Shea v TruEnergy Services Pty Ltd

Federal Court of Australia|2013-07-18|Before: Streeton J

REASONS FOR JUDGMENT 1 On 18 July 2013, I made the orders set out above for the reasons that follow. 2 The applicant, Kate Shea, was dismissed by her employer, the respondent, EnergyAustralia Services Pty Ltd, on 6 February 2012 on the ground that her position had become redundant. The applicant alleges that, to the contrary, she was dismissed because she exercised a workplace right by having made five successive complaints (or for reasons including such reason or reasons), that her dismissal was adverse action within the meaning of s 342(1) item 1(a) of the Fair Work Act 2009 (Cth) ("the Act") and that the respondent contravened s 340(1) of the Act. 3 The proceeding was commenced in April 2012 by an originating application and a statement of claim filed 4 April 2012. The respondent filed an amended defence on 12 November 2012 and an amended reply on 3 December 2012. 4 There have been a number of interlocutory applications. The trial is fixed for 26 August 2013. Outlines of evidence and expert reports have been filed. 5 By an interlocutory application filed 15 July 2013, the respondent sought orders that the applicant give further and better particulars of the loss and damage alleged under paragraph 21 of the statement of claim. 6 Further, the respondent sought orders that the applicant make discovery of all documents relating to the matters set out in document number 35 of the applicant's further list of documents dated 27 June 2013. 7 The application was supported by: (a) The affidavit of Michelle Power, a partner of the respondent's solicitors, sworn on 12 July 2013. (b) The affidavit of Michelle Power sworn on 18 July 2013. (c) Written submissions dated 18 July 2013. 8 The application was opposed. The affidavit of Katrina Raymond, the solicitor for the applicant, sworn on 17 July 2013, was filed in opposition to the application. 9 The respondent previously sought further and better particulars of the loss and damage alleged in sub-paragraphs 21(a) to (c) of the statement of claim. At a hearing on 26 June 2013, I ordered the applicant to file and serve the further and better particulars. 10 On 1 July 2013, the applicant subsequently furnished further and better particulars of sub-paragraphs 21(a), (b) and (c).

Sub-Paragraph 21(a) of the statement of claim 11 Sub-paragraph 21(a) of the statement of claim alleges "Lost opportunity to work for the Respondent up to and after November 2012 when it is anticipated the Respondent will publicly list on the Australian Stock Exchange". (In fact the respondent did not publicly list on the Australian Stock Exchange in November 2012 and has not yet done so). 12 The further and better particulars to sub-paragraph 21(a) provided on 1 July 2013 make clear that the applicant's principal claim is for reinstatement, together with lost remuneration totalling $962,230 from her termination on 6 February 2012 until reinstatement on a notional date of 7 September 2013. 13 The further and better particulars provide calculations in the following categories: (a) Unpaid bonuses of different types prior to termination. (b) Remuneration for 6 February 2012 to 31 March 2012. (c) Remuneration for 1 April to 31 July 2012. (d) Remuneration for period 1 August to 31 December 2012. (e) Remuneration for period 1 January 2013 to 31 March 2013. (f) Remuneration for period 1 April 2013 to 6 September 2013. 14 The further and better particulars also provide a means of calculating ongoing loss from 7 September 2013 until the date of reinstatement or until the applicant obtains suitable alternative employment. 15 Ms Raymond's letter to Ms Power dated 15 July 2013 confirmed that the applicant had not yet obtained comparable alternative employment, but that she intended to work until she attained the age of 65, was actively seeking further employment and hoped to obtain it in the short to medium term. 16 The respondent complained that although the applicant had provided a total yearly amount for her claim in relation to future remuneration should she not be reinstated on 7 September 2013, neither a total amount nor a period of future unemployment were stated. Accordingly, although the annual amounts were provided, they did not enable the respondent to calculate the quantum of the maximum claim under the relevant head. 17 The respondent submitted that it was entitled to know whether the applicant was alleging that Ms Shea is unemployable for life due to the adverse action (if established) and if so, the quantum claimed, which could represent a lump sum of up to about $25 million. 18 While the applicant submitted that the annual amounts of approximately $750,000 (rising to $1.4 million on the respondent's listing on the Australian Stock Exchange) would permit the calculation of a maximum sum based on the number of years between the applicant's present age and her intended retirement age of 65, the applicant does not allege that she is permanently unemployable but according to her solicitor's correspondence hopes to obtain alternative employment should she not be reinstated. 19 The applicant submitted that where sufficient integers to calculate the maximum possible quantum of the claim were provided, the particulars supported the allegation and were adequate in the context of a pleadings dispute. Therefore, it was unnecessary to provide further details, precision or clarity prior to trial. 20 In my opinion, however, the respondent was entitled, particularly given the late stage of the proceeding, to know the approximate total quantum claimed under the relevant head. 21 It did not suffice to provide a formula with potential application for a period ranging from a minimum of less than a year up to a maximum of about 17 years, with no indication of the likely term. As the respondent submitted, the resultant uncertainty precluded the effective negotiation for settlement. 22 As the applicant conceded, final orders could hardly be fashioned on the basis of a formula to be applied on a continuing basis until the applicant obtained alternative employment or attained the age of 65. 23 Clearly, the applicant would be required to indicate the quantum of the claim at the time of the fast approaching trial, which was fixed to commence in just over one month's time. It was accordingly reasonable to require the applicant to notify the respondent prior to trial of the case it must meet as a matter of substance, including the relevant quantum. 24 Moreover, the narrow and unduly technical approach which would permit an applicant to keep a respondent guessing until the commencement of trial as to the likely quantum of a claim it would face (albeit the ceiling could be calculated) would, in my view, defeat even the traditional fundamental function of pleadings, which is to notify opponents of the case they must meet: McKellar v Container Terminal Management Services Ltd (1991) 165 ALR 409; McIntyre v Southern Cross Equities' Ltd [2011] FCA 455. 25 That conclusion applies with greater force in the context of modern litigation and its recognised ideals. 26 In Croft v Evertop Investments Pty Ltd (No 2) [2011] FCA 749 ("Croft v Evertop"), McKerracher J considered O 12 r 5(1) of the now repealed Federal Court Rules 1979 (Cth), which stated: (1) the Court may order a party to file and serve on any other party: … (c) where he claims damages, particulars relating to general or other damages. 27 His Honour noted that while it would not be usual to order the provision of particulars for general damages, it may be difficult, as recognised in numerous authorities, clearly to delineate between special and general damages. Further, a wide variety of meanings attached to the former. 28 McKerracher J reiterated (at [20]) French J's apparent approval in Westside Typographics Pty Ltd v Flexi-Products International Pty Ltd & Anor [1988] FCA 543 of the statement in Perestrello E Companhia Limitada v United Paint Co Ltd (1969) 1 WLR 570 that: There is plenty of authority for the proposition that a plaintiff need not plead general damage; but since the expressions "special damage" and "special damages" are used in such a wide variety of meanings, it is safer to approach this question by considering what a plaintiff is required to plead rather than what he is not. … [I]f a plaintiff has suffered damage of a kind which is not the necessary and immediate consequence of the wrongful act, he must warn the defendant in the pleadings that the compensation claimed will extend to this damage, thus showing the defendant the case he has to meet and assisting him in computing a payment into court. The limits of this requirement are not dictated by any preconceived notions of what is general or special damage but by the circumstances of the particular case. "The question to be decided does not depend on words, but is one of substance" (per Bowen L.J. in Ratcliffe v Evans (1892) 2 QB 524, 529). The same principle gives rise to a plaintiff's undoubted obligation to plead and particularise any item of damage which represents out-of-pocket expenses, or loss of earnings incurred prior to trial, and which is capable of substantially exact calculation. Such damage is commonly referred to as special damage or special damages but is no more than an example of damage which is "special" in the sense that fairness to the defendant requires that it be pleaded. The obligation to particularise in this latter case arises not because the nature of the loss is necessary [sic] unusual, but because a plaintiff who has the advantage of being able to base his claim upon a precise calculation must give the defendant access to the facts which make such calculations possible. (emphasis added) 29 McKerracher J observed (at [21]): Therefore, it follows that there is no hard and fast rule as to the nature or extent, if any, of particularisation of damage that may be required. Rather it is largely an assessment of whether the defending party has an adequate opportunity to appreciate the nature and extent of financial exposure embraced by an applicant's case. 30 In Croft v Evertop, his Honour considered that to the extent to which heads of damage were quantifiable and capable of calculation on their face, there was no reason why at that stage of the proceeding the respondent should not be informed of the specific loss, whether by relevant expert reports or further and better particulars, because while the claim remained at large, realistic negotiation and answering evidence would be difficult and the respondent left to guess the methodology by which the applicant would calculate the losses. 31 In my opinion, McKerracher J's approach in Croft v Evertop gives effect to the principles of modern litigation and its recognised ideals, reflected in the current relevant Federal Court rule (which post-dates Croft v Evertop). Order 16 r 45(1)(c) of the Federal Court Rules 2011 (Cth) provides: If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of the party's case, the party may apply to the Court for an order that the party who filed the pleading serve on the party: … (c) if there is a claim for damages - particulars of the damages claimed. 32 Further and better particulars are required in this case to quantify the head of damage in sub-paragraph 21(a). Although the methodology for calculating a yearly amount is disclosed, the respondent can have no idea of the quantum of the claim without some indication of the term of years to which it is applicable and could be prejudiced in the conduct of its case.

sub-paragraph 21(b) of statement of claim 33 Sub-paragraph 21(b) of the statement of claim states: By reason of the matters alleged in paragraph 19 herein the Applicant has suffered loss and damage PARTICULARS (b) Lost remuneration and benefits, including shares/options, which would otherwise have been received, or were likely to be received, if her employment had continued until or after the public listing referred to in paragraph 21; 34 The further and better particulars provided for sub-paragraph 21(b) on 1 July 2013 indicate that the rate of lost remuneration claimed by the applicant will increase upon the respondent's public listing on the Australian Stock Exchange, which has not yet occurred but is intended to take place not later than February 2015. Following the listing, the applicant's remuneration will then be claimed at the rate of $1,386,000 per annum, plus CPI increases and a retention bonus of $308,000 for the first year. The calculation was based on an expert report (the Oppeus Report dated 28 May 2013) filed by the applicant. 35 The respondent submitted that the further and better particulars under sub-paragraph 21(b) were inadequate on the same basis as those under sub-paragraph 21(a). While a formula for annual remuneration was provided, there was no indication of the likely term, which would permit the quantum of the claim to be assessed. For the same reasons given in relation to sub-paragraph 21(a) above, I considered that further and better particulars to sub-paragraph 21(b) should be provided.

sub-Paragraph 21(c) of the statement of claim 36 Sub-paragraph 21 (c) of the statement of claim provides: By reason of the matters alleged in paragraph 19 herein the Applicant has suffered loss and damage PARTICULARS (c) Damage to reputation and career prospectus; and … 37 The further and better particulars provided on 1 July 2013 state that the applicant's principal claim is for reinstatement, and if reinstated and compensated as claimed, she makes no claim for further compensation for special damage to her reputation and career prospects. 38 The further and better particulars allege that the applicant enjoyed a high profile, was well known in the business sector prior to the termination and that her summary dismissal on the purported ground of redundancy was widely publicised and damaged her reputation, attaching stigma and obloquy. They state that this aspect of the claim sounds in general damages which are at large, and will be assessed under s 545(2)(b) of the Act. 39 The respondent complained that the further and better particulars to sub-paragraph 21(c) of the statement of claim given on 1 July 2013 did not advance the matter beyond the submissions made at the hearing on 26 June 2013. 40 At that hearing, counsel for the respondent stated that the respondent needed to know the nature and extent of the damage claimed under sub-paragraph 21(c) and in particular, whether it was wholly subsumed under, or was additional to, sub-paragraphs 21(a) and (b). 41 Senior counsel for the applicant submitted, in reliance on London & Northern Bank Ltd v George Newnes Ltd (1900) 16 TLR 433, that as sub-paragraphs 21(c) and (d) claimed merely general damages, they were a matter for assessment by the court and there was no need to provide particulars. 42 I was not, however, satisfied that sub-paragraph 21(c) claimed general damages or that damage to reputation and career prospects would be presumed to flow from being dismissed for having made a complaint. I expressed concern that the respondent may be taken by surprise should the applicant attempt to lead evidence at trial that her reputation and career prospects had suffered. Accordingly, on 26 June 2013, I ordered that further and better particulars be provided. 43 Counsel for the applicant submitted that the further and better particulars now given for sub-paragraph 21(c) were adequate, as they made clear that no claim under that head would be made if the applicant were reinstated and awarded the lost remuneration she claimed, which would comprehensively address her claim for future income. 44 Although counsel for the applicant submitted that damage to reputation was not capable of pecuniary qualification, sub-paragraph 21(c) was potentially relevant to the loss claimed under sub-paragraphs 21(a) and (b) in so far as it suggested that the alleged injury to the applicant's reputation and career could cause or aggravate the difficulty she had experienced or would experience in obtaining comparable employment. 45 It also remained unclear whether sub-paragraph 21(c) was intended merely to allege that as a matter of law damage to reputation and career prospects were presumed to flow from the relevant contraventions, if established, and as indicated at the previous hearing, the applicant would not lead evidence of damage to reputation and career prospects but would merely advance legal argument that loss of the relevant kind flowed from the contravention. 46 In my opinion, uncertainty still attended sub-paragraph 21(c) which could also be affected by the further particularisation ordered under sub-paragraphs 21(a) and (b). It was necessary that the position be clarified prior to trial. Further, consistently with McKerracher J's observations in Croft v Evertop, I was not persuaded that the nature of the damages claimed under sub-paragraph 21(c) were such that they need not be particularised. I considered that if sub-paragraph 21(c) otherwise remained in its current form, a figure should be given.

Application for further discovery 47 The respondent's application for further discovery was adjourned sine die.

Costs 48 The respondent sought the costs of the application for further and better particulars but I was not satisfied that the applicant had engaged in an unreasonable act or omission causing the respondent to incur the costs within the meaning of s 570(2)(b) of the Act. Accordingly, there was no order as to the costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.

Federal Court Rules 1979(Cth)

Fair Work Act 2009(Cth)ss 340(1), 342(1)

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