WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES GARTH JASON WATERS

APPLICANT

-v-

Taipan Pumps Pty Ltd (ACN 097 145 527)

RESPONDENT

CORAM Commissioner P E Scott

HEARD Wednesday, 21 December 2005, Tuesday, 31 January 2006, Wednesday, 29 March 2006

DELIVERED MONDAY, 24 APRIL 2006

FILE NO. U 108 OF 2005

CITATION NO. 2006 WAIRC 04233

CatchWords Industrial Law (WA) – Claim of harsh, oppressive and unfair dismissal – Issues in relation to applicant’s conduct – Application to adjourn pending the outcome of the Supreme Court proceedings granted - Whether public interest for both jurisdictions to proceed considered – Industrial Relations Act 1979 (WA) s 27(1)(b)(i)

Result Matter adjourned

Representation 

Applicant Mr R. Bower of counsel

Respondent Mr P. Patterson of counsel

Reasons for Decision

1         This is an application filed on 13 October 2005 by which the applicant claims that he was harshly, oppressively or unfairly dismissed from his employment with the respondent.  The applicant says that he was employed by the respondent for some two years and that he was purportedly dismissed on 15 September 2005 on the grounds that the respondent alleges that his actions whilst employed by the respondent breached his fiduciary duties to the respondent.

2         The respondent says that the applicant was a director of the respondent along with two others and that by reason of his employment he owed fiduciary obligations to the respondent.  The respondent says that on 10 June 2005, a company named Global Mining Products Pty Ltd was registered.  The sole director and shareholder of that company was the applicant’s wife, Beverley Ann Waters.  It is alleged that the applicant engaged in conduct which had the effect of diverting equipment and sales from the respondent’s business to Global Mining Products Pty Ltd. 

3         On 19 September 2005, the respondent took a matter to the Supreme Court of Western Australia (CIV 2123 of 2005), dealing with that issue pursuant to the Corporations Act 2001.  In the matter before the Supreme Court, the respondent seeks damages and an injunction against the applicant and Global Mining Products Pty Ltd.  On 6 October 2005, the Supreme Court issued an interlocutory injunction against the applicant and Global Mining Products Pty Ltd.  Since that time, the proceedings before the Supreme Court have proceeded through various stages.

4         The respondent says that the unfair dismissal claim should not proceed before the Commission but should be adjourned pending the outcome of the Supreme Court matter.  The applicant on the other hand seeks to proceed with his application before the Commission.

5         The Commission convened on 29 March 2006 to hear from the parties as to whether the application ought be adjourned pending the outcome of the Supreme Court proceedings or whether it ought be listed for hearing and determination. 

6         The applicant relies on a decision of Beech C, as he then was, in Portolesi v Fini Group (77 WAIG 1537) in particular by reference to s.34(3) of the Industrial Relations Act 1979 (“the IR Act”).  The applicant says the Commission should not defer to a superior court and that there is more prejudice to the applicant in the delay in this matter than there would be to the respondent.

7         The applicant says that whilst reinstatement is not sought, and that a more expeditious hearing of the matter would be sought were he seeking reinstatement, that should not make any real difference to the matter proceeding in the normal course and that there is no particular reason to adjourn.

8         The respondent says that there is no claim by the applicant that he will suffer any detriment by the matter not proceeding at this point.  He seeks compensation and not reinstatement.  There is no suggestion that the applicant is in financial difficulties such that the matter ought proceed. 

9         The respondent says that s.34 of the IR Act has no bearing on this matter but that the case in Portolesi (supra) was one where that there was an application to the Supreme Court to remove the case from the Commission. 

10      The respondent says that the appropriate test is Myers v Myers (1969 WAR 19) and that the Commission has the discretion to adjourn pursuant to s.27 of the IR Act.  The question of prejudice is the significant issue according to the respondent and it is that the Supreme Court action is moving slowly because the applicant is said to be slowing it down because the applicant wishes to proceed in the Commission’s jurisdiction.  The respondent is concerned that as the issue before the Commission will be essentially the same as lies before the Supreme Court, that the calling of evidence before the Commission to determine the claim of unfair dismissal may raise a question of issue estoppel in the Supreme Court proceedings.  The Supreme Court is specifically empowered to deal with allegations of breaches of the corporations law which is the essence of the respondent’s complaint about the applicant.  The respondent says there is potential prejudice to it where as there is no prejudice to the applicant. 

11      The applicant denies that he is seeking to delay the matter in the Supreme Court and says that the matter is being progressed in the normal way. 

Consideration

12      The issue before Beech C in Portolesi (supra) related to the provisions of s.34 of the IR Act in circumstances where the respondent in that matter had applied to the Supreme Court for a stay against the Commission.  That is not the case here. 

13      The appropriate test in this matter is that set out in Myers v Myers (page 21);

“Where the refusal of an adjournment would result in serious injustice to one party, an adjournment should be granted unless in turn this would mean serious injustice to the other party.”

14      The parties are in dispute as to the applicant’s conduct and the respondent’s response to it being the dismissal.  The Statement of Claim before the Supreme Court in CIV 2123 of 2005 relates to a claim for damages involving allegations as to the applicant’s conduct and he is said to have breached his fiduciary obligations to the respondent.  Those same allegations lead to the dismissal which gave rise to this claim.

15      It is clear to me that the facts of the matter before the Commission are the same as those which would be relied upon before the Supreme Court.  The Supreme Court and the Commission would both be capable of making findings as to the facts as to the applicant’s conduct.  The Commission would do this for the purposes of determining whether the dismissal was unfair.  On the other hand, the Supreme Court proceedings are for the purposes of determining whether the applicant has breached his fiduciary duties to the respondent and the respondent seeks damages for that alleged conduct.  The two matters appear to be the opposite sides of the same coin except to the extent that should the matter be determined by this Commission, it will be able to determine whether the applicant has been unfairly dismissed and ought be paid compensation.  However, it will not be able to resolve the issue of damage to the respondent for which damages might be due whereas the Supreme Court will be able to determine the applicant’s conduct and whether damages are due to the respondent, but not whether he has been unfairly dismissed and if so, compensate him accordingly.  Part of the difficulty of this matter proceeding before the Commission is that both jurisdictions will be faced with the requirement to make findings of fact.  It would be contrary to the public interest for both jurisdictions to proceed to determine the same facts.  The Supreme Court is the court which is empowered to deal with matters relating to the corporations law and the requirements on employees and directors which flow from that.

16      In all of the circumstances, I am not satisfied that should this matter be adjourned pending the outcome of the Supreme Court proceedings the applicant would suffer greater detriment than the respondent would if the matter proceeds to hearing.