Wilkinson v A a All Shape Pallets Pty Ltd
[2010] FMCA 922
•26 November 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILKINSON v A A ALL SHAPE PALLETS PTY LTD | [2010] FMCA 922 |
| INDUSTRIAL LAW – PRACTICE AND PROCEDURE – Application in a case – liquidator appointed to respondent after substantive proceedings settled – application in a case to proceed against respondent – whether matters within associated jurisdiction. |
| Workplace Relations Act 1996 (Cth), s.659 Corporations Act 2001 (Cth), ss.58AA, 471B, 500(2) Federal Magistrates Act 1999 (Cth), ss.14, 18 |
| Phillip Morris Inc and Anor v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Mahmoud v Owners’ Corporation Strata Plan No 811 [2007] FMCA 474 Fox v Robinson & Ors (No.1) [2005] FMCA 1310 |
| Applicant: | PETER WILKINSON |
| Respondent: | A A ALL SHAPE PALLETS PTY LTD |
| File Number: | MLG 1212 of 2009 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 12 November 2010 |
| Date of Last Submission: | 12 November 2010 |
| Delivered at: | Melbourne – via telephone link |
| Delivered on: | 26 November 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr McKenney |
| Solicitors for the Applicant: | Clark Toop & Taylor |
| Counsel for the Respondent: | No appearance |
| Solicitors for the Respondent: | No appearance |
ORDERS
The application in a case filed 9 September 2010 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1212 of 2009
| PETER WILKINSON |
Applicant
And
| A A ALL SHAPE PALLETS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Peter Wilkinson (“the applicant”) was employed by AA All Shape Pallets Pty Ltd (“the respondent”) from 1999 to 2008. The applicant commenced proceedings in this Court against the respondent arising from the termination of his employment on 23 September 2009 claiming breaches of s.659 of the Workplace Relations Act 1996 (Cth) (“the WR Act”).
On 12 February 2010 those proceedings were compromised and the following orders were made:
“1.The directions hearing on 12 February 2010 be vacated.
2. The proceedings be discontinued with a right of reinstatement but such right to be exercised by 10 December 2010.
3.No order as to costs.”
On 9 September 2010, the applicant filed an application in a case which sought to exercise the right of reinstatement set out in the abovementioned orders. The application in a case sought the following orders:
“ 1.That judgment be entered against the Respondent in the sum of $24,000.00 less payments made to the Applicant since 28 January 2010.
2.Interest pursuant to statute.
3.The Respondent pay the Applicant’s costs of and incidental to this application.
4.Insofar as leave may be required to continue this proceeding the Applicant seeks leave of the Court.
5.Any other order that this Honourable Court may decide.”
The grounds as contained in the application in a case were:
“1.Pursuant to the Orders … made 12 February 2010, the parties have a right of reinstatement of the proceedings to be exercised by 10 December 2010.
2.The Respondent has breached the Heads of Agreement dated 28 January 2010.
3.The Applicant has a right to reinstate the matter and to have judgment entered against the Respondent for default pursuant to Clause 7 of the Heads of Agreement dated 28 January 2010.
4.The Respondent has consented to such judgment and has agreed to not take steps to oppose it pursuant to Clause 7(b) of the Heads of Agreement dated 28 January 2010.”
The application in a case came before the Court on 14 October 2010. On that occasion, Mr McKenny appeared for the applicant. Material filed on behalf of the applicant in support of the application in a case evidenced that:
·the respondent had been voluntarily wound up and a liquidator appointed on 14 May 2010;
·solicitors for the applicant had sent correspondence to solicitors for the respondent and the liquidator;
·Annexure “AKC1” to the affidavit of the applicant’s solicitor filed 9 September 2010 contained a heads of agreement signed by and on behalf of the parties on 28 January 2010 upon which the parties compromised the substantive application;
·the applicant had not received all of the payments pursuant to the heads of agreement upon which the substantive application was compromised and $10,000 of the $24,000 agreed payment remained outstanding;
·Annexures “AKC1-AKC4” to the affidavit of the applicant’s solicitor filed 13 October 2010 set out correspondence between the applicant’s solicitor and the liquidator appointed to the respondent on 14 May 2010;
·the liquidator noted the applicant appeared to be a creditor of the respondent and that it appeared to the liquidator it was unlikely there would be any funds to permit a distribution to creditors; and
·the liquidator for the respondent was aware of the application in a case filed 9 October 2010 advised the applicant’s solicitor that given the provisions of s.500(2) of the Corporations Act 2001 they would need leave of a Court (as defined) and indicated he didn’t intend to appear on 14 October 2010.
On 14 October 2010 given the appointment of liquidators to the respondent the Court raised with Counsel for the applicant, whether the proceedings against the respondent had been stayed pursuant to s.471B of the Corporations Act 2001 (“the Corporations Act”).
Section 471B of the Corporations Act provides that proceedings against a company that is being wound up in insolvency or by the Court or a provisional liquidator is acting are stayed. The liquidator who had notice of the application in a case filed 9 October 2010 had also drawn to the attention of the solicitors for the applicant the provisions of s.500(2) of the Corporations Act and that the applicant would need leave of a Court (as defined) to proceed against the respondent.
Counsel for the applicant acknowledged no order had been made under the Corporations Act for the applicant to proceed with his claim against the respondent in these proceedings or otherwise.
As I understood the argument advanced on behalf of the applicant this was not necessary given the provisions of s.18 of the Federal Magistrates Act 1999 (Cth) (“the FM Act”). That argument was, notwithstanding the provisions of s.471B and s.500(2) of the Corporations Act, the application in a case against the respondent could proceed without leave of a Court (as defined in s.58AA of the Corporations Act) in reliance upon s.18 of the FM Act.
Given the position of the respondent, the attitude of the liquidator and the argument foreshadowed by Counsel for the applicant, the applicant was directed to put the liquidator on notice of his contention, that he did not need leave from a Court as defined in s.58AA of the Corporations Act as this Court had jurisdiction by virtue of s.18 of the FM Act and the matter was adjourned.
On 12 November 2010 Mr McKenney again appeared on the behalf of the applicant and there was no appearance on behalf of the respondent or the liquidator. Counsel for the applicant identified the material he relied on and made submissions in support of the contentions referred to above.
Consideration
Section 18 of the FM Act provides that:
“Jurisdiction in associated matters
To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.”
Section 58AA(1) of the Corporations Act defines “Court” as follows:
“Court” means any of the following courts:
(a) the Federal Court;
(b) the Supreme Court f a State or Territory;
(c) the Family Court of Australia;
(d)a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act.”
This Court is not a “Court” as defined in s.58AA(1) of the Corporations Act.
Section 471B of the Corporations Act provides that:
“Stay of proceedings and suspension of enforcement process
While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:
(a) a proceeding in a court against the company or in relation to property of the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.”
Section 500 of the Corporations Act provides that:
“Execution and civil proceedings
(1) Any attachment, sequestration, distress or execution put in force against the property of the company after the passing of the resolution for voluntary winding up is void.
(2) After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
(3) The Court may require any contributory, trustee, receiver, banker, agent, officer or employee of the company to pay, deliver, convey, surrender or transfer forthwith or within such time as the Court directs to the liquidator any money, property or books in his, her or its hands to which the company is prima facie entitled.”
Counsel for the applicant referred to the decision in Phillip Morris Inc and Anor v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 and submitted that as the applicant had commenced proceedings under the WR Act the application in a case currently before the Court was associated with the matter as his client was seeking leave to enforce settlement of a claim and under s.18 of the FM Act this Court had jurisdiction to do so.
In Mahmoud v Owners’ Corporation Strata Plan No 811 [2007] FMCA 474 (“Mahmoud”)[1] Lucev FM dealt with the issue of the approach to determining whether a matter was within the associated jurisdiction of the Court under s.18 of the FM Act at paras 51 to 56 as follows:
[1] citations and footnotes omitted from original
“51.Whether or not a matter is within the associated jurisdiction of the Court was recently dealt with by the Federal Court in New South Wales Department of Housing v Moskalev. At first instance in this Court an application under s.46PO of the Human Rights and Equal Opportunities Act 1986 (Cth) claiming discrimination in the provision of accommodation was dismissed, but notwithstanding the dismissal, the Court ordered the Department of Housing to reassess eligibility for priority housing under the Department of Housing Priority Housing Philosophy. The issue for the Federal Court was whether this Court’s order for reassessment of priority was beyond power. Ultimately, the answer to the issue depended upon whether the ability to make the order sought to be impugned was within this Court’s associated jurisdiction under s.18 of the FM Act.
52.In Moskalev the Federal Court set out the law concerning this Court’s associated jurisdiction as follows:
“In Philip Morris Incorporated and Another v Adam P Brown Male Fashions Proprietary Limited; United States Surgical Corporation v Hospital Products International Proprietary Limited and Others (1981) 148 CLR 457 at 474, Barwick CJ said of the application of s.32 of the Federal Court Act:
‘Thus, there may be circumstances in which the matter does not in substance itself attract federal jurisdiction, though that which attracts federal jurisdiction must in some way relate to the matter. Once federal jurisdiction is attracted, it is not lost because the claim or assertion which attracted it has not been substantiated or has been displaced by some countervailing fact. Once attracted, by whatever path attracted, the jurisdiction persists to enable the Court to resolve the matter.’
Since s.18 of the FMA is in virtually identical terms to s.32 of the Federal Court Act, his Honour’s observations are pertinent to the associated jurisdiction of the FMC.
There are however, limits to the type of matter which can properly be described as ‘associated’ with the jurisdiction of a federal court. Barwick CJ expressed the following caution at 474:
‘But the jurisdiction will not extend to any other matter, though that other matter might in some sense be an allied or associated matter. To be outside the accrued jurisdiction, however, the other matter must be separate and disparate from the matter in relation to or in connexion with which federal jurisdiction has been attracted.’
Gibbs J (as he then was) said of the extent of the jurisdiction of the Court to deal with matters, other than federal claims at 499:
‘The cases to which I have referred show that if a party claims relief on two different legal grounds, but the facts on which the relief is sought on each ground are identical, and the relief sought on each ground is the same in substance if not in form, there is only one matter for determination.’
Gibbs J made similar observations in Fencott and Others v Muller and Another (1983) 152 CLR 570 at 591:
‘It is now established by Philip Morris v. Brown that once a federal court is invested with jurisdiction with respect to a matter, it may determine all the questions which form part of that matter, even though they are questions which it would have no jurisdiction to entertain if they arose in separate proceedings.’
At 593 his Honour continued:
‘The question whether one claim is inseverable from another, so that both are part of one matter, is a question of fact and degree. The Constitution, however, makes it clear that the attached claim must be part of the matter that attracts jurisdiction; closeness of association is not enough.’
In Re Wakim; Ex parte McNally and Another; Re Wakim; Ex parte Darvall; Re Brown and Others; Ex parte Amann and Another; Spinks and Others v Prentice (1999) 198 CLR 511 at 585 Gummow and Hayne JJ said of the associated jurisdiction:
‘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 (377), 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" (378), "completely separate and distinct" (379) or "distinct and unrelated’ (380) are not part of the same matter.’
These authorities confirm that to enliven the associated jurisdiction of a court invested with federal jurisdiction, the facts must be common to each matter and the relief sought must be substantially the same.
Section 18 of the FMA provides a source of jurisdiction in associated ‘matters’. A ‘matter’ must be a justiciable dispute and not merely a legal proceeding. In In Re the Judiciary Act 1903-1920 and In Re The Navigation Act 1912-1920 (1921) 29 CLR 257 at 265 the majority, having considered an argument that the word ‘matter’ in s 76 of the Constitution referred only to a legal proceeding, said:
‘We do not accept this contention; we do not think that the word " matter" in sec. 76 means a legal proceedings, but rather the subject matter for determination in a legal proceedings. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court.’
See also: The Queen v Kirby and Others; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 272-274; The Queen v The Trade Practices Tribunal and Others; Ex parte Tasmanian Breweries Proprietary Limited (1970) 123 CLR 361 per Kitto J at 374; Re Wakim; Ex parte McNally 198 CLR [10].
Two observations may be made. First, the facts and evidence relating to the claim of the Moskalevs’ alleging discrimination are different to those relating to the administrative review of the Department’s decision pursuant to its Priority Housing Policy and are not ‘inseverable’ (see: Gibbs J in Fencott v Muller 152 CLR 593). The Court accepts the submission of the Department that there was no requirement for it to adduce evidence of its procedures relating to the operation of the Housing Appeals Committee in view of the only matter before Driver FM, namely the claim of discrimination. The order requires the Department to undertake a merits review of its determination in relation to the Moskalevs’ application for priority housing when such question did not arise either as a federal or as an associated matter.
Second, the request of the Moskalevs’ to be placed on the priority housing list did not constitute a separate ‘matter’ for the exercise of the Court’s jurisdiction. The claim for such order was ancillary to the claim of discrimination under the HREOC Act. Accordingly s 18 of the FMA cannot be used as a source of jurisdiction to justify the order.”
53. In Re Wakim ex parte McNally and Another it was said:
“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 in relationships”. There is but a single matter if different claims arise out of a “common transactions and facts” or a “common substratum of facts”, notwithstanding that the facts upon which the claims depend “do not wholly co-incide”.
…
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.”
54.In Trainor v BMW Melbourne Pty Ltd and Others this Court applied the passage cited from Re Wakim immediately above to hold that a claim under s.51AB of the Trade Practices Act 1974 (Cth) alleging unconscionable conduct was part of a single controversy which included a claim under s.52 of the TP Act which alleged misleading and deceptive conduct.
55.In Fox v Robinson & Anor, this Court considered s.18 of the FM Act and said as follows:
Section 18 of the FM Act is almost identical to s.32(1) of the Federal Court of Australia Act 1976. That section was considered by the High Court in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457. In that case Mason J stated in relation to that section which applied to the Federal Court the following:
“Plainly it was intended to vest a jurisdiction in the Federal Court to hear and determine matters not otherwise within its jurisdiction, matters that are ‘associated’ with matters in which the jurisdiction of the Court is invoked. The expression ‘To the extent that the Constitution permits’ suggests that s 32 is directed, not merely to jurisdiction to hear and determine matters arising under federal laws not otherwise vested in the Federal Court, but also to jurisdiction arising under State or other non-federal laws. Problems of constitutional validity arise in relation to the latter, but not in relation to the former. The opening words of s.32(1) would serve no purpose at all if the sub-section was exclusively directed to matters arising under federal laws.”
In the Philip Morris case Mason J further states at p 512,
“Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction”.
Conclusion
There was no submission made that this Court was a Court for the purpose of a s.58AA of the Corporations Act. Rather the argument advanced by the applicant was the application in a case filed
9 September 2010 could be brought in reliance on s.18 of the FM Act.
In Fox v Robinson & Ors (No.1) [2005] FMCA 1310 (Fox v Robinson & Ors (No.1)) at [9] McInnis FM said:
“9. I accept as submitted by Counsel for AIIL that apart from the issue of a common substratum of facts, the following factors are relevant:-
· whether a matter is a "single justiciable controversy"
· the question is not a "separate and distinct matter"
· whether there is an "identity of facts" (see Tait v Harris [2003] FCAFC 117, referring to Phillip Morris)
· whether any federal jurisdiction has properly been invoked (see Hebbard v Bell Potter Securities Ltd [2005] 216 ALR 779, referring to Walker v Lifespan Financial Planning (2003) 176 FLR 166 at [16])
· whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the Court vested with jurisdiction in matters arising under that law (see Mahoney v AGD Mining, referring to Fencott v Muller (1983) 152 CLR 570 at p.610)
· whether a matter is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim (see Mahoney v AGD Mining, referring to Phillip Morris at pp.494-495)
· whether there is but one matter where different claims are so related that the determination of one is essential to the determination of the other (see re Wakim; Ex parte McNally (1999) 198 CLR 511 per Gummow and Hayne JJ at 585)
In this matter there is no reason why I should not follow the decisions in Fox v Robinson & Ors (No.1) and Mahmoud. The appointment of the liquidator to the respondent after the substantive proceedings in this Court were compromised requires the applicant to seek leave from a Court as defined by s.58AA of the Corporations Act to pursue an “action or other civil proceeding.”
Putting to one side for present purposes whether this Court now has before it a properly constituted federal matter, Counsel’s argument (as I understood it) appeared to conflate the facts in the substantive proceeding and how the compromise had been arrived at without considering the issue of the changed status of the respondent after the appointment of the liquidator and the factors relevant to any leave to proceed against a corporation in liquidation. There were no submissions made as to what a Court (as defined in s.58AA) considering such an application would need to consider or their application in the circumstances of this matter.
As the authorities referred to in Mahmoud make clear to fall within the associated jurisdiction, the matter must arise out of the same substratum of facts. The jurisdiction of this Court was invoked in the substantive proceedings for orders under the WR Act. The facts and circumstances giving rise to a claim under s.659 of the WR Act in relation to the termination of the applicant’s employment could not be said to be the same facts and circumstances relied upon to proceed against the respondent once a liquidator was appointed.
The question(s) a Court (as defined) would have to take into account in determining whether to grant leave are different to the question(s) involved in relation to a claim over termination of employment under the WR Act or in enforcing a settlement in proceedings in this Court. The submissions on behalf of the applicant appeared to assume the agreement of the respondent as sufficient for the application in a case to proceed, did not consider the interests of other creditors or the changed nature of the respondent after the appointment of the liquidator.
On what is before me the orders sought in the application in a case which would be an “action or other civil proceeding” given what has happened, do not arise out of the same substratum of facts as in the substantive matter.
In light of the principles referred to in Mahmoud I am not satisfied given the course of events involved the application in a case arises out of a common substratum of facts or that the claims do depend on common transactions and facts. Given the above, on what is before me,
I am not satisfied:·the matter is a “single justiciable controversy”;
·the questions are not “separate and distinct matters”;
·there is a degree of “identity of facts”;
·the claim under the relevant law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by this Court; or
·the claims are so related that the determination of one is essential for the determination of the other.
The applicant also advanced an argument based on s.14 of the FM Act. In relation to that argument under s.14 of the FM Act to completely and finally determine the matter this Court would have to have jurisdiction to do so. In light of the conclusions reached above, it is in my view not necessary to further consider that argument given the operation of the relevant sections of the Corporations Act and that no Court (as defined in s.58AA) has given leave to proceed with an “action or other civil proceeding” against the respondent to which a liquidator had been appointed.
I am not satisfied this Court has jurisdiction pursuant to either s.14 or s.18 of the FM Act in the manner contended for by the applicant.
The applicant was represented by solicitors and no application was made to transfer the proceedings to the Federal Court. Given this, and as this Court was not asked to do so, I do not believe it is appropriate to consider doing so.
Given the above it is unnecessary to consider the applicant’s submissions as to costs. As unsatisfactory as this may seem from the point of view of the applicant, for the reasons set out above, the appropriate order is the application in a case filed 9 September 2010 should be dismissed.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Date: 26 November 2010
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