Hazledine v Arthur J Gallagher Australia & Co

1. Paragraphs 101 to 117 inclusive and 118 to 138 inclusive of the Statement of Claim be struck out.
2. Paragraph 3 of the Respondent's interlocutory application of 6 April 2017 is dismissed.
3. Any application for leave to amend the Statement of Claim is to be filed and served by 28 June 2017 and, in the event that such an application is filed, it will be made returnable at 2 pm on Tuesday 18 July 2017.
4. Orders 3 to 8 made on 9 February 2017 are vacated, noting that the Court will revisit those orders at the next directions hearing.
5. The matter is adjourned for further directions at 2 pm on 18 July 2017.
6. There be no order for costs in relation to the Respondent's interlocutory application of 6 April 2017.
7. There be liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHITE J: 1 On 17 May 2017, I heard submissions on an interlocutory application of the respondent seeking the striking out of parts of the applicant's Statement of Claim and an order pursuant to r 30.01 of the Federal Court Rules 2011 (Cth) (the FCR) for the separate hearing of one issue in the action. 2 At the conclusion of the hearing, I gave rulings on the challenge to the pleadings together with short reasons for those rulings. 3 I also announced my decision refusing the application for the separate trial, and said that I would publish reasons for that decision later. I now provide those reasons. 4 The applicant is a former employee of the respondent. She brings her action pursuant to s 46PO of the Australian Human Rights Commission Act 1986 (Cth) (the AHRC Act) seeking a declaration that, during her employment and in relation to its termination, the respondent engaged in unlawful discrimination. Her Statement of Claim alleges unlawful discrimination of five kinds: (a) discrimination in contravention of ss 14(2)(a) and (d) of the Sex Discrimination Act 1984 (Cth) (the SD Act) by the systemic payment of lower remuneration to female insurance brokers than that paid to their male counterparts, at [29]-[34] (the systemic underpayment claim); (b) discrimination in contravention of ss 14(2)(a) and (d) of the SD Act by the imposition of a "sexual hostile work environment", at [35]-[59] (the work environment claim); (c) victimisation of a kind made unlawful by s 94 of the SD Act, at [60]-[100] (the victimisation claim); (d) discrimination in contravention of ss 15(2)(a) and (d) of the Disability Discrimination Act 1992 (Cth) (DD Act) on the basis of the applicant's "domestic violence disability", at [103]-[117] (the domestic violence disability claim); (e) discrimination in contravention of ss 15(2)(a) and (d) of the DD Act on the basis of the disability which the respondent imputed to the applicant, at [118]-[138] (the imputed discrimination claim). 5 In addition, the applicant alleges breaches by the respondent of an implied term in her contract of employment. In particular, she alleges that the conduct relied upon for the work environment claim constituted a breach of an implied term that the respondent would provide her with a safe system of work and take all reasonable steps to protect her safety at work. 6 The question which the respondent seeks to have heard separately (and before) any other question in the trial is that of whether the Court has jurisdiction to hear and determine the victimisation claim based on s 94 of the SD Act. Section 94 provides (relevantly): 94 Victimisation (1) A person shall not commit an act of victimization against another person. Penalty: (a) in the case of a natural person - 25 penalty units or imprisonment for 3 months, or both; or (b) in the case of a body corporate - 100 penalty units. (2) For the purposes of subsection (1), a person shall be taken to commit an act of victimization against another person if the first-mentioned person subjects, or threatens to subject, the other person to any detriment on the ground that the other person: … (f) has reasonably asserted, or proposes to assert, any rights of the person or the rights of any other person under this Act or the Australian Human Rights Commission Act 1986; or (g) has made an allegation that a person has done an act that is unlawful by reason of a provision of Part II; or on the ground that the first-mentioned person believes that the other person has done, or proposes to do, an act or thing referred to in any of paragraphs (a) to (g), inclusive. (3) It is a defence to a prosecution for an offence under subsection (1) constituted by subjecting, or threatening to subject, a person to a detriment on the ground that the person has made an allegation that another person had done an act that was unlawful by reason of a provision of Part II if it is proved that the allegation was false and was not made in good faith. 7 There are decisions of this Court which indicate that the Court does not have jurisdiction to hear civil claims based on conduct alleged to have been unlawful by reason of s 94 of the SD Act, or at least raising doubts that the Court does have that jurisdiction. See Walker v State of Victoria [2012] FCAFC 38 at [98]-[99] (Gray J with whom Reeves J agreed); Chen v Monash University [2015] FCA 130 at [11] (Tracey J); Chen v Monash University [2016] FCAFC 66, (2016) 244 FCR 424 at [119]-[124]; and Chen v Birbilis [2016] FCA 661 at [7]-[11] (North J). 8 On the other hand, there are authorities indicating, or which may support, a contrary understanding. These include Penhall-Jones v State of NSW [2007] FCA 925 at [6]-[10] (Buchanan J); Dye v Commonwealth Securities Limited [2010] FCA 720 at [78] (Katzmann J); Dye v Commonwealth Securities Limited (No 2) [2010] FCAFC 118 at [70]-[71]; and Winters v Fogarty [2017] FCA 51 at [25]-[34] (Bromberg J). 9 It is not necessary for present purposes to articulate in detail the bases for the conflicting views. In general terms, the view that the Court lacks jurisdiction to deal with victimisation claims under s 94 of the SD Act has as its foundation the fact that s 94 creates a criminal offence and s 39B(1A)(c) of the Judiciary Act 1903 (Cth), which vests jurisdiction in this Court in respect of matters arising under laws made by the Australian Parliament, expressly excludes jurisdiction over matters "in respect of which a criminal prosecution is instituted or any other criminal matter". 10 The view that this Court does have jurisdiction has its basis in s 49B of the AHRC Act which provides: The Federal Court and the Federal Circuit Court have concurrent jurisdiction with respect to civil matters arising under Pt IIB or IIC. In addition, s 46PO of the AHRC Act permits an affected person, after the termination of a complaint to the AHRC, to make an application to this Court or to the Federal Circuit Court alleging "unlawful discrimination" by one or more of the respondents to the terminated complaint. The definition of "unlawful discrimination" in s 3 of the AHRC Act includes "any acts, omissions or practices that are unlawful" under, amongst other things, s 94 of the SD Act. That is to say, as I understand the position presently, the view has been taken that these provisions in the AHRC Act, in conjunction with s 19(1) of the Federal Court of Australia Act 1976 (Cth) are a source of this Court's jurisdiction which exists independently of s 39B of the Judiciary Act. 11 There were some submissions at the hearing concerning the status of the statements in the various authorities to which I have referred, that is, as to whether they formed part of the ratio decidendi or are obiter dicta. I consider it neither necessary nor desirable to address those questions presently. They are matters which will have to be the subject of detailed consideration on the hearing of the respondent's foreshadowed challenge to this Court's jurisdiction, whether that occurs as part of a separate trial or in the substantive trial. 12 In Prescott Securities Limited v Gobbett (No 2) [2017] FCA 81 at [13], I referred to authorities indicating the principles on which this Court acts in determining applications for the separate hearing of some issues in a proceeding, and summarised those principles as follows: (a) the general rule is that all issues of fact and law in a proceeding should be determined at the one time; (b) a party seeking a departure from the general rule should demonstrate that it is just and convenient for that course to be adopted; (c) it is inappropriate to order the trial of a separate question if that trial would not permit or involve a conclusive or final judicial decision based on concrete facts, either established or agreed, for the purpose of quelling a controversy between the parties; (d) when the separate question is one of mixed fact and law it is essential that there be precision both in formulating the question and in the identification of the facts upon which it is to be decided; (e) it is contrary to the judicial process and no part of the judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case; (f) great caution should be exercised in formulating a separate question for determination on the basis of assumed facts; (g) providing that the appropriate factual foundation for the determination of an issue has been resolved, a matter may be "ripe" for separate and preliminary determination when it is a central issue in contention between the parties and its resolution will either obviate the necessity of litigation altogether or narrow substantially the field of controversy; (h) the courts have repeatedly warned of the dangers which attend the trial of separate or preliminary questions and the desired benefits of doing so often prove illusory. Disadvantages arise from the fragmentation of the trial process, the potential for delay in the resolution of the overall litigation, the prospect of an appeal or appeals following the decision in the first stage of the trial, the prospect that the same witness may have to give evidence in each stage of the trial, and the prospect that the trial Judge may make adverse findings of credit concerning one or more witnesses in the first stage thereby compromising the Judge's ability to continue with the second stage of the trial if the same witnesses are to be called. 13 As was indicated by Edmonds J in Buchanan v TAL Life Ltd [2015] FCA 42, another matter which may point in favour of the separate trial of an issue in an action is the prospect that its resolution may contribute to a settlement of the litigation. 14 In the present case, counsel for the respondent submitted that a separate trial of the question of this Court's jurisdiction to hear the victimisation claim under s 94 was appropriate for a number of reasons: it is a pure question of law and the Court will not be required to determine any factual matters; there will be no requirement for either party to adduce evidence; the separate trial could be held well in advance of the date on which the substantive trial is presently listed to commence (4 December 2017) and would not delay its commencement; the determination of the separate question would narrow the issues for determination in the trial and may make it unnecessary for the Court to hear some evidence, including evidence concerning the issues which may arise if the respondent raises matters under s 94(3) of the SD Act; and may enhance the prospects of a negotiated settlement. 15 As I indicated during the course of the submissions, I am disinclined to attach weight to the prospect of the respondent raising matters pursuant to s 94(3) of the SD Act. The respondent has had ample opportunity to raise those issues to date, and has not done so. In fact, the respondent has not complied at all with the Court's order made on 9 February 2017 that it file and serve its defence by 13 April 2017. The absence of a filed defence makes it difficult for the Court to assess at this stage the matters which may be in dispute between the parties in the substantive trial. 16 I consider it appropriate to proceed on the basis that, given the state of the authorities, there is a live issue as to this Court's jurisdiction to hear and determine claims based on allegations of victimisation in contravention of s 94 of the SD Act and that a decision of the Full Court, at the least, will be necessary for that issue to be authoritatively determined. That being so, the prospect of an appeal against a first instance determination of the issue, whether in the trial of the separate question or in the substantive trial, is patent. 17 An appeal after a determination of the issue in a separate trial carries with it two alternatives which may have unfortunate consequences: either the substantive trial being postponed until the appeal process is completed so that the issues requiring determination are known; or the substantive trial proceeding in the interim. The unfortunate consequence in the case of the first alternative would be the delay before the trial commenced. In the case of the second, the position is more complex. If the first instance decision was to the effect that the Court lacked jurisdiction, but that decision was overturned on appeal, a second trial would be necessary. That second trial would require the Court to hear and determine some of the same factual matters canvassed in the first trial and to hear and evaluate the evidence of some of the same witnesses. This could give rise to a number of undesirable consequences, including additional expense to the parties, a duplication in the use of this Court's resources, and the possibility of inconsistent verdicts. 18 Further, in my opinion, the savings in trial time postulated by the respondent may turn out to be illusory. That is because many of the matters on which the applicant relies for the victimisation claim are also matters upon which she relies for the work environment claim and the breach of contract claim. Counsel for the respondent acknowledged that that was so, although pointing to some differences in the way in which those matters are raised for determination and pointing out that the victimisation claim pleads additional matters. 19 In my view, the prospect that the Court will, in any event, have to hear the same evidence, or substantially the same evidence in order to determine the applicant's remaining claims points strongly against the appropriateness of a trial of the separate question proposed by the respondent. 20 For these reasons, I refused the application of the respondent for the trial of a separate question and dismissed that part of the interlocutory application of 6 April 2017. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.