Taylor v Vivacity Engineering Pty Ltd
[2019] FCCA 1751
•25 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TAYLOR v VIVACITY ENGINEERING PTY LTD | [2019] FCCA 1751 |
| Catchwords: INDUSTRIAL LAW – COURTS AND JUDICIAL SYSTEM – Federal jurisdiction – applicant commenced proceeding in the Supreme Court of New South Wales for family provision order under s.59 of the Succession Act 2006 (NSW) (family provision proceeding) – applicant then commenced proceeding (FW Act proceeding) in the Federal Circuit Court (Court) under the Fair Work Act 2009 (Cth) (FW Act) claiming relief for contraventions of s.44(1) of the FW Act and damages for termination of employment contract without reasonable notice – whether the claims the applicant makes in the family provision proceeding and in the FW Act proceeding arise out of the same substratum of facts and, for that reason, constitute a single “matter” over which the Court has jurisdiction - claims constitute one “matter” – whether assuming the claims made in the FW Act proceeding and in the family provision proceeding constitute one “matter” the Court has a discretion whether to exercise that jurisdiction – Court has no discretion not to exercise jurisdiction but has power to stay part of proceeding that consists of the claims made in the family provision proceeding. |
| Legislation: Australian Constitution, ss.75, 76, 77 |
| Cases cited: Andrew v Andrew [2012] NSWCA 308 |
| Applicant: | PETER ANDREW TAYLOR |
| Respondent: | VIVACITY ENGINEERING PTY LTD |
| File Number: | SYG 3214 of 2018 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 27 March 2019 |
| Date of Last Submission: | 30 April 2019 |
| Delivered at: | Sydney |
| Delivered on: | 25 June 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr T Kane |
| Solicitors for the Applicant: | Argyle Lawyers Pty Ltd |
| Counsel for the Respondent: | Mr M Seck |
| Solicitors for the Respondent: | Hall & Wilcox |
ORDERS
The matter be listed at a time and date to be fixed for the purpose of hearing submissions on the orders that should be made to give effect to the reasons for judgment published on 25 June 2019.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3214 of 2018
| PETER ANDREW TAYLOR |
Applicant
And
| VIVACITY ENGINEERING PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The respondent (Vivacity) applies for an order that the proceeding brought by the applicant (Peter) in this Court (FW Act proceeding) be stayed until there is heard and finally determined what Vivacity claims is a related proceeding Peter commenced in the Supreme Court of New South Wales (family provision proceeding).
In the FW Act proceeding Peter claims he was an employee of Vivacity from around 2 December 1979 until about 20 April 2018; that on 20 April 2018 Vivacity purported to terminate his contract of employment in breach of what he claims was an implied term that he would be given reasonable notice; and that, on his employment being terminated, Vivacity failed to pay his full entitlement for annual leave Peter had accrued but not taken, contrary to s.90 of the Fair Work Act 2009 (Cth) (FW Act), such entitlement including what Peter claims is a contractual right to a 17.5% annual leave loading. Peter claims damages for breach of contract, an order for compensation under s.545 of the FW Act, and orders for pecuniary penalties. In the family provision proceeding, Peter seeks an order under s.59 of the Succession Act 2006 (NSW) (Succession Act) for provision out of the estate of his late father (Frank Taylor). The defendant in that proceeding is Peter’s sister (Jennifer) who was appointed litigation guardian of Peter’s mother (Margaret Taylor), the executrix of Frank Taylor’s will.
The ground on which Vivacity applies for a stay is what it submits is “a significant number of common issues between the” family provision proceeding and the FW Act proceeding “which make it undesirable that both proceedings proceed concurrently”.[1] Vivacity submits there is an overlap between the two proceedings “in relation to the nature and purpose of the orders sought, the relevant factors in determining relief and the parties involved”; and that, unless the FW Act proceeding is stayed, there will be “an overlap in terms of the evidence adduced, the cross-examination required and the findings made in each proceeding”.[2]
[1] Outline of Submissions of Respondent in Relation to Application in a Case dated 1 March 2019, [18]
[2] Outline of Submissions of Respondent in Relation to Application in a Case dated 1 March 2019, [18]
Peter opposes Vivacity’s application for a stay. He submits that the determination of the family provision proceeding will not resolve or reduce the issues in the FW Act proceeding;[3] the FW Act proceeding and the family provision proceeding involve the seeking of relief against different respondents, Vivacity being the respondent in the FW Act proceeding and Jennifer being the defendant in the family provision proceeding;[4] this Court could not have jurisdiction over the family provision proceeding even under its accrued jurisdiction because the family provision proceeding constitutes a different “matter”;[5] and, in any event, the jurisdiction conferred by s.59 of the Succession Act on the “Court”, which, under s.3 of the Succession Act, is defined as the Supreme Court of New South Wales or, in circumstances it is unnecessary to set out, the District Court of New South Wales, cannot be “picked up” by s.79 of the Judiciary Act 1903 (Cth) (Judiciary Act) because the Federal Circuit Court is not a “Court” within the meaning of s.3 of the Succession Act.[6]
[3] Peter Taylor’s Submissions – Application in a Case dated 1 March 2019, [13]
[4] Peter Taylor’s Submissions – Application in a Case dated 1 March 2019, [15]
[5] Peter Taylor’s Submissions – Application in a Case dated 1 March 2019, [15(a)]
[6] Peter Taylor’s Submissions – Application in a Case dated 1 March 2019, [15(b)], relying on Smith v Smith (1986) 161 CLR 217
Course of application and issues
At the hearing of the application on 27 March 2019 I raised the question whether the FW Act and the family provision proceedings constituted one “matter” with the consequence that this Court was seized with jurisdiction to determine the claims made in both proceedings, and that the Court had no discretion other than for itself to determine the claims Peter makes in the two proceedings. Counsel for Peter referred to paragraph 15(b) of his written submissions where he submitted that the power under s.59 of the Succession Act is expressly conferred on the Supreme Court of New South Wales and, for that reason, any claim for relief that might be made under that section is excluded from this Court’s accrued jurisdiction.[7] I indicated I thought this might not be correct. I said I would look into the question and, if I were to find there is a doubt about counsel’s submission, I would communicate through my associate any issues I might identify, and invite the parties to make submissions on those issues. The hearing then proceeded on the basis the parties had set out in their outline written submissions.
[7] Relying on Smith v Smith (1986) 161 CLR 217
After I reserved my decision and considered the matter further, at my direction on 28 March 2019 my associate sent an email to the parties that included the following:
1.At the hearing on 27 March 2019 his Honour raised with counsel the question whether the proceeding that had been commenced by the applicant in the Supreme Court of New South Wales (family provision proceeding) for relief under s.59 of the Succession Act 2006 (Cth) [sic] (Succession Act) might constitute part of the matter that is constituted by the proceeding the applicant has brought in this Court for relief under the Fair Work Act 2009 (Cth) (FW Act), with the consequence that this Court has jurisdiction to hear and determine the applicant’s claims for relief under s.59 of the Succession Act.
. . .
3.His Honour has looked into [the] question further, and is of the view there is a real question whether the claim for relief made in the family provision proceeding and the claims for relief made under the FW Act constitute a single controversy and, for that reason, both sets of claims for relief constitute a single matter over which this Court has jurisdiction to the exclusion of the jurisdiction the Supreme Court might otherwise have over the claim for relief made under s.59 of the Succession Act.
4.In these circumstances his Honour has requested that I draw the following matters to the parties’ attention:
(a)A “matter” is “the justiciable controversy between the parties arising out of the substratum of facts and claims representing, or amounting to, the dispute or controversy between or amongst the parties”. Thus, where “federal and non-federal claims comprise the same justiciable controversy, a court exercising federal jurisdiction will have jurisdiction to resolve the entire matter in the exercise of its federal jurisdiction” (Rana v Google Inc [2017] FCA 156, at [17]).
(b)Claims for relief made by one person against two or more different parties in separate proceeding may constitute a single matter if the claims arise out of the same substratum of facts. That is what the majority held in Re Wakim; ex Parte McNally ((1998) 198 CLR 511). In that case, a person had brought three separate proceedings in the Federal Court, one against a trustee in bankruptcy for relief under the Bankruptcy Act 1966 (Cth), and one each against two lawyers for negligence. The majority held that all three claims for relief, although brought in separate proceedings, constituted one matter. Gummow and Hayne JJ said that the fact that those advising the applicant “chose to issue separate proceeding at different times does not mean that the scope of the controversy is limited to matters raised in the first proceeding” (at [142]).
(c)Once a federal court has jurisdiction to hear and determine a claim for relief that does not arise under a law of the Commonwealth, the question of what law the court should apply in determining the non-federal claim is governed, at least in part, by s.79(1) of the Judiciary Act 1903 (Cth) (Judiciary Act) which provides as follows:
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
5.There appears to be authority for the principle that s.79 of the Judiciary Act is capable of “picking up” and applying State laws that provide for the creation or adjustment of rights even where under the relevant State law the jurisdiction to create or adjust such rights is conferred on a specific State court. That principle appears in the following passage from the judgment of the plurality in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd ((2001) 559, at [68]) (footnotes omitted):
It is well established from the decisions under s 79 of the Judiciary Act, most recently that in Austral Pacific Group Ltd v Airservices Australia, that a State statute may be applicable as a source of rights and remedies in federal jurisdiction even though, on its own terms, that law identifies only the courts of the enacting State as the courts to provide those remedies. Indeed, as Gibbs J indicated in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd, were that not so the operation of federal jurisdiction might readily be stultified. There might be withdrawn from courts exercising federal jurisdiction (including this Court) the effective authority to quell controversies in respect of which, by reason, for example, of the identity of parties, s 75 of the Constitution had conferred original jurisdiction upon this Court and s 77 empowered the Parliament to grant authority to the other federal courts and to State courts exercising federal jurisdiction. An attempt by State law to achieve that result would, as to this Court, be repugnant to s 75 of the Constitution. Where jurisdiction was conferred by a law made by the Parliament in exercise of its powers under s 77 of the Constitution, the State law also would be invalid for inconsistency under s 109 of the Constitution.
6.Also potentially relevant is the following passage from the judgment of McHugh J in Edensor Nominees (at [137]):
The fact that a State statute either expressly or as a matter of construction provides only for State courts to enforce its provisions does not mean that it cannot be “picked up” and applied by s 79 of the Judiciary Act in the exercise of federal jurisdiction.
7.In Edensor Nominees the judgment and reasoning in Smith v Smith was distinguished (at [59], [60], and [138]).
8.In light of these matters, his Honour invites the parties to provide submissions on the following questions:
(a)Do the claims for relief under s.59 of the Succession Act made in the family provision proceeding and the claims for relief made in this Court under the FW Act arise or substantially arise under the same substratum of facts such that both claims or sets of claims for relief constitute one “matter” over which this Court has jurisdiction?
(b)Assuming (a) is answered in the affirmative, would s.79 of the Judiciary Act operate to “pick up” s.59 of the Succession Act and all other provisions of that Act relevant to the making of a claim under s.59, even though under that Act applications for relief are to be made to “the Court” which, in s.3 of the Succession Act is defined to mean the Supreme Court of New South Wales or the District Court of New South Wales to the extent it has jurisdiction under s.134 of the District Court Act 1973 (Cth)?
(c)Assuming (a) and (b) are answered in the affirmative, what orders, if any, should be made to give effect to the Court’s having jurisdiction over both the claims for relief made under the FW Act and under the Succession Act? In particular, would it be necessary to make any orders to ensure that rights that have accrued (because, for example, the proceeding was commenced within the time limited by s.58(2) of the Succession Act) as a consequence of the commencement of the family provision proceeding remain on foot?
On 5 April 2019, when the matter came before me again, I directed the parties to file submissions on the matters raised in the email. Counsel for Vivacity indicated that Jennifer, as the defendant in the family provision proceeding, should be notified. I understood counsel for Vivacity to have said that his instructing lawyers would communicate with the legal representatives of Jennifer to determine whether she wishes to be heard on whether the claims made in the FW Act proceeding and the claims made in the family provision proceeding constitute the one “matter”. By 30 April 2019, being the day by which the last of the orders I made on 5 April 2019 had to be complied with, I had received no notice from or on behalf of Jennifer that she wished to be heard on that question. On 6 May 2019 I instructed my associate to request Vivacity’s lawyers to send to Jennifer’s lawyers in the family provision proceeding a letter to the following effect:
We act for Vivacity Engineering Pty Ltd in a proceeding brought in the Federal Circuit Court of Australia (Court) by Mr Peter Andrew Taylor claiming relief under the Fair Work Act 2009 (Cth) (FW Act).
A question has arisen about whether the claim made by Mr Peter Andrew Taylor in the Supreme Court of New South Wales for relief under s.59 of the Succession Act 2006 (NSW) forms part of the one “matter” with the claims Mr Peter Andrew Taylor makes in the Court under the FW Act. We enclose a copy of the written submissions that parties have filed on this question.
The Court has requested that we inform you that if Ms Jennifer Anne Taylor wishes to make any submissions on the matters raised in the written submissions the parties filed that she should so inform the Court by your sending an email to the associate to Judge Manousaridis . . . within ten days of your receiving this letter.
The legal representatives for Vivacity confirmed to my associate that a letter to this effect was sent to the legal representatives of Jennifer. My associate has received no communication from or on behalf of Jennifer.
In these reasons for judgment I consider the competing submissions on the issues identified in the email my associated sent to the parties on 28 March 2019. Before I do so, it will be necessary to set out:
a)Peter’s claims in the FW Act proceeding, the jurisdiction of this Court those claims invoke, and the issues that are apparent in that proceeding; and
b)the nature of the family provision proceeding, the claims Peter makes in that proceeding, and the issues that arise or apparently arise.
The FW Act proceeding
Peter relies on four causes of action in the FW Act proceeding.
Causes of action and issues arising
The first cause of action relies on an asserted contravention by Vivacity of s.44(1) of the FW Act, which provides that an employer must not contravene a provision of the “National Employment Standards” (NES). That expression is defined in s.61(3) of the FW Act to mean the standards constituted by Divisions 3 to 12 of Part 2-2 of the FW Act. Relevant to this part of Peter’s claims is s.90 of the FW Act, which is contained in Division 6 of Part 2-2, and which provides as follows:
(1) If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.
(2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
The expression “base rate of pay” is defined in s.16 of the FW Act to mean “the rate of pay payable to the employee for his or her ordinary hours of work”; and “ordinary hours of work” is defined in s.20 in relation to “award/agreement free employees” (which in s.12 is defined to mean an employee to whom neither an award nor an enterprise agreement applies) as the amount of ordinary hours agreed or, where there is no agreement, 38 hours a week.
Peter alleges that:
a)it was an implied term of his contract of employment that he would be paid an annual leave loading of 17.5%;
b)because of (a) and the operation of s.90 of the FW Act, Vivacity was required to pay to Peter annual leave loading of 17.5% on accrued but untaken annual leave when his employment had ended, such amount being $137,877.58; and
c)contrary to s.90 of the FW Act, Vivacity did not pay to Peter any amount for annual leave loading and, for that reason, it contravened s.44 of the FW Act.
The second cause of action also relies on an asserted contravention by Vivacity of s.44 of the FW Act. Here Peter alleges:
a)at the time his employment with Vivacity ended he had accrued but untaken annual leave of 682.82 days for which, under s.90 of the FW Act, at the time his employment ended he was entitled to be paid $787,871.86;
b)Vivacity paid to Peter at the time his employment ended only $676,207.22, being $111,664,64 less than the amount to which he was entitled to be paid; and
c)by failing to pay Peter $111,664.64, Vivacity contravened s.90 of the FW Act and, therefore, s.44(1) of the FW Act.
The third cause of action is based on breach of contract, where Peter alleges:
a)it was an implied term of his employment contract that either Peter or Vivacity could terminate the employment contract by the giving of reasonable notice;
b)Vivacity breached the implied term by purporting to terminate the employment contract without giving Peter the reasonable notice to which he was entitled to be given.
The fourth cause of action is pleaded as an alternative to the third. It relies on an asserted contravention by Vivacity of s.117(2) of the FW Act which provides that an employer must not terminate an employee’s employment unless the employer gives the notice specified in that subsection. Because s.117 is a NES, Peter alleges that by contravening s.117(2) of the FW Act Vivacity s contravened s.44(1).
In its defence, as it currently stands, Vivacity:
a)admits that on 20 April 2018 it summarily dismissed Peter from his employment;
b)says that it was justified in summarily dismissing Peter because he had engaged in serious misconduct and evinced an intention no longer to be bound by his contract of employment;
c)says Peter was not entitled to be given reasonable notice;
d)says that as at 20 April 2018 Peter had 586.05 days of accrued but untaken annual leave, and on that day Vivacity paid Peter $676,207.22 in discharge of his entitlement to being paid for such accrued leave; and
e)denies it is or was ever liable to pay to Peter loading on annual leave Peter had accrued but not taken.
In its draft amended defence,[8] Vivacity proposes to allege that Peter’s employment was covered by the Chemical Workers (State) Award of NSW 5772 (Chemical Workers Award); Peter’s contract of employment incorporated the provisions contained in the Chemical Workers Award relating to the giving of notice; and those provisions leave no room for the implication of a term requiring the giving of reasonable notice to terminate the employment contract.
[8] A draft of the proposed amended defence is MFI1
Jurisdiction
Section 566 of the FW Act provides that “[j]urisdiction is conferred on the Federal Circuit Court in relation to any civil matter arising under this Act”. The expression “matter arising under” is the expression used in s.76(ii) of the Constitution, and may be taken to have the same meaning except that it is limited to matters arising under the FW Act.
There are at least two means by which the Court’s jurisdiction conferred by s.566 of the FW Act can be invoked. The first is by a person, or organisation or association of the class specified in s.540 of the FW Act, applying for an order or orders under s.545 of the FW Act on the ground that a person has contravened, or proposes to contravene a “civil remedy provision”. That expression is defined in s.539(1) of the FW Act to mean the provisions identified in column 1 of the table to s.539(2) of the Act; and s.44 of the FW Act is included in that column. Peter has invoked this Court’s jurisdiction by this means by claiming that Vivacity has contravened s.44(1) of the FW Act by failing at the end of his employment to pay him amounts for accrued by untaken annual lave, and also, as an alternative to his claim for breach of his employment contract, because Vivacity failed to give Peter the notice s.117(2) of the FW Act required it to give when it terminated his employment.
A second means by which this Court’s jurisdiction can be invoked in relation to a matter arising under the FW Act is where an applicant, being a “national system employer or a national system employee”, applies under s.543 of the FW Act to this Court “to enforce an entitlement of the employer or employee arising under subsection 542(1)”. Section 542 of the FW Act provides:
(1) For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force from time to time, also has effect as an entitlement of the employer or employee under this Act.
(2) The entitlement has effect under this Act subject to any modifications, by a law of the Commonwealth (including this Act or a fair work instrument), a State or a Territory, of the safety net contractual entitlement.
The expression “safety net contractual entitlement” is defined in s.12 of the FW Act as “an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in” the NES and modern awards. In other words, “if a provision of a contract of employment replicates, or improves upon, the NES or a modern award in relation to matters such as wages, leave entitlements or notice of termination, it can be treated as a safety net contractual entitlement”.[9] The effect of s.543 of the FW Act, then, is to confer, where it applies, power on this Court to award any remedies that could be sought at common law for breach of contract.
[9] Creighton & Stewart’s Labour Law, sixth edition, 2016, page 618, [19.26]
Peter, therefore, has also purported to invoke the jurisdiction of this Court by claiming that Vivacity terminated his contract of employment in breach of an implied term that such termination could be effected only after the giving of reasonable notice. The giving of notice by an employer of an employee’s employment is dealt with in s.117, being a NES. It is reasonably arguable, therefore, that an implied term that a contract of employment can only be terminated on the giving of reasonable notice is a “safety net contractual entitlement” as defined in s.12 of the FW Act.[10]
[10] I have used the words “purported” and “reasonably arguable” to indicate that I have not formed any final view about these matters because I have not received any submissions about them.
The causes of action Peter advances in the FW Act proceeding, therefore, constitute a “civil matter arising under” the FW Act and, for that reason, fall within the terms of the grant of jurisdiction by s.566 of the FW Act.
Nature of and issues in family provision proceeding
Peter brought the family provision proceeding under s.58 of the Succession Act, which provides that an application for a “family provision order” may be made “whether or not administration of the estate of the deceased person has been granted”. Section 58 is contained in Chapter 3 of the Succession Act which is headed “Family Provision”. Chapter 3 was introduced into the Succession Act by the Succession Amendment (Family Provision) Act 2008 (NSW) which repealed the Family Provision Act 1982 (NSW) (Family Provision Act).
Some principles
The expression “family provision order” is defined in s.3 of the Succession Act to mean “an order made by the Court under Chapter 3 in relation to the estate or notional estate of a deceased person to provide from that estate for the maintenance, education or advancement of an eligible person”. The nature of the orders that constitute a “family provision order” is specified in s.65(1) of the Succession Act. Such orders must specify (a) the person or persons for whom provision is to be made; (b) the amount and nature of the provision; (c) the manner in which the provision is to be provided and the part or parts of the estate out of which it is to be provided; (d) the amount and nature of the provision; and (e) any conditions, restrictions, or limitations imposed by “the Court”.
The power to make a “family provision order” is conferred by s.59 of the Succession Act, which relevantly provides as follows:
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that:
(a) the person in whose favour the order is to be made is an eligible person, and
. . .
(c)at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2)The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.
Subsection 60(2) of the Succession Act provides the Court may, when considering whether to make a family provision order, consider matters that include the following:
(a)any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
(b)the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person’s estate,
(c)the nature and extent of the deceased person’s estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
(d)the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person’s estate,
(e)if the applicant is cohabiting with another person--the financial circumstances of the other person,
(f)any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person’s estate that is in existence when the application is being considered or that may reasonably be anticipated,
(g)the age of the applicant when the application is being considered,
(h)any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family, whether made before or after the deceased person’s death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
(i)any provision made for the applicant by the deceased person, either during the deceased person’s lifetime or made from the deceased person’s estate,
(j)any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
(k)whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
(l)whether any other person is liable to support the applicant,
(m)the character and conduct of the applicant before and after the date of the death of the deceased person,
(n)the conduct of any other person before and after the date of the death of the deceased person,
. . . , and
(p)any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered.”
To justify an order under s.59 of the Succession Act the Court “must be affirmatively satisfied that the deceased has not made “adequate provision for the proper maintenance ... or advancement in life of the person in whose favour the order is to be made””, and, if “that is established, the Court is empowered to order such provision out of the estate as the court “thinks ought to be made” for the identified purposes””.[11] The Family Provision Act was construed as requiring the Court to consider up to two questions.[12] The first, which was often referred to as the jurisdictional question, was whether the deceased made inadequate provision for the proper maintenance, education, or advancement in life of the person seeking a family provision order. The second question arose only if the first was answered in the affirmative: what provision ought to be made for the proper maintenance, education, or advancement in life of the person seeking a family provision order? In Andrew v Andrew, however, Basten JA suggested that the differences between the text and structure of s.59 of the Succession Act, on the one hand, and of s.7 and s.9 of the Family Provision Act on the other, means there “is no first stage of determining whether the actual provision was “inadequate”, followed by a discretionary exercise of determining what would be adequate and what should in fact be done”.[13] His Honour’s observations have generated discussion among the judges of the Supreme Court of New South Wales about the manner in which the Court is to determine whether a family provision order should be made, and that question does not appear to have been settled.[14] For the purposes of these reasons, however, it will be sufficient if I accept that the following passage from the judgment of Hallen J in Vidler v Ivimey reflects the current position:[15]
Perhaps, the way to approach the matter is to simply refer to the Act containing ‘twin tasks’ . . . being the jurisdictional question and the discretionary question, with one task overlapping, to some extent, with the other.
[11] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [593].
[12] Singer v Berghouse (1994) 181 CLR 201; Vigolo v Bostin (2005) 221 CLR 191
[13] Andrew v Andrew [2012] NSWCA 308, [29]
[14] In Maynard v Maynard [2018] NSWSC 1961 ([121-163]) Robb J considered the various opinions that have been expressed by judges, and in particular those expressed in Sgro v Thompson [2017] NSWCA 326
[15] [2013] NSWSC 1605, at [84] (approved by Robb J in Maynard v Maynard [2018] NSWSC 1961, at [157-158])
There are a number of principles that are relevant for determining whether the deceased has not made adequate provision under his or her will. These include the following:
a)Whether the deceased has made adequate provision for an applicant is a question of objective fact, the determination of which involves an evaluative judgment.[16]
b)Determining whether the disposition of the deceased’s estate is not such as to make adequate provision for the proper maintenance, education, or advancement in life of the applicant, will always, as a practical matter, involve an evaluation of the provision, if any, made for the applicant on the one hand, and the applicant’s “needs” that cannot be met from her, or his, own resources on the other; it being understood, however, that an applicant’s “needs”, when compared with the provision made for her, or him, out of the deceased’s estate, should not be the only, or even, the dominant consideration. An applicant’s financial needs and the financial needs of other persons with claims on the deceased’s testamentary bounty are important, and often highly important, considerations.[17]
c)There is no single provision of which it may be said that that is the provision that a wise and just testator would have made. There is instead a range of appropriate provisions, and minds may legitimately differ about the provision that should be made in any given case.[18]
d)The question of the adequacy of the provision made by the deceased “is not to be decided in a vacuum, or by looking simply to the question whether the applicant has enough upon which to survive or live comfortably”.[19] The inquiry is not confined only to the material circumstances of the applicant. It is a broader concept, which requires consideration of matters necessary to guard against unforeseen contingencies. The whole of the context must be examined.[20]
e)Whether adequate provision has not been made “will depend upon all the relevant circumstances, which include any promise which the testator made to the applicant, the circumstances in which it was made . . .
[16] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [596]
[17] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [597]
[18] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, [598]
[19] Vigolo v Bostin (2005) 221 CLR 191, [122]
[20] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [599]
Once satisfied the deceased has not made adequate provision for the proper maintenance, education, or advancement in life of an applicant, the Court does not have the authority to rewrite the will in a manner that accords with its view of fairness; the Court’s power to make an order is limited to redressing the circumstances where adequate provision has not been made for the proper maintenance, education, or advancement in life of the applicant.[21] Further, although the deceased’s wishes “may of course be overridden . . . they are part of the circumstances of the case and fall to be assessed in the round together with all other relevant factors”.[22]
[21] Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [615], quoting Pembroke J, in Wilcox v Wilcox [2012] NSWSC 1138, at [23].
[22] Ilott v The Blue Cross [2017] UKSC 17, at [47], quoted by Hallen J in Blendell v Byrne & Ors; The Estate of Noeline Joan Blendell [2019] NSWSC 583, at [616]
In Blendell v Byrne & Ors Hallen J considered that the following principles applied where the person who applies for a family provision order is an adult child (references omitted):[23]
(a)The relationship between parent and child changes when the child attains adulthood. However, a child does not cease to be a natural recipient of parental ties, affection or support, as the bonds of childhood are relaxed.
(b)It is impossible to describe, in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, “ordinarily the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, and where that is feasible; where funds allow, to provide them with a start in life – such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set their children up in a position where they can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation” . . . .
(c)Generally, also, “the community does not expect a parent to look after his or her children for the rest of [the child’s life] and into retirement, especially when there is someone else, such as a spouse, who has a prime obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parentsto provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute” . . .
(d)There is no need for an applicant adult child to show some special need or some special claim . . .
(e)The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration . . . . Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant . . . . . In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased . . . .
(f)The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim . . .
[23] [2019] NSWSC 583, at [629]
Peter’s claims for family provision order
By his will Peter’s father, Frank Taylor, appointed Peter’s mother, Margaret Taylor, sole executrix of his will, and devised to her the whole of Frank Taylor’s estate, including his class 3A shares in Vivacity, his shares in Megapoxy Sales & Services Pty Ltd, and his shares in Megapoxy China Ltd. The will further provided that if Margaret Taylor were not to survive Frank Taylor by 30 days, the will appoints, Peter, Jennifer, and Lee, being three of Frank Taylor’s four children, as executors; and, “as they have assisted me and my wife, Margaret Taylor, in developing the Company, Vivacity Engineering Pty Ltd, and its assets”, Frank Taylor gave to Peter, Jennifer, and Lee all of Frank Taylor’s shares in Vivacity, Megapoxy Sales & Services Pty Ltd, and Megapoxy China Ltd, his industrial property at 1 and 3 Sefton Road Thornleigh, and all trademarks and intellectual property owned by Frank Taylor. The will then provides that the residue of Frank Taylor’s estate is to be held on trust to pay debts and expenses and the balance on trust in equal shares for his four children, Peter, Jennifer, Lee, and Jeffrey.
Peter sets out in two affidavits the matters on which he relies for claiming a family provision order.[24] In his first affidavit (which he affirmed on 4 September 2018), Peter says as follows:
[24] Peter’s affidavits are annexed to the affidavit of Fay Calderone affirmed 28 February 2019.
a)Peter is one of four children of Frank Taylor.
b)Frank Taylor passed away on 5 August 2017, and his last will is dated 11 April 2005. The will nominated Margaret Taylor as executrix. Probate of the will has not been granted because Margaret Taylor has severe dementia.
c)So far as Peter is aware Frank Taylor’s estate consists of shares in Vivacity, shares in an associated company, Megapoxy Sales Pty Ltd, and a property at Thornleigh and a property in South Yarra, both of which are in the joint names of Frank Taylor and Margaret Taylor.
d)The only job Peter had was working at Frank Taylor’s side in the Vivacity Engineering business until 20 April 2018. Peter acquired no other skills or qualifications; he depended on Frank Taylor for his employment and earnings all his life. Peter recalls that early in his career he asked Frank Taylor whether he should enrol in a TAFE or university course, in response to which Frank Taylor told Peter not to waste his time.
e)Peter had a close and loving relationship with Frank Taylor, both during work and on social occasions. Over the years Peter discussed with Frank Taylor business plans and succession, and Frank Taylor would say that “[n]othing will change. You are the boss”.
f)From 2016 Frank Taylor and Margaret Taylor stopped coming into the office; and Peter was the person running the office.
g)Peter made “a significant contribution to” Frank Taylor’s estate “in terms of my contributions to Vivacity and/or Megapoxy”. These included working “several non-stop 24 hour shifts to meet customer demands at that time”; from 1992 to 20 April 2018 Peter worked in sales and marketing, travelling around the world developing new business channels and engaging in customer relations; he liaised with the business’s production team to adjust formulations and create new products to meet new customer demands; Peter kept and maintained data sheets on behalf of Vivacity; he carried out “work/renovations/improvements to the business to save money for my father”; and in October 2017 Peter personally secured for Vivacity its single largest contract, and coordinated the manufacturing for the contract. Peter rarely took holidays because Frank Taylor was “very strict and would not approve of my holiday requests”. Further, when required, Peter worked after hours and on weekends.
h)Up to 20 April 2018 Peter was employed as the Operations Manager of Vivacity, and was earning an annual salary of $300,000. He is currently not employed and does not receive an income. Margaret Taylor provided to Peter amounts totalling $8,000 over the last two years out of the rent paid on the Thornleigh property. Peter’s wife earns $12,500 per annum. Peter and his wife have monthly expenses of $7,533, and net assets of around $3.4 million.
i)Peter acknowledges that in his will Frank Taylor states Jennifer and Lee made contributions towards Vivacity’s business, but Peter does not believe they made the same level of contributions as he did. Over the years Peter expressed concerns to Frank Taylor that Peter had very little superannuation, and little to no savings. Frank Taylor told Peter he has nothing to worry about “because Peter will always have the business”, the “business will be split evenly between you, Jennifer, and Lee”, and “[y]ou will always have the business”.
j)In 2015 Jennifer was appointed a director of Vivacity. This occurred after she complained to the applicant’s father that Peter had been given business cards which described him as “General Manager”. Frank Taylor told Peter he had “nothing to worry about”, and that “I am not dead and you are the boss”.
In his second affidavit (which he affirmed on 9 October 2018), Peter provides what he says is “further detail in relation to matters raised” in his first affidavit. Peter says as follows:
a)The business of Vivacity involves the manufacturing of adhesive products for the civil engineering industry. Frank Taylor established the business in 1975, and it now employs 30 persons.
b)During 1979, being his first year working full time, Peter “personally developed what became the most successful and highest selling product known” as “Megapoxy PM White”.
c)From 1979 to 1992 Peter was in charge of production. He personally installed new and second hand mixing and dispensing machines that are still in operation. Frank Taylor taught him how to formulate and manufacture all of Vivacity’s products over the years. Peter was “directly involved in creating or adjusting at least 20 to 30 products”.
d)From 1992 to April 2018 Peter travelled around the world to build distribution channels.
e)On 1 January 2016 Frank Taylor announced to staff of “Vivacity Engineering, Resumax, Asheseal and Permatech” that in view of his advanced age as at 1 January 2016 he delegated his authority in the manner stated in the announcement. That included authorising Jennifer to be responsible for financial matters, including capital expenditures, wages, commissions, and remunerations, and Peter being “in charge of all operational matters, including the hiring and terminations [sic] of employees as well as operational authorisations which have been until now the duties of managing director”.
f)From January 2016, when Frank Taylor and Margaret Taylor stopped coming into the office, Peter ran the office. Jennifer was only in the office part time, and Lee was working shorter hours at work because he was living far away.
g)In 2016 and 2017 Peter was responsible for raising prices resulting in increased profits, and he was solely responsible for all large projects and tenders. In October 2017 Peter secured “the single largest contract . . . for $. . . ”.
h)Jennifer commenced working in the business in 1985 on a part time basis “as accounts receivable and payable”, and she was responsible for all of Vivacity’s accounts and finances under Frank Taylor’s instructions. After Jennifer was appointed director in 2015 she reduced her working days to three days a week.
i)Lee joined the business in 1992 when he was 18 years of age as a lab technician, but he was then assigned to a role in the office. That consisted of processing overseas orders, and liaising with production to fulfil customer requirements. For a period Lee assisted in technical sales. Jennifer appointed Lee a director of Vivacity and Megaproxy in April 2017. Lee moved to Tasmania in December 2017.
j)Jennifer engaged in conduct that was humiliating and disrespectful of Peter.
In addition to these matters Peter deposes to the circumstances leading to the termination of his employment. Peter says that on 3 April 2018 he found at the sink in the bathroom an unsigned letter addressed to him, and that on 10 April 2018 he received a letter from Vivacity signed by Jennifer, Lee and apparently by Margaret Taylor. The letter began by noting that a “number of serious concerns have been raised, regarding both your performance and conduct”, and that by “this letter, we put to you these allegations from staff and the directors in order for you to provide us with your responses”. There then follow 14 numbered paragraphs, each of which contains at least one allegation against Peter. The letter then states that “[w]e have spoken to you about the performance and conduct issues over a considerable period of time, to no avail nor do you make yourself available to discuss anything to do with anything business related”. The letter required Peter respond to the allegations in writing by 12 pm on 13 April 2018, and to attend a meeting at 3 pm on the same day “with the writers and an independent human resources professional to discuss the outcome of any decisions we may make”. Peter provided a written response, but he did not attend any meeting on 13 April 2018 because he claimed he was medically unfit. On 20 April 2018 Peter met with Jennifer, Lee, and Margaret Taylor, and he was handed a letter dated 20 April 2018. The letter records a number of observations on the responses Peter had given to Vivacity’s letter of 10 December 2018, and concluded that “we have decided your employment will be summarily terminated for serious misconduct with immediate effect”.
Lastly, Peter deposes to his current position and employment prospects. He says he has serious concerns about his ability to secure alternative employment because he is 55 years of age; he has no tertiary qualifications; he has only worked by Frank Taylor’s side in the family business; and he has no other skills or qualifications than those he learned and used in Vivacity’s business. Peter also says he owns no shares in Vivacity because all shares are held by Margaret Taylor; Jennifer and Lee hold a power of attorney for Margaret Taylor; Peter worked full time in the business whereas Jennifer only worked part-time; and Peter believes Frank Taylor expected that Peter would work in the business.
Jennifer swore an affidavit that was filed in the family provision proceeding. Jennifer deposes to matters that puts in issue most of the matters to which Peter deposes. Jennifer says:
a)Peter’s recollections about the development of the products he says he developed are inaccurate;
b)Peter’s attempts at obtaining overseas customers failed;
c)it was Frank Taylor, not Peter, who wrote the formulations;
d)Peter was not solely responsible for all large projects and tenders;
e)Jennifer and other employees worked beyond normal hours;
f)Frank Taylor did not appoint Jennifer solely to help him sign documents; he became angry when Peter had arranged to print business cards showing himself as general manager; and Frank Taylor made critical remarks about Peter’s management ability;
g)Peter has never treated Jennifer with respect or decency; and
h)Frank Taylor’s decision not to appoint Peter a director was deliberate.
Jennifer responded to that part of Peter’s second affidavit that dealt with the circumstances in which his employment was terminated as follows:
. . . . I do not propose to respond to the assertions made in these paragraphs 47-61 other than to say that:
(a)the termination of Peter’s employment from the business is the subject of Federal Circuit Court of Australia proceedings commenced by Peter against Vivacity on or about 16 November 2018;
(b)at this time, the parties have not served any evidence in those proceedings;
(c)Vivacity will vigorously defend those proceedings and it denies it is liable to Peter.
Is there one “matter”?
The first question I must consider is whether the claims made in the FW Act proceeding and in the family provision proceeding constitute one “matter”.
Principles
This Court has such jurisdiction as is vested in it “by express provision” under laws made by the Parliament.[25] Whether this Court has jurisdiction in relation to any particular matter, therefore, depends on there being a grant of jurisdiction under an Act of Parliament that conforms with s.77(i) of the Constitution,[26] and the particular matter falling within the terms of the grant of jurisdiction. As I have already noted, s.566 of the FW Act confers jurisdiction on this Court in relation to “any civil matter arising under” the FW Act, and the claims Peter makes in the FW Act proceeding constitute a civil matter arising under the FW Act.
[25] Federal Circuit Court of Australia Act 1999 (Cth), s.10
[26] Which provides: “With respect to any of the matters mentioned in the last two sections the Parliament may make laws . . . (i) Defining the jurisdiction of any federal court other than the High Court”.
The word “matter” in s.566 of the FW Act, however, is not restricted to a claim or claims that is or are made under the FW Act. “Matter”, as it appears in s.566 of the FW Act, has the meaning that “matter” has in s.75 and s.76 of the Constitution.[27] “Matter”, at least when used in relation to the expression “arising under any laws made by the Parliament” in s.76(ii) of the Constitution, means a set of alleged facts that have such a degree of commonality as to give rise to one justiciable controversy, even though the one controversy may give rise to more than one claim for relief or defence, provided that at least one of the claims for relief or at least one defence is alleged to arise under a law of the Parliament which, in the case before me, is the FW Act.
[27] I reproduce here what I said in Sarina & Anor v O'Shannassy [2019] FCCA 732, at [27-28]
Different expressions have been used to describe the required degree of commonality among alleged facts before they can properly be characterised as giving rise to one justiciable controversy. An influential formulation is that given by Mason J (as his Honour then was) in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd, who referred to “common transactions and facts” arising “out of a common substratum of facts”.[28] Also influential is the following formulation given by Gummow and Hayne JJ in Re Wakim:[29]
What is a single controversy ‘‘depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships’’. There is but a single matter if different claims arise out of ‘‘common transactions and facts’’ or ‘‘a common substratum of facts’’, notwithstanding that the facts upon which the claims depend ‘‘do not wholly coincide’’. So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are ‘‘completely disparate’’, ‘‘completely separate and distinct’’ or ‘‘distinct and unrelated’’ are not part of the same matter.
Often, the conclusion that, if proceedings were tried in different courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.
[28] (1981) 148 CLR 457, at page 512
[29] [1999] HCA 27; (1999) 198 CLR 511, at [140]- [141] (references omitted)
In Rana v Google Inc the Full Federal Court provided the following explanation of “matter”:[30]
The “matter” is the justiciable controversy between the parties arising out of the substratum of facts and claims representing, or amounting to, the dispute or controversy between or amongst the parties. Where federal and non-federal claims comprise the same justiciable controversy, a court exercising federal jurisdiction will have jurisdiction to resolve the entire matter in the exercise of its federal jurisdiction.
[30] [2017] FCAFC 156, at [17]
Thus, this Court would have jurisdiction to hear a claim that does not arise under the FW Act if there is a claim (or defence) before the Court that arises under the FW Act and the claim (or defence) that does not arise under the FW Act arises or substantially arises out of the same substratum of facts as that out of which the claim under the FW Act arises. The question, then, is whether the substratum of facts out of which Peter’s claims under the FW Act arise are the same as the substratum of facts out of which Peter’s claims under the Succession Act arise.
Parties’ submissions
Vivacity submits this question should be answered in the affirmative.[31] The substratum of facts Vivacity submits is common to the FW Act proceeding and the family provision proceeding are those that are relevant to determining the length of reasonable notice.[32] Vivacity submits that those matters include the age of the employee, the length of service, the professional standing and contributions of the employee to the business, the importance of the employee’s position in the business, the employee’s remuneration, the expected time it would take the employee to find alternative employment, the period for which the employee would have remained in employment, and the reasons and circumstances for the termination.[33] Vivacity submits that Peter relies on these matters in his claim for a family provision order in the family provision proceeding.[34] Vivacity submits, however, that even if the FW Act proceeding and the family provision proceeding constitute one matter, the Court has a discretion not to exercise its jurisdiction in relation to that part of the matter that does not arise under the FW Act; and that it should exercise its discretion by granting a stay of the FW Act proceeding pending the determination of the family provision proceeding.[35] In the alternative Vivacity submits there would be substantial merit if one court were to hear in one proceeding the claims made in the FW Act and the family provision proceedings, but a number of “substantive, procedural and case management considerations” will need to be taken into account, including the “legal and administrative arrangements to ‘transfer’ the” family provision proceeding to the Federal Circuit Court.[36]
[31] Outline Submissions of Respondent in Relation to Federal Jurisdiction, [3]
[32] Outline Submissions of Respondent in Relation to Federal Jurisdiction, [3] referring to Outline of Submissions of Respondent in Relation to Application in a Case dated 1 March 2019, [23-25]
[33] Outline of Submissions of Respondent in Relation to Application in a Case dated 1 March 2019, [24]
[34] Outline of Submissions of Respondent in Relation to Application in a Case dated 1 March 2019, [25]
[35] Outline Submissions of Respondent in Relation to Federal Jurisdiction, [15]
[36] Outline Submissions of Respondent in Relation to Federal Jurisdiction, [16]
Counsel for Peter, on the other hand, submit that the facts relevant to the family provision proceeding “go very significantly beyond the facts” that are likely to be in issue in the FW Act proceeding.[37] Counsel submit that the relevant facts in the FW Act proceeding are confined to the nature and extent of Peter’s employment, and in particular the alleged acts or omissions on which Vivacity purported to rely in summarily dismissing Peter from his employment; the facts “which inform the period of notice to which he is entitled upon termination of his employment if there was no justification for summary termination”; and the facts surrounding his annual leave entitlements.[38] The facts relevant to the family provision proceeding, on the other hand, “go very significantly beyond the facts in the current proceedings, and involves consideration of the same wide factual context as it applies to his brother Jeffrey and his mother Margaret, neither of whom are in any way associated with the current proceeding”.[39] Counsel support these submissions by identifying issues that will be the subject of evidence in the family provision proceeding which they submit cannot be relevant to any of the matters in issue in the FW Act proceeding.[40] Counsel for Peter also submit that if the FW Act proceeding and the family provision proceeding constitute the one “matter”, the Court has a discretion not to assume jurisdiction over the family provision proceeding, and it should exercise its discretion against assuming jurisdiction over the family provision proceeding.[41] Finally, counsel for Peter submit there is one other matter that demonstrates that the FW Act and the family provision proceedings cannot constitute a single “matter”; and that is that the twelve-month limitation period provided for by s.58(2) of the Succession Act for bringing a claim for a family provision order has expired.
[37] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [5]
[38] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [4]
[39] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [5]
[40] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [7]
[41] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [12]
The following issues arise:
a)Do the claims made in the FW Act proceeding and the family provision proceeding arise out of the same substratum of facts such as to constitute one justiciable controversy?
b)If (a) is answered in the affirmative, does s.79 of the Judiciary Act apply to “pick up” Chapter 3 of the Succession Act and permit this Court to exercise the jurisdiction the Supreme Court has under the Succession Act to hear Peter’s application for a family provision order?
c)Assuming (a) is answered in the affirmative, what, if anything, is the significance of the lapsing of the twelve-month limitation period prescribed by s.58(2) of the Succession Act?
d)Assuming the lapsing of the limitation period under s.58(2) of the Succession Act does not by itself deny the claims made in the FW Act proceeding and the family provision proceeding constituting a single “matter”, does the Court have a discretion not to exercise jurisdiction over the family provision proceeding and, if so, how should it exercise that discretion?
Single controversy?
I begin by identifying one matter that cannot reasonably be the subject of dispute. Peter’s claim for breach of contract based on Vivacity’s purported termination of his employment contract without giving reasonable notice will require an examination of Peter’s employment history with Vivacity. That is so because, assuming Peter’s contract of employment contained an implied term for giving reasonable notice, there are a range of matters that are or may be relevant to determining the length of notice Vivacity ought reasonably to have given Peter. Courts take into account a large range of factors when determining the length of reasonable notice.[42] These include the seniority and importance of the employee’s position; the length of the employee’s service; the age of the employee; the opportunities to obtain suitable alternative employment; the benefits foregone in accepting the employment; the likelihood of continuing employment; the existence of non-binding practices and customs; and the personal relationship between the parties. Much if not most of what Peter deposes to in the two affidavits he has affirmed in the family provision proceeding can reasonably be said to be relevant to these matters. It would not be unsurprising if Peter were to rely on the same or substantially the same affidavits in support of his claim based on breach of his employment contract.
[42] Irving, I., The Contract of Employment LexisNexis Butterworths Australia 2012, at [11.56]
It may be accepted that, as submitted by counsel for Peter, most of the factors identified in s.60(2) of the Succession Act, considered by themselves, are not relevant or at least obviously relevant to the issues arising in the FW Act proceeding. By itself, however, that does not necessarily mean the claims made in the FW Act proceeding and the family provision proceeding are incapable of constituting a single controversy:
a)As counsel for Peter accept, two of the factors identified in s.60(2) of the Succession Act are relevant to the question of determining the length of reasonable notice, although they are unlikely to be given significant weight. These are the age of Peter,[43] and the extent to which Peter contributed to Vivacity’s business.[44]
b)One factor that counsel for Peter submit is irrelevant but which, in my opinion, is relevant, to the FW Act proceeding is that identified in s.60(2)(m) of the Succession Act, namely, the “character and conduct” of Peter. In the family provision proceeding Peter intends to rely on the circumstances of his termination, and Jennifer has signalled in her affidavit that Vivacity intends to justify in the FW Act proceeding Peter’s summary dismissal. Jennifer, therefore, implies that she intends to rely on the matters that Vivacity intends to rely to justify its summary dismissal of Peter. Given that the matters on which Vivacity purported to rely in summarily dismissing him could reasonably be characterised as relating to Peter’s character and conduct, it is reasonably arguable that the same evidence in relation to the grounds on which Vivacity purported to dismiss Peter will be given in both the FW Act and the family provision proceedings.
c)Third, that a factor identified in s.60(2) of the Succession Act would not by itself be relevant to any of the issues in the FW Act does not necessarily mean that evidence that may be relevant to that factor would not also be relevant to an issue that arises in the FW Act proceeding. That is the case with the factor identified in s.60(2)(a), namely, the family or other relationship between Peter and Frank Taylor, or between Peter any other member of his family. That matter is not, by itself, relevant to the FW Act proceeding. The evidence, however, on which Peter relies in relation to this factor in the family provision proceeding is arguably relevant to the FW Act proceeding. That is because Peter claims that the mind behind Vivacity, his employer, was Frank Taylor; and the nature and length of Peter’s relationship with Frank Taylor in that capacity, including asserted statements by Frank Taylor that Peter did not need to obtain educational qualification, that Peter would be the “boss” and remain in the business, and Peter’s claimed involvement with Frank Taylor in managing the business, are at least arguably relevant to determining the length of reasonable notice.
d)Fourth, that there otherwise are matters identified s.60(2) of the Succession Act that cannot be relevant to any of the issues in the FW Act proceeding does not necessarily mean the claims made in the FW Act proceeding and the family provision proceeding do not constitute a single “matter”. Federal and non-federal claims are capable of comprising one matter even if the facts or asserted facts “do not wholly coincide”. Thus, if the determination of the federal and non-federal claims in different courts could potentially result in conflicting findings on one or more issues common to the two proceedings, this may indicate that the federal and non-federal claims comprise a single “matter”, even though the facts do not wholly coincide. The same may be said where the federal and no-federal claims are so related that the determination of one is essential to the determination of the other.
[43] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [7(g)], being the factor identified in s.60(2)(g) of the Succession Act
[44] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [7(h)], being the factor identified in s.60(2)(h) of the Succession Act
In my opinion, notwithstanding the absence of a complete overlap of the facts or asserted facts out of which the claims in the FW Act proceeding arise and those out of which the family provision proceeding arise, the claims made in the two proceedings arise out of the same substratum of facts and, for that reason, constitute the one controversy. The facts and evidence on which Peter is likely to rely in support of his claim for breach of contract in the FW Act proceeding are the same as those on which he intends to rely in the family provision proceeding; and the facts and evidence on which Vivacity intends to rely in justifying its dismissal of Peter from his employment are likely to be the same as those on which Jennifer will rely in the family provision proceeding. If these claims and defences are determined in separate proceedings, potentially different findings of fact will be made, although between different parties. Further, at least in a practical sense, the determination of the issues in the FW Act proceeding are necessary for the determination of Peter’s claims in the family provision proceeding and vice versa. It is reasonably arguable that whether or not Frank Taylor made adequate provision for Peter will depend, at least to a not insubstantial extent, on whether Vivacity was justified in summarily dismissing him because Peter’s expectations would have been frustrated, not because of any inadequate provision in Frank Taylor’s will but because of the conduct the 20 April 2018 letter alleges Peter had engaged in. And to the extent it is determined Frank Taylor did not make adequate provision for Peter, the determination of Peter’s claims in the FW Act proceeding may be necessary to determine what provision should be made. If, for example, Peter succeeds in the FW Act proceeding and obtains substantial compensation, that might be a not insignificant matter to take into account when determining what provision should be made.
That Peter’s claims in the FW Act and the family provision proceeding constitute one controversy can also be described in a more practical way. The controversy is between Peter, on the one hand, and Jennifer and Lee, the directors of Vivacity, on the other. It arises out of:
a)Peter claiming that, by causing Vivacity to dismiss him from his employment, Jennifer and Lee acted contrary to the expectations that the directing mind of Vivacity, Frank Taylor, by his statements and conduct, induced Peter to have, those expectations being that after Frank Taylor’s retirement from Vivacity’s business Peter would at the very least continue to perform the tasks he performed when Frank Taylor managed Vivacity’s business; and
b)Jennifer (and possibly Lee) denying that Peter was entitled to hold any such expectations and, to the extent that he was so entitled, Jennifer claiming that Peter forfeited the fulfilment of those expectations by engaging in the conduct alleged in the letter dated 20 April 2018 by which Vivacity terminated Peter’s employment.
The breach of contract claim Peter makes in the FW Act proceeding, and the claims he makes in the family provision proceeding, can both be viewed as Peter seeking a remedy that would in part compensate him for his disappointed expectations. Peter seeks to achieve this in his breach of contract claim by relying on what he alleges are the acts, omissions, and knowledge of Frank Taylor that induced Peter to hold his expectation as grounds for determining the reasonable notice period Vivacity ought to have given him when terminating his employment contract; and in his claim for a family provision order Peter seeks to rely on the same matters to submit that Frank Taylor inadequately provided for him and that a family provision order should therefore be made.
Does s.79 of the Judiciary Act “pick up” the Succession Act?
Subsection 79(1) of the Judiciary Act provides:
The laws of each State or territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
The nature and operation of s.79(1) of the Judiciary Act was considered by the High Court in Rizeq v The State of Western Australia,[45] although in the context of a State, rather than a federal, court exercising federal jurisdiction. The question in Rizeq was whether, in a trial by a court of Western Australia of a New South Wales resident for a contravention of a criminal law of Western Australia, being a trial which involved the exercise of federal jurisdiction under s.39(2) of the Judiciary Act,[46] s.79(1) operated to “pick-up” a law of Western Australia that permitted a majority jury verdict. It was contended that s.79(1) of the Judiciary Act operated to prevent the picking up of such provision, it being instead argued that s.79(1) applied to pick up as a law of the Commonwealth the criminal provision under which the accused was charged, with the consequence that s.80 of the Constitution was engaged to prevent majority verdicts. That argument was rejected. All justices held that s.79(1) of the Judiciary Act “picked up” the Western Australian law that permitted majority verdicts, but that the statutory provision of Western Australia creating the criminal offence applied by its own force.
[45] [2017] HCA 23
[46] Section 39(2) of the Judiciary Act provides that, subject to a number of conditions and restrictions, the “several Courts of the States shall within their several jurisdictions . . . be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which jurisdiction can be conferred upon it”. One of the matters in which original jurisdiction is conferred on the High Court is that specified in s.75(iv) of the Constitution which confers jurisdiction on the High Court on matters that include matters between a “State and a resident of another State”. The State court in Rizeq, therefore, was exercising federal jurisdiction because the criminal proceeding was a matter between the State of Western Australia and a resident of another State.
There are three judgments in Rizeq, but it will be sufficient if I refer to the judgment of the plurality. For the plurality the nature and extent of the operation of s.79(1) of the Judiciary Act is to be ascertained from an important consequence of a State court being invested with federal jurisdiction under s.39(2) of the Judiciary Act; and that consequence is that State law cannot govern the exercise of federal jurisdiction. More particularly, the vesting of federal jurisdiction on State courts prevents State laws that would otherwise be binding on the manner in which State courts would exercise State jurisdiction from applying to State courts exercising federal jurisdiction. The purpose and effect of s.79(1) of the Judiciary Act (subject to the conditions and limitations it identifies) is to replace the gap that would otherwise arise by the investing of federal jurisdiction on a State court, and by its terms make binding on the State courts in the exercise of federal jurisdiction those State laws that govern the exercise of jurisdiction that would have been binding had the State court been exercising State jurisdiction. That, at any rate, is my interpretation of the following passages from the judgment of the plurality.[47]
The incapacity of a State Parliament to enact a law which governs the exercise of federal jurisdiction by a court, whether it be a federal court or a State court, explains the necessity for s 79 of the Judiciary Act and is the key to understanding the nature and extent of its operation. Section 79 is a law, enacted under s 51(xxxix) of the Constitution, which serves to ensure that the exercise of federal jurisdiction is effective. The section fills a gap in the law governing the actual exercise of federal jurisdiction which exists by reason of the absence of State legislative power. The section fills that gap by picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. The section has no broader operation. . . .
Within the limits of State legislative capacity, State laws apply in federal jurisdiction as valid State laws unless and to the extent that they are rendered invalid by reason of inconsistency with Commonwealth laws. What State laws relevantly cannot do within the limits of State legislative capacity is govern the exercise by a court of federal jurisdiction. A State law can determine neither the powers that a court has in the exercise of federal jurisdiction nor how or in what circumstances those powers are to be exercised. A State law cannot in that sense “bind” a court in the exercise of federal jurisdiction, and that is the sense in which that word is used in s 79 of the Judiciary Act. The operation of s 79 is limited to making the text of the State laws of that nature apply as Commonwealth law to bind a court in the exercise of federal jurisdiction.
[47] Rizeq v The State of Western Australia [2017] HCA 23, at [63], and [101]
That interpretation is consistent with what the plurality recently said in Masson v Parsons (footnotes omitted):[48]
As was explained in Rizeq v Western Australia, the purpose of s 79(1) of the Judiciary Act is to fill a gap in the laws which regulate matters coming before courts exercising federal jurisdiction by providing those courts with powers necessary for the hearing and determination of those matters. In the case of a State court exercising federal jurisdiction (as in Rizeq), or a federal court exercising federal jurisdiction (as in this case), such a gap exists by reason of the absence of State legislative power to command a court as to the manner of its exercise of federal jurisdiction. In such cases, s 79(1) fills the gap by picking up the texts of State laws governing the manner of exercise of State jurisdiction and applying them as Commonwealth laws governing the manner of exercise of federal jurisdiction. But, as was stressed in Rizeq, s 79(1) of the Judiciary Act has no broader operation than that. In particular, s 79(1) is not directed to, and it does not add to or subtract from, laws which are determinative of the rights and duties of persons as opposed to the manner of exercise of jurisdiction.
[48] [2019] HCA 21, at [30]
These passages suggest there is no impediment to s.79(1) of the Judiciary Act “picking up” State laws, such as s.59 of the Succession At, that in substance create rights but do so by conferring jurisdiction on a particular State court. That was made clear by the plurality in Rizeq (footnotes omitted):[49]
Quite what is encompassed within s 79’s description of State laws that are “binding” on a court is to some extent elucidated by the section's express inclusion of ‘laws relating to procedure, evidence, and the competency of witnesses’. It would be wrong, however, to seek to delimit the scope of the section’s operation by invoking the difficult and sometimes elusive distinction between “substance” and “procedure”. It would also be wrong to seek to delimit the section’s operation by conceiving of a statute that is binding on a court as a statute which cannot also be binding on a person whose rights or obligations are to be determined by that court. As Dixon J commented in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett, it “is not unusual to find that statutes impose liabilities, create obligations or otherwise affect substantive rights, although they are expressed only to give jurisdiction or authority, whether of a judicial or administrative nature”. . . . .
By making State laws that are “binding” on courts also binding on courts exercising federal jurisdiction, s 79 of the Judiciary Act takes the text of State laws conferring or governing powers that State courts have when exercising State jurisdiction and applies that text as Commonwealth law to confer or govern powers that State courts and federal courts have when exercising federal jurisdiction.
[49] Rizeq v The State of Western Australia [2017] HCA 23, at [83] and [87]
It follows, therefore, that, assuming, as I have found, that the FW Act and the family provision proceedings arise out of the same substratum of facts, s.79(1) of the Judiciary Act applies to “pick up” Chapter 3 of the Succession Act with the effect that this Court can exercise the jurisdiction s.59 of the Succession Act confers on the Supreme Court of New South Wales.
Relevance of expiration of period prescribed by s.58(2) of Succession Act
Counsel for Peter submit that if I were to find that the claims made in the FW Act and the family provision proceedings constituted a single “matter”, it would not be possible for Peter to initiate new claims under the Succession Act because s.58(2) of that Act provides that an application for a family provision order must be made no more than twelve months after the deceased person died, and Frank Taylor died more than twelve months ago. That, counsel submit, would require Vivacity to apply under s.39 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act) for an order that the FW Act proceeding be transferred to the Federal Court, and also to apply to be joined as a party in the family provision proceeding for the purpose of applying to have the family provision proceeding transferred to the Federal Court under s.5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth).[50]
[50] Outline of Submissions of Applicant in Relation to Federal Jurisdiction, [11]
That the time for making an application under s.58(2) of the Succession Act has expired would not by itself necessitate Peter having to file any initiating document with this Court seeking a family provision order, and for Vivacity to apply to have the FW Act proceeding and the family provision proceedings transferred to the Federal Court. That is so because this Court has power under r.7.01 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) to allow or require a party to amend a document. Thus, it would be open to the Court, for example, to direct Peter to amend his claim by including in the application a claim for a family provision order, and to make directions that treat the affidavits that Peter and Jennifer filed in the family provision proceeding as having been filed in the FW Act proceeding.
There is, however, a potential difficulty. Peter commenced the FW Act proceeding on 16 November 2018, more than twelve months after Frank Taylor died. Even if the Court were to direct Peter to amend the application he filed in the FW Act proceedings, the amendment would take effect only from the date on which Peter commenced the FW Act proceeding, which is outside the twelve month period prescribed by s.58(2) of the Succession Act. This difficulty, however, would not prevent the claims made in the family provision proceeding from forming part of a single “matter”. The expiration of the time limited by s.58(2) of the Succession Act does not raise an absolute bar to making an application under s.59 for a family provision order. Subsection 58(2) provides that an application for a family provision order must be made not later than twelve months after the date of the deceased person’s death “unless the Court otherwise orders on sufficient cause being shown or the parties to the proceedings consent to the application being made out of time”. Thus, it would be open to the Court under s.58(2) of the Succession Act to otherwise order that Peter was not required to make a claim in this Court under s.58(2) of the Succession Act twelve months after Frank Taylor died.
I conclude, therefore, that the twelve-month period that has passed after Frank Taylor’s death does not prevent the FW Act proceeding and the family provision proceeding from constituting a single “matter”.
Discretion?
Both parties submit that where a federal court is seized of both federal and non-federal claims because they form part of a single matter the federal court has a discretion whether it should exercise jurisdiction over the non-federal aspect of the matter. Peter submits I should exercise the discretion against asserting jurisdiction, whereas Vivacity submits that the one court should hear the claims, although Vivacity submits the Federal Court is the more appropriate court to deal with the matter.
It has been said that a court “has a discretion whether to exercise the accrued jurisdiction in a particular matter”.[51] The source of that view appears to be the following passage from the judgment of Barwick CJ in Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd:[52]
It is settled doctrine in Australia that when a court which can exercise federal jurisdiction has its jurisdiction attracted in relation to a matter, that jurisdiction extends to the resolution of the whole matter. This accrued federal jurisdiction is not limited to matters incidental to that aspect of the matter which has in the first place attracted federal jurisdiction. It extends, in my opinion, to the resolution of the whole matter between the parties. This accrued jurisdiction carries with it the authority to make such remedial orders as are necessary or convenient for or in consequence of that resolution. For this purpose, the court exercising federal jurisdiction may enforce rights which derive from a non-federal source.
[51] Van Wyk v Sparks [2007] FamCA 495, at [32]
[52] (1981) 148 CLR 457, at page 475
That the jurisdiction to exercise a non-federal claim that forms part of the one “matter” is discretionary has been doubted, and, in my opinion, does not represent the current position. First, there is the following passage from the judgment of Gummow and Hayne JJ in Re Wakim; ex Parte McNally (footnotes omitted):[53]
In Philip Morris, Barwick CJ said that the exercise of the “accrued” jurisdiction “is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter”. In Stack, Mason, Brennan and Deane JJ refer to this proposition with approval but say that the idea is similar to the process of identification of a related matter mentioned in Fencott as being "a matter of impression and of practical judgment”. There may be some difficulty in analysing the question as one of “discretion”. It is not clear what principles or criteria would inform the exercise of a discretion of this kind. It may be that the better view is that the references to “discretion” are not intended to convey more than that difficult questions of fact and degree will arise in such issues - questions about which reasonable minds may well differ. It is, however, not necessary to decide what is meant by the references to discretion in this context.
[53] (1998) 198 CLR 511, at [188] (Gleeson CJ and Gaudron J agreeing )
Next there is what the plurality said in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd:[54]
There is no harm in the continued use of the term “accrued jurisdiction” in such situations provided several matters are borne in mind. First, while there are various claims, in these cases there is but one “matter” in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it. Moreover in Re Wakim . . . Gummow and hayne JJ (with whom Gleeson CJ and Gordon J agreed generally) expressed doubts as to what was meant by statements in some of the cases that the “accrued jurisdiction” was “discretionary” rather than “mandatory”. Ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised.
[54] (2001) 204 CLR 559, at [52] (referred to with approval by Hayne and Callinan JJ at [188]).
Although these passages suggest that whether a federal court has jurisdiction over a non-federal claim that forms part of a single “matter” does not depend on the exercise of discretion, they recognise that the court has the power to stay proceedings in relation to matters over which the court does have jurisdiction. Thus, even though a conclusion that there is a “matter” before a federal court implies the existence of a single controversy, that does not deny the court the power to stay the proceeding to the extent it relates to part of the “matter”. In the different, but not irrelevant, context of an application to stay a proceeding in Australia on the ground that Australia was a clearly inappropriate forum, Rares J in Suzlon Energy Ltd v Bangad (No.3) found that the Federal Court has power to grant a stay of part of the proceeding before it.[55] His Honour found the source of the power to be s.22 of the Federal Court of Australia Act 1976 (Cth). The FCC Act has an equivalent provision, and that is to be found in s.14 of that Act. Thus, this Court, too, has power to stay part of a proceeding for reasons such as, for example, its being a clearly inappropriate forum to determine that matter or because if no stay is granted there would be a multiplicity of proceedings.
[55] [2012] FCA 123
Conclusion and further progress
The claims Peter makes in the FW Act proceeding and in the family provision proceeding constitute a single matter, and this Court has jurisdiction to determine both sets of claims. My conclusion, however, brings with it a potential difficulty. Peter’s brother, Jeffrey, has also applied for a family provision order, and the proceeding Jeffrey commenced has been progressing in tandem with the family provision proceeding. On first impression it is difficult to see how Jeffrey’s family provision proceeding can be considered to form part of the single matter I have found is constituted by the FW Act proceeding and the family provision proceedings. Also on first impression, on the other hand, it is apparent that there will be common questions of fact between Peter’s family provision proceeding and Jeffrey’s family provision proceeding, and in particular the value of the Frank Taylor’s estate and the interests of other potential claimants. If this Court hears the FW Act and Peter’s family provision proceeding, questions common to Peter’s family provision proceeding and Jeffries’ family provision proceeding may need to be the subject of two separate proceedings.
This difficulty may be avoided if I were to grant a stay of part of what I have found constitutes a single matter, that part coinciding with the claim Peter makes in the family provision proceeding. It may be that by submitting that I should decline to exercise jurisdiction over Peter’s claims in the family provision proceeding, Peter is to be taken to be submitting that I should stay the proceeding before me to the extent it includes the family provision proceeding. If that is the case, and subject to hearing further submissions, I might be minded to grant a stay of that part of the “matter” that consists of Peter’s family provision proceeding, but on terms. Those terms would include Peter and Jennifer agreeing to be bound by any findings of fact I may make if I were to determine the claims made in the FW Act proceeding separately from the claims made in the family provision proceeding.
I do not propose to make any orders at this stage to give effect to these reasons for judgment. Instead, I will give the parties time to consider these reasons and discuss whether they can agree to orders that give effect to or, at least, are consistent with these reasons. I will list the matter at a time and date to be fixed for the purpose of hearing submissions on the orders I should make.
I certify that the preceding seventy-one (71) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 25 June 2019
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