WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2013 WAIRC 00773

DELIVERED : WEDNESDAY, 28 AUGUST 2013

FILE NO. : M 79 OF 2012

CLAIMANT

AND

A.C.N. 008 668 602 PTY LTD (Formerly Fonterra Brands Australia (P&B) Pty Ltd)

Respondent

Catchwords : Application to dismiss claim; Enforcement of Clause 22 – Introduction of Change and Redundancy of the Fonterra Brands Australia (P&B) Pty Ltd Balcatta Operations Union Collective Agreement 2008-2011; Whether the decision of the Full Bench of Fair Work Australia in Fonterra Brands Australia (P&B) Pty Ltd v Transport Workers’ Union of Australia and another [2010 FWAFB 9986] in relation to the meaning of “ordinary base weekly rate of wage” is binding on the Claimant; Whether Claimant is estopped from litigating the issue; Whether issue of estoppel is established; Whether the decision said to create estoppel is a final judicial decision; Whether the parties to the decision or their privies were the same person as the parties to the proceedings in which estoppel is raised; Finality of proceedings; Abuse of process.

Legislation : Workplace Relations Act 1996

  Fair Work (Transitional Provisions and Consequential Amendments) Act 2009     

Instrument : Fonterra Brands Australia (P&B) Pty Ltd Balcatta Operations Union Collective Agreement 2008-2011

Result : Application is granted - Claim is dismissed

Claimant : Mr R. Hooker, of Counsel, appeared for the Applicant

Respondent : Mr N. Gibian, of Counsel, appeared for the Respondent

Case(s) referred to  Transport Workers’ Union of Australia and another v. Fonterra

in Decision:   Brands Australia (P&B) Pty Ltd [2010] FWA 4538

Fonterra Brands Australia (P&B) Pty Ltd v. Transport Workers’ Union of Australia and another [2010] FWAFB 9986

Marek Kuligowski v. Metrobus (2004) 220 CLR 363

Miller v. University of New South Wales (2003) 200 ALR 565

Construction, Forestry, Mining and Energy Union v. Wagstaff Piling Pty Ltd and Others (2012) 203 FCR 371

Administration of Papua and New Guinea v. Daera Guba (1973) 130 CLR 353

Ramsay v. Pigram (1968) 118 CLR 271

Young and Others v. Public Service Board [1982] 2 NSWLR 456

Eljazzar v. BHP Iron Ore Pty Ltd (1996) 65 IR 40

Carl Zeiss Stiftung v. Rayner & Keeler Ltd (No 2) [1967] 1 AC 853

Effen Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (1993) 43 FCR 510

SOS Nursing & Home Care Service Pty Ltd v. Smith [2013] FCA 295

Walton v. Gardiner (1993) 177 CLR 378

Reichel v. Magrath (1889) 14 App Cas 665

REASONS FOR DECISION

The Claim

1         Lola Nuzzo alleges that her former employer, Fonterra Brands Australia (P&B) Pty Ltd (Fonterra) owes her money under the Fonterra Brands Australia (P&B) Pty Ltd Balcatta Operations Union Collective Agreement 2008–2011 (the Agreement). 

2         Ms Nuzzo was made redundant from her employment with Fonterra in 2009. Consequently, she was entitled to severance pay in accordance with Clause 22 - Introduction of Change and Redundancy (Clause 22), of the Agreement.  Clause 22(d) of the Agreement required that she be paid four weeks’ pay in lieu of notice and four weeks’ pay per year of completed service, to a maximum of 104 weeks.  A week’s pay is defined in the Agreement as meaning –

“… the ordinary base weekly rate of wage for the employee concerned.”

3         At the time of the termination of her employment, Ms Nuzzo was paid an annualised salary.  However, her severance pay was calculated by reference to the base hourly rate for her classification under the Agreement, and multiplied by 38.  Ms Nuzzo contends that the way in which her severance pay was calculated was incorrect, and that it should have been calculated by using her annualised salary.  She alleges, therefore, that she has been underpaid.

4         On 11 September 2012, Ms Nuzzo lodged a claim in this Court alleging that Fonterra had breached the Agreement.  Ms Nuzzo seeks an order that Fonterra pay her the difference between the severance pay to which she is entitled under the Agreement, and the amount that she has already been paid in purported satisfaction of Clause 22 of the Agreement.  She also seeks ancillary orders.

5         Ms Nuzzo makes her claim pursuant to section 539 of the Fair Work Act 2009 (Cth) (FW Act).  That provision enables an employee to bring proceedings alleging a contravention of a civil remedy provision, which includes a claim for payment arising under an industrial instrument.  Section 545(3) of the FW Act permits an “eligible state or territory court” to make orders with respect to an underpayment.  An “eligible state or territory court” includes this Court, being a Court constituted by an Industrial Magistrate.

6         On 10 April 2013, Fonterra made an application seeking the dismissal of Ms Nuzzo’s claim.  In effect, Fonterra seeks summary judgment.  It says that Ms Nuzzo’s claim should be dismissed without a hearing on the merits because an issue estoppel arises from the decision of Fair Work Australia (FWA) in Fonterra Brands Australia (P&B) Pty Ltd v. Transport Workers’ Union of Australia and another [2010] FWAFB 9986; (2010) 202 IR 24.  The decision in that matter arose from a dispute notified to FWA by the Transport Workers’ Union of Australia (TWU) and another, under Clause 21 – Disputes Settlement Procedure (Clause 21) of the Agreement.

7         Relevantly, Clause 21.2 of the Agreement provides –

“21.2 Any dispute or matter (“Matter”) raised by Fonterra arising from this Agreement, an employee or a group of employees shall be settled in accordance with the following procedure:

(a)      The Matter shall first be discussed between the appropriate supervisor, the employee concerned or the group of employees concerned (and where requested by an employee or employees, the Union workplace representative or other representative).

(b) If the Matter remains unresolved a more senior manager of Fonterra, the employee concerned or the group of employees concerned (and where requested by an employee or employees, the Union workplace representative or other representative) shall attempt to resolve the Matter.

(c)  If the Matter remains unresolved any party to the dispute (and where requested by an employee or employees, the Union workplace representative or other representative) may refer it for conciliation and/or arbitration by the Australian Industrial Relations Commission (“Commission”).

(d)  If arbitration is necessary the Commission shall have the power to do all such things as are necessary for the just resolution or determination of the Matter.  This includes exercising of procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

(e)  The parties to the dispute will abide by the decision of the Commission, subject to any party to the dispute exercising a right of appeal against the decision to a Full Bench of the Commission.”

8         The subject of the dispute as notified by the TWU in its application to FWA was “the proper construction of Clause 22, and the employees’ redundancy entitlement”.

9         Following an unsuccessful conciliation conference, Commissioner Williams conducted a hearing on 30 March 2010 for the purpose of arbitrating the dispute between Fonterra on the one part and the TWU and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) on the other.  Both Fonterra and the TWU were represented by counsel.  On 23 June 2010, Commissioner Williams handed down his decision in favour of the TWU and the CEPU, concluding that the word “ordinary” should be given the meaning of “regular, normal, customary or usual” and that the term “base … rate” means the annualised salary of an employee.

10      On 14 July 2010, Fonterra appealed the decision of Commissioner Williams to the Full Bench of FWA.  Again, Fonterra and the TWU were represented by counsel at the hearing which was conducted on 12 October 2010.  On 24 December 2010, the Full Bench of FWA handed down its decision, with the result being that the appeal was upheld and the decision of Commissioner Williams was quashed.  The Full Bench held that the term “ordinary base weekly rate of wage” in Clause 22 of the Agreement was that as attributed to it by Fonterra (see Fonterra Brands Australia (P&B) Pty Ltd v Transport Workers’ Union of Australia and another [2010] FWAFB 9986).

11      Fonterra says that as a result, this claim is issue estopped and ought to be dismissed at the threshold without Fonterra and the Court being put to the time and expense of a further trial. It argues that the ratio decidendi of the decision of the Full Bench of FWA on 24 December 2010 was that the term “ordinary base weekly rate of wage” does not mean the annualised salary of employees on an annualised salary. That is precisely the same question that this Court is being asked to determine, and accordingly, is issue estopped.  Alternatively, it submits that the Court should decline to hear the claim in the proper and fair exercise of its discretion. 

12      Ms Nuzzo contends that no issue estoppel could or does arise from the decision of FWA and even if it did, it would not prevent a claim being pursued.  She says that it is the duty of this Court to determine all claims brought within its jurisdiction. 

Issue Estoppel

13      In Marek Kuligowski v. Metrobus (2004) 220 CLR 363, the High Court of Australia reiterated that the following are requirements which need to be established for an issue estoppel to take effect: 

1. the same question has been decided;
2. the judicial decision which is said to create estoppel is final; and
3. the parties to the judicial decision, or their privies, were the same persons as the parties to proceedings in which the estoppel is raised, or their privies.

14      Fonterra contends each of those necessary elements is established.  Ms Nuzzo on the other hand, says that although FWA decided the same question, its expression of opinion as to the question of law, being the proper construction of the industrial instrument, cannot operate as a binding declaration of right or give rise to an issue estoppel, because FWA is not a Court.     Ms Nuzzo says further, that an issue estoppel can only arise between the parties to the original litigation, or their privies.  Given that she was not a party to the proceedings before FWA, she cannot now be bound by FWA’s decision.

Was There a Final Judicial Decision?

15      In submissions made on behalf of Ms Nuzzo, it was argued that the expression of opinion on an issue of legal rights by an Industrial Commission cannot establish res judicata or issue estoppel (per Gray J at [7] and at [8] in Miller v. University of New South Wales (2003) 200 ALR 565 (Miller)).  It is further submitted that findings about matters of legal rights made by a tribunal without the power to make a binding judicial determination cannot give rise to an issue estoppel (see Miller per Ryan and Gyles JJ).

16      Ms Nuzzo further relies on the recent decision of the Full Court of the Federal Court of Australia in Construction, Forestry, Mining and Energy Union v. Wagstaff Piling Pty Ltd and Others (2012) 203 FCR 371 (Wagstaff) to support her contention that even an arbitrated dispute resolution procedure could not validly purport to confer judicial power.  Any opinion expressed in a private arbitration as to the proper interpretation of an enterprise agreement, has no legal effect of any kind and therefore is not conclusive or binding on any Court.

17      In my view, both Miller and Wagstaff are distinguishable from the circumstances of this case.  In Miller, the Australian Industrial Relations Commission was called upon to exercise its discretion with respect to whether a dismissal was harsh, unjust or unreasonable.  It, coming to its conclusion concerning the dismissal, expressed a view about aspects of the parties’ rights.  Those observations, as part of the process of arriving at the ultimate decision, could not have had a binding effect and did not give rise to issue estoppel.  In Wagstaff, the opinion was expressed in arriving at a recommendation to resolve the dispute.  That could not have had any legal effect or have bound the parties. 

18      In the matter between Fonterra and the TWU and the CEPU, FWA was not called upon to express an opinion, but rather, to make a determination as to the meaning of “ordinary base weekly rate”.  The parties sought a final determination about the meaning of those words and agreed, subject to a right of appeal which was later exercised, to be bound by the determination.  Fonterra and the TWU and, for that matter the CEPU, submitted themselves to FWA for the purpose of achieving a final determination.

19      In Administration of Papua and New Guinea v. Daera Guba (1973) 130 CLR 353 (Daera Guba), Gibbs J said, at 453:

“The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between the parties, even if it is not called a court and its jurisdiction is derived from statute or from the submission of the parties, and it only has a temporary authority to decide a matter ad hoc.”

         (my emphasis)

20      That was precisely the position of FWA in determining the dispute between Fonterra, the TWU and the CEPU.  It is not the case that FWA acted without power.  To the contrary, the parties gave it power by submitting themselves to finally determine the issue between them.

Privity

21      Moving to Ms Nuzzo’s second argument, I observe to be correct her contention that an issue estoppel arises only between the parties to the original litigation, or their privies (see Ramsay v. Pigram (1968) 118 CLR 271 at 276 (Pigram)).

22      Fonterra says that the TWU was acting for and on behalf of its members in pursuing the FWA proceedings.  Ms Nuzzo was, at all material times, a member of the TWU.  It is argued that it was in effect the privy of those members who would have derived a benefit of an increased entitlement under Clause 22 of the Agreement, if the decision of Commissioner Williams had not been overturned on appeal.

23      The basic requirement of a privy of interest is that a privy must claim under or through the person of whom he is said to be a privy (see Barwick CJ at 299 in Pigram).  A person is not a privy because he has participated so actively in the first litigation that he has assumed a de facto role of an actual party (see Effen Foods Pty Ltd v. Trawl Industries of Australia Pty Ltd (1993) 43 FCR 510).

24      In Young and Others v. Public Service Board [1982] 2 NSWLR 456 (Young), Lee J held that members of an individual union or association have no legal privity of interest with the union so as to estop them in relation to proceedings in the New South Wales Industrial Commission.  The relevant factors leading to his Honour’s conclusion in Young were:

(a) the individual members could not appear as parties in the relevant proceedings in the Commission, and

(b) they had no control of the proceedings in the Commission; and

(c) they did not claim through or under their association.  They asserted their rights merely as employees.

25      In Young, Lee J explained at 466:

“But the fundamental matter which prevents the findings of Dey J from binding the plaintiffs in their action here against their employer is that they do not in these proceedings claim through or under the association.  The reverse is the case – they assert rights merely as employees of the defendant and without regard to the association or membership of it.  They require a decision as to whether the Board does have power to fix hours of work except by regulation and whether the Board has in fact fixed such hours.  In my view they are not estopped by the findings of Dey J on these matters, because there is no privity of interest between them and the association.  They are, of course, as stated earlier, estopped by s 87 from denying the terms of the Crown Employees (Overtime) Award and the binding effect thereof.

It follows from the fact that no issue estoppel arises in respect of the relief sought in pars (1) and (2) of the summons that the plaintiffs can seek relief in this Court.”

26      The same approach was taken in Eljazzar v. BHP Iron Ore Pty Ltd (1996) 65 IR 40.  That matter concerned the applicant who, with another, had been dismissed from their employment as a result of a fight.  Both were members of The Australian Workers’ Union, West Australian Branch, Industrial Union of Workers.  The union had an industrial agreement with the respondent to refer any unresolved disagreements between the union and the respondent to the Western Australian Industrial Relations Commission (WAIRC).  Given that the union had failed to have the respondent change its mind with respect to the dismissals, it referred the matter to the WAIRC.  Commissioner Beech (as he then was) of the WAIRC concluded that the decision to dismiss Mr Eljazzar was not unfair.  Mr Eljazzar was dissatisfied with the manner in which the union had represented him.  He asserted that there was a clear conflict of interest and that his case and that of the other employee involved in the fight should not have been heard together and, in any event, the union should not have acted for both of them.

27      In determining the position of Mr Eljazzar vis a vis the union, Madgwick J said at 43:

“The union had legitimate interests of its own to consider, which may or may not entirely have coincided with those of Mr Eljazzar.  In the first place it had also the interests of Mr Reid to consider.  It had its own obligation to refer its dispute with the respondent to the Commission.  It would have its own strategic and tactical industrial interests to consider.  It would have the interests of its members employed by the respondent other than the applicant and Mr Reid to consider.  It would have, in deciding whether or not to appeal, its own doubtless relatively scarce resources to consider. 

Thus, although the applicant was one of the intended beneficiaries of the union’s application to the Commission and, in a practical sense, a necessary participant in the proceedings there, on the face of it, he really had a relatively limited capacity to control the way his case was put and the extent to which it was advanced.  In particular, he had limited ability to ensure that only his own interests were taken into account in putting his case.”

28      In this matter, Ms Nuzzo believes that she was underpaid by Fonterra under the Agreement.  She claims this as an employee entitled to the benefit of the Agreement, and not under or through the TWU.  It is submitted that she is not, and could not be, estopped as a result of the decision of FWA which arose from a dispute notification filed by the TWU.  She argues that no issue of estoppel does or could arise from the decision of FWA so as to bind her or any person with respect to the legal question of the proper interpretation of Clause 22(d) of the Agreement. Further, the FWA decision cannot bind any Court in the determination of subsequent proceedings.

29      Each case will turn on its own facts.  The particular facts in this matter will dictate whether privity existed between Ms Nuzzo and the TWU, and whether she is now estopped in proceeding with her claim.  Any consideration of Ms Nuzzo’s position vis a vis the TWU, must commence with the contemplation of Clause 21.2(c) of the Agreement.  It provides:

“21.2(c) If the Matter remains unresolved any party to the dispute (and where requested by an employee or employees, the Union workplace representative or other representative) may refer it for conciliation and/or arbitration by the Australian Industrial Relations Commission (“Commission”).”

30      The opening words of Clause 21.2 of the Agreement make it clear that the dispute resolution process applies to a dispute between Fonterra, an employee, or a group of employees.  Sub-clause 21.2(c) provides that where the Matter (dispute) remains unresolved, any party to the dispute, being Fonterra, an employee or a group of employees (and where requested by an employee or employees) the union workplace representative or other representative may refer it for conciliation.  The invocation of the conciliation and/or arbitration process by the union representing employees, including Ms Nuzzo, could not have taken place on the union’s own initiative without having regard to its members.  Its power to act in the process could only have arisen through a request made by an employee or employees.  Unlike the situation in Young, individual members of the union affected by Fonterra’s decision, had, pursuant to Clause 21.2(c) of the Agreement, the right and ability to refer the matter to conciliation and/or arbitration.  They could have, if they had chosen to either individually or collectively, irrespective of the TWU or the CEPU, referred the dispute to conciliation and/or arbitration and thereby become personally involved in the matter before FWA.  Ms Nuzzo had the legal ability to commence proceedings in her own right or to be joined in the FWA proceedings, but did not to participate.  She allowed the TWU to act for her.  She did not assert her own rights but, rather, claimed through or under the TWU.  Her position is distinguishable from the situation in Young.

31      Indeed, her situation is not dissimilar to that described by Gibbs J in Daera Guba in which he said:

“77. Finally, the applicants denied there was an identity of parties before the Board and the Commission.  The native claimants before the Board included the Tubumaga Idibana and the Tubumaga Laurina, but it was for the former branch of the iduhu that claimed Era Taora.  The application to the Commission was made by Daera Guba on behalf of the descendants of Guba Daera but it emerged at the hearing that Daera Guba was representing both branches of the Tubumaga iduhu.  It was submitted that the relevant party before the Board was the Tubumaga Idibana – a communal group – whereas before the Commission the applicants were a number of individuals, represented by Daera Guba, and if the individuals were members of the group, they were nevertheless proceeding in a different capacity, and that a decision given against them by the Board in one capacity would not estop them in the other.  Of course, neither tribunal had any strict rules of pleading, and before the Commission there was some disconformity between the application, which described the persons represented by Daera Guba as the descendants of Guba Daera and the statement made by Daera Guba that he was representing the whole clan, but there is not the least doubt, when the evidence is regarded, that this case before the Commission was advanced on the basis that he was representing the whole of the Tubumaga people – both branches of the iduhu.  However, it was then submitted that the decision of the Board could not estop the Tubumaga Laurina, since that branch of the iduhu had made no claim before the Board to Era Taora.  In fact, both branches of the iduhu were represented before the Board, and by the same counsel.  In my opinion, if there was not an estoppel per rem judicatam between the Tubumaga Laurina and the Administration, the former were estopped by their conduct from relitigating the issue of ownership of the subject land.  The Tubumaga Laurina being a party, and knowing that the Board was required to decide who was the owner of land in question, stood by, and allowed the Tubumaga Idibana, the other branch of the iduhu, alone to assert its claim against the Administration.  In those circumstances, justice and common sense would require the Tubumaga Laurina to be bound by the result.”

32      Ms Nuzzo stood by and allowed the TWU to assert her claim.  She is now bound by the decision made by FWA.  If that were not so, the result would be that she would only be bound by the decision if it suited her purpose.  If not, she could re-litigate the very same issue.  That is impermissible.  Ms Nuzzo is clearly estopped in continuing with her claim, given that she was the TWU’s privy throughout the FWA proceedings.  The required elements to satisfy issue estoppel exist.

Summary Dismissal for Other Reasons

33      The Industrial Magistrates (General Jurisdiction) Regulations 2005 empower this Court to control and manage cases before it and to ensure that those cases are dealt with efficiently, economically and expeditiously.  There is also a requirement that the Court ensures that its judicial and administrative resources are used as effectively as possible.  The Court has wide powers to achieve those ends.

34      Fonterra argues that Ms Nuzzo should not be permitted to take her claim to trial essentially re-agitating an issue already decided a long time ago.  Her action is said to amount to an abuse of process.  Ms Nuzzo says that her claim can only be summarily dismissed if Fonterra can establish that her claim is so clearly untenable that it cannot possibly succeed, unless the decision of FWA gave rise to a declaration of right binding upon both the Court and Ms Nuzzo.  It is put that there is no basis to suggest that Ms Nuzzo’s claim is so clearly untenable that it cannot possibly succeed.  To support her contention, counsel for Ms Nuzzo cites the judgment of Ryan and Gyles JJ in Miller, in which they said at [81]:

“In our view, near enough to an estoppel is not good enough to establish abuse of process between the same parties without some other element being present.  There is the danger that persistent or unattractive litigants with awkward cases might be refused access to courts if there is a broad and imprecise discretion to stay actions which are somewhat like a previous proceeding.”

35      In my view, discretionary considerations remain.  Public policy demands that there should be an end to litigation.  Justice demands that the same party shall not be harassed twice for the same cause (see Carl Zeiss Stiftung v. Rayner & Keeler Ltd (No 2) [1967] 1 AC 853).

36      Indeed, Fonterra’s situation in this matter is similar to that of the applicant in SOS Nursing & Home Care Service Pty Ltd v. Smith [2013] FCA 295, in which his Honour Buchanan J referred at [50] to the decision of Walton v Gardiner (1993) 177 CLR 378 (Walton).  In Walton, Mason CJ, Deane and Dawson JJ (at 393), referring to Reichel v Magrath (1889) 14 App Cas 665, said:

“… proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate a new case which has already been disposed of by earlier proceedings.”

37      His Honour Buchanan J said at [51]:

“That principle appears to me to apply in the present case.  The point of construction which the applicant wishes to ventilate in the present case was fully argued to finality …”

38      It would be wrong to allow Ms Nuzzo to re-agitate precisely the same issue which was litigated on her behalf in respect of which a final decision has been made.  In any event, I rely on Daera Guba in concluding that in the circumstances, justice and common sense would require         Ms Nuzzo to be bound by the result of the FWA proceedings.

39      If it were not for the conclusion I reached earlier that issue estoppel applies, I would have dismissed the claim as an abuse of process in any event.

G. Cicchini

Industrial Magistrate