FEDERAL COURT OF AUSTRALIA

Ingram-Nader v Brinks Australia Pty Ltd [2006] FCA 624

INTERPRETATION – alleged unlawful discrimination in workplace – vicarious liability of employer – effect of s 106 of the Sex Discrimination Act 1984 (Cth)

PRACTICE AND PROCEDURE – application for leave to file application out of time – principles to be applied – prejudice – whether prejudice relating to events occurring before the commencement of time to file application may be taken into account

PRACTICE AND PROCEDURE – alleged unlawful discrimination in workplace – proceedings against employer on the basis of vicarious liability – whether joinder required of employees engaging in unlawful discrimination – whether employer severally liable

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Human Rights and Equal Opportunity Commission Act 1986 (Cth) ss 46P, 46PH, 46PO

Sex Discrimination Act 1984 (Cth) ss 3, 28A, 28B, 106

Federal Court Rules O 6 r 5

Australian Coal and Shale Employees’ Federation and Anor v The Commonwealth and Ors (1953) 94 CLR 621 cited

Duff and Ors v Freijah and Ors (1982) 62 FLR 280 considered

Gilroy v Angelov (2000) 181 ALR 57 followed

Hickey and Ors v Australian Telecommunications Commission (1983) 47 ALR 517 considered

House v The King (1936) 55 CLR 499 cited

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 followed

Lovett v Le Gall (1975) 10 SASR 479 considered

Pham v Commonwealth of Australia [2002] FCA 669 cited

Pinecot Pty Ltd v Anti-Discrimination Commissioner [2001] NTSC 107 referred to

Phillips v Aust Girls’ Choir & Anor [2001] FMCA 109 approved

The Koursk [1924] P 140 considered

Thompson v Australian Capital Television Pty Ltd and Ors (1996) 141 ALR 1 considered

Wedesweiller and Ors v Cole and Ors (1983) 47 ALR 528 considered

NEHME INGRAM-NADER v BRINKS AUSTRALIA PTY LTD

NSD 1812 of 2005

COWDROY J

26 MAY 2006

SYDNEY

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.      The appeal be allowed.

2.      The decision of Federal Magistrate Driver delivered on 19 September 2005 be set aside.

3.      The time for the appellant to file the application be extended to 26 August 2005.

4.      The application be remitted to the Federal Magistrates Court for directions and determination.

5.      The respondent pay the appellant’s costs of the appeal.

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

REASONS FOR JUDGMENT

1                     These proceedings concern a claim of sexual harassment made by the appellant against the respondent, his former employer. On 20 December 2004 the appellant made a complaint to the Human Rights and Equal Opportunity Commission (‘HREOC’) in respect of the conduct of several of his former work colleagues, which he alleged amounted to sexual harassment within the meaning of s 28A of the Sex Discrimination Act 1984 (Cth) (‘SDA’). The appellant simultaneously made a complaint against the respondent on the basis of s 106 of the SDA, pursuant to which an employer is vicariously liable for the conduct of its employees.

2                     The complaint against the respondent was terminated by the President of HREOC on 1 June 2005. Section 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) (‘HREOC Act’) provides that following the termination of a complaint, a complainant may within 28 days (‘the prescribed period’), or within such other time as the Court allows, apply to have their complaint of unlawful discrimination heard by the Federal Court or the Federal Magistrates Court.

3                     The appellant commenced proceedings in the Federal Magistrates Court in relation to his complaint on 26 August 2005, 58 days after the prescribed period had elapsed. Accordingly the appellant required leave of the Federal Magistrates Court to bring the proceedings in that court. Driver FM heard the appellant’s leave application on 19 September 2005 and delivered an ex tempore judgment in which his Honour determined not to grant leave to the appellant to bring the proceedings.

4                     The appellant appealed the judgment of Driver FM to this Court. Because Driver FM’s decision was interlocutory, the appellant required leave to appeal. On 3 November 2005, Jacobson J granted leave to appeal confined to two questions, namely:

1)                  whether the learned Federal Magistrate erred in his consideration of the test of whether the respondent was prejudiced by delay; and

2)                  whether the learned Federal Magistrate erred in his consideration of whether the respondent was liable for the actions of its employees, having regard to s 106 of the SDA.

Facts

5                     The appellant commenced employment with the respondent in July 1998. The alleged sexual harassment commenced in December 1998. In approximately September 2003 the appellant ceased attending the workplace due to an employment-related injury. He alleges that a further incident of harassment occurred on 30 August 2004 when he returned to the workplace to provide documentation to the respondent. In approximately September 2005 the appellant’s contract of employment with the respondent was terminated.

6                     On 20 December 2004 the appellant lodged his complaint with HREOC. HREOC notified the respondent of the appellant’s complaint on 3 March 2005.

7                     Section 46PH(1) of the HREOC Act relevantly provides:

‘(1)      The President may terminate a complaint on any of the following grounds:

…

(b)               the complaint was lodged more than 12 months after the alleged unlawful discrimination took place;

…

(i)         the President is satisfied that there is no reasonable prospect of the matter being settled by conciliation.’

8                     The President of HREOC terminated the complaint against the respondent by notice of termination dated 1 June 2005. In his reasons for termination, the President referred to the fact that the respondent was unwilling to attend a conciliation conference to attempt to resolve the matter.

9                     For various reasons the appellant did not apply for legal aid until 27 June 2005, two days before the prescribed period was due to expire. Legal Aid was unable to lodge his application with the Federal Magistrates Court until 26 August 2005 due to the time required to process his application and the absence on leave of the solicitor handling the matter,.

The decision of Driver Fm

10                  In refusing the leave application Driver FM considered the principles in Phillips v Aust Girls’ Choir & Anor [2001] FMCA 109 (‘Phillips’), which were approved by this Court in Pham v Commonwealth of Australia [2002] FCA 669. There is no dispute between the parties concerning the applicability of those principles; rather the dispute relates to the application by Driver FM of those principles. The paragraphs of his Honour’s reasons which relate to the issues in the current appeal are as follows:

‘The issues arising in the matter date from around 1998, although they extended through to 2004. Mr Gurran, for the respondent, put to me that the allegations made to HREOC came as a surprise to the respondent and the respondent rather thought that the issues might have been resolved at the termination of the complaint. A fourth relevant consideration is any prejudice in defending the proceedings occasioned by the delay.

This is a material factor against the grant of an extension, see Doyle at page 287. I regard the issue of prejudice in this case as a significant factor. The complaint to HREOC was against the employer only even though it was a complaint of sexual harassment by reason of the applicant’s sexual preference. No complaint having been made against the alleged harassers, no proceeding can now be brought in this court against those persons. The jurisdiction of the court is limited to considering the claim against the harasser’s employer and would be based on asserted vicarious liability. For its part, the respondent asserted before HREOC that the allegations of harassment came as a surprise.

…

The events complained of go back up to seven years. The respondent asserts that the individuals allegedly responsible for the harassment are no longer employed by the respondent and one relevant witness is no longer in Australia. There would be real difficulty facing the respondent in dealing with the allegations in this Court.

… The sixth consideration is that the merits of the substantive application are properly to be taken into account in considering whether an extension of time should be granted.

The material put before HREOC and before the court to this point is sufficient to establish a prima facie case of sexual harassment against the persons allegedly responsible for that harassment. That is not the same thing as establishing a prima facie case against the single respondent, the employer, which would depend upon proof of vicarious liability. At this stage and particularly if the only evidence available is that of the applicant I would have to say that the prospects of success of the application against the respondent are uncertain.

…

… He [the applicant] could have brought that complaint forward rather earlier than he did. He certainly could and in my view should have pursued his rights in this court more promptly than he did.

Having regard to the length of the delay in this matter which in my view is significant, the explanation for the delay which in my view is only partially convincing, the prejudice to the respondent if the proceeding continues, which in my view is real and substantial, and the interests of the administration of justice, I have come to the view that the application for an extension of time should be refused and I will so order.’

PRINCIPLES RELATING TO AN APPLICATION FOR LEAVE

11                  Several principles must be considered by the Court in determining an application for leave to extend time in which to institute proceedings. In Phillips McInnis FM referred to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 in which Wilcox J (at 348-9) set out the principles to be adopted in relation to an extension of time under s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’). McInnis FM determined that those principles were applicable to the exercise of discretion under s 46PO of the HREOC Act. Accordingly his Honour (at [10]) set out the following principles:

‘1.        There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The “prescribed period” of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 550). 

2.         It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition (Comcare v A’Hearn (1993) 45 FCR 441 and Dix v Client Compensation Tribunal (1993) 1 VR 297 at 302).

3.         Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. (See Doyle v Chief of Staff (1982) 42 ALR 283 at 287)

4.         Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension. (See Doyle at p 287)

5.         The mere absence of prejudice is not enough to justify the grant of an extension. (See Lucic at p 416)

6.         The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. (See Lucic at p 417)

7.         Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of the court’s discretion (Wedesweiller v Cole (1983) 47 ALR 528).’

12                  The above principles are drawn almost verbatim from those formulated by Wilcox J in Hunter Valley Developments. I consider that they are relevant to an application under s 46PO of the HREOC Act. The principles relevant to this appeal are numbers 4 and 6.

13                  The appellant contends that Driver FM erred in his interpretation of prejudice for the purposes of an application to extend time in which to bring proceedings. The appellant also contends that Driver FM erred in assessing the merits of the appellant’s case, because his Honour misconceived the basis of the vicarious liability of the respondent.

14                  Since the decision by Driver FM was an exercise of his Honour’s discretion, the principles referred to in House v The King (1936) 55 CLR 499 in relation to the role of the appeal court apply. In that decision, the majority of the High Court said at 504-5:

‘It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.’

See also Australian Coal and Shale Employees’ Federation and Anor v The Commonwealth and Ors (1953) 94 CLR 621 at 627 per Kitto J.

APPLICATION OF PRINCIPLES

Prejudice

15                  In assessing prejudice to the respondent arising from the delay in instituting this appeal, the appellant submits that the Court is only entitled to take into account prejudice caused by the delay of 58 days following the expiration of the prescribed period. The appellant says that Driver FM erred in taking into account the prejudice to the respondent resulting from the long period of time which has elapsed since the alleged conduct commenced. The appellant submits that such prejudice is not relevant in the context of an application for an extension of time, because it does not result from the delay of 58 days.

16                  In Lovett v Le Gall (1975) 10 SASR 479 Bray CJ said (at 485):

‘If the defendant has suffered no prejudice, as when he was well aware within the limitation period of the plaintiff’s claim, or where the excess period of time is small, or where he cannot show that he has lost anything by reason of the delay, it may well be that the court will not find it difficult to come to the conclusion that it is fair and equitable in the circumstances to grant the extension.’

All of the examples referred to by Bray CJ are examples of prejudice caused specifically by the delay in instituting proceedings.

17                  There are numerous authorities of this Court in which prejudice has been considered in this context, each of which has related to prejudice which accrued during the period for which an extension is sought: see for example Wedesweiller and Ors v Cole and Ors (1983) 47 ALR 528; Hickey and Ors v Australian Telecommunications Commission (1983) 47 ALR 517; Duff and Ors v Freijah and Ors (1982) 62 FLR 280. I have not been referred to any authority in which a court has taken into account prejudice caused by delay occurring prior to the commencement of the prescribed period.

18                  Significantly, the HREOC Act places no time limit on the making of a complaint of unlawful discrimination. Accordingly while the appellant in this case did not make a complaint to HREOC until more than five years after the conduct allegedly commenced, the appellant was entitled to make his complaint to HREOC when he did. Whilst the absence of a time limit in the HREOC Act may cause difficulties to respondents in some circumstances, the legislative scheme permits complaints to be made to HREOC at any time, and to be subsequently brought to the Court.

19                  Driver FM did not identify any prejudice to the respondent resulting from the failure to lodge the appeal within the prescribed period. Rather the prejudice referred to by Driver FM was occasioned by the fact that the appellant did not make a complaint to HREOC until 2004. I agree with the submission of the appellant that Driver FM erred by taking into account the prejudice suffered by the respondent which predated the expiry of the prescribed period. The only relevant period for consideration of prejudice is the 58 days following the expiry of the prescribed period.

Vicarious liability

20                  The second ground of appeal raises the issue of whether the appellant’s application to the Federal Magistrates Court made out a prima facie case against the respondent. The appellant submitted that Driver FM misconstrued the requirements for vicarious liability under the SDA, and accordingly misconceived the merits of the appellant’s application.

21                  The complaint made by the appellant to HREOC concerned alleged conduct by employees of the respondent which constituted sexual harassment. Sexual harassment is defined in s 28A of the SDA, which relevantly states:

‘(1)      For the purposes of this Division, a person sexually harasses another person (the “person harassed”) if:

(a)        the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or

(b)        engages in other unwelcome conduct of a sexual nature in relation to the person harassed;

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated that the person harassed would be offended, humiliated or intimidated.’

22                  Section 28B(2) makes it unlawful for an employee to sexually harass a fellow employee or a person who is seeking employment with the same employer.

23                  Pursuant to s 106 of the SDA, an employer may be liable for conduct of its employees which amounts to unlawful discrimination. Section 106 provides:

‘(1)      Subject to subsection (2), where an employee or agent of a person does, in connection with the employment of the employee or with the duties of the agent as an agent:

(a)        an act that would, if it were done by the person, be unlawful under Division 1 or 2 of Part II (whether or not the act done by the employee or agent is unlawful under Division 1 or 2 of Part II); or

(b)        an act that is unlawful under Division 3 of Part II;

this Act applies in relation to that person as if that person had also done the act.

(2)       Subsection (1) does not apply in relation to an act of a kind referred to in paragraph (1)(a) or (b) done by an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph.’

24                  Complaints in respect of ‘unlawful discrimination’ can be made to HREOC under s 46P of the HREOC Act. Under s 3 of the HREOC Act, ‘unlawful discrimination’ is relevantly defined as:

‘… any acts, omissions or practices that are unlawful under:

…

(c)                Part II of the Sex Discrimination Act 1984;

…’

25                  Sections 28A and 28B fall within Pt II of the SDA. Section 106 is contained in Pt VI of the SDA. The respondent submits that that unlawful conduct arising under s 106 would not constitute unlawful discrimination for the purpose of making a complaint under s 46P of the HREOC Act, or for subsequent Court proceedings under s 46PO, because s 106 is not contained in Pt II of the SDA.

26                  I reject this submission. The conduct is not made unlawful by s 106 of the SDA, but rather by s 28B. The effect of s 106 is to deem the employer liable for the unlawful conduct committed by individual employees. Section 28B falls within Pt II of the Act. Accordingly a complaint relying upon s 106 is a complaint alleging ‘unlawful discrimination’ as defined in s 3 of the HREOC Act.

27                  The appellant submits that Driver FM erred in suggesting that the appellant had to prove the liability of the respondent separately from the employees. The appellant submits that, by virtue of s 106 of the SDA, the respondent’s liability is deemed where an employee has engaged in unlawful conduct. Since Driver FM found as a matter of fact that there was a prima facie case against the individual employees, the appellant submits that it follows by virtue of s 106 that the appellant has made out a prima facie case against the employer.

28                  However, the respondent submits that his Honour’s finding that no prima facie case existed against the respondent was made on the basis that the individual employees alleged to have committed the unlawful acts were not parties to the proceedings, with the result that no findings and orders could be made against them. The respondent says since no orders could be made against the individual employees, the respondent could not be vicariously liable for their conduct under s 106 and that s 106 makes an employer jointly, but not severally, liable. It referred to O 6 r 5 of the Federal Court Rules which states that a party which is jointly but not severally liable for relief may apply for a stay of proceedings until all other persons jointly liable are joined to the proceedings.

29                  I agree with the submission of the appellant with respect to the effect of s 106 of the SDA. All that is required in order to make out a prima facie case against an employer is to establish a prima facie case against an employee of that employer. Once established, the provisions of s 106 deem an employer liable without the need for an appellant to prove the elements of vicarious liability against the employer.

30                  I also consider that an individual employee alleged to have engaged in unlawful discrimination need not be a party to a proceeding in order that the Court make a finding in respect of the lawfulness of their conduct. The words of s 106(1) that ‘this Act applies in relation to that person as if that person had also done the act’ indicate that an employer is to be severally liable for the discriminatory conduct of its employee. Such interpretation is supported by Gilroy v Angelov (2000) 181 ALR 57, in which Wilcox J made orders against an employer in circumstances where the employee was unable to be served with the application.

31                  This legislative scheme is consistent with common law principles of vicarious liability of employers for tortious conduct of employees. In The Koursk [1924] P 140 Scrutton LJ said at 155:

‘The substantial question in the present case is: What is meant by “joint tortfeasors”? and one way of answering it is: “Is the cause of action against them the same?” Certain classes of persons seem clearly to be “joint tortfeasors”: The agent who commits a tort within the scope of his employment for his principal, and the principal; the servant who commits a tort in the course of his employment, and his master; two persons who agree on common action, in the course of, and to further which, one of them commits a tort. These seem clearly joint tortfeasors; there is one tort committed by one of them on behalf of, or in concert with, another.’

32                  This decision, which was applied in Thompson v Australian Capital Television Pty Ltd and Ors (1996) 141 ALR 1, makes it clear that at common law, a vicariously liable employer is a joint tortfeasor with the employee against whom the tortious conduct is specifically alleged. Gummow J also observed in Thompson at 22:

‘At common law, the liability of joint tortfeasors was said to be joint and several. The plaintiff might sue any one of the tortfeasors separately for the full amount of the loss, or all of them jointly in the same action.’

Similar observations can be found in the judgment of Brennan CJ, Dawson and Toohey JJ at 4. See also the discussion of vicarious liability in Pinecot Pty Ltd v Anti-Discrimination Commissioner [2001] NTSC 107 at [12]-[24].

33                  At common law joint tortfeasors are jointly and severally liable for any loss occasioned by their tortious conduct. It follows that an employee does not need to be joined into proceedings against an employer for conduct of that employee in respect of which the employer is vicariously liable. The same effect is achieved by s 106 of HREOC Act in relation to an employer whose employee has engaged in unlawful discrimination.

34                  It follows from the above that Driver FM erred in his consideration of the merits of the appellant’s claim.

Re-exercising the discretion

35                  The primary reasons for the denial of leave by Driver FM were the factors which were considered in this appeal. The errors in Driver FM’s decision were errors of principle which materially affected the exercise of his discretion. Accordingly I consider his decision should be set aside.

36                  In relation to prejudice, I do not consider there is any demonstrated prejudice to the respondent because of the delay of 58 days from the expiration of the prescribed period. I accept the finding of Driver FM that the explanation for the delay by the appellant is ‘only partially convincing’. However, I do not consider that the appellant could be said to have ‘rested on his rights’ due to the delay between the date of termination of his complaint (1 June 2005) and 27 June 2005, being the date on which he made application to Legal Aid. Driver FM accepted that the subsequent delay was explained by matters relating to Legal Aid, which were beyond the control of the appellant.

37                  As to the merits of the application, I see no reason to disturb the finding of Driver FM, who had all the relevant material before him, that the appellant had established a prima facie case against the employees of the respondent. On the basis of such finding, I find that the appellant has established a prima facie case against the respondent.

38                  Taking these factors into account, I consider that leave to bring the application out of time should be granted.

Associate:

Dated:              26 May 2006