​Federal Court declarations and orders do not create an issue estoppel in subsequent proceedings - High Court of Australia determines in favour of worker

The High Court unanimously allowed an appeal from the Court of Appeal of the Supreme Court of NSW. The High Court held that declarations and orders made by the Federal Court of Australia in proceedings commenced by the Fair Work Ombudsman (Ombudsman) did not create an issue estoppel precluding a worker from asserting that an entity was not his employer in a subsequent proceeding.

In 2008, Mr Tomlinson, an abattoir worker, suffered injuries whilst working at an abattoir operated by Ramsey Food Processing Pty Limited (Ramsey). Mr Tomlinson commenced common law negligence proceedings in the District Court of NSW (the personal injury proceedings) where he asserted that, at the time of his injury, he was not an employee of Ramsey but was employed by a labor hire company, Tempus Holdings Pty Ltd (Tempus), thus making him a contractor of the abattoir. 

However, prior to his personal injury claim, the Ombudsman brought civil proceedings in the Federal Court seeking civil penalty for breaches by Ramsey of the Workplace Relations Act.The Federal Court made findings confirming that in 2008, Mr Tomlinson and other workers were employees of the abattoir and not contractors employed by Tempus.

In the personal injury proceedings, Ramsey argued that Mr Tomlinson was estopped from making a common law claim against Ramsey on the basis that the earlier Federal Court proceeding declared that Mr Tomlinson was employed by Ramsey. If Ramsey was held to be Mr Tomlinson’s employer at the time, then in bringing his claim in common law negligence rather than for compensation under the Workplace Injury Management and Workers Compensation Act and the Workers Compensation Act, Mr Tomlinson had not complied with the statutory requirements set out in those Acts in respect of Ramsey and, therefore, his claim would necessarily fail. In the alternative, if Mr Tomlinson was found to have been an employee of Tempus, than the action would be governed by the Civil Liability Act.     

At first instance, the District Court (Mahony DCJ) rejected Ramsey’s argument of issue estoppel and awarded common law damages against Ramsey. On appeal, the Court of Appeal determined that the declarations and orders of the Federal Court created an estoppel binding on Mr Tomlinson by reason of Mr Tomlinson having been ‘privy’ in interest with the Ombudsman.

On appeal to the High Court, it was held that the Court of Appeal erred in concluding that the Ombudsman was Mr Tomlinson’s privy. The High Court held that the 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. According to the High Court, by performing that function and invoking those procedures, the Ombudsman did not represent the legal interests of Mr Tomlinson by seeking in the Federal Court that Ramsey pay Mr Tomlinson and others amounts which Ramsey had failed to pay in breach of applicable terms. The fact that Mr Tomlinson had complained to the Ombudsman and the fact that he provided evidence in the proceeding made no difference to the High Court in reaching that conclusion.   

Accordingly, the High Court held that the declarations and orders made by the Federal Court in those proceedings created no estoppel binding on Mr Tomlinson in the District Court proceeding, or in any other subsequent proceeding, between Mr Tomlinson and Ramsey.