Townsend, Anthony v Australian Information Media Pty Ltd

[1997] FCA 1521

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - Interlocutory application - whether termination of employment was harsh, unfair or unreasonable - whether application for imposition of penalty for breaching certified agreement should be heard with tort and Fair Trading Act 1987 (NSW) claims

Workplace Relations and Other Legislation Amendment Act 1986.
Industrial Relations Act 1988, s 178.
Fair Trading Act 1987 (NSW), ss 42, 46.
Workplace Relations Act 1996, s 347.

ANTHONY TOWNSEND v AUSTRALIAN INFORMATION MEDIA PTY LTD

NI 1369 OF 1996

MOORE J
SYDNEY
23 DECEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NI 1369 of   1997

BETWEEN:	ANTHONY TOWNSEND APPLICANT
AND:	AUSTRALIAN INFORMATION MEDIA PTY LIMITED RESPONDENT
JUDGES:		MOORE J
DATE OF ORDER:		23 DECEMBER 1997
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

1. The interlocutory application is dismissed.

NOTE:SETTLEMENT AND ENTRY OF ORDERS IS DEALT WITH IN ORDER 36 OF THE FEDERAL COURT RULES.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NI 1369 of 1997

BETWEEN:	ANTHONY TOWNSEND APPLICANT
AND:	AUSTRALIAN INFORMATION MEDIA PTY LIMITED RESPONDENT

JUDGES:	MOORE J
DATE:	23 DECEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This is an application by Australian Information Media Pty Limited ("AIM") ("the interlocutory application") seeking to have struck out parts of an application and statement of claim filed by Mr Anthony Townsend ("Townsend") ("the principal application").  The principal application was originally filed in the Industrial Relations Court of Australia on 12 April 1996.  There is no issue that by operation of the Workplace Relations and Other Legislation Amendment Act 1996, the principal application and the interlocutory application are to be heard and determined by the Federal Court of Australia.

The principal application has been amended since it was filed and the amended application and amended statement of claim now involve three causes of action. The first is an application under s 178 of what was, at the time the principal application was filed, entitled the Industrial Relations Act 1988 seeking the imposition of a penalty on AIM for breaching cl 8.4 of a certified agreement, the Arnbridge Australia Enterprise Agreement ("the Agreement"). AIM's name was Arnbridge Australia Pty Ltd at the time the Agreement was certified on 14 April 1994. The second is an action alleging AIM was liable in tort for representations made to Townsend by or on behalf of AIM. The pleadings allege that the representations were made during the period November 1993 to 8 March 1995. The third is a claim brought under the Fair Trading Act 1987 (NSW) alleging contravention of ss 42 and 46 and damages or compensation flowing from contravention of those provisions.

To understand the issue arising in the interlocutory application it is necessary to recount the background against which the application is brought.  The following is based on an affidavit of Townsend of 2 April 1996 filed in the proceedings.  It has not yet been formally read or its contents tested.  However it  was accepted in the hearing of the interlocutory application that it could be referred to for the purpose of establishing the relevant background.

Townsend was employed by AIM from 3 April 1995 to 6 October 1995.  Termination of his employment was effected by a letter of 3 October 1995 from the Employee Relations Manager of AIM.  Townsend described himself as a senior journalist and he set out his employment history prior to commencing employment with AIM.  In 1994 he was employed as a senior journalist with Television New Zealand. Townsend deposed to several conversations he had in late 1993 and in 1994 concerning the possibility of working for AIM.  AIM was then being established in Australia as a satellite and cable television service provider with its substantial activity being the provision of a news service.  AIM was a company jointly owned by the Australian Broadcasting Corporation, John Fairfax and Sons Ltd and Cox Communications Pty Ltd.  In the expectation of obtaining employment with AIM, Townsend resigned from his employment with Television New Zealand in August 1994 with a view to returning with his family to Sydney which he did in October 1994.  Townsend proceeded on the basis that there would be a period in which he was in Sydney before taking up any employment with AIM. To tide him over he took up a position as Chief of Staff in the Channel Ten newsroom.  He commenced that employment on 7 November 1994 and resigned in early February 1995.  Townsend recounted a number of conversations he had with representatives of AIM in which a range of matters were discussed, including AIM's future.  It is unnecessary to detail what he said was discussed.  It is sufficient to note that a positive picture was painted about the future of AIM and Townsend's involvement in its operation.  Notwithstanding earlier expectations, the business of AIM was effectively wound up in September 1995. 

As noted earlier, the proceedings under s 178 allege AIM breached the Agreement. Specifically it is alleged that the termination of Townsend's employment was in contravention of the following provision in cl 8.4:

"Termination of employment, - including during the orientation period - (with or without notice) by the Company shall not be harsh, unjust or unreasonable."

The interlocutory application was framed in the following way.  It was not submitted by AIM that the claim founded on the Fair Trading Act 1987 (NSW) or that founded in negligence were causes of action this Court had no jurisdiction to hear under s 32 of the Federal Court of Australia Act 1976 in the present circumstances. Rather it was submitted that whether those claims were to be heard with the claim brought under s 178 of the Industrial Relations Act 1988 involved the exercise of a discretion by the Court. Reference was made to Jupp and Computer Power Group Ltd v CP Consultants Pty Ltd (unreported, Industrial Relations Court of Australia, Keely J, 5 October 1994); Philip Morris Incorporated & Ors v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457; and Fencott v Muller (1983) 152 CLR 570.

In substance, two matters were pointed to by counsel for AIM as warranting the exercise of the discretion against the hearing of the associated matters. The first was that the factual issues in the proceedings under s 178 were narrow in compass and would involve a consideration of the circumstances of Townsend's termination. On the other hand the proceedings under the Fair Trading Act 1997 (NSW) and the claim in negligence would involve a far more wide ranging inquiry.  That inquiry would relate to the representations alleged to have been made to Townsend prior commencing employment with AIM and would involve a consideration of whether or not those representations constituted misleading or deceptive conduct.  That, in turn, would involve evidence concerning the likely future position of AIM at the time the representations were said to have been made.

The other, and related, matter was that if AIM successfully defended the claims in the associated jurisdiction, it is unlikely that it would be able to secure its costs in defending those proceedings having regard to the limits imposed by s 347 of what is now entitled the Workplace Relations Act 1996. Section 347 provides:

"(1)     A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under s 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first- mentioned party instituted the proceeding vexatiously or without reasonable cause."

Counsel for AIM referred to Grout v Gunnedah Shire Council (1995) 129 ALR 372 in which I concluded that the limits imposed by s 347 extended to a common law claim brought in the associated jurisdiction of the Court with a statutory claim under the Industrial Relations Act 1988.

There was no real issue that the Court had a discretion in which a range of matters might be relevant. While the applicant took issue with whether the limitation on the power to award costs deriving from s 347 was a relevant consideration, I accept that it is. By exercising the discretion in a way that results in the hearing of the causes of action based on tort, and under the Fair Trading Act 1987 with the application under s 178, the Court gathers together all causes of action which might constitute part of the same justiciable matter and confers upon them the immunity created by s 347. That section would otherwise not apply to those aspects of the matter which could be litigated separately which did not arise under the Workplace Relations Act 1996.

I accept that the hearing of the action in tort and under the Fair Trading Act 1987 may prolong the hearing of the matter. Nonetheless I am satisfied that the interlocutory application should be dismissed. What constitutes a termination which is harsh, unjust or unreasonable may involve a range of considerations. While neither counsel for AIM nor Townsend could identify any authority which dealt expressly with relevance of pre-contractual discussions in the assessment of whether a termination was harsh, unjust or unreasonable, it must be strongly arguable that, in appropriate circumstances, it is. If an employee was offered employment that was well paid, was said to be long term, and resulted in an employee leaving well paid and secure employment to take it up, a measure of the harshness, unjustness or unreasonableness of a subsequent termination is likely to include a consideration of these matters. It is probable that the applicant will be able to lead evidence about these matters as part of the case it wishes to bring under s 178.

It will thus be necessary for the facts to be canvassed in evidence before the Court and findings to be made about these matters. In these circumstances, in my opinion, the balance in the interlocutory application tips substantially in the applicant's favour. While the respondent does, I accept, suffer the prejudice of potentially being deprived of its costs, that consideration is outweighed by the desirability of the one Court hearing and determining the entire controversy between the applicant and the respondent.  The length the hearing will take is, in substance, only an aspect of the question of costs.  If the hearing of the proceedings involving the claim in tort and under the Fair Trading Act 1987 result in a longer hearing then, in my opinion, that is of no moment save that the extra hearing that may be required is a hearing on which s 347 operates. However, as I have just indicated, I doubt whether the time needed to deal with the claims in tort and under the Fair Trading Act 1987 will prolong the hearing by any significant degree if the evidence upon which those claims are founded is evidence relevant to the application under s 178 in any event.

Accordingly I dismiss the interlocutory application.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated:             23 December 1997

Counsel for the Applicant:	Mr J Nolan
Solicitor for the Applicant:	Paul Murphy Solicitor
Counsel for the Respondent:	Mr R Goot
Solicitor for the Respondent:	Minter Ellison
Date of Hearing:	30 October 1997
Date of Judgment:	23 December 1997