FEDERAL COURT OF AUSTRALIA

Vergara v Living and Leisure Australia Ltd [2013] FCA 775

THE COURT ORDERS THAT:

1.    The applicant’s application for an extension of time under s 46PO(2) of the Australian Human Rights Commission Act 1986 (Cth) is refused.

2.    The applicant pay the respondents costs of the application.

3.    The applicant pay the respondents costs of the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    There are two applications before the Court:

    An application by the applicant (“Mr Vergara”) for an extension of time under s 46PO(2) of the Australian Human Rights Commission Act 1986 (Cth) (“Human Rights Commission Act”) in which to make an application to the Court alleging unlawful discrimination and breach of contract against the respondents (“the application”); and

    If leave is granted, an application by the fourth respondent (“Robert Walters”) to strike out the claim against it on the basis that it is incompetent.

Application for extension of time

2    On 23 May 2012, the President of the Australian Human Rights Commission (“the Commission”) by her delegate wrote to Mr Vergara advising that the complaint that Mr Vergara had lodged with the Commission alleging racial discrimination in employment, racial hatred and victimisation under the Racial Discrimination Act 1975 (Cth) (“the Racial Discrimination Act”) (“the Complaint”) had been terminated pursuant to s 46PH(1)(i) of the Human Rights Commission Act because the delegate was satisfied that there was no reasonable prospect of the matter being settled by conciliation (“the notice of termination”). By s 46PO(2) of the Human Rights Commission Act, Mr Vergara had sixty days after the date of issue of the notice of termination to make an application to this Court or to the Federal Circuit Court alleging unlawful discrimination by one or more respondents to the terminated Complaint. As the notice of termination issued on 23 May 2012, the application was required to be made by 23 July 2012. Mr Vergara did not file his application until 7 March 2013, some seven and a half months late, and therefore must obtain an extension of time from the Court to make the application.

3    The Court has the power under s 46PO(2) of the Human Rights Commission Act to grant the extension of time and the principals guiding the exercise of discretion to extend time are well established. The three main matters for the Court to take into account are:

    the explanation for the delay;

    any prejudice to the respondents, including any prejudice to them in defending the proceedings occasioned by the delay; and

    whether the applicant has an arguable case: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-9 per Wilcox J; Bahonko v Royal Melbourne Institute of Technology [2006] FCA 1325 at [21]-[24] per Weinberg J; Bahonko v Nurses Board of Victoria (No 4) [2007] FCA 1449 at [47]-[48] per Middleton J.

The background to the proposed application for unlawful discrimination

4    Mr Vergara is a chartered accountant who, at the relevant time, was employed by the fourth respondent (“Robert Walters”), a labour supply firm. Between March and May 2009 Mr Vergara provided accountancy services to the first respondent (“Living and Leisure Australia”) under a labour supply contract between Robert Walters and Living and Leisure Australia. On 27 May 2009, Mr Vergara’s placement with Living and Leisure Australia was terminated following a direction by Living and Leisure Australia to Robert Walters.

5    Mr Vergara complained to the Commission that he was unlawfully discriminated against whilst working at Living and Leisure Australia when he was subjected to racially-based name calling by the second and third respondents (“Mr Schryver” and “Mr King” respectively). He also claimed that he was treated unfairly by the summary termination of his placement without notice or explanation. He claimed that the termination was the direct result of asking for the name calling to stop. The Complaint was made against Living and Leisure Australia, Mr Schryver and Mr King. Mr Vergara did not complain to the Commission about Robert Walters.

6     Living and Leisure Australia, Mr Schryver and Mr King jointly responded to the Complaint, in which they explained that the name calling was intended to be an “inclusive and friendly” nickname for Mr Vergara which had stemmed from Mr Schryver mishearing Mr Vergara’s first name. They disputed that the name calling constituted an act of racial discrimination or racial hatred. They also disputed the reason that Mr Vergara gave for the termination of his placement. They stated that the reason that Mr Vergara’s placement had been terminated was that complaints had been made on 18 or 19 May 2009 and 26 May 2009 about inappropriate conduct by Mr Vergara towards an employee of Living and Leisure Australia, Ms Ewin. They denied any nexus between the name calling about which Mr Vegara complained and the termination of his placement.

7    The Commission facilitated conciliation discussions with the parties, but as the parties could not agree on appropriate terms of resolution, the Complaint could not be resolved. Accordingly, the President by her delegate terminated the Complaint pursuant to s 46PH(1)(i) of the Human Rights Commission Act. The notice of termination, issued on 23 May 2012, informed Mr Vergara about his right to make application to the Federal Court or the Federal Magistrates’ Court (as it was then known) alleging unlawful discrimination by one or more respondents to the Complaint and that the application must be made within sixty days of the date on the notice of termination.

8    By email dated 16 July 2012, Mr Vergara put Robert Walters on notice of his intention to make an application, and to include a claim against Robert Walters for breach of his employment contract and for breach of his human rights. Although Mr Vergara advised Robert Walters that “the deadline for [him] to commence proceedings” was 20 July 2012, Mr Vergara failed to commence the proceedings within the sixty day time limit.

9    It was not until 7 March 2013, some seven and a half months later, that Mr Vergara filed an application for unlawful discrimination. In the application Mr Vergara seeks, in addition to remedies for unlawful discrimination, remedies for breach of contract alleging as follows:

My contract of employment was breached as years subsequent to my dismissal I discovered that my contract was terminated for ‘serious misconduct’ which was never brought to my attention by either Living and Leisure Australia Limited nor Robert Walters Pty Ltd. My contract of employment specifically states that should I be dismissed for ‘serious misconduct’ written notice is to be provided to me. I am now complaining to the court that as a result of my employer(s) breaching my contract I have endured significant and very severe losses.

The explanation for the delay

10    Mr Vergara filed an affidavit in which he deposed that he did not file his application until 7 March 2013 because:

a.    he was involved in another legal matter in the Federal Court in which he, Living and Leisure Australia and Robert Walters were being sued by Ms Ewin for alleged breaches of the Sex Discrimination Act 1984 (Cth) (“the Ewin proceedings”);

b.    Ms Ewin was claiming over $4.7m in damages from him;

c.    the allegations made against him related to the claims of misconduct that she had made which had led to the summary termination of his placement;

d.    the nature of the allegations involved serious criminal conduct, the severity of which was “probably sufficient to break down any human being”;

e.    he “felt totally crippled by those Court proceedings to an extent that [he] cannot explain in words”;

f.    although he initially had legal representation, from very early on in the Ewin proceedings he was representing himself. Prior to the trial there were a series of requirements that needed to be addressed by him, including multiple conferences and preparing an array of legal documents for the purposes of the trial. He found those requirements extremely stressful and challenging given that he had “no legal qualification and had never had any type of legal experience”;

g.    the case was a big case for any legal team to take on, let alone a person with no legal knowledge or foundation;

h.    the trial of those proceedings was conducted over a three week period commencing on 3 December 2012 and ending on 20 December 2012;

i.    in addition to the legal proceedings that he was defending, he has steadily held full time employment in a professional environment where he manages a team of accountants and that maintaining that role over this period of his life has been extremely difficult; and

j.    over the same period, he had family commitments as a father to three young children, one of whom is now a young teenager.

11    Mr Vergara deposed that if the Ewin proceedings had not been on foot during, and beyond, the sixty day period from the date of notice of termination he “would most definitely [have] lodged an application in the Federal Court of Australia well within the 60 days”.

12    I am prepared to accept that Mr Vergara felt totally crippled by the Ewin proceedings and that he found the proceedings very stressful and challenging. I accept his explanation for not making the application whilst that case was on foot, though I have doubts as to whether the explanation provided is an acceptable excuse. But even if he is to be given the benefit of doubt, I do not consider that he had an acceptable excuse for waiting nearly another three months after the hearing of the Ewin proceedings before filing the application. It is not an acceptable excuse that he was working full time nor is it an acceptable excuse that he had family commitments. Time limits are not to be ignored merely because of daily exigencies. Nor did Mr Vergara furnish an acceptable excuse by the explanation that he gave in oral address that he needed some time to elapse after completion of the case before taking on the burden of the new application. The further delay of nearly three months was inexcusable, particularly as the delay in making the application was already very significant. He knew and understood that the application was required to be filed by 23 July 2012. His failure to attend to the making of the application promptly after completion of the other case meant that nearly another three months passed. I am not persuaded that there was any acceptable reason for the additional delay.

Prejudice to the respondents

13    The respondents claimed that they would be prejudiced if Mr Vergara was granted an extension of time in which to bring the application.

14    An affidavit in support of the claim of prejudice was sworn by Natalie Perrin in the employ of the solicitors for Living and Leisure Australia, Mr Schryver and Mr King. Ms Perrin deposed that:

a.    Living and Leisure Australia was taken over in early 2012 by Merlin Entertainments Group (“MEG”) and as a result there has been a change of directorship, Living and Leisure Australia has no employees in Australia and the head office function is now performed by MEG out of London and Sydney;

b.    Living and Leisure Australia has incurred costs associated with the delay in the filing of the application, including the costs of opposing the extension of time;

c.    Mr Schryver is no longer employed by Living and Leisure Australia and is now based in Sydney;

d.    Mr King has never been employed by Living and Leisure Australia and lives in Wodonga, some three hours away from Melbourne;

e.    Mr Schryver and Mr King have been prejudiced by the delay due to the significant time that had passed since the alleged events in 2009; and

f.    there will be a significant impact and inconvenience on witnesses, especially given the significant amount of time that has elapsed since the alleged events in 2009 and the overlapping nature of the allegations of fact between Mr Vergara’s application and the Ewin proceedings, in which some of those witnesses have already given evidence. Some of those witnesses are no longer employed or engaged by Living and Leisure Australia or any related company, and some of them live many hours outside Melbourne.

15    Robert Walters did not separately file any material but adopted the submissions for the other respondents.

16    I do not find that the claims of prejudice have been made out. The relevant consideration is the prejudice caused by delay in making the application, not the time that has passed since the events in question on which the application is founded: Ingram-Nader v Brinks Australia Pty Ltd (2006) 151 FCR 524 at 530 per Cowdroy J. Nothing in the evidence points to specific prejudice resulting from Mr Vergara’s seven month delay in making his application. In any event, I am not persuaded that there would be prejudice merely because of the time that has elapsed since the events in question. The possibility of faded memory ordinarily is not of itself sufficient to show real prejudice. As Sheppard J noted in Wedesweiller v Cole (1983) 47 ALR 528 at 534, human experience shows that people called upon to recall events which occurred in the past are able to remember a good deal if their minds are applied to the problem and reliable evidence of events long since past is given daily in the courts. I am also not persuaded that there would be prejudice merely because Mr Schryver and some witnesses are no longer employed by Living and Leisure Australia. It was not put that they would not be available or that instructions could not be taken from them. Furthermore, there is no prejudice of a kind that justifies the refusal of the extension of time merely because Mr Schryver, Mr King and some of the witnesses do not live locally. The other matters raised by Ms Perrin’s affidavit also lack substance in showing real prejudice.

17    Accordingly, this factor does not weigh against Mr Vergara. However, the authorities make it clear that the mere absence of prejudice is not enough to justify the grant of an extension of time: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 349 per Wilcox J; Douglas v Allen (1984) 1 FCR 287 at 295 per Morling J; Hickey v Australian Telecommunications Commission (1983) 47 ALR 517 at 523 per Lockhart J; Lucic v Nolan (1982) 45 ALR 411 at 416 per Fitzgerald J; Lindsay v Rose, Registrar of the Immigration Review Tribunal (1996) 44 ALD 570 at 579 per Branson J; ActewAGL Distribution v Australian Energy Regulator (2011) 195 FCR 142 at 163 per Katzmann J; Bahonko v Nurses Board of Victoria (No 4) [2007] FCA 1449 at [53] per Middleton J.

Is there an arguable case?

18    Living and Leisure Australia and Messrs Schryver and King argued that Mr Vergara’s claims of racial discrimination under ss 9, 15, 18A, 18C, 18E and 27 of the Racial Discrimination Act had no merit because Mr Vergara mischaracterised the nature and context of the acts complained of and misstated the way in which the name calling arose. They contended that the name calling was incapable of constituting racial discrimination within the meaning of the Racial Discrimination Act. They also argued that Mr Vergara cannot demonstrate any causal nexus between the name calling and his termination because his termination was caused by the allegations made by Ms Ewin of inappropriate conduct by him towards her.

19    These factual controversies require the resolution of the Court, which the Court is unable to do at this stage of the proceeding on the material presently available. Given that there appears to be no controversy that Mr Vergara was called the names about which he complained and given that those names arguably have a racial connotation, there is a factual foundation for the claims made by Mr Vergara under s 9 of the Racial Discrimination Act, though I express no view on the likelihood of success. Living and Leisure Australia and Messrs Schryver and King claimed that s 18C of the Racial Discrimination Act did not apply because in any event the name calling was done “in private”. Mr Vergara disputes this, contending that at least on one occasion the name calling took place in a hotel. This is not a matter for resolution now and I accept that there is a factual basis for a claim under s 18C.

20    It is doubtful, however, that Mr Vergara has a claim under s 15 of the Racial Discrimination Act. Section 15 applies where the unlawful act is committed by the employer in relation to an employee. On the available material, it seems reasonably clear that Living and Leisure Australia did not employ Mr Vergara.

21    Living and Leisure Australia and Messrs Schryver and King also raised with the Court a concern that the application may be an abuse of process because the material in the Complaint to the Commission suggests that Mr Vergara may seek to use the racial discrimination claim to re-litigate or re-defend the allegations made against him by Ms Ewin. Mr Vergara denied this. As there is insufficient material before the Court to enable any view to be formed at this stage, I place no weight on this submission.

22    Robert Walters argued that the claim against it is incompetent because it was not a respondent to the Complaint that Mr Vergara made to the Commission. In the course of argument Mr Vergara was asked to clarify whether his claim against Robert Walters was for racial discrimination or for breach of contract or both. Mr Vergara indicated that he only sought to pursue the breach of contract claim against Robert Walters. This was not made clear in the application but to put the matter beyond doubt, the Court has no jurisdiction in respect of a racial discrimination claim against Robert Walters. Section 46PO(1) of the Human Rights Commission Act only allows an application to this Court or to the Federal Circuit Court alleging unlawful discrimination “by one or more of the respondents to the terminated complaint”. As Robert Walters was not a respondent to the terminated complaint, s 46PO(1) precludes an application being brought against it for unlawful discrimination: Jandruwanda v Regency Park College of TAFE [2003] FCA 1455 at [11] per Selway J.

Conclusion

23    Although I am not satisfied that the delay in making the application has occasioned prejudice to the respondents and although I am satisfied that there is a factual foundation for the claims of racial discrimination, I am not persuaded that I should grant the extension of time. It is material to the exercise of the Court’s discretion that Mr Vergara has not provided any acceptable reason for not commencing the proceeding promptly after the conclusion of the Ewin proceedings. The additional delay of nearly three months is inexcusable and unjustifiable. In the circumstances, where it was within the control of Mr Vergara to make this application at the least nearly three months earlier than he did, it would not be fair and equitable to grant him an extension of time. Accordingly, Mr Vergara’s application is refused.

Application by Robert Walters to strike out the claim against it

24    As Mr Vergara has been refused an extension of time in which to make the application, it is not necessary now to strike out the claim against Robert Walters. However, for the reasons given, had Mr Vergara sought to pursue a claim for racial discrimination against it, that claim was incompetent.

Associate:

Dated:    8 August 2013