WINTER v GHD Services Pty Ltd
[2019] FCCA 775
•29 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WINTER v GHD SERVICES PTY LTD | [2019] FCCA 775 |
| Catchwords: INDUSTRIAL LAW – Application for summary dismissal – whether applicant “Australian-based employee” – whether contract of employment formed in Australia – whether law of Australia applied to contract – application dismissed. |
| Legislation: Copyright Act 1968 (Cth) Electronic Transactions Act (1999) (Cth), s.5 Fair Work Act 2009 (Cth), ss.35(2) & (3), 323, 340, 344, 351, and 566 Fair Work Regulations 2009 (Cth), reg.1.15F(4) Federal Circuit Court Act 1999 (Cth), s.10 Federal Circuit Court Rules 2001 (Cth), rr.13.01 and 13.10 |
| Cases cited: Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173 Cohen v iSOFT Group Pty Ltd (2013) 298 ALR 516 Chitty on Contracts, 33rd Edition, published by Sweet & Maxwell Ltd, 2018 |
| Applicant: | BRYCE WINTER |
| Respondent: | GHD SERVICES PTY LTD |
| File Number: | ADG 435 of 2018 |
| Judgment of: | Judge Heffernan |
| Hearing date: | 29 January 2019 |
| Date of Last Submission: | 29 January 2019 |
| Delivered at: | Adelaide |
| Orders delivered on: | 22 March 2019 |
| Reasons delivered on: | 28 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Ms G Walker |
| Solicitors for the Applicant: | PGC Legal |
| Counsel for the Respondent: | Mr L Howard |
| Solicitors for the Respondent: | Price Waterhouse Coopers |
UPON NOTING THAT:
(a)The judgment, reserved on 29 January 2019, will be published at a later date from chambers; and
(b)The matter has been referred to mediation on 26 March 2019 at 9.30am
ORDERS
The respondent’s Application in a Case filed on 23 July 2018 is dismissed.
There is no order as to costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADG 435 of 2018
| BRYCE WINTER |
Applicant
And
| GHD SERVICES PTY LTD |
Respondent
REASONS FOR JUDGMENT
This is an Application in a Case made by the respondent, GHD Services Pty Ltd. The application seeks the following orders:
“(1) Pursuant to rule 13.01 of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’), the proceeding be summarily dismissed.
(2) Further or in the alternative, and pursuant to rule 13.10 of the Rules, any residue of the proceeding be summarily dismissed, or alternatively, stayed.
(3) The applicant to pay the respondent’s costs of and incidental to and occasioned by the proceeding (including this Application in a Case).”
The applicant invokes the original jurisdiction of the Court conferred by s.566 of the Fair Work Act 2009 (Cth) (‘the FW Act’).[1] The Initiating Application in this matter alleges breaches of the FW Act, specifically a breach of s.323, relating to the method and frequency of payment; the protection against adverse action associated with the existence, exercise or proposed exercise of a workplace right encompassed in s.340; a breach of s.344, which prohibits exerting undue influence or undue pressure on an employee; and a breach of s.351, which prohibits the taking of adverse action on any of the discriminatory grounds identified in that section. In addition, the applicant invokes the Court’s accrued jurisdiction with respect to issues of estoppel and breach of contract.
[1] Section 10 of the Federal Circuit Court Act 1999 (Cth).
By its Application in a Case, the respondent disputes that the Court has jurisdiction in this matter under the FW Act on the basis that the allegations do not arise under that Act. At the very least, the respondent contends that the Court should summarily dismiss the applicant’s application to the extent that it seeks to agitate contraventions of the FW Act.
The respondent accepts, correctly, in my view, that summary dismissal of the FW Act claims under which original jurisdiction is conferred does not, in the ordinary course, mean that the Court is deprived of jurisdiction with respect to the attached non-federal claims.[2]
[2] Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173 at 181.
On the face of the pleading, the respondent accepts that the applicant’s contractual and equitable claims do have a common substratum of fact with the FW Act claims. Its position is, however, that the applicant’s attempt to invoke federal jurisdiction is colourable and, in those circumstances, the accrued jurisdiction of the Court should not attach.[3]
[3] Ibid.
In that context, the question then becomes whether the applicant’s claim that the respondent is bound by the FW Act can be said to be unarguable, an attempt to fabricate jurisdiction, or otherwise made for reasons that are not bona fide.[4]
[4] Ibid.
By way of brief background, the respondent is contracted by the Australian Department of Foreign Affairs and Trade to manage the Transport Sector Support Program in Papua New Guinea. The respondents took over that role in about June 2018 from the Snowy Mountains Engineering Corporation (‘SMEC’), which had been managing the program.
The applicant applied for a position as an organisational performance specialist with the program. At the time he did so, SMEC was managing the program. He was successful in obtaining the position and SMEC began the process of preparing his contract. The respondents took over the negotiations and contract preparation from SMEC. By 28 May 2018, the respondent had finalised the negotiations with the applicant and the applicant signed the contract of employment. The applicant was in the United States of America at the time.
Having signed the contract, he emailed it to Mr Brian Gleeson, an employee of the respondent. Mr Gleeson is based in New South Wales. The registered business address of the respondent is Level 7, 16 Marcus Clarke Street, Canberra, ACT. The contract[5] was addressed to the applicant at his Queensland address.
[5] See Affidavit of Andrew James Farr, affirmed 14 December 18, Annexure ‘AJR-1’.
Clause 23 stipulates that the laws of Papua New Guinea apply to the assignment.[6] The contract provided for the performance of duties in Papua New Guinea. The contract provided for mobilisation and relocation costs for the applicant’s travel to Papua New Guinea in order to commence employment. It provided for the applicant to be mobilised and demobilised from his address in the United States of America.
[6] Ibid at p 5.
The respondent’s contention is that this Court has original jurisdiction under s.566 of the FW Act which provides as follows:
“Jurisdiction is conferred on the Federal Circuit Court in relation to any civil matter arising under this Act.”
The geographical limits of the FW Act mean that provisions of the Act do not apply to persons and entities prescribed by the Fair Work Regulations 2009 (Cth) (‘the Regulations’). The Regulations provide that Part 3-1 of the Act only extends to:
“… Australian employers and Australian-based employees in relation to all of the areas outside the outer limits of the Australian exclusive economic zone and the continental shelf.”[7]
[7] Regulation 1.15F(4).
There is no dispute that the respondent is an Australian employer. The respondent disputes that the applicant is an ‘Australian-based employee’. In order to determine that issue, consideration must be given to the definition of ‘Australian-based employee’ under s.35(2) and (3) of the Act. The respondent submits that the exclusion in s.35(3) applies to the applicant. The relevant section provides as follows:
“…
(2) An Australian-based employee is an employee:
(a)whose primary place of work is in Australia; or
(b)who is employed by an Australian employer (whether the employee is located in Australia or elsewhere); or
(c)who is prescribed by the regulations.
(3)However, paragraph (2)(b) does not apply to an employee who is engaged outside Australia and the external Territories to perform duties outside Australia and the external Territories.”
In the respondent’s submission, and on the authority of Cohen v iSOFT Group Pty Ltd[8] and Munjoma v Salvation Army (NSW) Property Trust[9], the exclusion in s.35(3) applies because the applicant signed the contract in America. In Cohen, the applicant’s contract was executed in Singapore and required the performance of duties in Singapore. Given that factual matrix, the Court held that s.35(3) operated to exclude the operation of the FW Act.
[8] (2013) 298 ALR 516 at para [54].
[9] [2013] FWC 3337.
The decision in Cohen’s case has been held to establish that there are two limbs to be considered. Firstly, the ‘engagement outside’ limb which requires identification of the location of formation of the contract and, secondly, ‘the performance’ limb dealing with the issue of whether the duties were to be performed outside Australia.[10]
[10] Munjoma, op cit, at paras [45] to [46].
The respondent submits that the contract was executed outside Australia when acceptance was effected by the applicant signing it. As a result, the formation of the contract occurred in the United States. It is uncontroversial that the performance of the duties was to be wholly outside Australia. As a result of the formation being in the United States, the applicant falls foul of s.35(3), was not an Australian-based employee, and no matter arises under the FW Act. The respondent submits that the facts of this matter are on all fours with those in Cohen’s case.
I reject the respondent’s arguments in that regard. The general rule is that a contract is formed on the communication of the acceptance to the offeror and that it has no legal effect until that occurs.[11] Whilst the applicant’s signing of the contract was an indication of his assent to it, more was clearly required to communicate the acceptance to the respondent. Communication normally requires some act to bring this acceptance to the attention of the offeror.[12]
[11] Chitty on Contracts, 33rd Edition, published by Sweet & Maxwell Ltd, 2018, p 225 and to the cases referred therein.
[12] Chitty, op cit, p 226.
The respondent made the offer by signing the covering letter and forwarding the contract to the applicant. The issue of acceptance is dealt with in the contract at page 6 in the following terms:
“Acceptance
I hereby confirm that I have read this document which form (sic) the basis of my employment with GHD, and accept the offer on these terms and conditions.
I also acknowledge and agree that I have a lawful right to work or will obtain the right to work in Papua New Guinea and commit to performing the duties and responsibilities of employment outlined in document (sic) and attachments; I understand that this offer of employment will lapse immediately in the event that I am unable to obtain this right to work within a reasonable period of time.”
I do not read the clause relating to acceptance to amount to a waiver of the need for communication of acceptance. On a plain reading, the words, “I hereby confirm I have read this document … and accept the offer …” logically suggest to the contrary. Further, the very fact that the contract was reduced to writing and posted to the applicant for his signature also supports an inference that the contract was intended to be accepted by signing and returning it to the respondent by post or email in order to communicate acceptance.
That being the case, I accept the submission of Ms Walker that the formation of the contract occurred once communication was effected. Communication was effected by email. There is support in academic commentary for the proposition that the time for acceptance by email should be when the email is received by the offeror and that an email acceptance should be treated as received by the offeror when it arrives on their server.[13]
[13] Chitty, op cit, p 228.
That proposition is consistent with the principle established in earlier case law relating to an earlier form of electronic communication. In Entores Ltd v Miles Far East Corporation,[14] a contract on which an acceptance had been communicated by telex was held to have been formed in England, where the acceptance had been received, not Holland, where the telex had been typed.[15]
[14] [1955] 2 QB 327.
[15] Ibid at p 336.
I am not satisfied that there is merit in the respondent’s submission that this was not an electronic communication because of the fact that the contract was in writing. It was sent to the applicant’s email address. It was obviously going to be returned to the respondent by email in the form of an attachment. Communication of acceptance was only ever going to be effected once the attachment was received. The contract was formed in Australia.
I do not accept the submission of the respondent that the passage to which the Court was referred in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd[16] amounts to authority that the mere fact of signing a contract will amount to an effective acceptance in the absence of communication of that acceptance. The extract referred to dealt with an offeree being bound by a contract they had signed irrespective of whether or not they had read the contents of the written contract. Proof of the agreement is established by proof of the offeree’s signature. That is a different matter to the communication of acceptance to an offeror.
[16] (2004) 219 CLR 165 at [42].
I am also of the view that Cohen’s case is distinguishable on its facts. That case did not involve formation of the contract by acceptance communicated by email and the consideration of the term ‘engagement’ did not occur in that context. The contract in that matter was formed in Singapore.
I accept the submission of the applicant that Cohen does not stand for the proposition that a party who is outside Australia when they append their signature to a contract is a person ‘engaged outside Australia’. In that matter, as I have said, the contract was formed in Singapore. As a result, Dr Cohen was ‘engaged outside Australia’. In this matter, the contract was formed in Australia.
Further to the above, I accept the applicant’s submission that the Electronic Transactions Act (1999) (Cth) (‘the ET Act’) applies to the facts of this matter and that irrespective of the principles I have discussed above, when a contract is concluded by an electronic communication, such as an email, it is finalised at the place of business of the recipient of the email. By virtue of s.5 of the ET Act an electronic communication is, inter alia:
“‘electronic communication’ means:
(a)a communication of information in the form of data, text or images by means of guided and/or unguided electromagnetic energy.”
An email, sending an attachment containing an image of the contract, falls within that definition.
As to the attached non-federal causes of action, I accept the submission of the applicant that on a fair reading of the contract, it is far from certain that the applicable law for the contract is Papua New Guinea law. I accept that the parties did not include an express clause which identified the law applicable to the contract. Clause 23 states as follows:
“23 Laws
During the assignment, you agree to abide by local laws and established customs in Papua New Guinea, and to ensure that the good reputation of GHD and its related entities is maintained.
The laws of Papua New Guinea apply to this assignment.”
As Ms Walker has submitted, the ‘assignment’ is different to the contract governing performance of the assignment. The contract refers to itself as ‘the agreement’. Had the respondent intended to make clear that the law of Papua New Guinea was the law applicable to the contract governing performance of the assignment, the contract could have stated ‘the laws of Papua New Guinea apply to this contract’. In the absence of an express identification of the applicable law, it then becomes a matter of inference as to the particular system of law intended by the parties to govern the contract.[17]
[17] Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418.
Several pertinent matters were identified by the applicant in support of its submission that the relevant law of contract is Australian law. In addition to the matters I have identified above, they include that:
a)the contract was to be paid in Australian dollars; the contract was an Australian Government contract;
b)the respondent is an Australian-based employer; the contract refers to the Copyright Act 1968 (Cth) and not the corresponding legislation in Papua New Guinea;
c)the respondent provided the applicant with a Fair Work Information Statement as required for all new employees covered by that Act; and
d)the respondent did not comply with certain provisions of the Papua New Guinean Employment Act 1978 with respect to payment in Papua New Guinean currency and an endorsement as to literacy, knowledge and comprehension on the part of the applicant with respect to the contract.
In any event, the contract having been formed in Australia, the FW Act being applicable, the parties cannot contract out of Australian law.
I conclude that the applicable law with respect to the contract is Australian law and I have jurisdiction in the attached non-federal matters.
Finally, I reject the respondent’s argument as to forum non-conveniens. That argument was, as Ms Walker submitted, largely predicated on the basis that the law of Papua New Guinea applied. This Court is clearly the appropriate forum given the findings I have made above.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Heffernan
Date: 28 March 2019
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