Ma v Expeditors International Pty Limited

Judgment 1In 2011, the plaintiff, Ms Ma, was dismissed from her employment with the defendant. She seeks orders under the Civil Procedure Act 2005, that proceedings which she commenced in the District Court in 2012, in relation to an alleged breach of her employment contract, be transferred to this Court and then to the Industrial Court of New South Wales, to be heard together with proceedings which she has commenced in that Court, in relation to an alleged underpayment of long service leave entitlements under the Long Service Leave Act 1955. Alternatively, she seeks that the proceedings should all be dealt with by this Court. The defendant indicated that it would consent to orders which would transfer both proceedings to this Court, but contends that the various proceedings should remain where they were commenced. I am satisfied the proceedings should be dealt with by this Court. 2While the defendant has not yet filed a defence in the District Court proceedings, it intends to defend them and to bring a cross-claim, alleging breach of the employment contract by Ms Ma, in respect of which it will seek to recover damages, as well as alleging that she breached certain statutory obligations. Ms Ma was the defendant's company secretary and the defendant believes that she breached various duties imposed upon her by the Corporations Act 2001 (Cth). The defendant's position was that these claims could not be dealt with by the Industrial Court, but only by this Court or the Federal Court. 3It was common ground between the parties that Ms Ma's claims, taken together, fall somewhat below this Court's jurisdictional limit of $750,000; that the proceedings taken in the District Court could not have been commenced in the Industrial Court; that the Industrial Court has no jurisdiction in respect of the claims Ms Ma advances in the District Court proceedings, because its power to deal with such claims is restricted by s 366 of the Industrial Relations Act 1996, to contracts in respect of which an industrial instrument fixes the minimum rate or amount of remuneration for the work done under the contract; that the District Court has no jurisdiction in respect of the claims advanced in the Industrial Court under the Long Service Leave Act; that this Court has power under the Civil Procedure Act to make the orders for which the parties respectively contended, other than in relation to the breach of Corporations Act (Cth) claims; but that it could not order the transfer of the Industrial Court proceedings to the District Court. 4The transfer of the District Court proceedings to this Court may be ordered under s 140 of the Civil Procedure Act, as a matter of this Court's discretion. The transfer of the proceedings from this Court to the Industrial Court may be ordered under s 151 if the Court is satisfied that it is more appropriate for the proceedings to be heard in the Industrial Court. Section 151(2) provides: "(2) If either the Supreme Court or the Industrial Court is satisfied, in relation to proceedings before it, that: (a) there are related proceedings pending in the other court, and (b) it is more appropriate for the proceedings to be heard, together with the related proceedings, in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court and heard together with the related proceedings." 5Section 150 (2) provides: " For the purposes of this Division, proceedings are related if the matters with which they deal are so closely associated as to form part of the same controversy." 6Buddin J discussed the Court's discretion under s 140 of the Civil Procedure Act in Adam v Sara [2010] NSWSC 530 observing: "15 It is clear that the onus rests upon the party seeking the order and that the discretion which I am bound to exercise is a broad one. There is no limit placed upon the exercise of that discretion such as appears, for example, in ss (3) of that section which is concerned with a claim for damages arising from personal injury or death. In exercising the discretion I must have regard to the relevant circumstances of the case in order that justice is best served between the parties. See Trilogy Corporate Solutions & Anor v Fitzroy Shopfitting & Building Pty Ltd [2006] NSWSC 1026 at [para 11]; Harbourside Catering Pty Ltd v TMG Developments Pty Ltd [2006] NSWSC 631 at paras 17-18. The powers under s 140 of the Civil Procedure Act must be exercised in accordance with s 56 of that Act in order to facilitate the just, quick and cheap resolution of the real issues in the proceedings: Guthrie v Spence [2009] NSWCA 369 at para 27: See also Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175." 7Ms Ma's claim is that she was employed by the defendant between January 1987 and June 2011, when her employment was terminated and she was paid 5 weeks pay in lieu of notice, as well as a sum in respect of her entitlements to long service leave. 8The Industrial Court proceedings concern the question of whether or not Ms Ma was paid all of her statutory entitlements to payment for accrued but untaken long service leave. It raises questions of statutory construction, having in mind Ms Ma's contractual entitlements to remuneration and the definition of 'ordinary pay' in s 3 of the Long Service Leave Act. The amount of Ms Ma's untaken long service leave does not appear to be in issue. 9Ms Ma's claim in the Industrial Court is that she should have been paid in respect of 20.8 weeks of accrued but untaken long service leave, on the basis of her remuneration package, inclusive of base salary, car allowance and fixed monthly bonus. The defendant paid Ms Ma's long service leave entitlement on her base salary alone, with the result, on Ms Ma's case, that she has been underpaid an amount of some $271,522.90. 10Ms Ma's claim in the District Court is that her contract included an implied term that it could be terminated on the giving of reasonable notice, which in the circumstances was a period of 12 months. She claims damages calculated by reference to the remuneration she should have earned during such a period of notice, including in relation to salary, bonus and other benefits. 11The defendant has not yet filed a defence or cross-claim, for reasons which were explained. It has instructed its solicitor to bring a cross-claim in the District Court proceedings, alleging breach of Ms Ma's contractual, equitable and statutory duties. In the result, it will claim that it had no liability to make any payment to her on account of notice of termination. This, it will be claimed, is the result of serious misconduct of which it only became aware after the termination of the employment. The defendant will also seek to recover damages from Ms Ma in relation to allegations it advances against her. 12In the District Court proceedings, questions as to the notice provisions of Ms Ma's contract of employment and whether they have been breached arise on Ms Ma's case. These are different questions to those in issue in the Industrial Court proceedings, as are the claims which the defendant proposes to pursue by way of cross-claim. Both of Ms Ma's claims will, however, require consideration to be given to the terms of her contract as to the remuneration which she was entitled to be paid for the work which she performed. The cases otherwise raise different questions, as does the foreshadowed cross-claim. 13In support of her position Ms Ma contended that it would be advantageous to have both matters dealt with by the Industrial Court, because of its compulsory conciliation processes. That submission may not be accepted. While there are certain kinds of applications in respect of which such processes apply, for example, unfair contract applications to which s 109 of the Industrial Relations Act applies, or applications under s 366, to which s 371 applies, there are no such provisions which apply to the District Court claim, if transferred to that Court, but they are all related to her employment and its termination. 14By way of contrast, Part 20 of the Uniform Civil Procedure Rules 2005, the mediation provisions, apply to proceedings before the District Court and the Supreme Court. In the Industrial Court, those Rules do not apply (see Schedule 1 to the Uniform Civil Procedure Rules, Application of Rules). 15Ms Ma also claimed that an advantage to be gained from the making of the orders sought is that the matters in issue between the parties may be heard more quickly by the Industrial Court, than by this Court. That is not a matter about which any evidence was led and cannot be dealt with on the basis of conjecture. 16In support of its position, the defendant relied on the effect of s 179 of the Industrial Relations Act, which provides for an appeal to a full bench of the Industrial Court, rather than to the Court of Appeal, other than in the case of jurisdictional error. That, to me, does not seem to be a factor to which much weight, if any, may be given. The Legislature has given this Court power to make the orders transferring proceedings to the Industrial Court, in circumstances where the power, if exercised, will have an impact on the parties' appeal rights. That is, the parties will not be deprived of a right of appeal, but appeals will be heard by different courts, within the respective statutory frameworks, than would be the case if the orders sought by the plaintiff were not made. That is simply a feature of the scheme which the Parliament has enacted and in my view, is not a factor which would sway the exercise of the discretion one way or the other. 17There is no question that under the Industrial Relations Act, the Industrial Court, a superior court of record, exercises jurisdiction in cases where it has to consider and resolve questions such as those which Ms Ma has brought before the District Court. If Ms Ma's employment were covered by an industrial instrument, she would be entitled to pursue her District Court claim in the Industrial Court under s 366, as of right. 18The position does not appear to be the same, so far as any allegation as to breach of Ms Ma's obligations under the Corporations Act (Cth), is concerned. Section 1337B gives this Court and the Federal Court jurisdiction in relation to civil matters arising under the Corporations Act (Cth) and s 1337E gives 'lower courts' such jurisdiction. A 'lower court' is defined in s 9 to mean 'a court of a State or Territory that is not a superior court'. The Industrial Court is a superior court pursuant to s 152 of the Industrial Relations Act, but it is not a 'superior court' as defined in the Corporations Act (see s 9 ). 19Section 1337E deals with the jurisdiction of lower courts in relation to civil matters, providing: "1337E Jurisdiction of lower courts (1) Subject to section 9 of the Administrative Decisions (Judicial Review) Act 1977, jurisdiction is conferred on the lower courts of: (a) each State; and (b) the Capital Territory; and (c) the Northern Territory; with respect to civil matters (other than superior court matters) arising under the Corporations legislation. (2) The jurisdiction conferred on a lower court by subsection (1): (a) is subject to the court's general jurisdictional limits, so far as they relate to: (i) the amounts; or (ii) the value of property; with which the court may deal; but (b) is not subject to the court's other jurisdictional limits." 20Lower court is defined in s 9 to be: "a court of a State or Territory that is not a superior court." 21In accordance with this section, the Industrial Court would appear to be a lower court, for the purpose of the Corporations Act (Cth), thus having jurisdiction to deal with civil matters arising under that Act. There would, it seems to me, be no bar to any transfer of the claims advanced in the District Court proceedings against Ms Ma, including any claims advanced by way of cross-claim, which fell within s 1337E of the Corporations Act (Cth). 22Also to be considered is s 79(1) of the Judiciary Act (Cth) 1903 which provides: 79 State or Territory laws to govern where applicable (1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable." 23In that context, the provisions of s 154 of the Civil Procedure Act are also relevant. They provide: "154 Jurisdiction of transferee court The transferee court has, and may exercise, all of the jurisdiction of the transferor court in relation to any proceedings to which a transfer order relates, including jurisdiction to determine any question arising in any such proceedings." 24This, too, is a provision which supports the conclusion that the District Court proceedings could be transferred to the Industrial Court, by order of this Court. 25Also to be considered, however, is that the defendant proposes to rely on the provisions of s 1317H, of the Corporations Act (Cth), which deals with declaratory relief in relation to contravention of various obligations imposed under the Corporations Act (Cth). That is a matter which falls within the jurisdiction of a 'Court', as defined in s 58AA as: "58AA Meaning of court and Court (1) Subject to subsection (2), in this Act: court means any court. Court means any of the following courts: (a) the Federal Court; (b) the Supreme Court of a State or Territory; (c) the Family Court of Australia; (d) a court to which section 41 of the Family Law Act 1975 applies because of a Proclamation made under subsection 41(2) of that Act. (2) Except where there is a clear expression of a contrary intention (for example, by use of the expression "the Court"), proceedings in relation to a matter under this Act may, subject to Part 9.6A, be brought in any court. Note: The matters dealt with in Part 9.6A include the applicability of limits on the jurisdictional competence of courts." 26Neither the Industrial Court nor the District Court is such a 'Court'. It appears that the defendant's claim for relief under s 1317H could not be advanced by way of cross-claim brought in the District Court, but would have to be brought in this Court, or in the Federal Court. 27If such proceedings were brought, a question arises as to whether those proceedings could be transferred by this Court to the Industrial Court, given the provision of s 154 of the Civil Procedure Act. Section 5E of the Corporations Act (Cth) states an intention not to exclude or limit the concurrent operation of any State law, provided there is no direct inconsistency. The question of such an inconsistency, albeit in a different context was considered in Gordon v Tolcher (in his capacity as liquidator of Senafield Pty Ltd (In liquidation)) [2006] HCA 62; (2006) 231 CLR 334. It was there observed: "[40] Accordingly, s 588FF is dealing, as an essential aspect of the regime it creates, with the period within which the application must be made. An application may be made only to a court invested with federal jurisdiction by one or other of the provisions of Pt 9.6A. Thereafter, and subject to any other relevant provision of the Corporations Act, the conduct of the litigation is left for the operation of the procedures of that court. These procedures will vary from one State or Territory to another and within the court structures of those States and Territories. The scheme of the Corporations Act is not to impose a direct federal and universal procedural regime. Rather, s 79 of the Judiciary Act is left to operate according to its terms in the particular State or Territory concerned. [41] Thus the relationship between s 588FF and s 79 (and between Pt 9.6A and s 79) is not one of which it may be said that the former provision is a law of the Commonwealth which "otherwise provides" so as to deny the operation of s 79 in this case to pick up so much of the Rules as supported the orders made by the Court of Appeal. [42] There may be questions which arise respecting the relationship between s 79 and other provisions of the Corporations Act, including Pt 9.4B and Pt 9.5, to which reference is made earlier in these reasons. No issue of this nature arises in this appeal and no more should be said here on that possibility." 28In this case, it seems that any application under s 1317H of the Corporations Act, could only be made to this Court. Once made, it may well be that the powers granted by s 151 may be exercised, so that the proceedings could be referred to the Industrial Court. As yet, that application has not been made. 29In all of those circumstances, it seem to me that consistently with the overriding purpose specified in s 56 of the Civil Procedure Act, the just, quick and cheap resolution of the real issues lying between the parties, in this case requires that the District Court and Industrial Court proceedings be transferred to this Court, so that the cross-claim may be pursued in the one set of proceedings, so that all of the matters on which Ms Ma and the defendant each wish to rely are able to be dealt with and that the entirety of the dispute between the parties as to Ms Ma's employment and its termination can be disposed of together. 30It appears that evidence will be led from the same witnesses in respect of both of Ms Ma's two claims and the issues to be raised by the cross-claim. It is sensible to have all of the issues lying between the parties in respect of the employment contract and Ms Ma's obligations to the defendant in the case of her employment and what was payable to Ms Ma on its termination of the employment, heard and determined in the one set of proceedings, having in mind questions of convenience and cost. While the cross-claim will raise other matters, they relate to Ms Ma's performance of her duties during the course of her employment and raise the question of whether she engaged in any misconduct or breach of her contractual, equitable or statutory obligations. They are matters also relevant to the question of her entitlements on the termination of her employment. It would be inconsistent with the overriding purpose for these matters to be dealt with in more than one set of proceedings. The most cost effective course is to have all the proceedings dealt with in this Court.