Cunningham & Ors who are currently trading as, or who have traded as, Flower & Hart (A Firm) v Hart [2008] ICQ 27 2008

[Extract from Queensland Government Industrial Gazette, Dated 8 August 2008, Vol. 188, No. 15, pages 312-317] INDUSTRIAL COURT OF QUEENSLAND Industrial Relations Act 1999 - s. 341(1) - appeal against decision of industrial commission Robert James Cunningham, Michael John Douglas Meadows, David John Herbert Watt, Brian Walter Smith, Warren Grant Denny, Robyn Gay Lyons, Stephen John Tonge, Brian Francis Ward, James William Alley, Sharon Ann Winn, who are currently trading as, or who have traded as, Flower & Hart (A Firm) AND William Hamilton Hart (C/2008/20) PRESIDENT HALL 1 August 2008 DECISION On 21 December 2007, the Respondent, William Hamilton Hart, filed an application in the Queensland Industrial Relations Commission seeking Declarations under s. 274A of the Industrial Relations Act 1999 (the Act). The application, which named Flower & Hart (a firm of Solicitors) as the respondent to that application, was given the number B/2007/79. On 5 February 2008, (after Flower & Hart had filed a response) the Respondent filed an amended application in the Commission. The amended application named as the respondents to the application the present Appellants. The Declarations sought were: "(a) a declaration under s. 274A of the Industrial Relations Act 1999 ('the Act') that the remuneration paid to me as an employee of Robert James Cunningham, Michael John Douglas Meadows, David John Herbert Watt, Brian Walter Smith, Warren Grant Denny, Robyn Gay Lyons, Steven John Tonge, Brian Francis Ward, James William Alley, Sharon Ann Winn should have been paid without deduction of superannuation contributions; (b) a declaration under s. 274A of the Act that remuneration should have been paid to me by (the Appellants) for periods of annual leave taken during my employment at the rate specified in the Act; and (c) a declaration under s. 274A of the Act that remuneration should have been paid to me by (the Appellants) for periods of accrued but unused annual leave as at the termination of my employment at the rate specified in the Act.". By an affidavit filed in support of the application, the Respondent asserted that during his employment by the Appellants, the Appellants: "(a) deducted superannuation contributions from his remuneration without his consent; and (b) failed to pay him remuneration for any periods of annual leave taken during the second and subsequent years of his employment with the Appellants; and (c) failed to pay his remuneration for periods of accrued but unused annual leave as at the termination of his employment with the Appellants.". On 21 January 2008, the Respondent filed proceedings in the Industrial Magistrate's Court at Brisbane claiming certain monies against the Appellants as unpaid wages. An examination of the application filed in the Industrial Magistrate's Court shows an assertion that the sum of $72,720.38 claimed in those proceedings represents the total money amount said to have been underpaid by the Appellants in respect of the three matters listed in the Application for Declarations filed in the Commission. By a letter dated 12 February 2008, the Respondent's solicitors forwarded the Industrial Magistrate's Court application by way of service on the Appellants. (In fairness, on 22 January 2008, one of the Appellants, Robert Cunningham, as Managing Partner of Flower & Hart, was asked whether he would accept service on behalf of all of the Appellants of the Industrial Magistrate's Court application.) On 3 March 2008, the Appellants filed an application seeking the dismissal of the Respondent's amended application in the Commission, or, alternatively, an order that the Commission refrain until further order from hearing or deciding the matter. By a decision of 30 April 2008, now reported at 188 QGIG 10, the Commission dismissed the application. From that decision the Appellants bring an appeal to this Court. To expose the case developed by the Appellants at first instance and re-agitated on the Appeal, it is necessary to begin with an examination of ss. 274A and 399 of the Act. Section 274A, which was inserted by the Industrial Relations Act and Other Legislation Amendment Act 2007, provides: "274A Power to make declarations -- 1 of 6 -- 2 (1) The commission may, on application, make a declaration about an industrial matter. (2) The commission may make the declaration whether or not consequential relief is or could be claimed. (3) The application may be made by - (a) a person who may be directly affected by the declaration; or (b) an inspector; or (c) an organisation of employees or employers of which a person mentioned in paragraph (a) is a member, if it is acting with the person's written consent; or (d) an organisation of employees or employers who may be directly affected by the declaration. (4) Subject to chapter 9, a declaration made by the commission under this section is binding in any proceeding under this Act in relation to the issue determined by the declaration.". It is not disputed that the Declarations sought by the Respondent are declarations about "industrial matters"; neither is it disputed that the Respondent was a person entitled to make the application. It is conceded that, if s. 274A is read literally, the Commission has jurisdiction to grant the application sought. The provision of the Act pursuant to which proceedings were brought in the Industrial Magistrate's Court of Brisbane was s. 399 which provides: "399 Recovery of unpaid wages etc. (1) An application may be made to a magistrate for an order for payment of - (a) an employee's unpaid wages; or (b) an apprentice's unpaid tool allowance under section 138; or (c) remuneration lost by an apprentice or trainee because the employer has contravened section 391(2); or (d) remuneration unpaid because a person contravened an order mentioned in section 140A(1). (2) The application may be made by - (a) the employee; or (b) an employee organisation of which the employee is a member, acting for the employee; or (c) a person authorised by the employee to make the application, acting for the employee; or (d) an inspector. (3) The application must be made within 6 years after the amount claimed became payable. (4) However, for an apprentice or trainee, the application can not relate to an amount payable more than 4 years before the commencement of this section. (5) On hearing the application, the magistrate - (a) must order the employer to pay the employee the amount the magistrate finds to be payable and unpaid to the employee within the 6 years before the date of the application; and (b) may make an order for the payment despite an express or implied provision of an agreement to the contrary; and (c) may order the payment to be made on the terms the magistrate considers appropriate; and (d) may award costs to either party in an amount assessed by the magistrate. (6) A person can not make an application under this section if an application has been made under section 278 or 400F for the same matter. (7) In this section - employee includes a student to whom an order made under section 140A applies. employer includes an employer to whom an order made under section 140A applies.". It is frankly conceded by the Respondent that the Declarations pursuant to s. 274A are sought in order that the Declarations (if granted) may be relied upon in the proceedings in the Industrial Magistrate's Court pursuant to s. 399, for the purpose of establishing the liability of the Appellants to the Respondent. It is conceded also that the Respondent might have ignored s. 274A and, as the Respondent would have been required to do prior to the enactment of s. 274A, might have set about proving the matters which the Declarations will decide as between the Respondent and the Appellants in the proceedings in the Industrial Magistrate's Court. Additionally, it is common ground that; (a) the Industrial Magistrate's Court will be required to quantify the liability established by the Declarations; and that (b) on a literal interpretation of s. 274A(4) the Respondent is entitled to utilise the Declarations for the purpose and in the manner described. The contention of the Appellants is that if the Act is read as a whole, s. 274A does not carry its -- 2 of 6 -- 3 literal meaning and, in the alternative, if the Commission has jurisdiction to grant the Declarations, it should decline to exercise that jurisdiction because to exercise the jurisdiction would involve an abuse of process. It is, as I understand it, recognised by each of the Appellants and the Respondent that, because the Commission is a Court of Record rather than a Superior Court of Record (s. 255), the authorities bearing upon the circumstance in which a Superior Court will stay proceedings admittedly within its jurisdiction to prevent an abuse of process are not directly applicable. The Appellants' contention is that the same outcome may be reached by invoking s. 331(b) which provides: "331 Decisions generally The court or commission may, in an industrial cause - (a) ... (b) dismiss the cause, or refrain from hearing, further hearing, or deciding the cause, if the court or commission considers - (i) the cause is trivial; or (ii) further proceedings by the court or commission are not necessary or desirable in the public interest; or (c) ...". As I understand it, the Respondent does not dispute the availability of a remedy pursuant to s. 331(b), but adds the caveat that the authorities on an analogue of s. 331(b) in the Conciliation and Arbitration Act 1904 (Cwth), esp. Re: Queensland Electricity Commission and Others; ex parte Electrical Trades Union of Australia (1987) 72 ALR 1, suggest that the balancing of interests required by s. 331(b) is so much a matter of fact and degree that it will seldom be possible to demonstrate an error in the exercise of the discretion of s. 331(b) which of the kind described in House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ. Because the Appellants' arguments about statutory construction and s. 331(b) are intertwined, I shall begin with the legislative provisions from which solace is sought. The starting point is s. 278 which provides: "278 Power to recover unpaid wages and superannuation contribution etc. (1) An application may be made to the commission for an order for payment of - (a) an employee's unpaid wages; or (b) an apprentice's unpaid tool allowance under section 138; or (c) remuneration lost by an apprentice or trainee because the employer has contravened section 391(2); or (d) contributions to the approved superannuation fund payable for an eligible employee that are unpaid; or (e) remuneration unpaid because a person contravened an order mentioned in section 140A(1). (2) An application can not be made to the commission if the total amount claimed under subsection (1) is more than $50000. (3) The application may be made by - (a) for a claim for occupational superannuation - an employee who is an eligible employee on whose behalf an employer is required to contribute to an approved superannuation fund; or (b) for any other claim - an employee; or (c) an employee organisation of which the eligible employee or employee is a member, acting for the employee; or (d) a person authorised by the eligible employee or employee to make the application, acting for the employee; or (e) an inspector. (4) The application must be made with 6 years after the amount claimed became payable. (5) However, for an apprentice or trainee, the application can not relate to wages payable more than 4 years before the commencement of this section. (6) The vice president may, either before or after the start of a hearing, remit the application to a magistrate if the vice president considers the application could be more conveniently heard by a magistrate, having regard to - (a) the difficulty or expense of producing witnesses; or (b) another good and sufficient reason, for example, cost. -- 3 of 6 -- 4 (7) A magistrate may hear and decide the application as if it had been brought before the commission, and the magistrate's decision is taken to be a decision of the commission. (8) On hearing the application, the commission or magistrate - (a) must order the employer to pay the employee - (i) the amount the commission or magistrate finds to be payable and unpaid to the employee within the 6 years before the date of the application; and (ii) an amount the commission or magistrate considers appropriate, based on the return that would have been accrued in relation to the contributions had it been properly paid to the approved superannuation fund; and (b) may make an order for the payment despite an express or implied provision of an agreement to the contrary; and (c) may order the payment to be made on the terms the commission or magistrate considers appropriate. (9) For an order about an unpaid contribution, the order must require the contribution to be paid to - (a) if the employee is employed by the employer - the approved superannuation fund; or (b) if the employee is no longer employed by the employer - (i) the approved superannuation fund; or (ii) a complying superannuation fund; or (iii) a superannuation fund nominated by the employee; (iv) an eligible rollover fund; or (v) if the amount is less than the amount of total benefits that may revert to an employee under the Superannuation Industry (Supervision) Act 1993 (Cwth) - the employee. (10)The contribution must be paid into the unclaimed moneys fund, if a former employee in relation to whom an order is made - (a) can not be located after reasonable inquiry; or (b) does not nominate a superannuation fund for the purpose of the order, if required by the order to do so. (11)A person can not make an application under this section of an application has been made under section 399, 400F or 408 for the same matter. (12)In this section - employee includes a student to whom an order made under section 140A applies. employer includes an employer to whom an order made under section 140A applies. occupational superannuation includes an amount equal to the return that would have accrued in relation to the occupational superannuation had it been properly paid to an approved superannuation fund.". When ss. 278 and 399 are read together, it is apparent that an employee seeking to recover "wages" (in the statutory sense) of less than $50,000 may either take proceedings under s. 278 in the Commission or take proceedings under s. 399 in the Industrial Magistrate's Court. The restrictions are that an employee who has instituted proceedings in the Industrial Magistrate's Court may not institute proceedings in the Commission, and that an employee who has instituted proceedings in the Commission may not institute proceedings in the Industrial Magistrate's Court. An employee seeking to recover "wages" (in the statutory sense) in excess of $50,000 has no choice. Such an employee may institute proceedings in the Industrial Magistrate's Court but may not institute proceedings in the Commission. The next section of relevance is s. 320 which provides: "320 Basis of decision of the commission and magistrates (1) Subsections (2) and (3) do not apply for proceedings for - (a) the recovery of amounts, other than an amount ordered under section 278 of 408F; or (b) an offence against this Act. (2) In proceedings, the commission or Industrial Magistrates Court - (a) is not bound by technicalities, legal forms or rules of evidence; and (b) may inform itself on a matter it considers appropriate in the exercise of its jurisdiction. (3) Also, the commission or Industrial Magistrates Court is to be governed in its decisions by equity, good conscience and the substantial merits of the case having regard to the interests of - (a) the persons immediately concerned; and (b) the community as a whole. -- 4 of 6 -- 5 (4) In proceedings, the commission may admit evidence given before, and the findings of, the Anti- Discrimination Commission as evidence in the proceedings. (5) ... (6) ...". [All emphasis added] So significant are the differences between proceedings in the Commission and proceedings in the Industrial Magistrate's Court that where a s. 278 matter is remitted to an Industrial Magistrate, the Industrial Magistrate is expressly required to "hear and decide the application as if it had been brought before the Commission" (s. 278(7)). There are other important differences between proceedings in the Commission and in the Industrial Magistrate's Court going to legal representation (s. 319), recovery of costs (s. 335) and appeals (s. 341(1) and (2)). It is the contention of the Appellants that the Act has established two quite distinct streams for the recovery of wages and that an intention should not be attributed to the Legislature to permit use of s. 274A to establish issues in a wage recovery proceeding which, because of its quantum, might be brought only in the Industrial Magistrate's Court. The point is taken that the very Act which introduced s. 274A also introduced provisions for conciliation in employment claims in the Industrial Magistrate's Court, (see Part 6 of the Industrial Relations Act and Other Legislation Amendment Act 2007), which maintained the proposition that a claim is not an employment claim if the course of action to which the claim relates is within the jurisdiction of the Commission. An impertinent rejoinder might be that the omission of a provision precluding the use of s. 274A declarations in s. 399 recovery proceedings, was contemporaneous with recognition of an Industrial Magistrate's Court stream and an Industrial Relations Commission stream and contemporaneous with a preparedness to legislate to avoid overlap in the case of Part 6. However, the real obstacle to the Appellants' argument lies not in speculation and/or advocacy but in the absence of any language in the Industrial Relations Act and Other Legislation Amendment Act 2007* or the Industrial Relations Act 1999 (post the Amendment) to anchor the submission that s. 274A declaration proceedings and s. 399 recovery proceedings are not to be intermingled. Section 274A weighs heavily against such a construction. Section 274A is a provision of the type which gives the Commission a new discretion to issue a declaration and, if the Commission exercises its discretion in favour of an applicant, gives a new right to the applicant; see generally the discussion in Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291 at 295 to 296 per Handley JA with whom Giles JA agreed. Sections 320(1) to (3) and 274A read well together. There is no reason to suppose that the Legislature did not intend the protection against abuse to be found in the proper exercise of discretion. [*It is common ground that the Minister's Second Reading Speech (18 April 2007, 1294) does not assist. In my view, the Explanatory Note poses the same issues as the Act.] The Appellants' submission that a Superior Court of Record will stay proceedings where the processes and procedures of the court which exist to administer justice with fairness and impartiality are sought to be used as instruments of unfairness or injustice is plainly correct, compare Walton v Gardiner (1993) 177 CLR at para 23 per Mason CJ, Dean and Dawson JJ. It is clear that an established category of case for grant of a stay is where there are proceedings in more than one court and the court granting the stay is not the appropriate forum to hear the matter. On the authorities one must accept that the principle applies outside the area of private international law and applies to liable proceedings in domestic courts, see e.g. Batistatos v Road and Traffic Authority of New South Wales (2006) 226 CLR 256 at para 2 per Gleeson, Gummow, Hayne and Crennan JJ. (I am content to put aside the question whether in the case of domestic courts the test is whether the court asks for a stay is a "clearly inappropriate" court or whether the test is whether the rival court is a "more appropriate" forum.) I am prepared also to accept that in an appropriate case, s. 331 (and, I think, s. 274A itself) will authorise the grant of a stay to prevent abuse. However, having made all of those concessions, one encounters the difficulty that one is not concerned with exposition of the general law but with the construction of a particular statutory provision which expressly authorises, not the conduct of litigation in one court rather than another, but the conduct of part of a matter in the Commission and the other part of a matter in another court or tribunal. There may be some doubt that left to its own devices the general law would have countenanced such a proposition: but the Legislature has chosen to adopt it. To quote Kirby J in Batistatos v Road and Traffic Authority of New South Wales (2006) 226 CLR 256 at para 123 [footnotes omitted]: "There is a common tendency for lawyers to prefer judicial elaborations of the law over analysis of applicable legislation. This is a tendency which this Court, in recent years, with a single voice, has endeavoured to correct. ...". Here, all of the complaints raised by the Appellants are to be found in the Act itself. The complaints are the obvious complaints that if the issues raised in the Application for Declarations are litigated in the Commission rather than the Industrial Magistrate's Court, the Appellants will lose the right to legal representation, the right to insistence upon the rules of evidence, the right to seek costs on a follow-the-event basis and be limited as to the grounds of any appeal. This is not a case in which relief is sought on the basis of conduct of the Respondent as might be the case where, e.g. declarations are sought in the Commission after an s. 399 case involving the same issues has been fought, evidence has closed and the Industrial Magistrate has reserved the Court's decision. All that is put against the Respondent is that the Respondent, openly rather than by way of an ambush, has sought to take advantage of a remedy expressly made -- 5 of 6 -- 6 available to him by the Legislature. To grant relief under s. 331 (or to exercise the discretion at s. 274A adversely to the Respondent) would be to go beyond giving effect to s. 275 and embark upon its revision. I dismiss the Appeal. I reserve all questions as to costs. Dated 1 August 2008. D. R. HALL, President. Released: 1 August 2008 Appearances: Mr A. Herbert, instructed by Flower & Hart, Solicitors for the Appellants. Mr K. Watson, instructed by Milner Lawyers, Solicitors for the Respondent. Government Printer, Queensland The State of Queensland 2008. -- 6 of 6 --