add Mr Grixti as hopeless. For the purposes of r.9.05 of the Federal Court Rules I must be satisfied that the proposed claim has reasonable prospects of success. But even if I took that view, in the exercise of my discretion to grant the order sought, I would need to be satisfied that the making of an order adding Mr Grixti as respondent did not inflict undue prejudice upon the applicant.
In my view –
a)this application was made inexplicably late in the litigation;
b)the proposed cause of action against Mr Grixti does not have reasonable prospects of success; and
c)permitting the joinder of Mr Grixti at this advanced stage of the trial orchestrates undue prejudice upon the applicant which could not be adequately addressed by a costs order.
This application in a case filed 31 August 2016 is dismissed.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Wilson
Date: 20 September 2016
Further submissions in support of application in a case to add Paul Grixti as a respondent dated
1 September 2016.
Key Legal Topics
Areas of Law
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Employment Law
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Civil Procedure
Legal Concepts
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Res Judicata
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Abuse of Process
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Procedural Fairness
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Estoppel
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