Webber v Spotless Management Services Pty Ltd
[2015] VMC 41
•18 DECEMBER 2015
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
INDUSTRIAL DIVISION No F12751279
BETWEEN:
STEVEN WEBBER PLAINTIFF
-and-
SPOTLESS MANAGEMENT SERVICES PTY LTD DEFENDANT
MAGISTRATE: GINNANE
WHERE HEARD: MELBOURNE
DATE HEARD: 6 OCTOBER 2015
DATE OF DECISION: 18 DECEMEBER 2015
MEDIUM NEUTRAL CITATION: [2015] VMC041
APPEARANCES COUNSEL SOLICITORS
For the Plaintiff Mr Hooper Kelly Workplace Lawyers
For the Defendant Mr Galbraith John Douglas
Catchwords – Long Service Leave Act 1992 (Vic) – whether proceedings commenced contrary to s 160(4) of the Long Service Leave Act – whether failure to comply with s 160 (4) results in any proceedings commenced for long service leave a nullity – application of reasoning in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 – discussion of Berowra Holdings Pty Limited v Gordon [2008] 225 CLR 364 - proceedings commenced by plaintiff not a nullity – alternatively, whether correspondence that deals with settlement of a Fair Work Act dispute and also identified pursuit of a claim for long service leave may amount to a written demand for the money owed for the purposes of s 160(4) –observations on nature of Long Service Leave Act – observations on the purpose to be served by the provision of notice – no prescribed form provided– surrounding circumstances sufficient to conclude that correspondence satisfied objective provided for under s 160(4)
REASONS FOR DECISION
HIS HONOUR
Introduction and background
The plaintiff makes a claim in the Industrial Division of the Magistrates’ Court of Victoria for an amount representing unpaid long service leave[1]. This court is conferred with jurisdiction under the Long Service Leave Act 1992 (‘the LSL Act’) to determine such disputes. The defendant has raised a preliminary point which, if determined favourably to it, would summarily determine the plaintiff’s proceeding. For the reasons that follow, I am not satisfied by the defendant’s arguments that the plaintiff’s claim in this Court is a nullity for failure to comply with s 160 (4) of the LSL Act. It follows that I am not satisfied that the plaintiff’s claim is amenable to either a summary order under the Magistrates’ Court General Civil Procedure Rules 2010 (‘the CPR’) or for summary judgment under the Civil Procedure Act 2010 (‘the CPA’).
[1] 1. The history of long service leave in Victoria is dealt with in great detail in the judgment of Dodds-Streeton J in Melbourne Cricket Club v Francis Clohesy [2005] VSC 29 at [26 to 37].
The plaintiff and the defendant were represented by solicitors and counsel. Leave is required for parties to be legally represented in small claims. Given the nature of the proceeding and the issues raised it was appropriate that the parties were legally represented.
The plaintiff lodged his Small Claim[2] in the Industrial Division of the Magistrates’ Court which was marked as received on 30 July 2015.The plaintiff alleges a period of continuous employment with the defendant commencing in 1987 and concluding on 23 June 2015. He alleges employment in the position of General Manager of the defendant and with responsibility for “overseeing and ensuring the day- to- day and general running of the Defendant.”[3]
[2] A Small Claim is provided for by s 548 of the Fair Work Act 2009
[3] See details furnished in small claims form dated 30 July 2015
The plaintiff claimed long service leave in the amount of $18,366.14.
By its ‘Response to the Small Claim’, the defendant denied a continuity of employment by the plaintiff with it and said that the plaintiff was not continuously employed by the one employer within the meaning of the LSL Act for the period 1987 to 23 June 2015 and, furthermore, the plaintiff’s period of continuous service with the defendant was from 1 July 2010 to 23 June 2015. Significantly the defendant pleaded the following[4]:
“Further or alternatively, the Plaintiff is not entitled to bring these proceedings to recover money allegedly owed by the Defendant under the Long Service Leave Act 1992 because it did not give the Defendant a written demand for the money allegedly owing before starting the proceedings and, as a result, the proceedings must be dismissed.”
[4] A further response made to the plaintiff’s claim for the imposition of a penalty was resolved in preliminary argument
The matter came on for mention before me on 9 September 2015 and I gave directions for the progress of the matter including ordering that any application to dismiss the claim be filed and served by the defendant on the plaintiff and that the parties file and exchange a note of contentions of fact and law.
The defendant filed a summons dated 10 September 2015 in which the following relief was sought:
1. The proceedings and the plaintiff’s claim against the defendant be dismissed
2. The plaintiff pay the defendant’s costs
3. Such further or other orders as the Court deems appropriate.
The summons was supported by an Affidavit of John Daniel Douglas (‘Douglas’) sworn 10 September 2015.
On 22 September 2015 Joseph Kelly (‘Kelly’), the plaintiff’s solicitor, swore an Affidavit together with three exhibits.
10. The matter was listed on 30 September 205 but adjourned to 6 October 2015. The hearing of the defendant’s application occurred on 6 October 2015. At the conclusion of the hearing I reserved my decision.
The nature of the summons
11. Section 62 of the CPA states:
A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff’s claim or part of that claim has no real prospects of success[5].
[5] The test applicable under s.63 of the CPA enables parties to seek summary disposal of a proceeding where there is no prima facie plausibility of the claim / defence such that further investigation is warranted. See, for example, Kennedy v Shire of Campaspe [2015] VSCA 47
12. Order 23.01 of the CPR relevantly states:
(1) If a proceeding generally or any claim in a proceeding—
(a) does not disclose a cause of action; or
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the Court—
the Court may upon the application of a defendant who has filed a defence stay the proceeding generally or in relation to any claim or make an order for the defendant in the proceeding generally or in relation to any claim.
(2) If the defence to any claim in a proceeding—
(a) does not disclose an answer; or
(b) is scandalous, frivolous or vexatious—
the Court may make an order for the plaintiff in the proceeding generally or in relation to any claim.
13. On 30 September 2015 the matter was adjourned by consent to 6 October 2015.
14. On 6 October 2015 the plaintiff was represented by Mr Hooper of counsel and the defendant was represented by Mr Galbraith of counsel. At the conclusion of the hearing I reserved my decision.
15. The defendant relied on two separate basis for the relief claimed. Principally it argued that the proceedings commenced in this court by the plaintiff are a nullity. If, however, the proceeding was within jurisdiction then nonetheless it should be dismissed. Though separately adumbrated, the arguments involve a common set of contentions that hinge on the question of the provision by the plaintiff to the defendant of a demand for payment of long service leave.
The Plaintiff’s Long Service Leave proceeding
16. Section 160 of the LSL Act is headed: ‘Recovery of money owed’ and reads as follows:
160 Recovery of money owed
(1) An employee who is owed any money by an employer under this Act or any other Act, or under any employment agreement or order made under this Act or any other Act, may take proceedings in the Industrial Division of the Magistrates' Court to recover the money owing. The debt must arise out of the employment relationship.
(2) An organisation may, if requested to do so by an employee who is, or is eligible to become, a member of the organisation, take proceedings in the Industrial Division of the Magistrates' Court to recover money owed to the employee for long service leave.
(3) Proceedings under this section must be started within 6 years after the employee's entitlement to the money arises.
(4) Before proceedings may be started under this section, the employer must be given a written demand for the money owed.
(5) If the Court is satisfied that the employer—
(a) had reasonable notice of the employee's claim; and
(b) had no reasonable grounds on which to dispute the claim; and
(c) in the circumstances should have paid the claim without the need for proceedings being taken to establish the validity of the claim—
the Court may order the employer to pay interest to the employee on top of any other amount that the employee is entitled to.
(6) The interest must not be greater than the rate fixed under section 2 of the Penalty Interest Rates Act 1983 that applies at the time the Court makes the order.
(7) If a claim is made under this section by an employee's personal representative, subsections (5) and (6) apply despite anything to the contrary in section 29 of the Administration and Probate Act 1958.
(8) In this section—
employee includes a former employee;
employer includes a former employer;
employment agreement does not include—
(a) a federal agreement; or
(b) terms and conditions of employment to which an employee is entitled under—
(i) a federal award; or
(ii) a federal determination;
organisation has the same meaning as in the Commonwealth Fair Work Act.
Alleged failure to furnish s 160(4) written notice of demand
17. Mr Galbraith submitted that the plaintiff had not complied with the provision of a notice that meets the requirements specified in s 160 (4) of the LSL Act.
18. It is accepted by the plaintiff and the defendant that that no form of notice is prescribed by the LSL Act or by regulations.
19. Mr Galbraith submitted that there was no relevant decided authority on the point. My own researchers have been unable to find any directly relevant authority relating to s 160 (4) of the LSL Act. There are no indications of the legislative intent in the Second Reading speech when s160 (4) came to be introduced into the LSL Act. In my judgment, the matter falls to be determined by reference to first principles and ordinary rules of statutory construction.
20. What may amount to a notice that would meet the requirements of the subsection is a matter to be determined in any given case. In this instance, the plaintiff submitted that by reason of correspondence that passed between his solicitor and the solicitors for the defendant, the defendant was provided with a sufficient written notice of a demand for long service leave and, in light of this, ‘a written demand for the money owed’ was provided prior to the commencement of the proceedings.
21. The defendant objected to the plaintiff being able to rely upon some parts of such correspondence on the basis that they came into existence for a purpose that rendered them inadmissible under the Evidence Act 2008. Ultimately, I have concluded the defendant’s objections are not upheld. However, before expressing my reasons in relation to the objections raised under the Evidence Act, it is necessary to first determine if s160 (4) of the LSL Act imposes a mandatory obligation on an employee to make a written demand for the money owed, a failure of which renders the commencement of a proceeding a nullity. If it does not then the matter of the admissibility of the correspondence falls away.
The nature of the obligation imposed by s 160 (4) of the LSL Act
22. The defendant argues that the word ‘must’ inserted by the draughtsman into subsection 160(4) establishes prima facie the intention that compliance with a written demand is mandatory before proceedings are commenced.
23. Mr Galbraith referred to the decision of the High Court in Berowra Holdings Pty Limited v Gordon [2008] 225 CLR 364 but sought to distinguish it from the case at hand. The factual background is set out in the judgment of the High Court and can be summarised as follows. On 23 November 2001, the plaintiff worker had commenced proceedings in the District Court of New South Wales claiming common law damages in respect of an injury suffered on 2 October 2001 in the course of his employment. Notice of the injury was given to the employer on 12 October 2001. The notice enlivened s 151C (1) of the Workers Compensation Act that provided:
‘A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay the compensation until 6 months elapsed since notice of the injury was given to the employer’.
24. Section 151C (2) provided:
‘Despite subsection (1), the person is entitled to commence court proceedings against the employer if either of the following occurs:
(a) the employer denies all liability in respect of the injury, (b) the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which liability is admitted’.
25. The employer admitted liability for workers compensation payments. The Act did not state the consequences of failure to comply with s 151C (1). The employer’s solicitor took numerous steps in the proceeding without alluding to s 151C (1) until the day before the case was fixed for hearing at which time they gave notice that they would apply, inter alia, for an order for summary dismissal on the ground that the proceedings were a nullity.
26. The High Court held that the proceedings were not a nullity for reasons that included that the statutory provision should not be treated as if a plaintiff’s entitlement to commence proceedings after the passage of six months from the giving to the employer of notice of the injury was a pre-condition to the court’s jurisdiction to determine claims for work injury damages. As well, s 151C did not distinguish or create new rights but postponed the remedy for the common law right to initiate proceedings in a court of competent jurisdiction and that proceedings commenced in contravention of s 151C were not invalid for want of jurisdiction.
27. Mr Galbraith submitted that Berowra Holdings concerned the imposition of a statutory imperative as a pre-requisite to the exercise of a common law right and hence the decision of the Court that it the provision merely postponed the exercise of a right by the worker to commence proceedings was explicable. Mr Galbraith argued that the situation in Berowra Holdings, calls to be compared with the right the plaintiff seeks to pursue in these proceedings, which is a statutory right under the LSL Act.
28. Mr Galbraith also argued that the outcome of noncompliance that turns on a failure to comply with a time requirement is very different from the plaintiff’s non-compliance in these proceedings. He submitted that the character of the compliance demanded of an employee under s 160(4) of the LSL Act was not to be equated to failures to abide by pre- action protocols or non-compliance with a time limitation. Mr Galbraith submitted that a time limit is something ‘which a defendant employer may choose to ignore if the time limit is not met’. However, he submitted s 160(4) of the LSL Act:
‘ ...is a legislative requirement imposed on the employee claimant within a legislative scheme establishing a formal process for the recovery of statutory entitlements’.
29. In my view it would be wrong to characterise and thereby distinguish the decision in Berowra Holdings by reference to common law rights and time limitations. In my judgment, the effect of non-compliance must always be determined by a process of statutory construction by asking whether it was a purpose of the legislation that an act done in breach of a provision should be invalid. From adopting this approach to the matter there are decided cases that provide assistance.
30. In my judgment, the debate is better understood by reference to the decision of the High Court in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 in which the court said the answer to such a question depends on whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the statutory requirement. That legislative purpose is to be ascertained by reference to the language, subject matter and objects of the statute in question and the consequences for the parties if the act done in non-compliance with the statutory requirement is rendered invalid.
31. The purpose of the LSL Act is expressed in s 1 of the LSL Act which states:
The purpose of this Act is to make provision with respect to long service leave entitlements of certain employees.
32. The LSL Act is beneficial legislation and applies to a significantly large number of the working population. There is both a private right and a public benefit that informs the legislation. It makes provision for the method of calculation of long service leave in a variety of circumstances including when it is to be taken and characterises amounts owed to an employee in respect of long service leave as ‘arrears of pay ’.
33. Section 106(4) utilises two verbs, ‘may’ and ‘must’. The verb ‘may’ appearing as it does, suggests no more I think, than that the commencement of proceedings by an employee is permissive, in the sense that a claim for unpaid long service leave is capable of being started by an employer to recover money owed. There can be no doubt about this, because, of course, s106 (1) of the LSL Act says that ‘an employee…may take proceedings in the Industrial Division of the Magistrates’ Court…’ This is to be compared with other provisions of the LSL Act that require proceedings by way of prosecutions to be instituted not by an employee but, for example, by the Minister or an authorised office or the Chief Administrator. Section 106 (4) forestalls or postpones the starting of a proceeding until a written demand for the money owed is given to the employer but it does not impede the taking of proceedings in accordance with s 106 (1).
34. In my opinion the language of s 106(4) when read in light of the power conferred on an employee to take proceedings for unpaid long service leave under s 106(1) is a strong indication that the failure to give ‘a written demand for the money owed’ under s 106(4) may, if required, be corrected within the proceedings but the failure to do so does not rob proceedings that have been commenced of jurisdictional validity in the sense that they are a nullity. Had the legislature intended that result it could have used language such as ‘No proceedings may be taken …’ or ‘A proceeding may not be taken…’
35. Accordingly, I am not satisfied that the defendant’s contention that the plaintiff’s proceeding if taken and commenced before the giving of a written demand on the employer for the money owed would make the proceedings a nullity.
36. Mr Galbraith submitted that if s 160(4) is not treated as mandatory then the proviso would have no work to do. I disagree. I think that a failure to comply with s 160(4) may be very relevant to the extent to which an employee could claim interest under s 160(5) of the LSL Act. Absent such a written demand prior to the proceedings having been taken, an employee may be hard pressed to satisfy the court that the employer ‘had reasonable notice’ of the claim and ‘had no reasonable grounds on which to dispute the claim’.
37. Section 160 (4) does not use language of nullity or voidness. It is expressed in terms of what a person to whom arrears of pay by way of unpaid long service leave is required to do but without stating the consequence of non-compliance. Deriving those consequences as urged by the defendant therefore depends on drawing from the language and apparent purpose of the provision outcomes which Parliament has not stated.
The relative consequences for the parties if the proceedings are invalid
38. There can be no demonstrable prejudice to the defendant if the proceedings are valid. A validly instituted proceeding to recover a right cannot amount to relevant prejudice. A declaration of invalidity may however may visit operative prejudice on the plaintiff. The issue of prejudice was not pursued by the plaintiff in any real sense and therefore I make no finding in regard to it.
Conclusion
39. I am satisfied that although a written demand for the money owed is required under s 160(4) of the LSL Act, I am not satisfied that a ‘formal process for recovery of statutory entitlements’ in which there is a failure to comply will result in any proceeding commenced amounting to a nullity.
40. If, however, I am wrong in my conclusion as to the question of jurisdiction, then I am satisfied that the plaintiff gave ‘a written demand for the money owed’.
The correspondence
41. The Kelly affidavit deposes to the following events:
i.He represented the plaintiff in a claim made to the Fair Work Commission on 5 June 2015 alleging that the employer had breached the general protection provisions of the Fair Work Act.
ii.On 23 June 2015 the issues that formed the basis of the Fair Work Act matter were subject to a conference and settled on agreed terms. At the conference Mr Kelly represented the plaintiff and Mr Douglas represented the employer.
iii.The plaintiff’s claim for long service leave was not settled at the Fair Work conference.
iv.The resolution of the Fair Work Act matter was subject to terms of settlement dated 2 July 2015.
v.The terms of settlement provided that the plaintiff had 30 days from 2 July 2015 in which to make a claim for long service leave.
42. Prior to the plaintiff filing his claim for long service leave there was written correspondence by way of emails between Kelly and Douglas that referred to the claim for long service leave and specifically referred to the fact that the ‘starting date’ for assessment of long service leave was contentious.
43. Kelly sent an email at 11:50 am on 24 June 2015 that read: ‘As we have a live claim in relation to Long Service Leave how do you propose we deal with that? Either this claim is carved out from the release provided in clause 4 of the Deed or we enter into the Deed once the LSL issue is answered.’
44. At 1:08 pm on 2 July 2015 Kelly emailed Douglas …’please find attached the statutory declarations my client relies upon in support of his long service leave claim. Please provide your response to this claim as soon as possible’.
45. At 2:23 pm on 8 July 2015 Kelly emailed Douglas “…Can you please advise what your decision is on the question of his long service leave entitlement.”
Does the correspondence constitute attempts to negotiate a settlement and hence excluded from evidence that may be used to constitute a written demand for the money owed?
46. Paragraph 12 of the Kelly affidavit read:
The terms of settlement provided that Mr Webber had 30 days from 2 July 2015 in which to make a claim for long service leave.
47. The defendant objected to the reference in the Kelly affidavit to the terms of settlement. In my view the reference is not privileged. The plaintiff made his claim for long service leave on 30 July 2015. It is pertinent that the terms of settlement reserved the plaintiff’s right to ‘make a claim’ and did not reserve a period of 30 days in which to make ‘a written demand for the money owed’. I was not addressed whether the term of settlement amounted to a waiver of compliance with s 160 (4) of the LSL Act by the defendant. However, the statement deposed to indicates that the employer at that time was aware of the potential for a claim for long service leave to be taken within 30 days, that is on or before 30 July 2015, which in fact occurred.
48. In the course of submissions I took the plaintiff to task on a number of matters in relation to the submission that the correspondence exhibited by Kelly, whether read individually or construed as a whole, amounted to a ‘written demand for the money owed’. Since the reservation of my decision I have had occasion to better consider the arguments made by Mr Hooper and I largely agree with them.
49.Mr Hooper referred to Exhibit JK-2 to the Kelly affidavit, that read in part:
In the meantime please find attached the Statutory Declarations my client relies upon in support of his long service claim. Please provide your response to this claim as soon as possible[6].
[6] Underlined emphasis added
50. I am satisfied that the letters used language sufficient to encompass a demand for the money owed. The correspondence is commensurate with the terms of the Deed of Release that reserved the plaintiff a period of 28 days thereafter to commence a claim for long service leave.
51. I do agree with the submission by counsel for the defendant that the correspondence relied on by the plaintiff is correspondence that meets the character of s131 (1) of the Evidence Act 2008 by reason that it is a communication made ‘in connection with an attempt to negotiate a settlement of a dispute’. The ambit of the dispute at Fair Work was not before me with any particularity, although reference was made to it as a ‘General Protection’ application, and it is also apparent, that a matter that was ‘on the table’ was a claim for long service leave but that does not necessarily mean that the communication in relation to a side claim for long service leave should be clothed as a communication in connection with an attempt to negotiate a settlement of a dispute. I am not satisfied in the circumstances of the case that it should.
52. If I am wrong about that, then in my view, the correspondence falls to be regarded as an exception under the Evidence Act as the communication contains no attempt to negotiate a settlement or to suggest a compromise of the claim for long service leave but rather has the tenor of a demand and moreover one communicated in writing.
53. Furthermore, the plaintiff relies, if required, on the exception under s 131 (2) (g) of the Evidence Act that the correspondence is admissible on the basis that it is required in order to ensure that the court is not misled or likely to be misled because of the evidence adduced or the inference from the evidence adduced from Douglas at paragraph 6 of his affidavit that no written demand had been made on the defendant for long service leave. I agree that the correspondence falls to be admitted under this exception.
54. Lastly, I am also satisfied that the correspondence is admissible as an exception under s 131(2)(h)(i) of the Evidence Act on the basis that ‘making the communication, or preparing the document, affects a right of a person’. The plaintiff has a prima facie right for long service leave. To exclude the admissibility of the correspondence or the reference to the provision of time allowed under the deed of release or terms of settlement with the result that the plaintiff could not point to having made a written demand on the employer to satisfy s 160(4) of the LSL Act would be to affect his right to agitate for payment of long service leave. I see nothing to suggest the legislature had such a consequence in mind.
55. I am also of the opinion that the expression ‘money owed’ does not require a specific sum or calculation to be provided before proceedings are taken.
Provision of notice
56. Provision of proper and sufficient notice in a variety of circumstances prior to the commencement of proceedings is not novel. In simple cases for a civil debt a requirement that prior to the commencement of legal proceedings a letter of demand is provided is usual, and the absence of the same, can affect the disposition for costs that may be awarded. The CPA itself imposes a number of pre-litigation requirements. It is appropriate that prior to a party being caught up in the maelstrom of litigation that he or she or it be placed on notice with a degree of sufficient specificity of the existence of a claim or a demand such that it cannot be said a later stage that had such notice been provided the claim need not have escalated to the commencement of legal proceedings. The failure to comply with such steps can incur sanctions against the non-compliant party.
57. However, I am not persuaded by the defendant’s submission, that there is little if any room for argument that in relation to the condition to give a written demand it is clear that there has been a failure by the plaintiff to perform the obligation or comply with the condition imposed. The certainty with which the defendant’s propositions were advanced is conditional on the presumption that the correspondence from the plaintiff whether taken individually or collectively cannot amount to a written demand. I have concluded that I do not accept that characterisation.
58. The legislation is beneficial in nature and in my view the decision I have reached in relation to construction better conforms to giving effect to the purpose underpinning the provision of the benefit of long service leave.
Conclusion
59. The defendant’s application by summons is dismissed with costs.
60. I will now cause the proceeding to be listed for further directions to facilitate the hearing and determination of the claim.
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