Ballantyne v Hartnett Legal Services Pty Ltd
[2016] FCCA 2165
•23 August 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BALLANTYNE v HARTNETT LEGAL SERVICES PTY LTD & ANOR | [2016] FCCA 2165 |
| Catchwords: PRACTICE AND PROCEDURE – Application to abridge time for service of subpoenas. |
| Legislation: Fair Work Act 2009, ss.44, 125, 550(1) Federal Circuit Court Rules 2001, r.15A.13, pts.14, 27 |
| Cases cited: Director of Fair Work and Building Inspectorate v CFMEU (2016) FCCA 1569 John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] FCA 1032 |
| Applicant: | JAMES CAMERON BALLANTYNE |
| First Respondent: | HARTNETT LEGAL SERVICES PTY LTD |
| Second Respondent: | BEAU TIMOTHY JOHN HARTNETT |
| File Number: | BRG 1105 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 22 August 2016 |
| Date of Last Submission: | 22 August 2016 |
| Delivered at: | Brisbane |
| Delivered on: | 23 August 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kidston |
| Solicitors for the Applicant: | Ballantyne Law Group |
| Counsel for the Respondents: | Mr Hatcher SC |
| Solicitors for the Respondents: | Hartnett Lawyers |
ORDERS
The application in a case filed on 17 August, 2016 is dismissed.
The application in a case filed on 22 August, 2016 is dismissed.
Costs of both applications are reserved to the trial judge.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 1105 of 2014
| JAMES CAMERON BALLANTYNE |
Applicant
And
| HARTNETT LEGAL SERVICES PTY LTD |
First Respondent
And
| BEAU TIMOTHY JOHN HARTNETT |
Second Respondent
REASONS FOR JUDGMENT
On 8 December, 2014 James Ballantyne commenced these proceedings against Hartnett Legal Services Pty Ltd and a solicitor and the principal of Hartnett Lawyers, Beau Timothy John Hartnett. In the proceedings Mr Ballantyne seeks:
a)payment to him of an amount in excess of $33,500 said to be owed by way of unpaid employee entitlements;
b)declarations that the first respondent, as Mr Ballantyne’s employer, had contravened:
i)s. 44 of the Fair Work Act 2009 in that it failed to pay to him his accrued annual leave entitlements upon his employment ending;
ii)s. 125 of the Fair Work Act because it failed to provide a Fair Work Information Statement to him when he commenced his employment; and
iii)contravened on five occasions s.44 of the Fair Work Act because it failed to provide payslips to him as required by the Fair Work Act;
c)an order for compensation in excess of the sum of $19,500 for unpaid but accrued annual leave;
d)the imposition of pecuniary penalties on Hartnett Legal Services Pty Ltd for breaches of the Fair Work Act.
Mr Ballantyne also seeks relief against Mr Hartnett, including the imposition of pecuniary penalties on him because, it is alleged, he was involved in the first respondent’s contraventions of the Fair Work Act.
Mr Hartnett has a crossclaim against Mr Ballantyne for damages and declarations arising from Mr Ballantyne’s employment.
All parties have delivered pleadings that set out their respective cases. The current pleading from Mr Ballantyne in his claim is an amended statement of claim filed on 31 August, 2015. The respondents rely upon the same defence. The most recent version is the further amended defence filed on 23 May, 2016. Mr Ballantyne has filed a reply to the respondents’ defence. On the crossclaim, the pleadings consist of Mr Hartnett’s statement of claim filed on 24 May, 2016, Mr Ballantyne’s defence filed on 31 May, 2016 and Mr Hartnett’s reply filed on 8 June, 2016.
The pleadings on the claim reveal two seminal issues, namely:
a)What is the true identity of Mr Ballantyne’s employer? Mr Ballantyne contends it is Hartnett Legal Services Pty Ltd. Mr Hartnett contends that it was him.
b)Has the employment contract been terminated? Mr Ballantyne contends that he terminated the employment contract by written notice. Mr Hartnett contends that the employment contract is still on foot because the notice that was given was not given to the employer and otherwise was given in breach of the terms of the employment contract and Mr Hartnett has not accepted Mr Ballantyne’s repudiation of the contract represented by him giving notice in breach of its terms.
There are other issues that arise on the pleadings, but they are the most significant for present purposes. The issues on the crossclaim also arise from those matters. If they are determined in Mr Hartnett’s favour, issues concerning his loss consequent upon Mr Ballantynes alleged breaches of the employment agreement will arise.
The proceedings have a considerable history and from my observations from when the proceedings have been in court before me, there is considerable acrimony between the parties manifested by the hard fought way in which the proceedings are being conducted.
On 16 February, 2015 a judge of this Court gave judgment by default in favour of Mr Ballantyne against the respondents. As against the first respondent he ordered that the applicant pay a sum in excess of $35,000 for Mr Ballantyne’s claim and interest, made certain declarations that the first respondent had contravened provisions of the Fair Work Act, imposed a pecuniary penalty totalling $20,000 in respect of the contraventions of the Fair Work Act alleged against the first respondent and ordered those sums to be paid within 21 days of the date of those orders. Orders were also made against the second respondent for compensation ($20,287.30) and there were various declarations, including a declaration that the second respondent was involved in the contraventions found to have been committed by the first respondent for the purposes of s.550(1) of the Fair Work Act. Pecuniary penalties were imposed upon the second respondent for those contraventions.
His Honour’s orders were subsequently set aside on appeal. Having regard to His Honour’s reasons for judgment there were two reasons for the giving of judgment against the respondents. First, they had not filed a response within the time limit by the Federal Circuit Court Rules 2001 and there was no sworn evidence before his Honour as to why no defence had been filed within the time. Secondly, his Honour took the view that the defence that had been filed did not show a proper defence to the proceedings. The judgment by default was set aside on appeal on 22 July, 2015.
On 29 July, 2015 the respondents filed a response. They opposed all of the relief sought by Mr Ballantyne. The matter came before the judge of this Court that had given the judgment by default on 10 August, 2015. On that day directions were made for the service by the respondents of any request for further and better particulars of the statement of claim and that the respondents write to the applicant setting out any complaints that they have in relation to the statement of claim. The applicant was directed to respond to the request to further and better particulars and any complaints about the statement of claim in a timely way. The matter was adjourned to a subsequent date before me.
The application came on for directions before me on 31 August, 2015. On that day I ordered the applicant file and serve an amended statement of claim. Mr Ballantyne was ready to do that. I directed that the respondents file and serve an amended defence two weeks later. I made an order for the applicant to file a reply and the application was adjourned to 7 October, 2015 for further directions.
The applicant delivered an amended statement of claim on 31 August, 2015. The document is lengthy, but the nature of his claim has not changed from that revealed in his original pleading. A new aspect was added to the statement of claim in an attempt to deal with the second respondent’s allegation that at all relevant times he was the applicant’s employer rather than the first respondent.
On 14 September, 2015 the respondents filed an amended defence. On 25 September, 2015 the respondents provided a response to the applicant’s request for further and better particulars of some of the allegations in the defence.
On 21 October, 2015 I heard an application by the applicant for, amongst other things, discovery. Mr Hartnett sought leave to file and serve a crossclaim upon Mr Ballantyne.
On 6 May, 2016 I delivered my reasons and orders in respect of those applications. I gave Mr Hartnett leave to commence his foreshadowed crossclaim. I directed him to file and serve on Mr Ballantyne any further amended defence and any crossclaim which he wished to bring against the applicant. I made directions for subsequent pleadings.
I also ordered the parties to file and serve any affidavits of evidence in chief of all witnesses upon which they intended to rely upon at the trial of the proceedings. I then referred the matter to mediation. I adjourned the application to 1 August, 2016 for further directions following the completion of any mediation between the parties. I adjourned Mr Ballantynes application for discovery to a date to be fixed.
As counsel for the applicant now points out, in those proceedings I determined that it was appropriate for there to be discovery of documents that the applicant sought by their application in a case. I said in my reasons:
20. I accept the applicants submissions that the resolution of the issue of the identity of the employer calls for an examination of more than merely the written contract of employment because:
(a) the parties’ conduct post the alleged formation of the written contract of employment can be taken into account for the purpose of ascertaining whether they intended to conclude a binding agreement, and by extension between who;
(b) when deciding whether an entity is an employer, the totality of the relationship must be considered, not merely the fact that wages are paid by a particular entity.
21. The arrangements between Kentgale and the second respondent, and then later between the second respondent and the first respondent are known only to the second respondent. In circumstances where the second respondent alleges that there was an agency between Kentgale and him, and then later with the first respondent, that is not reflected in the terms of the written employment agreement, it is likely to be necessary for there to be some disclosure. Proper disclosure as sought by the applicant will be likely, I think, to contribute to the fair and expeditious conduct of the proceedings because it will illuminate the respondents’ position and pleas in a way that might facilitate an earlier resolution of the matters the subject of the proceedings.
22. I am not satisfied that the disclosure sought will not be easily made by the respondents. The documents sought are of a type commonly kept by business as part of proper record keeping. They are not likely to be voluminous.
23. However, I am not satisfied that discovery is necessary at this point in the proceedings. As is usual in a case of this nature in this Court, the parties will file affidavits of evidence in chief by themselves and their witnesses. Those affidavits, no doubt will have documents annexed to them. When that process is complete, it may be that no further discovery will be required. It might be that it will, but to a limited extent.
Whatever might be the case, I am not persuaded that a declaration and order for discovery is presently appropriate in the interests of the administration of justice in this matter. The application for orders for discovery will be adjourned to a date to be fixed to be brought on following five days notice in writing to the respondents.
Not so, however, in this case. When the matter returned to court following the parties’ unsuccessful attempt at mediation, the applicant sought the allocation of a date for the further hearing of its application for discovery. The respondents too, foreshadowed an application for a declaration for discovery. In those circumstances, given that both parties were seeking declarations and orders for discovery I made a declaration for discovery and directed that discovery take place according Part 14 of the Federal Circuit Court Rules. I am told that the respondents have made an application for leave to appeal that decision, although on what grounds I was not informed.
At the same time, I allocated a hearing date for these proceedings. I set it down for hearing at a trial on 2 September, 2016. The applicant suggested that the trial might take two days, the respondents suggested four. Notwithstanding those suggestions, I determined to fix the matter for trial on 2 September, 2016 and if further time was necessary, further time could be allocated in due course. The issues, notwithstanding the parties’ pleadings (including the crossclaim) seem to be of relatively narrow compass.
Both parties have filed the affidavits of evidence in chief by themselves and the witnesses upon which they intend to rely at the hearing. The applicant has filed affidavits by two witnesses and himself. The second respondent has filed an affidavit by himself. There are, then, the applicant, the respondent and two witnesses to give evidence.
By the present application Mr Ballantyne seeks some procedural orders permitting him to serve subpoenas on the first and second respondents and a firm, Walsh & Walsh Accountants. He seeks orders that the subpoenas be returnable on 26 August, 2016 and that the time for compliance with r.l5A.13, the time that must elapse between service of a subpoena and its return date, be shortened to three days.
The first and second respondents oppose the application. There seems to be three grounds of opposition. First, it is argued that the production of the documents would impinge upon Mr Hartnett’s entitlement to claim privilege against exposing himself against a civil penalty. The second is that the proposed subpoenas are to be used as a substitute for discovery. That is especially important, it is said, where the Court’s order about discovery is subject to an application for leave to appeal. Finally, it is said that the subpoenas are too wide and thereby an abuse of process.
As to the first matter, it is clear that a person the subject to proceedings in which a civil penalty is claimed is entitled to remain silent and not plead, nor provide discovery in those proceedings, in respect of the issues to which the civil penalty relates: see for example Re Australian Property Custodian Holdings (in liq) (recs and mgrs apptd) (controllers apptd) (No 2) (2012) 93 ACSR 130; John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] FCA 1032. However, the privilege must be expressly claimed and can be waived.
Here, it is likely that Mr Hartnett has waived the privilege because he has pleaded a defence, jointly with the first respondent that responds directly to the relevant issues that may give rise to the civil penalty. He has sought, by his defence, to engage with those issues and answer them. The privilege is now no answer to the applicant’s claim for discovery or the production of documents upon subpoena.
I am not satisfied that the use of these subpoenas is an abuse of process because they are being used as a substitute for discovery. Subject to what I say below about the width of some of the categories of documents sought, whether or not there is a declaration for discovery, subpoenas are an appropriate method of ensuring that a party has at its disposal the necessary documents held by others to effectively prosecute its claims at a trial.
However, the subpoenas in respect of which leave is sought are too wide. The principal issue to which they are directed is the identity of the applicant’s employer. Documents that relate to the issue of the applicant’s employer will be relevant. Documents that relate to all employees of Kentgale and Hartnett Legal Services Pty Ltd and the way in which all of those employees’ wages are calculated (as sought in items 7, 8, 9 and 10 in the draft subpoena to Wallace and Wallace (exhibit 1)) are not, on their face, relevant. What are relevant are the documents that might show how Mr Ballantyne’s wages were calculated and paid.
One of the points made by the respondents’ defence (I think) is that the lawyers employed at the law firm are employed by the second respondent whereas all other administrative staff are employed by the first respondent. Thus, documents which go to the employment of lawyers by the law firm will be relevant, but those going to the employment of people who are not lawyers will not.
The categories set out in paragraphs 3 – 6 of the draft subpoenas are too wide because they do not confine the documents to be produced to services in the nature of the employment and making available of lawyers or professional staff. The categories set out in paragraphs 7 – 10 of the draft subpoenas are too wide because they are not confined to the applicant. Categories 11 and 12 are too wide because they are not confined to the applicant or lawyers working for the firm.
The documents sought by categories 13 – 18 are likely to relate to documents that contain compendious information relating to all employees including the applicant. Those categories are not too wide. So too, the documents sought in categories numbered 19, 20 and 23 – 27 of the draft subpoenas. However, the documents sought in categories 21 and 22 of the draft subpoena have no apparent immediate relevance to the proceedings.
The applicant does not need the Court’s leave to issue the subpoenas that he wishes to issue. He does, however, need an order that the time for service of those subpoenas upon the recipients named in them be abridged. If the subpoenas are issued in the form of the drafts I have referred to above, I would refuse to abridge the time for service.
However, were subpoenas to be presented to the registrar for issue that were not too wide as I have set out above, the registrar should issue those subpoenas, make the time for their return 29 August, 2016 and abridge the time for service of any such subpoenas to three business days.
There is a second application in a case before me. That application in a case filed on 22 August, 2016 by the respondents seeks that the orders that I made on 1 August, 2016 relating to disclosure, filing and serving outlines of argument and the listing of the matter for hearing on 2 September, 2016 at 10:00am be vacated. The respondents seek the following directions:
a)That by 4.30pm on 19 September 2016, both parties file and serve any notice/s of objection to the other parties affidavits of evidence in chief.
b)That by 4.30pm on 26 September 2016, counsel for both parties confer, with a view to resolving the objections.
c)That by 4.30pm on 3 October 2016, both parties administer notices to admit facts.
d)Not later than 4.30pm ten (10) business days before the hearing, both parties file and serve an outline of argument setting out all of their arguments that they will run at trial.
e)The application be adjourned to a date to be fixed by the Registrar.
f)The parties have liberty to apply upon the giving of three (3) days notice in writing to the other party and to the Court.
g)That costs be reserved.
In my view, it is unnecessary to abandon the directions that I have already made and to make further directions as the respondents seek. It is unnecessary to make directions about the filing and service of notices of objections to evidence. Both parties are represented by counsel. I would expect that counsel would, without any direction of the Court being necessary, confer over objections to evidence prior to the trial. The obligation upon those who appear is to assist the Court with the efficient and timely disposition of the Court’s business with which they are concerned. Conferring about objections to evidence and resolving as many as possible prior to the commencement of a trial is part of that obligation. No order should be necessary.
I would also expect that should either of the parties have wished to administer notices to admit facts to the other, they would do so without an order of the Court. An order to deliver a notice to admit facts is unnecessary.
The issues in the case are defined by the pleadings. There are one or two major issues and some that follow upon how those major issues might be resolved. Being lawyers themselves, the parties have, no doubt, defined the issues in their pleadings as clearly as they can be defined.
It is of some concern that the second respondent takes the view that his obligations to comply with the directions and orders of the Court concerning discovery come second to the conduct by him of his legal practice. Nonetheless, it seems from his affidavit filed in support of his application that Mr Hartnett has set about preparations to make discovery. He suggests that the order for discovery was for discovery “generally” and did not limit the parties to “obligations to make disclosure by reference to documents directly relevant to the issues in dispute, or otherwise in relation to particular classes of documents or, particular issues”. Indeed, the order for discovery did not limit the parties’ obligation to make discovery to particular classes of documents or particular issues. It was an order for discovery that was not so limited. That, however, does not mean that the discovery required goes beyond discovery of documents which are relevant to the issues that are in dispute. Discovery for the purposes of the Federal Circuit Court Rules is the disclosure of documents that relate to a matter in question in the proceedings. Here, there are pleadings and the matters in question in the proceedings are those that arise on the pleadings: Director of Fair Work and Building Inspectorate v CFMEU (2016) FCCA 1569. There is no uncertainty in the form of the order for disclosure as to the parties’ obligations under it.
His argument that he cannot complete discovery within the (now passed) time frame permitted by the rules is not to the point. It is clear that the respondents have been on notice since October last year that the applicant was pressing discovery of the documents set out in his application in a case dealt with in my judgment of 6 May, 2016. Surprisingly, Mr Hartnett swears that he is “personally required to undertake the task of the review of the pleadings and to consider all those possible categories of documents which may in any way, directly or indirectly, relate to the issues in question in these proceedings”. Having regard to Mr Hartnett’s position as a respondent in these proceedings and the fact that, according to the terms of the pleadings certified by him, he is aware of the truth of the allegations by the respondents in their pleadings and therefore the issues in dispute in the proceedings, it is surprising that he would then have to review those pleadings again to determine what might be relevant and what might not be relevant to the issues raised in them.
In my view, no case is made out for the abandonment of the directions I made on 1August, 2016 or the adjournment of the trial date.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Date: 23 August, 2016
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