Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28: Privity of Interest and Issue Estoppel
Wednesday 12 August 2015 @ 1.34 p.m. | Industrial Law | Legal Research | Torts, Damages & Civil Liability
In Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28 (12 August 2015), the High Court of Australia has unanimously allowed an appeal from a decision of the Court of Appeal of NSW, holding that declarations and orders made by the Federal Court of Australia in proceedings commenced by the Fair Work Ombudsman (the FWO) against the respondent (Ramsey)did not create an issue estoppel that precluded the appellant (Mr Tomlinson) from asserting that Ramsey was not his employer in a subsequent proceeding.
Background Facts
Mr Tomlinson had worked at an abattoir facility operated by the Ramsey Food Processing Pty Ltd (Ramsey). Initially Ramsey had employed Mr Tomlinson directly as an employee; however, on 16 October 2006, Mr Tomlinson's employment was formally terminated. On the day following his termination, Mr Tomlinson entered into employment with Tempus Holdings Pty Ltd (Tempus) - a labour hire company that had been recently registered. Mr Tomlinson however, continued to work at the abattoir where he had worked for Ramsey, under the direction of Ramsey until his employment was finally terminated, along with the employment of other workers at the abattoir, in November 2008.
District Court NSW Proceedings
In June 2011, (see Grant Tomlinson v Ramsey Food Processing Pty Ltd [2013] NSWDC 64) Mr Tomlinson sued Ramsey for negligence in the District Court, his action being a claim for damages resulting from a workplace injury he had suffered in June 2008 (the 2008 injury claim). Mr Tomlinson alleged in those proceedings that at the time of his injury he was employed by Tempus. However, Ramsey contended that it (Ramsey) was the true employer at that time, because, if it could establish that position, the 2008 injury claim would fail as a result of Mr Tomlinson’s non-compliance with various requirements imposed by the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and the Workers Compensation Act 1987 (NSW).
In separate Federal Court proceedings against Ramsey (through its manager, Mr Stuart Ramsey, see Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176 (19 October 2011)) the FWO was taking action under section 719 of the Workplace Relations Act 1996 (Cth) (the WRA Claim) for the recovery of unpaid severance entitlements. The FWO action was on behalf of a group of former employees that included Mr Tomlinson. In Justice Buchanan's judgment delivered on 19 October 2011, he found that Tempus had not been an employer in its own right and that, from at least 17 October 2006, Mr Tomlinson’s employer had been Ramsey (the Federal Court finding).
In resisting the 2008 injury claim, Ramsey contended that the District Court was bound by the Federal Court finding (a defence based on estoppel). On 17 May 2013 Judge Mahony of the District Court gave judgment in favour of Mr Tomlinson, awarding him damages of $155,069. His Honour struck out the defence based on estoppel and held that the Federal Court finding could not be used by Ramsey to raise an "issue estoppel" because:
- the subject matter of the WRA Claim was different from that of the 2008 injury Claim; and
- there had been no privity of interest between the FWO and Mr Tomlinson because Mr Tomlinson was unable to control the FWO’s conduct of the WRA Claim.
Court of Appeal NSW Proceedings
In the Court of Appeal (Ramsey Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 (21 July 2014)) the majority (Meagher, Ward and Emmett JJA) unanimously allowed an appeal by Ramsey while Emmett JA, with whom Ward JA agreed, found that Judge Mahony of the District Court had erred by considering that differences in cause of action and evidence, as between the WRA Claim and the 2008 injury claim, were material to the question of issue estoppel. The concept of employment that arose in the 2008 injury claim was no different from that in the WRA Claim, and the question of which company was Mr Tomlinson’s employer at the relevant time had been conclusively determined by the Federal Court finding.
All members of the Court of Appeal NSW found that, since the WRA Claim was made by
the FWO on behalf of Mr Tomlinson and for his benefit, the privity of interest required
for an issue estoppel existed. It found that
the declarations and orders of the Federal Court finding created an estoppel binding
Mr Tomlinson by reason of the appellant having been "privy" in interest with the FWO
in the Federal Court findings according to the principle stated in Ramsay v Pigram (1968) 118 CLR 271.
The Court of Appeal therefore held, that Ramsey should have been permitted to raise the defence based on estoppel, leading to the result that Mr Tomlinson could not succeed on the 2008 injury claim.
Application for Special Leave
On appeal to the High Court of Australia for Special Leave (granted: 12 December 2014) the ground of appeal for Mr Tomlinson was:
The Court of Appeal NSW erred inholding that the Appellant [was] issue estopped by the Federal Court decision in Fair Work Ombudsman v Ramsey Food Processing Pty Limited.
Ramsey the Respondent sought leave to rely on a proposed notice of contention, the ground of which was:
The Court of Appeal NSW ought to have held that the evidence established that the Appellant was an employee of the Respondent in the course of his employment at the time of the said accident, as expressed by Emmett JA (at paragraph [99] of the judgment), with whom Ward JA agreed.
The High Court's Decision
The High Court has held that the Court of Appeal NSW was in error in concluding that the FWO was the appellant (Mr Tomlinson's) privy in the Federal Court findings, as the FWO was not enforcing payment of Mr Tomlinson's entitlements "under or through", or "on behalf of", Mr Tomlinson. See paragraph [44] of the decision:
"The Court of Appeal erred in concluding that the Fair Work Ombudsman was Mr Tomlinson's privy on the basis that, in the Federal Court proceeding, the Fair Work Ombudsman was enforcing Mr Tomlinson's entitlements "under or through", or "on behalf of", Mr Tomlinson. In truth, the Fair Work Ombudsman was acting pursuant to his statutory power to commence proceedings in a court "to enforce" the Workplace Relations Act and an award made under that Act. That power was not derived from Mr Tomlinson or his entitlements. The Fair Work Ombudsman was not acting pursuant to his distinct power "to represent" employees who are, or may become, a party to proceedings in a court. The orders for the payment of Mr Tomlinson's entitlements were made, not in satisfaction of a claim asserted on behalf of Mr Tomlinson by the Fair Work Ombudsman as his representative, but pursuant to the power of the court to make such an order, which power arose when the court found that employees had not been paid their entitlements."
By commencing proceedings against the respondent (Ramsey), the FWO was acting pursuant to its statutory power to enforce the Workplace Relations Act 1996 (Cth) and awards made under the legislation - a power not derived from Mr Tomlinson or his entitlements, and a power which when exercised by the FWO was not representing the legal interests of Mr Tomlinson. See paragraph [47] of the judgment:
"It follows that the declarations and orders made by the Federal Court in the proceeding commenced by the Fair Work Ombudsman created no estoppel binding on Mr Tomlinson in the subsequent District Court proceeding or in any other subsequent proceeding between Mr Tomlinson and Ramsey. If Mr Tomlinson was paid the amount that the Federal Court determined Ramsey to have underpaid and that it ordered Ramsey to pay to him, Mr Tomlinson would be prevented from personally pursuing Ramsey for the same amount. That would not be because of the operation of an estoppel arising from the order made by the Federal Court. It would be the result of the operation of the distinct rule against double recovery."
The High Court by majority remitted the matter to the Court of Appeal NSW for determination of an outstanding issue.
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Sources:
Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28 (12 August 2015)
Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176 (19 October 2011)
Ramsey Food Processing Pty Ltd v Tomlinson [ 2014] NSWCA 237 (21 July 2014)
Grant Tomlinson v Ramsey Food Processing Pty Ltd [2013] NSWDC 64
