McGinn v Department of Family and Community Services

FACTUAL BACKGROUND

1. A summary of the factual background to the proceedings brought by the applicant against the respondent is contained in the judgment of McCallum J (commencing at [2]) which I gratefully adopt: Ms Sophia McGinn was employed by the Department of Family and Community Services as Quality Manager and Internal Auditor in the Land and Housing Corporation's Projects Division, which delivers social housing in New South Wales. She had been in that role since July 2007. Her duties included managing the Quality Management System (QMS), including conducting a quarterly review of that system. In January 2016, the New South Wales government announced proposed changes which contemplated that the Projects Division would be transformed from a construction management model to a development management model delivering dwellings in partnership with other sectors. The changes were to involve a complete restructure of the Projects Division. In August 2016, the proposed restructure was presented to staff at a meeting. The presentation included a draft diagram which foreshadowed (among other things) that, once the restructure had been implemented, the position held by Ms McGinn would no longer exist. The Department maintains that it was made clear in that meeting that "business as usual would continue throughout the transition" and that "non-executive roles remain 'as is' pending finalisation of the new business model and structure". Ms McGinn evidently apprehended that, as her role in performing the QMS function was to be "deleted", there was no ongoing utility in performing some of her duties. From early January 2017, there were a number of exchanges between her and her supervisors as to the status of her employment and the extent of any obligation to continue to perform the QMS function. From an early stage, those exchanges reflected fundamentally different understandings of the status of Ms McGinn's employment. The Department was insisting that her position had not been deleted and that she was still required to complete the QMS function. Ms McGinn was insisting that her position had been deleted and that, if the work was still required to be undertaken, she should be "reinstated". She accepts that, during that time, she refused to conduct the quarterly review of the QMS. The exchanges between Ms McGinn and her supervisors continued throughout February and early March 2017. On 16 March 2017, the Executive Director of the Projects Division, Mr Phemister, sent an email to all staff announcing "the commencement of the matching and job application process". The new structure to be implemented by that process contemplated a reduction in the number of full time employees. No person was eligible for direct appointment from an old position to a new position. The implementation of the restructure required every person in the Projects Division to apply for and be appointed to a new role in the new structure. Ms McGinn argues that the announcement of 16 March 2017 gave effect to the termination of her position. The Department maintains that, as at that date, Ms McGinn's employment was ongoing. The legal significance of that contest is considered below. On 30 March 2017, following Ms McGinn's repeated refusal to perform duties as directed, the Human Resources Director of the Department, Ms Juliet Adriaanse, formally warned Ms McGinn that she was considering terminating her employment in accordance with s 47(1)(f) of the Government Sector Employment Act 2013 (NSW) for refusing to perform the duties of the role assigned to her. A condition of the exercise of the power conferred by that section is that the employment to be terminated is "ongoing employment". Ms Adriaanse's warning letter said: "I am aware that you are refusing to perform the Quality Management System (QMS) duties assigned to you as Quality Manager and Internal Auditor and, despite being directed to perform these duties on several occasions, you have refused to do so. These include but are not limited to conducting the quarterly review of the QMS system and audit related activities. These are core to your duties.You have argued that these duties are not required because your position has been "deleted". As has been explained to you on numerous occasions (including those noted below), your position has not currently been deleted and all your duties must still be performed. While LAHC is transitioning to a new operating model and some positions may be deleted, including yours, you are still required to perform the functions of your role, including QMS, while the transition is occurring." Ms McGinn was given an opportunity to make written submissions in relation to the proposed termination of her employment. She was also informed of the availability of support through the Employee Assistance Program. She responded by asserting that her employment could not be terminated under s --7 because her position had been deleted and was therefore not "ongoing". She accused Ms Adriaanse of knowingly using false and misleading information in an official letter which, she said, was a criminal offence. Ms Adriaanse responded by again asserting that Ms McGinn's employment was ongoing and reminding her of the deadline for submissions and the availability of support. Ms McGinn responded that she had no intention of making further submissions. She threatened that if her employment was terminated she would commence proceedings in the Industrial Relations Commission and said in that event it would be Ms Adriaanse who would need the support of the Employee Assistance Program, not her. On 13 April 2017, Ms Adriaanse terminated Ms McGinn's employment. As foreshadowed, Ms McGinn commenced proceedings in the Industrial Relations Commission seeking reinstatement to her former position. The application was dismissed: McGinn v Secretary, Family & Community Services [2017] NSWIR Comm 1039. Ms McGinn filed an application for leave to appeal to the Full Bench of the Industrial Relations Commission against the Commissioner's decision. By the same application, she sought a stay of the Commissioner's decision. The stay application was refused, evidently on the basis that only this Court could grant such an injunction. Ms McGinn then sought an injunction in this Court. The order sought was an injunction "that the respondent not to delete the applicant's former position". It may be noted that there was some tension between the position adopted in that application and Ms McGinn's earlier refusal to perform certain duties on the basis that her position had already been deleted. In any event, the application was dismissed by Lonergan J:McGinn v Department of Family and Community Services [2017] NSWSC 1124. The application for leave to appeal to the Full Bench of the Industrial Relations Commission was heard on 22 September 2017. Ms McGinn, who has represented herself throughout the proceedings in the Commission and in this Court, did not attend that hearing. The application for leave to appeal was dismissed. Ms McGinn then commenced these proceedings seeking damages for breach of contract.

The initial application FOR injunctive relief

1. On 27 July 2017 the applicant sought (inter alia) an injunction restraining the respondent from (as she put it) "deleting" her former position. At the time of seeking that order, the applicant had not commenced any proceedings against the respondent in this court, although she had commenced proceedings in the Industrial Relations Commission ("the Commission"). Her application for injunctive relief was dismissed by Lonergan J: McGinn v Department of Family and Community Services [2017] NSWSC 1124.
2. In respect of the proceedings which were then before the Commission, Lonergan J said (commencing at [37]): 37. The plaintiff asserts that she may have a breach of contract claim if she fails in her appeal before the IRC. However, the fact that her proceedings before the IRC are not yet concluded, and because of the relief available to her in that Court pursuant to s 89 of the Industrial Relations Act 1996 (NSW) includes damages, there is not a serious question able to be tried in this Court to which protection of a right by injunction could currently apply. 38. The plaintiff can make a claim for damages for breach of contract in this Court should she choose to do so if she fails in the IRC. That right is not affected in any way by the refusal to grant the injunction sought. 39. The balance of convenience tells against the grant of the injunction sought. Remedies available to the plaintiff pursuant to s 89 of the Industrial Relations Act 1996 (NSW) remain available to her if her appeal is successful, including reinstatement and damages. Clearly the balance of convenience favours the relevant issues currently before the IRC in the plaintiff's appeal being determined by the Full Court of that Court. 40. The relief sought in this Court appears to be misconceived. In saying that, I express no opinion as to the merits of the plaintiff's appeal before the IRC. 41. In the circumstances, I dismiss the plaintiff's application and order that the plaintiff pay the respondent defendant's costs of the notice of motion.

The respondent's application for dismissal OF THE PROCEEDINGS

1. As noted in [1] above, a statement of claim was filed by the applicant on 25 September 2017 following Lonergan J's decision.
2. On 23 October 2017, the respondent filed a notice of motion seeking to have the proceedings brought by the applicant dismissed pursuant to r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) ("the rules"), or alternatively struck out pursuant to r 14.8 of the rules. The respondent relied on the affidavit of Ms Edwards in support of that motion, which set out (inter alia) the history of the proceedings. The motion came before McCallum J for hearing on 8 February 2018. Her Honour delivered judgment on 14 February 2018 dismissing the proceedings.
3. In her judgment, her Honour noted (at [15]) that r 13.4 confers a power to dismiss proceedings where they are frivolous or vexatious, where no reasonable cause of action is disclosed, or where they are an abuse of process of the court. Her Honour also noted (again at [15]) that the respondent had sought, in the alternative, to rely on r 14.28 of the rules which confers a power to strike out pleadings if they disclose no reasonable cause of action, have a tendency to cause prejudice, embarrassment or delay, or are an abuse of process.
4. Her Honour noted (at [16]) that the respondent's principal contention was that the proceedings brought by the applicant were an abuse of process because they sought to re-litigate issues that had been determined in the proceedings brought by the applicant in the Commission. Her Honour further noted (again at [16]) that the essence of the respondent's submission was that the proceedings brought by the applicant raised an issue as to whether her employment was "ongoing" at the time that it was terminated, and that the Commission's determination of that issue gave rise to an estoppel, such that any attempt to re-litigate the issue in this Court would be an abuse of process.
5. Her Honour concluded (at [36]) that the issue of the applicant's ongoing employment was to be regarded as having been decided by the Commission in the relevant sense. In reaching that conclusion, her Honour expressly referred (at [29]) to the applicant's submissions.
6. Her Honour further concluded (at [40]) that the issue of the applicant's ongoing employment was closed by the decision of the Commission, and that in those circumstances it would be an abuse of process to re-litigate that issue in this Court. In reaching those conclusions her Honour made specific reference (at [37]-[39]) to the applicant's submissions.
7. Finally, in the event that her principal conclusions were found to be incorrect, her Honour recorded (at [41]) that she would have struck out the applicant's pleadings because they disclosed no reasonable cause of action. In reaching that conclusion, her Honour again expressly referred (at [42]) to the applicant's submissions.
8. Consistent with the references in her Honour's judgment to the applicant's submissions, the transcript of the hearing before her Honour makes it clear that quite apart from having been given the opportunity to file written submissions, the applicant was given ample opportunity to make oral submissions at the hearing. In giving the applicant that opportunity, her Honour said (commencing at T19.33): Ms McGinn, it is now your opportunity to present your submissions and you should, in doing so, respond to anything that you have heard come from Mr Shariff but also present any argument that you want to present in response to the motion … The application that you face today focuses on your pleadings, your statement of claim and the applications to have your proceedings dismissed on the basis that what you have brought forward as a claim should not be allowed to continue in this Court, either because it has already been decided in the Commission or because, even on the material that you have put forward, it is clear enough that you cannot win. So they are the two grounds that you have to respond to. Do you understand?
9. The transcript then records the respondent's lengthy oral submissions, extending over some 27 pages of the transcript. Plainly, the respondent was given every possible opportunity to articulate her position.

Submissions of the applicant

1. The primary submissions of the applicant are set out in her affidavit filed in support of the motion. They may be summarised as follows.
2. Firstly, the applicant submitted that when the proceedings were before McCallum J she had objected to the affidavit of Ms Edwards on the grounds of relevance. She further submitted that in the absence of any pleading, the affidavit was inadmissible and that her Honour erred in admitting it. The applicant submitted that in these circumstances, "the judgment was entered irregularly" because the only affidavit filed by the respondent was irrelevant to the orders sought, and therefore inadmissible having regard to the provisions of s 56(2) of the Evidence Act 1995 (NSW). The applicant submitted that McCallum J had no power to determine the matter in the absence of admissible evidence.
3. Secondly, the applicant submitted that McCallum J had failed to consider the question of whether proceedings could be brought based on the alleged breach of contract to which Lonergan J had referred in her judgment at [38]. The applicant submitted that McCallum J was "silent on Justice Lonergan's finding that breach of contract is a valid cause of action". She further submitted that McCallum J's "silence" constituted "an admission that Justice Lonergan's finding is correct and the statement of claim should not be dismissed". It was submitted that in these circumstances, and because McCallum J "didn't publish the judgment as she said she would", there was an "admission" that the judgment had been "given against good faith". It is not clear to me what the applicant meant by her references to the publication of the judgment.

Submissions of the respondent

1. Counsel for the respondent submitted that the applicant's affidavit essentially advanced two bases upon which it was suggested that the decision the decision of McCallum J should be set aside, namely that: 1. the affidavit which had been filed in support of the application was inadmissible having regard to s 56(2) of the Evidence Act 1995, such that McCallum J had no power to determine the matter in the absence of admissible evidence, leading to a conclusion that the judgment had been entered irregularly; and 2. the decision of McCallum J was made in bad faith because her Honour had failed to consider the applicant's submissions.
2. The respondent submitted that both of these propositions were based on incorrect factual assumptions, and that neither enlivened any power, or gave rise to any foundation, to have the orders of McCallum J set aside.
3. As to the first proposition, counsel for the respondent submitted that the assertions made by the applicant regarding Ms Edwards' affidavit were incorrect, and that the affidavit had been read without objection in the proceedings before McCallum J. Counsel further submitted that there was no irregularity arising from the affidavit or its filing, and that even if such an irregularity arose, the failure on the part of the applicant to raise it in a timely manner meant that she had waived her right to rely on any issue as to its admissibility in the current application. Counsel further submitted that even a cursory examination of Ms Edwards' affidavit disclosed that its contents were admissible.
4. As to the second proposition, counsel for the respondent submitted that any suggestion that the decision of McCallum J was reached without considering the applicant's submissions had no proper basis, and was completely at odds with what had in fact occurred. Specifically it was submitted that: 1. the applicant had previously filed written submissions on 13 December 2017; 2. McCallum J heard further oral submissions from the applicant at the hearing of the motion; 3. McCallum J specifically referred to the applicant's submissions in her judgment, from which it was clear that such submissions had been and considered; and 4. it was otherwise evident that in coming to the conclusion that the proceedings disclosed no reasonable cause of action, her Honour had considered the applicant's submissions concerning the alleged breach of contract.
5. It was submitted that in all of these circumstances, no bad faith had even been disclosed let alone established, and that the present notice of motion should be dismissed.

The relevant LEGISLATIVE PROVISIONS

1. Rule 36.15 of the rules is in the following terms: GENERAL POWER TO SET ASIDE JUDGMENT OR ORDER (1) A judgment or order of the Court in any proceedings may, on sufficient cause being shown, be set aside by order of the Court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the Court in any proceedings may be set aside by order of the Court if the parties to the proceedings consent.
2. Section 56 of the Evidence Act 1995 (NSW) is in the following terms: RELEVANT EVIDENCE TO BE ADMISSIBLE (1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. (2) Evidence that is not relevant in the proceeding is not admissible.

Consideration

1. The written submissions of the respondent made reference to a number of authorities which govern the operation of r 36.15, and from which the following propositions can be drawn.
2. Firstly, the focus of r 36.15(1) is upon the judgment or order that is attacked. The question is whether it was "given … entered or … made …" (inter alia) irregularly, such that the focus is on irregularity in those steps. The rule applies with particular force to default or consent judgments and orders, and those given or made ex-parte. It can only have limited application to judgments and orders made or entered after a hearing on the merits, at which all parties were represented and fully heard: Perpetual Trustees Australia Pty Limited v Heperu Pty Limited (No. 2) (2009) 78 NSWLR 190; [2009] NSWCA 387 at [16]-[17] per the Court (Allsop P (as his Honour then was), Campbell JA and Handley AJA).
3. Secondly a judgment is not given or entered irregularly, and an order is not made irregularly, where the irregularity occurred prior to a substantive hearing in which both parties were fully heard: Perpetual Trustees Australia Pty Limited v Heperu Pty Limited (No. 2) (supra) (at [18]).
4. Thirdly, a judgment is not given or entered irregularly, and an order is not made irregularly, where the alleged irregularity relates to technicality, and not a point relating to the substantive rights of the parties: Weber v Aquaqueen International Pty Limited [2013] NSWSC 1181 at [122]; [129]-[130].
5. Fourthly, in order for the power conferred by r 36.15(1) to be exercised, the irregularity or bad faith must relate to the making of the order, or the entering of judgment. A judgment must not be set aside if the irregularity or failure to exercise good faith is for slight or uncertain causes. This is because of the principle concerning the necessity for finality of judgments: Kendell v Carnegie (2006) 68 NSWLR 193; [2006] NSWCA 302 at [45] per Bryson JA (Hodgson and McColl JJA agreeing); Perpetual Trustees Australia Pty Limited v Heperu Pty Limited (No. 2) (supra) (at [32]-[33]; [45]).

Consideration

1. In my view, the present notice of motion should be dismissed for a number of reasons.
2. Firstly, and fundamentally, no irregularity has been demonstrated in the making of the order to dismiss the proceedings. McCallum J made that order following a hearing on the merits, at which the applicant was given every possible opportunity to make submissions. It is apparent, both from the transcript of the proceedings and her Honour's judgment, that the applicant's submissions were fully considered. Any suggestion to the contrary is completely unfounded.
3. Secondly, the affidavit of Ms Edwards was plainly admissible in the proceedings before McCallum J.
4. Thirdly, it is evident from the transcript of the proceedings before McCallum J that at the outset of the hearing, counsel for the respondent made it clear that he was relying upon Ms Edwards' affidavit. When asked by her Honour, the applicant confirmed that she had received the affidavit. She raised no objection to it, and the hearing proceeded.
5. Fourthly, the reference by Lonergan J in her judgment (at [38]) to proceedings for breach of contract amounts to nothing more than an observation by her Honour that it was open to the applicant to bring proceedings based on that cause of action if she wished to do so. That observation said nothing about, and certainly did not determine, the merits of any such proceedings. McCallum J considered those issues and reached the conclusion that the proceedings should be dismissed. No irregularity has been demonstrated in that conclusion, or the orders which followed upon it.

Orders

1. I make the following orders: 1. The notice of motion is dismissed. 2. Absent agreement, the parties are to file with my Associate submissions as to the question of costs, such submissions not to exceed two pages in length.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 June 2018