Faiello v Unique Lines Australia Pty Ltd

[2020] FCCA 735

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIELLO v UNIQUE LINES AUSTRALIA PTY LTD & ORS [2020] FCCA 735

Catchwords:
INDUSTRIAL LAW – Fair Work Act – Where proceedings dismissed by reason of applicant failing to attend – application for re-instatement – adequacy of explanation – where there are clear deficiencies in practice management skills of applicant’s solicitor – whether a potential remedy for the applicant could adequately address potential punitive aspects of the initiating application as against the respondents – application for re-instatement granted – applicant’s solicitor referred to Law Society for professional standards guidance.

Legislation:

Fair Work Act 2009 (Cth), s.550

Cases cited:

Madigan v South Australian Museum Foundation Inc & Ors [2017] FCCA 2165

MZYEZ v Minister for Immigration and Citizenship [2010] FCA 530

Applicant: NICOLA FAIELLO

First Respondent: UNIQUE LINES AUSTRALIA PTY LTD (ABN 41 387 042 527)

Second Respondent: ALFREDO CARLO CALUYA

Third Respondent: ROBERT MARCIANO

File Number: ADG 285 of 2019

Judgment of: Judge Heffernan

Hearing date: 3 February 2020

Date of Last Submission: 3 February 2020

Delivered at: Adelaide

Delivered on: 3 February 2020

REPRESENTATION

Counsel for the Applicant: Mr R Manuel

Solicitors for the Applicant: Starke Lawyers

Counsel for the Respondents: Ms K Eaton

Solicitors for the Respondents: Gilchrist Connell

ORDERS

1. These proceedings are reinstated.

2. The solicitor for the applicant is to personally pay the costs of the respondent of and incidental to the appearance on 5 November 2019 on an indemnity basis as agreed or assessed.

3. Order 2 of the orders of 22 November 2019 is amended to provide that the solicitor for the applicant is to personally pay the costs of the respondent of and incidental to the appearance on 22 November 2019 on an indemnity basis as agreed or assessed.

4. The applicant’s solicitor is to pay the costs of and incidental to this application on an indemnity basis as agreed or assessed.

5. The solicitor for the applicant is to make contact with the Professional Standards section of the Law Society of SA within 28 days to identify any appropriate practice management course(s) to be undertaken by him within the next 12 months and is to comply as to attendance at such courses and any other reasonable directions given by them as to practice management issues, NOTING THAT the Court will provide copies of the reasons in this matter; copies of affidavits filed in this matter; and a copy of the Court’s decision in Madigan v South Australian Museum Foundation Inc & Ors [2017] FCCA 2165 to the Professional Standards section of the Law Society of SA by way of letter.

6. Orders 1 to 4 of the orders of 5 November 2019 are amended as follows:

   (a)By 4.00pm on 2 March 2020, the parties provide mutual informal discovery of all documents in their respective possession, custody or control.

   (b)By 4.00pm on 20 April 2020, the applicant do file and serve any affidavits upon which it intends to reply.

   (c)By 4.00pm on 4 May 2020, the respondents do file and serve any affidavits upon which they intend to rely.

   (d)By 4.00pm on 18 May 2020, the applicant file any affidavits in reply.

7. Further consideration of the matter is adjourned to 9.30am on 19 June 2020 before Judge Heffernan for directions.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADG 285 of 2019

NICOLA FAIELLO

Applicant

And

UNIQUE LINES AUSTRALIA PTY LTD (ABN 41 387 042 527)

First Respondent

ALFREDO CARLO CALUYA

Second Respondent

ROBERT MARCIANO

Third Respondent

REASONS FOR JUDGMENT

(Settled from Transcript)

1. This is an application for reinstatement of these proceedings, which were dismissed on 22 November 2019 when there was no appearance on behalf of or by the applicant, Mr Nicola Faiello.  The substantive application is under the Fair Work Act2009 (Cth) (‘the Act’) and seeks remedy for contraventions pursuant to s 550 of the Act, which I will refer to later in these proceedings.

2. This matter has an unfortunate history.  It was initially referred to mediation by me on 26 September 2019.  That mediation did not proceed and I am told that that is because the parties were simply so far apart and, presumably, because a jurisdictional point was being taken by the respondent it was not seen as an appropriate vehicle for mediation by the Registrar.

3. The affidavit filed by the respondent indicates, however, that the solicitor for the applicant failed to provide a position paper for use at the mediation, notwithstanding a direction by the Registrar that he do so.  On 5 November, the matter came back before me for directions.  There was no appearance by or on behalf of the applicant on that occasion and Ms Fitzgerald appeared for the respondents.  I made certain orders on that occasion for the filing of various documents and mutual informal discovery together with other orders.  I adjourned the matter to 22 November 2019 before me for directions indicating that if the applicant or his solicitor failed to attend, the proceedings would be dismissed.

4. As I have already noted, on 22 November there was no appearance by or on behalf of the applicant.  I proceeded to dismiss the application and I made an order that the applicant was to pay the respondents’ costs of that attendance. 

5. I had previously indicated that if all parties were present on 22 November that I would list the matter for trial.  That was not able to occur.  There was, and this is referred to in the respondents’ affidavit, an initial delay in the filing of the Application in a Case to reinstate these proceedings.  An attempt was made to file that late last year within reasonably good time and it was not accepted by the Registry.  I wish to make clear that that was as a result of a miscommunication between my chambers and the Registry.  That delay, of itself, cannot be sheeted home to the solicitor for the applicant.  The application to reinstate was ultimately received by the Registry in January.

6. In support of the application the solicitor for the applicant, Mr Starke has filed an affidavit dated 26 November 2019.  He confirms that he had the conduct of this matter at all relevant times and that the affidavit is sworn in support of the application for reinstatement.  He deposes that he was advised by solicitors for the respondent and subsequently obtained a copy of the sealed orders made by me on 5 November 2019 advising of the hearing date on 22 November.  However, he did not note that adjourned date in his office diary.  He says that the applicant made several attempts to contact him to arrange an appointment to discuss this matter.  However, due to the exigencies of his practice, he had not been available to meet with the applicant.  His affidavit then contains this paragraph:

   “This matter has been clouded with confusion as the matter was previously listed for mediation, then it was cancelled.  Email correspondence between the parties in respect of an application for consent orders and the like added to the confusion.  I was contacted by the applicant in regards to this matter and, upon perusal of the orders made on 5 November 2019, it was drawn to my attention that the matter was adjourned to 22 November 2019 for directions, at which time the proceedings would be dismissed if this office failed to attend.  I sincerely apologise to the court and the respondents for this oversight.  However, the failure to attend was an oversight on behalf of this office and the applicant should not be prejudiced as a result.  In light of the inconvenience caused to the solicitor acting for the respondents, solicitors for the applicant consent to an order for costs in relation to the hearings of 5 November and 22 November 2019.”

7. That is the extent of the explanation provided by Mr Starke.  The respondent filed an affidavit dated 31 January 2020 of Joel Zyngier.  That affidavit confirms that the matter was listed for mediation and that by 23 October 2019 the solicitor for the respondent had still not received the applicant’s mediation position paper.  That was followed up with the solicitor for the applicant.  On 25 October 2019 the respondents’ solicitor said they had still not received the applicant’s mediation position paper and a further email was sent to Mr Starke requesting it.  That was ultimately received on 27 October 2019.  The respondent asserts that the non-compliance caused delay to the respondents because they did not have the mediation paper.

8. The mediation was ultimately cancelled with a notice to the parties by Judicial Registrar Parkyn.  It seems this was because of the jurisdictional issue I have already referred to.

9. The solicitor for the respondents sent draft orders to Mr Starke on 4 November to deal with the directions hearing listed for the following day but did not receive a response to the email which enclosed those orders.  They did not receive any telephone response either.  They attended at the hearing on 5 November 2019 and I have referred to the orders that I made.  On 5 November an email was sent by the solicitor for the respondent to Mr Starke at about 10.40am in relation to his non-attendance at the directions hearing.  The respondents’ solicitor had also attempted to contact Mr Starke at the time of the directions hearing, but was unable to do so.  Further attempts were made to contact him later that day. 

10. The respondents’ solicitor acknowledges that Mr Starke telephoned her and apologised for his non-attendance and to thank Ms Fitzgerald for having called him. 

11. A similar sequence of events occurred on 22 November when the respondents’ solicitor attended at court and there was no attendance by or on behalf of the applicant.  Ultimately, the respondent received an email from Mr Starke on 18 January 2020 attaching a filed version of the application for reinstatement. 

12. The submission of the respondent is that matters were relatively clear and that they could not be said to have been “clouded with confusion” in any way.  On behalf of the applicant, Mr Manuel made submissions and referred me to a number of authorities in relation to the principles applicable to reinstatement applications.

13. Fundamentally, Mr Manuel submitted that the Court must be concerned with the interests of justice.  It is not disputed that this Court has power to make an order for reinstatement.  It is a discretionary matter.  It was submitted that the delay in this matter was not sufficient to assert forensic disadvantage and I note that the respondent does not make such an assertion.  Mr Manuel conceded that the power to resurrect a proceedings should be exercised sparingly and with great caution and that the Court must always be mindful of the need for finality in litigation, but nonetheless, he submits the applicant has filed an application within time and a remedy can be applied by the Court, namely orders for costs can be made against Mr Starke personally in favour of the respondents.

14. The question that should be foremost in my mind, Mr Manuel submitted, was whether the interests of justice are better served by reinstating these proceedings for dismissing the application and leaving the applicant to fall back on the recourse he might have to Law Claims.

15. For the respondent, Ms Eaton indicated that the application was opposed.  She submitted that what distinguishes this case is that this is not a single oversight.  There is a course of conduct on the part of the practitioner which suggests a lack of attention to the proper carriage of these proceedings.  His own affidavit provides an insufficient explanation and there cannot reasonably be said to be any cloud of confusion which hangs over the matter.  It is simply a failure of the practitioner to competently diarise the relevant court events.

16. There is nothing out of the ordinary, it was submitted, or unusual in the correspondence that was sent to Mr Starke.  The respondents have experienced increased costs and delay as a result of this matter, although, as I have already noted, they do not assert forensic disadvantage.  The Court cannot have any confidence and should not simply assume that there will be any better outcome – in other words, that there will be any better or more competent carriage of the matter – if these proceedings were to be reinstated.  What confidence can the respondents have that they will not be put to similar further delay and eventual prejudice as to both costs, time and, potentially, forensic prejudice?

17. The respondents accepts an observation I made during the course of argument that the applicant has applied inter alia for civil penalty provision orders to be made against the respondents in this matter and, of course, if these proceedings were not to be reinstated that could not be sheeted home to the respondents.  Ms Eaton referred me to a number of authorities from the migration jurisdiction of this Court, which emphasises that reinstatement is not automatic, that it is a discretionary remedy, and the fact that it exists and the discretion exists means that there are occasions on which it will be refused.  It is for the Court to determine the weight to be given to any of the relevant factors and the factors that have been indicated in the authorities, I note, are not exhaustive.

18. Ms Eaton stressed that the applicant personally was under an obligation at all times to ensure that he was aware of the relevant dates and so it cannot simply be a question of Mr Starke taking all of the blame in this matter.  The reasons provided by Mr Starke were simply unacceptable to enliven the discretion to reinstate the proceedings, it was submitted.  Further, the respondents submit that there is no merit in these proceedings.  Their position is that this is essentially a jurisdictional issue and that is the basis upon which they present their defence.  They regard it as a shareholders dispute because the applicant was a shareholder in the first respondent at all relevant times and that that is properly the way in which the dispute should be characterised.

19. For that reason, it was submitted that if the applicant has a remedy it is in another court.  Of course, I have not had the benefit of substantive affidavit material from the respondents at this stage.  Ultimately, Ms Eaton submitted, this matter raises the question as to how much non-compliance this Court is prepared to abide from the practitioner who bears the primary responsibility, as an officer of the court, for attending when matters are listed.  It was submitted that if Mr Starke does not have a capacity, either in terms of his professional competence or the exigencies of his practice, to properly deal with this matter then the proper course for him was to refer it to someone who could. 

20. In reply, Mr Manuel suggested that it was not appropriate to look to the future and simply try to divine that there might be similar mistakes made to the detriment of the respondents. 

21. The relevant principles have been summarised in numerous authorities, but it is sufficient for these purposes to refer to the decision of Ryan J in MZYEZ v Minister for Immigration and Citizenship [2010] FCA 530. I note that at paragraph 7 of that decision the Court sets out the relevant principles. It notes that a discretion falls to be exercised by the Court before which the applicant for reinstatement is returnable and the discretion requires the consideration of at least three factors and those factors are:

    a)Whether there was a reasonable excuse for the parties’ absence from the hearing in which the proceeding was struck out;

    b)The existence and nature of any prejudice which might flow to any other party from the reinstatement and the extent, if any, to which that prejudice can be assuaged by an adjournment, an order for costs or other relief which the Court is empowered to grant; and

    c)Whether the applicant has a reasonably arguable prospect of success in the substantive application. 

22. It seems to me that that is a succinct enough summary of the main principles that pertain to an application for reinstatement.  I made comment during the course argument in this matter, although I acknowledge that it should not be a determinative factor in the outcome of this application, that Mr Starke has previously needed to make a similar application before me in this Court.  I am referring to the matter of Madigan v South Australian Museum and Foundation Incorporated & Ors [2017] FCCA 2165. That was a Fair Work application, in which proceedings were filed out of time. As noted in my reasons, in that matter, at paragraph 13, Mr Starke’s affidavit provided this explanation:

    “On completion of the conference I placed Mr Madigan’s file on one of the secretary’s desk.  For whatever reason, Mr Madigan’s file was removed from the desk.  It went missing in the office.  As Mr Madigan’s file was not in my immediate presence and I failed to diarise the timeframes. (sic)  I overlooked finalising the form 4.”

23. In that matter, Mr Starke’s affidavit was frank that the applicant had attempted to contact him by telephone on numerous occasions and that he was aware messages had been taken from him in relation to those calls and that, notwithstanding his client’s attempts to contact him, presumably to seek confirmation that proceedings have been filed, Mr Starke failed to return either Mr Madigan’s phone calls or to ensure that the proceedings were filed within the relevant 14 day period.  Mr Starke was frank in his affidavit that he accepted sole responsibility in relation to that matter.  That explanation is not very far removed from the explanation provided in this matter.

24. I think the submission made by the respondents is a fair submission.  It is difficult to see how this matter could be characterised as having been clouded with confusion.  The only confusion seems to have been on the part of Mr Starke when, having failed to attend on 5 November, he failed to properly diarise the next court event in his diary, notwithstanding the fact that it had been brought to his attention.  It seems clear that Mr Starke has a practice management issue which, at the very least, extends to a difficulty with adequately noting timeframes, court dates and time limits in his practice diary.  That is not a matter that can be sheeted home to the applicant and I take into account that if I do not reinstate these proceedings the applicant’s recourse will be at first instance to Mr Starke’s professional indemnity insurer.

25. I am not in a position to give weight to the submission from the respondents that this is properly characterised as a jurisdictional issue.  It is too early for me to make that assessment at this stage, there having been no relevant affidavit material filed as to the nature and extent of the issues between the parties.  I accept, and it was accepted by the respondents, that there is no prejudice to the respondents if these proceedings were to be reinstated, save as to the cost and delay burden that it has already experienced.  I also take into consideration the fact that there is a public interest in the timely resolution of disputes and that the failure of practitioners to attend when matters are listed in court is something which frustrates that public interest.

26. Another matter to which I give weight is the basis upon which the application has been made by the applicant. He seeks remedies pursuant to the Fair Work Act and that includes remedies for penalties with respect to the contraventions. I think it is a relevant matter, to which I give some weight, that if these proceedings were not to be reinstated they would proceed, more likely than not, with Law Claims. It is uncertain to me and I think it unlikely that in those circumstances any responsibility by way of penalty could be sheeted home to the respondents for any contraventions if they were to be accepted by Law Claims. In other words, the respondents would in all likelihood escape penalty should such an order be indicated on the facts of the matter.

1. That is a relevant matter in the public interest because the nature and scheme set out by the Fair Work Act encourages persons who believe they have been victims of contraventions of the Act to make applications, with the usual course being that any penalty imposed for such contravention – quite apart from compensation, is paid to the successful applicant in the usual course. That is clearly part of the scheme of the Act which encourages applicants to make claims and involves a pragmatic acknowledgement that the Fair Work Commission cannot and does not provide a comprehensive regulatory service with respect to all potential breaches of the Act in all employment relationships. I take into account the fact that the applicant would have recourse to Law Claims and I give that some weight.

2. I turn to consider the merits of the application.  As I have already indicated, no substantive affidavits have been filed.  On the face of it, I cannot say that the application is devoid of merit.  It seems to have some merit on its face.  It is expressed in cogent terms and, on the face of the statement of claim, if the matters asserted were to be proven it seems that there is some prospect that the application would proceed.  I take into account that the applicant is not to be punished or prejudiced because of any failing or neglect of his solicitor in the carriage of this matter.  Members of the public are entitled to expect that solicitors, who are officers of the courts in which they appear, will conduct their matter in a timely, competent way and, at the very least, they will attend court when they are required to.

3. Referring to some matters I discussed earlier, it seems to me that, irrespective of any order that I make, I should make an order referring the applicant to the professional standards section of the Law Society to address practice management issues.  By way of observation, I clarify that I have considered this as an appropriate course rather than referring Mr Starke to the Legal Professional Conduct Commissioner.  I accept that the discretion is to be exercised sparingly and that the primary concern is whether an order will facilitate the interests of justice.  The conduct of Mr Starke in this matter could properly be described as having been dilatory.

4. Nonetheless, whilst I have significant reservations about the very limited explanation he has provided for the delay, it does seem to me to be adequate in that, at least, it enables the court to conclude a matter, about which there seems to be very little doubt:  that Mr Starke has difficulties in managing his practice diary in the exigencies of the practice which he conducts.

5. I propose to reinstate the proceedings, and I make the orders to be found at the beginning of these reasons.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Heffernan

Associate: 

Date:  1 April 2020