Collins v Burgess Rawson (Qld) Pty Ltd
[2018] FCCA 3142
•1 November, 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COLLINS v BURGESS RAWSON (QLD) PTY LTD & ORS | [2018] FCCA 3142 |
| Catchwords: INDUSTRIAL LAW – Commonwealth – industrial courts – costs – proceedings without reasonable cause. |
| Legislation: Fair Work Act 2009 (Cth), ss.340, 340(1)(a)(ii), 341(1)(c)(ii), 342(1)(c), 343, 343(1)(a), 550, 550(1), 550(2)(a), 570, 570(1), 570(2) Federal Circuit Court Rules 2001 (Cth), r.21.10, Pt 1 of Sch 1 Federal Court Rules 2011 Pt 40. |
| Cases cited: Fair Work Ombudsman v Complete Windscreens (SA) Pty Ltd [2016] FCA 621 Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 Hamlin v University of Queensland (No 2) [2013] FCCA 702 Hinchcliffe v University of Sydney (No 2) [2004] FMCA 640 Maxton & Maxton Pty Ltd v Port Village Accommodation Pty Ltd (No 2) [2012] FMCA 359 Potter v Fair Work Ombudsman [2014] FCA 187 |
| Applicant: | MICHAEL JAMES COLLINS |
| First Respondent: | BURGESS RAWSON (QLD) PTY LTD |
| Second Respondent: | PATRICK KELLY |
| Third Respondent: | JOHN AMOS |
| File Number: | BRG 178 of 2017 |
| Judgment of: | Judge Jarrett |
| Hearing date: | By written submission |
| Date of Last Submission: | 23 April 2018 |
| Delivered at: | Brisbane |
| Delivered on: | 1 November, 2018 |
REPRESENTATION
| Solicitors for the Applicant: | Synkronos Legal |
| Solicitors for the First and Second Respondents: | Carter Newell Lawyers |
| Solicitors for the Third Respondent: | Cooper Grace Ward |
ORDERS
The applicant pay the third respondent’s costs of and incidental to the application filed on1 March, 2017 to be assessed according to Schedule 1 of the Federal Circuit Court Rules 2001 if not otherwise agreed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 178 of 2017
| MICHAEL JAMES COLLINS |
Applicant
And
| BURGESS RAWSON (QLD) PTY LTD |
First Respondent
| PATRICK KELLY |
Second Respondent
| JOHN AMOS |
Third Respondent
REASONS FOR JUDGMENT
By an application commenced on 1 March, 2017 Michael Collins sought relief pursuant to the Fair Work Act 2009 (Cth) against Burgess Rawson (Qld) Pty Ltd, Patrick Kelly and John Amos. On 20 December, 2017 Mr Collins filed a notice of discontinuance whereby he discontinued all of the proceedings against each of the respondents.
On 13 February, 2018 Mr Amos filed an application in which he seeks an order that Mr Collins pay his costs of and incidental to the application “calculated in accordance with the rules of taxation under Part 40 of the Federal Court Rules 2011 (Cth), or as agreed between the parties”.
The cause of action that Mr Collins sought to pursue against Mr Amos is revealed in his statement of claim filed on 18 April, 2017. In general terms, Mr Collins alleged that:
a)he was an employee of the first respondent from 6 September, 2010 until 23 November, 2016;
b)the second respondent was a director or principal of the first respondent;
c)during the course of his employment, Mr Collins made a number of complaints or enquiries to the first and second respondents about certain matters that arose in the course of his employment;
d)in making those complaints or enquiries, Mr Collins was making a complaint or enquiry in relation to his employment within the meaning of s.341(1)(c)(ii) of the Fair Work Act;
e)in those circumstances he was exercising a workplace right each time he made a complaint or enquiry;
f)because he exercised a workplace right to make complaints or enquiries about his employment, the first and second respondents took adverse action against him within the meaning of s.342(1)(c) of the Fair Work Act;
g)eventually, Mr Collins’ employment with the first respondent was terminated;
h)on 1 November, 2016 Mr Collins received an email from the third respondent identifying himself as a consultant to the first respondent and asking to meet with Mr Collins to discuss the issues affecting the business;
i)the third respondent again wrote to the applicant on 2 November, 2016 requesting a meeting with Mr Collins by 5:00pm on that day;
j)on 2 November, 2016 the second respondent sent an email to the applicant stating:
“I have discussed the matter with [the third respondent] and he agrees that all further negotiations on employment terms and distributions he will handle. I am not prepared to become involved in these discussions until I receive final advice from [the third respondent] and Matt. [The third respondent] is waiting on your response to a meeting time today”;
k)on 2 November, 2016 Mr Collins declined a meeting with the third respondent as was requested of him;
l)on 8 November, 2016 the applicant met with the third respondent during which meeting, the third respondent said to the applicant words to the effect of:
“I see the company from an independent perspective. I have seen all the correspondence. Burgess Rawson is a very good business. [The second respondent] is extremely well connected around town and if you play your cards right it would be worthwhile you continuing with the business. [The second respondent] wants you in the business. [The second respondent] will retire one day I can’t change the perceptions of [the second respondent]. I see myself as a conduit to resolve the issues. [The second respondent] believes it is his business. It is his [the second respondent’s] offer or nothing. I do not know the facts. [The second respondent] is on the right side of the mess and you should just accept the revised Remuneration Agreement and get on with it”;
m)on 16 November, 2016 the third respondent sent an email to Mr Collins which amongst other things said:
“I have been asked to notify you on behalf of Burgess Rawson that you are required to indicate your acceptance of the terms of the offer by 5:00pm on Friday 18 November 2016”;
n)the applicant did not respond to that request;
o)on 19 November, 2016 the applicant spoke with the third respondent who said to Mr Collins words to the effect of, “your employment has been suspended because you have not accepted the revised employment terms”; and
p)on 23 November, 2016 the first and second respondents terminated Mr Collins’s employment.
Mr Collins sought the imposition of a civil penalty against the first, second and third respondents for their contraventions of ss.340 and 343 of the Fair Work Act. He also sought an order for compensation. The third respondent was alleged to be an accessory to the first and second respondents’ contraventions of s.342 and 343 of the Fair Work Act and liable to the applicant pursuant to s.550(1) of the Fair Work Act.
By his defence filed on 19 May, 2017, the third respondent admitted some of the allegations made against him, and denied others. Specifically, he:
a)denied that he said words to the effect that “the applicant’s employment has been suspended because you have not accepted the revised employment terms…”;
b)denied that he organised and took action or threatened to take action against the applicant with the intent to coerce him not to exercise a workplace right;
c)denied that his actions were intended to negate choice for the applicant;
d)denied that his actions were in contravention of s.343(1)(a) of the Fair Work Act through the operation of s.550(1) of the Fair Work Act;
e)pleaded that:
19. (b) … the applicant’s pleading fails to establish the subsection of section 550(2) of the FW Act upon which the applicant seeks to rely on, as constituting involvement in the alleged contravention (which is denied) and as a consequence any alleged contravention (which is denied) is unsustainable as the applicant has not established a proper basis for the third respondent to be held liable”;
f)pleaded in answer to the whole of the applicant’s claim that:
i)he was engaged by the first respondent to assist the company at a management level in respect of financial performance maintenance and compliance review;
ii)specifically in respect of any liability of the third respondent by virtue of s.550 of the Fair Work Act, the third respondent:
(1)did not have any day to day control of company decisions or decisions made in relation to the applicant’s employment by the first respondent;
(2)did not have the required knowledge of the essential facts constituting the alleged contraventions of the Fair Work Act;
(3)was not knowingly concerned in the alleged contraventions of the Fair Work Act; and
(4)was not an intentional participant in the alleged contraventions of the Fair Work Act.
Mr Collins filed a reply on 2 June, 2017. In respect of the third respondent’s defence, the applicant pleads:
5. By virtue of the conduct of the Second and Third Respondents as set out at paragraphs 59 – 72 of the Statement of Claim, they attempted to coerce the Applicant to sign a detrimental revised contract of employment in an effort to prevent the Applicant from making further inquiries and complaints about his employment.
6. Therefore, the Second and Third Respondents each contravened section 343(1)(a) of the FW Act by attempting to prevent the Applicant from being able to exercise a workplace right, namely, to make an inquiry or complaint in relation to his employment within the meaning of section 341(1)(c)(ii) of the FW Act.
On 3 April, 2017 the Court ordered that Mr Collins file and serve statements of the evidence in chief of each witness that he proposed to call at a trial by 9 June, 2017. The applicant delivered one statement by himself on 3 July, 2017. A few days after, on 7 July, 2017, the third respondent’s solicitors wrote to Mr Collins’s solicitors informing them that the claim against him was “misconceived and baseless” because in order to be liable under s.550 of the Fair Work Act, a person must have had “knowledge of the essential facts constituting the contravention”, and that the applicant must clearly identify the “subsection of 550” upon which he intended to rely. The correspondence invited the applicant to consider settling the case against the third respondent commercially by discontinuing the proceedings with each party to bear their own costs.
Mr Collins’s solicitors responded twice on 21 July, 2017 to that correspondence. In each case, they reasserted the cause of action against the third respondent and identified s.550(2)(a) as that which “has been engaged by the third respondent’s conduct”. An amended statement of claim was foreshadowed and on 11 September, 2017 I ordered that any application for leave to amend the statement of claim be filed and served no later than 4:00pm on 15 September, 2017. However, no application for leave to file an amended statement of claim was made by Mr Collins.
As I have set out above, on 20 December, 2017 Mr Collins discontinued the proceedings against all respondents and on 16 January, 2018 he served a copy of the notice of discontinuance upon the third respondent’s solicitors.
The third respondent argues that he should have his costs of these proceedings because Mr Collins instituted them against him vexatiously or without reasonable cause – it having had no prospects of succeeding – or because of his unreasonable acts in maintaining a defective pleading once put on formal notice regarding the difficulties in the case, and in refusing to accept the third respondent’s settlement offer of 7 July, 2017.
Section 570 of the Fair Work Act provides:
570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
The case against the third respondent was that he was an accessory to the contraventions of the Fair Work Act committed by the first and second respondents. Section 550(2)(a) of the Fair Work Act provides the basis for accessorial liability for a contravention under the Act where a person has “aided, abetted, counselled or procured the contravention”. The contraventions to which the third respondent was alleged to have been an accessory were contraventions of ss.343(1)(a) (coercion) and 340(1) of the Act (adverse action). As the third respondent submits (emphasis in the original):
15. Therefore, in order to prove that the [third respondent] was involved in the First Contravention, the [applicant] would have been required to prove:
a. that he had a workplace right;
b. that the First or Second Respondents had organised or taken, or threatened to organise or take, any action against him;
c. with intent to coerce him;
d. to exercise or not exercise that workplace right; and
e. critically, that, knowing all the essential facts which constituted the contravention, the [third respondent] intentionally aided, abetted, counselled or procured the acts: Giorgianni v the Queen (1985) 156 CLR 473 at 487-8, 495, 500 and 503.
As the third respondent submits, in respect of the knowledge required by him to be involved in the relevant contraventions, it is actual knowledge that is needed rather than any inferred or implied knowledge. I accept the third respondent’s submissions that it is not enough to say that the third respondent ought to have known all of the facts or would have done so if he had acted with reasonable care and diligence. To be “knowingly concerned” in the contravention, a person must have knowledge of the essential facts constituting the contravention and be an intentional participant in it, the necessary intent being based on knowledge of the essential elements of the contravention. However, knowledge of the law is not required: that is to say, for a person to be liable as an accessory they need not know certain conduct amounts to a contravention. All that is required is knowledge of the essential facts which constitute the contravention.
In Potter v Fair Work Ombudsman [2014] FCA 187 at [81] Cowdroy J explained it in this way:
Knowledge that the Clerical NAPSA applied to the Employees is not identical to knowledge that a failure to pay the Employees in accordance with the Clerical NAPSA constitutes a breach of a civil remedy provision, although it is undeniable that the difference is a small one. The Court finds that, to be an accessory to the underpayment contraventions, Mrs Potter must have known the Clerical NAPSA applied to the Employees. It is not difficult to imagine a situation in which directors of a company honestly but mistakenly arrange for the company’s employees to be paid under an incorrect award. There would be no doubt that the company had underpaid its employees, and by virtue of that fact, contravened the FW Act. If the position were as the FWO submits however, the directors would be liable as accessories to those contraventions simply because they knew how much the employees were being paid and because they had knowledge of the existence of the applicable award, even though they honestly believed that such award did not apply.
In Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 White J, when considering the decision of Fair Work Ombudsman v Al Hilfi [2012] FCA 1166, said:
[184] Besanko J considered a similar question in the context of a summary dismissal application in Fair Work Ombudsman v Al Hilfi [2012] FCA 1166. The allegation in that case was that Coles Supermarkets Ltd was liable as an accessory in respect of the underpayment of wages to trolley collectors employed by a subcontractor. Coles submitted that the FWO had to establish that it had actual knowledge of the following matters:
(i) that the four employees who were the subject of the claim were employed by Mr Ali Hilfi during the relevant period;
(ii) that the Cleaning Services Award 2010 applied to the employment of those employees;
(iii) that the work of each of the employees gave rise to the specific entitlements alleged;
(iv) that the employees were not paid those entitlements by Mr Al Hilfi.
Ultimately, it was not necessary for Besanko J to decide the correctness of the position asserted by Coles, but he did say (at [44]) that there was “a good deal of force” in its submission.
…
[188] … I consider that the claims of accessorial liability in this case should be determined in accordance with the principles stated in Potter and Al Hilfi. That is because knowledge that there is an award which is applicable which prescribes minimum rates or entitlements is a factual element necessary for the establishment of the accessory’s intention.
An example of the approach is to be found in Fair Work Ombudsman v Complete Windscreens (SA) Pty Ltd [2016] FCA 621, where Besanko J explained:
[309] … The FWO suggested that there was a difference between the approach in Potter and the approach in Devine Marine Group. I do not need to address this submission because it was common ground between the parties, and I think it is correct that, taking the meal breaks as an example, the FWO must prove that Mr Lindsay Dean knew that the relevant employees were governed by an industrial award and that the award stipulated minimum meal breaks and that the meal breaks actually provided were less than stipulated under the award before he is held liable under s 728 of the WR Act and s 550 of the FW Act.
I accept the third respondent’s submission that there is no basis alleged in the statement of claim (that is to say no material facts alleged in the statement of claim) nor in the evidence provided in the applicant’s statement of evidence in chief, which could satisfy the elements necessary to engage s.550(2)(a) of the Fair Work Act and thus render the third respondent liable for the first and second respondent’s conduct as an accessory.
Moreover, there is no evidence which would support any allegations against the third respondent that he had knowledge of the essential facts or that he intentionally participated in the alleged contraventions. It is plain from Mr Collins’ statement of evidence in chief and his statement of claim that he had no direct evidence, nor any evidence from which it might be inferred, that the third respondent knew or had wilfully blinded himself to the particular matters of which he needed to be demonstrated to have had knowledge if he was to be liable as an accessory. For example, there was no plea and no evidence to demonstrate that the third respondent knew that Mr Collins had made the pleaded complaints or inquiries about his employment that formed the basis of his claims against the first respondent. The statements that allege to have been made by the third respondent in the statement of claim could not possibly, without more engage s.550(2)(a).
Mr Collins submits that “while some of the [third respondent’s] conduct might fall within the range of conduct that might be expected of a consultant or advisor, the alleged conduct of the [third respondent] at the meeting on 8 November, 2016 added a dimension to it that demonstrated a deeper involvement in the alleged contravening conduct of the first and second respondents”. What was said at the meeting between Mr Collins and the third respondent was pleaded in paragraph 43 of the statement of claim. It is in the following terms:
43. On 8 November 2016 at 4.00pm the Applicant met with the Third Respondent. At that meeting the Third Respondent said to the Applicant, words to the effect of, “I see the company from an independent perspective. I have seen all the correspondence. Burgess Rawson is a very good business. Pat [Second Respondent] is extremely well connected around town and if you play your cards right it would be worthwhile you continuing with the business. Pat wants you in the business. Pat will retire one day. I can’t change the perceptions of Pat. I see myself as a conduit to resolve the issues. Pat believes it is his business. It is his [Pat] offer or nothing. I do not know the facts. Pat is on the right side of the mess and you should just accept the revised Remuneration Agreement and get on with it”.
However, the applicant’s evidence about the meeting on 8 November, 2016, set out in his statement of evidence, suggests that he and the third respondent had the following conversation:
87. I meet with Amos on Tuesday, 8 November at 4.00pm. The meeting went for approximately 1 hour 20 minutes. I attempted to discuss matters with Amos regarding the allegations Kelly had made and the various issues between us. The only matter he would discuss was the proposed new employment terms as set out in the Revised Contract of Employment. Amos said to me words to the effect of “Pat is on the right side of the mess, it’s a great business and if you play your cards right you will be a part of the future of the business. You should just accept the revised employment terms and move on Pat is well connect around town”. During the meeting I made notes of our conversation. Attached and marked MJC-29 is a copy of the notes I made.
It is apparent that Mr Collins’s proposed evidence would not prove the allegations he makes about the conversation he had with the third respondent in paragraph 43 of his statement of claim. There are significant differences. His evidence would be insufficient to prove the requisite knowledge of all of the facts on the part of the third respondent.
The power to award costs is conditional upon the Court being satisfied that one of the matters specified in s.570(2) is made out. In the event that the Court is so satisfied, the discretion to make an order as to costs is enlivened.
Mr Collins submits that “in bringing proceedings against the third respondent, the applicant relied on documents that he purported were evidence of the extent to which the third respondent was acting in unison with (or aiding) the first and second respondents in the alleged adverse action”. The documents referred to are those set out at annexure SOB1 to the affidavit of Sally Burdon filed on 16 March, 2018. Most of those documents, however, do not emanate from the third respondent at all. Some emanate from the second respondent and others from the applicant himself. The documents do not assist the applicant’s response to this application.
Mr Collins contends that his allegations against the third respondent have never been tested. That misunderstands the nature of the argument made by the third respondent in this application. The third respondent contends that there has been no sufficient pleading of the necessary material facts to properly engage accessorial liability under s.550(1) of the Fair Work Act and more than that, on the applicant’s own evidence, s.550(1) of the Fair Work Act cannot be engaged. I accept those submissions.
In the absence of a proper pleading that sufficiently pleads the material facts upon which the cause of action is based and, in the absence of any evidence which might form the basis of a sufficient pleading, it is plainly the case that the proceedings were commenced against the third respondent without reasonable cause and I so find.
In my view, these proceedings were commenced without reasonable cause against the third respondent. There has been no or insufficient attention given to the matters that need to be pleaded and proved to succeed in a cause of action against the third respondent and that was pointed out to the applicant’s solicitors in July, 2017. Despite suggesting that the statement of claim might be amended, it was never so amended.
In those circumstances the discretion to make an order for costs pursuant to s.570(1) of the Fair Work Act is engaged and in my view as a matter of discretion it is appropriate to make an order for costs. The applicant should pay the third respondent’s costs of these proceedings.
The third respondent seeks his costs to be assessed according to Part 40 of the Federal Court Rules 2011. But no submissions have been addressed as to that. The starting point is that ordinarily costs, if they are to be awarded, will be assessed according to the event based scale set out in Part 1 of Schedule 1 to the Federal Circuit Court Rules 2001: FCCR 21.10, Hinchcliffe v University of Sydney (No 2) [2004] FMCA 640 at [10]; Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No 3 ) [2010] FMCA 250 at [43]; applied in Maxton & Maxton Pty Ltd v Port Village Accommodation Pty Ltd (No 2) [2012] FMCA 359 and Hamlin v University of Queensland (No 2) [2013] FCCA 702. In the absence of any argument to depart from the prima facie position established by the Federal Circuit Court Rules, the cost to be paid by the applicant to the third respondent should be assessed according to Schedule 1 of the Federal Circuit Court Rules 2001. Neither party has provided an assessment of those costs under the scale. In those circumstances it is appropriate to order that they be assessed if they cannot otherwise be agreed.
For the above reasons, I make the order set out at the commencement hereof.
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 1 November, 2018.
Date: 1 November, 2018
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