Discrimination claim under s 105 and 106 of [Equal Opportunity Act 2010](/cgi-bin/viewdoc/au/legis/vic/consol_act/eoa2010250/)
marital status in employment
summary dismissal application pursuant to [s 75](/cgi-bin/viewdoc/au/legis/vic/consol_act/eoa2010250/s75.html) and clause 18 of schedule 1 of VCAT Act
prior claim in Federal Circuit Court against employer pursuant to section 351 of [Fair Work Act 2009](/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/)
Source
Original judgment source is linked above.
Catchwords
Discrimination claim under s 105 and 106 of [Equal Opportunity Act 2010](/cgi-bin/viewdoc/au/legis/vic/consol_act/eoa2010250/)marital status in employmentsummary dismissal application pursuant to [s 75](/cgi-bin/viewdoc/au/legis/vic/consol_act/eoa2010250/s75.html) and clause 18 of schedule 1 of VCAT Actprior claim in Federal Circuit Court against employer pursuant to section 351 of [Fair Work Act 2009](/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/)no final orders in prior proceeding
employer went into voluntary administration: no assets
consideration about effect of delay and merits of claim
summary dismissal application dismissed.
Judgment (51 paragraphs)
[1]
The applicant made a complaint to the Victorian Equal Opportunity & Human Rights Commission ("the Commission") on 28 July 2014, alleging discrimination in his employment on the basis of his marital status ("the complaint"). He is married to Dianne ("Mrs McMahon").
In the complaint, the applicant stated that both he and Mrs McMahon worked as after hours caretakers at Kensington ( Gardens) Lifestyle Village in Shepparton (" the village").It was a shared job role but only one of them had to be on call at any one time. He named their employer as Kensington Management Services (Pty Ltd) ("KMS").They were required to live in a house on the village's property for which they paid weekly rent of $280.
Mrs McMahon's employment was terminated on 26 April 2012. According to the complaint, the applicant stated that his employment was then terminated on 2 May 2012 because he would not evict his wife of 42 years from the house. He maintained that if he had done so, he could have remained employed. He intended to continue in this employment to the age of 70 but he was only 64 years old when terminated. He therefore sought monetary compensation, including loss of future earnings, due to the alleged discrimination.
In the printed complaint form, it is noted that the President of the Commission can decide not to investigate a complaint made to it more than 12 months after the occurrence of the relevant event. The applicant was therefore required to provide a reason for his delay (then over 2 years).The reason given by the applicant in the complaint was that there had been other on-going legal proceedings which remained unresolved and that it had only recently been suggested to him by a family member "who is in the legal profession" that they believed he had been discriminated against due to his marital status.
The complaint to the Commission was made against 8 individuals. They were Shaun Green (as a director of the Green Group of Companies ["GG"] including KMS and as the signatory on show cause and termination letters sent to him),Peter Lollo (as CEO of GG and KMS and aware of the reason for termination), Anthony Green, Keeley Green and Marlene Green (all as directors and aware of why he was terminated),Colin Ward (regional manager with whom the applicant had close contact in his employment and who would have well known how and why he was terminated), Peter Stanbrook (manager of the village with whom the applicant had close daily contact and who delivered the show cause and termination letters at the request of Mr Shaun Green) and Nicole Dyckhoff (HR manager who had been named as a person involved in the underpayment of wages to KMS staff located in Albury in a Federal Magistrates Court ["FMC"] proceeding instituted by the Fair Work Ombudsman ["FWO"] in 2011).
By letter to the applicant dated 8 August 2014, the Commission effectively accepted the complaint and confirmed the commencement of the dispute resolution process through a conciliator.
However, by letter dated 15 October 2014, the Commission advised the applicant that it was closing its file as Mr Chris Mossman of M&K Lawyers, solicitors for the respondents, ("Mr Mossman") had advised the Commission on 24 September 2014 that his clients wished to withdraw from the Commission's dispute resolution process. The Commission advised the applicant to contact VCAT.
[2]
The Tribunal received the applicant's application on 23 February 2015.He only named as respondents Mr Lollo and Shaun Green (as former employers), Mr Ward (as regional manager of former employer), Ms Dyckhoff (as HR manager of former employer) and Mr Stanbrook (as site manager of former employer).
In his application he confirmed that it was being made more than 12 months after the relevant incident but gave the reason for the delay as being due to other legal matters in progress with "this employer" but which were now completed. He also added that "none of these matters refer to the discrimination case" now being made in this proceeding.
He has then essentially reiterated in his application the nature of events as he did to the Commission and further noted that he was uncertain as to whom "was totally responsible" for his termination and therefore he had named multiple respondents who may individually or as a group have been responsible for the termination decision. The applicant also noted that he had only since been able to obtain some part-time work, details of which were not provided.
Attached to the application form were 2 letters. The first letter was dated 2 May 2012 and was sent to the applicant under GG letterhead and signed by Shaun Green from KMS. Forming standard printed portions of the layout of the letter were GG contact details which confirmed a Bundaberg Queensland base and the names of 7 companies (including KMS ) and one business (named Kensington Gardens Lifestyle Estates ) which made up GG. The letter was headed show cause and read as follows:
[3]
"As you are aware, I recently reminded you that the caretaker's residence is only available for use by persons employed as caretakers by KMS. Dianne is no longer an employee of KMS and accordingly, she has no entitlement to reside at the caretaker's residence.
[4]
I issued you a direction last week that you were to ensure that any person, who is not employed as a caretaker by KMS, is not to reside at the caretaker's residence. You were instructed to comply with this direction by no later than 5.00 pm on Monday, 30 April 2012.
[5]
There is good reason for this policy. The caretaker's residence is our property. The premises are supplied for use by employees only. Having non-employees live on the residence potentially exposes the company to liability for injuries that a non-employee may sustain at our premises.
[6]
It has come to my attention that despite my direction, Dianne has remained living at the caretaker's residence.
[7]
In my view, your actions amount to a deliberate disobeyance of a lawful and reasonable direction.
[8]
In those circumstances, I believe your actions constitute serious misconduct which may entitle me to dismiss you from your employment. Before I make any decision in that regard, I will give you the opportunity to respond to me as to why you believe that you should not be dismissed from your employment. Any such response should be emailed to me at SGreen@green-group.net before 5: 00pm, 4 May 2012.
[9]
If I dot(sic) receive a response , then I will make a decision on the information I currently have before me. "
[10]
The second attached letter was a facsimile from Mr Mossman to the applicant's then lawyers, Faram Ritchie Davies ("FRD") dated 8 May 2012, which omitting formal parts read as follows:
[11]
"We act as lawyers for KMS. Our client has provided to us a copy of your letter addressed to Shaun Green of 8 May 2012.
[12]
Our client has considered your response. It is clear from that response that your client is continuing to disobey our client's lawful and reasonable direction that he ensures that persons who are not employed by KMS do not reside in the caretaker's residence.
[13]
Given your client's position, our client has no other choice but to dismiss your client from his employment, effective immediately.
[14]
Your client must vacate the caretaker's residence by 5pm Friday 11 May 2012."
[15]
It is apparent, other considerations aside, that the above correspondence may cast some doubt on the applicant's version to date about exactly when and how his employment was terminated. However, I regard the reproduction of the contents of the letters as extremely important to provide clarification of the applicant's claims in this proceeding. In any event, any current uncertainty expressed by the applicant about exactly when and how his employment was terminated have no substantive impact on my reasons.
[16]
14 By an application dated 27 March 2015, Mr Mossman on behalf of the respondents, has sought orders pursuant to section 75 and Clause 18 of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 ("VCAT Act") that this proceeding be struck out with a costs order against the applicant.
15 Section 75 of the VCAT Act relevantly provides:
[17]
"(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion -
[18]
is frivolous, vexatious, misconceived or lacking in substance; or
[19]
(2) If the Tribunal makes an order under subsection (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.
(5) For the purposes of this Act, the question whether or not an application is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process is a question of law."
[22]
It is well established that before striking out or dismissing a proceeding under the powers contained in section 75, the Tribunal ought to be satisfied that the proceeding is manifestly hopeless or has no chance of success (see Pizers Annotated VCAT 5th Edition pages 310 -371 and the cases there cited).In general, a party is entitled to present his evidence and have his case heard in the usual way and that right should only be denied in the clearest of cases. Respondents face a high hurdle to overcome to succeed in a section 75 application, particularly at such an early stage of a proceeding.
Clause 18 of Schedule 1 of the VCAT Act provides:
[23]
" The Tribunal may make an order under section 76 summarily dismissing an application under the Equal Opportunity Act 2010 in respect of an alleged contravention of Part 4,6 or 7 of that Act if the alleged contravention occurred more than 12 months before the application was made."
[24]
Mr Mossman filed submissions on 20 April 2015 in support of the strike out/dismissal application of the respondents. This proceeding had been the subject of a directions hearing on 30 March 2015. On that day, Victoria Legal Aid ("VLA") commenced acting for the applicant. On 19 May 2015, VLA filed submissions in response on behalf of the applicant.
The summary dismissal application was heard by me on 9 June 2015. I reserved my decision which is now the subject of these reasons. Mr Robert Hocking, solicitor from the Melbourne office of M&K Lawyers, appeared for the respondents. VLA ceased to act for the applicant prior to the hearing. The applicant and Mrs McMahon appeared and the applicant relied upon the submissions filed and served by VLA and they both gave short sworn evidence about matters raised by Mr Hocking.
[25]
For clarity, I will initially refer to a background chronology of relevant events contained in the applicant's submissions. None of this chronology was substantively disputed or corrected by either party at the hearing.
The applicant and Mrs McMahon were jointly appointed as employees of KMS, effective 1 February 2010, by letter dated 20 January 2010. From comments made at the hearing by the applicant and Mrs McMahon, it was apparent that they believed during their employment with KMS that they were inadequately paid given the significant hours they were having to work. As referred to earlier, a proceeding had been commenced by the FWO in 2011 in the FMC relating to alleged underpayment of wages by KMS to its staff in Albury. It appears that around November 2011, the FWO indeed found that KMS had been underpaying the Albury employees and an award was made for a lump sum to be paid by KMS representing the amount of underpayments.
From the chronology of events set out by VLA, it is stated that the applicant and Mrs McMahon made a complaint in January 2012 to the FWO for underpayment of wages. Settlement offers were made to them but not accepted. The employment of Mrs McMahon with KMS was terminated on 26 April 2012 and the applicant's employment was, in fact, terminated on 8 May 2012 because he refused to evict his wife (as he alleges). In May 2012, Mrs McMahon commenced proceedings for unfair dismissal, and the applicant around the same time made a complaint of unfair dismissal to Fair Work Australia ("FWA"). After FWA certification that the applicant's complaint could not be resolved by conciliation, the applicant then commenced a claim against KMS in the FMC on 1 November 2012, which was subsequently transferred to the Federal Circuit Court ("FCC") under Court File Reference MLG1399/2012 ("the applicant's FCC claim."). His claim alleged that he had been dismissed in contravention of a general protection order and that such termination constituted a breach of section 351(1) of the Fair Work Act 2009 (Clth) ("the FW Act"). He was represented by FRD, and he sought orders for compensation for pain and suffering and loss of income at a rate of $1255 gross per week from date of termination to date of decision. KMS which was represented by Mr Mossman denied liability on the basis that the reason for the applicant's termination was that he did not follow a lawful and reasonable direction issued to him by KMS.
[26]
" A person must not request, instruct, induce, encourage, authorise or assist another person to contravene a provision of Part 4 or 6 or this Part."
[27]
"If, as a result of a person doing any of the things specified in section 105, the other person contravenes a provision of Part 4 or 6 or this Part, a person may-
[28]
bring a dispute to the Commission for dispute resolution ; or
[29]
against either the person who authorises or assists or the person who contravenes a provision of Part 4 or 6 or this Part or both of those persons."
[30]
Mr Hocking conceded that the applicant did not, in the applicant's FCC claim, pursue the claim to a final hearing. The applicant maintains that the only questions considered in the applicant's FCC claim were whether different entities from KMS in GG could be joined to the FCC proceeding and could be considered to have been the employer and that the fundamental issue of liability for unlawful discrimination has yet to be tried, there have been no findings of fact or law on this issue and it would not be in the interests of justice to summarily strike out or dismiss this proceeding in those circumstances.
Mr Hocking, however, in his oral submissions at the hearing, effectively regarded the failure to proceed to a final hearing as immaterial. He examined the applicant's FCC claim and the decision of Judge Whelan very comprehensively and particularly focussed on paragraphs 20 and 46 of the decision. Paragraph 20 was included in that part of His Honour's decision where he was setting out matters requiring consideration and read :" The Applicant alleges a contravention of s 351 of the (FW) Act. Section 351 of the Act refers to adverse action taken by an employer. Unless the provisions of s 550 of the Act which applies to "a person who is involved in a contravention" are relevant, only an employer can be a respondent to an application under s 539 of the Act, which alleges a contravention of s 351 of the Act." Paragraph 46 was contained within Judge Whelan's "conclusions" and reads : "With respect to Mr Green and Mr Lollo, who were both directors of KMS Pty Ltd, there is no evidence to suggest that in their dealings with the Applicant they acted other than as directors of that company."
In order to put in proper context Mr Hocking's contentions relating to these sections which are detailed further below in my reasons, as noted earlier, the applicant's FCC claim alleged a breach of s 351 of the FW Act. Section 351, among other things, sets out on the issue of "discrimination", the bases/grounds (which include 'marital status') upon which an employer must not take adverse action against an employee. It also provides that it is a civil remedy provision. Section 539 of the FW Act deals with applications for orders in relation to contraventions of civil remedy provisions. Most importantly, section 550 of the FW Act provides:
[31]
"(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
[32]
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
[33]
(a) has aided, abetted, counselled or procured the contravention; or
[34]
(b) has induced the contravention, whether by threats or promises or otherwise; or
[35]
(c ) has been in any way, by act or omission, directly or indirectly knowingly concerned in or party to the contravention; or
[36]
(d ) has conspired with others to effect the contravention."
[37]
Mr Hocking noted the similarities between s 550 of the FW Act with s 105 of the EO Act now relied upon by the applicant in this proceeding. Mr Hocking further noted that the applicant was represented by FRD in the FCC claim and they are lawyers experienced in the practice of employment law and that the issue raised by the joinder application was effectively who should be the respondents to the applicant's FCC claim. Mr Hocking therefore submitted that in those circumstances, with reasonable diligence, the applicant, given the contents of paragraph 20 of Judge Whelan's reasons, had the opportunity and should have then applied to have Shaun Green and Peter Stanbrook also joined as respondents pursuant to s 550 of the FW Act. Further, or alternatively, he argued that given the comments about Shaun Green by Judge Whelan in paragraph 46 of his reasons (in circumstances where Mr Stanbrook would have ultimately reported to him), the issues now sought to be brought by the applicant in this proceeding, have, in fact, been decided. Mr Hocking also submitted that in terms of section 105 of the EO Act, in looking at Mr Green and Mr Stanbrook and whether their actions had the effect of making the employer liable for unlawful discrimination, the factual matrix is the same as, in their roles as director and site manager for KMS, they were synonymous with the employer.
Accordingly, the respondents in this proceeding, assert that because such issues have been or should have been considered in the applicant's FCC claim, this proceeding should then be struck out as an abuse of process. I therefore need to have regard to whether this proceeding is barred by res judicata, issue estoppel or Anshun estoppel.
[38]
RES JUDICATA, ISSUE ESTOPPEL AND ANSHUN ESTOPPEL
[39]
These principles are set out in the judgment of Einstein J in John Anthony Jeans v John Richard Bruce and Ors (20040 NSWSC 539 (at paragraph 304) where he says :
[40]
" 304 Authorities from recent decades have concentrated on defining precisely which aspects of a res judicata remain binding on the parties and their privies. It is now settled that this area involves the potential operation of three interrelated- but nonetheless conceptually distinct- estoppels:
[41]
(a) 'Cause of Action Estoppel' (alternatively, res judicata or estoppel per rem judicatam): As expressed by Fullagar J in Jackson v Goldsmith [1950] HCA 22; (1950) 81 CLR 446 at 466 (approved by Gibbs CJ, Mason and Aickin JJ in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 at 597), "where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action." As Fullagar J put the matter (at 467), the critical question that arises when such a cause of action estoppel is pleaded is "whether the cause of action in the later proceedings is the same as that which was litigated in the former proceedings." If the prior cause is indeed identical to the subsequent, then it has been deprived of any independent existence and cannot be averred as between the same parties or their privies; if established the cause merges in the judgment, and if defeated it is extinguished ad infinitum: Blair & Anor v Curran [1939] HCA 23; (1939) 62 CLR 464 at 532, per Dixon J.
[42]
(b) 'Issue Estoppel' (alternatively, 'estoppel by record'): An issue estoppel, as put by Higgins J in Hoysted v Federal Commissioner of Taxation [1921] HCA 56; (1921) 29 CLR 537 at 561, differs from a cause of action estoppel in that the scope of its operation is not confined to the final conclusions of law reached in the prior proceedings. Rather, as stated by Dixon J in Blair v Curran at 532-533, an issue estoppel arises in subsequent proceedings when "a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order", provided always that the issues in question were "fundamental or cardinal" to the prior decision rather than merely "subsidiary or collateral." While manifold judicial clarifications of this dichotomy have since been formulated, it is sufficient for present purposes to underscore that the estoppel extends only to those matters upon which it was necessary for the court to reach a conclusion, typically being matters against which an avenue of appeal lies: Murphy & Ors v Abi-Saab & Ors (1995) 37 NSWLR 280 at 288, per Gleeson CJ (with whom Kirby P and Rolfe AJA agreed).
[43]
(c) 'Anshun Estoppel': The extended application of the res judicata estoppels primarily associated in Australia with the decision in Port of Melbourne Authority v Anshun Pty Ltd has its origins in the judgment of Wigram VC in Henderson v Henderson [1843] EngR 917; (1843) 3 Hare 100 at 114-5, where the Vice Chancellor said:
[44]
"The plea of res judicata applies, except in special circumstances, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."
[45]
305 In Anshun, Gibbs CJ, Mason and Aickin JJ similarly held (at 602) that parties and their privies will be estopped from presenting a claim or defence in subsequent proceedings when, although not actually raised in the first action, that matter was "so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it." While the application of this test is largely a matter of fact- turning on considerations of (inter alia) expense to the parties, the importance of the issue to the prior proceedings and the motives of the party in failing to raise it- its intended strictness is evident in their Honours express rejection (at 601-2) of the equivalent English formulation to the effect that all matters which "could and therefore should have been litigated in the earlier proceedings" will be caught by this form of res judicata estoppel: Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590, per Lord Kilbrandon."
[46]
As to how one should determine whether the cause of action now brought is the same as that brought previously, reference should be had to the following passage from the judgment of Gummow J in Re Travel Industries of Australia Pty Limited : (Receivers and Managers Appointed) (In Liquidation) & Ors v Effem Foods Pty Limited (1992) FCA 272 (at para 51):
[47]
"It is said that for the estoppel to operate the cause of action in each proceeding must be the same. Ramsay v Pigram(1968) HCA34 [1968] HCA 34; (1968) 118 CLR 271 at 280.But as Brennan J. pointed out in Anshun.... The phrase 'cause of action' is used imprecisely and in several senses. These include (i) the series of facts which the plaintiff must allege and prove to substantiate a right to judgment, (ii) the legal right which has been infringed, and (iii) the substance of the action as distinct from its form."
[48]
I cannot find that this proceeding is barred by any of these three estoppels. By way of reiteration, it did not proceed to a final hearing and the applicant maintains in his submissions, which I accept, that the only questions considered in the applicant's FCC claim were whether different entities from KMS in GG could be joined to the FCC proceeding and could have been considered to be the applicant's employer. In this regard, I also accept the applicant's submissions that the applicant's FCC claim was not pursued to a final hearing as the interlocutory application to join GG as respondents was dismissed and the respondent WC (formerly KMS) had gone into voluntary administration. Accordingly, the questions of whether adverse action had been taken by the respondent in breach of section 351 of the FW Act and of unlawful discrimination in the applicant's employment have not been considered and there have been no findings of fact or law on these issues.
I also accept the applicant's submissions that while the essential facts leading to the unlawful discrimination and the applicant's FCC general protection claim are the same, there are fundamental differences at law. Therefore, having regard to the requisite considerations and tests referred to above in the law relating to the estoppels and its application, I do not regard the applicant as having been required, despite Judge Whelan's reference to section 550 of the FW Act, to have dealt with, and to have sought to rely on, that section, in the actual joinder application or in any part or step in the FCC proceeding. This Tribunal proceeding is an application against persons who are alleged to have authorised and assisted each other and the employer in the contravention of the EO Act. It is not against the employer WC. It contemplates the requirements for different presentation, consideration and argument of, and about, evidence. The liability of the respondent individuals alleged to be personally involved has not been determined nor has a finding been made about whether they or either of them authorised and/or assisted the alleged contravention. By way of further reiteration, it is not necessary for the applicant to prove that the respondents or either of them in this proceeding were his employer but rather that they or either of them assisted the employer and/or others in contravening Part 4 of the EO Act. Section 106 of the EO Act, when read with section 105, provides the option of claiming against either or both of the person who assisted and the person who contravened.
[49]
On the issue of delay, Mr Mossman stressed that Clause 18 of Schedule 1 of the VCAT Act allows me to summarily dismiss this application ( if I decided to so exercise my discretion) because it was not filed by April 2013.Both he and Mr Hocking then argued, both in relation to this provision and section 75, that it would be unjust to allow this application to proceed. While not resiling from the position that an estoppel applied as a bar to the application, they asserted that it would be generally unfair to permit the applicant to again litigate his complaints.
The unfairness, according to them, arose because the applicant had, including with the benefit of legal advice, already brought other proceedings in other forums before now deciding to file this application almost 3 years after the relevant events occurred. The respondents also argued that such a delay brought with it significant prejudice to the respondents in being able to properly defend this proceeding as memories deteriorate and decline over time. In this regard, Mr Hocking noted that the nature of this application will require oral evidence to be given in addition to reliance on documentary evidence.
In relation to the merits of the actual claim of the applicant in this proceeding against the two respondents, both Mr Mossman and Mr Hocking submitted that it was manifestly hopeless. As noted above, Mr Hocking relied on Judge Whelan's comments about Shaun Green in paragraph 46 of the applicant's FCC claim as support for this position and especially so in circumstances where Mr Stanbrook would have ultimately reported to Mr Green. Mr Hocking also contended there was simply no evidence of any conduct of either respondent which would fall within section 105 of the EO Act or that either of them acted in any capacity other than within the scope of their KMS roles. Finally, on the merits issue, Mr Hocking also expressed the view that the fact that FRD did not include a claim against the respondents in the applicant's FCC claim, is perhaps to be regarded as a fair indicator that, as the applicant's lawyers, FRD also regarded such a claim to be without merit.
VLA, for the applicant, set out in general terms, the principles it contended needed to be relied upon when determining whether delay in bringing a proceeding makes it an abuse of process. These contentions were based on decisions in Jago v District Court of New South Wales and Ors and in Burrows v State of Victoria (Department of Education) primary consideration is the interest of justice. In this regard, relevant factors to be considered and balanced against each other, included whether the delay is ordinate or unreasonable and inexcusable, the adequacy of any explanation for the delay, the nature of the proceeding, whether the respondents were responsible for the delay, public interest, the nature and extent of any prejudice to the respondents, and whether , with particular regard to the quality of available evidence, the ability to have a fair hearing has been compromised. However, none of these myriad of factors alone was to be determinative of the primary consideration.
[50]
In all the circumstances, I cannot find any deliberate delay by the applicant. I accept the submission that these tragic and difficult personal experiences would have caused the applicant to lose the ability for a period of time to consider his legal rights and options. Added to this have been the claims and proceedings set out in the chronology of events. In this regard, I also accept the applicant's submissions that he supported Mrs McMahon through her unfair dismissal application which spanned 18 months including appeals by KMS and GG, he was involved with Mrs McMahon in the conduct of their claim through the FWO for underpayment of wages which took 12 months before there was a final determination and he instituted his General Protection FCC claim which was conducted over 15 months without being finalised. All of these were affected by the employer going into voluntary administration when it did and then coming out of voluntary administration without assets or employees which had significant consequences for the applicant (and Mrs McMahon).Despite this, the applicant and Mrs McMahon took the required steps as creditors of KMS and even attended a creditors' meeting in Queensland.
As to the issue of prejudice arising from any delay, these various claims and proceedings involving the applicant and Mrs McMahon would reasonably be expected to ensure the retention of the available documentary evidence for the respondents and also an on-going involvement of Shaun Green and Peter Stanbrook. Such involvement would, more likely than not, have required them to quite regularly focus their attention on, and maintain recollections of, all relevant details of the events surrounding, and circumstances leading up to, the application's termination of employment.
Accordingly, after considering all the above, I cannot find the delay to be unreasonable and inexcusable or without any acceptable explanation from the position of the applicant. There is also no objective basis to find any likely prejudice to the two respondents in the conduct of their defence or of any likely compromise in the fairness of any final hearing of this proceeding.
As to the merits issue, it is relevant to generally note the principles relating to a section 75 application as set out in the applicant's submissions based on the decisions in Burrows and in Rabel v State Electricity Commission (1998) 1 VR. These are that the Tribunal should be cautious before summarily terminating a claim (all other considerations aside) at this early stage, particularly when oral evidence has not been given. To do so would deprive the litigant of the opportunity to have the claim heard in the ordinary course and would need the Tribunal to be satisfied that the claim is manifestly unsustainable, undoubtedly untenable or on no reasonable ground could justify relief for a reason specified in section 75
[51]
I have made orders, accordingly, dismissing the respondents' application. I have also made orders removing Peter Lollo, Colin Ward, and Nicole Dyckhoff as respondents.
As will also be seen from my orders, the applicant is now required to file and serve particulars of claim setting out how he brings this claim under sections 105 and 106 of the EO Act against Shaun Green and Peter Stanbrook. The application itself does not contain this information.
Parties
Applicant/Plaintiff:
McMahon
Respondent/Defendant:
Green
Legislation Cited (3)
Opportunity Act 2010
Work Act 2009
Civil and Administrative Tribunal Act 1998
Cases Cited (7)
McMahon v Green (Human Rights) [2015] VCAT 1156 (31 July 2015)
(1921) 29 CLR 537
(1950) 81 CLR 446
(1981) 147 CLR 589
(1995) 37 NSWLR 280
(1968) 118 CLR 271
(1939) 62 CLR 464
Reverting again to VLA's chronology, the FWO on 21 January 2013 advised of their decision that the applicant and Mrs McMahon were owed $206,145.10 in underpayments by KMS. Then on 22 February 2013, Commissioner Blair, on behalf of the Fair Work Commission ("FWC"), ordered $59,050 compensation for unfair dismissal to Mrs McMahon. This award was made against KMS and, through joinder, also against GG. On the same day, being 22 February 2013, KMS went into voluntary administration.
When KMS was placed into voluntary administration, the employees at the village became employees of Eastcoast Management Services Pty Ltd, another company within GG. A Deed of Company Arrangement was entered into by KMS on 6 March 2013. On 17 April 2013, KMS was released from administration and back into the control of its directors but without assets or employees. On 18 April 2013, KMS appealed the decision of the FWC in Mrs McMahon's proceeding including the order joining GG. The appeal was heard on 11 September 2013 with the decision reserved.
After the applicant's FCC claim was adjourned by mentions, by interlocutory application filed on 17 September 2013, the applicant sought to join as additional respondents to proceeding MLG1399/2012 the remaining 8 entities forming part of GG ("the joinder application.") It should be noted that earlier, on 3 May 2013, as a result of KMS having changed its name to Wilson Curry Pty Ltd ("WC"), WC was formally substituted as the sole respondent in the applicant's FCC claim.
The interlocutory application was heard by Judge Whelan on the basis of affidavits sworn and filed by each of the applicant and Shaun Green together with submissions being made by the parties' legal representatives. On 30 October 2013, Judge Whelan handed down his decision which denied the joinder of any of the other entities of GG to the applicant's FCC claim.
On 31 December 2013, the Full Bench of the FWC allowed part of the appeal by KMS in Mrs McMahon's unfair dismissal claim against KMS in respect of Commissioner Blair's order joining the other GG entities as respondents to that proceeding, but the award of compensation of $59,050 was affirmed.
The basis of the joinder application was that the applicant questioned who was, in reality, his employer. Doubtless, a principal consideration for the applicant in bringing this application would have been that, save for a payment of around $10,000, the applicant and Mrs McMahon were unable, due to each of KMS going into voluntary administration, becoming WC, and GG rearranging employment relationships for the village employees within GG, to recover the total remaining balance of over $250,000 of their award for underpayment of wages and Mrs McMahon's compensation award for unfair dismissal.
However, the applicant relied on other arguments in the joinder application, which he submitted effectively resulted in there being a real issue about whether GG had entered into sham arrangements and, if so, the FCC could lift the corporate veil and look behind the legal personality to the real controllers. Such other arguments included that GG had common directors and registered places of business, the property upon which the village operates is owned by two of the other companies within GG, other village employees with whom the applicant had close and important dealings appeared to have been employed by entities within GG other than KMS even before it went into voluntary administration, Mr Shaun Green had practical and legal control and direction of the employees throughout GG and made the hiring decisions, and finally with particular reference to the show cause letter, correspondence was sent on GG letterhead but signed ostensibly on behalf of one or other entities within GG, rather than those entities having their own letterheads.
WC, in its submissions, contended that KMS had always been the applicant's employer. It relied on the letter of employment setting out that KMS will be the applicant's employer, the applicant's tax file declaration showed KMS as his employer, the show cause letter was signed on behalf of KMS , the PAYG payments summaries always named KMS as the employer and KMS made all superannuation contributions for the applicant. WC also argued that while there is a commonality of directors among the companies sought to be joined, it was not a situation of a parent company and subsidiaries, but rather one of all the entities being separate with separate functions.
Judge Whelan, as noted above, found against the applicant. He regarded the documentary evidence as supporting that the employment relationship was between the applicant and KMS and that neither the creation of KMS back in 1994 nor the relevant contract of employment was a sham arrangement. He also found that while GG is a group of associated companies with many common directors (including Shaun Green as a director of all the companies), there was nothing to show that any of those companies is the controller of any other company in GG.
Finally, Judge Whelan was satisfied that KMS had both practical and legal control of the applicant, it paid his remuneration, its directors made decisions about the level of remuneration and about terminating the applicant's employment and it was not acting as an agent for one or more of the companies in GG.
I accept that the applicant's application itself in this proceeding is not clear in the nature and basis of how it has been made pursuant to the EO Act. Accordingly, given that the respondents sought summary strike out/dismissal soon after the application was made in this proceeding by the filing of the application and the respondents have had to file and serve their submissions in support before the applicant has been required to file his response, the primary basis upon which these written submissions were based had to be orally changed and expanded somewhat by Mr Hocking when appearing for the respondents at the hearing. Principally, the written submissions of the respondents focussed on the proceedings constituted by the applicant's FCC claim and that as it had been made and Judge Whelan made the findings that he had, the applicant has no prospect of success in establishing that any of the named respondents in this proceeding was his employer and accordingly, the application is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process.
However, the applicant's response to the written submissions has clarified the basis upon which the application by the applicant has been made in this proceeding. At the hearing, the applicant in evidence confirmed, as set out by VLA, that his claim is made pursuant to sections 105 and 106 of the EO Act and therefore he does not need to establish that any of the named respondents was his employer. He also confirmed in line with the VLA submissions that if this application for summary strike out/dismissal is dismissed, he seeks the amendment of his application in this proceeding to claim only against Shaun Green and Peter Stanbrook as he alleges that they are the respondents properly liable under s 105 and s106 of the EO Act.
Section 105 of the EO Act states:
As I will also refer to on the merits' issue below, it further follows on the estoppels' issues that I do not regard the comments about Shaun Green by Judge Whelan in paragraph 46 of his decision as being of such a nature that they are determinative of the matters to be proved by the applicant to succeed in this proceeding. In my opinion, it is clear that the reference to Mr Green, in his dealings with the applicant as a director of KMS as having acted in no manner other than as a director of KMS, was made on the basis of the limited required evidence and the limited necessary issues of deciding whether any entity within GG, other than KMS, had practical and legal control of the applicant and/or whether in the same context KMS acted as an agent for another entity within GG.
In addition to the earlier VLA chronology of events relating to the proceedings of Mrs McMahon for compensation, the "other" proceedings of the applicant, the proceedings of the applicant and Mrs McMahon for underpayment of wages, and the changes in the employer's circumstances, the applicant's written submissions and evidence given by the applicant and Mrs McMahon at the hearing also identified other specific relevant factors for the delay.
Very sadly, in September 2012, Michelle O'Brien, the daughter of the applicant and Mrs McMahon, was diagnosed with leukemia at the age of 40 and died in Brisbane on 10 July 2013. This caused enormous distress and grief for both the applicant and Mrs McMahon. Mrs McMahon who had also been nursing her terminally ill mother then went into severe depression requiring treatment and the need for constant care by the applicant. These events caused the applicant to lose focus on any legal proceedings and other issues pertaining to the events, the subject of this application, for a considerable period of time and it was only in July 2014 that he could direct sufficient attention to filing the complaint with the Commission.
I reiterate the opinion I expressed earlier about Judge Whelan's comments about Shaun Green in paragraph 46 of his decision in the applicant's FC claim. They were made in relation to the narrower issue about whether another entity in GG, other than KMS, should be considered to have been the applicant's employer and therefore joined as a respondent. In reaching his decision, Judge Whelan only had the benefit of affidavits and submissions, without the benefit of oral evidence, and without the need to consider the wider issues raised by sections 105 and 106 of the EO Act.
I agree with the applicant's submissions. It is too early in this proceeding to summarily strike out or dismiss the application. On the same basis, I do not regard it as possible or reasonable for the respondents to currently assert that this application is hopeless and without merit.
I am therefore not prepared to make an order dismissing the application under section 76 of the VCAT Act pursuant to Clause 18 of Schedule 1 of the VCAT Act because the application was not filed by April 2013. I am also not prepared to make a strike out or dismissal order under section 75 of the VCAT Act in respect of any part of the application as I am not of the opinion that it is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process.