Sterne v Tweed Health for Everyone Pty Ltd
[2019] FCCA 27
•8 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| STERNE v TWEED HEALTH FOR EVERYONE PTY LTD & ORS | [2019] FCCA 27 |
| Catchwords: HIGH COURT AND FEDERAL COURT – Federal Circuit Court – procedure – ending proceedings early – summary disposal or stay. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth), s.17A |
| Cases cited: Mogilevsky v Leroy (Trustee) [2017] FCAFC 52 |
| Applicant: | VICTORIA LOUISE STERNE |
| First Respondent: | TWEED HEALTH FOR EVERYONE PTY LTD |
| Second Respondent: | JENNIFER SODEN |
| Third Respondent: | DIANE BLANCKENSEE |
| File Number: | BRG 337 of 2018 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 5 October 2018 |
| Date of Last Submission: | 5 October 2018 |
| Delivered at: | Brisbane |
| Delivered on: | 8 January 2019 |
REPRESENTATION
| Counsel for the Applicant: | Ms Hartigan |
| Solicitors for the Applicant: | Maurice Blackburn Lawyers |
| Counsel for the Respondents: | Ms Radcliff |
| Solicitors for the Respondents: | Noble Law |
ORDERS
The application in a case filed on 16 August, 2018 is dismissed.
The application is adjourned to 9:30am on 6 February, 2019 for directions.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 337 of 2018
| VICTORIA LOUISE STERNE |
Applicant
And
| TWEED HEALTH FOR EVERYONE PTY LTD |
First Respondent
| JENNIFER SODEN |
Second Respondent
| DIANE BLANCKENSEE |
Third Respondent
REASONS FOR JUDGMENT
This is an application for the summary dismissal of the principal proceedings commenced by Ms Sterne in which she claims that she was dismissed in breach of certain general protections afforded to her by the Fair Work Act 2009 (Cth) as either an employee of, or a contractor to, the first respondent.
To succeed on the application the respondents must demonstrate that Ms Sterne has no reasonable prospect of successfully prosecuting her proceedings: s.17A of the Federal Circuit Court of Australia Act 1999 (Cth). For the reasons that follow, they do not satisfy that test. The application for summary dismissal must itself be dismissed.
The first respondent conducts a medical clinic known as the Tweed Health for Everyone Super Clinic at Tweed Heads, New South Wales. The second and third respondents are directors of the first respondent. Ms Sterne is a dietician. By her statement of claim filed on 5 April, 2018 Ms Sterne claims that she was employed by the first respondent to provide dietetic services or in the alternative, she was engaged by the first respondent as an independent contractor to provide dietetic services to patients of the first respondent’s clinic.
The critical allegations concerning the applicant’s engagement to work at the first respondent’s clinic appear in paragraphs 5 – 8 of her statement of claim. Relevantly, she pleads that she was employed as a dietician between early May, 2013 and 22 December, 2017. She alleges that the contract was “formed by oral agreement between the first respondent and the applicant”. By way of particulars she says that she attended an interview for the position of dietician on 10 April, 2013. In attendance at the interview was the applicant and the then directors of the first respondent. There were three of them: the second and third respondents and the applicant’s husband, Austin Sterne.
Ms Sterne claims that at the conclusion of the interview the third respondent, acting on behalf of the first respondent, offered her a role as a dietician at the practice which, she says, she accepted. There seems to be no dispute that Ms Sterne commenced providing dietetic services from early May, 2013 at the first respondent’s clinic.
By paragraph 8 of her statement of claim she alleges, in the alternative, that she was engaged by the first respondent pursuant to a contract for services (i.e. as an independent contractor) to provide dietetic services.
The respondents deny that Ms Sterne was engaged as an employee or an independent contractor. They allege that Ms Sterne provided dietetic services to patients at the clinic through a corporate entity, Sterne Medical and Legal Pty Ltd trading under the business name The Nutrition Clinic. It seems uncontroversial that Sterne Medical and Legal Pty Ltd was an entity controlled by Ms Sterne and her husband, Austin Sterne.
The respondents plead that no money was ever paid to Ms Sterne personally for her services as a dietician. Payment in respect of the work that she performed was always made to a bank account held in the name of Sterne Medical Trust (the trustee of which was Sterne Medical and Legal Pty Ltd). The respondents also point out that the payments made to Sterne Medical Trust were never reduced by the deduction of any PAYG tax nor did the first respondent withhold or pay any PAYG tax on behalf of the applicant. She maintained her own Medical Practitioner’s Liabilities Insurance and through Sterne Medical and Legal Pty Ltd she was registered for and paid goods and services tax. The respondents assert that the applicant did not accrue and was not paid any leave entitlements, she chose her own hours of business, when she took leave and she was not restrained from being able to operate The Nutrition Clinic or provide dietetic services in her own right at any other clinics or locations.
On 19 June, 2018 the Court made an order that provided for each of the parties to file and serve any affidavit evidence containing the evidence in chief upon which they intended to rely at trial. The applicant’s material was due by 4:00pm on 24 July, 2018. The respondent’s material was due by 4:00pm on 7 August, 2018. Both parties have filed affidavits. The applicant’s material appears to consist of affidavits sworn by her and filed on 28 May, 2018 24 July, 2018 and 4 October, 2018. She has also filed, and presumably relies upon, affidavits sworn by Austin John Sterne and filed on 24 July, 2018 and 4 October, 2018. There is also an affidavit sworn by Michael Anthony Cox filed on 24 July, 2018.
The respondents have filed affidavits by Jennifer Soden (on 4 May, 2018) and Diane Blanckensee (on 9 June, 2018). There is also an affidavit filed by the respondents in support of the summary dismissal application sworn by Alana Flohr and filed on 16 August, 2018.
I have decided this application by reference to the affidavits to which I have just referred although not all of them were formally read by the parties on the application. But a word of caution needs to be expressed about all of them. Affidavits are intended to be sworn statements of evidence. They are generally intended to be a substitute for oral evidence-in-chief. That is especially so where a court has made a direction for the filing of affidavits setting out witnesses’ evidence-in-chief as was the case here. It is trite that, subject to any legislative prescriptions to the contrary, the rules of evidence apply to the contents of an affidavit. The affidavits in this case filed by and on behalf of each of the parties pay very little attention to the rules of evidence. They are generally speaking, inadmissible argument, speculation and conclusion and so, generally speaking, not particularly helpful to the resolution of the application before me.
If Ms Sterne succeeds in establishing the allegations set out in paragraphs 5 – 8 of her statement of claim to which I have referred above, she has a reasonable prospect of successfully prosecuting her proceedings because the matters raised by way of defence to her claim do not answer the basic proposition that it was she who was engaged by the first respondent rather than any corporate entity in which she was interested. Each of the matters relied upon by the respondents to answer Ms Sterne’s claim are rooted in the respondents’ contention that she personally was never an employee of, or independent contractor to, the first respondent. Any engagement was of Sterne Medical and Legal Pty Ltd.
In her first affidavit filed on 28 May, 2018 the applicant swears:
My Employment
10. On or about 10 April 2013 I attended a job interview for the position of dietitian at the practice. The second and third respondents and Dr Sterne were in attendance at my interview.
11. During the interview we discussed, and agreed to, the following terms and conditions of employment:
a. I would start working three half days per week with my hours worked to increase as the practice developed, first to three full days and eventually full time;
b. The first respondent would provide all materials, equipment and administrative services and support I required in my role as dietician;
c. I would use the first respondent’s software to record my patient notes so they could be viewed by other medical and allied health professionals at the practice, in order to provide a holistic service;
d. I would receive 70% of billings from patients that I saw, with the first respondent retaining the remaining 30%;
e. The first respondent would prepare and provide weekly invoices summarising my income;
f. All general practitioners working at the practice would refer their patients to me if they needed a dietician;
g. The first respondent would provide me with a practice email address for my use in my role as dietician at the practice;
h. I would have remote access to the first respondent’s server, allowing me to access emails and patient notes when away from the practice;
i. The first respondent would advertise my services by adding my details to their website and the practice’s “multi- screen” televisions located in the practice’s waiting rooms, and by providing me with business cards; and
j. I would be required to participate in performance reviews conducted by the first respondent.
12. At the end of the interview, the third respondent offered me the role of dietician. I accepted the offer, and it was agreed I would commence employment in May 2013.
These statements are not especially useful. Ms Sterne’s assertion that an offer was made and that she accepted the offer is nothing more than conclusion sworn to by her based presumably upon the words that were spoken by Ms Blanckensee and the words that were spoken by Ms Sterne in response. But those words or words to the effect of those used are not set out in the applicant’s evidence and so it is difficult to tell if her conclusion about those matters is accurate. She is simply swearing to the issue. Given the factual contest between the parties, the actual words used by the parties during the course of the negotiations are likely to be critical.
In her affidavit filed on 24 July, 2018 Ms Sterne repeats much of what I have just set out above from her first affidavit but then adds:
13. At the end of my interview, Dr Blanckensee asked me words to the effect of “when do you want to start?”
14. I suggested, and the Directors agreed, that I would commence employment in May 2013.
This evidence too, does not help much because there is no context given to the conversation or the words used by the third respondent. The words sworn to by the applicant above are as consistent with her case as they are with the respondents’ case.
The evidence of the applicant’s husband is no better. In his affidavit filed on 24 July, 2018 he swears:
6. On or about 10 April 2013 I conducted Vicky’s job interview, along with Dr Blanckensee and Dr Soden (‘the Directors’). From memory the interview went for about 30 minutes. I recall that Dr Soden arrived late to the interview. The interview was held in offices we had across the road from where the Clinic was being built.
7. I remember Vicky saying that she needed a particular type of nutrition software called ‘Foodworks’ that costs $350 per year, and that the Directors agreed that the Clinic would buy this for her.
8. We agreed that Vicky would commence employment in May 2013. The Clinic officially opened on 31 May 2013, however a number of practitioners, including myself, started seeing patients at the Clinic a few weeks before the official opening.
Again, he swears to the issue without providing the facts upon which he reaches the conclusion expressed in paragraph 8 of his affidavit.
The other affidavits filed by the applicant and her husband, and that of Mr Cox, do not provide any evidence about the nature of the engagement, if any, between the applicant and the first respondent.
The evidence of the second and third respondents is equally unhelpful. Neither gives evidence about the meeting of 10 April, 2013 in any detailed way. Their evidence and particularly that of the third respondent is simply argumentative:
ALLEGED “EMPLOYMENT” OF VICTORIA STERNE
10. As sworn by Dr Soden at paragraphs 19 to 22, the applicant Victoria Sterne was a Dietician and former tenant at THE and was never an employee of THE [Tweed Health for Everyone].
11. On her own evidence she was self employed (see JMS14- medical certificate).
12. Tenancy by medical professionals at the clinic is a day to day arrangement and there is no contractual period of tenancy with any notice period required to be given prior to any termination of services of any medical professional.
13. The tenant interacts with employed staff on a daily basis. Tenants advise THE when they will be available in their rooms and what their availability is, which is entirely up to the contractor.
14. Mrs Sterne never attended a job interview. There was a meeting on or around 10 April 2013 where it was discussed how she would be running her nutrition clinic within the Super Clinic. On or around 14 April 2013, the applicant put to TIIE her proposal for her dietetic services for our consideration. This proposal also included her request for service requirements such as rooms and administration requirements. Exhibited at DJB 1 is a copy of the applicant’s proposal entitled “Suggested provision of dietetic services for THESC”.
15. After all, the applicant was a beneficiary receiving a share of the profits from her business interests in THE. The directors agreed that the applicant through her entity the Nutrition Clinic would be provided with facilities and support services of the clinic commencing 31 May, 2013. At no time did she express a desire to be an employee and she was always free to consult at other practices as all other contractors are free to do.
Despite the difficulties with the evidence of each of the parties, neither took any objection to the affidavit material relied upon by the other. If the objectionable material contained within the applicant’s affidavit was struck out, then her evidence would be insufficient to prove her case. I would have no difficulty in concluding that she would have no reasonable prospect of successfully prosecuting her proceedings because the evidence does not prove that she was an employee or an independent contractor of the first respondent. The agreement upon which she relies could not be made out on the evidence.
But objectionable evidence that is not the subject of objection becomes part of the evidence upon which a court might act. Although the applicant’s own characterisation of her relationship with the first respondent might not attract very much weight from a trial judge I cannot discount the possibility that if the evidence remains as it is a court might be persuaded that there was an agreement as the applicant alleges. Having established the agreement for which she contends, the applicant then faces the task of persuading the Court that she is in fact within the terms of the Fair Work Act as an employee or an independent contractor. But that is a matter to be determined according to the initial agreement between the parties in addition to the matters usually considered to resolve such a contest.
But the question of the identity of the contracting parties is answered by the negotiation leading to and formation of the relevant contract. The subsequent conduct of the parties might arguably help to inform the Court’s conclusion about the nature of the engagement between the protagonists although those matters must be assessed in light of the agreement between the parties, whatever it might be. Here, there are a number of matters which point in favour of the applicant’s case and a number of matters which point against that case.
In Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 Gilmour J reminded judges dealing with summary dismissal applications (at [6]) that:
(a) the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;
(b) the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;
(c) in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;
(d) it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;
(e) if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;
(g) it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;
(h) evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;
(i) in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party.
approved and applied in Mogilevsky v Leroy (Trustee) [2017] FCAFC 52 at [64].
I bear these matters in mind notwithstanding that there has been a direction for the parties to file affidavits of all of the evidence-in-chief upon which they intend to rely in the proceedings.
On the present state of the evidence, the applicant’s case can only be best described as very weak. But even very weak cases are entitled to a hearing.
I am not satisfied that the applicant has no reasonable prospect of successfully prosecuting her proceedings. Accordingly, the application for summary dismissal is refused.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 8 January 2019
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