Armstrong v Healthcare Recruiting Australia Pty Ltd - [2008] FMCA 357

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ARMSTRONG v HEALTHCARE RECRUITING AUSTRALIA PTY LTD & ANOR

[2008] FMCA 357

INDUSTRIAL LAW – Application for penalties – respondents’ failure to serve evidence in accordance with directions – hearing vacated and adjourned – power to award costs thrown away – unreasonable act or omission on the part of the respondents – costs awarded.

Workplace Relations Act 1996 (Cth), s.824

Applicant:

INSPECTOR DAVID ROBERT ARMSTRONG

First Respondent:

HEALTHCARE RECRUITING AUSTRALIA PTY LTD

Second Respondent:

MICHELLE SANTOS LLOYD

File Number:

SYG 2998 of 2007

Judgment of:

Smith FM

Hearing date:

12 March 2008

Delivered at:

Sydney

Delivered on:

12 March 2008

REPRESENTATION

Counsel for the Applicant:

Mr D Jordan

Solicitors for the Applicant:

Freehills

Counsel for the First Respondent:

Mr S Walsh

Solicitors for the Respondents:

Breene & Breene Solicitors

ORDERS

The hearing appointed for 12 March 2008 is vacated.
The respondents have leave to file and rely upon the affidavit of Michelle Santos Lloyd sworn 11 March 2008.
The respondents must file all additional evidence relied upon them no later than by 9 April 2008, and no later evidence in chief will be admitted without the leave of the Court.
The applicant must file and serve any amended pleadings on or before 30 April 2008.
The applicant must file and serve all affidavits in reply on or before 30 April 2008.
The parties have leave to request the issue of more than 5 subpoenas.
The matter is referred to the District Registrar for mediation or conciliation pursuant to s.26 of the Federal Magistrates Act 1999 (Cth) and Part 27 of the Federal Magistrates Court Rules 2001 (Cth). Primary dispute resolution must be completed before 23 May 2008.
Any party may request that the proceeding be listed for further directions or for the hearing of an interlocutory application on a date allowing 5 clear days’ notice to the other parties. The appointment shall be obtained from the Associate on 9377 5528.
The application is listed for final hearing on 10 July 2008 at 10.15 am, 5 days allowed.
The applicant must file and serve any additional outline of its submissions and list of authorities 5 working days before the hearing.
The respondents must file and serve an outline of its submissions and list of authorities 2 working days before the hearing.
Pursuant to s.824(2) of the Workplace Relations Act 1996, the respondents must pay the applicant’s costs incurred by reason of Order 1, as agreed or taxed under Federal Court Rules O.62. Pursuant to r.21.02(2)(c), refer those costs for taxation by a Registrar under O.62.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2998 of 2007

INSPECTOR DAVID ROBERT ARMSTRONG

Applicant

And

HEALTHCARE RECRUITING AUSTRALIA PTY LTD

First Respondent

MICHELLE SANTOS LLOYD

Second Respondent

REASONS FOR JUDGMENT

(revised from transcript)

In this matter, an application was filed on 27 September 2007 by an inspector of the Office of Workplace Relations, now the Workplace Ombudsman, seeking the imposition of penalties under the Workplace Relations Act 1996 (Cth) against the first and second respondents, in relation to alleged underpayment of wages to three nursing assistants in aged care facilities.
The application was returnable at a first court date before me on 26 October 2007. On that occasion both parties appeared, on the part of the respondents by way of a solicitor who filed a notice of address. He consented to directions setting out a timetable for the filing of evidence, the issuing of subpoenas, a referral for mediation, and the listing of the matter for a final hearing over three days commencing from today. The respondents’ solicitor indicated that his instructions were that mediation was appropriate, thereby suggesting that he was in communication with his clients at that time.
The timetable required the applicant to file all evidence by 21 November 2007, and that evidence was in fact filed on that date. The timetable required the respondents to file and serve all affidavits relied upon by 5 December 2007. However, there has been no evidence filed by the respondents, although they filed a response and a defence on 18 October 2007. The defence makes some admissions as to the position of the second respondent and the relevant obligations in relation to wages and allowances, but denies a relationship of employer between the first respondent and the employees. No particulars of the denial are given in the defence. There are also unparticularised denials of the claims by the employees that the respondents made deductions from their entitlements without their consent.
In view of the failure of the respondents to file evidence, the solicitors for the applicant requested the Court to appoint a directions hearing. This was appointed for 25 January 2008, and both parties were informed by letter from my Associate dated 10 January 2008. At the directions hearing, the respondents’ solicitor on the record, Mr Livingstone, appeared and informed the Court that he no longer had instructions, and that he intended to file a notice of withdrawal, having served his clients with a notice of intention to withdraw in December. Such a notice of withdrawal was filed on 7 February 2008, accompanied by an affidavit of Mr Livingstone which attached a notice of intention to withdraw dated 21 December 2007.
On 25 January, I vacated my order for mediation, but otherwise affirmed the directions I had given in October 2007. I added a direction giving the respondents further leeway in relation to filing evidence, by directing:
The respondents must file all evidence relied upon them no later than 13 February 2008, and no later evidence-in-chief will be admitted without the leave of the Court.
A copy of that order was given to Mr Livingstone on that day, and he undertook to the Court to forward a copy to his former clients.
The second respondent is the sole director, shareholder and manager of the first respondent. Her affidavit sworn on 11 March 2008 claims that she telephoned the applicant’s solicitors in late January 2008, indicating that she needed time to find another solicitor. However, I am told from the Bar table today that no further communication was made to the applicant’s solicitors, in particular, foreshadowing the evidence which might be sought to be relied upon by her. No evidence was filed in accordance with my directions of 25 January 2008.
Today, the respondents appeared by counsel who sought leave to file the second respondent’s affidavit. It raises numerous issues concerning conversations with the employees who are alleged to have been underpaid. In my opinion, the matters raised are such that applicant is clearly entitled to have the hearing vacated and adjourned to allow proper instructions to be taken from the employees, so that affidavits in reply can be filed and any subpoenas issued for additional witnesses. This entitlement is not disputed by the respondents.
The circumstances of the need to vacate the hearing raise the issue whether costs should be ordered, as would normally be the case for an adjournment under such conditions. Section 824 of the Workplace Relations Act 1996 (Cth) contains a provision which precludes costs being ordered against another party, but that is subject to an exception in s.824(2):
(2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first‑mentioned party to pay some or all of those costs.
The second respondent’s affidavit shows in paragraphs 89 to 97 that she and her new solicitors were alive to the need to explain to the Court her failure to comply with the Court's directions for the filing of evidence. She does not deny being told of the Court's orders made in October 2007, but says only: “I do not recall being told of the order”. She accepts that she was sent a letter in late December from her former solicitor, giving notice of his intention to withdraw. However, she says that she was absent from Australia from 26 December until 26 January or possibly 22 January 2008. She deposes to then telephoning the applicant solicitors and indicating that she was seeking to find another solicitor, but she does not claim to have informed them of anything further, nor made any other contact, nor caused any solicitor to make such contact.
In my opinion, the second respondent has not provided any reasonable explanation for the failure of her and her company to comply with the Court's timetable. In particular, she has not explained why nothing was done in the immediate period after her return to Australia and before the hearing, to ensure that her proposed evidence was properly notified to the applicant's solicitors in time for them to take instructions on evidence in reply. Rather, her affidavit was only served yesterday afternoon, and notice requiring the attendance of the applicant's witnesses was only served last Monday.
Taking in to account all the circumstances set out above and shown in the second respondent’s affidavit, I am satisfied that the costs incurred by the applicant, and now thrown away by reason of the need to vacate the hearing today, were the result of “an unreasonable act or omission” on the part of the respondents. I am also satisfied it is appropriate for me to exercise the discretion under s.824(2) to order them to pay the applicant's costs, taxed under the Federal Court scale, which were incurred as a result.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate: Michael Abood

Date: 20 March 2008