Construction, Forestry, Maritime, Mining and Energy Union v Precision Painting Contractors Pty Ltd and Anor
[2018] FCCA 1152
•18 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION v PRECISION PAINTING CONTRACTORS PTY LTD & ANOR | [2018] FCCA 1152 |
| Catchwords: INDUSTRIAL LAW – PRACTICE & PROCEDURE – summary dismissal sought against Respondents who have failed to engage properly in the proceeding – inappropriate submissions and conduct of the matter by solicitor who contended that there was no distinction between a Defence and the provision of particulars – solicitor also contended that the Court’s Order requiring that a Defence be filed was done without power – Orders made for summarily dismissal of the Respondents’ Defence and judgment entered for the Applicant – restraint on Respondent’s solicitor appearing before the Court in this Registry due to his history of unprofessional and time-wasting conduct. |
| Legislation: Fair Work Act 2009 (Cth), ss.50, 357, 550, 570(2)(b) Federal Circuit Court of Australia Act 1999 (Cth), s.17A Federal Circuit Court Rules 2001 (Cth), rr.1.05, 4.05(13), 13.03A(2), 13.03B(2), 16.01, 29.05 |
| Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 Boston Commercial Services Pty Ltd v GE Finance Australasia Pty Ltd (2006) 236 ALR 720 Helal v McConnell Dowell Constructors (Aust) Pty Ltd (2010) 193 FCR 213 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 B. Cairns, Australian Civil Procedure (Eleventh Edition) (Sydney: Thomson Reuters – Lawbook Co., 2016) |
| Applicant: | CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION |
| First Respondent: | PRECISION PAINTING CONTRACTORS PTY LTD |
| Second Respondent: | SORAN SHERO |
| File Number: | CAG 18 of 2017 |
| Judgment of: | Judge Neville |
| Hearing date: | 11 October 2017 |
| Date of Last Submission: | 26 October 2017 |
| Delivered at: | Canberra |
| Delivered on: | 18 May 2018 |
REPRESENTATION
| Solicitor/Advocate for the Applicant: | Ms Read |
| The Applicant: | Construction, Forestry, Maritime, Mining, & Energy Union |
| Solicitor/Advocate for the Respondents: | Mr Ford |
| Solicitors for the Respondents: | Hugh Ford & Associates |
THE COURT ORDERS THAT:
The Defence of the Second Respondent, filed on 3 October 2017, be struck out.
Default Judgment be entered in favour of the Applicant against the First and Second Respondent.
Pursuant to s 545 of the Fair Work Act 2009 (Cth) (“the Act”), the First and Second Respondents pay compensation in the following amounts:
(a)To Mr Kushner in the amount of $17,633.70;
(b)To Mr Swiderski in the amount of $6,907.10;
(c)To Mr O’Connor in the amount of $15,706.59;
(d)To Mr McDonald in the amount of $22,957.84; and,
(e)To Mr Kesina in the amount of $18,863.07.
Pursuant to s 547 of the Act, interest is to be paid in respect to the amounts payable under Order 3.
These reasons be forwarded by the Registrar of this Court to the President of the Law Society of the ACT and to the President of the ACT Bar Association.
Costs be granted to the Applicant pursuant to s 570(2)(b) of the Act.
The Applicant and Respondents are to file written submissions of no more than 5 pages within 21 days of the date of these Orders, being by 8 June 2018, in relation to the penalties sought by the Applicant in the Statement of Claim pursuant to s 546 of the Act.
Absent any opposing Application within 14 days of the date of these Orders, being by close of business on 1 June 2018, the Respondents’ solicitor, Mr Ford, will be refused the right of appearance before Judge Neville.
THE COURT DECLARES THAT:
Under s 16 of the Federal Circuit Court of Australia Act 1999 (Cth) and s 545 of the Act:
In respect to Mr Kushner:
(a)The Second Respondent contravened s 357 of the Act by representing to Mr Kushner that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(b)The First Respondent contravened s 357 of the Act by the actions of its director the Second Respondent representing to Mr Kushner that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(c)The First Respondent contravened clause 1 of the Agreement and s 50 of the Act by failing to pay Mr Kushner the hourly rate prescribed by the Agreement for a CW2 employee;
(d)The First Respondent contravened clauses 36-37 of the Award as incorporated into the Agreement and s 50 of the Act by failing to pay Mr Kushner overtime loadings and weekend penalties on occasions he worked overtime during the week and worked on weekends;
(e)The First Respondent contravened clause 8.1 of the Agreement and s 50 of the Act by failing to pay Mr Kushner weekly;
(f)The First Respondent contravened clause 8.4 of the Agreement and s 50 of the Act by failing to provide Mr Kushner with a written statement specifying the period of his employment, his classification or the type of work he performed;
(g)The First Respondent contravened clause 14 of the Agreement and s 50 of the Act by failing to make superannuation contributions for the benefit of Mr Kushner;
(h)The First Respondent contravened clause 16 of the Agreement and s 50 of the Act by failing to enrol Mr Kushner in ACIRT and make weekly contributions to ACIRT in respect to Mr Kushner;
(i)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Kushner a consolidated disability allowance for all hours worked;
(j)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Kushner travel allowance on days he started and finished work on site;
(k)The First Respondent contravened clause 30 of the Agreement and s 50 of the Act by failing to provide Mr Kushner with personal protective equipment, safety footwear and clothing as required by clause 30 of the Agreement;
(l)The First Respondent contravened clause 37 of the Agreement and s 50 of the Act by failing to affect an income protection insurance policy for Mr Kushner;
(m)The Second Respondent was by s 550 of the Act involved in the contraventions set out in (iii) to (xii) above and contravened s 50 of the Act.
In respect to Mr Swiderski:
(a)The First Respondent contravened clause 1 of the Agreement and s 50 of the Act by failing to pay Mr Swiderski the hourly rate prescribed by the Agreement for a CW2 employee;
(b)The First Respondent contravened clause 8.1 of the Agreement and s 50 of the Act by failing to pay Mr Swiderski weekly;
(c)The First Respondent contravened clause 8.4 of the Agreement and s 50 of the Act by failing to provide Mr Swiderski with a written statement specifying the period of his employment, his classification or the type of work he performed;
(d)The First Respondent contravened clause 14 of the Agreement and s 50 of the Act by failing to make superannuation contributions for the benefit of Mr Swiderski;
(e)The First Respondent contravened clause 16 of the Agreement and s 50 of the Act by failing to enrol Mr Swiderski in ACIRT and make weekly contributions to ACIRT in respect to Mr Swiderski;
(f)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Swiderski a consolidated disability allowance for all hours worked;
(g)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Swiderski travel allowance on days he started and finished work on site;
(h)The First Respondent contravened clause 30 of the Agreement and s 50 of the Act by failing to provide Mr Swiderski with personal protective equipment, safety footwear and clothing as required by clause 30 of the Agreement;
(i)The First Respondent contravened clause 37 of the Agreement and s 50 of the Act by failing to effect an income protection insurance policy for Mr Swiderski; and,
(j)The Second Respondent was by s 550 of the Act involved in the contraventions set out in (i) to (ix) above and contravened s 50 of the Act.
In respect to Mr O’Connor:
(a)The Second Respondent contravened s 357 of the Act by representing to Mr O’Connor that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(b)The First Respondent contravened s 357 of the Act by the actions of its director the Second Respondent representing to Mr O’Connor that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(c)The First Respondent contravened clause 1 of the Agreement and s 50 of the Act by failing to pay Mr O’Connor the hourly rate prescribed by the Agreement for a CW2 employee;
(d)The First Respondent contravened clause 8.1 of the Agreement and s 50 of the Act by failing to pay Mr O’Connor weekly;
(e)The First Respondent contravened clause 8.4 of the Agreement and s 50 of the Act by failing to provide Mr O’Connor with a written statement specifying the period of his employment, his classification or the type of work he performed;
(f)The First Respondent contravened clause 14 of the Agreement and s 50 of the Act by failing to make superannuation contributions for the benefit of Mr O’Connor;
(g)The First Respondent contravened clause 16 of the Agreement and s 50 of the Act by failing to enrol Mr O’Connor in ACIRT and make weekly contributions to ACIRT in respect to Mr O’Connor;
(h)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr O’Connor a consolidated disability allowance for all hours worked;
(i)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr O’Connor travel allowance on days he started and finished work on site;
(j)The First Respondent contravened clause 30 of the Agreement and s 50 of the Act by failing to provide Mr O’Connor with personal protective equipment, safety footwear and clothing required by clause 30 of the Agreement;
(k)The First Respondent contravened clause 37 of the Agreement and s 50 of the Act by failing to effect an income protection insurance policy for Mr O’Connor; and,
(l)The Second Respondent was by s 550 of the Act involved in the contraventions set out in (iii) to (xi) above and contravened s 50 of the Act.
In respect to Mr McDonald:
(a)The First Respondent contravened clause 1 of the Agreement and s 50 of the Act by failing to pay Mr McDonald the hourly rate prescribed by the Agreement for a CW3, CW4 and CW5 employee at times Mr McDonald fell within classifications CW3, CW4 and CW5;
(b)The First Respondent contravened clause 8.1 of the Agreement and s 50 of the Act by failing to pay Mr McDonald weekly;
(c)The First Respondent contravened clause 8.4 of the Agreement and s 50 of the Act by failing to provide Mr McDonald with a written statement specifying the period of his employment, his classification or the type of work he performed;
(d)The First Respondent contravened clause 14 of the Agreement and s 50 of the Act by failing to make superannuation contributions for the benefit of Mr McDonald;
(e)The First Respondent contravened clause 16 of the Agreement and s 50 of the Actby failing to enrol Mr McDonald in ACIRT and make weekly contributions to ACIRT in respect to Mr McDonald;
(f)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Actby failing to pay Mr McDonald a consolidated disability allowance for all hours worked;
(g)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr McDonald travel allowance on days he started and finished work on site;
(h)The First Respondent contravened clause 30 of the Agreement and s 50 of the Act by failing to provide Mr McDonald with personal protective equipment, safety footwear and clothing as required by clause 30 of the Agreement;
(i)The First Respondent contravened clause 37 of the Agreement and s 50 of the Act by failing to effect an income protection insurance policy for Mr McDonald; and,
(j)The Second Respondent was by s 550 of the Act involved in the contraventions set out in (i) to (ix) above and contravened s 50 of the Act.
In respect to Mr Kesina:
(a)The Second Respondent contravened s 357 of the Act by representing to Mr Kesina that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(b)The First Respondent contravened s 357 of the Act by the actions of its director the Second Respondent representing to Mr Kesina that the contract of employment under which he was to be employed and was employed was a contract for services under which he would perform work as an independent contractor;
(c)The First Respondent contravened clause 1 of the Agreement and s 50 of the Act by failing to pay Mr Kesina the hourly rate prescribed by the Agreement for a CW2 employee;
(d)The First Respondent contravened clauses 36 and 37 of the Award as incorporated into the Agreement and s 50 of the Act by failing to pay Mr Kesina overtime loadings on each occasion he worked overtime on weekdays and on occasions he worked on weekends;
(e)The First Respondent contravened clause 8.1 of the Agreement and s 50 of the Act by failing to pay Mr Kesina weekly;
(f)The First Respondent contravened clause 8.4 of the Agreement and s 50 of the Act by failing to provide Mr Kesina with a written statement specifying the period of his employment, his classification or the type of work he performed;
(g)The First Respondent contravened clause 14 of the Agreement and s 50 of the Act by failing to make superannuation contributions for the benefit of Mr Kesina;
(h)The First Respondent contravened clause 16 of the Agreement and s 50 of the Act by failing to enrol Mr Kesina in ACIRT and make weekly contributions to ACIRT in respect to Mr Kesina;
(i)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Kesina a consolidated disability allowance for all hours worked;
(j)The First Respondent contravened the clause 18 of the Agreement and s 50 of the Act by failing to pay Mr Kesina travel allowance on days he started and finished work on site;
(k)The First Respondent contravened clause 30 of the Agreement and s 50 of the Act by failing to provide Mr Kesina with personal protective equipment, safety footwear and clothing as required by clause 30 of the Agreement;
(l)The First Respondent contravened clause 37 of the Agreement and s 50 of the Act by failing to effect an income protection insurance policy for Mr Kesina; and,
(m)The Second Respondent was by s 550 of the Act involved in the contraventions set out in (iii) to (xii) above and contravened s 50 of the Act.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
No. CAG 18 of 2017
| CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION |
Applicant
And
| PRECISION PAINTING CONTRACTORS PTY LTD |
First Respondent
| SORAN SHERO |
Second Respondent
REASONS FOR JUDGMENT
Introduction
Substantively, this matter concerns contravention proceedings under the Fair Work Act 2009 (“the Act”) with respect to, among other things, claims of sham contracting and underpayment of wages pursuant to a Collective Agreement between the parties, which operated from 21st March 2014 and had a nominal expiry date of 31st March 2016.
Procedurally, pursuant to an Application in a Case filed by the Applicant on 10th October 2017, the Applicant now seeks Orders that:
a)The Defence, filed [only] by the Second Respondent on 3rd October 2017, be struck out on either or all of the grounds that: (i) it is inconsistent with rule 16.41 of the Federal Court Rules 2011 (which apply by virtue of the operation of rule 1.05 of the Federal Circuit Court Rules 2001), (ii) it has a tendency to cause prejudice, embarrassment or delay, and/or (iii) it is an abuse of process;
b)Default judgment be entered in favour of the Applicant on the basis that both the First and Second Respondents are in default because they have failed to comply with an Order of the Court in the proceeding. The relevant Orders for this relief were issued on 18th April, 17th July, and 26th September 2017. These Orders directed that both Respondents file and serve a Defence as required by Rule 4.05(3) of the Federal Circuit Court Rules 2001. Each Order required the Defence to be filed within a prescribed time set out in the Order. The Applicant also contends that the Respondents have failed to defend the proceeding with due diligence. Rule 4.05(3) of this Court’s Rules relevantly provides (emphasis added):
If a Statement of Claim or points of claim are filed under paragraph (2)(b), a respondent:
(a) must file a Defence or points of Defence instead of an affidavit; and
(b) may file a cross‑claim.
The Applicant further seeks Orders that the matter be stood over for hearing to determine compensation and penalties as sought in the Applicant’s Amended Statement of Claim.[1] Finally, the Applicant seeks an Order for costs pursuant to s.570(2)(b) of the Act.
[1] The original Statement of Claim was filed on 23rd March 2017. An Amended Application and Statement of Claim was filed on 18th April 2018. The latter document simply amended the Applicant’s name following the amalgamation of the two Unions involved, which have become the entity stated as the Applicant in the current proceeding.
For the reasons that follow, the relief sought by the Applicant should be granted. Further, and in addition to the following reasons I accept and adopt the submissions of the Applicant. Conversely, I reject as untenable the submissions on behalf of the Respondents. Among other things, submissions that, for example, there is no distinction between a “Defence” and “further and better particulars”, flies in the face of the highest, and long-standing, authority. The Respondents’ submissions required the Applicant and the Court to waste precious scarce resources on matters that should never have been argued. Finally, the multiple procedural and other opportunities afforded to the Respondents were squandered by them at least in part because of the indefensible arguments propounded by their legal adviser.
Annotated Chronology
On 23rd March 2017, the Applicant filed an Application, together with a Statement of Claim, which set out claims in relation to sham contracting regarding the employment of Mr Kushner. It is pleaded that Mr Kushner was, in fact, employed by the First Respondent between 18th November 2015 and 12th May 2016, which the Applicant claims is a contravention under s.357 of the Act.
The Statement of Claim makes similar claims, all under s.357 of the Act, in relation to Mr O’Connor and Mr Kesina. Section 357 of the Act is concerned with situations where a person’s employment is misrepresented as being that of an independent contractor.
The Statement of Claim further pleads that there were breaches of the Collective Agreement between the parties regarding Mr Kushner, Mr Swiderski, Mr O’Connor, Mr McDonald and Mr Kesina, primarily in relation to underpayment of wages, all of which lead, it is contended, to contraventions pursuant to s.50 (which section concerns contravening an enterprise agreement) and s.550 of the Act (which section concerns the involvement of a person in a contravention being treated in the same way as the actual contravention). These contraventions are directed to both Respondents.
The Applicant seeks declaratory relief for breaches of the Act and, in particular, s.50 and s.357 in relation to each of the workers. The Applicant also seeks compensation (plus penalties) in relation to the following underpayments that are set out in schedules to the Statement of Claim which provide the bases for the amounts claimed:
| Mr Kushner | $17,633.70 |
| Mr Swiderski | $6907.10 |
| Mr O’Connor | $15,706.59 |
| Mr McDonald | $22,957.84 |
| Mr Kesina | $18,863.07 |
These sums amount to a total in underpayments, as alleged in the Statement of Claim, of $82,068.30.
The Application and Statement of Claim were served on the Respondents, respectively, on 24th March and 3rd April 2017.
On 18th April 2017, the first Court date, the Second Respondent appeared as a self-represented litigant. He said that he appeared also on behalf of the First Respondent. The Orders made on that date were to the following effect: the Applicant agreed to provide further and better particulars to the Respondents by 2nd May, and the Respondents were to file a Response and Defence by 16th May 2017.
On 16th May, the Respondents filed an Application in a Case seeking further and better particulars from the Applicant, and various other consequential Orders. On 29th May, the Respondent(s) stated that it was not content with the further and better particulars that had been provided. The matter was referred to a Registrar to determine that issue.
On 14th July, the Registrar made Orders dismissing the Respondents’ Application in a Case.
On 17th July 2017, Orders were again made for the Respondents to file a Response and Defence by 31st August; the matter was referred to the Registrar for mediation.
On 1st August 2017, the Respondents filed a Response but no Defence to the Statement of Claim.
On 26th September 2017, a third set of Orders was made for the Respondents to file a Response and Defence; this was to be done by 7th October. The Orders of 26th September, noted, amongst other things, that if no Defence was filed, there was a risk of default judgment being entered. At that time, the solicitor for the Respondents made an oral Application for my recusal. The Court directed that if this Application was pressed, it needed to be formalised in the usual way with an Application in a Case supported by an affidavit. To date, no such Application has been filed. There is brief reference to “recusal” in the written submissions set out below but only by reference to the solicitor’s conduct in some sort of unspecified complaint against me. Absent relevant detail and formal Application, it is impossible (either for the Court or for the Applicant) to consider this aspect of the matter.
On 3rd October 2017, the Second Respondent filed a Defence which was qualified in the following way. It asserted, among other things, that: this Court does not have “legal authority” to order “the Respondents” to file a Defence (par.1); in ordering that a Defence be filed the Court has acted “ultra vires” (par.2); and that, in any event, “the Respondent is not bound by any statements made in the Defence. The Defence is irrelevant” (par.5).
The comments set out in this document filed by the solicitor for the Respondents, in my view, are alarming. Among other things they show scant if any respect for the Court, and a disturbing lack of knowledge about (a) the conduct of litigation, (b) the powers of the Court under its own Act and Rules, not to mention other legislation and Rules, and (c) basic legal principle relating to, for example, the clear and long-standing role of pleadings and the distinction between pleadings, on the one hand, and further and better particulars, on the other. Indeed, in my view, as an officer of the Court, it was improper for the Respondents’ solicitor to file a document entitled “Defence” and to include in it the statements to which I have referred above (at [16]), and further for that solicitor to sign it. It borders on contempt by the solicitor.[2]
[2] The solicitor in question here is Mr H Ford, not Mr Abbas, who appeared on behalf of the Respondents on 11th October 2017.
On 10th October 2017, the Applicant filed an Application in a Case, seeking (as noted earlier) that the Defence as filed be struck out because, among other things, it was inconsistent with the Federal Court Rules and because it constituted an abuse of process. The Applicant sought an Order be made to enter default judgment against the Respondents, together with an Order for costs. The affidavit in support of the Application in a Case deposed that no Defence had been filed on behalf of the First Respondent. The same is also confirmed by reference to the Court file.
On 11th October, Orders were made for the filing of written submissions regarding the Applicant’s Application in a Case in relation to the strikeout application and in relation to default judgment.
Submissions of the Applicant
The Applicant filed written submissions on 19th October 2017; they were as follows (emphasis in original):
1) The Applicant has applied for orders that, consistent with Rule 16.21 of the Federal Court Rules 2011 (which apply by virtue of the operation of Rule 1.05 of the Federal Circuit Court Rules 2001) the Defence filed by the Second Respondent dated 3 October 2017 be struck out on the basis that it:
a) Is inconsistent with Rule 16.41 of the Federal Court Rules 2011, and
b) Has a tendency to cause prejudice, embarrassment or delay, and
c) Is an abuse of process.
2) The purpose of pleadings (including the requirement to file a defence) is to:
a) “furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it” Dare v Pulham [1982] HCA 70; and
b) to identify the issues that require the Court's attention and determination and which will inform all interlocutory disputes and the running of the trial: Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356, [2010] FCAFC 133; at [49]-[50].
3) The Applicant submits that the Defence filed by the Second Respondent fails to achieve either of these purposes.
Inconsistency with the Rules
4) The Defence filed by the Second Respondent does not contain any particulars of any defence or other matter pleaded. Rule 16.41 of the Federal Court Rules, (which is relevant by virtue of the operation of Rule 1.05 of the Federal Circuit Court Rules) requires that a Defence must state the necessary particulars of each claim or defence or other matter pleaded by the party. This requirement to particularise the Defence is also consistent with the general law regarding pleadings. With regard to particulars it has been held that:
“The fundamental principle … is that a party must be aware of the nature of the case he is called upon to meet. … it is not a question whether one party has adequate knowledge of the actual facts; it is a question whether he has adequate knowledge of what the other party alleges are the facts.” Sims v Wran [1984] 1 NSWLR 317
5) In this case, in the absence of any particulars at all, the Applicant cannot reasonably anticipate the case to be brought by the Respondent. On this basis the Applicant submits that the Defence is so lacking in particulars as to be inconsistent with the Rules and so inconsistent with the authorities in relation to the content of a defence as to justify it being struck out.
6) The Applicant further submits that the Defence fails to plead material facts (our submission in relation to this aspect of the matter is set out in greater detail below). This failure to plead material facts is a further ground of inconsistency with the Rules (specifically Rule 16.07 of the Federal Court Rules) and of itself justifies the Defence being struck out for inconsistency with the Rules.
Tendency to cause embarrassment or delay
7) The Applicant submits that the Defence filed by the Second Respondent is embarrassing: A pleading may be embarrassing when:
a) It simply pleads a conclusion (Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393 [18])
b) It is at too great a level of generality (Liam Bartlett v Swan Television and Radio Broadcasters Pty Ltd [1995] FCA 1429 [17])
c) It fails to plead material facts (Gunns Ltd v Marr [2005] VCS 251 [15])
d) It contains irrelevant material (Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393 [18])
8) The defence filed by The Second Respondent is embarrassing because it pleads only conclusions, does not disclose any material facts, and is at such a high level of generality such that it fails to disclose a proper, coherent, and intelligible statement of the Respondent’s case.
9) The pleading filed by the Second Respondent contains a number of blanket denials without reference to the material facts which support those denials. This is inconsistent with Rule 16.07 of the Federal Court Rules. The note to rule 16.07 of the Federal Court Rules that states that the rule requires a party to address each material fact pleaded in an opposing party’s pleading in addition, according to the note, a general denial or an evasive answer will not be sufficient. In Re Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd [1991] FCA 417 [7], the Court held that:
“I do not accept that the pleading of something which can be described as a conclusion cannot also be a pleading of a material fact. The real issue in a case where such an objection is raised is whether the facts are pleaded at too great a level of generality. In my opinion, the level of generality of the statement of claim in this case is too great for Rothmans to know with any precision what case it has to meet. The facts relied upon to support the conclusion about Rothmans' alleged purpose in refusing supply should be spelt out...” (emphasis added)
10) In addition the Full Court of the Federal Court has held that:
“Material Facts must be pleaded with the degree of specificity necessary to define the issues and inform the parties in advance of the case they have to meet. There are certain levels of generality in pleading which while they may bring in all facts necessary to establish a cause of action, are insufficient for that purpose.” Betfair Pty Limited v Racing NSW [2010] FCAFC 133 [49 ]
11) The Applicant submits that the Defence is plead with a high degree of generality. The Defence contains a repeated assertion that the members of the Applicant who are the subject of the Application were “independent contractors” but it does not identify or spell out the material facts necessary to support that assertion or to contradict the Applicant’s claim that these persons were employees. In addition, the Defence fails to identify any material facts which support its denial of the Applicant’s claim in relation to the application of s.357 of the Fair Work Act 2009. In relation to this aspect of the claim the Defence simply states at paragraph 15, “The Respondent denies this claim”, it is not clear if this denial relates to the s 357 claim as a whole or only to the material facts plead in paragraph 10 of the Statement of Claim.
12) In Gunns Ltd v Marr [2005] VCS 251 [15] the Supreme Court of Victoria held that:
That the pleading must allege material facts is fundamental. That they must be alleged with certainty follows from the principle stated that the pleading must convey a clear conception of the case being made. If it does not, it will be embarrassing in the sense that that word is used in this area of legal discourse and, in particular, for present purposes, in RSC r.23.02 and its predecessors both here and in England. The full Court of this Court has described a pleading as being embarrassing -
“…..where the pleading is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him.”
13) The Applicant submits that the Second Respondent’s Defence is embarrassing in the sense identified in Gunns v Marr, in that none of the material facts upon which the Second Respondent purports to rely are identified, such that the Applicant cannot identify what is alleged by the Respondent. In addition, the Defence fails to disclose a reasonable defence in relation large components of our Statement of Claim. There is no pleading at all to matters set out in the Statement of Claim between Paragraphs 11 and 43; and between Paragraphs 45 and 83, and between Paragraphs 85 and 118; and between Paragraphs 120 and 133.
14) The Applicant submits that it is not clear if:
a) the pleading set out in paragraph 15 of the Defence in relation to paragraph 10 of the Statement of Claim is also intended to apply to all the paragraphs between paragraphs 10 and 43 of the Statement of Claim
b) the pleading set out in paragraph 16 of the Defence in relation to paragraph 44 of the Statement of Claim is also intended to apply to all the paragraphs between paragraphs 44 and 83 of the Statement of Claim
c) the pleading set out in paragraph 17 of the Defence in relation to paragraph 84 of the Statement of Claim is also intended to apply to all the paragraphs between paragraphs 84 and 118 of the Statement of Claim
d) the pleading set out in paragraph 18 of the Defence in relation to paragraph 119 of the Statement of Claim is also intended to apply to all the paragraphs between paragraphs 119 and the end of the Statement of Claim
15) On one reading it is possible that paragraphs 15 -18 of the Defence are intended to respond the subsequent paragraphs of the Statement of Claim (as identified). Alternately, it is open to the Applicant to assume, following the usual rules of pleading, that all the paragraphs not plead to (as identified above) are admitted. The existence of these two contrary interpretations and the lack of specificity in the drafting of the Defence further leads to the conclusion that the Defence is so lacking in specificity and so vague as to be embarrassing and liable to be struck out.
16) The Defence filed by the Second Respondent is likely to cause delay insofar as it states the following at paragraph 5 “The Respondent is not bound by any statements made in the Defence. The Defence is irrelevant”. A defence which is not binding cannot serve the purpose of a pleading which is to identify the issues necessary to be resolved at trial. The filing of a non-binding defence has the result that all of the issues in the statement of claim will be required to be contested at trail. [sic] Self-evidently this will be a cause of delay and prejudice, as compared to a properly plead and particularised defence which serves the expediting purpose of narrowing and identifying the issues required to be resolved at trial.
17) Finally, the Second Respondent states at paragraph 5 that the Defence is “irrelevant”. As by its own admission the Defence is irrelevant this appears to be an invitation for the pleading to be struck out for containing irrelevant material.
The Defence is an abuse of process
18) The Second Respondent states at paragraph 5 of the Defence that he does not intend to be bound by any statements made in the Defence. This is prima facie an abuse of the process of filing a defence, having regard to the ordinary purposes of pleadings set out above. In Walton v Gardiner [1993] HCA 77, the High Court adopted the position that the power to correct an abuse of process is:
"the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people". [23]
19) The Applicant submits that the Defence filed by the Second respondent is an abuse of process in this sense, in that it would be manifestly unfair to the Applicant and bring the administration of justice into disrepute to allow a defence which is stated to be non-binding and irrelevant, to stand as basis for the conduct of this matter.
Default Judgement
20) The Applicant also seeks that that consistent with Rule 13.03B of the Federal Circuit Court Rules the Court issue Default Judgment in favour of the Applicant on the basis that both the First and Second Respondents are in default because they have failed to:
a) comply with an order of the Court in the proceeding (namely the orders of the Court that a Defence be filed) which were issued on 18 April 2017, 17 July 2017, and 26 September 2017; and
b) file and serve a document required under the Federal Circuit Court Rules 2001 namely the Defence which is required by Rule 4.05(3) of the Rules; and
c) defend the proceeding with due diligence.
21) The Defence which has been filed states that it is filed on behalf of Soran Shero. Mr Shero is the Second Respondent. On the face of the documents before the Court the First Respondent has failed to comply with the Court’s order and has not filed a defence of any kind. The Applicant has written to the Respondents and asked them to clarify this matter. As no clarification has been received it is reasonable to proceed on the basis that the First Respondent has not filed, and does not intend to file, a defence.
22) In relation to the Defence filed by the Second Respondent the Applicant submits that the deficiencies in the Defence filed by the Second Respondent cannot be remedied by an order for particulars on the basis that particulars are not a remedy for failure to plead a matter. In this vein we submit that the matter has been on foot since 23 March 2017, and the proper time for filing of a defence was properly in April of this year. The Respondents have been ordered to file a defence on three occasions, two of which occurred after they obtained legal representation. In the circumstances, if the Defence is struck out, no further opportunities to rectify the deficiencies identified by the Applicant are warranted and we submit that it is appropriate and timely for the Court to order default judgement in our favour.
23) If the Court makes the orders sought at points 1 and 2 of our Application in a Case the Applicant submits that it is also appropriate that the matter be stood over for further hearing in relation to the orders for compensation and penalties sought in the Applicant’s original Statement of Claim.
24) Finally we submit that the Court should order the Applicant’s costs in relation to this Application in a Case, on the basis set out in s 570(2)(b) of the Fair Work Act 2009 (Cth). Specifically, we say that both of the Respondents’ unreasonable acts and omissions in failing to either file a defence of any kind (in relation to the First Respondent) or file a defence which is appropriate and consistent with the Rules (in the case of the Second Respondent), and both of the Respondent’s unreasonable failure to rectify these issues when brought to their attention by the Applicant in our correspondence of 5 October 2017, have led the Applicant to incur the costs of these proceedings.
The Respondents’ Submissions
The Applicant filed written submissions on 26th October 2017.
Those submissions were as follows:
Opening objection
The respondents' solicitor requests his honour Judge Neville to recues [sic] himself from this matter for the reason that the solicitor has made a complaint against his honour
Introduction
1) On 10 October 2017, the applicant filed an Application in a case seeking the striking out of the defence filed by the respondent on the basis that the defence:
a) is inconsistent with the Rules 16.41 of the Federal Court Rules 2011 (pursuant to the Rule 1.05 of the Federal Circuit Court Rules 2001, Rule 16.41 applies to the proceeding before the Federal Circuit Court.)
b) has the tendency to cause prejudice, embarrassment or delay
c) is an abuse of the process.
2) The applicant further sought the default judgement against the respondents on the basis that the respondents failed to comply with the orders dated 18/04/2017, 17/07/2017 & 26/09/2017 of the court. These orders were in relation to the filing of a defence by the respondents, filing and serving document as required under Rule 4.05 (3) of the Federal Circuit Court Rules 2001 and defending the proceeding with due diligence.
3) The applicant initiated the proceeding under the Fair Work Act 2009 (FWA).
4) Section 566 of the FWA confers Jurisdiction on the Federal Circuit Court in relation to any civil matter arising under the FWA.2
5) Section 567 of the FWA provides that Jurisdiction conferred on the Federal Circuit Court under section 566 of the FWA is to be exercised in the Fair Work Division of the Federal Circuit Court if, among others, an application is made to the Federal Circuit Court under this Act.
6) Section 10A of the Federal Circuit Court Act 1999 is the provision corresponding to the section 566 of the FWA, which declares that the jurisdiction of the Federal Circuit Court comprises two Divisions namely the General Division and the Fair Work Division. Every proceeding in the Federal Circuit Court of Australia must be instituted, heard and determined in the relevant Division.
7) Section 50 (1) of the Federal Circuit Court of Australia Act 1999 provides the mode of instituting proceeding which is by way of filing an application without the need for the pleadings.
8) Chapter 7 part 45 of the Federal Circuit Court Rules prescribes forms which are approved for the initiating proceeding and requires that the application must be in accordance with the approved form. Copy of list of approved forms is attached and marked as annexure "A".
9) For the purpose of present proceeding the approved form is "Application- Fair Work Division". Copy attached and marked as annexure "B".
10) It is pertinent to mention that the applicant in the present proceeding did not use the approved "Application- Fair Work Division", which was required to be used by Chapter 7 of the Federal Circuit Court Rules for the purpose of the proceeding under the Fair Work Division.
11) For the purpose of the response to the proceedings, as is for the starting of the proceeding, the respondent (s) must file a response in accordance with the approved form and the respondents in this case complied with this requirement.
12) In view of the above, the FCC Rules do not require a respondent to file a "defence" as alleged by the applicant. The term "defence" implies a form of response by way of pleading, which, by virtue of section 50(1) of the Federal Circuit Court Act is not needed. However, subject to reservation, the respondents filed "defence" by using the Form 33 under the Rule 16.32 of the federal Court Rules.
13) The strike-out application is based on the assumption that the respondents were required to file the defence as required by the Federal Court Rules 2011 on the basis that the Federal Court Rules apply to the proceeding in Federal Circuit Court pursuant to the Rule 1.05 of the FCC Rules 200 l.
14) However, this analysis of Rule 1.05 is erroneous. Sub-rule 2 of the Rule l.05 clearly states that the Federal Court Rules can only be applied when the Federal Circuit Court Rules are insufficient or inappropriate. For the purpose of applicant's claim, the Federal Circuit Court Rules have all-inclusive forms and applications to provide for starting the claim and seeking the relief claimed for. Likewise the Rules, as mentioned above, also provide the relevant form required by the respondent to respond to the applicant proceeding.
15) The initial response filed by the respondents was compliant with the requirements of the Federal Circuit Court Rules 2001 and also the "defence" filed by the respondents provides the requisite information sufficient for the purpose of the adjudication of the proceeding by the Federal Circuit Court.
16) The respondents reject the applicant's claim that:
a) the response or for that matter the defence is inconsistent with the Rules;
b) the response by the respondents has the tendency to cause embarrassment or delay;
c) the response or defence is an abuse of process; and
d) the applicant is entitled to seek a default judgement.
17) The respondents, therefore, submit that the strike-out application be rejected and costs of the responding to the application be awarded to the respondents.
Consideration & Disposition
In what follows, there are three matters that require consideration: (a) the role of pleadings (and the Court’s power to make Orders in relation to them); (b) principles relating to pleadings that are either “embarrassing” and or “an abuse of process”; and (c) principles in relation to summary dismissal.
The Role of Pleadings & the Court’s Attendant Powers Thereto
A convenient starting point in relation to the proper and important role of pleadings is the speech of Lord Radcliffe in the House of Lords in Esso Petroleum Co. Ltd v Southport Corporation.[3] In that case, his Lordship detailed the importance of both pleadings and of further and better particulars, noting that the Appellants “were entitled to conduct the case and confine their evidence in reliance upon the further and better particulars of paragraph 2 of the statement of claim which had been delivered by the respondents.” He went on to confirm that the purpose of “particulars” is that they should help “to define the issues and to indicate to the party who asks for them how much of the range of his possible evidence will be relevant and how much irrelevant to those issues.” And at the conclusion of his judgment, Lord Radcliffe confirmed the centrality of “pleadings” as being even more important than how the matter ultimately ran at trial.
[3] Esso Petroleum Co. Ltd v Southport Corporation [1956] AC 218 at pp.241 – 244.
On the basis of this long-standing authority, it is patently clear that there is a distinction between “pleadings” and “further and better particulars.” Both are crucial in defining the issues in contest between the parties and the issues which the Court is required to decide.[4]
[4] It is apposite and sufficient to note also that standard texts on practice and procedure routinely discuss “pleadings” and “further and better particulars” as commonplace and identifiable incidents of litigation. See, for example, B. Cairns, Australian Civil Procedure (Eleventh Edition) (Sydney: Thomson Reuters – Lawbook Co., 2016) Chapter Six – “Pleadings.”
More recently, in Banque Commerciale SA en liquidation v Akhill Holdings Limited the High Court detailed the following basal principles in relation to pleadings.[5] For current purposes, it is sufficient to note the comments from the joint judgment of Mason CJ and Gaudron J (at pp.286 - 287; internal citations omitted; emphasis added):[6]
The function of pleadings is to state with sufficient clarity the case that must be met … In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities.
[5] Banque Commerciale SA en liquidation v Akhill Holdings Limited (1990) 169 CLR 279 (“Banque Commerciale”).
[6] See also the comments of Brennan J at pp.287 – 289.
In the light of such statements, it is invariably the case that Courts require pleadings to set out the allegations made by one party against the other and for the other party to set out each and every fact to support what is said by way of defence to each allegation set out in the Statement of Claim. As the High Court said in Banque Commerciale, this is required, among other things, to ensure that procedural fairness is afforded to each party to the litigation so that each party knows what case will have to be met at trial.
In short, pleadings serve at least two purposes: they give notice of the matters in issue to each party and for the Court to determine, and they identify and define those issues, which (absent leave to amend) bind the parties.
It is also the case, as detailed further in Rules of Court, that each pleading must contain a statement in summary form of the material facts upon which the party relies.[7]
[7] See, for example, r.16.02 Federal Court Rules.
Given that the Defence as filed by the Second Respondent (a) states the intention not to be bound by anything set out in that document, (b) otherwise pleads either blanket denials to certain paragraphs of the Statement of Claim, and/or (c) does not plead at all to many paragraphs in the Statement of Claim (set out in the Applicant’s written submissions), in my view it clearly fails to comply with basic rules of pleading.
In a different way, given that the First Respondent has filed no Defence at all, there is nothing to say other than that there has been the repeated failure by the First Respondent to comply with Orders of the Court on three separate occasions to file such a document. In those circumstances, r.13.03A(2), and in consequence r.13.03B(2), of this Court’s Rules relevantly applies. These Rules are set out below.
Earlier in these reasons I set out Rule 4.05(3), which prescribes when a Defence is to be filed. The Rule uses the word “must”, thereby confirming that there is no discretion involved. It is patently unarguable to suggest (as the Second Respondent does in his written submissions and in his Defence as filed) that some other Rule or Regulation somehow proscribes what this Court can and cannot do in derogation of the clear words of the Court’s own Rules. I reject that submission as untenable.
Moreover, Rule 29.05 of this Court’s Rules prescribes that a person must comply with the Court’s Orders.[8]
Pleadings: Embarrassment & Abuse of Process
[8] See also the general plenary power of the Court set out in Rule 16.01, which provides that the Court may, at any stage in a proceeding on the application of a party, give any judgment or make any order even if the claim was not made in an originating process.
In Crowley v WorleyParsons Limited, Foster J set out the releveant principles in relation to a pleading that is relevantly “embarrassing”. At [59] & [60] his Honour said:[9]
[59] In r 16.21(1)(d), a pleading is embarrassing if it is unintelligible, ambiguous, vague, evasive or too general with the consequence that the opposite party is “embarrassed” because that party does not know what is alleged against him or her (Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263) A pleading which is internally inconsistent is also embarrassing (Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905).
[60] A pleading is also embarrassing within the subrule if it simply asserts a conclusion to be drawn from facts which are not stated.
[9] Crowley v WorleyParsons Limited [2017] FCA 3. His Honour’s comments were acknowledged as properly setting out relevant principle by Beach J in Webster (Trustee) v Murray Goulburn Co-Operative Co. Limited [2017] FCA 995 at [34].
In my view, in addition to the other formal defects outlined earlier in these reasons regarding the statement to the effect that no statement in the Defence would bind the [Second] Respondent, the Defence of the Second Respondent clearly but unfortunately falls into the two categories of defect outlined by Foster J in Crowley. By its deliberate, almost precocious lack of information, the Applicant cannot relevantly know with any proper or due precision what the Second Respondent is actually pleading in his Defence. Further, overwhelmingly, the Defence, in terms, regularly if not almost invariably asserts a conclusion which is drawn from facts that are not pleaded.
For these reasons, the Defence as filed is “embarrassing” and is “likely to cause prejudice or delay” for the purposes of the r.16.21(1) of the Federal Court Rules.
“Abuse of process” is understood in related terms. For example, in Arthur JS Hall v Simons, Lord Diplock said that “abuse of process” concerned the misuse of a Court’s procedure which would be “manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.”[10]
[10] Arthur JS Hall v Simons [1982] AC 529 at 536.
In Williams v Spautz, albeit primarily in the context of criminal proceedings, the High Court discussed at some length the principles relevant to what does and what does not constitute “abuse of process.”[11] I need not detail those principles except to note that the Court emphasised the proper role of a Court to ensure that the proper administration of justice should attend all matters before it and that the questionable conduct of one of the parties could form the basis of a permanent stay on the proceedings.
Summary Dismissal – Principles
[11] Williams v Spautz (1992) 174 CLR 509 at pp.518 – 530 (Mason CJ, Dawson, Toohey & McHugh JJ).
For current purposes, I note the following comments taken from the Full Court decision in Polar Aviation Pty Ltd v Civil Aviation Safety Authority.[12] Relevantly, at [41] – [43], quoting with approval the comments of the Court below, the Full Court recounted (some internal citations omitted):
[41] Her Honour also noted that the rule governing strike out essentially related to the sufficiency of pleadings and (at [8]) set out the following extract from the Full Court’s decision in Wride v Schulz [2004] FCAFC at [25]:
[T]he the pleadings must disclose a reasonable cause of action against the party against whom the cause of action is brought and must state all material facts necessary to establish that cause of action and the relief sought. A “reasonable cause of action” for this purpose means one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant.
[12] Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325. The Full Court upheld the decision at first instance of Kenny J and quoted extensively from her Honour’s judgment.
[42] Her Honour discussed authorities … [which] indicated that a reasonable cause of action was one with some chance of success having regard to the allegations pleaded, even if weak; and that the strike out power should be exercised only in a plain and obvious case, where it was obvious that no reasonable amendment could cure the alleged defect and there was no reasonable question to be tried.
In Allstate, Beaumont J (at 24) cited the following principles:
(1) A “reasonable cause of action” means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185
(2) The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action;
(3) Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect:
(4) It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised.
(5) Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point.In addition to the outline of principle already set out, it is important also to record here, as summarily as possible, the terms of and relevant principle in relation to the operation of s.17A of the Federal Circuit Court of Australia Act (“the FCC Act”).[13]
[13] Much of the summary of principle here has been taken from an earlier judgment of this Court: Amalgamated Commercial Holdings Pty Ltd v Compas Pty Ltd & Anor (2011) 203 IR 411. It has, of course, been revised and updated.
In Three Rivers District Council v Governor and Company of the Bank of England (No.3) (“Three Rivers”),[14] which was cited with obvious approval by French CJ and Gummow J in their joint judgment in Spencer v Commonwealth,[15] Lord Hope said (internal citations omitted; emphasis added):
The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, ... that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.
[14] [2003] 2 AC 1 at p.260-261 [95].
[15] (2010) 241 CLR 118 at pp.130 & 132 [21] & [26].
It is the last comment made by Lord Hope that is most relevant or apposite here: in my view, this matter, despite numerous attempts to bring some coherence and order to it, “is not fit for trial at all.”
The statutory basis upon which the Court exercises its power in relation to summary judgment is located in s.17A of the FCC Act. That section provides:[16]
[16] S.17A of the Federal Circuit of Australia Act 1999 relevantly mirrors s.31A of the Federal Court of Australia Act 1976.
(1) The Federal Circuit Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Federal Circuit Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4) This section does not limit any powers that the Federal Circuit Court has apart from this section.
Rule 13.10 of this Court’s Rules also relevantly provides as follows:[17]
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; …
[17] This Rule also provides for the summary dismissal of matters where they are considered to be frivolous or vexatious (Rule 13.10(b)), or an abuse of process (Rule 13.10(c)).
In Spencer v Commonwealth, the plurality judgment of Hayne, Crennan, Kiefel and Bell JJ said, at [56]:
Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.
And at [58] – [60], the plurality commented (internal citations omitted):
[58] How then should the expression “no reasonable prospect” be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is “no reasonable prospect”. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like “no reasonable prospect” is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes, as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt.
[59] In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like “clearly”, “manifestly” or “obviously”) as “frivolous”, “untenable”, “groundless” or “faulty”. But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word “reasonable”, in the phrase “no reasonable prospect”, be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a “frivolous”, “untenable”, “groundless” or “faulty” claim.
[60] Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
Subject to more recent guidance from the High Court and the Federal Court, it is convenient to note here the following cases which otherwise, respectfully, provide a convenient and helpful touchstone for the Application currently before the Court. Thus: White Industries Australia Ltd v Federal Commissioner of Taxation, Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd, and the Full Court decision in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd.[18]
[18] White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 (Lindgren J), Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 (Rares J), and the Full Court decision in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 (Finkelstein, Rares & Gordon JJ). In the latter case, see especially the six principles set out by Gordon J at [123] – [134]. I am also conscious of Finkelstein J’s more recent helpful, and direct, discussion of Jefferson Ford in Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (2008) 252 ALR 41. See his “dialogue”, especially at [7] – [9], of the distinction between summary judgment and strike out applications. In a non-statutory context, see also the principles set out by Kirby J in Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251 at [14]. A number of these cases have most recently been considered and applied by the Full Court of the Federal Court in C v Commonwealth of Australia [2015] FCAFC 113 at [56] – [59].
It is helpful to note also the summary of principle by Sundberg J in Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd.[19] At [37], his Honour said:
[37] In applying s 31A, the court does not conduct fact finding but must assess the strength of the allegations made by reference to the pleadings, affidavits and any other evidence adduced, in order to determine whether the claim is sufficiently strong to warrant a trial: see Jefferson Ford 167 FCR at [23] (Finkelstein J), [74] (Rares J) and [130] (Gordon J); see also Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd [2008] FCA 1257 at [28] (Emmett J); Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920 at [6] (Finkelstein J). Ultimately, the court must consider whether there are any real, as opposed to fanciful, issues of fact or law that require proper determination at a trial.
o In assessing whether there are reasonable prospects of success, the court should draw all reasonable inferences (but only reasonable inferences) in favour of the non-moving party: see Jefferson Ford 167 FCR at [132] (Gordon J). Moreover, where the evidence on a summary judgment application is of an ambivalent character, there will be a real issue of fact and therefore reasonable prospects of success for the purposes of s 31A: see Boston 236 ALR at [45]; Jefferson Ford 167 FCR at [73] (Rares J) and [130] (Gordon J).
o The moving party bears the onus of persuading the court that its opponent has no reasonable prospects of success: see Jefferson Ford 167 FCR at [127] (Gordon J); Boston 236 ALR at [45]. However, where the moving party establishes a prima facie case for summary judgment, the opposing party must be able to point to “specific factual or evidentiary disputes that make a trial necessary”: see Jefferson Ford 167 FCR at [127] (Gordon J).
o As s 31A requires in effect a prediction as to the outcome of a claim, the court should be more reluctant to summarily dismiss a claim where real questions of fact and credit arise. In those cases, the court will not have all material evidence before it until trial, the credit of important witnesses will not have been tested and it will as a consequence be very difficult if not impossible to fairly assess the prospects of the claim: see Jefferson Ford 167 FCR at [20] (Finkelstein J); Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [6] (Gilmour J).
[19] [2009] FCA 499.
Sundberg J’s remarks have been endorsed in subsequent cases, some of which are post the High Court judgment in Spencer v Commonwealth (noted below). Thus: Kenny J in Deputy Commissioner of Taxation v Southgate Investments Funds Limited, and Ryan J in Helal v McConnell Dowell Constructors (Aust) Pty Ltd.[20]
[20] Respectively, (2010) 81 ATR 220 at [22], and (2010) 193 FCR 213 at [12]. See also the comments of Bennett J in Australian Competition and Consumer Commission and Another v Link Solutions Pty Ltd (CAN 126 049 214) and Others (No 2) [2010] FCA 919, and by Gleeson J in Geneva Laboratories Ltd v Nguyen (t/as Health Line Pharmacy Sydney (2015) 110 IPR 295.
Further, in Spencer v Commonwealth, French CJ and Gummow J said, at [24]: “The exercise of powers to summarily terminate proceedings must always be attended with caution.” Their Honours further counselled, at [25] – [26] (internal citations omitted):[21]
[25] Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
[26] Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact.
[21] See, too, the earlier comments of Gleeson CJ, Gummow, Hayne & Crennan JJ in Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at p.275 [46] (internal citations omitted): “Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." These remarks from Batistatos were cited with approval in Spencer at pp.131-132 [24].
To the above, I simply note the Full Court’s brief observation in Davis v Insolvency and Trustee Service Australia,[22] at [18]: “… we do not read Spencer as requiring that summary relief be withheld where there are factual disputes about matters which are not material to the resolution of the litigation.”
[22] Davis v Insolvency and Trustee Service Australia [2010] FCAFC 141.
More recently still, in Ekes v Commonwealth Bank of Australia, the New South Wales Court of Appeal said, at [88] (Bathurst CJ) (Beazley P at [176] and Emmett JA at [204] agreeing; some internal citations omitted):[23]
[88] Although the principles are well known it is useful in the particular circumstances of the present case to refer to a summary of them by Emmett JA in New South Wales v Williams [2014] NSWCA 177 at [71], Macfarlan JA and Simpson J agreeing:
[71] The requirement for establishing that there is no triable issue is a demanding one and the power to strike out a pleading on the basis that it discloses no reasonable defence, or is an abuse of process, should be exercised only in plain and obvious cases. The power should not be exercised in cases of doubt or difficulty or where the pleading raises a debatable question of law. Once it appears that there is a real issue, whether of fact or law, and that the rights of the parties depend upon it, a court should not dismiss a defence raising such an issue, either on the basis that no reasonable defence is disclosed or as an abuse of process.
[23] Ekes v Commonwealth Bank of Australia (2014) 313 ALR 665.
It remains only, for the sake of completeness, to set out the relevant terms of Rules 13.03A(2) and 13.03B(2), thus (respectively):
For rule 13.03B, a respondent is in default if the respondent:
(a) has not satisfied the applicant’s claim; and
(b) fails to:
(i) give an address for service before the time for the respondent to give an address has expired; or
(ii) file a response before the time for the respondent to file a response has expired; or
(iii) comply with an order of the Court in the proceeding; or
(iv) file and serve a document required under these Rules; or
(v) produce a document as required by Part 14; or
(vi) do any act required to be done by these Rules; or
(vii) defend the proceeding with due diligence.
Rule 13.03B(2) provides:[24]
[24] Also for completeness, I simply note the wide powers of the Court, under Rule 13.03C where there is “default of appearance of a party.” Given the circumstances of the current matter with respect to the First Respondent who has not only not filed any Defence in accordance with Court Orders but has also not formally attended more recent Court events, in my view it would be open to the Court to invoke the operation of this Rule also.
(2) If a respondent is in default, the Court may:
(a) order that a step in the proceeding be taken within the time limited in the order; or
(b) if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:
(i) the debt or liquidated damages; and
(ii) if appropriate—costs; or
(c) if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:
(i) the applicant appears entitled to on the statement of claim; and
(ii) the Court is satisfied it has power to grant; or
(d) give judgment or make any other order against the respondent; or
(e) make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.
In my view, subject to brief further comments below, the circumstances outlined here entitle the Court to make the following findings and Orders:
(i)The First Respondent has failed to comply with Orders of the Court to file any Defence. Accordingly, the First Respondent is in breach of Court Orders;
(ii)The Second Respondent has filed a Defence but its terms (a) clearly state that the Second Respondent does not intend to be bound by any statement contained in it, (b) are at such a level of generality as to be embarrassing and an abuse of process, and (c) relevantly do not plead to significant portions of the Statement of Claim. Accordingly, the Defence of the Second Respondent should be struck out;
(iii)The terms outlined by the High Court in Spencer v Commonwealth in relation to summary dismissal in my view have been clearly made out here such that if there be any remaining or possible defence it cannot be sustained on the extremely limited and in other respects defective material put before the Court by the Respondents;
(iv)The Respondents have had multiple opportunities to file relevant documents and a properly pleaded Defence. They have not done so, either at all (in the case of the First Respondent), or only in the most flawed manner (in the case of the Second Respondent;
(v)It remains only to note the Court’s very limited, public resources have been provided multiple times to the Respondents but in my view they have been needlessly wasted;[25]
(vi)In the light of all of the circumstances, the relief sought by the Applicant in its Application in a Case, filed 10th October 2017, including costs pursuant to s.570(2)(b) of the Act, should be granted. In my view, the actions (or rather the ongoing default) of the Respondents has meant that the Applicant has been forced needlessly to incur costs.[26]
[25] See the salutary cautions of the High Court regarding the proper use of public resources in AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 and Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Limited (2013) 250 CLR 303.
[26] See Australian and International Pilots Association v Qantas Airways Ltd (No.3) (2007) 162 FCR 392 at [37] where Tracey J held that failure to comply with Court directions can constitute an unreasonable act or omission and therefore found a claim for costs.
In addition to the above, the relief sought by the Applicant in the Statement of Claim (and confirmed in the Amended Statement of Claim) in the declarations and Orders for the payment of unpaid wages at paragraphs 119 – 133 should also be made.
In relation to the penalties that should apply pursuant to s.546 of the Act, as sought in paragraphs 121, 124, 127, 130 and 133 of the Statement of Claim (which are mirrored in the Amended Statement of Claim), the Applicant is to file an outline of submissions of no more than 5 pages within 21 days of the date of these Orders. The Respondents are to do likewise on the same terms and within the same time-frame as the Applicant, noting that failure to comply with this Order may expose them to the risk of the Court accepting the Applicant’s submissions by default.
Postscript
Briefly and unfortunately, I must note one further matter. It concerns, not for the first time, the inapposite, and in my view, unprofessional conduct of the Respondents’ solicitor.
I have already outlined earlier in these reasons the inappropriate terms of the Defence filed on behalf of the Second Respondent. I need not repeat what has been earlier said regarding his lack of knowledge (or refusal to accept) of basic legal principle, except to note that, in my view, it was not professionally appropriate for a solicitor, as an officer of the Court, to file a document on behalf of a client that (a) challenged the Court’s regularly made Orders, and (b) declared that nothing in that document was able to be relied upon by the Court (or the Applicant) because the Second Respondent, by his lawyer, held that the Defence ordered to be filed was “irrelevant.” In my view, the conduct of the solicitor, and the terms of the documents he caused to be filed, were completely unprofessional. His conduct has again wasted the Court’s (and the Applicant’s) time and limited resources.
In again making adverse comment on the inappropriate conduct of this solicitor, my primary aims are as follows: (a) to protect the Court and other parties from having to deal repeatedly with conduct and submissions that are legally untenable and plainly so. Basic legal principle is either ignored by this solicitor or unknown to him;[27] (b) to protect the general public from wasting their money by paying for legal services that invariably fall very far short of reasonable professional competence and which invariably leads to costs Orders being made against Mr Ford’s clients;[28] and (c) the very poor example he sets for other practitioners.[29]
[27] Weaver v Law Society of New South Wales (1979) 53 ALJR 585 at 587 (Mason J).
[28] New South Wales Bar Association v Meakes [2006] NSWCA 340 at [114] (Basten JA); Re a Legal Practitioner (1981) 55 FLR 405 at 423.
[29] De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 at [42] (French J).
Accordingly, these reasons are requested to be forwarded by the Registrar of this Registry to the President of the Law Society of the ACT and to the President of the ACT Bar Association.
Further, because this is but the latest in a significant history of repeated, unprofessional and ultimately time-wasting and resource-sapping conduct before me, absent any Application by the solicitor in question within 14 days, I propose to refuse to allow this solicitor, Mr Ford, the right of appearance before me.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Judge Neville
Associate:
Date: 18 May 2018
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