Wylie v McCann Worldgroup Pty Limited
[2010] FMCA 457
•30 June 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WYLIE v McCANN WORLDGROUP PTY LIMITED & ANOR | [2010] FMCA 457 |
| HUMAN RIGHTS – Sex Discrimination Act1984 (Cth) – interim applications. Application to strike out part of further amended points of claim – whether points of claim disclose reasonable cause of action – embarrassment – whether failure to plead material facts – whether striking-out appropriate in the circumstances – pleadings in proceedings in the Federal Magistrates Court – whether leave to replead. Application to consolidate or hear together matters instituted by two former employees of the first respondent – whether in the interests of justice to do so. Application for separate determination of questions – whether just and convenient. |
| Australian Human Rights Commission Act 1986 (Cth), s.3 Federal Court Rules, O.6 r.6, O.11 r.16, O.29 r.2 |
| Aristocrat Technologies Australia Pty Limited v Global Gaming Supplies Pty Limited [2007] FCA 943 Buckingham v KSN Engineering Pty Ltd [2008] 177 IR 427; [2008] FMCA 546 Calmer Pty Ltd & Ors v Michel's Patisserie (WA) Pty Ltd & Anor [2009] FMCA 42 CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601 Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited (1931) 46 CLR 41; (1931) 38 ALR 73 John Kennedy v Mary Annett de Trafford, Henry Stourton and Joseph Bottomley Dodson [1897] AC 180 at 188; [1895-9] All ER Rep 408 Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (1991) 217 ALR 171; [1991] FCA 417 Millar v Harper (1888) 38 Ch D 110 Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591; [1997] FCA 1040 O'Brien v Michel's Patisserie (WA) Pty Ltd & Anor and Calmer Pty Ltd & Ors v Michel’s Patisserie (WA) Pty Ltd & Anor [2010] FMCA 7 Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) [2010] FCA 361 Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559 Re Ling; Ex Parte Ling v Commonwealth of Australia (1995) 58 FCR 129; [1995] FCA 1410 Sterling Commerce (Australia) Pty Ltd v Iliff (2008) 173 IR 378; [2008] FCA 702 Taylor v Morrison & Ors [2003] FMCA 79 The Bell Group Ltd (in liq) and Others v Westpac Banking Corporation and Others (No 9) (2008) 225 FLR 1; [2008] WASC 239 Trade Practices Commission v David Jones (Australia) Pty Ltd and Others (1985) 7 FCR 109; [1985] ATPR 40-607 |
| Applicant: | SIMONE ALEXIS WYLIE |
| First Respondent: | McCANN WORLDGROUP PTY LIMITED (ACN 000 154 889) |
| Second Respondent: | PAUL BROWN |
| File number: | SYG70 of 2009 |
| Judgment of: | Barnes FM |
| Hearing dates: | 2 & 4 March 2010 |
| Last date for submission: | 9 March 2010 |
| Delivered at: | Sydney |
| Delivered on: | 30 June 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Darams |
| Solicitors for the Applicant: | Harmers Workplace Lawyers |
| Counsel for the First Respondent: | Mr P Newall |
| Counsel for the Second Respondent: | Mr J Fernon SC |
| Solicitors for the Respondents: | Baker and McKenzie |
ORDERS
The following parts of the Further Amended Points of Claim be struck out:
(a)that part of paragraph 5 which states “and authorised it to act for it and advise on general and specific employment related matters”;
(b)that part of paragraph 6B which states “and accordingly one of agency”;
(c)paragraph 55A;
(d)paragraph 87B;
(e)paragraph 87C;
(f)paragraph 87D; and
(g)that part of paragraph 89 which refers to the first respondent.
The applicant have leave to file and serve Further Further Amended Points of Claim on or before 30 July 2010.
The first respondent’s Amended Application in a Case filed on 26 February 2010 and the second respondent’s Application in a Case filed on 26 February 2010 otherwise be dismissed.
The applicant’s Application in a Case filed on 4 February 2009 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG70 of 2009
| SIMONE ALEXIS WYLIE |
Applicant
And
| McCANN WORLDGROUP PTY LIMITED (ACN 000 154 889) |
First Respondent
| PAUL BROWN |
Second Respondent
REASONS FOR JUDGMENT
Background
On 12 January 2009, the applicant (Ms Wylie) commenced proceedings under the Human Rights and Equal Opportunity Act 1986 (Cth) (now the Australian Human Rights CommissionAct1986 (Cth) referred to as the AHRCA hereafter) alleging that the first and second respondents (McCann Worldgroup Pty Limited (McCanns) and Mr Brown respectively) engaged in conduct contrary to the Sex Discrimination Act 1984 (Cth) (the SDA). Ms Wylie is a former employee of McCanns. She seeks damages, declaratory relief and other orders in relation to McCanns and declaratory relief and other orders in relation to Mr Brown. Her claim against McCanns alleges discrimination and breach of a contract of employment. One aspect of the claim of discrimination is a claim of victimisation said to be based on conduct of Mr Brown and also of McCanns. Originally a claim was also made against a third respondent, Baker and McKenzie (Bakers). That claim is no longer pursued.
The applicant relied on points of claim filed on 12 January 2009. Points of defence were filed on 19 March 2009. On 26 March 2009 each respondent filed interim applications seeking orders that certain parts of the Points of Claim be dismissed pursuant to r.13.10 of the Federal Magistrates Court Rules or struck out pursuant to O.11 r.16 of the Federal Court Rules and/or that the applicant’s claims for relief against the second and (then) third respondents be dismissed.
Parts of the Points of Claim were struck out, but the applicant was given leave to file Amended Points of Claim (see Wylie v McCann Worldgroup Pty Ltd & Ors [2009] FMCA 959). The applicant filed Amended Points of Claim on 3 November 2009 and discontinued her proceedings in relation to Bakers. Further Amended Points of Claim were filed by the applicant on 16 November 2009 as provided for in orders made on 13 November 2009. These are referred to for convenience as the “latest Points of Claim”.
These proceedings
On 4 February 2009 Ms Wylie filed an application in a case seeking orders that these proceedings and matters no. SYG535/2008 (between Ms Davidson as applicant and McCanns as respondent) and SYG71/2009 (between Ms Davidson as applicant and McCanns and Mr Brown as respondents) be heard together and that evidence in one matter be evidence in the others (the “consolidation application”). Ms Davidson also filed a consolidation application. The hearing of those applications was postponed while other interlocutory matters were resolved.
On 5 February 2010 McCanns filed an application in a case seeking that certain paragraphs in the latest Points of Claim be struck out (the “strike-out application”) and that all matters relating to and claims against Mr Brown be heard and determined separately and prior to the hearing of matters alleged and claims made against McCanns.
McCanns filed an amended application in a case on 26 February 2010 which reiterated (with a minor amendment) the strike-out application. In addition, it sought either an order under O.6 r.6 of the Federal Court Rules for the separate hearing of specified allegations against Mr Brown or an order for the separate determination of specified questions under r.17.02 of the Federal Magistrates Court Rules (the “separate questions application”).
Mr Brown also filed an application in a case on 26 February 2010 seeking that part of the latest Points of Claim be struck out and the separate hearing of allegations against Mr Brown or the separate determination of specified questions.
In addition, an amended application in a case was filed by Ms Davidson in matter SYG71/2009 seeking orders in the same terms as Ms Wylie’s consolidation application or, in the alternative, orders that the two matters in which she is the applicant be consolidated or heard together.
These various applications were heard together. This judgment deals the respondents’ strike-out and separate questions applications (and the alternative formulations of the orders sought) and with Ms Wylie’s consolidation application.
Ms Davidson’s consolidation application raises discrete issues in relation to the two actions commenced by her and is the subject of a separate judgment (see Davidson v McCann Worldgroup Pty Limited & Anor [2010] FMCA 451).
The strike-out application
Relevantly, by its amended application in a case filed on 26 February 2010 McCanns seeks orders pursuant to O.11 r.16 of the Federal Court Rules that the following paragraphs of the latest Points of Claim filed by Ms Wylie be struck out:
a)paragraph 5, or alternatively that part of paragraph 5 which states “and authorised it to act for it and advise on general and specific employment related matters”;
b)paragraph 6B, or alternatively that part of paragraph 6B which reads “and accordingly one of agency”;
c)paragraph 55A;
d)paragraph 87B;
e)paragraph 87C;
f)paragraph 87D; and
g)that part of paragraph 89 which refers to the first respondent.
By his application in a case filed on 26 February 2010 Mr Brown sought an order pursuant to O.11 r.16 of the Federal Court Rules that paragraph 5, or alternatively that part of paragraph 5 which states “and authorised it to act for it and advise on general and specific employment related matters” of the Further Amended Points of Claim be struck out. It is convenient to consider the strike-out applications together.
In essence, McCanns’ strike-out application relates to those parts of the latest Points of Claim that plead that McCanns was liable to Ms Wylie for alleged conduct by Mr Brown (the Paul Brown Conduct) by reason of an asserted agency. Most of these paragraphs were amended following the earlier strike-out application. However McCanns submitted that the latest Points of Claim did not plead facts, matters or circumstances in such a way as to enable McCanns to know the case it had to meet in relation to the Paul Brown Conduct and did not disclose a reasonable cause of action in this respect. It was submitted that these problems were not capable of being remedied.
The so-called Paul Brown Conduct is described in paragraph 55 of the latest Points of Claim as four statements alleged to have been made by Mr Brown in a telephone call he made to Ms Wylie on or about 17 November 2006 after Ms Wylie’s neighbour had discussed Ms Wylie’s employment issues with Mr Brown (who is described as a solicitor whom Ms Wylie allegedly “knew” was usually engaged by McCanns). Ms Wylie alleged that she informed Mr Brown of her concerns about her employment and termination of her employment by McCanns as detailed in paragraph 54A; that Mr Brown stated he had been informed of her situation by her neighbour; that he advised her to write a letter to McCanns; that he advised her “as to the content of that letter”; and that he “stated that the Applicant should not consider legal proceedings if the letter failed to achieve the desired outcome as the First Respondent would “bury” the Applicant in paperwork”.
There are two basic aspects to the impugned Points of Claim: first an allegation that the relationship between Mr Brown and McCanns was one of solicitor and client and hence of agency and second an allegation that by reason of the agency relationship between the respondents the Paul Brown Conduct was conduct by McCanns (as well as by Mr Brown) that is said to constitute an act of victimisation and unlawful discrimination by each respondent.
The respondents rely on O.11 r.16 of the Federal Court Rules (which, it is accepted, is applicable in this court by virtue of r.1.05 of the Federal Magistrates Court Rules).
Under O.11 r.16 the court has a discretion as to whether to strike out all or part of a pleading where the pleading:
(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
(b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or
(c) is otherwise an abuse of the process of the Court…
To consider the submissions in this respect it is appropriate to have regard to the latest Points of Claim as a whole, as well as the shortcomings said to exist in specified paragraphs. In particular, it is necessary to consider the impugned paragraphs in the context in which they appear.
Paragraph 5 appears in the part of the latest Points of Claim headed “The Parties”. Relevantly, after reciting that Mr Brown was a legal practitioner and member of the partnership known as Baker and McKenzie (in paragraph 2) and that Ms Wylie was employed by McCanns (paragraph 4), paragraph 5 is as follows:
During the period September 2003 to December 2006, from time to time, the First Respondent retained the services of Baker & McKenzie and authorised it to act for it and advise on general and specific employment related matters.
The particulars to paragraph 5 are as follows:
See table in Schedule 1 for matters in which the First Respondent retained Baker & McKenzie during the period.
Schedule 1 lists seven matters by matter description consisting of a person’s name and also two matters described as General Employment Advice 2004 and General Employment Advice 2006 and indicates the dates on which each such file was opened. The 2006 General Employment File was opened on 27 November 2006. The named files do not include any file in the name of Ms Wylie.
Paragraph 6 of the claim pleads that Mr Brown was the Baker and McKenzie lawyer “designated to provide the services” for which Bakers was retained by McCanns in the matters set out in Schedule 1. Paragraph 6A pleads a telephone conversation said to have taken place on or about 17 November 2006 between Mr Brown and Ms Wylie in which Mr Brown allegedly informed Ms Wylie that McCanns was his client; that he “had to defend” McCanns; and that “he would use everything in his power to defend” McCanns. Paragraph 6B pleads that:
By reason of the matters pleaded in paragraphs 5, 6 and 6A above, at all material times, and at least as at November 2007 (sic) the relationship between the First Respondent and the Second Respondent was that of solicitor/client and accordingly one of agency.
The reference to November 2007 is intended to be a reference to November 2006.
Paragraph 55A appears after paragraphs 54A and 55 which plead the alleged telephone conversation on or about 17 November 2006 between Mr Brown and the applicant said to constitute the Paul Brown Conduct. It pleads that:
By reason of the matters pleaded in paragraph 8 (sic), the Paul Brown Conduct was conduct by the First Respondent.
with particulars that:
The First Respondent is liable as principal for the conduct of the Second Respondent as its agent.
It was clarified in submissions that the reference to paragraph 8 was intended to be a reference to paragraph 6B of the latest Points of Claim.
Paragraph 87B appears in that part of the latest Points of Claim headed “Victimisation” which first pleads (in paragraph 86) that the Paul Brown Conduct was conduct by Mr Brown that was intended to subject or did subject or threaten to subject the applicant to detriment on specified grounds. Particulars refer to the content of the alleged telephone conversation between the applicant and Mr Brown on or about 17 November 2006. It is then pleaded that by reason of the Paul Brown Conduct the applicant suffered detriment (paragraph 87) and that by reason of these matters pleaded in paragraphs 54A, 55, 86 and 87 Mr Brown committed an act of victimisation against the applicant within the meaning of s.94 of the SDA (paragraph 87A).
Paragraph 87B states:
By reason of the matter pleaded in paragraph 6B above, the Paul Brown Conduct was conduct by the First Respondent.
Paragraph 87C is as follows:
By reason of the matters pleaded in paragraphs 87A and 87B, above, the First Respondent has committed an act of victimisation within the meaning of section 94 of the SDA against the Applicant.
Paragraph 87D states:
By reason of the matter pleaded in paragraph 87C, the First Respondent has committed an act of unlawful discrimination within the meaning of section 3 of the Australian Human Rights Commission Act 1986 (Cth) (formerly HREOCA) against the Applicant.
Paragraph 87E pleads unlawful discrimination on the part of Mr Brown against the applicant.
Paragraph 89 is in the part of the latest Points of Claim headed “Loss and Damage” which pleads (in paragraph 88) that by reason of McCanns and Mr Brown’s conduct the applicant suffered loss or damage. Paragraph 89 is under the sub-heading “Non-Economic Loss” and is as follows:
By reason of the unlawful discriminatory conduct, including the First, and Second Respondents’ victimisation of the Applicant, set out above, the Applicant suffered hurt, humiliation, stress and anxiety.
Order 11 rule 16 is concerned only with the adequacy of pleading and does not “permit or allow consideration of facts or evidence outside the pleadings” (see Imobilari Pty Ltd (ACN 091 464 729) v Opes Prime Stockbroking Ltd (in liq) (recs and mgrs apptd) (ACN 086 294 028) and Others (2008) 252 ALR 41; [2008] FCA 1920 at [4] per Finkelstein J). However in evidence before the court are copies of correspondence between the solicitors for the parties in relation to further and better particulars of aspects of the latest Points of Claim that the parties each referred to as relevant to the exercise of the court’s discretion in relation to the strike-out application. The parties brought to the attention of the court that the respondents had sought particulars of matters including the facts and circumstances relied upon to allege that Mr Brown was the lawyer designated to provide the services set out in Schedule 1 to the Points of Claim. In response the applicant’s solicitors referred to timekeeper references in a table of the list of matters in which Baker and McKenzie acted for McCanns. These are the matters listed in Schedule 1 to the Points of Claim. It was clarified that the “material” times referred to in paragraph 6B were from 1 January 2006 to date and that the reference to November 2007 should be to November 2006.
The respondents’ solicitors also sought particulars of the facts and circumstances relied upon to allege in paragraph 55A that the Paul Brown Conduct (as defined in the Points of Claim) was conduct of McCanns and the basis for the allegation that the Paul Brown Conduct was the conduct of McCanns and that McCanns was liable for the conduct of Mr Brown.
The solicitors for the applicant responded that the facts and circumstances relied upon may be summarised as:
(a) as set out in paragraph 6B, the relationship between the Second Respondent and the First Respondent was one of solicitor and client;
(b) the relationship between solicitor and client is one of agent and principal (see Spedley Securities (In Liq) v Bank of New Zealand (1991) 26 NSWLR 711; Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 225 FLR 1);
(c) in such a relationship, the actions of the agent will bind the principal in two relevant circumstances:
(i) where those actions are done within the scope of the agent’s actual or ostensible authority; or
(ii) where the agent has actual or ostensible authority to perform a class of acts and the relevant act occurs within that class (see Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 FLR 41); and
(d) at the outset of the Paul Brown Conduct, and as set out in paragraph 6A, the Second Respondent made it clear that he was acting within the scope of his actual or ostensible authority in talking to the Applicant.
In support of the strike-out application, counsel for McCanns referred to the fact that the fundamental purpose of pleadings was to define the issues with clarity so that the respondents understood and had the opportunity to meet the case made against them (see Dare v Pulham (1982) 148 CLR 658 at 664; [1982] HCA 70 and McKellar and Another v Container Terminal Management Services Ltd and Others (1999) 165 ALR 409 at 415; [1999] FCA 1101) and to the “most fundamental rule of pleading” and basic requirement of procedural fairness that a statement of claim must plead all the material facts necessary for the purpose of formulating a complete cause of action or it was liable to be struck out (see Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591 at 44,151; [1997] FCA 1040; Trade Practices Commission v David Jones (Australia) Pty Ltd and Others (1985) 7 FCR 109 at 115; [1985] ATPR 40-607 and Banque Commerciale S.A., in liquidation v Akhil Holdings Limited (1990) 169 CLR 279 at 286; [1990] HCA 11 per Mason CJ and Gaudron J). McCanns contended that it was “expressly not sufficient” for a pleading to state conclusions drawn from unstated facts (TPC v David Jones at 114). On this basis it was submitted that a pleading which failed to plead the material facts necessary to formulate a complete cause of action necessarily should be struck out.
Counsel for the first respondent observed that the categories in O.11 r.16 of the Federal Court Rules may overlap in a particular case. Thus a pleading may be prejudicial or embarrassing because it discloses no reasonable cause of action or because it is “susceptible to different meanings” as to the legal basis on which proceedings are founded (see Tresize and Another v National Australia Bank Ltd and Others (2005) 220 ALR 706; [2005] FCA 1095 at [20]). McCanns submitted that the pleadings which disclosed no reasonable cause of action necessarily would cause delay in the proceedings.
It was submitted for McCanns that such principles ought to be applied a fortiori in the Federal Magistrates Court where proceedings were intended to be speedy and circumscribed in the way they were run. It was contended that in this context it was imperative that the pleadings carry out their function of making entirely clear to a respondent what was being said against it and on what material facts that was said. McCanns also contended that the pleadings were required to be precise because of the complexity of the law of agency.
In relation to the latest Points of Claim it was pointed out that a fundamental part of Ms Wylie’s claim was that McCanns was somehow liable for the actions of Mr Brown (in the Paul Brown Conduct) for reason of “agency”, albeit the firm Baker and McKenzie were no longer respondents. It was submitted that none of the paragraphs sought to be struck out disclosed any facts or circumstances upon which the applicant relied to establish that a relationship of agency between McCanns and Mr Brown existed at the time or times when the Paul Brown Conduct was alleged to have occurred. Mr Newall for the first respondent suggested that the necessary material facts had not been pleaded by Ms Wylie in those parts of the Points of Claim in which it was pleaded that McCanns was liable to her for the actions of Mr Brown as its agent. McCanns submitted that the applicant had not defined the issues as required so that it was sufficiently informed of the case it was required to meet (see also Council for the City of the Gold Coast v Pioneer Concrete (Qld) Pty Ltd and Others (1998) 157 ALR 135 at 143 per Drummond J). Rather it was contended that the latest Points of Claim made a bald assertion of a relationship of agency in circumstances where the firm of solicitors Baker and McKenzie (who were said to be retained by McCanns) were not alleged to be agents of McCanns.
Further, while McCanns acknowledged that liability for the acts of an agent may arise when the acts of the agent were done within the scope of actual or ostensible authority, it was submitted that the applicant did not plead any facts or circumstances which gave rise to an allegation of actual or ostensible authority at the time of the Paul Brown Conduct, but did nothing more than assert the existence of a retainer or retainers (the terms of which were not particularised) between McCanns and Baker and McKenzie at certain times as evidenced by the matter descriptions contained in Schedule 1 to the Points of Claim.
McCanns contended that there was precedent for points of claim in human rights matters to be struck out where allegations were vague and general and failed to disclose a case to answer (see for example Jandruwanda v University of South Australia & Ors (No.2) [2003] FMCA 233 upheld on appeal in Jandruwanda v University of South Australia [2004] FCA 219). This was said to be more so when the particular allegations concerned disclosed no reasonable prospects of success. (See Cate v International Flavours & Fragrances (Aust) Pty Ltd [2007] FMCA 36 per McInnis FM at [75]).
McCanns addressed each of the impugned paragraphs and submitted that the paragraphs in issue in the latest Points of Claim continued to suffer from the failings and insufficiencies of the earlier Points of Claim identified by this court in the decision of 1 October 2009.
Mr Brown relied generally on McCanns’ submissions and also addressed paragraph 5 of the latest Points of Claim as discussed below.
Counsel for the applicant acknowledged that the applicant’s case in relation to McCanns’ liability for the Paul Brown Conduct essentially turned upon the issue of agency and the extent and consequence of the liability of principals for the acts of agents in relation to specific conduct under the SDA and AHRCA.
The applicant submitted that the impugned paragraphs of the latest Points of Claim sufficiently pleaded the basis of the allegation that the relationship between the respondents was one of solicitor and client and that McCanns was liable for the Paul Brown Conduct of Mr Brown as its agent by reference to the matters pleaded in paragraph 6B.
It was submitted that the fact that a relationship between a solicitor and client was one of agency was uncontroversial and that in such circumstances the client as principal would be liable, within limitations, for unauthorised wrongful acts of the solicitor (the agent) (see Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited (1931) 46 CLR 41 at 49; (1931) 38 ALR 73 per Dixon J and Forestview Nominees Pty Ltd and Another v Perron Investments Pty Ltd and Another (1999) 93 FCR 117 at 134; [1999] FCA 405 at [87]). Such a proposition was said to be particularly pertinent in a human rights matter such as the present, as it had been held by Connolly FM that a principal could be held liable for sex discrimination by its agent by way of the commission of acts constituting victimisation within s.94 of the SDA included in the definition of unlawful discrimination in s.3 of HREOC Act (as it then was) “on the basis of primary responsibility of a principal for the conduct of an agent giving (sic) ostensible authority to bind the principal” (Lee v Smith & Ors [2007] FMCA 59 at [213]).
The applicant submitted that it was important that there had been no denial of the relationship of solicitor and client between McCanns and Mr Brown at this stage or any evidence filed that denied that there was any general retainer. On this basis it was contended that there was an arguable basis for the allegations.
In Wylie v McCann [2009] FMCA 959 I outlined principles applicable in relation to the exercise of the discretion to strike out points of claim under O.11 r.16 of the Federal Court Rules and the concepts of embarrassment and no reasonable cause of action (at [23] – [35]). Relevantly, a pleading will be embarrassing if allegations are made at such a level of generality that the respondent does not know in advance the case it has to meet and a reasonable cause of action is one which has some chance of success if regard is had only to the allegations and pleadings relied on. (See Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) [2010] FCA 361 for a recent discussion of the exercise of the power under O.11 r.16.)
Insofar as it is contended that no reasonable cause of action is disclosed in the impugned parts of the latest Points of Claim, I have borne in mind that the discretionary power to strike out portions of pleadings should be applied sparingly and only in a clear case. As stated in Murex Diagnostics Australia Pty Limited v Chiron Corporation and Another (1995) 55 FCR 194; [1995] FCA 1040, it must be plain and obvious that impugned portions of the pleadings are unarguable before they will be struck out on this basis and no amendment allowed.
More generally, it is notable that while the long-standing principles in Dare v Pulham and TPC v David Jones and Mitanis v Pioneer Concrete referred to by counsel for the first respondent were set out by Weinberg J in McKellar, his Honour went on to refer to cases in which it had been suggested that some revision of the strictness with which the rules governing pleadings should be approached may be justified in light of the increasing complexity of modern commercial litigation. In particular, Weinberg J referred to the views expressed by Drummond J in State of Queensland v Pioneer Concrete (Qld) Pty Ltd (1999) ATPR 42,821 (41-691); [1999] FCA 499 at [14] as follows:
Notwithstanding O 11 r 2(a), a respondent does not have an absolute right in every case to insist upon the applicant pleading in the statement of claim every material fact necessary to show the existence of a complete cause of action.
In Pioneer Concrete Drummond J referred (at [18]) to more flexible responses to challenges to the adequacy of pleadings reflecting the discretionary nature of the power in O.11 of the Federal Court Rules and the objectives of the court’s case management system and continued (at [19] – [20]):
When it is said that a pleading is so bad that it should be struck out, the outcome, in my opinion, is now to be governed not just by whether the pleading fails to comply with one or other of the rules of pleading. The Court will take into account whether the defects are of substance, ie, whether, notwithstanding any deficiencies in the pleading, the fundamental function of pleading is still served. The Court will also take into account how these objectives can best be achieved, where a pleading does not do that: striking out may be appropriate in some cases while an order for particulars or directions under O 10 r 1(2), including directions of the kind referred to by Lockhart J, may be appropriate in others.
In any event, that a pleading alleges conclusions does not mean it is necessarily bad. The requirement of O 11 r 2 to plead the material facts, is subject to the established qualification to rules in this form that allows, in appropriate cases, pleading at a level of generality which excuses the failure to plead every fact material to the cause of action sued upon: Charlie Carter Pty Ltd v SDAEA (WA) (1987) 13 FCR 413 at 417. In Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (Federal Court of Australia, 3 September 1991, unreported) French J, in dealing with a complaint that a statement of claim alleging contraventions of s 45 of the Act pleaded conclusions in terms of the section, rather than the material facts underlying them, said:
"I do not accept that the pleading of something which can be described as a conclusion cannot also be a pleading of a material fact. The real issue in a case where such an objection is raised is whether the facts are pleaded at too great a level of generality … for [the respondents] to know with any precision what case it has to meet."
In O'Brien v Michel's Patisserie (WA) Pty Ltd & Anor and Calmer Pty Ltd & Ors v Michel’s Patisserie (WA) Pty Ltd & Anor [2010] FMCA 7 Lucev FM summarised the principles applicable to strike-out applications in this court. As his Honour stated at [14], the general rules concerning pleadings should be considered having regard to the objects of the Federal Magistrates Act 1999 (Cth) and Rules and modern case management techniques. Under s.3 of the Federal Magistrates Act the objects of this court are to enable it to “operate as informally as possible in the exercise of judicial power” and “to use streamline procedures” (see s.3).
The criticisms levelled by the respondents at the latest Points of Claim must be considered in light of such observations (see McKellar at [32]) and the need to exercise the discretion with caution (see Buckingham v KSN Engineering Pty Ltd [2008] 177 IR 427; [2008] FMCA 546, Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559, Sterling Commerce (Australia) Pty Ltd v Iliff (2008) 173 IR 378; [2008] FCA 702 and the discussion in Wylie v McCann at [29] – [32]).
As indicated above, the respondents’ concern is with the pleading of agency between McCanns and Mr Brown and the basis of the claim that (by reason of such agency) McCanns is liable for the actions of Mr Brown that are said to constitute victimisation.
Mr Newall raised cogent specific concerns about the conclusionary nature of those parts of the latest Points of Claim that referred to or relied on assertions of agency. As Lord Herschell stated in John Kennedy v Mary Annett de Trafford, Henry Stourton and Joseph Bottomley Dodson [1897] AC 180 at 188; [1895-9] All ER Rep 408: “No word is more commonly constantly abused that the word ‘agent’.” Nonetheless, what is clear is that the agent’s authority to act must be made out. As Bowstead and Reynolds put it, the agent’s authority may result “from a manifestation that (the agent) should represent or act for the principal expressly or impliedly made by the principal to the agent himself” (actual authority, express or implied) or “from such a manifestation made by the principal to a third party” (apparent or ostensible authority) (Bowstead & Reynolds on Agency (18th edition, London, Sweet & Maxwell, 2006 at 1).
In this case it appears from the applicant’s submissions and the response to the respondents’ request for further and better particulars that either actual (implied) authority based on a retainer or apparent (or ostensible) authority is asserted on the basis of a relationship of solicitor and client and hence of agency.
Solicitors acting for clients clearly “fall within the realm of agency” (as discussed in Dal Pont C.E. “Law of Agency” (2nd edition Lexis Nexis Butterworths, 2008 at [1.39]). However, as the essence of agency is a person (the agent) representing the interests of another (the principal) to a third party there must first be a relationship of agency arising from the principal’s conferral of authority on the agent.
McCanns takes issue with whether the applicant has pleaded authority giving rise to an agency relationship between Mr Brown and McCanns as solicitor and client relevant to dealings by Mr Brown as McCanns’ agent with Ms Wylie as a third party. The scope of any such agency and of a solicitor’s authority to impact legally on his client’s rights and duties is usually said to rest on the terms of the retainer agreement. In The Bell Group Ltd (in liq) and Others v Westpac Banking Corporation and Others (No 9) (2008) 225 FLR 1; [2008] WASC 239 (one of the cases referred to in the applicant’s response to the respondents’ request for further and better particulars) Owen J stated (at 604):
It is often stated as a settled principle that a solicitor is an agent for the client. However, decisions cited as authority for this proposition are, generally speaking, ones in which the client is involved in litigation or in which the solicitor is authorised to carry out the legal aspects of a transaction. In such circumstances, there is an express or implied authority to act on behalf of the client in all matters that may reasonably be expected to arise for decision in the course of the proceedings, subject to those matters in which the client’s consent is specifically required: Spedley Securities Ltd (in liq) v Bank of New Zealand (1991) 26 NSWLR 711 at 729-730; Sargent v ASL Developments Ltd (1974) 131 CLR 634; Forestview Nominees Pty Ltd v Perron Investments Pty Ltd (1999) 93 FCR 117.
The position is not as clear when a solicitor is engaged in a purely advisory role. It is difficult to see how a solicitor who is retained to do nothing more than provide an opinion has any power to affect the client’s relations with third parties …
Owen J (at 604) referred to the well-established principles that:
A lawyer’s retainer carries with it the implied authority to do all things incidental to the object of the representation: Polkinghorne v Holland (1934) 51CLR 143. “The attorney is the general agent of the client in all matters that may reasonably be expected to arise for decision in this cause”: Prestwich v Poley (1865) 144 ER 662 at 666.
The first aspect of the respondents’ concerns relates to the pleading of the existence of the facts and circumstances relevant to the issue of agency and authority in relation to dealings with Ms Wylie at the time of the alleged Paul Brown Conduct. The parts of the latest Points of Claim that plead a relationship of principal and agent between McCanns and Mr Brown include paragraphs 5 and 6B.
Counsel for the first respondent submitted that paragraph 5 of the latest Points of Claim was not relevant to any issue in these proceedings, was embarrassing on its face and did not disclose any cause of action. It was said to be a bare assertion that McCanns “authorised” Baker and McKenzie to “act for it and advise on general and specific employment related matters” yet was relied upon, at least in part, to assert a relationship of agency in paragraphs 6B and 55A between McCanns and Mr Brown material to the cause of action alleged in paragraph 87B against McCanns in relation to the Paul Brown Conduct.
Mr Brown relied on McCanns’ general submissions in support of his application to strike out paragraph 5 or that part of paragraph 5 which states “and authorised it to act for it and advise on general and specific employment related matters”. Counsel for Mr Brown submitted that the allegations that were said to bear on McCanns retaining the services of Baker and McKenzie were liable to be struck out as embarrassing. Mr Fernon submitted that paragraph 5 was pleaded at such a level of generality that it could not be regarded as relevant to any material fact bearing on Mr Brown or McCanns. It was submitted that the particulars did not cure the general pleading problem, but rather illustrated it, because they did not refer to the particular case that was brought by this applicant in these proceedings.
It was also contended for the respondents that the latest Points of Claim did not plead how it was that Baker and McKenzie was “authorised” to act for McCanns and to advise on general and specific employment related matters, nor the terms of that authorisation. It was submitted that while a retainer or retainers with Baker and McKenzie was asserted, the latest Points of Claim failed to address how it was said that Mr Brown acted in accordance with the retainer (other than as a partner of Baker and McKenzie, when the firm of Baker and McKenzie were not alleged to be agents).
There are particulars to paragraph 5 in the latest Points of Claim consisting of a reference to a table in Schedule 1 of matters in which McCanns retained Bakers during the period in question. However, as the First Respondent pointed out, none of these matters are said to relate to Ms Wylie. Insofar as the court’s discretion is in issue, it was suggested that there was apparently nothing caught by the subpoena addressed to Bakers referred to by counsel for the applicant to suggest any retainer at the relevant time by McCanns of Bakers and/or Mr Brown in relation to Ms Wylie. The respondents submitted that Schedule 1 did not touch on anything to do with the Wylie case and that nothing in Schedule 1 showed or tended to show any material fact toward there being any relevant agency relationship, so that these were not particulars that enabled McCanns to see how it was that it was said that there was an agency arrangement that made McCanns liable to Ms Wylie for the alleged Paul Brown Conduct of Mr Brown.
Counsel for the first respondent acknowledged that neither paragraph 6 nor 6A was the subject of the strike-out application, but submitted that they formed part of the background to paragraph 6B with which McCanns did take issue (at least insofar as it referred to the relationship between the first respondent and second respondent being one of agency).
It was contended that while paragraph 6 referred directly to the matters in Schedule 1 relied upon to prove a retainer between McCanns and Bakers, there were no particulars in relation to the “designation” of Mr Brown alleged in paragraph 6, in particular the terms of the designation or the relationship between the designation and the terms of the alleged retainer (which were not themselves pleaded). The designation alleged in paragraph 6 appeared to be the basis for the alleged link between the respondents, but it was submitted that McCanns was not able to meet such a claim where nothing was said about how this “designation” came about or what it was in circumstances where the firm Baker and McKenzie was not a party to the proceedings.
It was submitted on this basis that the reference to the retainer of Baker and McKenzie did not suffice and that the matters pleaded in paragraphs 5, 6 and 6A (which refers to the alleged conversation between Mr Brown and Ms Wylie on or about 17 November 2006 in which he is said to have informed her that McCanns was his client) did not disclose the essential matters required as the basis for the assertion that at all material times and at least in November 2006 (the time of the Paul Brown Conduct) the relationship between McCanns and Mr Brown was that of solicitor/client and accordingly one of agency as pleaded in paragraph 6B. McCanns submitted that the latest Points of Claim not only failed to allege the terms of the agency but also how it was said that the particular agency existed at the time of the Paul Brown Conduct in November 2006.
In these circumstances it was submitted that the first respondent could not determine the extent to which or how the applicant alleged that Mr Brown was acting within the scope of any retainer of Bakers. It was submitted that paragraph 6B should be struck out, or at least that part of paragraph 6B which reads “and accordingly one of agency”.
Counsel for the applicant explained that the allegation in paragraph 6 that Mr Brown was the Baker and McKenzie lawyer “designated” to provide the services for which Baker and McKenzie was retained by the first respondent in connection with the matters set out in Schedule 1 was made on the basis of material provided by Baker and McKenzie in response to a subpoena requesting production of documents recording, referring to or evidencing the retainer of Bakers by McCanns between 1 January 2005 and 31 December 2008, in particular a list of matters in which Baker and McKenzie had acted for the first respondent. It was said to be clear from this material that Mr Brown (who was identified by a particular timekeeper reference) was the lawyer designated to provide the services in the matters set out in Schedule 1 to the latest Points of Claim.
It was contended that, given that at this stage there had not been any orders for discovery, the applicant was doing the best that she could on the basis of documents that had been provided.
The applicant submitted in this respect that it was relevant that Schedule 1 included (as a matter on which Bakers had been retained) a reference to General Employment Advice in 2006 and also that in paragraph 6A the allegation of fact was made that on 17 November 2006 Mr Brown informed Ms Wylie that he was McCanns’ solicitor and that McCanns was his client, that he had to defend it and that he would do everything in his power to defend it. The Paul Brown Conduct was said to have been engaged in by Mr Brown after he disclosed these material facts.
The applicant submitted that when one considered the latest Points of Claim as a whole, there were material facts set out about the Paul Brown Conduct which, when coupled with the material allegation in relation to the general retainer that was said to exist between the first respondent and Baker and McKenzie and the designation of the second respondent as the solicitor to deal with the matters on behalf of the first respondent, provided a basis for the allegations in the points of claim.
The applicant contended that the matters set out in paragraphs 6, 6A, 54A and 55 of the latest Points of Claim were the facts relevant to whether or not at the particular time that the Paul Brown Conduct was engaged in (November 2006), whether there was in existence a retainer, either general or specific, between McCanns and Baker and McKenzie and whether Mr Brown had been designated as the lawyer to deal with matters on behalf of the first respondent.
As counsel for the first respondent acknowledged, while a solicitor may be the agent of his client in all matters that may be reasonably expected to arise for decision in the “cause” (Griffiths v Evans [1953] 2 All ER 1364; [1953] 1 WLR 1424 at 1431), the applicant has not attempted to plead the “cause” (that is the terms of the retainer or retainers pleaded in the latest Points of Claim).
The existence of a retainer does not of itself mean that a solicitor has acted within the bounds of the solicitor/client agency in all circumstances during the time that the relationship exists. Thus, a solicitor’s retainer to conduct litigation is limited to all things necessary and proper for the conduct of the litigation (see Ex parte Maxwell; Re Bill of Costs (1955) 72 WN(NSW) 333 at 336; (1955) 30 ALJ 93 per Roper CJ). Further, as Owen J pointed out in The Bell Group v Westpac, there may be a distinction between the authority of a solicitor acting for a client in litigation and a solicitor engaged in a purely advisory role. As his Honour stated at 604:
The position is not as clear when a solicitor is engaged in a purely advisory role. It is difficult to see how a solicitor who is retained to do nothing more than provide an opinion has any power to affect the client's relations with third parties. …
The difficulty with the latest Points of Claim is that even if the relationship of solicitor and client between McCanns and Mr Brown is sufficiently pleaded based on the references to the retainer of Baker and McKenzie and Mr Brown’s position as a partner and designated lawyer, such pleadings do not provide any particulars of the retainer or retainers alleged to give rise to a relevant relationship of agency or the terms of the retainer or agency or how it existed at the time of the Paul Brown Conduct.
Insofar as implied actual authority is intended to be in issue based on a relationship of solicitor/client between McCanns and Mr Brown, the latest Points of Claim fail to identify the terms of the “retainer” referred to in paragraph 5 or any other basis for determining the scope of the alleged agency or representation by Mr Brown as agent for McCanns relevant to the scope of his authority, in particular any implied authority to do things incidental to the object of the representation.
As counsel for the first respondent contended, on such Points of Claim McCanns cannot determine the extent to which – or how at all – Ms Wylie alleges Mr Brown was acting within the scope of any retainer in his conversation with her on or about 17 November 2006.
In submissions the applicant placed reliance on the existence of a general retainer of Baker and McKenzie by McCanns to act for it and advise on employment related matters. None of the specific matters in the table in Schedule 1 of matters in which McCanns retained Bakers during the period in question are said to relate to Ms Wylie. The latest Points of Claim assert generally a retainer between McCanns and Bakers, but not the terms of any such retainer. Counsel for the applicant suggested that, absent discovery, the applicant was not at this stage in a position to provide better particulars of the relationship alleged between McCanns and Bakers and/or Mr Brown. It appears that reliance is placed on the inclusion in Schedule 1 of a matter described as “General Employment Advice 2006”.
As the applicant is a third party rather than a party to any alleged retainer, her ability to provide particulars of the alleged general retainer, apparently based on the matter “General Employment Advice 2006” in Schedule 1, may well be limited at this stage. However, this is not the place for a detailed consideration of whether and the extent to which discovery should be made available. Even if in some circumstances discovery may be ordered before particulars are supplied (or affidavit evidence filed) where the party who seeks particulars has the means of knowing the facts in dispute and the other party does not (see Millar v Harper (1888) 38 Ch D 110 at 112 per Cotton LJ and Bowen LJ), in this case it is difficult to see how a matter that “started” after the date of the alleged Paul Brown Conduct (given that the particulars state that the “General Employment Advice 2006” file was opened on 27 November 2006) could have any relevance to the scope of any general retainer prior to that time.
There is nothing in the latest Points of Claim (and apparently nothing caught by the subpoena addressed to Bakers referred to by counsel for the applicant) to suggest any other retainer at the relevant time (that is on or about 17 November 2006) by McCanns to Bakers and/or Mr Brown in relation to Ms Wylie.
As McCanns submitted, because a solicitor is not necessarily acting within the authority conferred by his client, a bare assertion of agency (without the necessary material facts being pleaded) means that McCanns is unable to understand what is being said against it in this respect. A firm of solicitors is not necessarily assumed in all its conduct to be the agent of a client and a member of that firm of solicitors is not necessarily assumed to be acting in that capacity or within any agency. On the latest Points of Claim it is not apparent what is relied on by the applicant to establish the existence of agency between McCanns and Mr Brown, how it is said that Mr Brown was acting within such agency and how McCanns is said to be held responsible for the alleged conduct of Mr Brown consisting of the Paul Brown Conduct. The pleading of conclusions in this respect does not suffice to establish a reasonable cause of action.
Further, insofar as the latest Points of Claim may be relied on to ground a claim of ostensible authority, there is no specific pleading of any facts, matters or other circumstances said to provide the basis for a representation or other “manifestation” or holding out by McCanns to Ms Wylie of Mr Brown as having authority as agent for McCanns such as to arguably confer apparent or ostensible authority on Mr Brown to act on McCanns’ behalf in relation to Ms Wylie in the Paul Brown Conduct. A representation of authority by an agent does not constitute a representation or manifestation by the principal (cf paragraph 6A of the latest Points of Claim). Insofar as such claim may be intended to be based on the status McCanns allegedly conferred on Mr Brown as its solicitor, this reinforces the need for proper pleading of the material facts on which the allegation of the particular solicitor/client relationship is based.
The fundamental difficulty is that the parts of the latest Points of Claim relied on to establish that a relationship of agency existed between McCanns and Mr Brown at the time the Paul Brown Conduct was alleged to have occurred do not enable McCanns to see how it is said that there was an agency arrangement between McCanns and Mr Brown involving any authorisation said to make McCanns liable for the Paul Brown Conduct.
This is reinforced when one considers the other impugned paragraphs in the latest Points of Claim (paragraphs 55A, 87B, 87C, 87D and part of paragraph 89).
Paragraph 55A asserts that McCanns is liable for the Paul Brown Conduct by reason of matters pleaded in (what is intended to be a reference to) paragraph 6B on the basis that McCanns is liable as principal for the conduct of Mr Brown as its agent. Similarly, in paragraph 87B it is pleaded that “By reason of the matter pleaded in paragraph 6B” the Paul Brown Conduct was conduct by the first respondent.
These were said by the first respondent to be bare assertions. It was said that the response to the request for particulars did not set out any particulars going to agency or authority and how it was alleged that McCanns was responsible for the Paul Brown Conduct.
The applicant contended that the pleadings in this respect were sufficient. Reference was made to the discussion in Forestview v Perron of principles of agency and whether a client was liable for conduct of its solicitor. In that case what was in issue was a client’s liability for contempt committed by its solicitor. The majority of the Full Court of the Federal Court found that an innocent principal was not vicariously liable for any contempt committed by the principal’s solicitor. However RD Nicholson J pointed out (at [87]) that the “relationship between a principal and a solicitor potentially attract[ed] both the application of the law of agency as well as the tortious law of vicarious liability”. Reference was made to Colonial Mutual Life in which Dixon J had stated (at 49):
…there is, I believe, no case which distinctly decides that a principal is liable generally for wrongful acts which he did not directly authorize, committed in the course of carrying out his agency by an agent who is not the principal's servant or partner, except, perhaps, in some special relations, such as solicitor and client, and then within limitations.
I note that the applicant appears to have taken these remarks as justification for the pleading asserting no more than the existence of a solicitor/client relationship constituting an agency as the basis for the principal’s liability for unauthorised acts of the agent. However in Forestview v Perron RD Nicholson J set out what he considered to be the position in relation to imposing liability upon a solicitor’s innocent principal for contempt committed by the solicitor (at [107]) as follows:
… I consider the following to be the position on the issue at law:
1. A solicitor is an officer of the Court.
2. A solicitor is the agent of his or her principal.
3. The scope of the solicitor's authority as an agent is to undertake those matters which flow from the retainer subject to limitations requiring special authority for certain expenses of pledging the principals (sic) credit …. The solicitor is authorised to act as his or her principal's agent in all matters (not falling within an exception) which may reasonably be expected to arise for decision in the course of proceedings ….
…
His Honour went on to state (at [107]) that “[a]n omission is distinguishable from a step taken in excess of authority where the solicitor is generally authorised to act”. The omission in that case was a failure to comply with a court order and was held to be outside the authority of the retainer given by the principal so that it could not create any liability in the principal (consistent with what was said by Dixon J in Colonial Mutual Life at [48] – [49]).
The applicant contended that this left an area in which liability would still be imposed on the client as principal for acts of a solicitor as agent that were not directly authorised but which were committed by the solicitor in the course of carrying out his agency. It was contended that McCanns could thus be liable as principal for conduct of Mr Brown as its solicitor/agent. On this basis it was submitted that the allegations in the latest Points of Claim gave rise to an arguable case that should be entitled to go to trial that the relationship between the solicitor and client was one of agency and that as a principal McCanns was liable for acts of its agent that were in excess of authority.
However the mere fact that there may be some circumstances in which a client is liable for unauthorised acts of a solicitor does not obviate the need to plead material facts and circumstances relevant to the scope of the alleged agency relationship and any authority or manifestation of authority to a third party by the principal.
Paragraph 6B forms the basis for the allegations in paragraphs 55A and 87B that the Paul Brown Conduct was conduct by McCanns liable as principal for the conduct of Mr Brown as its agent. However, absent any pleading of any material fact going to authorisation by McCanns of Mr Brown to act as its solicitor in relation to Ms Wylie at the relevant time, there is simply a bare assertion of agency insufficient to establish a reasonable cause of action. Even if the applicant was able to make out an allegation of agency as pleaded in paragraph 6B, paragraph 6B alone does not provide a basis for the allegations pleaded in paragraphs 55A and 87B, given that the applicant did not plead and has failed to identify the facts, matters and circumstances on which the alleged relationship of agency and authority is said to have arisen or applied at the time that Mr Brown is alleged to have engaged in the Paul Brown Conduct.
There has been a failure in the latest Points of Claim to set out the material facts that are said to give rise to the existence of a relationship of agency and authority of some kind at the relevant time and in the context of the conduct that occurred. It does not suffice to state that there is a relationship of solicitor/client and that McCanns is liable as principal for the conduct of McCanns as its agent without more.
Similarly, the pleadings in paragraphs 87C and 87D (which in effect state that by reason of Mr Brown committing an act of victimisation and that by reason of the matters pleaded in paragraph 6B the Paul Brown Conduct was conduct by McCanns) are mere conclusions at such a level of generality that McCanns cannot know with any precision what case it has to meet (see Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (1991) 217 ALR 171). No facts, matters or circumstances were pleaded to suggest how McCanns is said to be liable for the conduct of Mr Brown.
As pleaded the latest Points of Claim disclose a cause of action that cannot succeed. The pleading that by agency McCanns committed an act of victimisation within the meaning of s.94 of the SDA and committed an act of unlawful discrimination within s.3 of the AHRC Act discloses no reasonable prospects of success.
Again, even if some solicitor/client relationship is assumed, there is nothing in the pleadings to show how McCanns could be guilty of a breach of the legislation in issue or how any relevant alleged agency applied or existed at the time of the alleged breach.
Paragraph 87D (which contends that by reason of the matter pleaded in paragraph 87C McCanns committed an act of unlawful discrimination within s.3 of the AHRCA against the applicant) fails to refer directly to any conduct of McCanns that could be said to be in breach of s.3 of the AHRCA and nor does any other part of the latest Points of Claim. The applicant has failed to state how any alleged agency applied or existed at the time of the alleged act of victimisation by Mr Brown pleaded in paragraph 87A. The mere assertion that Mr Brown was at some time (although it was not alleged how) an agent of McCanns, does not of itself give rise to an action for breach pursuant to s.3 of the AHRCA. The impugned part of paragraph 89 cannot stand in these circumstances.
The deficiencies in pleading mean that it is not to the point that it may be arguable that a principal is liable for acts of an agent said to amount to victimisation on principles of actual or ostensible authority (on the basis that conduct committed by an agent with ostensible authority is also committed by the principal), or that it is arguable that the principal itself committed an act of unlawful discrimination (see Lee v Smith & Ors [2007] FMCA 59 and Taylor v Morrison & Ors [2003] FMCA 79).
As contended for by the respondents, the part of paragraph 5 that pleads that “the First Respondent retained the services of Baker & McKenzie and authorised it to act for it and advise on general and specific employment related matters” is pleaded at such a level of generality that it is embarrassing, at least in relation to the absence of any particulars suggesting any retainer at the relevant time by McCanns of Bakers and/or Mr Brown in relation to Ms Wylie. That part of paragraph 5 and the part of paragraph 6B relevant only to the alleged liability of McCanns for the Paul Brown Conduct by reason of agency should be struck out, as should the subsequent impugned paragraphs which in the context of the latest Points of Claim are bare conclusionary pleading. The applicant does not plead and fails to identify how any alleged agency applied or existed at the time of the alleged breach or any basis for determining the scope of any authority of Mr Brown. It does not disclose a reasonable cause of action by merely asserting the relationship of solicitor and client and hence agency and, without more, that the conduct of Mr Brown said to amount to victimisation was conduct of McCanns. Further, the pleading is not such as to enable McCanns to know the case it has to meet.
In considering the discretion to strike out parts of the latest Points of Claim, I have borne in mind that the necessary procedural fairness may be afforded by methods other than the striking out of pleadings. However the latest Points of Claim, the particulars thereto and the response to the request for further and better particulars do not plead or in some other way identify any material fact going to authorisation by McCanns of Bakers or Mr Brown to act as solicitor for McCanns in relation to Ms Wylie at the time of the Paul Brown Conduct, let alone the scope of any authority, whether express or implied actual authority or ostensible authority.
I have considered whether the deficiencies in the latest Points of Claim might be addressed in another manner, for example by directing the applicant to file and serve affidavits to show that there are facts which can be proved which (if proved) would support the general statements in the latest Points of Claim (see the discussion in Pioneer Concrete), but given the absence of disclosure of a reasonable cause of action, as well as the fact that the level of generality of the impugned Points of Claim is too great for McCanns to know “with any precision” (see Kernal Holdings at 173 per French J) what case it has to meet in relation to the Paul Brown Conduct, I am of the view that these parts of the latest Points of Claim should be struck out. The object of pleadings has not been met in this respect. The issues for decision have not been sufficiently defined “so that the preparation of the case and hearing can be controlled” (O’Brien v Michel’s Patisserie at [10] per Lucev FM). While it is unfortunate that the need to address issues of pleading may be seen as delaying resolution of the applicant’s claims at hearing, the nature of the aspect of her claims in issue (McCanns’ liability for the alleged Paul Brown Conduct of Mr Brown) is such that a greater degree of precision is required.
McCanns submitted that these allegations in the latest Points of Claim were not sustainable and that leave should not be granted to replead, because that opportunity had been given and the repleading had not and could not take the matter any further as there was no underlying series of facts that could be pleaded. While there is considerable force in this submission, I am of the view that should the applicant regard the deficiencies in pleading as able to be remedied she should have one further opportunity to replead the facts, matters and circumstances relied on with respect to the claimed liability of McCanns for the Paul Brown Conduct. I would propose that any further amended Points of Claim be filed by 30 July 2010.
The separate questions issue
Both the first respondent McCanns and the second respondent Mr Brown seek orders pursuant to Or.6 r.6 of the Federal Court Rules or, in the alternative, pursuant to r.17.02 of the Federal Magistrates Court Rules.
Order 6 rule 6 of the Federal Court Rules provides:
Where any joinder of parties or of causes of action may complicate or delay trial of the proceeding or is otherwise inconvenient, the Court may order separate trials or make such other order as the Court thinks fit
The respondents seek that all of the allegations made by Ms Wylie against Mr Brown in paragraphs 53 – 55, 86, 87, 87A and 87E of the latest Points of Claim be heard separately to those matters alleged and claims made against McCanns and be heard first in time and decided prior to the hearing of matters alleged and claims made against McCanns.
In the alternative, orders are sought pursuant to r.17.02 of the Federal Magistrates Court Rules that prior to any hearing of the claims against McCanns the court hear and determine the following questions:
a. Did the Paul Brown Conduct as alleged in paragraph 55 of the Claim, or alternatively in paragraphs 54A and 55 of the Claim, occur?
b. If the answer to a. is yes, did the Second Respondent:
i. intend to subject,
ii. subject, or
iii. threaten to subject,
the Applicant to a. detriment as alleged in paragraph 86 of the Further Amended Points of Claim?
c. If the answer to a is yes, did the Applicant suffer a detriment as alleged in paragraph 87 of the Further Amended Points of Claim?
d. If the answer to a. b. and c. is yes, did the Second Respondent commit an act of victimization as alleged in paragraph 87A of the Further Amended Points of Claim?
e. If the answer to d. is yes, did the Second Respondent commit an act of unlawful discrimination as alleged in paragraph 87D (sic) of the Further Amended Points of Claim?
It is apparent that the reference to paragraph 87D (which relates to McCanns) is intended to be a reference to paragraph 87E. On that basis, none of the paragraphs referred to are the subject of the strike-out application.
Rule 17.02 of the Federal Magistrates Court Rules is as follows:
The Court may make an order for the decision by the Court of a question separately from another question at any time in a proceeding.
The respondents’ submission is that whether reliance is placed on r.17.02 of the Federal Magistrates Court Rules or O.6 r.6 of the Federal Court Rules the same result in practical terms can properly be achieved. It is not in dispute that O.6 r.6 of the Federal Court Rules may be applied in this court by virtue of r.1.05 of the Federal Magistrates Court Rules. Counsel for the second respondent suggested that the more desirable course would be for the court to make an order pursuant to r.17.02 of the Federal Magistrates Court Rules. The applicant opposes any such order on either basis proposed.
It is not in dispute that the court has power to order separate trials or separate decision of questions. I am of the view that the starting point should be consideration of whether orders should be made under r.17.02 of the Federal Magistrates Court Rules. The court has a wide discretion in dealing with such an application.
The relevant principles to be applied are those considered by the Federal Court in Reading Australia Pty Ltd v Australian Mutual Provident Society and Another (1999) 217 ALR 495; [1999] FCA 718 in relation to that Court’s power under O.29 of the Federal Court Rules which is the equivalent of (although not identical to) Part 17 of the Federal Magistrates Court Rules (and see Verge & Anor v Devere Holdings Pty Ltd & Ors (No.2) [2008] FMCA 743).
In Reading Branson J referred to the wide powers of the court “to regulate the procedures to be adopted for the hearing and determination of a proceeding” (at [6]). As her Honour stated (at [7]), the general rule is that “[o]rdinarily all issues of fact and law in a proceeding will be determined at the one time by the court following a trial”.
Branson J pointed out (at [7]) that O.29 r.2 had been relied on to support the making of orders that modified this general rule in a number of ways, including by requiring that “certain questions, formulated by the order, be decided separately from (and presumably, before) any other questions in the proceeding” or by requiring the separate trial as a “a preliminary issue” of certain of claims an applicant or by requiring the question of the respondent’s liability to be tried separately.
It is necessary to consider the nature of the claims made in these proceedings and the matters sought to be determined separately. The latest Points of Claim detail Ms Wylie’s claims against McCanns said to amount to discrimination on the grounds of sex, pregnancy and/or family responsibilities as well as claims of breach of contract and breach of fiduciary duty by McCanns as the former employer of Ms Wylie.
In addition, the applicant makes factual claims (paragraphs 53 to 55 of the latest Points of Claim) under the heading “Conduct of Paul Brown”. These claims are, in essence, that on or about 17 November 2006 Ms Wylie received a telephone call from Mr Brown in which she informed him of certain things about her employment by McCanns and her claims; that Mr Brown allegedly stated that he had been informed of her situation by her neighbour; that he advised her to write a letter to McCanns; that he advised her as to the content of that letter; and that he stated that she should not consider commencing legal proceedings if the letter failed to achieve the desired outcomes as McCanns would “bury” her in paper work.
The Paul Brown Conduct is alleged to amount to victimisation under the SDA and an act of unlawful discrimination under the AHRCA on the part of Mr Brown (according to paragraphs 86, 87, 87A and 87E of the latest Points of Claim).
As discussed above, it is also alleged that the Paul Brown Conduct is the conduct of McCanns. There is no suggestion that the issue of whether the Paul Brown Conduct (if established) was conduct of McCanns and the consequences of any such finding should be dealt with as a separate question. The paragraphs that relate to this aspect of the claim are the subject of the strike-out application. Given that leave to replead is to be given I have had regard to those allegations as part of all the circumstances in considering the separate questions issue. If there is no repleading the issue of agency will not arise. However it is apparent from Ms Wylie’s application and the latest Points of Claim that determination of the proposed separate questions would not dispose of the whole of her case, whether or nor there is a repleading of the paragraphs that are to be struck out.
The respondents seek determination of separate questions in relation to those paragraphs of the latest Points of Claim that relate to the liability of Mr Brown. If the separate questions were answered in favour of Mr Brown, that would resolve the questions of liability of Mr Brown to Ms Wylie and any liability of McCanns for the alleged Paul Brown Conduct, but would leave unresolved the issue of McCann’s liability to Ms Wylie on the other bases alleged. If the questions were resolved in favour of Ms Wylie, the issue of any remedies in relation to Mr Brown would remain to be determined as part of the “main” hearing. That would be so whether or not there was an issue of liability of McCanns for the Paul Brown Conduct and remedies in that respect. If the parts of the latest Points of Claim in relation to the Paul Brown Conduct are repleaded, any liability of McCanns and remedies in that respect would also remain for determination.
In Reading (at [8]) Branson J summarised the principles that govern the circumstances in which an order will be made under O.29 r.2 of the Federal Court Rules as follows:
(a) the term “question” in O 29 r 1 includes any question or issue of fact or law in a proceeding. The distinction in the rule between an “issue” and a “question” is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an “issue”, and less decisive matters of dispute being “questions” (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647);
(b) a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties’ rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647);
(c) however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 ; 161 ALR 399 ; [1999] HCA 9 at [45]);
(d) where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242–3 ; [1969] 1 All ER 629 at 663-4 per Lord Pearson; Bass v Perpetual Trustee at [53]);
(e) care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not “ripe” for separate and preliminary determination. An issue may not be “ripe” for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O’Neill (1985) 1 NSWLR 601 per Kirby P at 606);
(f) factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may:
(i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or
(ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O’Neill per Kirby P at 607);
(g) factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may:
(i) give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934);
(ii) result in significant overlap between the evidence adduced on the hearing of the separate question and at trial — possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) (unreported, Fed C of A, Sundberg J, Nos VG629–37 of 1995, 8 September 1995, BC9502745). This factor will be of particular significance if the court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or
(iii) prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth).
Her Honour suggested (at [9]) that the ultimate issue was whether it was “just and convenient” for the order to be made.
Counsel for Mr Brown observed that the questions proposed for a separate and preliminary determination were of mixed fact and law, but submitted that the questions were precisely formulated and “ripe” for separate determination (see Reading at [8](e)). It was submitted that all the relevant facts were ascertainable by judicial determination and that determination of the separate questions would allow an efficient and early resolution of any liability of the second respondent and “thereby provide a conclusive determination to quell that controversy” in the sense considered in Reading at [8].
It was pointed out that if the questions were answered in favour of Mr Brown, no further questions of agency would arise in the claim against McCanns, thereby obviating the need to explore that rather vexed question.
Counsel for Mr Brown acknowledged that the court would be cautious in relation to an application of this kind and that the respondents bore the onus of persuading the court that it would be just and convenient to make an order under r.17.02. It was submitted however that having regard to the confined nature and the limited strength of the claim there was a strong case for separation of the liability question.
According to Mr Brown, the advantage and convenience of this course of action were apparent from a review of the latest Points of Claim. It was submitted that because Mr Brown’s liability was said to arise from the so-called “Paul Brown Conduct” consisting of four statements said to have been made in a single conversation on 17 November 2006, the issue of whether that conduct occurred was a discrete issue in which McCanns had no involvement. It was contended that the facts apparently pertaining to the Paul Brown Conduct were of narrow compass (and would involve three witnesses) in contrast to the case against McCanns which, it was suggested, would call for considerable evidence and argument having regard to the extent of the claims in the latest Points of Claim.
It was also submitted that this issue did not give rise to significant contested factual issues and that there was no overlap of evidence (and hence no significant overlap) with any other part of the applicant’s claim against McCanns.
Counsel for the second respondent submitted that if an order for determination of the separate questions was not made, Mr Brown would be forced to participate in what was likely to be a lengthy hearing against McCanns, notwithstanding that the claim against him was within a narrow parameter. It was pointed out that the applicant’s claims against McCanns, her former employer, would involve questions as to the content of the terms of Ms Wylie’s contract of employment and whether there were any implied terms as alleged; whether there was a breach of the contract of employment; whether McCanns directly discriminated against Ms Wylie by reason of the matters alleged in paragraph [65] – [69] of the latest Points of Claim; whether McCanns imposed various conditions, requirements or practices on its employees as alleged in paragraphs [75] – [79]); whether such conditions, requirements, or practices alleged were disadvantaging of women and not reasonable as alleged; and whether McCanns indirectly discriminated against the applicant; and whether McCanns victimised the applicant by the Paul Brown Conduct (depending on the result of the strike-out application).
It was submitted that there was, similarly, reliance in the Further Amended Points of Claim in the Wylie matter on imposition of a condition, requirement or practice on employees, including Ms Wylie, that employment was to be on a full-time basis. This was said to have been adopted from mid-2005 at the latest. The conversation that Ms Wylie claimed to have had with Mr Cressall was said to be relevant in relation to Ms Davidson’s claim.
It was submitted that the alleged factual matters relevant to the claims about indirect discrimination in this respect in Wylie and in Davidson No. 1 were in substance the same, as the claim was that each applicant was subject to conduct that was demonstrative of McCanns’ policy in this respect, albeit there were differences in the form of the conduct in each matter.
It was also contended that there was commonality in the allegations of direct discrimination. In Davidson No. 1 there was an allegation that there was an act of direct discrimination by McCanns offering Ms Davidson a significantly lower redundancy package when she was made redundant in the latter part of 2006 and in Ms Wylie’s case by McCanns offering her a significantly lower redundancy package when her employment was terminated shortly after her return from a second period of maternity leave.
It was said to be clear that Ms Wylie would give evidence in Ms Davidson’s case and vice versa and that it was possible that Mr Cressall and possibly Mr Mort would give evidence in both cases. Hence it was submitted that it would be beneficial to the court and the parties in respect of time in having these witnesses give evidence and be cross-examined once.
It was submitted that as a consequence of these matters there were certain questions of fact and law that were common to both the Davidson No. 1 and Wylie matters in relation to the policies and practices of McCanns during (at least) the period from mid 2005 to early 2007 in respect of women who were married and/or who had taken or intended to take maternity leave; McCanns’ approach to flexible working arrangements for mothers and whether McCanns had adopted a practice or policy whereby it would only employ persons on a full-time basis, thus denying flexible working arrangements to mothers; whether McCanns had a policy of not reviewing performance and/or remuneration of women who had taken a period of maternity leave as a consequence of the taking of such leave; McCanns’ practice as regards other employment terms and conditions for mothers (in relation to client-facing roles and participation in management meetings); whether McCanns had a policy, consistent with an alleged intention to “weed out” part-time positions, whereby women who had requested flexible working arrangements had their positions made redundant; whether McCanns had adopted a policy or practice in 2006 whereby the positions it made redundant were “non-client facing” positions and therefore the impact this had for mothers; McCann’s views and attitudes on part time work and women with carer’s responsibilities and whether this created a hostile working environment; the legal effect and the consequence of the polices and procedures contained in McCann’s handbook, which was said to be relevant to both applicants’ arguments regarding contractual terms of employment and McCanns’ defences under s.106(2) of the SDA.
Counsel for the applicants submitted that O.29 r.5 did not require that there be identical material facts between applications before the court could order consolidation, but rather provided that the presence of common facts, among other factors, enlivened the court’s discretion to order consolidation.
The applicants submitted that having regard to the nature of the allegations in relation to direct and indirect discrimination and the policies and practices of the first respondent during the period of time in issue, it would be necessary to adduce the same evidence to establish such policies and practices in both the Wylie and Davidson matters.
It was also submitted that the court would benefit from a single hearing of evidence of what occurred to other employees who were or were not in similar or not substantially different positions and single cross-examination of those witnesses relevant to all the Wylie and Davidson cases. Counsel for the applicants suggested that it was most likely that the evidence of particular comparators would be the same because of what was said to be the commonality in these proceedings.
In relation to the breach of contract claims, the applicants contended that both Ms Davidson and Ms Wylie made allegations that there was a custom and practice within McCanns that each employee would be entitled to four weeks pay per year of service. In each case the applicant would seek to put evidence before the court as to how the first respondent made payments to other employees who had their employment terminated for reasons of redundancy.
Ms Mocsari has given affidavit evidence of an intention to call witnesses to establish differential treatment. At the time of her affidavit of 24 March 2009, her evidence was that Ms Davidson was not in a position to say with certainty who those persons might be because the first respondent had not discovered documents that enabled that determination to be made. There was said to be an ongoing dispute in relation to the relevance of certain documents in relation to other employees, apparent from correspondence between the solicitors for the parties in May 2008. It was contended that thereafter there had been a number of interlocutory steps that had taken up the time of the court and the parties and had involved additional costs and that this was one reason why the matter had not advanced any further. It was, however, submitted that when the witnesses were identified it would be preferable for them to give their evidence once and to be subject to cross-examination once and that the court would be in a position to determine what evidence was relevant to each claim that was made.
The applicants also submitted that (subject to a strike-out application in relation to aspects of the Points of Claim in the Wylie matter) there were common issues about the scope of the retainer between McCanns and Baker and McKenzie and Mr Brown and common questions of law relevant to the Wylie and Davidson No. 2 matters about the relationship between s.94 of the SDA and s.3 of the AHRCA as well as about the liability of the first respondent for the actions of the second respondent.
It was contended generally that as certain issues were the same and occurred during the same period, the same evidence would be or would be likely to be adduced in each case to establish these allegations and that if the matters were heard at different times this would require the court to hear the evidence twice. There was said to be a real likelihood that similar or the same evidence would be led in Wylie and Davidson No. 1 and also in Wylie and Davidson No. 2. On this basis it was submitted that “consolidation” would streamline the court’s time and processes and would also mean that witnesses would only have to give evidence and be subject to cross-examination once and that this was in the interests of justice.
The applicants acknowledged that there were issues in the respective claims that differed and that this was something for the court to take into account, but submitted that this was not a determinative factor.
Counsel for the applicants indicated that if the court was not disposed to make an order consolidating the Wylie matter with the two Davidson matters, then Ms Davidson sought that the two Davidson matters be heard together and that evidence in one matter be evidence in the other (or that the two Davidson matters be consolidated). This aspect of the application is addressed below.
The first respondent opposed the applications to consolidate or hear together the Wylie matter and the two Davidson matters. It was submitted that the prima facie position was that matters should run before the court as they had been brought and pleaded and that the power to consolidate separate cases was a discretionary power turning essentially on whether the consolidation would serve the interests of justice. The onus was on the party seeking to persuade the court to alter the manner in which the cases had been brought before the court (in this instance the applicants).
The first respondent submitted that “consolidation” of the three matters (or hearing them together with evidence in one matter being evidence in the others) would not serve the interests of justice, essentially because there were said to be three discrete and distinct proceedings each raising different factual matters occurring at different times.
It was submitted that the facts agitated by Ms Davidson and Ms Wylie did not overlap but were discrete, that the matters were confined to particular incidents and that there was no pleading of any systematic or institutionalised discriminatory conduct, so that each matter stood alone and the asserted commonalities were superficial and not substantial. The first respondent contended that the Davidson and Wylie proceedings in reality turned on different facts and propositions of law and the fact that there were some common parties and common witnesses would only give rise to confusion (particularly in cross-examination) and the very real prospect that the evidence would be distorted and confused and the matters miscarry. It was submitted that the only real commonality was that the applicants were using the same solicitors and that this was not a basis for proceedings to be consolidated. On this basis the first respondent submitted that no issues of convenience arose but rather there was a real prospect of inconvenience and confusion and a real and substantial prejudice to the first respondent if the matters were joined.
It was contended that the circumstances did not satisfy the criteria in O.29 r.5 or the matters relevant to O.6 r.2 and that even if the criteria were notionally able to be satisfied, consolidation would cause such prejudice and difficulty that the court could not be satisfied that the orders sought would serve the interests of justice.
The respondents’ strike-out and separate questions applications were also said to be relevant to the exercise of the court’s discretion in relation to the consolidation application.
In particular, the first respondent contended that running the cases together would not necessarily save time and costs, particularly as witness evidence could not be “rolled together” out of fairness and to avoid confusion. It was suggested that factual matters (which were said to be almost all separate and discrete) would in fact have to be addressed separately as matters of evidence and in submissions. If matters were to miscarry (which, it was submitted, may be more likely given the possibility of confusion or perceived confusion) and an appeal result on that basis, then costs and time would be exaggerated rather than saved.
It was also submitted that the Davidson matters had not to date been amenable to settlement and that the solicitors for Ms Davidson had indicated on instructions that they were not prepared to participate in off the record “without prejudice” discussions or would participate only on such basis as they decided. No such aversion to settlement discussion or mediation had been suggested in the Wylie matter. It was submitted that to consolidate the matters and therefore commingle their costs would immediately render the Wylie matter as intractable of settlement as the Davidson matters and that this was not a proper course of action and not in the interests of justice.
Counsel for the second respondent relied upon the first respondent’s submissions in contending that the three individual matters raised different factual considerations and that there were distinctions between the particular claims made. It was submitted that the thematic similarity relied on by the applicants was not such as to warrant consolidation.
It was also submitted that it would be inappropriate in any circumstance for evidence in one matter to be evidence in the others, as this would be conducive to confusion and would encourage the parties to debate the admissibility of evidence and hence delay the hearing, inconvenience the court and the parties and divert attention from matters of substance.
Counsel for the second respondent also suggested that it was significant that the evidence that the applicants had put before the court (in the Mocsari affidavits) in relation to their intention to seek various witnesses went no higher than to refer to such an intention in early 2009, and that it could not be said that there had not been the opportunity to seek to speak to any proposed witnesses. However there was nothing before the court to suggest that specified persons may be witnesses in both the Davidson and Wylie proceedings. Hence it was submitted that on the evidence before it the court could not be satisfied that any of the witnesses who would be called for the respective applicants would in fact be common as between Davidson No. 1, Davidson No. 2 and/or Wylie or that such witnesses as would be called would give evidence in respect of facts that were common as between the matters.
It was also submitted that while each of Ms Davidson and Ms Wylie would be cross-examined in relation to their respective claims, it was difficult to see how these matters would pertain to the other claims within “consolidated” proceedings.
Counsel for the second respondent contended that there was a compelling case that none of the proceedings should be consolidated or joined in any way and a significant risk that if there were such “consolidation” the proceedings would be lengthier and more prone to procedural debate than otherwise.
Resolution
Order 29 rule 5 gives the court a broad discretion to order consolidation or make the other orders sought in this case, where it is in the interests of justice to do so. The applicants point to a number of factors in support of the contention that the Wylie and Davidson matters should be heard together with evidence in one matter being evidence in the others. However, for the reasons given below, having considered all the submissions and the material before the court, I am not satisfied that the Wylie and Davidson matters should be heard at the same time with evidence in one to be evidence in the others or that an order for consolidation of the Wylie matter with the Davidson matters should be made.
The applicants’ contentions in this respect focused on commonality of parties and suggested factual similarities in the claims made by each applicant and the suggested bases for such claims. It was also submitted that there were common questions of fact and law relating to policies and practices of McCanns, in particular in relation to mothers, the scope of the retainer between McCanns and Mr Brown and the liability of McCanns under the SDA and AHRCA for the actions of Mr Brown as its solicitor (subject to the result of the strike-out application).
First, O.29 r.5(a) refers not simply to common facts but to “some common question of law or fact”. Further, while this is one basis on which the discretion arises, the ultimate question is whether it is in the interests of justice to make the orders sought.
This is not a case in which all the parties are the same (cf Re Ling at 134). Nor is it a case in which an issue is common to both the Wylie and Davidson matters in the sense considered in Lord v Agreserves Australia Limited (where corporate insolvency was in issue in numerous proceedings against persons said to have received amounts as unfair preferences).
There are some common questions of fact and law arising in these cases because of the similar nature of the basis for the claims by the applicants, both of whom worked for McCanns, both of whom became mothers while in employment and both of whom took issue with what occurred thereafter and the circumstances in which they ceased to work for McCanns. Both allege discrimination on grounds of sex, pregnancy and/or potential pregnancy and breach of contract. Ms Wylie also alleges discrimination on the grounds of marital status. Both applicants assert that Mr Brown engaged in conduct that constituted victimisation and that McCanns also engaged in such conduct. I have borne this in mind, notwithstanding my conclusions in relation to the strike-out application in Wylie, given the leave to replead.
However, as the respondents contended, the extent of this initial similarity must be seen in light of the fact that the applications brought by Ms Wylie and by Ms Davidson involve claims arising out of separate transactions and separate incidents. The claimed rights to relief do not arise out of the same transaction or series of transactions. The applicants each allege breaches of the same provisions of the SDA in several respects, but each alleged breach arises out of different facts. In this sense the questions of law that arise are quite distinct and will turn on their own discrete facts (see Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 521). I accept the submissions of the respondents that in these circumstances a consolidated or joint hearing would raise a real possibility of confusion in relation to the separate allegations.
Insofar as the applicants’ submissions appear to suggest that it is not merely alleged that the applicants were each treated less favourably than comparators but also that there was some thematic or systematic discrimination by McCanns (on some basis that is not pleaded), the relevant legislation does not permit this approach.
In Davidson No. 1, Ms Davidson alleges breach of contract and direct and indirect discrimination by McCanns (her former employer) for whom she was employed between 1996 and February 2007. None of these allegations relate in any way to Ms Wylie, but arise out of particular events alleged to have occurred during Ms Davidson’s employment. In particular, in paragraph 50 of the Points of Claim it is specifically alleged that McCanns directly discriminated against Ms Davidson as a result of four particular incidents from May 2005 involving the appointment of other persons to certain positions, an alleged freeze on Ms Davidson’s remuneration level and an alleged failure to pay Ms Davidson monies and benefits on par with those of a person appointed to another position.
In addition, there is an allegation of indirect discrimination by McCanns against Ms Davidson as a result of alleged conditions, requirements or practices (specified in paragraphs 55 and 56 of the Points of Claim in Davidson No. 1) that she work full-time and that the “stated views” of McCanns on part-time employees and women with carer’s responsibilities subjected her to a “hostile work environment” for women.
In contrast, Ms Wylie claimed that she was employed intermittently by McCanns between 1996 and 2006 but her contractual claims arise out of her own contractual relationship with the first respondent, wholly unrelated to Ms Davidson’s contract and her claim in that respect.
Ms Wylie’s claim of discrimination, while of a similar nature to that of Ms Davidson insofar as it is said to arise under the SDA, is based on different transactions and circumstances to those asserted by Ms Davidson. Ms Wylie claims direct discrimination on the basis of specified alleged events between 2003 and 2006, consisting of a failure to review her performance or remuneration after her first period of maternity leave, a failure to keep her position open or to return her to the same position after her first or second period of maternity leave, cessation of requests for her attendance at management meetings and notification that she could not take client-facing roles.
Ms Wylie also alleges indirect discrimination on the basis of four asserted conditions, requirements or practices at different times between 2004 and 2006 (that McCanns would not review performance or remuneration of employees commencing or recently returned from maternity leave; that part-time employees could not take on client-facing roles; that positions of employment were to be on a full-time basis; and that the only positions to be made redundant in late 2006 were those the termination of which would not impact on any direct client relationships).
Insofar as such “conditions” are said to involve common policies or practices of McCanns, the commonality is limited. The alleged “policy” in the Davidson case called the “hostile working environment” does not appear in the Wylie case as pleaded in the further amended Points of Claim, while the so-called review, part-time and redundancy conditions, requirements or practices alleged in the Wylie matter do not appear in the Davidson case.
In relation to the so-called full-time condition, there is some commonality in the pleadings. A similarly worded condition is alleged as a form of indirect discrimination in each of Wylie and Davidson No. 1. However when one considers the detail of such allegations it is apparent that the issues in the Wylie matter in this respect arose in a different way and at a different time to those involving Ms Davidson.
Ms Davidson’s complaint is that in November 2006 she requested flexible working arrangements on her return to work (working full-time but spending one day a week at home or working part-time for four days a week) and that McCanns advised that her request for flexible working arrangements was denied. In Wylie it is alleged that in June 2004 Ms Wylie asked to spend one day a week working from home to care for her child, but that this request was denied and she returned to work (to what was initially a full-time role that was to be reviewed after one month). However, it is said that in about August 2004 Ms Wylie and McCanns agreed to her working part-time and that she commenced to do so and that Ms Wylie was subsequently promoted to another part-time position. It is then alleged that after Ms Wylie fell pregnant with her second child, a meeting was held to discuss her present and future roles, in which she queried McCanns’ willingness to allow part-time work. Ms Wylie claims that she subsequently requested and was denied the ability to work one day a week from home. However insofar as her complaint about what occurred after her return from her second period of maternity leave relates to her employment in a role that was not client-facing, no such issue is raised by Ms Davidson. Hence, while there is some similarity in the bases for the claimed discrimination, the facts underlying the particular questions or issues are not the same and are not common in each matter. The factual circumstances alleged in relation to the claims about part-time work are different in each case.
Similarly, while it is contended that both applicants were denied performance and/or pay reviews as a consequence of the taking of maternity leave, it is apparent from the points of claim that in each case specific facts concerning the specific applicant are relied upon and the positions are factually quite different.
Insofar as the applicants suggested that McCanns’ practice as regards other employment terms and conditions for mothers was a common factor, these matters are pleaded in respect of Ms Wylie but not Ms Davidson. The issue of whether there was a policy in 2006 of making positions that were not “client-facing” redundant is an allegation in the Wylie matter and not in the Davidson matter, whereas the issue about the so-called hostile working environment concerned Ms Davidson but not Ms Wylie.
The applicants submitted that a common issue would be the legal effect and consequences of the policies and procedures contained in the first respondent’s “Worldgroup Sydney Office Information Handbook”. This was said to be relevant to both applicants’ arguments relating to their contractual terms of employment and to the first respondent’s defences under s.106(2) of the SDA. Each applicant does allege breaches of her contract of employment, including “terms” about the first respondents’ compliance with its “guiding principles” as to equal opportunity in the workplace, meeting requests for part-time or flexible employment and return to an original or similar position after maternity leave. However the “terms” in the Handbook relied upon are not identical, Ms Wylie alleging a term in relation to regular reviews of performance and remuneration not relied on by Ms Davidson.
Further, while both Ms Davidson and Ms Wylie assert the existence of implied terms based on the “custom, practice and usage” of McCanns, the alleged implied terms are not identical. Thus Ms Davidson claims that there was an implied term in her contract of employment about payment of an annual bonus (an issue not raised by Ms Wylie) and that if McCanns terminated her employment by reason of her redundancy it would pay her a severance payment calculated to be equivalent to four weeks per year of service or pro rata thereof. Ms Wylie also claims that there was an implied term about a redundancy arrangement, but that in her case it also included other matters about its calculation for periods of full and part-time employment. Consideration of these similar but distinct contentions in the one proceeding is likely to lead to confusion. More importantly, the terms of a contract for any particular employee is always a discrete question.
The applicants also argued that there were common questions in relation to the scope of the retainer between the first respondent and the second respondent in Wylie and Davidson No. 2. However (assuming satisfactory repleading in Wylie) it is apparent from the respective Points of Claim as they presently stand that there are different considerations in that respect. Importantly, in the Davidson matter it is specifically pleaded that in or about September 2007 the first respondent retained the services of Baker and McKenzie and Mr Brown to act on its behalf in relation to the first complaint by Ms Davidson and the terms of the retainer are addressed. There is no comparable allegation in the Wylie matter.
Moreover the allegations in each case involving Mr Brown relate to completely different matters, described as the “conciliation conduct” and the “dinner party conduct” in Davidson No. 2 as distinct from the alleged conversation with Ms Wylie (the “Paul Brown Conduct”) relied on in the Wylie matter.
None of the matters relied on in Davidson No. 2 have common facts in issue with those relied on in Wylie, except that McCanns and Mr Brown are said to be involved. Insofar as the applicants contended that there was a similarity or overlap arising out of the alleged course of conduct by Mr Brown, no course of conduct is pleaded or identified. Rather, there are separate allegations about discrete incidents showing no course of conduct.
Moreover, in Davidson No. 2 the pleading in relation to attributing liability to the first respondent is based on an allegation of agency by reference to a specific retainer, whereas in the Wylie matter the facts relied upon, as far as this is revealed by the Further Amended Points of Claim, are quite different. In such circumstances the fact that both matters raise issues of agency (assuming repleading in Wylie) is of limited weight in considering whether consolidation is in the interests of justice. There may then be a common issue in relation to the application of s.94 of the SDA, as well as more general common questions as to whether there is liability under the SDA or the AHRCA. However in proceedings based on allegations of sex discrimination there will always be a question as to whether there was a breach of a particular section and consequent liability. This does not of itself provide a reason for consolidation on the basis of common questions of law. As stated in Lambroglou (at 524), a question of law is not simply the grounds relied on in support of an order sought and as Lucev FM stated in Calmer (at [18]), it is “not sufficient for the applicants to say that because the causes of action are the same, there are common questions of law. There are many proceedings with the same causes of action, however the legal question or questions a court must address in each instance varies depending on the facts”.
In this instance, although similar legal issues may arise in some respects, different questions of law arise where the factual issues differ.
On balance, the “commonality” in the questions of law or fact in the Wylie and Davidson matters is not such as to weigh significantly in favour of consolidation (or trial at the same time on the basis proposed by the applicants) when seen in light of other relevant circumstances and the difficulties that would be associated with such a consolidated hearing.
The applicants referred to the fact that the “main” witnesses might give evidence in each matter (each applicant, Mr Cressall, perhaps Mr Mort and, presumably, Mr Brown). The respondents see no issue arising from any need for their witnesses to give such evidence. The alleged conduct of Mr Brown relied on in each case is quite separate and distinct.
Of more force is the applicants’ submission about the need for evidence from witnesses such as comparators and other employees in both the Wylie matter and in Davidson No. 1. However, insofar as reliance was placed on the affidavits of Ms Mocsari, these affidavits were sworn over a year ago. It was deposed that there was an intention on the part of those acting for the applicants to speak to certain people who might be potential witnesses. While these affidavits were advanced in support of the proposition that there would be a commonality of evidence, nothing further has emerged to identify such witnesses. There is no evidence suggesting that anything has been done in this respect. In these circumstances the general prospect of the same witnesses being required to give evidence in two matters is not such as can be given great weight in support of the consolidation application.
There has been no identification at this stage of all potential witnesses and while the question of the length of a consolidated hearing was raised by me, it was not addressed clearly by the applicants. In any event, were such witnesses to give evidence and be cross-examined only once, there would be a real prospect of confusion and a lack of clarity about which evidence was relevant to which matter. While this may be convenient for the as yet unidentified witnesses, on the evidence before the court I cannot be satisfied that there would be consequential savings of time and expense for the parties or for the courts.
Further, while there may be some common witnesses, there are different factual matters relevant to each application. The nature of these applications is such that it is not unlikely that a consolidated hearing may become confused and hence protracted because of the differences between the applications and the facts and law in issue in the Wylie and Davidson matters.
There may be some savings in preparation time, given that the same lawyers act for both applicants. However in all the circumstances any potential savings of time and expense in that respect do not weigh significantly in favour of consolidation given the possibility of confusion, prejudice and possible protraction of a consolidated hearing. I note that if the orders sought are not made, some such savings may still be available to the applicants given their common representation, the common causes of action and the similarities between some of the legal issues to be addressed (particularly if there were separate but consecutive hearings).
This is not a case in which the rights to relief claimed are in respect of, or arise out of, the same transaction or series of transactions.
The anti-discrimination claims arose out of the individual circumstances of each individual employee at particular times. There is no common or “class” claim of discrimination as the legislative tests require the assessment of an individual’s circumstances on a particular occasion and not a collective approach to that assessment. Each of the Davidson and Wylie matters involve allegations of discrimination and breach relating to different transactions and personnel within the employment of McCanns at the relevant times.
According to the first respondent it appears that in Davidson No. 1 there will be at least eight potential witnesses, in Davidson No. 2 three witnesses and in Wylie at least nine potential witnesses. The court will be required to make findings of fact in each matter. It is likely that the evidence in each case, given the number of allegations and the time period involved, will be substantial and complex thus raising the potential for evidence about separate and distinct events and allegations to be confused. I am satisfied that this would result in a real potential for prejudice to the parties, in particular to the first respondent.
It is not a sufficient answer to say that the court can determine which evidence relates to which matter as counsel for the applicants submitted. There is likely to be a significant impact on the parties’ and the court’s time and resources if it is necessary to untangle such evidence and there is also the very real potential for proceedings relating to different parties to confuse witnesses themselves, particularly if witnesses are cross-examined and re-examined in relation to both the Wylie and Davidson matters at the same time. The potential for confusion is such that, in fairness and to avoid confusion, some witnesses might be obliged to give their affidavit evidence and be cross-examined separately in each of the matters. If that were to occur any saving of time or costs would be significantly reduced.
It was contended that credit would be in issue. A finding of credit on one matter of fact would not be determinative of credit on another and a finding of credit in one case would not determine the assessment of credit in another. I accept that this is a matter of concern. As counsel for the first respondent submitted, consolidation would create a real potential for difficulty in relation to credit. There is a possibility of prejudice to all parties if findings of credit are made in relation to particular evidence and it is not clear as to which case such evidence and the credit ruling are properly applicable. As Lucev FM stated in Calmer (at [32]): “To run these … different cases together runs a risk that evidence will be conflated, or that evidence intended to be relevant to one matter is considered as part of the other matter” and (at [38]):
Failure to separately hear the two cases may give rise to injustice because of the potential for confusion, especially as to which case the principal respondents’ witness’ evidence may relate. Unless very carefully examined, and, in particular, cross-examined, there is significant potential for that evidence to be confused and possibly misapplied. Each case will, in the Court’s view, be clearer, more easily defined and more easily decided, if kept separate rather then (sic) consolidated.
On balance, I am not satisfied on the material before the court that it is desirable or in the interests of justice that the Wylie and two Davidson matters be consolidated or heard at the same time on the basis that the evidence in one case is evidence in the others.
Ms Davidson’s and Ms Wylie’s respective cases will, in my view, “be clearer, more easily defined and more easily decided, if kept separate rather then (sic) consolidated” (Calmer at [38]).
Ms Wylie’s application in relation to the consolidation of Wylie and Davidson No. 1 and No. 2 should be dismissed.
I certify that the preceding two hundred and sixty-one (261) paragraphs are a true copy of the reasons for judgment of Barnes FM
Associate:
Date: 30 June 2010
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