Testart v Testart (No 2)

Case [2023] FCA 209

FEDERAL COURT OF AUSTRALIA

Testart v Testart (No 2) [2023] FCA 209

File number: VID 661 of 2021
Judgment of: O’CALLAGHAN J
Date of judgment: 16 March 2023 
Catchwords: INDUSTRIAL LAW – interlocutory application by respondent to dismiss applicant’s claims for compensation for alleged contraventions of ss 45 and 323 of the Fair Work Act 2009 (Cth) – where applicant and respondent are “parties to a marriage” within the meaning of s 4(1)(ca) of the Family Law Act 1975 (Cth) – where applicant alleged she was hired by respondent under contract of employment – where applicant and respondent divorced – respondent sought summary dismissal of proceeding on the ground that applicant’s claim was a “matrimonial cause” within the meaning of s 4(1)(ca) of the Family Law Act 1975 (Cth) and thus within the exclusive jurisdiction of the Federal Circuit and Family Court of Australia – whether claims for compensation for breach of civil remedy provisions under the Fair Work Act 2009 (Cth) were “property” within the meaning of s 79 of the Family Law Act 1975 (Cth) – Mullane v Mullane (1983) 158 CLR 436 applied – whether applicant’s claim “arises out of the marital relationship” within the meaning of s 4(1)(ca)(i) of the Family Law Act 1975 (Cth) – whether applicant’s claims under the Fair Work Act 2009 (Cth) were claims that “relate to completed divorce proceedings between the parties” within the meaning of s 4(1)(ca)(ii) of the Family Law Act 1975 (Cth) – respondent sought summary dismissal of proceeding on the ground that applicant was prevented from bringing civil remedy claims under the Fair Work Act 2009 (Cth) by reason of the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 – whether and to what extent applicant’s claims were time-barred by operation of ss 544 and 545(5) of the Fair Work Act 2009 (Cth)
Legislation:

Fair Work Act 2009 (Cth) ss 45, 323, 539, 539(1), 539(2), 544, 545, 545(5), 548, 566

Family Law Act 1975 (Cth) ss 4(1)(a), 4(1)(ca)(i), 4(1)(ca)(ii), 4(1)(e) (as at 5 August 1976), 4(2)(a), 8(1), 39, 39(1)(a) (as at 6 June 2019), 39(5AA) (as at 6 June 2019), 79, 90AD(1), 90XC(1), 114(1) (as at 5 August 1976)

Legal Services Award 2010
Cases cited:

Bate v Priestley (1989) 97 FLR 310

Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276

Bridge v Lindrum [1957] AR (NSW) 356

Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245

Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62

Clayton v Bant (2020) 272 CLR 1

Cromwell v County of Sac 94 US 351 (1877)

Dougherty v Dougherty (1987) 163 CLR 278

In the Marriage of Bak (1979) 46 FLR 271

In the Marriage of Mills (1976) 25 FLR 433

In the Marriage of Murkin (1980) 5 Fam LR 782

Jobbins v Capel Court Corp Ltd (1989) 25 FCR 226

Jones v Lorne Saw Mills Pty Ltd [1923] VLR 58

Lang v ACN 078 899 591 Pty Ltd t/as Kohinoor Indian…

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Details
AGLC
Testart v Testart (No 2) [2023] FCA 209
Case
[2023] FCA 209
Decision Date

CaseChat Overview and Summary

In Testart v Testart (No 2), the Federal Court was asked to determine whether claims for compensation for contraventions of the Fair Work Act 2009 (Cth) were within the exclusive jurisdiction of the Federal Circuit and Family Court of Australia under the Family Law Act 1975 (Cth). The applicant, Ms Testart, alleged that she was hired by the respondent, Mr Testart, under a contract of employment. After their divorce, Ms Testart brought claims in the Federal Court for unpaid wages, unpaid annual leave, and annual leave loading. Mr Testart applied for summary dismissal of the claims, arguing that they constituted a "matrimonial cause" within the meaning of s 4(1)(ca) of the Family Law Act, and thus fell within the exclusive jurisdiction of the Federal Circuit and Family Court of Australia.

The court considered whether claims for compensation for breach of civil remedy provisions under the Fair Work Act were "property" within the meaning of s 79 of the Family Law Act. The court found that such claims were not "property" within the meaning of s 79, as they were personal rights and not proprietary rights. The court also considered whether the claims "arose out of the marital relationship" or "related to completed divorce proceedings between the parties". The court found that the claims did not arise out of the marital relationship or relate to completed divorce proceedings between the parties. The court further considered whether the claims were time-barred by operation of ss 544 and 545(5) of the Fair Work Act, but did not find it necessary to resolve this issue.

The court dismissed Mr Testart's interlocutory application for summary dismissal of the claims, and ordered that the proceeding be referred to mediation. The court reserved the question of costs. The court found that the claims for unpaid wages, unpaid annual leave, and annual leave loading alleged to have taken place prior to 11 November 2015 were time-barred, and therefore dismissed those claims. The court dismissed the interlocutory application on all other grounds, and ordered that the proceeding be referred to mediation. The court also ordered that the Registrar of the Court report back to the Court as to the result of the mediation by no later than 19 May 2023. Costs were reserved.

Orders

Orders of the court

1. All claims made by the Applicant relating to contraventions of the Fair Work Act 2009 (Cth) in respect of unpaid wages, unpaid annual leave and annual leave loading alleged to have taken place prior to 11 November 2015 are dismissed.

2. The Respondent’s interlocutory application dated 10 February 2022 is otherwise dismissed.

3. Pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth) and r 28.02 of the Federal Court Rules 2011 (Cth), the proceeding is referred to mediation on all issues before a Registrar of the Court, as soon as practicable, and by no later than 12 May 2023.

4. The Registrar shall, not later than 19 May 2023, report back to the Court as to the result of the mediation.

5. Costs reserved.

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

Background

Background to the litigation

Ms Testart relied on an affidavit she swore dated 9 November 2021.THE FACTS The relevant facts are as follows. Ms Testart commenced working for Mr Testart, who is a barrister, on 1 July 2009, and continued to do so until June 2017. The parties married in 2010 after a period of co-habitation and separated on a final basis in May 2019. Ms Testart deposed that on 30 June 2009, Mr Testart made her a written offer of employment as his personal assistant. That offer included a proposal to “pay an annual salary of $79,000, payable weekly in advance, together with superannuation at the appropriate statutory rates”. The terms of the offer included references to “the normal terms and conditions of employees in the legal secretarial industry”, “rights you otherwise have under Commonwealth legislation”, “normal industry sick leave entitlements” and “4 weeks’ holiday annually”. The evidence also included a letter dated 17 September 2009, signed by Mr Testart, in which he confirmed the employment of the applicant as his personal assistant from 1 July 2009. This letter provided, among other things, that the “position is permanent, and full time … [and that Ms Testart] is employed at a yearly salary of $80,000, plus statutory superannuation”. Following their separation, Ms Testart commenced a family law proceeding in June 2019 in the then-Federal Circuit Court of Australia, seeking interim and final property and spousal maintenance orders, which included seeking the alteration of property interests under s 79 of the Family Law Act (Family Law Proceeding). Section 79 of the Family Law Act relevantly provides:(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property … Section 4(1)(a) of the Family Law Act defines “property” in relation to the parties to a marriage or either of them to mean “property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion”. The application for spousal maintenance was dismissed in October 2019 and the remainder of the Family Law Proceeding was finalised by consent on 6 August 2020. A divorce order was granted on 21 October 2020 and it took effect on 22 November 2020. The final orders made by Judge Kirton on 6 August 2020 relevantly provided that “[t]here be final orders, by consent, in terms of the Minute of Consent Orders signed by the parties and dated 6 August 2020”. That minute was relevantly in these terms:BY CONSENT IT IS ORDERED THAT:l. All previous Orders be and are hereby discharged.2.That upon settlement of the sale of the property at … (“the Yallourn North property”) the balance of settlement monies be paid to the Wife into an account nominated by her.3.Save as otherwise provided herein, the Wife retain, to the exclusion of the Husband, for her sole use and benefit:-(a) Her personal savings;(b) Her vehicles;(c) Her personal belongings and effects; and(d) Any superannuation entitlement she may have.4.The Wife be solely liable for any debts in her name or for which she is personally liable, including but not limited to any credit card liabilities.5.Save as otherwise provided herein, the Husband retain, to the exclusion of the Wife, for his sole use and benefit:-(a) His personal savings;(b) His vehicles;(c) His personal belongings and effects; and(d) Any superannuation entitlement he may have.6.The Husband be solely liable for any debts in his name or for which he is personally liable, including but not limited to any credit card liabilities or any liabilities to the Australian Taxation Office arising from his work as a barrister.7.Unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these Orders:(a)Each party otherwise be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders;(b)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;(c)Money standing to the credit of either party in any bank, building society or investment account shall be the sole property of the owner named thereunder;(d)All insurance policies shall be the sole property of the owner named thereunder;(e)Each party shall be solely liable for and indemnify the other in respect of their individual debts; and(f)Any joint tenancy of the parties in any property real or personal is hereby severed.8. All applications be otherwise dismissed and there be no Order as to costs.THE COURT NOTES THAT:A.Pursuant to Section 81 of the Family Law Act 1975, the parties intend that these Orders shall, as far as practicable, finalise their financial and other relationships and sever their financial ties.B.The Husband’s lawyers may provide a copy of these Orders to Gadens Lawyers, who act on behalf of the mortgagee in possession, for the purposes of Gadens being able to make the payment to the Wife pursuant to these Orders.C.The parties have finalised their property matter on a final basis in accordance with the terms of these Final Orders …THIS PROCEEDING

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Ms Testart’s claim for superannuation entitlements falls into a different category because it is the subject of some on-going dispute with the Australian Taxation Office, the particulars of which were not made clear (at least to me). So whether and to what extent the claim with respect to superannuation entitlements is time-barred (or has any merit) are not issues that I am asked to resolve, as Mr Testart’s counsel seems to have accepted in her note set out above. CONCLUSION For the foregoing reasons, I will order that all claims made by Ms Testart relating to Fair Work Act contraventions in respect of unpaid wages, unpaid annual leave and annual leave loading for the period prior to 11 November 2015 be dismissed. Mr Testart’s interlocutory application will otherwise be dismissed. I will reserve the question of costs. I also propose to order that the proceeding be referred to mediation by a Judicial Registrar of the court as soon as practicable, and by no later than 12 May 2023.

Ratio Decidendi

Legal Principle Established

Section 39 of the Family Law Act provides that “[s]ubject to this Part, a matrimonial cause may be instituted under this Act: (a) in the Federal Circuit and Family Court of Australia (Division 2)”. (In 2019 when the Family Law Proceeding was commenced, s 39 provided that a matrimonial cause could be instituted under the Act either in the Family Court or the Federal Circuit Court: see s 39(1)(a) and s 39(5AA)). By virtue of proclamations made by the Governor-General under ss 39(7) and 40(3) of the Family Law Act, the jurisdiction of the Federal Circuit and Family Court of Australia to hear matrimonial causes is exclusive (other than in Western Australia and the Northern Territory). See, by way of example, Commonwealth of Australia Gazette (No S86, 27 May 1976); Commonwealth of Australia Gazette (No GN45, 13 November 1996).Consideration It follows that in order for Mr Testart to make good his contention that the Fair Work Proceeding is a matrimonial cause within the meaning of s 4(1)(ca) of the Family Law Act, it must be established that it:(1)is between the parties to a marriage;(2)is with respect to the property of the parties to the marriage or either of them; and(3)either:(i)arises out of the marital relationship; or(ii)relates to completed divorce proceedings between the parties. The Fair Work Proceeding is relevantly between the parties to a marriage by operation of s 4(2)(a) of the Family Law Act because Mr Testart and Ms Testart are persons who were parties to a marriage that has been terminated by divorce. The first necessary condition is therefore satisfied. The contention that the Fair Work Proceeding is a matrimonial cause, however, falls at the next hurdle, because claims for compensation for breach of civil remedy provisions under the Fair Work Act are not “property” within the meaning of s 79 of the Family Law Act. As Mason ACJ, Wilson, Brennan, Deane and Dawson JJ said in Mullane v Mullane (1983) 158 CLR 436 at 445, “s 79 on its proper construction refers only to orders which work an alteration of the legal or equitable interest in the property of the parties or either of them. An interest in property is a right of a proprietary nature, not a mere personal right”. That is to say, “[w]here [s 79] refers to a settlement of property, it should be understood as using that expression in a sense which is closely related to the meaning which the expression bears in the law of real and personal property”. Ibid. And it is obviously the case that a claim for an award of compensation for loss that a person has suffered because of a contravention of a civil remedy provision of the Fair Work Act is quintessentially a personal, not a proprietary right, because it cannot be assigned. And it cannot be assigned because “an assignee is not a person who comes within the terms of the statutory remedy”. Compare Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62 at 117 [205] (von Doussa J). See too National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (No 1) (1995) 132 ALR 514; [1995] FCA 874 at 539 (“The causes of action under [ss 52 and 82 of the Trade Practices Act 1974 (Cth)] and the [Securities Industry Code (Vic)] are not assignable, if for no other reason, because it is relevantly only the claimants who could possibly satisfy the statutory descriptions of being persons who suffered loss or damage caused by the conduct described in the statutes”).