FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Bartlett v Goodwin [2022] FedCFamC2G 691
File number(s): ADG 371 of 2020 Judgment of: JUDGE BROWN Date of judgment: 25 August 2022 Catchwords: INDUSTRIAL LAW – fair work – claim for unpaid leave entitlements on termination of employment – applicant commenced proceedings against his former corporate employer alone – former employer placed into liquidation – applicant given leave to proceed against liquated former employer – liquidator elected not to defend proceedings – judgment and pecuniary penalties imposed on liquidated employer on an undefended basis in earlier proceedings – applicant commences current proceedings against directors and officer holders of liquidated company on basis of alleged accessorial liability – respondents seeking summary dismissal of applicants application on basis such proceedings represent an abuse of process – respondents assert that applicant made forensic decision to proceed against liquidated company alone – prejudice – interests of the administration of justice – matters to be considered Legislation: Evidence Act 1995 (Cth) s 91
Fair Work Act 2009 (Cth) ss 3, 90, 550, 550(1) 550(2)
Federal Circuit & Family Court of Australia of Australia Act 2021 (Cth) s 190
Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth) div 13.4, r 13.13
Cases cited: Aon Risk Management Limited v Australian National University (2009) CLR 175
Bartlett v Goodwin [2021] FCCA 1871
Bartlett v Signostics (In Liquidation) (No 1) [2019] FCCA 2989
Bognar v Skilled Offshore Pty Ltd & Anor [2016] FCCA 2962
CFMEU v BHP Coal Pty Ltd (2015) 230 FCR 298
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Johnson v Gore Wood & Co [2002] 2 AC 1
Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507
UBS AG v Tyne as Trustee of the Argot Trust (2018) 265 CLR 77
Division: Division 2 General Federal Law Number of paragraphs: 117 Date of hearing: 28 March 2022 Place: Adelaide Counsel for the Applicant: Mr Rice Solicitor for the Applicant: Bartlett Workplace Lawyers & Consultants Counsel for the First, Second & Fourth Respondents: Mr Duggan QC Solicitor for the First, Second & Fourth Respondents: Fair Work Lawyers Counsel for the Third Respondent: Mr O’Grady QC Solicitor for the Third Respondent: Hall & Wilcox ORDERS
ADG 371 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: STEWART BARTLETT
Applicant
AND: KEVIN GOODWIN
First Respondent
YOON SHIN
Second Respondent
DAVID KEOGH (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
25 AUGUST 2022
THE COURT ORDERS THAT:
1.The applications in a case filed by the third respondent on 7 October 2021 and by the first, second and fourth respondent on 15 November 2021 are dismissed.
2.The applicant file and serve an amended statement of claim within forty-two (42) days of the date of these orders.
3.The first, second, third and fourth respondents file…
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- AGLC
- Bartlett v Goodwin [2022] FedCFamC2G 691
- Case
- [2022] FedCFamC2G 691
- Decision Date
CaseChat Overview and Summary
The case of Bartlett v Goodwin involves an application brought by Stewart Bartlett, the applicant, against several respondents, including Goodwin, Shin, Keogh, and EchoNous. Bartlett is seeking to hold the respondents liable for the compensation and pecuniary penalties imposed on Signostics, a company that Bartlett was formerly employed by. The primary legal issues revolve around whether the current proceedings represent an abuse of process, whether Bartlett's Statement of Claim discloses a cause of action, and whether Bartlett has reasonable prospects of success in his application. The court must also consider whether the current proceedings are an abuse of the court’s processes.
In reaching its decision, the court examined the nature of the proceedings and the potential for abuse. It was noted that Bartlett had commenced earlier proceedings against Signostics, which entered into liquidation before any judgment was made. The court found that the current proceedings arose due to the liquidation of Signostics, an action taken by EchoNous and its officers, not Bartlett. The court concluded that Bartlett did not continue the proceedings against Signostics to gain an unfair tactical advantage, unlike a previous case where such an inference was made. The court also weighed the public interest in the efficient resolution of claims against the potential unfairness to the respondents. Ultimately, the court found that the current proceedings were not an abuse of process and that Bartlett had reasonable prospects of success.
The court dismissed the application to stay the proceedings, allowing Bartlett to continue with his claim against the respondents for the compensation and penalties imposed on Signostics. The court found no evidence of an abuse of process or that Bartlett's claims were frivolous or vexatious. Consequently, the proceedings against the respondents can continue, and Bartlett's application for pecuniary penalties and compensation was not dismissed.
In reaching its decision, the court examined the nature of the proceedings and the potential for abuse. It was noted that Bartlett had commenced earlier proceedings against Signostics, which entered into liquidation before any judgment was made. The court found that the current proceedings arose due to the liquidation of Signostics, an action taken by EchoNous and its officers, not Bartlett. The court concluded that Bartlett did not continue the proceedings against Signostics to gain an unfair tactical advantage, unlike a previous case where such an inference was made. The court also weighed the public interest in the efficient resolution of claims against the potential unfairness to the respondents. Ultimately, the court found that the current proceedings were not an abuse of process and that Bartlett had reasonable prospects of success.
The court dismissed the application to stay the proceedings, allowing Bartlett to continue with his claim against the respondents for the compensation and penalties imposed on Signostics. The court found no evidence of an abuse of process or that Bartlett's claims were frivolous or vexatious. Consequently, the proceedings against the respondents can continue, and Bartlett's application for pecuniary penalties and compensation was not dismissed.
Orders
Orders of the court
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Background
Background to the litigation
It is the position of these persons, that it is an abuse of the court’s processes to allow these proceedings to continue as it was open to the applicant to join them in the earlier proceedings but he took a forensic decision not to do so. These reasons for judgment are directed towards the resolution of this interlocutory application.BACKGROUND Between early-2005 and mid-2017 Stewart Bartlett, the applicant in the substantive proceeding currently before the court, was employed as the Chief Operating Officer of a company known as Signostics Ltd.[2] Signostics was incorporated in Australia. As I understand matters, Signostics was a medical technology company.[2] Hereinafter referred to as “Signostics”. It is his case that, at the direction of its United States owner, Signostics down-sized its Australian operations in response to the Global Financial Crisis and let go many of its Australian-based employees. In this context, he asserted that Signostics’ management determined to make his on-going position at the firm as difficult as possible. On 18 December 2017, Mr Bartlett commenced the earlier proceedings, in this court, against Signostics, pursuant to the provisions of the FWA. He claimed to be owed salary, leave entitlements and other employment benefits by Signostics, due to the provisions of the contract of employment between them. His case was supported by a statement of claim. Mr Bartlett also invoked civil penalty proceedings under the FWA. In general terms, the court is conferred with jurisdiction to impose fines on employers and their agents if it is established that there has been a breach of any of the National Employment Standards or a relevant workplace right applicable to a person employed by them. In late-December of 2017, solicitors for Signostics filed a notice of address for service and on 30 January 2018 a defence. No other significant documents were filed on behalf of Signostics, in the proceedings, thereafter. On 28 February 2018, Signostics entered into liquidation. Accordingly, Mr Bartlett was unable to proceed further against the company without the leave of the Federal Court, which was granted to him on 13 June 2019. Thereafter, the relevant liquidator of Signostics, Mr Phillips, indicated that he did not intend to defend the proceedings brought by Mr Bartlett. In these circumstances, Mr Bartlett continued with his application, against Signostics, on an undefended basis before Judge Heffernan, formerly a judge of this court. These proceedings are now concluded, without the court taking any evidence directly from any person previously related with Signostics. Mr Bartlett himself provided evidence in support of his position in affidavit form, including an affidavit of documents. It would seem to be the case that Mr Bartlett had access to affidavits prepared by Mr Goodwin and Ms Shin as these were tendered by him on 4 July 2019 during the undefended hearing before Judge Heffernan and have been subsequently returned to him by the court’s administration. I have not read these documents. Certainly none of the present respondents to Mr Bartlett’s current application gave oral evidence or was cross-examined.
Evidence
Evidence Before The Court
As a consequence, he seeks that Mr Goodwin, Ms Shin, Mr Keogh and EchoNous pay the compensation and pecuniary penalties imposed by Judge Heffernan on Signostics and that supporting declarations be made regarding their involvement in the FWA contraventions alleged against each of them.THE EVIDENCE Each party has filed affidavit material either in support of the dismissal application or in Mr Bartlett’s case seeking the rejection of the application. Mr Keogh, Mr Goodwin, Ms Shin and EchoNous rely on the following affidavit:·Two affidavit of Jessica Kamleh filed on 22 April 2021 & 7 October 2021 respectively. She is Mr Keogh’s solicitor.Mr Bartlett relies on the following affidavit:·An affidavit of himself filed on 3 December 2021. As these are interlocutory proceedings, none of this evidence has been subject to scrutiny through cross-examination. Accordingly, the court is not able to resolve factual controversy arising from the comparison of the affidavits.DISCUSSION Mr Keogh responded to the application brought by Mr Bartlett on 11 February 2021. As indicated above, Mr Goodwin, Ms Shin and EchoNous join in the application on the same bases and each has formally filed an application in case. They each seek the dismissal of the application on one of the following basis:·It is an abuse of process; or·Mr Bartlett’s Statement of Claim does not disclose a Cause of Action; or·Mr Bartlett has no reasonable prospects of success in his application. Division 13.4 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)[8] provide a regime for the summary disposal and stay of proceedings. In particular, Rule 13.13 provides as follows:The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:(a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or(b)the proceeding or claim for relief is frivolous or vexatious; or(c)the proceeding or claim for relief is an abuse of the process of the Court.[8] Hereinafter referred to as “the Rules”. Mr Bartlett’s current application relies on the provisions of section 550(1) of the FWA. Section 550(1) provides that a person who is involved in a contravention of a civil remedy provision of the Act is also taken to have contravened that provision. Section 550(2) provides a definitive list of the circumstances in which a person is taken to be involved in a contravention. A person is so involved only if the person concerned:·has aided, abetted, counselled or procured the contravention; or ·has induced the contravention, whether by threats or promises or otherwise; or·has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or·has conspired with others to effect the contravention. As previously indicated, Judge Heffernan found that Signostics had contravened a civil remedy provision of the Act by failing to pay Mr Bartlett his employment entitlements. This finding forms the basis for the allegation that the various respondents in the current matter has accessorial liability for Signostics’ conduct.
Decision
Reasons for decision
In concluding that Mr Tyne’s proceedings in the Federal Court did represent an abuse of process, vis-à-vis UBS, Gageler J said as follows:It was not necessary for the effect of the Federal Court proceedings on UBS to rise to the level connoted by language such as "unfairness" or "oppression". Rather, UBS's private interest was sufficiently engaged by UBS being compelled by the coercive authority of the Federal Court to respond to a process designed to vindicate a claim which should have been brought in the SCNSW proceedings, which UBS had already gone to the time and expense of bringing to completion. With that private interest was to be weighed the public interest in the timely and efficient resolution of claims within the integrated Australian legal system of which the Supreme Court and the Federal Court each form part.[38][38] See UBS AG v Tyne as Trustee of the Argot Trust (2018) 265 CLR 77 at 105 [75].CONCLUSIONS The issue of whether to characterise the current proceedings as an abuse of process or otherwise is one which requires a broad based merits judgment, involving an assessment of all the factors in the case. This encompasses two broad limbs, namely the potential oppression to the party subject to the impugned litigation and the interests of the public regarding possible perceptions relating to the manner in which the relevant litigation is being conducted. The court should not condone unfairness in litigation. However, regardless of the degree or otherwise of potential unfairness to a party, the inquiry must have regard to the benefits implicit to the community of cost efficient and timely disposal of litigation. In conducting this exercise, the court must beware of adopting too dogmatic approach. It requires a balance of the public and the private interest. I do not think that it can be said that EchoNous and the United States-based respondents have been twice vexed in the proceedings or indeed that there is the possibility that Mr Bartlett may receive some form of double recompense if the second proceedings continue. Rather, the need for the second round of proceedings arose because of the actions of EchoNous in liquidating Signostics and the fact that the earlier judgment obtained against it has no financial consequences. Accordingly, any tactical advantage or indeed disadvantage relating to the insolvency of the company, vis-à-vis EchoNous and its officers, is attributable solely to the actions of those persons, not Mr Bartlett. The company was liquidated when the proceedings against it had been fixed for final hearing, which was comparatively imminent. No evidence has been provided by Mr Keogh or any of the other respondents to refute Mr Bartlett’s assertion that the liquidation was a calculated exercise, on the part of the guiding hands of Signostics, to frustrate his claim. In my assessment, Mr Bartlett did not continue the proceedings against Signostics alone due to any desire on his part to derive some form of unfair tactical advantage over that company or indeed over any other person. In this sense, he was in a materially different position to Mr Tyne, who was conducting complex litigation over several fronts and involving several entities, each of which he controlled. Significantly, Mr Bartlett cannot have been privy to the decision to liquidate Signostics, which occurred after he had commenced his proceedings against it and after his application had been fixed for hearing.
Ratio Decidendi
Legal Principle Established
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