Notaras v Knight [2008] NSWIRComm 219 (25 November 2008)

Last Updated: 16 January 2009

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Notaras v Knight [2008] NSWIRComm 219



FILE NUMBER(S):
IRC 850

HEARING DATE(S):
10 November 2008

DATE OF JUDGMENT:
25 November 2008

PARTIES:
APPELLANT
Irene Notaras
RESPONDENT
Stephanie Knight

CORAM:
Marks J Schmidt J Kavanagh J


CATCHWORDS: Appeal - Anshun principle - Appeal against interlocutory decision of Chief Industrial Magistrate refusing to strike out second claim for underpayment of award wages - first claim for underpayment of wages under an award - settled - second claim for underpayment of wages over different time frame - appellant sought to have second claim struck out as an abuse of process and application of Anshun estoppel principle - HELD - proceedings brought in tranches to enable them to be dealt with as small claims - strategy designed to avoid policy of legislation - no right to ‘elect’ to proceed by way of small claim - respondent entitled to be heard as to how matter should proceed - industrial court must ‘decide’ to deal with proceedings as a small claim - necessary to consider all circumstances of proceedings when applying Anshun principle - leave to appeal granted - both sets of proceedings cover issues that are part of the same subject matter of the litigation - splitting the claim to allow it to be litigated using the small claims procedure amounts to abuse of process - appellant agreed to compromise first claim knowing that respondent intended pursuing further proceedings - appellant made no suggestion that compromising the first claim would be raised as a bar to institution of second proceedings - unable to characterise second claim as abuse of process - appeal dismissed

LEGAL REPRESENTATIVES
APPELLANT
Mr D Knaggs (Solicitor)
RESPONDENT
Ms K Nomchong of counsel

CASES CITED:
Amalgamated Investment and Property Co Ltd (in Liq) v Texas Commerce International Bank Ltd [1981] 3 All ER 577
Austin v NF Importers Pty Ltd & Anor [2005] NSWIRComm 136; (2005) 146 IR 113
Azar v James Ritchie & Anor (2006) 156 IR 427
Barrow v Bankside Members Agency Ltd [1996] 1 All ER 981
Bill Gibbs and McAllion Lloyd Pty Ltd v Kinna [1998] VSCA 52
Box Valley Pty Ltd v Price [2000] NSWIRComm 117; (2000) 97 IR 484
Davis v Kyogle Council [2008] NSWIRComm 68
Dr Bilal Trading As The Hornsby Medical Centre v Jenni Marshall [2006] NSWIRComm 360
Green v Brown [2002] NSWIRComm 177
Henderson v Henderson (1843) 67 ER 319
Johnson v Gore Wood and Co (a firm) [2002] 2 AC 1
Port of Melbourne Authority v Anshun Pty Ltd (1980 - [1981] HCA 45; 1981) 147 CLR 589
Triantafillivs v National Australia Bank Ltd [1995] V.Conv.R [54]
Tu v Utting [2006] NSWIRComm 330

LEGISLATION CITED:
Industrial Relations Act 1996 s123, s188, s197, s379


TEXTS CITED:




JUDGMENT:

INDUSTRIAL COURT OF NEW SOUTH WALES

FULL BENCH

CORAM: Marks J
Schmidt J
Kavanagh J

Tuesday 25 November 2008

Matter No IRC 850 of 2008

Irene Notaras v Stephanie Knight

Application by Irene Notaras for leave to appeal and appeal against an interlocutory decision of Chief Industrial Magistrate Hart given on 26 May 2008 in matter No. CIM88537 of 2008

JUDGMENT

[2008] NSWIRComm 219

1 The respondent to this appeal, Stephanie Knight, commenced proceedings in the Chief Industrial Magistrate’s Court against her former employer, Irene Notaras, who is the appellant. Those proceedings were commenced on 10 May 2007 and we shall hereafter refer to them as “the first claim”. The claim was for underpayment of wages under an award arising out of her employment by the appellant and was for a limited period. That claim was settled. On 8 February 2008, the respondent commenced fresh proceedings in the Chief Industrial Magistrate’s Court against the appellant claiming underpayment of award wages and other entitlements arising out of her employment. We shall refer to this as “the second claim”.

2 The appellant sought by motion, filed in the Chief Industrial Magistrate’s Court, to have the second claim struck out alleging, in essence, that it was an abuse of process and that by application of the Anshun estoppel principles, it should be dismissed. The Chief Industrial Magistrate dismissed the motion and the second claim proceedings have been set down for hearing before his Honour on 8, 9 and 10 December 2008. The appellant has sought leave to appeal and to appeal from this decision of the Chief Industrial Magistrate. It is those matters that are the subject of the proceedings in this Court and which are the subject of this judgment.

The factual background

3 The first claim was commenced by an application filed in the Chief Industrial Magistrate’s Court on 10 May 2007. The applicant in the proceedings before the Chief Industrial Magistrate is the respondent in these appeal proceedings. The application was filed on her behalf by the Media Entertainment and Arts Alliance (“MEAA”), an industrial organisation of employees. The application claimed payment of $8,405.75 said to be “wages + interest.” The particulars of the claim were: “Incorrect classification of CW1 in the course of employment despite performing duties of CW3 under the Entertainment And Broadcasting Industry – Cinema (State) Award.”

4 The application also contained the following:

“The applicant elects to have this application dealt with as:

· A small claims application under s 379 of the Industrial Relations Act (NSW)...
· An application for enforcement of a penalty provision in relation to s 123 of the Act.”

5 S 379 of the Act is in the following terms:

379 Small claims procedure

(1) A person who makes an application to an industrial court for an order under this Part may request that the application be dealt with under this section.

(2) An application that the industrial court decides to deal with under this section is called a "small claims application".

(3) The maximum amount that the industrial court may order an employer to pay on a small claims application in respect of any one employee is:

(a) except as provided by paragraph (b)-$10,000, or

(b) if some other amount is prescribed by the regulations for the purposes of this section-that other amount.

(4) The industrial court is not bound by the rules of evidence when dealing with a small claims application, but may inform itself of any matter in such manner as the court thinks fit.

(5) A party to proceedings on a small claims application may be represented by an agent, but is not entitled to be represented by an agent who is an Australian legal practitioner unless the industrial court so approves. That approval is not to be given unless:

(a) all parties to the proceedings agree, and

(b) the industrial court is satisfied that the parties (other than the party who applies for approval) or any of them will not be disadvantaged.

(6) The approval of the industrial court to be represented by an Australian legal practitioner is not required if the practitioner:

(a) represents a corporation and is an officer of the corporation within the meaning of the Corporations Act 2001 of the Commonwealth, or

(b) represents an owners corporation constituted under the Strata Schemes Management Act 1996 and is one of the proprietors or lessees constituting the owners corporation, or

(c) represents a member of an industrial organisation and is an officer or employee of the organisation, or

(d) represents a member of a State peak council and is an officer or employee of that council.

(7) The approval of the industrial court to be represented by an Australian legal practitioner may be given subject to such conditions as the court considers reasonable to ensure that any other party to the proceedings is not disadvantaged by the practitioner appearing in the proceedings.

(8) A contravention of subsections (5)-(7) does not invalidate the proceedings or any order made in those proceedings.

6 S 123 of the Act is in the following terms:

123 Particulars of remuneration to be supplied to employees

(1) An employer must, when paying remuneration to an employee, supply the employee with such written particulars regarding the payment as are prescribed by the regulations.

Maximum penalty: 20 penalty units.

(2) The employer may, instead of supplying those written particulars, make other arrangements approved by the Industrial Registrar for supplying information about remuneration to all or any of the employees of the employer. Any such approval:

(a) must be granted to the employer in writing, and

(b) must not be granted unless the Industrial Registrar is satisfied that the arrangements are in the interests of the employees concerned and meet their reasonable requirements for information about remuneration, and

(c) may be revoked or varied by the Industrial Registrar by notice in writing to the employer.

7 We should add for completeness that the amount fixed in s 379(3) is now, by regulation, $20,000.

8 A number of observations may be made about the effect of the provisions of s 379:

1. The small claims procedure referred to in s 379 requires an application to be made to an industrial court that the provisions of the section apply to the proceedings.

2. Furthermore, s 379(2) requires the industrial court to “decide” to deal with the proceedings as a small claim.

3. If the industrial court decides to deal with the proceedings under s 379, it is not bound by the rules of evidence. However, the court “may inform itself of any matter in such manner as the court thinks fit.” It is arguable in these circumstances that the court is expected to operate in an inquisitorial fashion and in doing so is obliged to ensure that it is informed of matters which are relevant to the proceedings and in such a manner as allows it to be satisfied that it is safe to rely on the material to be considered in the determination of the proceedings.

4. Although, prima facie, an Australian legal practitioner is disentitled from representing a party to the proceedings, there is a qualification that allows the court to give approval if all parties to the proceedings agree and the court is satisfied that there will be no disadvantage to parties not seeking representation by an Australian legal practitioner.

5. There is no provision that would permit any application brought under s 123 of the Act to be dealt with as a small claim, as provided for in s 379.

9 Notwithstanding the provisions of s 379, which require an application to be made to an industrial court and for the court to decide to deal with the proceedings as a small claim, the application brought by the respondent in the first proceedings specified that the applicant “elected” to have the application dealt with as a small claim. In doing so, the applicant utilised the provisions of the Application form from the Chief Industrial Magistrate’s Court’s website. In providing for an “election” for an application to be decided as a small claim, that form is incorrect and misleading.

10 Annexures to the first application filed by the respondent set out calculations of monies allegedly underpaid because of an incorrect classification under the Award of the CW1 rate as opposed to the CW3 rate allegedly payable during the year 2001. The amount claimed for the underpayment of wages was $5,357.76 together with interest of $3,047 making a total of $8,405.75.

11 On 9 August 2007, there was filed by the National Claims Officer of the Media Entertainment and Arts Alliance, a number of documents including a witness statement of the respondent. The witness statement made it clear that the respondent claimed to have been employed by the appellant at a cinema in the Grafton region between September 1995 and November 2005. The claim for underpayment of wages commenced in 2001 because a claim for any earlier period was statute barred. The statement further said “I will be instructing the MEAA to pursue a further application of underpayment of wages from 1st January 2002 to 6th December 2005 and also long service leave entitlements, as these matters also remain unresolved.”

12 It was common ground that the first claim was brought to enable those proceedings to be dealt with as a small claim and that it was anticipated that further proceedings would be commenced at a later date also, presumably, in tranches to enable each of them to be dealt with as a small claim.

13 The first claim came on for hearing before Chief Industrial Magistrate Hart on 28 August 2007. Transcript reveals Ms Clarke of the MEAA appeared for the respondent in the proceedings. The appellant appeared “in person with Mr Knaggs.” The transcript reveals the appellant was present and that she was accompanied for at least part of the proceedings by Mr Douglas Knaggs, a solicitor. The appellant, who is severely hearing impaired, asked for a facility which would assist her in hearing the proceedings. The Chief Industrial Magistrate observed that it had not as yet been organised, acknowledging that she had requested that facility on the previous day. The appellant also said “And also, can I ask also, the claim is for something like $40,000, and they’re dividing that up into five claims. Can’t we hear the whole lot and get it out the way?” There is no indication that Mr Knaggs was present at that stage, nor shortly thereafter, when the following exchange occurred between the appellant and his Honour:

RESPONDENT: Your Honour could I have representation, because of my hearing difficulties?

HIS HONOUR: No the matter is before me as a small claim

RESPONDENT: And the fact that it is a big claim?

HIS HONOUR: Well, we haven't got to that yet, I'm just dealing with one matter at the moment, thank you, I'll just hear from Ms Clarke please? Ms Clarke?

14 We observe that his Honour concluded that the matter was before him “as a small claim”. Even at that stage, if one could have construed the “election” contained within the application form filed with the court as being an application brought under s 379 for the hearing of the proceedings as a small claim, his Honour appears to have decided the matter without considering the circumstances of the appellant, nor any of the circumstances pertaining to the proceedings generally, including the fact that the respondent was seeking to split the totality of her claim for the purpose of having the small claims procedure applied to each of the tranches, thereby frustrating the intention of the section.

15 The “matter” referred to by his Honour was a reference to a motion that the respondent had filed, seeking to amend the amount of the claim. Having dealt with that issue, his Honour stood the matter down, so that consideration could be given to the amendment and for discussions between the parties to proceed. There is no question that Mr Knaggs was then present, advising the appellant in relation to the course which the proceedings then took.

16 The parties later reported that their discussions were progressing and his Honour observed:

HIS HONOUR: And in relation to the particular area that's been talked about here, it's clear that an employee might have a number of claims against an employer and if they were all added together, there may be a sum of money that's claimed to be owing which is in excess of the twenty thousand dollar limit, which is the specific amount that defines the small claims procedure. It is my personal view that where there is a dispute between an employee and an employer, or a former employee of an employer its desirable for all of the matters to be dealt with together in one proceeding. Otherwise there is a most inefficient use of the court's time, dealing with matters that are obviously linked and related in a piecemeal fashion, rather than in one hit.

I think the parliament thought that there would be some matters that would be small in terms of the monetary amount claimed that an applicant might be reluctant to pursue if they thought that they would have to incur legal costs or face the risk of having to pay the other side's legal costs if they're unsuccessful. The parliament didn't want people to be deterred from pursing their entitlements, even if the amount was relatively small, and hat's the purpose of the small claims procedure. It's not there for a fifty thousand dollar purpose of it and if there is a use of it in that way, it's my personal view that it's an inappropriate use of the small claims procedure and it's the sort of approach that might cause the parliament to revisit the small claims procedure and form the view that it's being abused in some way and should be changed. That's my personal view.

Now it seemed to be a matter of some concern this morning to Ms Notaras, and I don't' know whether there are other matters that have already been lodged and are in --

CLARKE: In fact, I'll just run through a bit of a time line with your Honour. We've actually been trying to settle the matter. It's an outstanding claim for forty two thousand. It is a wage claim from 2000, due to the Statute of Limitations, 2001, 2002, 3, 4, and 5 --

HIS HONOUR: Yes

CLARKE: -- and also a long service leave claim, Ms Knight did not receive long service leave on termination regardless of being there for over ten years on continuous service. We have attempted many occasions to negotiate and to settle the matters. There's been a lot of correspondence between the parties and, if you would like, I could hand them up to yourself?

HIS HONOUR: No, no, I don't need to see any of the material.

CLARKE: this is our last resort. I don't want to burden the court with continual matters such s this. As I said, we didn't get anywhere at all. There is still an outstanding claim for wages for 2002, 3, 4, and 5, which equals about two twenty seven thousand.

HIS HONOUR: Yes.

CLARKE: If you would direct me to file all of those together, than I certainly would. There is a long service leave -

HIS HONOUR: I would suggest that its the appropriate course.

CLARKE: Okay.

HIS HONOUR: Rather than directing you to, and, if there's also a long service leave issue, I think that should be part of the same claim, and , when it's all dealt with in that form, it gives the respondent the chance to come before the court with legal representation to defend a substantial matter, and, when the matter is substantial, it seems to me fair that they have the opportunity to have legal representation, and it also means than the applicant has to be sure that she is bringing a matter that is properly conceived before the court, because there is the risk of costs being awarded against her if she's unsuccessful, and that's as it should be. It shouldn't' be the case that an applicant is freed from that burden in such matters.

So that would be my suggestion. And, of course, if the parties can't reach agreement in relation to the claim, it would then be dealt with by the court in the general jurisdiction of the Chief Industrial Magistrate's court, that is, with legal representation and all the usual rules that apply, rather than in the small claims area. That would be my suggestion. But, in relation to today's matter, its' clear that the parties have had a breakthrough in that there has been the capacity to reach agreement on this particular matter, and that's a good sign, because that breakthrough might mean that other matters can be resolved as well, if you build on the degree of cooperation that you've established today.

So what I'll do, I'll note that the matter before the court today has been settled and I note that there are some further steps that will need to be taken to formally resolve the matter, including the payment of some moneys. But, when that's been attended to, the parties can simply file in the registry a notice of discontinuance, which will need to be executed by both sides. The court does not need to be told the details of any settlement, it's a matter for the parties whether you wish consent order to be made or to be recorded. But if it's a case of the parties having reached an agreement which you're both content with, then all the court will require in due course is the lodgement of a notice of discontinuance.

KNAGGS: Your Honour, I jotted down some order that we'd ask the court in line with what you just said.

HIS HONOUR: Yes?

KNAGGS: to make now, unless Ms Notaras comes up to the door in the next 15 seconds, but we would ask that the orders, if this suits my friend and your Honour, to be these, by consent (1) the proceedings are discontinued upon compliance by the respondent/defendant, Ms Notaras, of terms of, terms which are not disclosed, but which are agreed between the parties, (2) no order as to costs, (3) both parties agree to sign a formal notice of discontinuance by the applicant.

HIS HONOUR: Well I can certainly, it's not an order, but the court can certainly indicate that the proceedings will be discontinued upon the lodgement of an executed notice of discontinuance, and I note that the parties intend to do that. As I've indicated, the terms of settlement are not disclosed and certainly the court does not require them to be disclosed, and, in relation to costs, well, of course, the small claims procedure is a no-cost jurisdiction in any event, so I can certainly make it clear that there will be no order as to costs in relation to this matter.

KNAGGS; Yes your Honour.

HIS HONOUR: Anything further?

KNAGGS: No your Honour.

HIS HONOUR: Ms Clarke?

CLARKE: No, thank you your Honour.

tp6-8

17 The second claim brought by the respondent was commenced by the filing of an application for the recovery of money in the Chief Industrial Magistrate’s Court on 8 February 2008. It again relied upon an incorrect classification under the Award and claimed a total of $28,049.97 for monies allegedly underpaid during the years 2002 to 2005 inclusive. There was also a claim for payment of unused long service leave and further claims for underpayment of wages based on breaches of provisions of the Award requiring a minimum 3 hour call, and the payment of overtime in certain circumstances. The total of all of the amounts claimed was $37,835.67.

18 On 26 May 2008, the appellant filed a motion in the second claim proceedings seeking that they be dismissed on the basis that they constituted an abuse of process and relying also on Anshun estoppel. The notice of motion came on for hearing on 26 May 2008 and the Chief Industrial Magistrate dismissed it at the conclusion of the hearing that day giving short reasons in an ex-tempore judgment.

19 The gravamen of the appellant’s motion was that the respondent should have included all of the claims that she wished to bring against the appellant arising out of her employment with the appellant in the one set of proceedings and that it would constitute an abuse of the processes of the court to allow her to proceed with the second claim, particularly after the appellant had settled the first set of proceedings.

The decision

20 In his reasons for judgment, the Chief Industrial Magistrate noted that at the time that she settled the first proceedings, the appellant was on notice that the respondent intended to pursue further claims in relation to the later years. In dealing with a complaint by the appellant that the second proceedings constituted an abuse of process in that, together with the first proceedings, they represented a strategy designed to take advantage of the small claims procedure for the totality of a claim which exceeded the limit that applied to small claims procedures, his Honour denied that this would constitute an abuse of process, although he acknowledged that it was not an appropriate way for the respondent to have proceeded.

21 In rejecting the Anshun estoppel point, his Honour characterised the first proceedings as being confined to a claim for underpayment of wages during 2001 and concluded that the second proceedings could be characterised as a different claim, namely for underpayment of wages for later years. It is from this judgment that the appeal is brought to this Court.

The Anshun principle

22 This principle derives its name from the judgment of the High Court of Australia in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1980-1981) 147 CLR 589. Those proceedings followed a claim for personal injuries brought by a plaintiff who had suffered an injury arising out of the use of a crane. He sued both the hirer of the crane and the owner of the crane and was successful in obtaining an award of damages against both defendants, both making a contribution to the payment of the damages and costs. Later, the owner of the crane sought a total indemnity for all amounts paid by it from the hirer under the provisions of the hiring agreement. The High Court held that the owner should not be permitted to sue on the indemnity clause in the hiring agreement because, essentially, the claim for the indemnity could have been raised by the owner in the original proceedings.

“It was so closely connected with the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery by the Authority from Anshun. The third party procedures were introduced to enable this to be done. If successful, the indemnity case would have obviated an enquiry into contribution. If reserved for assertion in a later action, it would increase costs and give rise to a conflicting judgment.” (Per Gibbs CJ, Mason and Aickin JJ at 604).

23 The joint judgment of Gibbs CJ, Mason and Aickin JJ was based, essentially, on a principle established in England in 1843. Their Honours said:

“The critical issue, then, is whether the case falls within the extended principle expressed by Sir James Wigram V.C. in Henderson v. Henderson (1843) 3 Hare, at p 115 (67 ER, at p 319). The Vice-Chancellor expressed the principle in these terms:

‘where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, 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.’ (At p598)”

24 The joint judgment contains a detailed discussion of the basis for the development of the principle and the circumstances in which it might be applied. The joint judgment recognises that there may be circumstances in which it is appropriate to refrain from raising a particular issue or matter in proceedings and a party may be permitted to institute separate proceedings with respect to that particular issue or matter without offending the principle. Indeed, there continues to be debate about the nature and extent of the Anshun principle in particular circumstances. We instance the discussion in the Supreme Court of Victoria Court of Appeal in Triantafillivs v National Australia Bank Ltd [1995] V.Conv.R [54] – 536 and Bill Gibbs and McAllion Lloyd Pty Ltd v Kinna [1998] VSCA 52. We refer also to the extensive consideration of the Anshun doctrine by a Full Bench of this Court in Green v Brown [2002] NSWIRComm 177 (Wright J President, Walton J Vice-President and Boland J) especially at [40] and following.

25 Because of the conclusion that we have reached regarding the application of the Anshun principle to these proceedings, it is not necessary to consider the nature and extent of the principle and the qualifications which have been suggested to its application further, save for a reference to the judgment of the House of Lords in Johnson v Gore Wood and Co (a firm) [2002] 2 AC 1

26 In those proceedings, the appellant had carried on a property development business using a company structure. The company encountered financial difficulties as a result, allegedly, of the conduct of its solicitors. It brought proceedings claiming damages for professional negligence against those solicitors. The solicitors were aware that at all times the appellant intended to bring a claim for professional negligence against them in his own right. The company settled the proceedings and as part of the settlement negotiations the appellant undertook that in any claim which he brought personally against the solicitors he would limit the amount of certain aspects of the claim. He subsequently commenced those proceedings and the solicitors applied to have the proceedings stayed as constituting an abuse of process. The matter was considered on appeal by the House of Lords.

27 The proceedings were based upon the principles established in Henderson v Henderson, the same principles which were at the heart of the reasons for the joint judgment in Anshun. The principal speech in the House of Lords concerning this aspect of the proceedings was that of Lord Bingham of Cornhill (Lords Goff, Cooke and Hutton agreeing with his Lordship’s reasoning. Lord Millett delivered separate reasons.) Lord Bingham cited with approval the judgment of the Court of Appeal in Barrow v Bankside Members Agency Ltd [1996] 1 All ER 981 in which it was said:

“The rule in Henderson v Henderson...is very well known. It requires the parties, when a matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the court so that all aspects of it may be finally decided (subject, of course, to any appeal) once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion, but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on forever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed.” ((1996) 1 All ER 981 at 983)

28 However, Lord Bingham counselled that care needs to taken in applying the principle. It is necessary to consider all of the circumstances of the proceedings including the circumstances of the litigants. At 30 – 1 his Lordship said:

“It may very well be, as has been convincingly argued (Watt, "The Danger and Deceit of the Rule in Henderson v. Henderson: A new approach to successive civil actions arising from the same factual matter," 19 Civil Justice Quarterly, (July 2000), page 287), that what is now taken to be the rule in Henderson v. Henderson, has diverged from the ruling which Wigram V.-C. made, which was addressed to res judicata. But Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.”

29 It will be remembered that in Johnson the initial claim brought by the company against the solicitors had been settled by way of a compromise. It had been argued before the House of Lords that the rule in Henderson v Henderson did not apply because of the compromise result in the initial proceedings. Lord Bingham rejected this argument. His Lordship said:

“An important purpose of the rule is to protect a defendant against the harassment necessarily involved in repeated actions concerning the same subject matter. A second action is not the less harassing because the defendant has been driven or thought it prudent to settle the first; often, indeed, that outcome would make a second action the more harassing.” (At 32).

In the course of his submissions in these proceedings, Mr Knaggs, who appeared for the appellant, relied heavily on this observation. It was his contention that the appellant, as defendant, having compromised the first proceedings should not be put to the harassment involved in the second proceedings.

30 However, to accept the observations of Lord Bingham as creating some universal or blanket principle to be applied is, in our opinion, misleading. That is because his Lordship and the House of Lords held that in the circumstances of Johnson v Gore Wood, the Henderson v Henderson principle should not be applied so as to constitute the second proceedings as an abuse of process even allowing for the fact that the first proceedings had been compromised. This was because, in his Lordship’s opinion, the firm of solicitors in compromising the claim brought by the company in effect agreed that the further proceedings brought by the individual personally would not constitute an abuse of process because there was an assumption that such proceedings would be brought. Accordingly, it would be “unfair or unjust” to allow the solicitors to go back on that assumption.

31 In so concluding, his Lordship relied upon a statement of Lord Denning MR in Amalgamated Investment and Property Co Ltd (in Liq) v Texas Commerce International Bank Ltd [1981] 3 All ER 577 at 584 where his Lordship said:

“The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by representation of fact, estoppel by acquiescence, and promissory estoppel. At the same time it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption - either of fact or of law - whether due to misrepresentation or mistake makes no difference - on which they have conducted the dealings between them - neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.”

32 Accordingly, as has already been observed, the totality of the circumstances of the proceedings needs to be considered in determining whether or not the Anshun principle is to operate.

Leave to appeal

33 There is no automatic right of appeal. The appeal is brought pursuant to s 197 of the Industrial Relations Act 1996 by virtue of s 188. Relevantly, s 188(1) and (2) states:

188 Appeals to Full Bench by leave only

(1) An appeal to a Full Bench of the Commission under this Part may be made only with the leave of the Full Bench.

(2) The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted.

34 In Tu v Utting [2006] NSWIRComm 330, Wright J, former President, summarised the Full Bench powers to consider appeals and leave applications and relevantly stated at [13]:

The appeal is brought pursuant to s 197 of the Industrial Relations Act 1996 but by virtue of s 188 appeals under the relevant Part of the statute (Part 7 of Chapter 4, which includes s 197) may be made only by leave and the grant of leave is a serious matter; certainly, leave will not be granted automatically or lightly and the prospects of the appellant obtaining leave to appeal is a significant consideration in matters such as the present: see, for example, Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380, Perrott v Xcellenet Australia Limited and Others (1998) 84 IR 255 and Cavacuiti and Another v Toyota Motor Corporation Australia Ltd (2002) 122 IR 247 at 269.... The question then whether the application by the appellant is granted becomes one where the Court must be satisfied whether, having regard to the relevant elements of the statutory scheme, it is necessary to grant the appellant's application to do justice between the parties and to ensure the proper administration of justice: Van Rooy Machinery Pty Limited v WorkCover Authority of New South Wales (Inspector Wolf) (2000) 97 IR 436 at [33]; Tadic v Beslic [2001] NSWIRComm 107 at [22].

35 In Azar v James Ritchie & Anor (2006) 156 IR 427,the Full Bench, as to leave, stated at [15] and [16]:

It is well settled that leave to appeal will never be lightly granted and not when the issues in the appeal have already been the subject of authoritative pronouncement, or when the issues raised on appeal were not argued at first instance. An appeal bench is ultimately concerned with correction of error. (See Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 381; Perrott v XcelleNet Australia Ltd (1998) 84 IR 255 at 265; De Simone Consulting Pty Ltd v Ison (2000) 97 IR 478 at 482; Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264; Ace Business Brokers Pty Ltd v Phillips-Treby [2000] NSWIRComm 163; (2000) 100 IR 420 and Strathfield Group Ltd v Hall (2002) 121 IR 158 at [45].)

36 It is also well settled that some issue of real significance in the interests of justice will need to be identified for such an application to succeed (see Austin v NF Importers Pty Ltd & Anor [2005] NSWIRComm 136; (2005) 146 IR 113 at [4]). Therefore, if an appeal seeks, by and large, merely to challenge findings of fact or the exercise of a discretion, it will face a significant hurdle in obtaining leave. (See Box Valley Pty Ltd v Price [2000] NSWIRComm 117; (2000) 97 IR 484 [4].)

37 One other issue arises in this Application for Leave to Appeal and Appeal not addressed in submissions. This is an Appeal from an Interlocutory Decision arising from the appellant's Notice of Motion, in substantive proceedings not yet heard. Such appeals were referred to in Davis v Kyogle Council [2008] NSWIRComm 68 where Staff J conveniently has recently stated the relevant principles and authorities at [15] and [16]:

“15 Fourthly, leave will rarely be given to appeal against an interlocutory procedural decision: see Caltex Petroleum Pty Limited and ors v Harmer (1999) 92 IR 264; Direct Home Loan Corporation Pty Ltd v Wiltshire (No 2) (2004) 137 IR 166 at [10] - [11]; Express Data (A Division of Dimension Data Australia Pty Ltd) and NUW, Re [2005] NSWIRComm 140; Metrocall Inc v Electronic Tracking Systems Pty Limited (No 2) (2000) 102 IR 309 at [21]; AFMEPKIU, New South Wales Branch v David (2006) 154 IR 297.

16 Furthermore, the High Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 176 - 177 observed that an appellate court should be loathe to interfere in a matter of practice and procedure”

38 Given that the appeal raises the question of the application of the Anshun principle to claims for underpayment of wages brought under the award enforcement provisions of the Industrial Relations Act 1996, in circumstances of an apparent practice in the Chief Industrial Magistrate's Court, of applicants splitting their claims in order to avail themselves of a small claims process, we are satisfied that leave to appeal should be granted, notwithstanding that this was an interlocutory decision. The appeal raises an important question as to the practice of the Chief Industrial Magistrate's Court, which should be resolved by decision of this Court.

The merits of the appeal – the small claims process in the first proceedings

39 Under s 379, an applicant has no 'right' to have a matter dealt with as a small claim. In Dr Bilal Trading As The Hornsby Medical Centre v Jenni Marshall [2006] NSWIRComm 360, it was observed by another Full Bench that:

“29 This statutory scheme envisages that an applicant may request to have a matter dealt with as a small claim and that an industrial court may accept that request. In our view, a court, or its registry staff, is not entitled to proceed on a basis where it is assumed that an applicant wishes to make such a request. This is what may have occurred in this case, given the nature of the advice given to the parties, that the matter, described as a "small claim dispute", had been listed for hearing on 16 November 2005. It follows that even if it appears to the court that the matter is an appropriate one to be dealt with as a small claim, some formal steps were necessary to be taken to address that issue, before the matter could be dealt with by the court, as a small claim. On one view, the appellant was also entitled to be heard on the question, although it is not necessary to decide that issue.

30 Under this statutory scheme, real consequences flow for the proceedings from such a decision, which it appears were overlooked. One of them was that the matter had to be heard on the basis that the rules of evidence applied, if it was not available to be dealt with as a small claim. (See s383 of the Act and clause 43 of the Industrial Relations (General) Regulations 1996). That appears to have been overlooked.”

40 As was observed in Dr Bilal the only 'right' granted to an application by s 379 is to request that the application be dealt with as a small claim. It is a matter for an industrial court to determine whether or not such an application should be granted. That is a matter of discretion, about which a respondent is entitled to be heard, if the question of how the matter should proceed arises as an issue in the proceedings.

41 As will be clear, the form of application made by the respondent contained an “election” to proceed by way of a small claim. There is no right to so elect and, in any event, it is inappropriate and impermissible to deal with an application that contains both a claim for underpayment of wages and an application for penalty as a small claim. The Chief Industrial Magistrate should not have proceeded on this basis.

42 Furthermore, the Chief Industrial Magistrate failed to deal with any application made by the respondent to have the proceedings dealt with as a small claim and failed to engage in a process which would have enabled him to make an appropriate and proper finding to the effect that the proceedings should be dealt with as a small claim, (assuming that it was permissible to do so).

43 If the Chief Industrial Magistrate had embarked upon a proper process, he should, in our opinion, have taken into account the appellant’s obvious hearing difficulties and should have assessed the appropriateness or otherwise of her being thereby denied legal representation, not only by reference to her impaired hearing, but also because the respondent was represented by a trade union official. His Honour would also then have appreciated the impact on the application of the imposition of a penalty.

44 In considering whether the small claims procedure should have been applied, it would also have been appropriate, in our opinion, for the Chief Industrial Magistrate to have considered the nature of the proceedings, the evidentiary material that was required, and the various arguments that the parties wished to pursue in connection with the proceedings.

45 Further, as is obvious from comments that we have previously made, the Chief Industrial Magistrate should, in our opinion, have had regard to the fact that the respondent wished to pursue other claims for later years of employment that, in their totality, would have exceeded the limit of the amount fixed by the legislature for the conduct of proceedings as a small claim. Far from expressing disapproval of the strategy adopted by the trade union on behalf of the respondent, the Chief Industrial Magistrate should, in our opinion, have determined that he would not countenance the splitting of claims in this way, because it was a strategy designed to avoid the policy of the legislation and thereby constituted, on a prima facie basis, an abuse of the processes of the Court.

46 It follows that his Honour’s conclusion that the approach adopted to the small claims process did not constitute an abuse of process, was incorrect. To the contrary, the manner in which that issue was dealt with was the genesis of the difficulties which were created for the parties and which has led to the incurring of costs both before the Chief Industrial Magistrate and before this Court.

The merits of the appeal – do the second proceedings constitute an abuse of process?

47 In applying the Anshun principle, which in turn rests on the Henderson v Henderson principle, it is first necessary to identify the subject matter of the first claim and the subject matter of the second claim. The totality of the first claim, where the respondent sought a monetary order, was confined to an allegation of underpayment based on an incorrect classification under the Award. Part of the second claim is based on the same allegation. The only difference relates to the years of employment that are covered. There is no suggestion that there is any different factual regime that applies to the different years, nor is there any suggestion made in the respective applications filed in the Chief Industrial Magistrate’s Court that would indicate that there was any change in the substantive provisions of the Award that would have affected the respondent’s entitlement to make a claim.

48 Accordingly, it may be said that both sets of proceedings cover issues or facts that are so clearly part of the same subject matter of the litigation and so clearly could have been raised in the first claim, that the second claim would constitute an abuse of the processes of the Chief Industrial Magistrate’s Court.

49 Indeed, the only explanation given on behalf of the respondent by the trade union which had the carriage of the proceedings on her behalf was that it was sought to allow the totality of the respondent’s claim against the appellant to be litigated using the small claims procedure. In the course of hearing the matter, the Chief Industrial Magistrate determined that such a procedure was inappropriate. On appeal, counsel for the respondent candidly admitted that this was so and indicated that the trade union concerned would not utilise this device in the future.

50 In our opinion, the use of a device of this kind prima facie constitutes an abuse of the proceedings of the Chief Industrial Magistrate’s Court. By permitting such a device to be used, a claimant becomes entitled to pursue a claim without relying on the rules of evidence and denies the respondent to the claim an opportunity of having the respondent’s case presented by a legal practitioner.

51 In determining that the issues and facts in the second claim, in so far as those proceedings relate to the incorrect classification point constitutes prima facie an abuse of process, we reject the conclusion of the Chief Industrial Magistrate that the subject matter of each piece of litigation was different because each related to different employment years. Such a conclusion misstates the subject matter which is clearly a claim based on an incorrect classification of an employee under an industrial award during a period of employment which spanned many years.

52 However, there can be no doubt that such part of the second claim as contains a claim for long service leave does not constitute an abuse of process. Arguably the same conclusion may be reached with respect to such part of the second claim as is based on breaches of the Award with respect to which there is a claim for minimum hours of work and overtime.

53 As we have emphasised, in determining whether the appellant’s submission that the second claim constitutes an abuse of process, it is necessary to look at the totality of the circumstances of those proceedings. Included in those circumstances is the fact that the appellant, who clearly had access to the advice of a solicitor, determined to compromise the first claim, knowing full well that the respondent intended pursuing further proceedings relating to subsequent years of employment. Seen in this way, the second claim is analogous to the circumstances considered by the House of Lords in Johnson, which we have previously described. Although it must be conceded that the mere fact that the appellant compromised the first claim does not of itself preclude the second claim from being characterised as an abuse of process on the basis of the Henderson v Henderson principle, it is also necessary to look at the totality of the circumstances that apply to the second claim. It would, in our opinion, be inequitable to preclude the respondent from proceeding to pursue her claim for underpayment of wages under an industrial instrument in circumstances where her intention to so proceed was made clear to the appellant at the time that the appellant compromised the first claim. There was no suggestion at that time made by the appellant, or her solicitor, that the fact that the first claim was compromised would be raised as an alleged bar to the institution of the second proceedings. We refer again to the statement of principle of Lord Denning MR in Amalgamated Investment and Property Co, which we have previously extracted.

54 In these circumstances, we are unable to characterise the second claim as constituting an abuse of the processes of the Chief Industrial Magistrate’s Court and for these reasons the appellant’s appeal must fail.

Orders

55 For the reasons that we have previously given, leave to appeal is granted and the appeal is dismissed. We order accordingly. Costs should follow the event. The appellant is to pay the respondent’s costs of the appeal in an amount assessed in default of agreement.



LAST UPDATED:
25 November 2008