New South Wales Supreme Court CITATION : Macatangay v State of New South Wales [2007] NSWSC 57 HEARING DATE(S) : 6 February 2007 JUDGMENT DATE : 9 February 2007 JURISDICTION : Common Law JUDGMENT OF : Michael Grove J at 1 DECISION : Proceedings dismissed generally CATCHWORDS : CIVIL PROCEDURE - ACTION IN TORT - PREVIOUS LITIGATION BETWEEN PARTIES IN INDUSTRIAL RELATIONS COMMISSION - SETTLEMENT OF THOSE PROCEEDINGS AFFIRMED BY IR COMMISSION - ACTION BASED ON SAME FACTS - EMPLOYEE (TEACHER) SUING FORMER EMPLOYER - ESTOPPEL OR ABUSE OF PROCESS CLAIMED BY DEFENDANT - UCPR 13.4 Conveyancing Act 1919 LEGISLATION CITED : Industrial Relations Act 1996 (NSW) Limitation Act 1969 Teaching Services Act 1980 Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 Arnold v National Westminster Bank (1991) 2 AC 93 Burazin v Blacktown City Guardian 1990 142 ALR 144 Harvey v Phillips (1956) 95 CLR 235 Henderson v Henderson 1843 3 Hare 100 (67 ER 313) CASES CITED : Johnson v Unisys (2003) AC 518 Masters v Cameron (1954) 91 CLR 353 Miller v University of NSW [2002] FCA 882 NSW v Paige (2002) 60 NSWLR 371 The Queen v Kirby, Ex Parte Boilermakers Society of Australia (1956) 94 CLR 254 Waterside Workers Federation of Australia v J.W. Alexander Ltd (1918) 25 CLR 434 PARTIES : Miguela Alvarez Macatangay v State of New South Wales FILE NUMBER(S) : SC 20144/05 COUNSEL : In person (Plaintiff) M. Minehan (Defendant) SOLICITORS : Hicksons (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MICHAEL GROVE J Friday 9 February 2007 20144/05 - MIGUELA ALVAREZ MACATANGAY v STATE OF NEW SOUTH WALES JUDGMENT 1 HIS HONOUR: There is before the Court a claim for damages asserting negligence on the part of persons and instruments of the defendant within its Department of Education and Training (the Department) in connection with the employment (and its termination) of the plaintiff as a teacher of mathematics. The applicable statement of claim specifies the relief sought as follows: "a) lost income, both past and future; b) lost superannuation entitlements; c) damages for loss of opportunity to advance her career; d) exemplary damages and aggravated damages." 2 To this pleading the defendant has filed a defence which includes, of significance for present purposes: "1. The plaintiff is estopped from maintaining proceedings in relation to her employment and the termination of her employment by the defendant by reason of having brought proceedings in the Industrial Relations Commission of New South Wales in Matter No. IRC 02/5099 ('the IRC Proceedings') which arose out of the same facts and circumstances as pleaded in these proceedings (Matter No 020144 of 2005 in the Supreme Court of New South Wales) and which were settled and subsequently dismissed. 2. The plaintiff is estopped from maintaining these proceedings in that the plaintiff is bound by the terms of the Deed of Release between the plaintiff and the defendant prepared on or about 8 April 2003 in relation to the IRC proceedings, including clauses 1.9 (second numbered) and 2 thereof. 3. The plaintiff is prevented from maintaining these proceedings by virtue of s 179 of the Industrial Relations Act 1996 (NSW) , in that the plaintiff in these proceedings is seeking that the IRC proceedings be appealed, reviewed, quashed or called into question." 3 The pleadings also reveal a dispute concerning the status of the plaintiff in her employment, she asserting that she was a teacher "within s 59C" of the Teaching Services Act 1980 and the defendant contending that she had been appointed as a Teacher Mathematics (Mobile) on probation (see s 48 of that Act). 4 The present hearing was initiated by notice of motion filed on 9 June 2006 by the defendant by which relief was sought in these terms: "1. That pursuant to Rule 13.4 of the Uniform Civil Procedure Rules, the proceedings be dismissed. 2. In the alternative, that pursuant to Rule 28.2 of the Uniform Civil Procedure Rules, an order be made for the separate determination of the following questions: a. Whether or not the plaintiff is estopped from bringing or maintaining these proceedings by reason of having brought proceedings in the Industrial Relations Commission of New South Wales in Matter No. IRC 02/5099 ('the IRC Proceedings') which were settled and subsequently dismissed. b. Whether or not the plaintiff is bound by the terms of the Deed of Release between the plaintiff and the defendant prepared on or about 8 April 2003 in relation to the IRC proceedings. c. If the answer to question b. is yes, whether or not the plaintiff is prevented from bringing or maintaining these proceedings by virtue of the provisions of the said Deed of Release. d. Whether or not the plaintiff is prevented from bringing or maintaining these proceedings by virtue of the operation of s 179 of the Industrial Relations Act 1996 (NSW) . e. Whether or not the plaintiff is estopped from alleging that she was not employed on probation by the defendant." 5 The plaintiff appeared in person and the defendant was represented by Mr Minehan of counsel. There have been previous interlocutory proceedings to which some reference will be made. There was obvious commonality in the material to which reference would be made in respect of the prayer in paragraph 1 and the alternative in paragraph 2 of the notice of motion, and it became apparent that the parties had anticipated that the substance of what was sought in paragraph 2 was intended to be canvassed rather than, as the prayer specifically sought, a determination made only about separate hearing. By consent, argument was received on all issues articulated in the motion in order to enable an expeditious despatch of the real issues between the parties. 6 It is necessary to recount some historical detail, most of which can be extracted from the annexures of the affidavit of Mr Burns sworn 9 June 2006 in support of the defendant's motion. 7 By letter dated 15 July 1999 the plaintiff was appointed as a Teacher Mathematics (Mobile) to commence duty on 19 July 1999. The proposition that she was appointed pursuant to s 59C (since repealed) of the Teaching Services Act is untenable. It suffices to note that s 59C required that a person appointed to fill a vacancy such as that contemplated by that provision must either be on a promotion list or be an officer in the service in respect of whom the Director General has made a determination of fitness, neither of which qualifications was held by the plaintiff. 8 The plaintiff's original assignment was to Bossley Park High School. In January 2000 she was transferred to Merrylands High School. She ceased work there on 11 October 2000 and on 31 October 2000 lodged a worker's compensation claim asserting, inter alia, psychological injury because of unfair treatment by superiors at the school. She was provided with administrative duties for a period until she was transferred to Canley Vale High School with effect from 12 June 2001. She ceased work there on 17 September 2001 and lodged a further worker's compensation claim on 20 September 2001 alleging that she was suffering various pain symptoms arising out of harassment, verbal and emotional abuse by the principal and (other) teachers. 9 On 4 September 2002 the plaintiff commenced proceedings in the Industrial Relations Commission (IRC) for unfair dismissal which, by definition in the Industrial Relations Act 1996, includes threat of dismissal. Her services were in fact terminated on 6 December 2002. Accompanying the formal notice was a letter which included the information: "In addition your name will be placed on the confidential list of persons not to be employed in NSW government schools or TAFE without reference to the Director of Personnel Services." 10 The proceedings in the IRC remained on foot and were eventually scheduled for commencement before Commissioner Macdonald on 24 March 2003 for an estimated five day hearing. In the interim, possible settlement of the matter was explored. Perhaps, and I gather from some comments made by the plaintiff somewhat reluctantly she retained a lawyer to act for her, a Ms Markovski. On 20 March 2003, the solicitor for the Department sent what was described as an "amended" offer of settlement. These terms were proposed: "The Department is prepared to resolve the proceedings on the following basis. The Department will: 1. rescind the Applicant's annulment provided the Applicant tenders her resignation effective from the same date as the annulment; 2. accept that resignation; 3. not take action to place the Applicant's name on the confidential list of staff not to be employed by the Department in government schools or TAFE provided that the Applicant: i. supplies the Department with a written undertaking not to seek employment as a teacher with the Department; and ii. returns to the Department any letter(s) of approval to teach casually that have been issued to her by the Department. The written undertaking required of the Applicant in accordance with item 3(i) does not extend to TAFE NSW. This undertaking would not preclude the Applicant from applying for employment as a teacher with TAFE NSW. 4. take administrative action to give effect to the provisions of clause 3(i) and (ii); 5. if requested, issue the Applicant with a standard statement of service which will include the words ' ceased employment with the Department whilst services were under review' . This offer is also conditional on the parties confirming this agreement in a Deed of Release which would also include provisions for the: 1. confidentiality of the agreement; 2. finalisation of the proceedings; and 3. agreement for both parties to meet their own costs in the proceedings to date." 11 It happened that as at 20 March 2003 Ms Markovski was overseas and another solicitor, Mr Capsanis, was acting as her locum tenens. He described himself in some documentation as "on consultancy/agency for Norma Markovski". I note from the documentation that his qualifications include a Diploma in Labour Relations. Timed at 8.40 am on 21 March 2003, he notified the Department's solicitor by facsimile transmission of acceptance of the amended offer in these terms: "I acknowledge receipt of amended offer of settlement per your facsimile letter of 20/3/03. I note from our discussions that the proposed Deed of Release is to contain a recital to cover the words/expression 'under review' in the standard statement of service & which recital will be excluded from the confidentiality provision in the Deed of Release. On the above basis, the matter is settled & I'll proceed accordingly to notify the Commissioner's associate." 12 A copy affidavit sworn by Mr Capsanis in IR proceedings (and tendered by the plaintiff on this motion) records that on 20 March 2003 he had a detailed conference with the plaintiff of at least several hours duration at which, in relation to the proposed settlement, she instructed him "….yes you can go ahead…" 13 However, in May 2003 the plaintiff in person contacted the IRC asserting that the matter had not been settled. In response to this assertion the Department contended that the matter was settled. Lawyers no longer represented the plaintiff. 14 Ultimately, the Department moved for dismissal of the IRC proceedings. The plaintiff appeared in order to oppose that motion. A decision was made by Commissioner Macdonald on 25 June 2004 and he dismissed the proceedings. The Commissioner published detailed reasons for his decision. As can be observed therefrom, he had attempted beforehand to achieve a "conciliation of the parties' differences". 15 As I understand the plaintiff's submissions she seeks to derive from this course of events a demonstration that the proceedings had not in fact been settled but were at a stage of continuing negotiation. The stance of the Department was that the proceedings had been settled in accordance with the exchange between its solicitor and Mr Capsanis as above set out. It was not inconsistent with that stance that the Department was willing to enter conciliation discussions with its former, and obviously now disgruntled, employee. 16 Whether the plaintiff's claim in the IRC had been settled was the very issue debated before and determined by Commissioner Macdonald. The Commission's powers included the award of compensation, subject to limit, for wrongful dismissal. It undoubtedly had power to determine whether proceedings regularly instituted before it had been settled or not. 17 The plaintiff appealed against the dismissal of the claim by Commissioner Macdonald and a full Bench of the IRC (Walton J, Vice President, Staff J and Patterson C) on 28 February 2005 dismissed her appeal. The judgment in the appeal included these observations: "21. The essential finding of the Commissioner was that the appellant gave instructions to her agent at the time, Mr Capsanis. The Commissioner further found the appellant gave instructions to settle and an agreement was thereby reached. 22. As the case unfolded before us, it became clear that the appellant focused her attack upon the Commissioner's decision based upon a contention that there was an absence of capacity and instruction for Mr Capsanis to reach a settlement on her behalf. The appellant conceded that Mr Capsanis had reached an agreement with the respondent which was reflected in five terms contained in the letter of 20 March 2003. Thus, whilst the appellant continued to challenge the deed of release, advancing some submissions concerning Masters v Cameron (1954) 91 CLR 353, she did not contest, at the end of the day that an agreement had been reached by Mr Capsanis, (expressed in the letter of 20 march 2003), albeit without her authority. It is also clear from her oral submissions that the issues the appellant had with the deed of release did not concern the five terms earlier agreed." 18 It was apparent from the submissions on the hearing of the present motion that the plaintiff was seeking once again to agitate a claim that the IRC proceedings had not been settled. She also made reference to some texts, cases and statutory provision. Although I do not consider it necessary to deal with the references to determine the issues on the motion, some brief observations may be appropriate. They are made in the context of the plaintiff's submissions, setting to one side for the present the consequences flowing from the exercise of jurisdiction by the IRC. 19 The plaintiff drew attention to fundamentals of contract law relating to acceptance corresponding with the offer and the necessity for it to be unequivocal: Law of Contract: Carter & Harland @ p41. It did not offend those principles that the acceptance by Mr Capsanis noted particular recitals which were agreed to be incorporated in a proposed Deed of Release. Further references to the identity of contractors need to be understood in the context of the authority of retained legal counsel to bind a client to the terms of settlement of litigation: see Harvey v Phillips (1956) 95 CLR 235. 20 The plaintiff also drew attention to the requirements for the execution of a deed set out in s 38(1) of the Conveyancing Act 1919. The Department is not seeking to enforce an obligation of the plaintiff derived from a deed but an agreement to settle litigation, one of the terms of which was that a deed incorporating certain provisions would be entered. 21 It was contended that the nature of the IRC was in some way relevant. The plaintiff referred to Waterside Workers Federation of Australia v J.W. Alexander Limited (1918) 25 CLR 434 and to The Queen v Kirby, Ex Parte Boilermakers Society of Australia (1956) 94 CLR 254. Following such references, she read from a variety of sources where res judicata or estoppel had operated in respect of decisions of courts drawing, as I understood her, a distinction between judicial and arbitral tribunals. This distinction is not germane. Significantly, Gibbs J (as he then was) in Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 said: "The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties, and it only has temporary authority to decide a matter ad hoc." 22 I add for completeness, without in my view any need for comment, that the plaintiff also drew attention to another text Civil Procedure: Colbran & Ors 2005 @ pp 324-334; Henderson v Henderson 1843 3 Hare 100 (67 ER 313) and Arnold v National Westminster Bank (1991) 2 AC 93. 23 Although the reference given by the plaintiff ([2003] FCA 180) would appear to be incorrect, there is some guidance to be gained from the judgment of Branson J in Miller v University of New South Wales [2002] FCA 882. In that case a former employee of the University had failed to gain relief in the Australian Industrial Relations Commission in respect of termination of his employment which he alleged (in terms of applicable Federal legislation) was harsh, unjust or unreasonable. Subsequently he brought an action in the Federal Court, seeking, inter alia, relief at common law, upon an alleged breach by the University of his contract of employment. Although that case involved legislation, awards and agreements not pertinent to this plaintiff and I do not canvass the detail, I quote from her Honour's findings: "Paragraph 6 of the amended application claims damages for breach of the contract of employment between Dr Miller and the University. The statement of claim filed by Dr Miller reveals that this claim is based on the allegation that the direction that he performed the duties of FYLD was a repudiatory breach of contract on the part of the University in that it required him to perform duties which were inconsistent with his position as Associate Professor. In my view, in view of the findings of the Full Bench of the AIRC, Dr Miller is estopped from re-litigating this issue. If I am wrong in this regard, I consider that the claim gives rise to an abuse of process as it seeks to re-litigate anew the case disposed of by the Full Bench of the AIRC." 24 In the context of the present case it is convenient to note New South Wales v Paige (2002) 60 NSWLR 371, the particular facts of which need not be recounted. Although, for reasons which he gave, Spigelman CJ dissented in the result, a claim in negligence brought by a teacher (a school principal) failed. In the course of his reasons the Chief Justice adverted to Johnson v Unisys (2003) AC 518 where in the speech of Lord Millett it was observed: "The co-existence of two systems overlapping but varying in matters of detail and heard by different tribunals, would be a recipe for chaos. All coherence in our employment laws would be lost." 25 Spigelman CJ later continued: "In cases of dismissal it would be necessary to imply a term or an obligation akin to a requirement to exercise the power of dismissal in good faith and with due regard to any known sensitivities of the employee. Such an obligation could not be consistent with the right of an employer to dismiss an employee on any grounds. Similar considerations apply to the Australian industrial relations context, and similar purposes as those imputed to the UK Parliament are discernible in the legislation governing unfair dismissals in Australia. With respect to the factors given weight in Johnson v Unisys , the relevant provisions in New South Wales under the Industrial Relations Act 1996 are: . Tribunals – Chapter 4 sets up the Industrial Relations Commission for the hearing of disputes under the Industrial Relations Act (s 145 and s 146); s 84(1) provides that applications for a remedy after unfair dismissal are made to the Commission. . Class of applicants – s 83(1) limits a right of application to public sector employees, any employee whose annual remuneration is less than $64,000 (supplied by Workplace Relations Regulations 1996 (Cth) , reg 30BB, by reason of Industrial Relations (General) Regulation 2001 , cl 5) and any employee who is covered by an industrial instrument regardless of their remuneration. Also specifically excluded by s 83(2) with regulation c 16 are certain probational, short-term, causal and specific-purpose employees. . Size of award – the primary remedies are reinstatement or re-employment (s 89). The quantum of compensation that may be awarded cannot exceed the value of 6 months' remuneration, discounted by any failure of the employee to mitigate his/her circumstances by seeking employment. . Time for application – an application must be made within 21 days of dismissal with provision for the consideration of out of time applications (s 85). The New South Wales legislation thus evinces a similar intention to that discussed in Johnson v Unisys , namely, to limit the class of applicants and the quantum of compensation that may be awarded within reasonable parameters, in the interests of employers and the community generally. Burazin v Blacktown City Guardian (1990 142 ALR 144), suggests that awards for compensation may be made for psychological injury provided the quantum is within the specified limits. Additionally, the scheme for dealing with unfair dismissal claims involves a specialised tribunal, with a range of remedial options and a requirement to expedite the proceedings by bringing a claim, in the usual course, within 21 days of dismissal. These arrangements are directed to the efficient handling of unfair dismissal claims and would be thwarted by the creation of a parallel remedy of unlimited scope, that could be sought at any time, subject only to the Limitation Act 1969 , and would be dealt with in the general jurisdiction of the New South Wales court system without the availability of the primary remedies of reinstatement or re-employment." 26 The primary relief sought by the defendant is dismissal of the proceedings as an abuse of process of the court pursuant to UCPR 13.4(1)(c). The contention is that what is sought to be relitigated is the issue which has already been determined by the IRC. The response of the plaintiff was that, in this Court, the claim is solely for damages arising from negligence by those for whom the defendant is vicariously liable, whereas the claim in the IRC was for reinstatement. That overlooks the ambit of proceedings pursuant to Chapter 2 Part 6 of the Industrial Relations Act 1996 which invokes remedies including damages albeit limited as Spigelman CJ commented in Paige. 27 I have elaborated in some detail the scope of the issues between the parties and the terms of settlement which were reached in the IRC proceedings. In my view it is amply demonstrated that this action seeks to relitigate what was finalized by the settlement of that litigation. It was a comment, justified in the circumstances, by counsel for the defendant that the oral submissions by the plaintiff were cogently demonstrative of her desire in this Court to agitate once again issues which had been determined against her in the IRC. 28 I do not need to deal in terms with the proposed separate questions in paragraph 2 of the notice of motion beyond recording that, by analogy with and in harmony with the views of Branson J in Miller, I would hold the plaintiff estopped from maintaining these proceedings but, in any event, by reason of the duplication they should be dismissed as an abuse of process. 29 I record that I would doubt that the commencement of this action at common law by the plaintiff involves calling in question the decision of the IRC in the sense of s 179 of the Industrial Relations Act but in the light of the conclusion I have reached otherwise I do not explore this matter further. 30 The plaintiff read a lengthy submission which was obviously derived from a previously prepared typescript. This is not a criticism of that circumstance but it is an indication of a failure to recognize matters in issue that, in addition to seeking to reargue matters explicitly already determined in the IRC proceedings, the plaintiff sought as a final submission that orders be made to strike out the defence and enter summary judgment in her favour for damages to be assessed. Such an order was previously sought and expressly refused by McClellan CJ at CL on 14 February 2006. 31 Pursuant to UCPR 13.4 I order that the proceedings founded upon the further amended statement of claim filed on 28 March 2006 be dismissed generally. The plaintiff is ordered to pay the defendant's costs of the action. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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