Slater and Gordon Ltd v Sellars - [2020] NSWSC 1793

Supreme Court

New South Wales

Medium Neutral Citation: Slater & Gordon Ltd v Sellars [2020] NSWSC 1793
Hearing dates: 8 December 2020
Date of orders: 8 December 2020
Decision date: 08 December 2020
Jurisdiction: Equity
Before: Rees J
Decision:
Strike out part of defence and cross claim.

Catchwords:
PLEADINGS – strike out – solicitor resigns and establishes new law firm – former employer receives 146 file transfer requests to new firm – solicitor sued for breach of fiduciary duties – employee files cross-claim seeking work injury damages for bullying causing mental illness – workers compensation legislation not complied with – employee not presently entitled to bring cross-claim – whether workers compensation legislation applies to cross-claims – whether equitable set-off – cross-claim struck out.

Legislation Cited:
Civil Procedure Act 2005 (NSW), ss 21, 22
Uniform Civil Procedure Rules 2005 (NSW), rr 9.1, 14.2, 14.28(1)
Work Health and Safety Act 2011 (NSW)
Work Health and Safety Regulations 2011 (Cth)
Workers Compensation Act 1987 (NSW), ss 9AA, 150A, 150B, 151H(1)
Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 4, 250, 254(1), 280A, 312, 313, 315, 316, 317, 318A, 318H

Cases Cited:
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Crabb v Arun District Council [1976] Ch 179
Dillingham Constructions Pty Limited v Steel Mains Pty Limited (1975) 132 CLR 323
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Grant v NZMC Ltd [1989] 1 NZLR 8
Minister for Lands and Forests v McPherson (1991) 22 NSWLR 687
Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Limited (1997) 42 NSWLR 462
Sydmar Pty Ltd v Statewise Developments Pty Limited (1987) 73 ALR 289

Texts Cited:
Meagher, Gummow & Lehane's Equity: Doctrines and Remedies
The Hon. Mark Leeming, Equity: Ageless in the 'Age of Statutes' (2015) 9 Journal of Equity 108
Taylor P, E Elms E, Justice G Bellew and M Meek, Ritchie's Uniform Civil Procedure NSW (Looseleaf, LexisNexis)

Category: Principal judgment
Parties: Slater & Gordon Ltd (Plaintiff/Cross-defendant)
Erin Sellars (First defendant/Cross-claimant)
Justice4All Pty Ltd trading as Don Cameron & Associates (Second defendant)
Donald Cameron (Third defendant)
Representation:
Counsel:
Mr S Prince SC (Plaintiff/Cross-defendant)
Mr G O’Shea (First Defendant/Cross-claimant)
Mr B Lloyd (Second and Third Defendants)
Solicitors:
Arnold Bloch Leibler (Plaintiff)
PJ Ellis & Co (First Defendant)
Rural Law (Second Defendant)
Mark O’Brien Legal (Third Defendant)

File Number(s): 2020/248634

ex tempore Judgment

HER HONOUR: This is an application to strike out portions of a cross-claim and defence pursuant to rule 14.28(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) as being an abuse of process or failing to disclose a reasonable cause of action. The plaintiff, Slater & Gordon Ltd, relied on an affidavit by its solicitor, Bridget Little, and an affidavit by Helen Vines, special counsel at Slater & Gordon.

Substantive proceedings

The substantive claim is brought by Slater & Gordon against a former employee, Erin Sellars, a solicitor who was primarily engaged in police…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NSWSC 1793
Decision Date: 08 December 2020

CaseChat Overview and Summary

In the matter of Slater and Gordon Ltd v Sellars, the dispute involved a former solicitor, Sellars, who had resigned from his position and subsequently established a new law firm. After his departure, the former employer received 146 file transfer requests to the new firm. Slater and Gordon Ltd sued Sellars for breaching his fiduciary duties, while Sellars filed a cross-claim seeking damages for work-related injuries due to alleged bullying, which caused a mental illness. The crux of the legal issues revolved around whether the workers compensation legislation applied to the cross-claim and whether equitable set-off was permissible.

The court was required to determine if the workers compensation legislation precluded the employee from bringing a cross-claim for damages outside the legislative framework. Additionally, the court needed to examine whether the principles of equitable set-off could be applied in this context, allowing for the netting off of claims between the parties. The court's analysis focused on the statutory interpretation of the workers compensation legislation and the applicability of equitable principles to the cross-claim.

The court found that the workers compensation legislation applied to the cross-claim, effectively barring the employee from pursuing damages outside the legislative scheme. Furthermore, the court held that equitable set-off was not available in this instance, as it would circumvent the statutory provisions designed to protect employees. Consequently, the cross-claim was struck out.

The court's final orders included the dismissal of the cross-claim brought by Sellars and the continuation of the proceedings against Sellars for breach of fiduciary duties.

Orders