Dermatology & Cosmetic Surgery Services Pty Ltd v Fair Work Ombudsman
[2024] FedCFamC2G 1413
•19 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Dermatology & Cosmetic Surgery Services Pty Ltd v Fair Work Ombudsman [2024] FedCFamC2G 1413
File number(s): MLG 2328 of 2023 Judgment of: JUDGE MANSINI Date of judgment: 19 December 2024 Catchwords: PRACTICE AND PROCEDURE – FAIR WORK – application for setting aside or variation of statutory compliance notices issued by Fair Work Ombudsman – interlocutory application for strike out of pleadings and discovery. Legislation: Fair Work Act 2009 (Cth) ss. 570, 700, 701, 716, 717
Federal Circuit and Family Court of Australia Act 2021 (Cth) s. 143
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr. 7.01, 13.10, 13.13, 17.01
Cases cited: Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499
Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427
Wats v Infosys Technologies Limited Australia [2017] FCCA 866
Division: Division 2 General Federal Law Number of paragraphs: 38 Date of hearing: 5 December 2024 Place: Melbourne Counsel for the Applicant: Mr Howard Solicitor for the Applicant: L A Warren Lawyers Counsel for the Respondent: Ms Campbell Solicitor for the Respondent: Australian Government Solicitor ORDERS
MLG 2328 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: DERMATOLOGY & COSMETIC SURGERY SERVICES PTY LTD (ACN 055 927 618) (AS TRUSTEE FOR THE D & V LANZER FAMILY TRUST (ABN 645 138 751 61))
Applicant
AND: FAIR WORK OMBUDSMAN
Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
19 DECEMBER 2024
THE COURT ORDERS THAT:
1.Dermatology & Cosmetic Surgery Services Pty Ltd (ACN 055 927 618) (as trustee for the D & V Lanzer Family Trust (ABN 645 138 751 61)) (Company) have leave to file an amended statement of claim in the form annexed to the Affidavit of Leonard Adrian Warren affirmed 18 September 2024.
2.The Fair Work Ombudsman (FWO)’s amended cross claim filed 11 June 2024 be struck out in its entirety.
3.By 4.00pm on 7 February 2025, the FWO have leave to file an amended cross claim.
4.The matter be listed for case management hearing at 9.15am on 26 February 2025, in person at the Melbourne Registry.
5.Pending any application for costs of the interlocutory application, costs be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Mansini
IN SUMMARY
Before the Court is an application challenging decisions of the Fair Work Ombudsman (FWO) to issue two statutory compliance notices to Dermatology & Cosmetic Surgery Services Pty Ltd (Company).
The FWO informed the Company that it had conducted an investigation based on which the notices were issued by a Fair Work Inspector Coleman (on 6 April and 15 May 2023, respectively). The Company says they have complied with both notices except for as they relate to alleged contraventions of unpaid meal break obligations. The notices are presently stayed pending the outcome of these proceedings.
In the substantive matter, it is claimed that the formation of the requisite “reasonable belief” that precipitated the issue of each notice was beyond power, in respect of some (not all) alleged contraventions, and therefore the notices ought be quashed by writ of certiorari. Alternatively, that there was no contravention in the particular respects identified in the notices and the notices ought be varied pursuant to s.717(3) of the Fair Work Act 2009 (Cth) (the Act). The FWO denies any error and, by way of cross claim, asks the Court for a declaration effectively upholding its decisions pursuant to s.717(3) of the Act.
Presently to be determined is an interlocutory application for orders that:
(a)The FWO’s cross claim be summarily dismissed; and
(b)The FWO make discovery of documents.
These reasons explain the orders of the Court.
THE PLEADINGS
The Applicant’s statement of claim
The originating application was filed on 21 December 2023 and a statement of claim was filed on 20 March 2024.
Without conceding that it were essential, in response to various correspondence of the FWO that it had not pleaded the material facts relevant to part (the alternative basis) of its claim, at interlocutory hearing on 5 December 2024, the Company sought leave to amend their statement of claim in the terms at page 49 of LW-1 annexed to the Affidavit of Leonard Adrian Warren affirmed 18 September 2024. Specifically, some additions to the pleadings at paragraph 14 and a new paragraph 15. Absent opposition and at a relatively early stage of the proceedings, it is appropriate that the Company have leave to amend the statement of claim as sought.
With that amendment, the Company’s case as plead is, in summary:
(a)The FWO committed jurisdictional error in the purported formation of the beliefs under s.716(1) of the Act that:
(i)In respect of the statutory compliance notice issued on 6 April 2023 (the First Notice), the Company had contravened clauses 14.1(b) and 27.1(b) of the Nurses Award 2010 in respect of 21 employees;
(ii)In respect of the statutory compliance notice issued on 15 May 2023 (the Second Notice), the Company had contravened clause 27.1(b) of the Nurses Award 2010 in respect of one employee.
(b)By reason of the jurisdictional error(s) pleaded, the FWO had no power to issue each the First Notice and the Second Notice under s.716(2) of the Act.
(c)In the giving of the First Notice and the Second Notice, the FWO committed jurisdictional errors.
(d)Further or in the alternative, and for the purposes of s.717(1)(a) of the Act, the Company did not contravene clauses 14.1(b) and 27.1(b) of the Nurses Award 2010 as set out in the First Notice and the Second Notice because, on a proper construction of those provisions, the Award did not “require” an employee to be on duty during a meal break.
The relief sought for the jurisdictional error(s) subject of the pleading summarised at (a) to (c) above is articulated in the originating application as:
Pursuant to sections 135(3) and 140(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), and section 567 of the Fair Work Act 2009 (Cth), a writ of certiorari quashing the notices given by the Fair Work Ombudsman on 6 April 2023 and 15 May 2023, pursuant to section 716(2) of the Fair Work Act 2009 (Cth) (the Notices). (sic.)
The relief sought for the error subject of the alternative pleading summarised at (d) above is found:
(a)In the originating application as:
Further or in the alternative, pursuant to Pursuant to sections 135(3) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), and sections 567 and 717(3) of the Fair Work Act 2009 (Cth), an order varying the Notices. (sic.)
(b)As an amendment to the statement of claim. There, it is said that the Court can vary the First Notice and the Second Notice pursuant to s.717(3) of the Act and “excise” the subject contravention allegations which in each case relates to unpaid meal breaks.
The FWO’s defence and cross claim
The FWO filed a defence and cross claim on 3 May 2024.
By their amended defence and cross claim accepted for filing on 11 June 2024, a declaration is sought on the basis that Inspector Coleman lawfully gave the First Notice and the Second Notice to the Company and by doing so lawfully required the Company to take the steps required by both notices in respect of particular unpaid meal break contraventions (being those steps in the notices that have not yet been taken).
The FWO also sought a further or alternative order(s) that:
(a)The First Notice and the Second Notice are confirmed pursuant to s.717(3) of the Act; or
(b)In the event that the Court finds that the Company did not commit any of the unpaid meal break contraventions with respect to any of the employee and/or that the quantum of any underpayment arising from the unpaid meal break contraventions with respect to any of the employees is different to that set out in the First Notice and/or the Second Notice, an order varying the notices pursuant to s.717(3) of the Act.
THE INTERLOCUTORY APPLICATION BEFORE THE COURT
On 3 October 2024, the Company filed an application in a proceeding. That which was in contest proceeded to hearing on 5 December 2024.
Objection to the FWO’s cross claim
The Company submitted that the FWO’s amended cross claim should be disposed of by way of summary judgement pursuant to s.143 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) and rr.13.10 and/or 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules) because it is not capable of supporting an independent cause of action, is incomplete and/or inchoate and the FWO has no standing to seek orders as plead in the alternative claim. Alternatively, that the amended cross claim be struck out with no leave to re-plead.
The FWO said that it was perfectly appropriate for a regulator to seek a declaration upholding their decisions. And, there being some complexity in the Company’s parallel pursuit of an application for judicial review and variation of the notices under s.717 of the Act, the issues are properly to be determined in the substantive matter.
Applicable principles
The parties agreed that the principles were not controversial other than as to the appropriate degree of emphasis.
There is a power conferred on this Court, by s.143 of the FCFCOA Act, to order summary judgement. Relevantly:
(2) The Federal Circuit Court of Australia (Division 2) may give judgement for one party against another in relation to the whole or any part of the proceeding if:
(a) the first party is defending the proceeding or a part of the proceeding: and
(b) the Court is satisfied that the other party has no reasonable prospects of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a 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 and Family Court of Australia (Division 2) has part from this section.
Rule 13.13 of the Rules provides:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
The Court was taken to the authority in Wats v Infosys Technologies Limited Australia [2017] FCCA 866 (Jones J) (Wats) where some consideration was given to the principles of summary judgment in the context of an application under an equivalent predecessor to r.13.13(a): at [15] to [18]. As explained in Wats, the power to summarily dispose of cases for no reasonable prospect of success under this provision may be accepted as a deliberately different and less stringent test to that which had previously existed at common law and a former statutory provision. Nonetheless an assessment of the claim is required, which assessment proceeds on 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: Wats at [17] citing Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 (Sundberg J).
Summary judgement for an abuse of process of the Court may be entered where the proceedings amount to unjustified trouble and harassment or utilisation of the Court’s procedures in such a way as to bring the administration of justice into disrepute: Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at [89].
Consideration
This matter might have been resolved informally but at the election of the parties, as is their right, has proceeded and continues by way of pleadings.
Uncontroversially, the Company bears the onus of persuading the Court that the amended cross claim bears no reasonable prospect of success or is an abuse of process of the Court.
There is no affidavit evidence in support of the cross claim. The assessment therefore proceeds on the basis of the pleading alone.
The factual substance of the FWO’s amended cross claim reflects a mirror image of its defence. It is comprised of a series of unparticularised assertions at paragraphs 15 to 17 by cross-reference to the defence (specifically, paragraphs 1, 3, 4, 5, 6 and 7 of the defence). In both the defence and amended cross claim the FWO seeks to address a narrower case, limited to the reasonable beliefs and decisions of Inspector Coleman as appointed by the FWO under s.700 of the Act, whereas the Company pleads that of the FWO as a person able to be sued and inspector for purposes of s.716 of the Act by operation of s.701 of the Act.
The relief sought by the FWO is not delineated as between the defence and the amended cross claim on the face of the pleading. At interlocutory hearing, the FWO was understood to submit that the relief sought in the amended cross claim is that at paragraph 18(c). That is, declaratory relief.
The Company correctly pointed out that, were the FWO to succeed in its defence of the claim, then a writ of certiorari would not issue or, in the alternative case, would remain in effect without variation. In both scenarios the interlocutory stay would lift and the statutory notices would stand as lawful and enforceable pursuant to s.716(5) of the Act.
However, in neither scenario would the relief sought by the FWO be in the result.
In respect of paragraph 18(c) of the amended cross claim the FWO seeks a binding declaration of the lawful status of the Inspector’s issue of the notices and the Company’s obligation to comply. I am satisfied that the FWO is a regulatory authority which has standing to seek a declaration relevant to its functions. The power to order declaratory relief may be appropriately exercised to record the enforceable rights of a party especially where there is an ongoing violation. That which the FWO seeks is cast differently and strictly an independent source of relief to that sought or available in the resolution of the Company’s case.
It remains that the pleading is inadequate. It does not stand alone. And, to appropriately define the issues, it ought include particulars (identify all the material facts and supporting information) of each allegation and upon which the FWO intends to rely at trial, with sufficient clarity to enable the Company to understand and have an opportunity to meet the case advanced against them. Annexed to the Company’s originating materials is an affidavit with the FWO’s cover letters that accompanied the First Notice and the Second Notice. Those cover letters expressly referred to investigation(s) conducted by the FWO and evidence considered during the investigation(s), on which the Inspector’s beliefs underpinning the issue of the notices were said to have been based. It follows that proper particulars of a cross claim seeking declaration of the lawfulness of the notices and/or reasonableness of the beliefs underpinning the issue of the notices might relevantly include the material facts and information about the FWO’s investigation(s) and the evidence that was considered during the FWO’s investigation(s) and which the Inspector is said to have based her beliefs upon.
To the extent of factual contentions common to the statement of claim and the cross claim, the case can be managed via the Court’s procedures in such a way as to prevent unnecessary duplication of effort and maintain the integrity of the administration of justice.
While the relief sought at paragraphs 18(d) and (e) of the amended cross claim was understood to be plead in the defence and not as part of the amended cross claim, these sub-paragraphs are expressed as further or in the alternative to the relief at 18(c). I am of the view that, the Company having engaged the Court’s jurisdiction to review the First Notice and Second Notice pursuant to s.717 of the Act, in defence of the Company’s claim the FWO is entitled to seek an alternate form of order under s.717(3) of the Act but does not necessarily need to do so by way of cross claim.
In all of the circumstances and where the application arises at a relatively early stage of the proceedings, the amended cross claim will be struck out and the FWO will be afforded the opportunity to re-plead pursuant to the broad discretionary power at rr.7.01 and 17.01 of the Rules. I consider it more likely that the case will proceed in an orderly manner if new pleadings are produced with regard to these reasons.
Discovery
The Company sought discovery of the following documents which it contends are in the FWO’s possession, custody or control:
(a)Documents identifying the reasons, and timing, of the FWO’s decisions to investigate (including any documents that identify requests for same by third parties);
(b)Documents recording how the FWO purported to form the beliefs underpinning the First Notice and the Second Notice;
(c)Documents that were before the FWO at the time it purported to form the beliefs underpinning the First Notice and the Second Notice; and
(d)Documents recording how the FWO purported to form the beliefs subject of the First Notice and the Second Notice,
(where “FWO” is defined to extent to any and all of the FWO’s officers, agents and employees who were involved in the decision to investigate and in the formation of the beliefs the subject of the notice).
In evidence before the Court was a history of correspondence between the parties regarding the Company’s informal request for discovery of the above categories of documents and the FWO’s responses which offered to informally produce documents limited to Inspector Coleman rather than the FWO and was not to include documents identifying the reasons and timing of the decision to investigate (including any documents identifying requests by third parties). On 7 August 2024, the FWO did produce some documents framed by reference to the beliefs formed by Inspector Coleman.
While there was some force to the arguments put on behalf of the Company, as the form of the pleadings is not yet resolved, it would be premature to rule on the matter of discovery. In the event that the parties remain unable to resolve the discovery dispute by way of the informal exchange of documents following the FWO’s amended pleading, further application may be made.
RESOLUTION
For the above reasons, I will order that the Company have leave to file the amended statement of claim and the FWO’s amended cross claim be struck out but that the FWO have leave to file a further amended cross claim.
There being no application for costs and having regard to the operation of the limitation at s.570 of the Act, the question of what if any costs of the interlocutory application be ordered will be reserved.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini.
Associate:
Dated: 19 December 2024
0
3
3