D'Angola Services Pty Ltd v Li Li

[2024] NSWSC 1628

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	D’Angola Services Pty Ltd v Li Li [2024] NSWSC 1628
Hearing dates:	13 December 2024
Date of orders:	13 December 2024
Decision date:	13 December 2024
Jurisdiction:	Equity - Applications List
Before:	Kunc J
Decision:	Amended notice of motion dismissed; defendants to pay the plaintiff's costs of the motion
Catchwords:	CIVIL PROCEDURE — Cross-vesting — Transfer to Federal Circuit and Family Court of Australia or Federal Court of Australia — Defendant seeks to file cross-claim for relief under Fair Work legislation for which Supreme Court does not have jurisdiction
Category:	Procedural rulings
Parties:	D’Angola Services Pty Ltd (Plaintiff) Li Li (First Defendant) Brighton Investment Group Pty Ltd (Second Defendant)
Representation:	Counsel: EA Hyde (Plaintiff) A Galbraith (First and Second Defendants) Solicitors: Paradise Charnock Hing (Plaintiff) Jemmeson & Fisher (First and Second Defendants)
File Number(s):	2024/00346349

EX TEMPORE JUDGMENT (REVISED)

Summary

1. The plaintiff, D'Angola Services Pty Ltd, employed (using that term in its most general and non-technical sense) the first defendant through the second defendant.  D’Angola has commenced proceedings in this Court solely limited to claims based upon the equitable obligation of confidence, which D’Angola says the defendants have breached.  Those proceedings are procedurally well advanced. 

2. The defendants wish to file a cross‑claim which relates solely to allegations made, and relief to which the first defendant cross‑claimant is said to be entitled, under the Fair Work legislation. On no view can it be said that the proposed cross‑claim impugns in a practical or legal sense D’Angola's claim based upon the equitable obligation of confidence. 

3. By amended notice of motion, leave having been granted for the amendment today, the defendants seek to have these proceedings transferred either to the Federal Circuit and Family Court of Australia, or the Federal Court of Australia or, alternatively, to the District Court. There is no dispute that any of those courts has jurisdiction to hear the matters raised by the cross‑claim.  There is also no dispute that this Court does not have jurisdiction to hear those matters.

4. The defendants were subject to orders that any cross‑claim be filed in the first instance by 4 November 2024, and then by extension to 11 November 2024.  No cross‑claim was filed. Therefore, without any criticism of the defendants, the fact of the matter is that leave is required to file the cross‑claim. For the reasons which follow, that leave will not be granted and the amended notice of motion will be dismissed.

Consideration

5. The Court has been assisted by the written submissions of the defendant, as amplified in oral submissions by Mr A Galbraith of Counsel, and oral submissions made in response by Mr E Hyde of Counsel for D’Angola.  Without disrespect to those careful submissions, the answer to this application seems to me to be clear.  The essential difficulty which Mr Hyde has drawn to the Court's attention, and which I accept, is that the Court either cannot or certainly should not allow to be filed a cross‑claim which it is accepted this Court does not have jurisdiction to hear.  In my respectful opinion, that is the end of the application.

6. Mr Galbraith, entirely properly, accepted the difficulty about the filing of the cross‑claim.  He submitted that in anticipation, as it were, of the filing of a pleading that would raise those issues, the Court should still transfer the proceedings to any of the courts that might have jurisdiction.  I do not accept that submission.

7. As a matter of the exercise of the Court's discretion, I would not transfer the matter to the District Court because I am satisfied that there is a very real question ‑ without going into the detail of the issues raised by the parties – as to whether the District Court has the equitable jurisdiction to hear the claim brought by D’Angola.

8. The prospect that the federal courts in their associated jurisdiction would have jurisdiction to hear D’Angola's claim seems to me to be stronger, but again would require a closer analysis than the time allowed for an application in this list permits. In any event, it does not overcome the difficulty that I see about the filing of a claim of the cross‑claim in these proceedings.

9. Next, as a matter of discretion, the proceedings in this Court are well advanced.  Subject to the defendants having an opportunity to satisfy themselves as to whether any further evidence is required by reason of evidence that has been filed in reply by D’Angola, the case is ready to take a hearing date.  D’Angola is entitled, having properly commenced proceedings in the Equity Division of this Court - which is the natural jurisdiction for asserting the equitable obligation of confidence - to have its claim heard promptly.

10. Next, assuming the present case proceeds and the defendants bring a Fair Work claim in the appropriate court, I do not accept that there is any possibility of inconsistent findings of fact.  Having considered both the summons and the proposed statement of cross‑claim, I cannot see any scope for inconsistency when it comes to the material facts. They are quite different actions based on different legal characterisations of different facts.

11. In reaching this conclusion, I accept that the equitable duty of confidence may be informed to some extent, as Mr Galbraith submitted, by the nature of the contractual or other arrangements between the parties. Two things may be said about this. 

12. First, insofar as there was a contract said to exist between D’Angola and the relevant defendant (and which was in evidence before me), that contract only expands what would otherwise be the equitable duty of confidence.

13. Second, insofar as whatever the obligations between the parties were, an examination of those obligations will not ultimately require a particular label to be affixed to the nature of the employment relationship between the parties to determine D’Angola’s claim in equity.  That exercise will not, in my view, impinge upon the more precise analysis required of the employment relationship that is invited by the proposed cross‑claim.  The more precise analysis should be the task of a specialist court that deals with claims under the Fair Work laws.

Conclusion

14. For these reasons, leave to file the proposed cross-claim will not be granted and the amended notice of motion will be dismissed.

15. Mr Hyde has sought his client's costs on the basis that this is a discrete application which has been lost and, in the ordinary course, costs should follow the event. Mr Galbraith has invited the Court to reserve costs because that has been the pattern of these proceedings throughout.

16. The Court accepts Mr Hyde's submissions that this has been a discrete application, the subject matter of which will never be revisited, and which will not be influenced by the ultimate outcome of the proceedings. Costs should follow the event.

17. The formal orders of the Court are:

1. Amended notice of motion dismissed, and

2. The defendants are to pay the plaintiff's costs of the motion.

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Amendments

18 December 2024 - Correction to representation; solicitors for the plaintiff

Decision last updated: 18 December 2024