Submissions
49 The parties provided detailed written submissions supplemented by oral submissions.
50 The applicant identified five factors which she submitted were significant in the exercise of the Court's discretion in this matter: (1) the circumstances of the parties and the nature of the allegations; (2) there is a reasonable explanation for the delay; (3) there were attempts to resolve the claims made promptly after the applicant was notified of the intention to terminate her engagement with the firm which put the respondents on notice of the claims; (4) there is no prejudice to the respondents; and (5) there is a reasonably arguable claim for final relief.
51 The parties addressed each of those considerations.
52 In relation to the circumstances of the parties, the applicant noted the nature of the allegations and that those actions resulted in significant economic loss, which the applicant continues to suffer. It submitted the actions also resulted in significant psychological distress due to the disruption to the applicant's career and identity. That the impact is significant and ongoing, is on the applicant's submission, an important consideration favouring the grant of leave. The applicant submitted the matter also raised issues of general importance and ongoing significance in terms of the respondents' failure to remunerate women who work part time as a result of their family responsibilities in a non-discriminatory manner and the failure to invite such women to join equity partnership, and therefore the matter raises issues in the public interest generally. It was also submitted that a complaint about alleged unlawful discrimination by a law firm, that performs legal work for clients such as the state and federal government and other large institutions, should be the subject of a determination by this Court.
53 In relation to the nature of the allegations, the applicant submitted that the respondents' omissions were an "ongoing pattern of conduct", citing Commissioner of Fire Brigades (New South Wales) v Lavery [2005] NSWSC 268 at [61]-[62] and [66]. The applicant alleges that the respondents failed to invite her to join the equity partnership on the basis of her sex and/or family responsibilities throughout her tenure as a partner, and by its nature, this "omission" is difficult to pinpoint to a precise moment in time. The applicant made the same submission in relation to the respondents' failure to vary her "fixed profit share" commensurate with her efforts to build the financial performance of the Newcastle office. The applicant referred to the Partnership Agreement drawing attention to a specific clause dealing with the "admission of new partners" in support of this consideration. The applicant alleges that during late 2012 or 2013-2014, the respondents determined not to invite her to become an equity partner and/or not to consider her for progression to equity partnership. The applicant submitted this was in a context where she had made a significant contribution to the profitability of the respondents' Newcastle office having significantly increased the client base and the number of files throughout 2011 to 2014. In discussions with Mr Markos the applicant had expressed interest in progressing to equity partnership. It was submitted that there was every reason why, if partnership was to be offered to a lawyer in the Newcastle office, the offer should have been made to the applicant other than that she was female, with children and working part time. Her move to the Brisbane office was at the instigation of the respondents. It is the applicant's case that her move to Brisbane and the lack of promised support for her there, were deliberate acts by the respondents in an effort to minimise any claim she might make for equity partnership. The applicant submitted that unlike other discrete acts of discrimination, the failure to invite her to equity partnership is difficult to pinpoint in time and is of a continuing nature. Her feelings that she was being discriminated against because of her sex and/or her family responsibilities only crystallised after Mr Markos purported to terminate her relationship with the respondents in June 2016. It was submitted that while on the face of it, the applicant's complaints relate to issues dating back to at least 2011, the nature of her two allegations are such that they were of an ongoing nature continuing at least until the termination of her employment on 31 December 2016, which was only affected by the Agreement entered into on 7 February 2017. As a result, on the applicant's submission, the relevant date for consideration of any relevant delay ought to be taken from 7 February 2017.
54 The respondents addressed these first two considerations together, and submitted that the circumstances of this case are not unusual or novel. The respondents submitted that the applicant alleged conduct was an "ongoing pattern of conduct" to justify the 7 February 2017 date as being the date of the last alleged discrimination. The respondents proceeded on the basis that 7 February 2017 is the date from which the timeframe in s 46PO(2) should run, meaning it is unnecessary for the Court to consider the applicant's submission about an "ongoing pattern of conduct". Nonetheless, the respondents contended the submission that there was some "ongoing pattern of conduct" is misconceived, and that the events referred to by the applicant do not support that conclusion. It was submitted that at best, those matters establish that, despite desiring to be invited to become an equity partner, no such invitation was made to her or anyone else in that time. The respondents submitted this proceeding does not raise a matter of "general importance and ongoing significance", but rather this matter simply arises out of the ending of a partner's relationship with a law firm.
55 In relation to delay, the applicant submitted that there is no time limit for the making of a complaint to the AHRC. It was submitted that delay in bringing a complaint is one consideration to be taken into account in the exercise of discretion as to whether to grant leave, and the grant of leave should not be approached in the same way as an application for an extension of time. The applicant acknowledged that there was a delay in the complaint, it not being lodged until 25 May 2018, a delay of approximately three and a half to four months.
56 The applicant submitted that regardless of which approach the Court adopts to the question of when the alleged conduct/omissions constituting unlawful discrimination occurred, the delay of the applicant is adequately explained and is not a sufficient basis upon which to refuse leave. The applicant submitted that from her affidavit it is clear that her feelings of being discriminated against on the basis of her sex or family responsibilities did not crystallise until after June 2016 when she was faced with the putative termination of her relationship with the respondents. Further, the applicant submitted that she reasonably formed the view moving to the Brisbane office in early 2015 to help establish a "national practice" would assist her case for equity partnership. The applicant submitted that as soon as Mr Markos purported to terminate her relationship with the respondents by letter dated 3 June 2016, the applicant promptly sought the assistance of a solicitor that same day. The applicant submitted that despite being a lawyer, she recognised her vulnerable mental state and her limited experience in the area of discrimination and employment law and relied on her legal team to provide her with advice and representation. With the assistance of her solicitor, the applicant prepared for and participated in a mediation conference on 14 December 2016. The mediation did not resolve her claims of sex discrimination but resulted in her entering into the Agreement on 7 February 2017 to leave the partnership with effect from 31 December 2016.
57 The applicant submitted that the evidence establishes that as of 7 February 2017, the applicant had stated to Ms Milner that she wished to pursue her claim of sex discrimination against the respondents.
58 The affidavit of Ms Milner gives reasons for not lodging a complaint with the AHRC until 25 May 2018. First, Ms Milner's understanding as at 7 February 2017 was that while the AHRC had the power to terminate a complaint if it was not made within 12 months of the alleged discrimination, a complainant still had the right to pursue proceedings in the Court. Second, Ms Milner was unaware of the April 2017 amendments that inserted the requirement that an applicant must seek leave if their complaint is lodged more than 12 months after the alleged discrimination until 28 March 2018 when the applicant informed her of the conversation she had had with Ms Raper. Third, the advice of senior and junior counsel in May 2017 that the applicant may have a claim for adverse action under the Fair Work Act which resulted in her explaining to the applicant, on 23 October 2017, that for a matter under the Fair Work Act the relevant time limit is six years. Fourth, the advice of senior counsel in May 2017 that the applicant and Ms Milner provide more detailed information about the events in question, provide more information about whether the applicant was an employee, and comment on what legal/statutory provisions are intended to be relied upon to determine the cause of action. Fifth, on the advice of counsel, the significant work and effort that was expended on the preparation of a chronology and statement from the applicant and her husband which was dispatched to senior counsel in December 2017.
59 The applicant's evidence was that senior counsel advised her for the first time in April 2018 that she should lodge a claim in the AHRC. She gave evidence that she did "not know why a decision about the strategic direction of the matter was not made in 2017", or "why her solicitor did not make a diary note of the date for the filing of an application in the AHRC and if needed, the claim under the Fair Work Act 2009 (Cth)". She deposed that she "relied on the advice of her solicitor at all times".
60 The applicant submitted that on the evidence the reason for the delay in lodging a complaint can be described as "representative error". The applicant relies on statements in Comcare v A'Hearn [1993] FCA 498; (1993) 45 FCR 441 (Comcare) at 443 and Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344 at [33], to support a submission that the applicant should not be denied the opportunity to pursue her claim solely because of her solicitor's error or inaction. The applicant submitted any delay in lodging the complaint after she instructed a solicitor on 3 June 2016 arises solely from the actions of her legal team and cannot be attributed to her, which weighs in favour of granting leave.
61 The respondents took issue with the applicant's submission, contending the evidence does not satisfactorily explain the delay. It was submitted that the only relevant events are those after 7 February 2017, and therefore the evidence about the events in the second half of 2016 are irrelevant to this question. After detailing the timeline thereafter, it was submitted there was ample opportunity for the complaint to be filed. The respondents submitted that the Court should reject the applicant's explanation as being sufficient for her to now, some three years after the end of her relationship with the respondents, be granted leave to bring this proceeding. Therefore, the respondents contended that the delay is a significant factor that militates against the applicant being granted leave to bring, and now continue, this proceeding.
62 The respondents submitted the delay also continued after the President's delegate terminated the complaint with leave to file the application not being obtained within the 60 day time period required by s 46PO(2).
63 In relation to the applicant's attempts to resolve the claims, the applicant submitted that this factor weighed heavily in her favour. The applicant submitted that she put the respondents on notice of her claim of sex discrimination by letter dated 20 September 2016, which was further elaborated in a mediation position paper provided to them on 12 December 2016. The applicant submits that she also foreshadowed a claim for unlawful discrimination in correspondence from her solicitor to the respondents, dated 7 February 2017. Through both of these processes, the applicant contended that she placed the respondents on notice, at an early stage, of her claims.
64 The respondents submitted that this is a matter irrelevant to whether leave should be granted. It submitted that even accepting the respondents were on notice of the allegations of discrimination before 7 February 2017, it was not unreasonable for them to have proceeded on the basis that, after entry into the Agreement, the applicant had determined not to proceed to prosecute them.
65 In relation to prejudice to the respondents, the applicant submitted they suffer no discernible prejudice as a result of any delay in making the complaint to the AHRC, and that it is notable that they have elected not to file any evidence demonstrating any particular prejudice to them. The applicant made a number of submissions on this factor by reference to the reasons given by the delegate for the termination of the complaint.
66 The respondents submitted the failure to file evidence is irrelevant and it is evident they will suffer considerable prejudice should leave be granted to bring, and now continue, this proceeding. The respondents submitted the reasons of the delegate do not assist, and instead emphasised that the alleged events the subject of the proceeding happened between 2011 and 2016 and it is over three years since the last of the events. Given the nature of the claim it was submitted that the prejudice arising from the delay is readily apparent.
67 In relation to having a reasonably arguable claim, the applicant submitted that the Court can be satisfied from the detailed statement of claim that her claims of sex discrimination have reasonable prospects of success so as to justify a grant of leave. The applicant noted that she may file and rely on additional evidence if leave is granted.
68 The applicant alleges that by failing to vary her "fixed profit share" other than through the payment of bonuses during the period 2011 to 2016 commensurate with her contribution to the partnership and the overall profitability of the partnership, the respondents contravened s 17(3)(a) of the SDA by denying her access, or limiting her access to any "benefit" arising from being a partner in the partnership or alternatively contravened s 14(2)(b) of the SDA by denying her access, or limiting her access to benefits associated with her engagement. The applicant alleges that it was a "benefit" of the Partnership Agreement that she receive a fixed profit share determined by a resolution of the Equity Partners holding not less than 75% of the Partnership Capital (clause 7(b) of the Partnership Agreement, dated 6 July 1999) and that the Equity Partners would not exercise this power unreasonably, arbitrarily, capriciously or not in good faith and that, in the alternative, these were benefits associated with her "employment" with the respondents.
69 The applicant submitted that there are two main elements to meet the definition of direct discrimination on the ground of sex or family responsibilities under s 5(1) and 7A of the SDA: (1) less favourable treatment than a comparator in materially similar circumstances; and (2) causation, that the less favourable treatment was because of the applicant's sex, family responsibilities or a characteristic that appertains generally or is generally imputed to persons with family responsibilities.
70 The applicant contended that her fixed profit share was not increased during the period of her tenure as a fixed share profit partner because she was a woman or because she worked part time due to her family responsibilities. She submitted this is so given her significant contribution to the overall profitability of the Newcastle office during 2011-2015 that would have been recognised and remunerated accordingly had she been a man or working full time without family responsibilities. The applicant notes that further evidence is likely to be adduced at any final hearing of the issues in dispute after interlocutory processes are concluded. The applicant alleges that the respondents' failure to invite her to the equity partnership was an instance of direct or indirect discrimination that contravened either s 17(2)(a) of the SDA when "determining who should be invited to become an equity partner of the partnership" or s 14(2)(b) of the SDA by denying the applicant access, or limiting the applicant's access, to opportunities for promotion.
71 In the case of direct discrimination, the applicant alleges that she was treated less favourably than Mr Marhaba in not materially different circumstances, and that the reason she was not invited to equity partnership was either her sex/and or her family responsibilities. As stated above, the applicant relies on her significant contribution to the financial success of the Newcastle office between 2011 and 2015 which warranted an invitation to equity partnership, as well as her discussions with Mr Markos where he is alleged to have said to her in June 2011 "don't tell me you're pregnant, it will ruin all my plans" and asked in late 2012 whether she was "planning to have more children?". She also relies on the respondents' submission to the Workplace Gender Equality Agency in 2014-2015 which confirms that their law firm has not invited any women to join equity partnership despite the large number of senior women in fixed profit share partner positions, at least four of whom worked part time.
72 In relation to indirect discrimination, the applicant referred to the definition of "indirect discrimination" under s 5(2) of the SDA, and submitted that it requires the applicant to establish: (1) that a condition, requirement or practice existed that only the full time fixed profit share partners would be invited to equity partnership; and (2) that this condition, requirement or practice has or is likely to have the effect of disadvantaging women who are more likely than men to bear family responsibilities requiring them to work part time for at least the period before their children attend school and while their children attend the early years of primary school. To establish the practice that only full time fixed profit share partners would be invited to equity partnership the applicant relies on the statement made by Mr Markos to Ms Virgara in late 2016 that "the partnership agreement does not accommodate partners who work part time" and the report submitted by the respondents to the Workplace Gender Equality Agency in 2014-2015. The applicant contended that this practice of the respondents, if established, disadvantages women who are more likely than men to bear family responsibilities requiring them to work part time for at least the period before their children attend school and while their children attend the early years of primary school.
73 If established, the applicant noted that by virtue of s 7B and s 7C of the SDA, the respondents must prove that the condition, requirement or practice that only full time fixed profit share partners would be invited to equity partnership is reasonable in the circumstances. The applicant contends that the respondents will not be able to meet this burden of proof. Accordingly, the applicant's claim sets out substantive allegations against the respondents which, if established on the evidence, would be capable of constituting contraventions of ss 17 or 14 of the SDA.
74 The applicant submitted that proper construction of the Agreement between the parties at the time of leaving the respondents' firm, is not a bar to her commencing this application against the respondents as the Agreement does not include within its scope the applicant's claim for sex discrimination.
75 The respondents submitted that the complaint has poor prospects of success.
76 The respondents submitted that to the extent the applicant's claim alleges: (1) a failure to vary her fixed profit share contravened ss 17(3)(a) and 14 of the SDA, the Partnership Agreement did not provide the applicant with any "right" to a remuneration review or increase; (2) a failure to invite the applicant to become an equity partner was direct discrimination contravening ss 17(2)(a) and 14(2)(b) of the SDA, the applicant had no right (contractual or otherwise) to, nor was she given any guarantee of, advancement to equity partner; and (3) a failure to invite the applicant to become an equity partner was indirect discrimination, that allegation is, necessarily, mutually exclusive to direct discrimination. On the respondents' submission, the same pleaded conduct cannot be both direct and indirect discrimination.
77 It was submitted that for those reasons, much (if not all) of the applicant's claim is liable to be dismissed summarily, and the statement of claim is liable to be struck out. The respondents submitted that independently of the substantive defects in the applicant's claim, the Agreement (referred to by the respondents as a "Deed of Release") states that if the applicant makes a claim against the respondents and is awarded damages, then the subject of such a claim will have a credit against the amount of such damages in the amount of $108,000. Assuming, contrary to the submissions above, liability is established, the effect of clause 7 is that any award of damages will be reduced by $108,000. Having regard to awards of damages in discrimination cases, the respondents submitted that it is highly unlikely the applicant will receive any award after the credit is applied.