Wyanga Holdings Pty Ltd v Forno
[2014] NSWIC 4
•20 November 2014
Industrial Court
New South Wales
Case Title: Wyanga Holdings Pty Ltd v Forno Medium Neutral Citation: [2014] NSWIC 4 Hearing Date(s): 12 November 2014 Decision Date: 20 November 2014 Before: Boland AJ Decision: The Court confirms the orders made on 12 November 2014, namely that:
(1) The applications by Wyanga Holdings Pty Limited in Matter Nos IRC 145, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156 and 157 of 2014 are dismissed.
(2) Wyanga Holdings Pty Limited shall pay the cross respondents' costs in respect of each of the applications as agreed or assessed.
Catchwords: PRACTICE AND PROCEDURE - ex parte proceedings - Application by Transport Workers Union of New South Wales (TWU) to dismiss 12 applications filed as cross-claims to an application by TWU for recovery of wages - No jurisdiction to entertain cross-claims made pursuant to Trade Practices Act 1974 (Cth) - No estoppel - Applicability of rules 12.7 and 13.4 of the Uniform Civil Procedure Rules 2005 - No reasonable cause of action disclosed - Cross-claims dismissed - Costs Legislation Cited: Corporations Act 2001 (Cth)
Fair Work Act 2009 (Cth)
Industrial Relations Act 1996
Trade Practices Act 1974 (Cth)
Uniform Civil Procedure Rules 2005Cases Cited: Attorney-General v Wentworth (1988) 14 NSWLR 481
Cox v Journeaux (No 2) [1935] HCA 48; (1935) 52 CLR 713
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784; (2000) 99 FCR 95
Peden v Lake Macquarie Refrigeration Pty Ltd [2004] NSWIRComm 66; (2004) 134 IR 149
Re Operational Ambulance Officers (State) Award (No 2) [2011] NSWIRComm 85
Spencer v Commonwealth [2010] HCA 28; 241 CLR 118Category: Principal judgment Parties: Wyanga Holdings Pty Limited (Cross-Applicant in all matters)
Wayne Forno (First Cross-Respondent in all matters)
Jason Graham Arnold (Second Cross-Respondent in all matters)
Michelle Kathryn Booth (Third Cross-Respondent)
Wayne Crossman (Fourth Cross-Respondent)
G F Haulage Pty Limited (Fifth Cross-Respondent)
Francis David Crowe (Sixth Cross-Respondent)
Glen Phillip Irving (Seventh Cross-Respondent)
Graham Crapp (Eighth Cross-Respondent)
Timothy Gibbons (Ninth Cross-Responden)t
Ian S Barr (Tenth Cross-Respondent)
Kathleen Barr (Eleventh Cross-Respondent)
S Tickner Pty Limited (Twelfth Cross-Respondent)
Shane Tickner (Thirteenth Cross-Respondent)
Bennett Earthmoving & Plant Hire Pty Limited (Fourteenth Cross-Respondent)
Peter John Bennett (Fifteenth Cross-Respondent)
Florance Ann Holmes (Sixteenth Cross-Respondent)
Thorby Transport Pty Limited (Seventeenth Cross-Respondent)
Robert John Thorby (Eighteenth Cross-Respondent)
Pamela Jean Thorby (Nineteenth Cross-Respondent)
N P Tickner Tippers Pty Limited (Twentieth Cross-Respondent)
Neville Phillip Tickner (Twenty-First Cross-Respondent)
Hennessy Haulage Pty Limited (Twenty-Second Cross-Respondent)
Carl Rodney Hennessy (Twenty-Third Cross-Respondent)
Helen Jean Hennessy (Twenty-Fourth Cross-Respondent)
Diaz Enterprises Pty Limited (Twenty-Fifth Cross-Respondent)
Leonardo Diaz (Twenty-Sixth Cross-Respondent)
Virginia Beatriz Diaz (Twenty-Seventh Cross-Respondent)Representation - Counsel: M Gibian of counsel (Cross-Respondent in all matters) - Solicitors: Transport Workers' Union of New South Wales (Cross-Respondent in all matters) File Number(s): IRC 145 and 147-157 of 2014
JUDGMENT
The Transport Workers' Union of New South Wales ("TWU"), in ex parte proceedings, had sought the dismissal of 12 applications by Wyanga Holdings Pty Ltd ("Wyanga" or "respondent"). On 12 November 2014, the Court made orders granting the TWU's application and awarded costs to the TWU. What follows are the Court's reasons.
Background
It is necessary, first, to provide some background. Matter No IRC 812 of 2012 is an extant application to the Court by the TWU for recovery of money payable under s 365 of the Industrial Relations Act 1996 ("IR Act"). The respondent to the application is Wyanga. The application was made on behalf of 12 contract carriers whom it was alleged performed work for the respondent, such work being subject to the provisions of the Transport Industry - Excavated Materials, Contract Determination ("the Determination"). It was alleged in the application (which was twice amended, the latest being 21 July 2014) that the carriers were paid an hourly rate less than that prescribed by the Determination for the work performed.
In response to the TWU's application, Wyanga filed 12 applications on 28 February 2014 that were referred to as "cross-claims" (Matter Nos IRC 145 and 147-157 of 2014). The secretary of the TWU, Mr Wayne Forno, was named in each application as "first cross-respondent", a Mr Jason Graham Arnold was named as "second cross-respondent" and in an attached schedule, 25 other "cross-respondents" were named. On the cover sheet of each application was named a particular contract carrier for whom the TWU acted. It is these applications that are the subject of this judgment.
The cross-claims were materially in the same terms. It was broadly alleged in respect of each of the contract carriers that:
·they agreed to work at rates less than that prescribed by the Determination;
·on the basis of the representations by the carriers Wyanga entered into a contract to perform certain work;
·at no time did the contractors inform Wyanga that they were covered by the Determination;
·Wyanga suffered detriment;
·the carriers engaged in conduct in trade and commerce that was misleading or deceptive within the meaning of s 52 of the Trade Practices Act 1974 (Cth); and
·in any event, the carriers were estopped from relying on the Determination.
The relief sought was damages.
In relation to Matter No IRC 812 of 2012, directions were made on 5 September 2012 in preparation for hearing the matter. There followed a long period of inactivity until Wyanga filed its cross-claims on 28 February 2014. On 1 May 2014, further directions were made regarding the cross-claims. On 20 June 2014, Wyanga's solicitors filed a notice of ceasing to act. When all the matters came back before the President, Walton J, on 4 July 2014 no appearance was entered for Wyanga, either in respect of the TWU's application or in respect of its own applications.
In the proceedings on 4 July 2014, counsel for the TWU foreshadowed an amended process together with additional affidavits. In that light Walton J made directions to the following effect:
(1)Any amended application and further affidavits were to be filed on or before 21 July 2014.
(2)The amended application and affidavit were to be served on the respondent in accordance with the relevant Rule.
(3)All matters were listed for further directions on 30 July 2014.
(4)The TWU was to serve a communication on the respondent indicating the directions made by his Honour.
Walton J indicated that in the event of Wyanga's non-appearance on 30 July 2014 his Honour might proceed to list the proceedings for hearing ex parte. However, in the event there was an appearance his Honour would hear Wyanga as to further programming. His Honour also stated that consideration should be given to further conciliation in relation to the "cross-claims".
On 30 July 2014, there was again no appearance for Wyanga. The TWU tendered an affidavit of its legal officer in which the officer deposed that he had taken steps to send correspondence to Wyanga's registered business address, to the addresses of the two directors of Wyanga derived from an ASIC search of Wyanga and to two email addresses. The correspondence reflected the directions made by Walton J on 4 July 2014. An amended application and affidavits were also served on Wyanga.
The ASIC search also revealed that on 17 July 2014 there had been "Notification of Application to Wind Up Company under s 459p, 462 or 464". The ASIC search also indicated under the heading "Current Petitioner Court Action", the name "Workers Compensation Nominal Insurer".
The TWU sought an ex parte hearing of all matters. Walton J indicated that he intended to allocate the matters to another judicial member on the basis that, in the absence of Wyanga, all matters would be heard ex parte.
All matters were allocated to me. I called the matter on for directions on 27 October 2014. There was no appearance by Wyanga despite that entity being advised of the directions hearing. I was advised by counsel for the TWU that an order had been made in the Supreme Court to appoint a liquidator and that Wyanga was now externally administered. The TWU had contacted the liquidator and the information was confirmed.
Given the provisions of s 471B of the Corporations Act 2001 (Cth), the TWU cannot proceed against Wyanga without the leave of the Supreme Court. No such leave had been sought and so Matter No IRC 812 of 2012 is effectively stayed for the time being. In relation to Wyanga's applications there was no such impediment and the TWU proposed that the respondent's applications be dealt with ex parte given it had not heard from Wyanga since 5 July 2014, that Wyanga's solicitors had ceased to act and that there had been no appearance by Wyanga in the last three proceedings before the Court despite that entity being properly advised of the time and place for hearing.
The Court indicated it would hear the TWU regarding Wyanga's applications on an ex parte basis if there was no appearance by Wyanga. This was subject to Wyanga being further advised its applications were listed for hearing on 12 November 2014 and that in the event there was no appearance by Wyanga the Court would proceed ex parte.
Wyanga was advised accordingly at its registered business address as were the two directors of the company. There was no appearance for Wyanga on 12 November 2014 and the Court proceeded to deal with its applications ex parte.
Consideration
The TWU relied on a number of bases to submit the cross-claims should be dismissed. First, that despite directions being made on 1 May 2014 for Wyanga to file an outline of contentions, no such outline had been filed. Second, the solicitors for Wyanga had ceased to act and Wyanga had made no contact with the TWU since 5 July 2014. Thirdly, there had been no appearance by Wyanga on four occasions before the Court despite being advised of the time and place for hearing. In those circumstances it was submitted the Court should dismiss the cross-claims for want of due despatch pursuant to r 12.7(1) of the Uniform Civil Procedure Rules 2005 ("UCPR"), which provides
(1) If a plaintiff does not prosecute the proceedings with due despatch, the court may order that the proceedings be dismissed or make such other order as the court thinks fit.
Next, the TWU relied on rr 13.4(1)(a) and (b) of the UCPR which provide:
(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:
(a) the proceedings are frivolous or vexatious, or
(b) no reasonable cause of action is disclosed, or
...
the court may order that the proceedings be dismissed generally or in relation to that claim.
Proceedings may properly be regarded as vexatious if, irrespective of a motive of a litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless: Attorney-General v Wentworth (1988) 14 NSWLR 481 per Roden J at 487, approved and applied by the Full Bench in Re Operational Ambulance Officers (State) Award (No 2) [2011] NSWIRComm 85 at [32]. In Peden v Lake Macquarie Refrigeration Pty Ltd [2004] NSWIRComm 66; (2004) 134 IR 149, the Full Bench considered the word "frivolous" as it is used in s 181(2)(c) of the IR Act, stating at [20]:
[20] In light of the well established line of authority, and the ordinary meaning of the word "frivolous", we are satisfied that an application under s 84 will be frivolous if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter.
Dismissal under r 13.4(1)(b) would only be appropriate if Wyanga's claims were so clearly deficient that it would be inappropriate to allow the proceedings to continue: Cox v Journeaux (No 2) [1935] HCA 48; (1935) 52 CLR 713 at 720. See also General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129 where Barwick CJ stated:
It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense".
The power to exercise summary judgment must be exercised with "great care" and "exceptional caution": Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at [24] and [55]. In Spencer, Hayne, Crennan, Kiefel and Bell JJ referred to the test as "requiring formation of a certain and concluded determination that a proceeding would necessarily fail": at [53].
Wyanga's primary allegation was that the cross-respondents had contravened s 52 of the Trade Practices Act (which relevantly applied at the time the alleged representations were made). Section 52, which appeared in Div 1 of Pt V, was in the following terms:
52. (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive.
(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1).
Section 86, which appeared in Pt VI, dealt with the jurisdiction of courts. Section 86(2) provided:
(2) The several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject-matter or otherwise, and, subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Part IVA or IVB or Division 1, 1A or 1AA of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.
It may be seen that courts of the States were invested with federal jurisdiction, within the limits of their jurisdictions in respect of matters, inter alia, under Pt V. The Industrial Court of New South Wales is a superior court limited by statute. There is nothing in the statute governing the Court's jurisdiction, express or implied, that even faintly resembles a power to deal with allegations of misleading and deceptive conduct under s 52 of the Trade Practices Act. The nearest source of power for dealing with misrepresentation is s 106 of the IR Act relating to unfair contracts, but that is not a power available to Wyanga: see Fair Work Act2009 (Cth), s 26(2)(e).
In relation to estoppel, it was asserted the contract carriers were estopped from relying, inter alia, on the terms and rates set out in the Determination. Section 406 of the IR Act provides:
406 Awards and other industrial instruments provide minimum entitlements
(1) The conditions of employment set by an industrial instrument are the minimum entitlements of employees.
(2) The provisions of a contract of employment or other contract do not have effect to the extent that they provide an employee with a benefit that is less favourable to the employee than the benefit to which the employee is entitled under an industrial instrument.
(3) In the case of a contract determination or contract agreement, a reference in this section to an employee is a reference to a driver or carrier and a reference to employment is a reference to engagement as a driver or carrier.
In the light of s 406, no estoppel can arise in the manner asserted by Wyanga. To emphasise the point, in Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784; (2000) 99 FCR 95 at [19]-[20] and [22] French J stated:
[19] Up until the enactment of the Workplace Relations Act, an honest and common but erroneous assumption of parties to an award as to the nature of the rights it confers and obligations it imposes has been seen to have little effect against its statutory force. Griffiths CJ in Josephson v Walker at 696 put it thus:
"The obligation created by [the award] does not depend upon any agreement of the parties express or implied and may arise without their knowledge. If by the award it is determined that journeymen plumbers shall receive not less than a certain rate of wages, each journeyman plumber is entitled to those wages, and although the employer and the employee have gone on for a long time the one paying and the other receiving what each honestly believes to be the proper rate of wages, nevertheless if it is afterward found that the wages paid are less than those fixed by the award, the right of the employee to receive the wages so fixed has accrued."
It is possible to perceive in that passage some of the matters which might be relied upon today to found an estoppel.
[20] The inability to contract out of an award by virtue of its statutory operation militates against the proposition that parties may be estopped from enforcing its provisions or may waive its benefits in a way that is legally enforceable. The effect of the statutory provisions which give awards their binding force are at least as powerful against the common law and equitable principles of estoppel and waiver as they are against the common law of contract. There is nothing novel in the general proposition that statutes which preclude contracting out of the rights and obligations they confer will defeat the application of estoppel and waiver to like effect: Beckford Nominees Pty Ltd v Shell Co of Australia Ltd (1986) 73 ALR 373 at 378 (Pincus J).
...
[22] At least up until the amendment of the Industrial Relations Act by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) (the WROLA Act), there was a well-established line of judicial authority in relation to industrial awards inimical to the notion of contracting out of award obligations and, a fortiori, the invocation of principles of estoppel or waiver in relation to them. The underlying philosophy goes back to the beginnings of industrial law in Australia. It is exemplified in Duncan v Ellis (1916) 21 CLR 379. That case concerned a prosecution brought under the Factories and Shops Act 1915 (Vic) against an employer who had paid his employee less than the minimum rate applicable by statutory determination in the belief induced by his employee that he was younger than the age which would have entitled him to that rate. It was not a defence that the employer reasonably believed what his employee had said. The primary object of the Act was "the benefit of the public" in the sense that it was an Act "not merely for regulating certain trade matters but, generally speaking, one of social reform - an Act for improving the condition of wage earners and others, not only for their sake but for the public betterment which will ensue from these provisions", per Barton J (at 382). Isaacs J identified as the fundamental notion of the Act (at 385):
"... the inability of employees to bargain effectively for themselves as to their surroundings and their remuneration, and therefore, in order to protect them as a class and carry out the professed object of the enactment, the Legislature have found themselves compelled to lay down a rigid rule, precluding inquiry as to accident, or inadvertence, or negligence, or other person's acts, except where it has expressly or by necessary intendment introduced those factors..."
Although estoppel was not raised in Duncan, it was relied upon in similar circumstances in Walsh v Commercial Travellers Association of Victoria (1940) VLR 259. An adult who had obtained employment by fraudulently misrepresenting that he was 19 and had been paid the rate of wages payable to persons of that age, sued his employer to recover the difference between such rate and the Wages Board Rate prescribed for adults. He was held by the Full Court to be entitled to succeed despite his own fraud. Neither estoppel nor a counterclaim for deceit could avail the defendant. The relationship between the inability to contract out of the obligations and the inapplicability of estoppel was made clear by Mann CJ (at 263):
"It would destroy in a large measure the operation of the statute to allow a plea of estoppel where the statement relied upon constituted the means employed to bring about a contract of employment although the contract itself can afford no defence."
Any one of the bases relied upon by the TWU to dismiss Wyanga's cross-claims was sufficient to enable the Court to do so: there is no power in the Court to entertain a claim under s 52 of the Trade Practices Act, no power to award damages under that Act and the doctrine of estoppel has no application. Wyanga's applications disclosed no reasonable cause of action. Indeed, the applications could not possibly succeed; they were manifestly groundless.
Despite the opportunities provided to Wyanga to appear before the Court to explain its position or to make submissions opposing summary judgment, nothing was heard from Wyanga or its directors.
Orders
The Court confirms the orders made on 12 November 2014, namely that:
(1)The applications by Wyanga Holdings Pty Limited in Matter Nos IRC 145, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156 and 157 of 2014 are dismissed.
(2)Wyanga Holdings Pty Limited shall pay the cross respondents' costs in respect of each of the applications as agreed or assessed.
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