Shane Heal v Sydney Flames Basketball Pty Ltd

Cases Cited: Blair v Curran (1939) 62 CLR 464; [1939] HCA 23
Heal v Sydney Flames Basketball Pty Ltd [2024] FCA 401
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 89 ALJR 750; [2015] HCA 28

Category: Procedural rulings

Parties: Shane Heal (Plaintiff)
Sydney Flames Basketball Pty Ltd (First Defendant)
Hoops Capital Pty Ltd (Second Defendant)
Paul Smith (Third Defendant)
Robyn Denholm (Fourth Defendant)
Victoria Denholm (Fifth Defendant)
Julian O’Brien (Sixth Defendant)

Representation: Counsel:
K Smark SC (Plaintiff)
M Richardson SC / D Helvadjian (First, Second, Third and Sixth Defendants)
D R Sibtain SC / M J Lewis (Fourth and Fifth Defendants)
Solicitors:
Banki Haddock Fiora (Plaintiff)
Babingtons Lawyers (First, Second, Third and Sixth Defendants)
Lander & Rogers (Fourth and Fifth Defendants)

File Number(s): 2024/126853

Publication restriction: N/A

JUDGMENT

1. HIS HONOUR: The first defendant, Sydney Flames Basketball Pty Ltd, together with the other five defendants, move the Court to strike out the Statement of Claim and dismiss the proceedings against them. The Statement of Claim by Shane Heal, a former famous Australian basketball player, Olympian and coach of the Sydney Flames, sues the six defendants for damages arising from an allegedly defamatory publication.

2. The Sydney Flames is a corporation which conducts a basketball team in the Women’s National Basketball League and is the publisher and operator of a webpage under the name Sydney Flames; content hosted on X with the handle @Sydney Flames; a Facebook account under the name Sydney Flames; and content hosted on Instagram under the account Sydney Flames.

3. The second defendant, Hoops Capital Pty Ltd, is the owner and operator of Sydney Flames and is alleged to be in the same position relating to social media and content as the Sydney Flames.

4. The third defendant, Paul Smith, is alleged to be the founder and effective controller through Hoops Capital of the Sydney Flames. He is the individual who signed and delivered a letter of suspension to the plaintiff on or about 16 January 2023 and issued, approved and/or authorised the publication regarding the plaintiff on or around 14 February 2023.

5. The fourth defendant, Robyn Denholm, is a director, officer and shareholder of Wollemi Capital Group which acquired a significant minority holding in Hoops Capital in 2022; is alleged to be an agent of Sydney Flames and Hoops Capital; was instrumental in the appointment of her daughter, the fifth defendant, as the President of the first defendant; and also a person who issued, approved and/or authorised the publication regarding the plaintiff on or around 14 February 2023.

6. The fifth defendant, Victoria Denholm, is, as earlier stated, the daughter of the fourth defendant; the President and/or an agent of Sydney Flames; and an individual who, with others, issued, approved and/or authorised the publication regarding the plaintiff on or around 14 February 2023.

7. The sixth defendant, Julian O’Brien, is an employee and/or agent of Sydney Flames; an employee and/or agent of Hoops Capital; the director of communications and media for the Sydney Flames; and another individual who issued, approved and/or authorised the publication regarding the plaintiff on or around 14 February 2023.

8. As may be gleaned from the foregoing, the publication on 14 February 2023 was, it is alleged, a publication defamatory of the plaintiff. The details of the Statement of Claim are less relevant to these motions than would ordinarily be the case. Concerns Notices have been served and serious harm has been pleaded. The issue on the motions is the question of estoppel and/or abuse of process.

9. In order to understand the issue, it is necessary to trace some history of previous litigation involving the plaintiff. Before doing so, it is appropriate that the alleged imputations arising from the material published be recited. Those imputations are that:

(a) The plaintiff, as Head Coach of the Sydney Flames, bullied multiple Sydney Flames players; (b) The plaintiff’s conduct as Head Coach of the Sydney Flames towards multiple Sydney Flames players was so severe as to be a risk to the health and safety of players; (c) The plaintiff’s conduct in bullying multiple Sydney Flames players was so severe that a number of players had to seek counselling and support from the Australian Basketball Players Association; (d) The plaintiff had behaved so appallingly as Head Coach of the Sydney Flames towards players that he had to be suspended so as to protect the women he was coaching; and (e) The plaintiff has brought unmeritorious legal proceedings for the improper purpose of delaying or blocking the Sydney Flames enterprise from concluding its investigation into him.

10. On 12 March 2021, the plaintiff commenced employment under a fixed term employment agreement which was agreed to expire on 11 March 2024. Complaints were received, it is alleged, by the Sydney Flames from several players on or around 9 January 2023, and on 16 January 2023, the plaintiff was suspended from his employment, on pay, pending the outcome of an external investigation into the complaints.

11. On 3 February 2023, a workplace investigation report prepared by lawyers was provided to Sydney Flames. The report detailed the complaints and a conclusion that, in the investigator’s opinion, the complaints were, at least in part, substantiated.

12. On the same date, namely 3 February 2023, Sydney Flames advised and/or confirmed to the plaintiff the outcome of the workplace investigation and the content of the investigation report. On 4 February 2023, Sydney Flames delivered to the plaintiff a “show cause letter” seeking to have the plaintiff show cause as to why his employment should not be terminated.

13. On 7 February 2024, the plaintiff commenced proceedings in the Fair Work Division of the Federal Court of Australia (hereinafter “the Federal Court Proceedings”), the defendants and/or respondents to which were Sydney Flames (the first defendant herein), Victoria Denholm (the fifth defendant herein) and Paul Smith (the third defendant herein).

14. The originating application of 7 February 2024 which commenced the Federal Court Proceedings sought declarations and orders under ss 545 and s 550 of the Fair Work Act 2009 (Cth) for injunctive relief and penalties against each of the respondents in the Federal Court Proceedings.

15. The declaration sought against the first respondent was that it had contravened s 340 of the Fair Work Act in each of the following ways: by issuing its letter of 16 January 2023; by requiring that the applicant not attend the workplace, nor undertake any duties or contact team members and employees pending completion of the investigation; by commencing and undertaking the investigation against the applicant; by making findings of misconduct against the applicant in its letter of 3 February 2023 despite various unanswered requests by the applicant for information and concerns raised by the applicant; and by proposing to terminate the employment of the applicant by its show cause letter of 4 February 2023. It was said that the foregoing was “adverse action” prohibited by s 340 of the Fair Work Act. The declarations sought against the second and third respondents were that they were involved in the contraventions of the first respondent as described by s 550 of the Fair Work Act.

16. The Fair Work Act defines adverse action and a workplace right. The terms of ss 340, 341 and 342 are:

SECT 340

Protection

(1) A person must not take adverse action against another person:

(a) because the other person:

(i) has a workplace right; or

(ii) has, or has not, exercised a workplace right; or

(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b) to prevent the exercise of a workplace right by the other person.

Note: This subsection is a civil remedy provision (see Part 4 - 1).

(2) A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person's benefit, or for the benefit of a class of persons to which the second person belongs.

Note: This subsection is a civil remedy provision (see Part 4 - 1).

SECT 341

Meaning of workplace right

Meaning of workplace right

(1) A person has a workplace right if the person:

(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

(c) is able to make a complaint or inquiry:

(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

(ii) if the person is an employee--in relation to his or her employment.

Meaning of process or proceedings under a workplace law or workplace instrument

(2) Each of the following is a process or proceedings under a workplace law or workplace instrument:

(a) a conference conducted or hearing held by the FWC;

(b) court proceedings under a workplace law or workplace instrument;

(c) protected industrial action;

(d) a protected action ballot;

(e) making, varying or terminating an enterprise agreement;

(f) appointing, or terminating the appointment of, a bargaining representative;

(g) making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;

(h) agreeing to cash out paid annual leave or paid personal/carer's leave;

(i) making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements);

(ia) giving a notification, or receiving an offer or notice, under Division 4A of Part 2-2 (which deals with casual employment);

(j) dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;

(k) any other process or proceedings under a workplace law or workplace instrument.

Prospective employees taken to have workplace rights

(3) A prospective employee is taken to have the workplace rights he or she would have if he or she were employed in the prospective employment by the prospective employer.

Note: Among other things, the effect of this subsection would be to prevent a prospective employer making an offer of employment conditional on entering an individual flexibility arrangement.

Exceptions relating to prospective employees

(4) Despite subsection (3), a prospective employer does not contravene subsection 340(1) if the prospective employer makes an offer of employment conditional on the prospective employee accepting a guarantee of annual earnings.

(5) Despite paragraph (1)(a), a prospective employer does not contravene subsection 340(1) if the prospective employer refuses to employ a prospective employee because the prospective employee would be entitled to the benefit of Part 2-8 or 6-3A (which deal with transfer of business).

342 Meaning of adverse action

(1) The following table sets out circumstances in which a person takes adverse action against another person.

| Meaning of adverse action | | Item | Column 1 Adverse action is taken by … | Column 2 if … | | 1 | An employer against employee | The employer: (a) dismisses the employee; or (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee’s prejudice; or (d) discriminates between the employee and other employees of the employer. | | 2 | a prospective employer against a prospective employee | the prospective employer: (a) refuses to employ the prospective employee; or (b) discriminates against the prospective employee in the terms or conditions on which the prospective employer offers to employ the prospective employee. | | 3 | a person (the principal) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor | the principal: (a) terminates the contract; or (b) injures the independent contractor in relation to the terms and conditions of the contract; or (c) alters the position of the independent contractor to the independent contractor’s prejudice; or (d) refuses to make use of, or agree to make use of, services offered by the independent contractor; or (e) refuses to supply, or agree to supply, goods or services to the independent contractor. | | 3A | a digital labour platform operator that has entered into a contract with an employee‑like worker for use of, or access to, a digital labour platform against the employee‑like worker | the digital labour platform operator: (a) terminates the contract; or (b) injures the employee‑like worker in relation to the terms and conditions of the contract; or (c) alters the position of the employee‑like worker to the employee‑like worker’s prejudice; or (d) refuses to make use of, or agree to make use of, services offered by the employee‑like worker; or (e) refuses to provide to the employee‑like worker use of or access to the digital labour platform. | | 4 | a person (the principal) proposing to enter into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor | the principal: (a) refuses to engage the independent contractor; or (b) discriminates against the independent contractor in the terms or conditions on which the principal offers to engage the independent contractor; or (c) refuses to make use of, or agree to make use of, services offered by the independent contractor; or (d) refuses to supply, or agree to supply, goods or services to the independent contractor. | | 4A | a digital labour platform operator that proposes to enter into a contract with an employee‑like worker for use of, or access to, a digital labour platform against the employee‑like worker | the digital labour platform operator: (a) refuses to agree to provide to the employee‑like worker use of, or access to, the digital labour platform; or (b) discriminates against the employee‑like worker in relation to the terms and conditions on which the digital labour platform operator agrees to provide to the employee‑like worker use of, or access to, the digital labour platform; or (c) refuses to make use of, or agree to make use of, services offered by the employee‑like worker. | | 5 | an employee against his or her employer | the employee: (a) ceases work in the service of the employer; or (b) takes industrial action against the employer. | | 6 | an independent contractor against a person who has entered into a contract for services with the independent contractor | the independent contractor: (a) ceases work under the contract; or (b) takes industrial action against the person. | | 6A | an employee‑like worker against a digital labour platform operator that has entered into a contract with the employee‑like worker for use of, or access to, a digital labour platform | the employee‑like worker takes industrial action against the digital labour platform operator. | | 7 | an industrial association, or an officer or member of an industrial association, against a person | the industrial association, or the officer or member of the industrial association: (a) organises or takes industrial action against the person; or (b) takes action that has the effect, directly or indirectly, of prejudicing the person in the person’s employment or prospective employment; or (c) if the person is an independent contractor—takes action that has the effect, directly or indirectly, of prejudicing the independent contractor in relation to a contract for services; or (d) if the person is a member of the association—imposes a penalty, forfeiture or disability of any kind on the member (other than in relation to money legally owed to the association by the member). | | 8 | an industrial association, or an officer or member of an industrial association, against an employee‑like worker | the industrial association, or the officer or member of the industrial association, takes action that has the effect, directly or indirectly, of prejudicing the employee‑like worker in relation to a contract for use of, or access to, a digital labour platform. |

(2) Adverse action includes:

(a) threatening to take action covered by the table in subsection (1); and

(b) organising such action.

(3) Adverse action does not include action that is authorised by or under:

(a) this Act or any other law of the Commonwealth; or

(b) a law of a State or Territory prescribed by the regulations.

(4) Without limiting subsection (3), adverse action does not include an employer standing down an employee who is:

(a) engaged in protected industrial action; and

(b) employed under a contract of employment that provides for the employer to stand down the employee in the circumstances.

17. On 7 February 2023, the Federal Court granted expedition of the hearing of the application including mediation on 9 February 2023. The orders of 7 February 2023 also restrained Sydney Flames from terminating the employment prior to the close of business on 15 February 2023, on which date the matter was returnable before the Duty Judge in the Federal Court. The mediation was unsuccessful.

18. On 15 February 2023, the first respondent, Sydney Flames, undertook to the Court not to terminate the plaintiff’s employment before 5pm on the last day of the final hearing as to liability in the proceedings. The matter proceeded by way of pleadings and the plaintiff filed a Statement of Claim on 31 March 2023.

19. The Federal Court Statement of Claim described the issuing of the publication on 14 February 2023 as the Tenth Incident of Adverse Action, seemingly on the basis that the plaintiff had been directed not to refer directly or indirectly to the existence of the investigation or the matters that were the subject of the investigation. The Statement of Claim claimed loss and damage, being loss of income, including annual leave entitlements which were required to be utilised during the course of the suspension; loss of opportunities to pursue additional employment opportunities; and harm to reputation, hurt, humiliation and injury suffered by reason of the unlawful adverse conduct engaged in by the respondents.

20. Further, as already stated, a declaration was sought pursuant to the terms of s 545 of the Fair Work Act that the issuing of the media statement publicly discussing the “Allegations and Investigation” against the plaintiff was adverse action against the plaintiff.

21. The application was opposed and the respondents to the Federal Court proceedings filed their defences.

22. It is sufficient to summarise part of the defence filed on behalf of Sydney Flames insofar as is directly relevant to the issues before the Court in these proceedings. Sydney Flames admitted that it issued a media statement which referred to allegations of bullying by the plaintiff, the investigation into the plaintiff’s conduct and the Federal Court Proceedings. It did not otherwise admit paragraph 54, being the relevant paragraph in the Statement of Claim, but alleged that by the date of the publication, the matters that were the subject of the media statement were already the subject of media articles, which were not the result of any action taken by Sydney Flames or its officers, agents or employees.

23. The defence also pleaded that the Federal Court Proceedings had been commenced by 14 February 2023 (the date of the media statement); the Federal Court had informed the parties that it had received requests from the media for access and that access was to be granted at least to the originating application; and the originating application disclosed the investigation against the plaintiff, the findings of misconduct in the Investigation Report, and that the Sydney Flames were proposing to terminate the applicant’s employment; and, in so doing, the statement of 14 February was factually accurate and did not disclose matters that were not already the subject of media articles or available to the media by means of access to the Originating Application.

24. The defence filed by other respondents to the Federal Court Proceedings, while differing as to responsibility for the publication of the 14 February statement, did not do other than adopt the response of the Sydney Flames.

25. On 19 April 2024, Halley J of the Federal Court issued judgment, the matter having been listed over seven days from 30 June to 7 August 2023.

26. In the course of his reasons for judgment, the learned judge said:

“202. I do not accept the contention advanced by Mr Heal that the players’ complaints were a ‘smoke screen’ advanced by Sydney Flames to disguise the fact that the Suspension Adverse Action was taken because of Mr Heal’s alleged exercise of the Initial Workplace Rights.

203. I reject Mr Heal’s submission that the players’ complaints could not be characterised as matters that could reasonably support a decision to suspend Mr Heal. Nor do I accept Mr Heal’s contention that the failure of Sydney Flames to pursue alternative, less dramatic solutions to address the Team’s concerns gives rise to a compelling inference that the Suspension Adverse Action was not taken because of the players’ concerns conveyed by Ms Froling and Ms Mangakahia.

204. The complaints were objectively serious. They were principally advanced by the captain of the Team in a one hour meeting to senior management on behalf of the Team, they concerned four players, and they included claims that players were struggling, a player had had a panic attack and another player was struggling with mental health issues. These were not complaints advanced in an ‘off the cuff’ or informal manner in the course of a game or in its immediate aftermath. The seriousness of the complaints was compounded by the call from a player agent to Mr Pongrass the day after his one hour meeting with Ms Froling asking him what Sydney Flames were going to do about the players’ complaints.

…

290. Mr Heal submits that issuing the Media Statement ‘harmed’ him and was therefore adverse action because (a) the Media Statement dealt with the investigation and these proceedings which are in connection with his employment, (b) the timing of its release was intended to disadvantage him and (c) it damaged his reputation.

…

292. Sydney Flames submits that by the time that it was released, the matters that were the subject of the Media Statement were already the subject of:

(a) at least seven press articles that referred, amongst other things, to ‘a club investigation’, an investigation by lawyers, Mr Heal’s FWC Application, and these proceedings; and

(b) social media commentary, including references to Mr Heal’s sudden absence, ‘a major drama’, ‘a club investigation’, a bullying claim, and these proceedings.

…

295. I am satisfied that the Media Statement did not disclose anything that was not already in the public arena. Given what was already in the public arena, I do not accept that the Media Statement prejudiced Mr Heal in the sense of him being worse off after the Media Statement than before. The issue of the Media Statement did not cause an injury to Mr Heal of any compensable kind, because it did not adversely affect, or cause the loss or alteration of a legal right he held as an employee, so as to amount to injuring Mr Heal in his employment. [Emphasis added.]

…

298. I accept Mr Smith’s evidence that he prepared the first draft of the Media Statement, and that the decision to issue the Media Statement and its content were ultimately his decisions. Circulating the draft of the Media Statement to others for their input did not detract from Mr Smith’s evidence that he made the decision to circulate the statement in the form in which it was published. That evidence is consistent with the other evidence discussed above, that Mr Smith has the final say in all matters relating to Sydney Flames, and with Mr Smith being the Chairman and majority owner of Sydney Flames.

…

300. In any event, Mr Smith and any other persons who might be considered to have been materially involved in issuing the Media Statement, in particular Mr O’Brien, denied that they decided to issue the Media Statement because of Mr Heal’s exercise of any of the accepted or alleged workplace rights. I accept those denials. The denials are consistent with the apparent logic of events and were not seriously challenged in cross examination.

301. In accepting those denials I had particular regard to the context in which the Media Statement was issued, in particular, that Mr Heal had commenced these proceedings against Sydney Flames and the number of press articles and other public commentary about the investigation and these proceedings.

302. The following explanation given by Mr Smith for approving the release of the Media Statement is inherently plausible and consistent with the apparent logic of events given the extent of the speculation in the press about Mr Heal, the Team and Sydney Flames that demanded a response from Sydney Flames:

[M]atters had reached a point where we had to go on the public record regarding what had occurred with Mr Heal, and in response to the speculation in the media and on social media, as well as in response to Mr Heal’s Court proceedings. I wanted to protect the club’s reputation.” [1]

27. Essentially, the defendants in these proceedings submit that the plaintiff is estopped from proceeding for damages under the cause of action in defamation as a consequence of the Federal Court Proceedings, on the basis of issue estoppel, Anshun estoppel and/or abuse of process.

The principles on estoppel

28. It is unnecessary for the Court to deal with all species of estoppel known to the law. That which is relevant is estoppel, including abuse of process, arising from prior litigation. Thus, the equitable remedies associated with estoppel are, for present purposes, irrelevant. It is also unnecessary to deal with the doctrines of “merger” or “res judicata”.

29. Rather, the Court is required to deal with that which operates as a rule of law to prevent or preclude the assertion of a right or obligation or the raising of an issue of fact or law. [2]

30. In Tomlinson, the High Court described three forms of estoppel that have been recognised by the common law of Australia arising from a final judgment in proceedings. The majority in Tomlinson said: [3]

“22. Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as ‘cause of action estoppel’. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as ‘issue estoppel’. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a ‘judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies’. The third form of estoppel is now most often referred to as ‘Anshun estoppel’, although it is still sometimes referred to as the ‘extended principle’ in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a ‘true estoppel’ and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.

23. The present significance of the recognition of those three forms of estoppel is that each has the potential to preclude assertion of a right or obligation, or the raising of an issue of fact or law, between parties to a proceeding or their privies. Absent a principled basis for distinction – and none has been suggested – one principle must govern the identification of privies for the purpose of all forms of estoppel which result from the rendering of a final judgment in an adversarial proceeding.

24. To explain contemporary adherence to the comparatively narrow principle in Ramsay v Pigram, it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.

25. Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.

26. Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

27. The final element of the legal context relevant to explaining continuing adherence to the comparatively narrow principle in Ramsay v Pigram is the continuing existence of the distinct rule, equitable in origin, which prevents a person from actually recovering more than once for a given loss that results from breach of a given obligation. The rule applies irrespective of the part, if any, which the person might have played in a proceeding which would otherwise facilitate the double recovery against which it guards. Its distinct operation was noted more than two centuries ago in the seminal explanation of issue estoppel. There it was explained that ‘a finding upon title in trespass not only operates as a bar to the future recovery of damages for a trespass founded on the same injury, but also operates by way of estoppel to any action for an injury to the same supposed right of possession’ and that ‘it is not the recovery, but the matter alleged by the party, and upon which the recovery proceeds, which creates the estoppel’. The explanation continued:

‘The recovery of itself in an action of trespass is only a bar to the future recovery of damages for the same injury: but the estoppel precludes parties and privies from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them, or by those to whom they are privy in estate or law, has been, on such issue joined, solemnly found against them.’” [Footnotes omitted.]

31. Notwithstanding the earlier comments that res judicata was not relevant to the objections raised by the defendants in these proceedings, it is necessary to understand the distinction between res judicata and issue estoppel in order to understand the breadth and limitations on issue estoppel. The classic clarification was contained in the reasons for judgment of Dixon J in Blair v Curran [4] in which his Honour said:

“The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, 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.

Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.

In the phraseology of Lord Shaw, ‘a fact fundamental to the decision arrived at’ in the former proceedings and ‘the legal quality of the fact’ must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.” [Footnote references omitted.] [5]

32. The foregoing principles inform the determination of the issues between the parties. Fundamentally, the issue is whether the cause of action in defamation, or an aspect of it relating to the damage caused by the publication, was necessarily resolved as a step in reaching the determination made in the Federal Court Proceedings. Are the controversies or some aspect of it that is essential to each of them substantially the same in each of the controversies? The answer to that question is not altogether straightforward.

The defendants’ submissions

33. It is necessary to briefly outline the defendants’ submissions. As one would expect, the submissions of the fourth and fifth defendants and the submissions of the first, second, third and sixth defendants are to a similar effect. Essentially, each submits that the plaintiff alleged that the media statement by the Sydney Flames constituted adverse action taken against him by the respondents, who are some of the defendants in the proceedings.

34. The claim in the Federal Court Proceedings, as is clear from the foregoing summary, agitated that the plaintiff had suffered “harm to reputation, hurt, humiliation and injury” as a result of the unlawful adverse conduct, which included the publication of the media statement. The plaintiff sought compensation for that unlawful adverse conduct which resulted in the “harm to reputation, hurt, humiliation and injury”.

35. The fourth and fifth defendants submit that implicit in the reasons for judgment of Halley J that the statement did not disclose anything not already in the public arena is that the publication of the media statement did not prejudice the plaintiff. In the sense there used, the fourth and fifth defendants submit that the plaintiff could not have been worse off after its publication than he was before and that, therefore, the plaintiff’s reputation had not been harmed.

36. Further, the fourth and fifth defendants submit that, even if the Court was not convinced that the effect of the judgment of the Federal Court was as submitted by them, the principle that the plaintiff should have taken and ought reasonably to have taken the defamation proceedings in the earlier Federal Court Proceedings, results in the plaintiff being prevented from taking them now, under the principles applying to Anshun estoppel.

37. Over and above the foregoing, the fourth and fifth defendants submit that the present proceedings are “unjustifiably vexatious and oppressive to the fourth and fifth defendants” because it will inevitably lead to a repeat of the same evidence and the agitation of the same issues that have previously been determined in the Federal Court Proceedings.

38. The submissions of the first, second, third and sixth defendants are to like effect, the necessary changes being made. The said defendants rely upon the same principles, although more obviously on Anshun estoppel than cause of action estoppel, and point out that the Federal Court Proceedings involved a claim for economic loss as well as harm to reputation, hurt, humiliation and injury, which damage was sought and is sought in each of the proceedings.

39. Apart from relying upon Anshun estoppel, the first, second, third and sixth defendants rely upon abuse of process (as to a lesser degree do the fourth and fifth defendants) and upon the principles already recited to which the High Court referred in Tomlinson.

40. The first, second, third and sixth defendants also rely upon issue estoppel in relation to whether harm has been occasioned and the level of damage caused. In doing so, the said defendants refer to the conclusion of Halley J that “no harm” had been occasioned and rely on the highlighted passage, recited above, at [295] of his Honour’s judgment.

The plaintiff’s submissions

41. Essentially, the plaintiff submits that the claim in the Federal Court Proceedings was a claim in “industrial law” and the findings relate not to defamation, but to civil remedies associated with adverse action in the employment context and confined to that context.

42. In terms of Anshun estoppel, the plaintiff submits that given the very specialised nature of the proceedings before the Federal Court, it was not reasonable to expand the proceedings to include a claim for defamation, which would require different legal representatives and an enlargement and expansion of the matters that were before the Federal Court in a way that would undermine the urgency and expedition that had otherwise been granted.

Consideration

43. The Fair Work Act is necessarily confined by the constitutional limits of the Australian Parliament. The legislation in question was enacted under the incidental powers in s 51(xxxix) of The Constitution, being matters largely incidental to laws with respect to foreign, trading or financial corporations from within the limits of the Commonwealth (s 51(xx) of The Constitution).

44. The foregoing is not intended to suggest that there are relevant limitations on the operation of the Fair Work Act, only that the Fair Work Act does not deal with defamation or damages arising from defamation. Rather, it deals relevantly with protection to employees from adverse action taken by their employer.

45. The protection to employees is a protection to the employee in her or his capacity as an employee. Action taken against a person in that person’s capacity as a consumer, for example, even if taken by the person’s employer, who may also sell goods, is not covered by adverse action, unless, somewhat unusually, it may have been motivated by the consumer’s position as an employee and, therefore, taken as adverse action against the person in their capacity as an employee.

46. The publication of defamatory material which contains imputations against a person who happens to be an employee is not, in and of itself, adverse action. Ordinarily, the commencement and processing of proceedings against a person’s employer for adverse action and protection of rights under the Fair Work Act would not form a basis for stopping the person, in a different capacity, from proceedings in tort, including defamation.

47. I do not consider it reasonable for the plaintiff to have expanded the proceedings before the Federal Court to include defamation proceedings, particularly in circumstances where the defamatory material was published at a point in time after the commencement of the Federal Court Proceedings. However, this does not answer the objection taken by the defendants.

48. While there is much merit in the submission of the plaintiff, particularly having regard to the comments of Halley J as to how his Honour found damages or the lack thereof, there is one fundamental difficulty with the plaintiff’s submission. What would have happened if Halley J had found that there was damage in the nature of adverse action occasioned by the publication of the material that is defamatory material in the proceedings now before this Court?

49. If that hypothetical were to have been the case, the damages arising from the publication would have been the subject of compensation. It cannot seriously be suggested, in such a circumstance, that the plaintiff in these proceedings would be entitled to further damages arising from the same publication. Such a course would be inconsistent with fundamental rules associated with the awarding of damages once only for that which has occurred.

50. The foregoing hypothetical still does not totally answer the problem. The Federal Court judgment did not quantify the damages because the Federal Court held that there was no adverse action.

51. However, one of the bases for the finding that no adverse action occurred was that the allegedly defamatory matter did not damage the plaintiff. Thus, the Federal Court has reached a conclusion, which was a necessary aspect of the proceedings, that deals with a fundamental aspect of the proceedings now before this Court. As earlier remarked, estoppel arising from prior litigation precludes the raising in subsequent proceedings of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the earlier judgment.

52. Once one reaches the conclusion as to the finding of Halley J on the absence of damage arising from the impugned publication, the answer to the foregoing hypothetical gives the answer to the objection made by the defendants. The plaintiff, in his capacity as the applicant in the Federal Court Proceedings, sought from the Federal Court damages from the publication of the defamatory material. He claimed those damages in his capacity as an employee because it was said to be adverse action which was protected by the Fair Work Act. However, the damages are identical.

53. The fundamental difficulty is that the Federal Court dismissed the proceedings on liability. The reasons for judgment of Halley J made clear that the Federal Court considered there was no “adverse action” and therefore, that which under the Fair Work Act is called compensation was not available.

54. However, the Federal Court determined that it was not adverse action because no damage was caused by the publication. If damage were to have been caused, then compensation would have been available which would have been the equivalent to damages for the publication of defamatory material. Estoppel cannot depend on the result of the necessary finding. It depends upon the necessity for the finding.

55. On that basis, to seek damages for defamation is an abuse of process and the abuse of process applies to prevent the proceedings being taken against any of the defendants, even those for whom no issue estoppel or cause of action estoppel would run.

56. For these reasons, the Court makes the following orders:

57. Judgment on the motions for the defendants;

58. Proceedings dismissed;

59. The plaintiff shall pay the defendants’ costs of and incidental to the proceedings.

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Endnotes

Heal v Sydney Flames Basketball Pty Ltd [2024] FCA 401.

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 89 ALJR 750 at 756; [2015] HCA 28 at [21] (French CJ, Bell, Gageler and Keane JJ).

Tomlinson, supra, at [22]-[27].

(1939) 62 CLR 464 at 532; [1939] HCA 23.

Ibid at 532-533 (Dixon J).