Cole v Quest Software Pty Ltd
[2014] FCCA 1251
•18 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COLE v QUEST SOFTWARE PTY LTD | [2014] FCCA 1251 |
| Catchwords: PRACTICE AND PROCEDURE – Interlocutory application seeking tender of late evidence by Respondent as to its constitution – Application opposed by applicant – Relevant considerations – Application to tender late evidence refused. |
| Legislation: Evidence Act 1995 (Cth), ss.59, 69 |
| Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Cole v Quest Software Pty Ltd ABN 81 078 118 144 [2013] FCCA 1160 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2009] NSWSC 1370 Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 Jones v Dunkel (1959) 101 CLR 298 Maronis Holdings Ltd & Ors v Nippon Credit Australia Pty Ltd & Ors [2000] NSWSC 753 Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2009] NSWSC 17 Platinum Investment Management Limited v Chief Commissioner of State Revenue [2009] NSWSC 998 Queensland & Anor v JL Holdings Pty Ltd(1997) 189 CLR 146 |
| Applicant: | LAURENCE COLE |
| Respondent: | QUEST SOFTWARE PTY LTD (ABN 81 078 118 144) |
| File Number: | SYG 871 of 2013 |
| Judgment of: | Judge Lloyd-Jones |
| Hearing date: | 9 May 2014 |
| Date of Last Submission: | 16 May 2014 |
| Delivered at: | Sydney |
| Delivered on: | 18 June 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr T. Saunders |
| Solicitors for the Applicant: | Mr S. Ratu of Allens |
| Counsel for the Respondent: | Mr C. Lambert |
| Solicitors for the Respondent: | Mr M. Green |
ORDERS
Leave to tender Annexure “SR 2” to the Affidavit of Sikeli Ratu sworn 5 May 2014 and filed on 9 May 2014 (the “Ratu Affidavit”) into evidence is refused. The tender of the Ratu Affidavit otherwise be allowed.
Costs are reserved.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 871 of 2013
| LAURENCE COLE |
Applicant
And
| QUEST SOFTWARE PTY LTD (ABN 81 078 118 144) |
Respondent
REASONS FOR JUDGMENT
Introduction
On 5, 6 and 9 May 2014 these proceedings came before the Court for final hearing. An earlier interlocutory judgment was handed down by the Court in these proceedings on 22 August 2013 in respect of an application filed by the respondent, Quest Software Pty Ltd ABN 81 078 118 144 (“Quest”), seeking to set aside a subpoena that had been issued by the applicant, Laurence Cole (“Mr Cole”); Cole v Quest Software Pty Ltd ABN 81 078 118 144 [2013] FCCA 1160. It is convenient to refer to those reasons to provide a background of the proceedings generally. At [1] and [4] therein I stated:
1. This is an application filed on 26 April 2013 by the applicant, Laurence Cole (“Mr Cole”), alleging breaches by the respondent, Quest Software Pty Ltd (“Quest”), of the Trade Practices Act 1974 (Cth) (the “TPA”), the Australian Consumer Law (the “ACL”) and the Fair Trading Act 1987 (NSW) (the “FTA”) in respect of Mr Cole’s employment with Quest. It is not necessary at this stage to canvas the substantive application, however, this will be addressed in further detail below.
…
4. The claims generally advanced by Mr Cole are conveniently summarised at [9]–[11] of Quest’s submissions filed at the hearing of the Interim Application. They state:
Mr Cole’s Claims
9. Mr Cole pleads multiple causes of action … In summary, Mr Cole pleads the following factual allegation (many of which are denied):
a) On 7 September 2007, Mr Cole accepted an offer of employment by Quest. Thereafter, from about 1 October 2007 until 2 May 2011, Mr Cole was an employee and the Managing Director of Quest.
b) In connection with making the employment offer Quest made a series of representations (the “Representations”) that:
i) induced Mr Cole to accept the employment offer; and
ii) also constituted express terms of Mr Cole’s employment contract (the “Express Terms”).
c) In summary, the Representations and Express Terms included representations and promises that Quest would comply with its own code of conduct, would act fairly and honestly towards Mr Cole and would not terminate his employment except in specified circumstances.
d) There were also implied terms of the contract of employment, which included obligations of good faith, of cooperation and to maintain the relationship of trust and confidence between the parties (the “Implied Terms”).
e) On 2 May 2011, Mr Cole was called into a meeting with the regional Vice President of Quest’s parent company and Quest’s Human Resources Director at which he was informed that his employment was terminated with immediate effect. He was told that he could either accept the minimum compensation due to him or be paid 3 months’ salary if he immediately signed a letter of resignation and deed of release.
f) Shortly afterwards, the offer of 3 months’ salary was increased to 6 months’ salary and Mr Cole [signed] the resignation letter and deed “under duress”. By that and related conduct, Mr Cole’s employment was terminated.
g) At the time of the termination of Mr Cole’s employment, he was a registered director and the Managing Director of Quest and, under ss 203C and 203F of the Corporations Act 2001, could only be removed as a director or Managing Director by a resolution of the board of directors. At no time on or before 2 May 2011 was any such resolution passed and the summary termination of Mr Cole’s employment and his removal as Managing Direction was of “no effect at law and was unjust and unfair.
h) By its conduct in relation to the termination of Mr Cole’s employment and appointment as Managing Director pleaded at paragraphs 24–37 and 60–73 of the Statement of Claim (summarised at (e)–(g) above), Quest:
i) rendered the Representations false and misleading in contravention of ss 42 and 46 of the TPA and their FTA and ACL equivalents, in that Mr Cole’s employment was terminated contrary to the Representations;
ii) breached the Express Terms and the Implied Terms of the employment contract; and
iii) acted unconscionably for the purposes of s 51AC of the TPA, alternatively ss 21 and 22 of the ACL.
i) Having regard to that conduct and the circumstances surrounding the execution of the deed of release:
i) the deed of release was unjust for the purposes of the Contracts Review Act 1980 (NSW) (the “CRA”); and
ii) Quest’s conduct in summarily terminating Mr Cole’s employment and “demanding” that he sign a letter of resignation and execute the deed of release was unconscionable for the purposes of s 21 of the ACL.
10. Mr Cole claims a range of relied in relation to the termination of his employment (his entitlement to which is denied), namely:
a) damages or statutory compensation for loss under ss 82 and 87 of the TPA, 68 and 72 of the FTA and 236 and 237 of the ACL, presumably for alleged misleading conduct constituted by making the Representations and for unconscionable conduct in contravention of the TPA and ACL;
b) “compensation” for loss and damage caused by Quest’s alleged breach of Mr Cole’s employment contract; and
c) an order that Quest pay the maximum pecuniary penalty under ACL s 224 for breach of ACL s 21 (unconscionable conduct in relation to the supply of goods or services) and s 31 (misleading conduct relating to employment), and an order under ACL s 237 or s 238 that the penalty be paid to Mr Cole.
11. The loss claimed of past and future remuneration, commission payments and superannuation, anxiety, humiliation and distress. The claimed loss also includes the value of shares (“RSU’s”) in Quest’s parent company that were allegedly promised to Mr Cole but the legal title to which did not vest in him as a result of Quest’s alleged breach of contract in terminating his employment.
…
Proposed Tender of Constitution
On the final day of the substantive hearing of these proceedings Quest filed in court the Affidavit of Sikeli Neil Ratu sworn 5 May 2014 (the “Ratu Affidavit”). The Ratu Affidavit contains three annexures:
a)Annexure SR-1, being an email sent by Mr Ratu to Ms Zorzi and Ms Barekzai requesting they send him a copy of Quest’s Constitution;
b)Annexure SR-2, being an email by Ms Zorzi to Mr Ratu with two attached documents, being Quest’s current Constitution (the “Constitution”) that had been adopted in November 2007 and the member’s resolution adopting the Constitution; and
c)Annexure SR-3, being an email sent by Ms Zorzi to Mr Ratu identifying the signature at the top of the Constitution and to whom the signature belonged.
Mr Saunders, counsel for Quest, sought to read the Ratu Affidavit in to evidence. Mr Lambert, counsel for Mr Cole, indicated he did not object to the reading of the Ratu Affidavit, however, did object to the tender of the Constitution contained at Annexure SR-2. Rather than adjourning the matter for further oral submissions on this issue, I indicated I would grant the parties leave to file and serve written submissions on the proposed tender of Quest’s Constitution and prepare brief written reasons thereafter. Both parties complied with the Court’s orders and, for the sake of convenience, I will reproduce their written submissions as provided to the Court.
Quest’s Submissions
On 30 April 2014, the Respondent (Quest) notified the Applicant (Mr Cole) that it intended to tender a copy of its Constitution, as a business record, at the hearing of the matter. Mr Cole’s solicitors informed Quest’s solicitors that he intended to object to Quest’s tender of the Constitution. As a result, Mr Sikeli Neil Ratu, a solicitor employed by Allens, Quest’s solicitors, prepared an affidavit sworn by him on 5 May 2014 and filed in court on 9 May 2014. Quest reads and relies upon that affidavit.
There are three annexures to Mr Ratu’s affidavit:
a)Annexure SR-1 is an email from Mr Ratu to Ms Kate Zorzi and Ms Barekzai, who work for Allens in Melbourne and who are responsible for the maintenance of the records that Allens holds for Quest in connection with the provision by it of company secretarial services to Quest. Mr Ratu asked Ms Zorzi and Ms Barekzai to send him a copy of Quest’s Constitution;
b)Annexure SR-2 is an email from Ms Zorzi attaching a copy of Quest’s Constitution, together with a members’ resolution dated 28 November 2007 adopting the Constitution; and
c)Annexure SR-3 is a chain of emails identifying the signature which appears on the Constitution.
Mr Cole does not object to Mr Ratu’s affidavit or the emails annexed to it.[1] However, Mr Cole objects to the admittance into evidence of Quest’s Constitution, a copy of which forms part of annexure SR-2 to Mr Ratu’s affidavit.
[1] Transcript at p173 lines 1 to 5 (T173.1-5)
Relevance of Constitution to issues in dispute
Quest’s Constitution is relevant to two issues in the proceedings.
First, the Constitution is relevant to Mr Cole’s assertions in paragraphs 64 to 67 of his Statement of Claim that:
a)A resolution of the Board of Quest was required to remove Mr Cole as a director of Quest;
b)A resolution of the Board of Quest was required to remove Mr Cole as the Managing Director of Quest;
c)At no time did the Board of Quest pass a resolution either terminating Mr Cole’s appointment as Managing Director or removing him as a director of Quest; and
d)The purported summary termination of Mr Cole as Managing Director of Quest and removal of Mr Cole as a director of Quest was of no effect at law and was unjust and unfair.
Quest’s case in relation to these issues is as follows:
a)Mr Cole was appointed as a director of Quest and he voluntarily resigned from his role as a director by letter dated 2 May 2011;[2]
[2] Affidavit sworn by Mr Cole on 24 October 2013 at annexure R
b)A resolution of the Board of Quest was not required to remove Mr Cole as a director of Quest;
c)Quest employed Mr Cole in the position of “Managing Director – ANZ”[3], but at no time did Quest appoint Mr Cole to the statutory office of Managing Director within the meaning of the Corporations Act;
[3] Affidavit sworn by Mr Cole on 24 October 2013 at annexure B (letter of offer – first paragraph)
d)Even if, contrary to Quest’s primary case, Mr Cole was appointed to the statutory office of Managing Director within the meaning of the Corporations Act, a resolution of the Board of Quest was not required to remove Mr Cole from the statutory office of Managing Director of Quest; and
e)Even if, contrary to Quest’s primary case, Mr Cole was not validly removed from his statutory office of director and/or Managing Director, such a finding would not assist Mr Cole’s claim in these proceedings because he does not seek any compensation or other relief associated with the alleged invalidity of his removal from those statutory offices.
The Constitution is relevant to Quest’s defence of these allegations as follows:
a)Pursuant to rule 47(b) of the Constitution, Mr Cole’s office as a director of Quest automatically came to an end on the cessation of his employment with Quest;
b)Pursuant to rule 51(a) of the Constitution, the directors of Quest may appoint a director to the office of Managing Director for the period and on the terms as they determine. There is no evidence that the directors of Quest ever passed a resolution appointing (or otherwise appointed) Mr Cole to the statutory office of Managing Director; and
c)By reason of rules 47(b) and 51(b) of the Constitution, even if Mr Cole was appointed to the statutory office of Managing Director, his appointment to that office automatically came to an end on the cessation of his employment with Quest.
Secondly, the Constitution is relevant to Quest’s defence of Mr Cole’s claim that the Deed of Release was not validly executed by Quest. In particular, Quest will submit, as one of a number of its arguments in defence to this part of Mr Cole’s claim that its execution of the Deed of Release was not inconsistent with any provision in its Constitution because the Constitution is silent in relation to the way in which Quest may enter into a deed.
Business record
There is no doubt that the Constitution is one of Quest’s business records within the meaning of the Evidence Act. In particular, the Constitution is or forms part of the records belonging to or kept by Quest in the course of, or for the purposes of, its business.[4] So much is clear from paragraphs [2] to [7] and annexures SR-1 to SR-3 to Mr Ratu’s affidavit.
[4] Section 69(1)(a) of the Evidence Act; Roach v Page (No 15) [2003] NSWSC 939 per Sperling J at [5]
Quest’s Response to Objections raised by Mr Cole
Mr Cole has identified three grounds for his objection to the Constitution being admitted into evidence:
a)First, Mr Cole alleges Quest is attempting to introduce “further evidence” in contravention of the court’s directions concerning the filing and service of affidavits;[5]
[5] T10.41 – 11.24
b)Secondly, Mr Cole alleges that reliance by Quest on its Constitution would have the effect of “allowing the respondent to amend their pleadings at the hearing by stealth”;[6] and
[6] T11.24 – 11.40
c)Thirdly, Mr Cole alleges that Quest failed to produce the Constitution in answer to the subpoena served on Quest by Mr Cole.[7]
[7] T11.40 – 12.12
As to the first argument raised by Mr Cole, numerous documents have been tendered by each party at the hearing of this matter. Those documents were not referred to in, or annexed to, an affidavit from any of the witnesses in the proceedings. Quite properly, neither party objected to any of those documents being admitted into evidence on the basis that they were an attempt to introduce “fresh evidence”. Quest’s Constitution is in the same category as those documents. The tender of a business record such as the Constitution does not contravene any of the pre-trial directions made by the court in relation to the filing and service of affidavits. The only reason the Constitution is annexed to Mr Ratu’s affidavit is because Mr Cole indicated he would object to the tender of it as a business record, so an affidavit was put on to prove the source of the document.
As to the second argument raised by Mr Cole, he relies on the fact that Quest admitted Mr Cole was “the appointed Managing Director” of Quest in paragraph 61 of the Statement of Claim and paragraph 61 of the Defence. Quest does not seek to resile from paragraph 61 of its Defence. Quest admits that Mr Cole was appointed to the employed position of Managing Director. Importantly, however, paragraph 61 of the Statement of Claim does not allege that Quest appointed Mr Cole to the statutory office of Managing Director within the meaning of the Corporations Act. It has always been Quest’s case that Mr Cole was never appointed to that statutory office. The Constitution supports Quest’s argument in that regard.
It is also necessary to have regard to the fact that the Constitution is relevant to Quest’s defence of the allegations referred to in [7] above. There is no suggestion, and nor could there be, that Quest has admitted any allegation relevant to these issues.[8] Accordingly, even if, contrary to Quest’s primary argument, Quest’s reliance on the Constitution could be considered to be inconsistent with its case that Mr Cole was not, at any time, appointed to the statutory office of Managing Director, the Constitution ought be admitted in relation to Quest’s claims that any appointment of Mr Cole to the statutory office of Managing Director came to an end when he ceased to be an employee of Quest and the fact that Quest’s execution of the Deed of Release was not inconsistent with any provision in its Constitution.
[8] See, for example, paragraphs 65 to 67 of the Statement of Claim and paragraphs 65 to 67 of the Defence.
As to the third argument raised by Mr Cole, the Constitution was not caught by the categories of documents in the subpoena. These categories were set out in the schedule to the subpoena, which was amended by an order of the court made by Judge Manousaridis by consent on 24 September 2013. In particular, the amended subpoena required Quest to produce, amongst other things:
a)Originals of all records, pay advice, wage records, records of commission payments, employment share schemes, personnel or employment files, offers of employment, contracts of employment, agreements, employment handbooks, employment policies (the expressions employment handbooks and employment policies will be taken to refer to those policy documents that applied to Mr Cole during the period of his employment by Quest including the policies referred to in the pleadings in this proceeding), all contributions to the appointed superannuation fund, all group certificates, all files, notes, correspondence, emails, statements, notes, records of interview and reports concerning, regarding, in respect of or pertaining to the employment of Mr Cole by Quest (the expression all files, notes, correspondence, emails, statements, notes, records of interview and reports concerning, regarding, in respect of or pertaining to the employment of Mr Cole by Quest is to be limited to those documents which record the terms and conditions of Mr Cole's employment by Quest, record assessments of his performance of his contractual duties, or concern the decision to terminate his employment);
b)Originals of all records, file notes, emails, statements, notes and reports regarding the decision of Quest to terminate the employment of Mr Cole;
c)Originals of all records, file notes, emails, statements, notes and reports regarding the decision of Quest to remove Mr Cole as a director of Quest.
The Constitution is plainly not such a document. In any event, Mr Cole has not suggested (and nor could he) that he will be prejudiced in any way by reason of the fact that a copy of the Constitution was provided to his solicitor on Wednesday, 30 April 2014, rather than at some earlier time.
For the reasons set out above, Quest submits that Mr Ratu’s affidavit should be admitted into evidence, including the Constitution and other documents annexed to it.
Mr Cole’s Submissions
The Conduct of the Proceedings and the Respondent’s Delay and Non-Compliance
The Statement of Claim in the proceedings was filed on 26 April 2013.
The Respondent filed its Defence in these proceedings on 13 May 2013.
On 24 May 2017 His Honour Judge Lloyd-Jones ordered the parties in this matter attend mediation.
On 17 July 2013 the Applicant served the Respondent with a Subpoena that at Item 3 of the Schedule sought “Originals of all records, file notes, emails…regarding the decision of the Respondent to terminate the employment of the Applicant” and at Item 4 of the Schedule “Originals of all records…regarding the decision of the Respondent to remove the Applicant as a director of the Respondent.” It is clear that the Documents the Respondent now seeks to tender came within and were captured by both Items 3 & 4 of the Schedule of the Subpoena.
On 1 August 2013 the Respondents bought an application before his Honour Judge Lloyd-Jones seeking to set aside the Applicant’s Subpoena.
On 22 August His Honour handed down judgment and declined to set aside the Subpoena.
On 24 September 2013 Judge Manousaridis made the following Orders with the consent of the parties:
a)Item 2 of the Schedule of the Subpoena filed 17 July 2013 by the Applicant be amended in accordance with Annexure A;
b)Items 1, 3, 4 and 5 of the Schedule of the Subpoena dated 17 July 2013 remain unchanged;
c)The Subpoena is returnable by 24 September 2013;
d)The applicant to file and serve any affidavit evidence on which he relies by 25 October 2013;
e)The respondent to file and serve any affidavit evidence on which it relies by 6 December 2013; and
f)The applicant to file and serve any affidavit evidence in reply by 24 December 2013.
On 24 September 2013 the Respondent returned “1 small box”[9] of documents.
[9] See the Court's Subpoenaed Items and Exhibits List by File.
The Applicant then relying on the documents returned by the Respondent under the Subpoena prepared and served its’ affidavit evidence in chief on 25 October 2013 and in accordance with the above Orders of the Court.
Having been in possession of the Applicant’s evidence for some six weeks on 5 December 2013, the day before it was due to file and serve its evidence, the Respondent unilaterally informed the Applicant it would not be complying with Judge Manousaridis’s Orders[10].
[10] See letter of 5 December from the Respondent’s solicitor’s attached to these submissions.
On 11 December 2013 the Respondent provided the Applicant with an unsigned draft copy of Mr Barrie Sheers affidavit and a copy of Mr William Evans’ affidavit that had not been sworn in accordance with r.15.26 of the Federal Circuit Court Rules.
On 13 December 2013 the Respondent filed and served a sworn copy of the Affidavit of Barrie Sheers on the Applicant.
None of the emails annexed to Mr Sheers affidavit had been produced under subpoena as required by the order of Judge Manousaridis.
On 18 December 2013[11] the Applicant's solicitor wrote to the Respondent's solicitors complaining of the uncertain and unfinished state of the Respondents' evidence and advising them that unless the Respondent filed and served its' remaining evidence by 20 December it would approach the Court for further Orders.
[11] See letter of 18 December from the Applicant's solicitor’s attached to these submissions.
On 20 December 2013 the Respondent filed and served a sworn copy of the affidavit of Mr William Evans in proper form on the Applicant.
None of the emails annexed to Mr Evans’ affidavit had been produced under subpoena as required by the order of Judge Manousaridis.
At 5.19pm on 11 February 2014, the day before the matter was due to come back to court for final directions, the Respondent's solicitors sent an email to the Applicant's solicitor informing him it would seek the next day, without having filed or served an application on the Applicant, to file further evidence dealing with the Sharepoint Sales Representative issue[12]. This email made no mention of the alleged Constitution of Quest Software Pty Ltd or the Special Resolution by Sole Member of Quest Software Pty Ltd purporting to adopt the same (hereinafter the "Documents").
[12] See the attached email of 11 February 2014 from Mr. Sikeli Ratu.
On 12 February 2014 His Honour Judge Lloyd-Jones made the following order:
"The Respondent's oral application seeking to adduce further evidence is dismissed.
It is to be noted that this order precluded the Respondent from adducing further evidence in the proceedings.
On 30 April 2014 the Respondent's solicitor forwarded a copy of alleged Constitution of Quest Australia Pty Ltd (hereinafter "Quest Australia") and the Special Resolution to the Applicant's solicitor informing him that they intended to attempt to tender these Documents at the hearing to commence on 5 May 2014.
Although it is apparent that both the Special Resolution and the alleged Constitution of Quest Australia has been in possession of the Respondent since 28 November 2007[13] at no time since the commencement of the proceedings had the Respondent made any reference to its intention to rely upon either document in its Pleadings in Defence, in its' affidavit evidence or in any or its previous correspondence with the Applicant's solicitor. In this regard the Applicant was completely taken by surprise three days before the hearing.
[13] See the date inscribed on the Special Resolution of the Sole Member of Quest Australia.
On 1 May 2014 the Applicant's solicitor wrote to the Respondent's solicitor seeking to know the purpose for which the Respondent wished to tender the document.
On Friday 2 May 2014 the Applicant's solicitor received an email from the Respondent's solicitor informing him that the Respondent intended to use the documents with respect to the issues as to whether Mr Cole "was appointed a 'managing director' for the purposes of the Corporations Act2001 (Cth); and whether the Deed of Release executed by Mr Cole on 2 May 2011 was validly executed by Quest."
At no time since the commencement of the proceedings had the Respondent put the Applicant on notice that it intended to allege that Mr Cole was not validly appointed for the purposes of the Corporations Act2001 (Cth) or that the Constitution of Quest Australia in some way allowed for the execution of the Deed of Release (hereinafter "the Deed") in the form in which Mr Sheers purported to execute the Deed, which the Applicant denies it does, nor did the Respondent's Pleadings in Defence plead these allegations. In this regard the Applicant was completely taken by surprise on the last business day before the hearing.
Although it could have at any time prior to the hearing made an Application to the court to amend its' Pleadings in Defence and to plead the alleged effect of these Documents, which the Applicant denies, at no time since the commencement of the proceedings has the Respondent done so.
Just prior to hearing commencing on 5 May, 2014 the Respondent's solicitor handed the Applicant's solicitor a copy of an affidavit made on the same date by the Respondent's solicitor annexing the Documents and sought to read that affidavit and tender Quest Australia's Constitution and the Special Resolution. Although at hearing the Applicant's counsel did not object to the tender of the emails annexed to Mr Ratu's affidavit[14], the Applicant strongly objects to both the reading of the affidavit in an attempt to bring the alleged Constitution and special resolution into evidence and the attempt at the time of hearing to "tender" of the Documents.
[14] Transcript at p173 lines 1 to 5 (T173.1-5)
Relevant Submissions
Although the Respondent submits that it wishes only to "tender" the Documents as a business record it is clear from the Respondent's submissions that the purpose of tender is an attempt to provide an evidentiary basis for the allegation that Mr Cole was never validly appointed as a Managing Director for the purposes of the Corporations Act2001 (Cth) and the rather odd proposition that the silence of the alleged Constitution of Quest Australia with respect to the way Quest Australia might enter into a deed in some way permitted the execution of the Deed in the invalid form in which Mr Sheers purported to execute the Deed, which the Applicant denies it does.
In this regard, given that the Documents had been in the possession of the Respondent and its solicitors since 28 November 2007, the Respondent had every opportunity to bring the Documents into evidence by filing and serving affidavit evidence of a properly registered Director of Quest Australia or an authorised officer of Quest Australia annexing the Documents in the more than eight (8) weeks it took to file its' evidence in reply to Mr Cole's affidavit and contravention of the Orders of the Court of 24 September 2013.
Further, given (i) that the Documents had been in the possession of the Respondent and its' solicitors since 28 November 2007; and (ii) and that the Documents should have been produced in response to the Subpoena; and (iii) the Respondent had every opportunity to make an application to amend its' Pleadings in Defence; and (iv) the Respondent had every opportunity to include the Documents in its' affidavit evidence the Applicant submits that the Respondent made a tactical decision not to do so and is now attempting to gain a tactical advantage at this extremely late stage of the proceedings by seeking to tender the Documents.
The Applicant therefore repeats and emphases the submission made at hearing that to now allow the Respondent to tender and to admit the Documents into evidence would be in contravention of and in disrespect of His Honour Judge Lloyd-Jones decision on 12 February 2014 ordering no further evidence was to be adduced by the Respondent.
The Prejudice to the Applicant
In contrast it is to be noted that Mr Cole had only four weeks to prepare and file his evidence[15] and as the Respondent failed to comply with the terms of the Subpoena served on it on 17 July 2013 or plead its reliance on the Documents, Mr Cole was prejudiced in not being given the opportunity to put on evidence in chief concerning the alleged Constitution of Quest Australia.
[15] See the Orders of the 24 September 2013.
One would think that if anyone was in a position to give evidence about the currency and effect of the alleged Constitution on Quest Australia it would be Mr Cole who the Respondent does not deny was appointed[16] as and functioned as the Managing Director of Respondent for almost four years and the Respondent held out to the world during this time as the Respondent's Managing Director.
[16] See paragraphs 60(a) and 61 of the Respondent's Defence and paragraphs 60 & 61 of the Applicant's Statement of Claim.
Mr Cole was also further prejudiced by the Respondents failure to file and serve affidavit evidence of a properly registered Director of Quest Australia or an authorised officer of Quest Australia annexing the Documents as part of their evidence as he was again denied the opportunity in his evidence in reply to respond to the alleged effect or otherwise on his appointment as the Managing Director of the Respondent.
The Question of Admissibility
Importantly the Documents themselves are hearsay and prima facie excluded by s.59 of the Evidence Act 1995 (Cth) (hereinafter "the Act"). The Respondent seeks to tender the Documents as a Business Record and under the exception of s.69 of the Act. Section 69 of the Act provides;
"(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made (a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or (b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact."
"(5) For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person's knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact)."
In seeking to read the affidavit of Mr Ratu and tender the alleged Constitution and special resolution the alleged fact that the Respondent seeks to assert is that the alleged Constitution annexed to Mr Ratu's affidavit was the Constitution of Quest in effect continuously from the date of the special resolution annexed to Mr Ratu's affidavit and remained current at the date of Mr Cole's summary termination by the Respondent on 2 May 2011.
This is not a fact about which it can be asserted Mr Ratu did or could have had personal knowledge of nor is his alleged knowledge of the fact or the alleged knowledge of Kate Zorzi "might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact)".
In fact, where Ms Zorzi states in her reply to Mr Ratu enquiry as to whose signature in appears on the front page of the alleged Constitution; "The signature appears to belong to Maryse MacMurdo (a former Allens employee) who was appointed as company secretary at the time" then the time she is by definition be referring to is the date that the special resolution was signed but by definition this is not the date that Mr Cole was terminated.
Ms Zori does not state the basis of her alleged knowledge that the alleged Constitution "was in place in May 2011" and this is not a fact it about which it can be asserted she did or could have had personal knowledge of. She was not the Company Secretary of Quest Australia at May 2011.
Even if she were to state that in her email that she has made enquiries of the Members or Directors or Quest Australia to determine if the alleged Constitution was current at May 2011 or if between November 2007 and May 2011 the Constitution of the Quest Australia was in any way amended this would still only be "a previous representation made by a person about the fact".
In fact the ASIC Record[17] shows that Ms MacMurdo resigned as the Company Secretary of Quest Australia on 10 July 2009 and was replaced by Ms Cindy Campus on 7 September 2009 who resigned on 22 January 2010. Thereafter the post was vacant and in particular it remained vacant on 2 May 2011 when Mr Cole was summarily terminated.
[17] See pages 45 and 46 of the ASIC Search annexed to Mr Cole's Affidavit of 24 October 2013.
On this basis it is submitted that the only persons who could have had personal knowledge of what Constitution and in what form it was current at May 2011 were the registered officers of Quest Australia being Mr Cole and Mr Jensen[18]. Given that Mr Jensen remains a Director this is evidence that should be properly be and can only be given by him. Evidence that yet again the Respondent has failed to produce.
[18] See pages 44 of the ASIC Search annexed to Mr Cole's Affidavit of 24 October 2013.
In light of the failure of Mr Ratu's affidavit to comply with the requirements of s. 69(2) of the Evidence Act 1995 (Cth) then the documents do not come within the exception and it is submitted must be excluded as hearsay,
The Principles of Procedural Fairness and Case Management
As the Court is aware the previous leading case on the manner in which the principles of case management should be applied in proceedings was formerly Queensland & Anor v JL Holdings Pty Ltd(1997) 189 CLR 146.
However on 5 August, 2009 the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 delivered three separate judgments which have had a significant impact on the conduct of litigation, when judges, magistrates and decision makers are required to exercise their discretion in matters of case management under the current rules of procedure requiring the “just resolution” of the “real issues” in dispute.
There was a separate decision by French CJ, a joint judgment by Gummow, Hayne, Crennan, Kiefel and Bell JJ [19] and a separate decision by Heydon J.
[19] References to AON without specific attribution to a judgment are references to the joint judgment.
What did AON -v- ANU decide?
The three separate judgments unanimously held:
a)The starting point for any application, and by inference the effect of the application on the court's timetable, are the rules of the relevant jurisdiction [at 55]: in AON this was the ACT Court Procedure Rules (in the Federal Jurisdiction the equivalents are the Federal Court of Australia Act 1976 (“FCA”) and Federal Circuit Court Rules 2001 (“FCCR”));
b)The case management principles embodied in the ACT Rules (and by extension the FCCR and the inclusion of PART VB in the FCA) postdate the High Court’s decision in Queensland v JL Holdings and the purposes stated in the rules cannot be ignored: the rules are to be applied having regard to the stated objectives, being the timely disposal of the proceedings at an affordable cost [at 97] or as the Chief Justice put it the “just resolution of the real issues in the proceeding with minimum delay and expense" [at 36];
c)Speed and efficiency in the sense of minimum delay and expense are essential to a just resolution of proceedings which remains the paramount purpose of the FCCR as embodied in Rule 1.03[20] and s.37M of the FCA; limits may be placed upon re-pleading, and by extension the failure to serve evidence in accordance with the timetable set by the Court, when delay and cost are taken into account [at 98];
[20] The corresponding sections of the CPA (NSW) 2005 are s.56, 57 & 58.
d)There is no entitlement to raise an arguable claim by an amendment to a pleading subject to payment of costs by way of compensation [at 111 and French CJ at 5] and therefore it can be argued there is no entitlement to an extension in terms of failures to comply with court mandated timetables subject to the payment of costs. In other words costs should not always be viewed as a panacea for delay; and
e)Inefficiencies in the use of a court as a publicly funded resource by reason of late applications, and by extension continuing delays, are to be taken into account in the proper exercise of a primary judge’s exercise of discretion to grant an application and by extension leave to serve out of time: so too is the need to maintain the public’s confidence in the judicial system [French CJ at 5] and the effects on other litigants in the court system [101].
How has AON v ANU changed the landscape of Case Management?
Statements in JL Holdings, which suggested a limited application for case management, should not be applied in the future [at 111].
JL Holdings cannot be taken as authority for the view that a waste of public resources and undue delay should not be taken into account in the exercise of interlocutory decisions [French CJ at 30].
The obligation imposed by the Rules to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution [at 98].
In jurisdictions having rules similar to Rule 21 (See ss.37M, 37N, 37P of FCA and Rule 1.03 of FCCR) and Rule 502 of the ACT Court Procedure Rules, JL Holdings has ceased to be of authority. It is necessary to apply the rules without any preconceptions derived from what was said in JL Holdings [Heydon J at133].
JL Holdings has had a damaging influence on the conduct of litigation [Heydon J [133] and created a culture and mentality of “uncomplaining supine liberality” for delinquent litigants (referring to Bryson J in Maronis Holdings Ltd & Ors v Nippon Credit Australia Pty Ltd & Ors [2000] NSWSC 753 at [15] “in a passage which merits preservation from the oblivion of unreported judgments”).
There was no explanation offered for the delay in seeking to amend [53]: this was critical to the exercise of any discretion in favour of AON [114]; therefore there was no basis for a finding of oversight [108] or mistake of judgment [109]; it can be inferred that there could be no reasonable explanation in the absence of any explanation [108]; French CJ regarded the failure to raise the new claim as an apparent deliberate tactical decision in those circumstances [4].
The Greater Relevance of Case Management Principles
AON confirms that case management principles have changed significantly by the rules of procedure enacted by various jurisdictions since JL Holdings.
The statutory duty imposed by civil procedure rules such as the FCA, FCCR and the CPA in NSW requires a court – in mandatory terms – to give effect to the overriding purpose of case management rules being “the just resolution of disputes...(b) as quickly, inexpensively and efficiently as possible"[21] including limiting "the number of documents that may be tendered in evidence"[22].
[21] See s.37M of the Federal Court of Australia Act, 1976.
[22] See s. 37P(3)(c) of the Federal Court of Australia Act, 1976.
That duty is a significant qualification to the power to grant leave to amend and by extension the power to grant leave to vary from the Court’s mandated timetable with respect to evidence in the proceedings.
AON is a significant and unanimous recent decision of the High Court considering the principles of proper case management in the context of current rules of court concerning practice and procedure that since that time has been applied by state and federal courts with respect applications to adduce further evidence at hearing (See Platinum Investment Management Limited v Chief Commissioner of State Revenue [2009] NSWSC 998, Phoenix Commercial Enterprises Pty Ltd v City of Canada Bay Council [2009] NSWSC 17 & Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2009] NSWSC 1370).
It should not be overlooked that even before AON, the NSW Court of Appeal in a judgment by Chief Justice Spigelman (with which Basten and Campbell JJA agreed) had held that JL must be understood as subject to the statutory duty imposed on courts by the rules of civil procedure: Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 (1 April 2009) at [28] – [29].
Mr Cole’s Submissions
It is clear that the Respondent does not just wish to "tender" the documents but rather is attempting to use them as the evidentiary basis to establish the following allegations;
Quest’s case in relation to these issues is as follows:
a)a resolution of the Board of Quest was not required to remove Mr Cole as a director of Quest;
b)Quest employed Mr Cole in the position of “Managing Director – ANZ”, but at no time did Quest appoint Mr Cole to the statutory office of Managing Director within the meaning of the Corporations Act;
c)even if, contrary to Quest’s primary case, Mr Cole was appointed to the statutory office of Managing Director within the meaning of the Corporations Act, a resolution of the Board of Quest was not required to remove Mr Cole from the statutory office of Managing Director of Quest; and
d)even if, contrary to Quest’s primary case, Mr Cole was not validly removed from his statutory office of director and/or Managing Director, such a finding would not assist Mr Cole’s claim in these proceedings because he does not seek any compensation or other relief associated with the alleged invalidity of his removal from those statutory offices.
The Constitution is relevant to Quest’s defence of these allegations as follows:
a)pursuant to rule 47(b) of the Constitution, Mr Cole’s office as a director of Quest automatically came to an end on the cessation of his employment with Quest;
b)pursuant to rule 51(a) of the Constitution, the directors of Quest may appoint a director to the office of Managing Director for the period and on the terms as they determine. There is no evidence that the directors of Quest ever passed a resolution appointing (or otherwise appointed) Mr Cole to the statutory office of Managing Director; and
c)by reason of rules 47(b) and 51(b) of the Constitution, even if Mr Cole was appointed to the statutory office of Managing Director, his appointment to that office automatically came to an end on the cessation of his employment with Quest."[23]
[23] The Respondents Submissions at paragraphs 6 & 7.
With respect to paragraph 6(a) above the Respondent is attempting to play on a simple drafting error in the Applicant's Statement of Claim were at paragraph 64 the Applicant pleads " Being the appointed Managing Director and a registered Director of the Respondent Section 203C of the Corporations Act 2001 (Cth) required a resolution of the Board of Directors for the Applicant to be removed as a Director of the Respondent." The Applicant is clearly pleading reliance on and repeats its' reliance on s. 203C of the Corporations Act that reads;
"Removal by members--proprietary companies (replaceable rule--see section 135)
A proprietary company:
(a) may by resolution remove a director from office; and
(b) may by resolution appoint another person as a director instead."
The Respondent submits that "It has always been Quest’s case that Mr Cole was never appointed to that statutory office"[24].
[24] The Respondents Submissions at paragraph 12.
There is only one problem with this submission nowhere in the Defence of the Respondent, filed over a year ago, does the Respondent plead any of the above allegations.
The allegations set out at paragraphs 6 & 7 of the Respondents submissions are in effect pleadings and being pleaded for the first time in these proceedings.
In this regard, the Applicant does not resile from its submission from the Bar Table in its opening submissions that the effect of allowing the Respondent to tender the documents sought to be tendered will have the practical effect of allowing the Respondent to effectively amend its pleadings without having made a formal application at any time over the last year to do so and will have the practical effect of allowing the Respondent to now raise an issue and rely upon Documents that the Applicant has been given no opportunity to consider and respond to and have taken the Applicant entirely by surprise.
Leaving to one side the unfair tactical advantage that the Respondent now seeks to obtain, given (i) there is no definition of the term "Managing Director" in the Corporations Act; and (ii) role of Managing Director is not a role that requires registration with ASIC; and (iii) the Respondent admits[25] Mr Cole was appointed Managing Director on 7 September 2007 by way of the offer of employment and his acceptance of the same; and (iv) the alleged Constitution was adopted some seven weeks[26] after Mr Cole was appointed; and (v) he therefore was not appointed under the alleged Constitution it is difficult to see how the Documents can assist the Respondent.
[25] See Paragraph 60(a) of the Respondents Defence.
[26] See the date inscribed on the Special Resolution of the Sole Member of Quest Australia.
The Respondent argues a finding Mr Cole was not validly removed from his statutory office of director and/or Managing Director "would not assist Mr Cole’s claim in these proceedings because he does not seek any compensation or other relief associated with the alleged invalidity of his removal from those statutory offices."[27] Mr Cole seeks both statutory compensation and aggravated statutory compensation for anxiety, humiliation and distress and by definition that extends to the anxiety, humiliation and distress he experienced through his unconscionable removal as a Director and as the appointed Managing Director of Quest Australia.
[27] See paragraph 6 of the Respondent's Submissions.
The argument of the Respondent that the Documents are not documents that came within the terms of the Subpoena[28] is nothing but sophistry when they now seek to rely upon them to justify the Respondent's unconscionable conduct in the manner in which it removed Mr Cole as the Respondent's Managing Director and when the Subpoena sought “Originals of all records…regarding the decision of the Respondent to remove the Applicant as a director of the Respondent.”[29]
[28] See paragraph 15 of the Respondent's Submissions.
[29] See Item 4 of the Schedule to the Applicant' Subpoena served on the Respondent on 17 July 2013.
The Respondent argues that one of the reasons that the Documents should be admitted is because "numerous documents have been tendered by each party at the hearing of this matter. Those documents were not referred to in, or annexed to, an affidavit from any of the witnesses in the proceedings"[30]. This assertion rather conveniently overlooks the fact that with the exception of Exhibit R4, being a Deed of Release of Mr McAfee, every other document tendered by both sides in the proceedings was a document produced as an annexure, exhibit or in response to a subpoena.
[30] See paragraph 11 of the Respondent's Submissions.
The Documents now sought to be tendered are not documents that were produced in response to the Applicant's Subpoena and documents which the Applicant has had no reasonable time to consider with respect to the effect of the same on its' case.
The Respondent submits "Mr Cole indicated he would object to the tender of it as a business record, so an affidavit was put on to prove the source of the document." It is noted no line reference from the transcript accompanies this statement. It is more than apparent from these submissions that the basis of the Applicant's objections to the tender and admission of the Documents are far more numerous than objecting that the Documents do not come within the s.69 exception to hearsay but rather are grounded on the highly pertinent and relevant principles of Case Management and Procedural Fairness.
In this regard, it is submitted to allow the tender and admission of the Documents now will only add to the costs of both sides in these proceedings and considerably lengthen the time needed to prepare closing submissions to address the allegations the Respondent now wishes to raise at this late hour.
In Summary
In the matter at hand the Respondent has completely failed to comply with directions by the court to serve its evidence on the Applicant in accordance with the timetable ordered by the Court or even in accordance with the Orders made by the Court and agreed by consent between the parties.
No adequate explanation has been offered to the Court by the Respondent for its failure to comply with the Orders of the Court, the Court’s Rules or its duty under s.37N (1) of the Federal Court of Australia Act1976.
The Applicant has been prejudiced in as much as in complying with the Orders of the Court the Applicant was forced to serve its evidence without knowing the case the Respondent now wishes it to answer.
The Respondent has been in receipt of the Applicant’s Statement of Claim since 26 April 2013 and the Applicant's evidence since 25 October 2013 and is attempting to obtain a tactical advantage in now seeking to raise issues which it had not previously put the Applicant on notice of until the last business day before the hearing was to commence.
Although having almost a year since the date of filing its Defence the Respondent has never in this time filed an application in the court seeking to amend its defence to include the pleading that Mr Cole was not validly appointed as the Respondent's Managing Director.
No explanation has been offered by the Respondent for its delay in acting to seek leave to amend its’ allegedly flawed pleadings. In this regard, not even a proposed amended defence was ever proffered to the Applicant by the Respondent for the Applicant's consideration.
In Aon Risk Services Australia Limited v Australia National University the majority at [94] [95] and [114] held:
In Gale v Superdrug Stores Plc161 Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd,162 said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.163
[95] The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question…. [114] Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. ...What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.
It is respectfully submitted that the above passage is on point in this matter.
It is further submitted that at its' heart Aon Risk Services Australia Limited v Australia National University [2009] HCA 27 now provides all courts in this country with a clear guide to be applied to achieve the "just resolution" of the "real issues" in dispute. It is submitted that the question of whether Mr Cole may or may not have been appointed or removed from a "statutory position" in accordance with alleged Constitution of Quest Australia is not the real issue in dispute in these proceedings.
Rather the real issues in dispute in these proceedings is the misleading and deceptive conduct Quest Australia engaged in when it made the representation set out in paragraphs 13 to 16 of the Statement of Claim to Mr Cole and the Unconscionable Conduct it engaged in when it summarily terminated Mr. Cole in the manner it did so on 2 May 2011 thereby breaching both the Australian Consumer Law and Mr Cole's contract of employment. It is submitted these are the real issues in dispute and issues that the Court should keep firmly in the forefront of its mind in determining this application to tender and by definition admit these Documents.
It is respectfully submitted in the light of the facts of this matter and of the greater relevance of the importance of the application of the principles of case management as laid down by the High Court in Aon Risk Services Australia Limited v Australia National University that the Court should dismiss the application to tender these Documents that have, by definition, been in the possession of the Respondent from the 28th November 2007.
It is submitted that to allow the Respondent to tender and admit the Documents would effectively be allowing the Respondent to change its’ case at hearing and would be a grave injustice to Mr. Cole and therefore the Respondent’s application to tender the Documents must be dismissed. The Applicant should not be prejudiced by the tardiness of the Respondent and the Respondent should be made to live with the consequences of its own tardiness and lack of compliance with the orders of the Court. It has made its own bed and therein it should lie.
In the alternative, any boon that might be granted by the Court to allow the Respondent to tender the Documents can only be at the indulgence of the Court and therefore where the Court determines to grant leave to the Respondent to tender the documents thereby effectively extending the time for the service of the Respondent's evidence that will in practical terms have the effect of amending the Respondent's defence then the Applicant should have its costs on an indemnity basis from the date of the first return in this matter.
Consideration
The final hearing of this matter took place over three days on 5, 6 and 9 May 2014. During the course of the hearing affidavit evidence was sought to be read and objections raised thereto. Broadly, I indicated to the parties I would allow evidence in, noting and considering the objections and, when preparing reasons, give that evidence the weight if any the Court deemed appropriate. The parties also tendered a number of documents over the course of the hearing which were marked as exhibits. These documents were read without objection.
On 30 April 2014, five days prior to the commencement of the hearing, Quest’s representatives wrote to Mr Cole’s representatives indicating it would seek to tender the Constitution at the final hearing. Mr Cole’s representatives indicated this course would be opposed and Quest then proceeded to prepare the Ratu Affidavit and its annexures. Mr Cole’s representatives indicated at the hearing they were not amenable to the Ratu Affidavit being dealt with in the same manner as the other contested evidence in the proceedings and, as a result of this, these reasons will determine whether or not the Ratu Affidavit and particularly the Constitution are to be allowed into evidence.
Both parties have prepared detailed written submissions specifically addressing this issue in response to orders made at the end of the hearing of these proceedings on 9 May 2014. Within those submissions is a fairly comprehensive chronology of events covering the period between the filing of the application on 26 April 2013 and the final hearing. I do not believe it is necessary to traverse over those details in my consideration, unless a particular event is crucial to the forming a view and the ultimate decision. As indicated above, the parties’ submissions have been reproduced in full and, where applicable, cross-referencing in these reasons has been added in.
In considering whether to exercise its discretion to grant Quest leave to read the Ratu Affidavit and, particularly, Annexure “SR2”, the Court is obliged to have regard to the interests of justice, the administration of justice, and a balance between those considerations and case management considerations. The Court was referred, in Mr Cole’s submissions (see [62]-[75] above), to the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (supra) and the application of the principles in that judgment by Courts in a number of cases. Although the authority and principle has been referred to and relied upon in numerous decisions of this Court, those decisions predominately address the issue of adjournments. This, however, does not in any way diminish the relevance of the High Court’s decision in Aon (supra) to this matter.
In addition, ss.3 and 42 of the Federal Circuit Court of Australia Act 1999 (Cth) (the “FCC Act”) and reg.1.03 of the Federal Circuit Court Rules 2001 (Cth) oblige this Court as a federal trial court of first instance to act with expedition in the disposition of matters before it. The Court is obliged to, whilst operating as informally as possible, use streamlined processes and act as speedily as possible in the effective resolution of matters. However, as is also made clear by the FCC Act, these objectives and prescriptions must also be seen in light of the need to ensure that proceedings are not protracted.
Orders made by this Court at the early stages of these proceedings were made, at least, with a view to ensure that the proceedings were not protracted. I have also been referred to the policy set out in s.37M of the Federal Court Act 1976 (Cth) (the “FCA Act”) and Order 8.21 of the Federal Court Rules 2011 (Cth) (the “FCA Rules”). Reference to the FCA Act and FCA Rules is relevant due to the operation of rr.1.03 and 1.05 of the FCC Rules. Regulation 1.03 states:
FEDERAL CIRCUIT COURT RULES 2001 - REG 1.03
Objects
(1) The object of these Rules is to assist the just, efficient and economical resolution of proceedings.
(2) In accordance with the objects of the Act, the Rules aim to help the Court:
* to operate as informally as possible
* to use streamlined processes
* to encourage the use of appropriate dispute resolution procedures.
…
Regulation 1.05 states:
FEDERAL CIRCUIT COURT RULES 2001 - REG 1.05
Application
(1) It is intended that the practice and procedure of the Court be governed principally by these Rules.
(2) However, if in a particular case the Rules are insufficient or inappropriate, the Court may apply the Federal Court Rules or the Family Law Rules, in whole or in part and modified or dispensed with, as necessary.
…
Given that this is a proceeding that has been subject to pleadings in the form of a detailed statement of claim, s.37M of the FCA Act relevantly provides:
(1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a) According to law; and
(b) As quickly, inexpensively and efficiently as possible.
(2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives:
(a) The just determination of all proceedings before the Court;
(b) The efficient use of judicial and administrative resources available for the purposes of the Court;
(c) The efficient disposal of the Court’s overall case load;
(d) The disposal of all proceedings in a timely manner; and
(e) The resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute
(3) The civil practice and procedure provisions must be interpreted and applied and any power conferred or duty imposed by them (including the power to make rules of court) must be exercised or carried out, in the way that best promotes the overarching purpose.
I note the views expressed by the High Court in Aon (supra) at [103] that:
103. Generally speaking, where a discretion is sought to be exercised in favour of one party and to the disadvantage of another, an explanation will be called for.
No real explanation has been given in respect of the late filing of the Ratu Affidavit and its annexures. Although this is addressed in the written submissions, the focus is on a chronology of events leading up to the exchange between the parties on the days immediately prior to the commencement of the final hearing. As a consequence, there was an indication by Mr Cole’s representatives that the tendering into evidence of the Constitution would be objected to, resulting in Quest’s representatives preparing the Ratu Affidavit to address the genesis of the Constitution. I cannot say I have received much assistance as to why the Constitution and Minutes of Resolution of the sole member was not sought to be filed in accordance with the various orders of this Court, or in response to the subpoena issued by Mr Cole. I acknowledge there is dispute between the parties in respect of whether the wording of the Subpoena covers these two documents, but it does not explain why they weren’t filed some considerable time ago.
It is abundantly clear from the written submissions reproduced above the issue of acceptance into evidence of the Constitution and the Minutes of Resolution of the sole member is being vigorously pursued. The respective arguments for the documents’ inclusion or exclusion are detailed and do not require repeating. However, on the material before the Court, I have some reservations in respect of both arguments as to whether the objectives that they hope to achieve, either by the inclusion or exclusion of the Constitution and Minutes of Resolution, can actually be achieved by either party. I have formed the view that both parties, to successfully achieve their respective objectives, would need to be presenting further information for this Court to be satisfied those objectives had been met. I note the evidence is closed and material of that nature is not present and this raise in the Court’s mind that an inference based on the principle in Jones v Dunkel (1959) 101 CLR 298 may arise. It is open for the Court to draw a negative inference against a party who chose not to address evidence that might ordinarily be considered relevant, corroborative and available with the influence being that such evidence would not have assisted that party.
Substantial submissions have been made that if these documents were permitted to be read into evidence it would lead to a considerable volume of final submissions addressing the issues that arise therefrom. It must also be inferred, in those circumstances, there would be an equally substantial response. As I have formed the view that the documents themselves do not substantially go to establishing or proving an aspect of the status of Mr Cole within Quest’s corporate structure and considering this in the framework of case management referred to above the reading into evidence of the Constitution should be declined and costs reserved.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of Judge Lloyd-Jones
Associate:
Date: 18 June 2014
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