Fair Work Ombudsman v 2Cloud Technology Pty Ltd
[2025] FedCFamC2G 154
•13 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v 2Cloud Technology Pty Ltd [2025] FedCFamC2G 154
File number(s): MLG 2233 of 2024 Judgment of: JUDGE BINGHAM Date of judgment: 13 February 2025 Catchwords: INDUSTRIAL LAW – application for leave under r 9.04 – director and second respondent proposes to represent corporation – purposes of representation – application dismissed Legislation: Fair Work Act 2009 (Cth) s 716(5)
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 175 and 190
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 9.04
Cases cited: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2004] FCA 1361
Complete Windscreens (SA) Pty Ltd v Fair Work Ombudsman [2017] FCA 473
Fair Work Ombudsman v ABMENG Pty Ltd [2024] FedCFamC2G 636
Fair Work Ombudsman v Finetune Holdings Pty Ltd & Anor [2010] FMCA 889
Fair Work Ombudsman v Konsulteq Pty Ltd & Ors [2013] FCCA 1315
Fair Work Ombudsman v VicPro Security Pty Ltd [2024] FedCFamC2G 1040
Molnar Engineering Pty Ltd v Burns [1984] FCA 201
Silkearl Pty Ltd v Ainsworth Game Technology Ltd [2006] FCA 949
Slattery v Canard Consolidated Pty Ltd [2023] FedCFamC2G 198
Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241
Wong v Dong Lai Sun Massage Pty Ltd [2016] FCCA 18
Worldwide Enterprises Pty Ltd v Silberman [2010] VSCA 17
Division: Division 2 General Federal Law Number of paragraphs: 31 Date of last submissions: 5 February 2025 Date of hearing: 5 February 2025 Place: Melbourne Solicitor for the Applicant: Fair Work Ombudsman The Respondents: The Second Respondent appeared in person ORDERS
MLG 2233 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: 2CLOUD TECHNOLOGY PTY LTD (ACN: 653527854)
First Respondent
CANYUAN LIAO
Second Respondent
ORDER MADE BY:
JUDGE BINGHAM
DATE OF ORDER:
13 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by the Respondents on 21 November 2024 be dismissed.
2.The Directions listed on 4 March 2025 be adjourned to 16 April 2025 at 9:30am.
3.No order as to costs.
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 BINGHAM:
Rule 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (the GFLRules) provides among other things that a corporation may not start or carry on a proceeding otherwise than by a lawyer except with leave of the Court. The First Respondent in these proceedings, 2Cloud Technology Pty Ltd (2Cloud), is a corporation that is not presently represented by a lawyer. The Second Respondent is a director of the First Respondent, Mr Canyuan Liao (Mr Liao). Mr Liao seeks leave to represent 2Cloud in the substantive proceedings.
The substantive proceedings concern alleged contraventions of the Fair Work Act 2009 (Cth) (as amended) (the FW Act) in that it is alleged by the Applicant, the Fair Work Ombudsman (FWO), that 2Cloud failed to comply with a compliance notice issued by it and that Mr Liao is an accessory to 2Cloud’s contraventions.
For the purpose of the hearing of the Application in a Proceeding filed by Mr Liao on 21 November 2024 (the Interim Application) I granted him leave to represent 2Cloud limited to the representation of 2Cloud on that occasion. Mr Liao relied upon the Outline of Submissions filed on behalf of the Respondents on 15 January 2025 and his affidavit supporting the Interim Application of 21 November 2024. The FWO relied upon its Outline of Submissions filed on 22 January 2025. Both parties made oral submissions at the hearing.
Section 175 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (the FCFCOA Act) provides that a party to a proceeding is not entitled to be represented by another person unless:
(a) under the Judiciary Act 1903, the other person is entitled to practise as a barrister or solicitor, or both, in a Federal Court; or
(b)under the regulations, the other person is taken to be an authorised representative; or
(c) another law of the Commonwealth authorises the other person to represent the party.
Rule 9.04 of the GFL Rules provides as follows:
9.04 Corporation must be represented
Except as provided by or under an Act or regulations made under an Act, or with the leave of the Court, a corporation may not start or carry on a proceeding otherwise than by a lawyer.
The discretion to grant leave is a broad one and depends on the existence of a sufficient cause: Molnar Engineering Pty Ltd v Burns [1984] FCA 201; Silkearl Pty Ltd v Ainsworth Game Technology Ltd [2006] FCA 949, [4].[1]
[1] See also Wong v Dong Lai Sun Massage Pty Ltd [2016] FCCA 18, [19]-[20]; Complete Windscreens (SA) Pty Ltd v Fair Work Ombudsman [2017] FCA 473, [20].
The purpose of representation is to promote the proper administration of justice: Worldwide Enterprises Pty Ltd v Silberman [2010] VSCA 17 at [35]. In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [14], incorporation confers benefits, but it also confers burdens, one of which is that in litigation, a company must normally be represented by a lawyer. In Fair Work Ombudsman v Konsulteq Pty Ltd & Ors [2013] FCCA 1315 at [11], Judge Lucev considered the purpose of representation as considered by the Court and reiterated:
[…] The policy behind that rule is that, in the interests of justice and the administration of justice, the courts should be assisted by persons who are qualified and experienced in arguing factual and legal disputes and who have ethical duties to clients and the courts. Incorporation confers many benefits on those connected with a company; it also imposes some corresponding burdens, one of which is that in litigation a company must normally be represented by a lawyer.
Citations omitted.
The relevant considerations include: the complexity (or simplicity) of the case; the manner that the proceedings have progressed and the manner in which they may progress; whether granting leave is opposed; whether prejudice will be suffered by any party; financial considerations; a representative’s ability to exercise objectivity; whether the person seeking to be the representative will be a principal witness; the effect of granting leave on the Court and other litigants; whether there has been an appropriate opportunity to arrange legal representation; whether the application is opposed; and the objects and purposes of the rules and acts applying to the Court: Slattery v Canard Consolidated Pty Ltd [2023] FedCFamC2G 198; Fair Work Ombudsman v ABMENG Pty Ltd [2024] FedCFamC2G 636; Fair Work Ombudsman v Finetune Holdings Pty Ltd & Anor [2010] FMCA 889.
SHOULD LEAVE BE GRANTED?
Complexity of the proceedings
The Respondents’ Outline of Submissions claimed that Mr Liao’s familiarity with the case was justification for leave to be granted. Mr Liao submitted that his knowledge with respect to the employment relationship with Ms Wang, the compliance issues raised by the FWO and his familiarity with the evidence filed in the matter places him in the position of effectively able to represent the Respondents.
The FWO submitted that Mr Liao’s inability to conduct the matter on behalf of the Respondents is evident from his conduct in the proceedings so far. In paragraph [7] of its Outline of Submissions, the FWO referred to the Respondents’ Amended Defence filed on 8 November 2024 as an example. There is no indication as to which paragraphs of the FWO’s Amended Statement of Claim were admitted or denied, therefore the Amended Defence failed to narrow the issues in the dispute.
The FWO submitted that the affirmative case pleaded in the Amended Defence demonstrates a misapprehension of the elements that make up the alleged contraventions. The question for the Court is not whether the contraventions as alleged in the Compliance Notice occurred, but rather whether the Respondents complied with the Compliance Notice as required by s 716(5) of the FW Act.[2]
[2] Outline of Submissions filed by the Fair Work Ombudsman on 22 January 2025, [8].
I agree with the submission of the FWO that the affirmative case currently pleaded and the Amended Defence in general demonstrates that Mr Liao misapprehends the case put against both 2Cloud and himself as such contains irrelevant matters outside the case pleaded against him.
Mr Liao’s reliance on his knowledge of the employment relationship between 2Cloud and Ms Wang to support the application for leave is also indicative of his misunderstanding of the subject matter of the proceedings and the allegations made against 2Cloud.
Proceedings under the FW Act can be complex and technical. Generally, proceedings relating to compliance with a notice are not necessarily complex. The manner in which the Amended Defence has been pleaded, the affirmative case that has been put and that the proceeding will be contested results in me concluding that there will be a level of complexity in the proceeding that is against a grant of leave.
The manner of the proceeding
Mr Liao was granted leave to represent 2Cloud at Directions before me on 24 September 2024 and 28 November 2024.
The first listing of this matter was adjourned because Mr Liao was travelling overseas for an undisclosed period of time and he deposed that he would not be able to attend Court, even by videoconference.
Mr Liao has engaged with the FWO resulting in joint minutes being provided to my Chambers. Mr Liao has complied with the majority of the Orders of this Court. Compliance with filing orders is commendable.
Mr Liao opposed amendments to the FWO’s statement of claim which were of form, not substance. The opposition resulted in a hearing that was wholly unnecessary as Mr Liao consented to those proposed amendments at the hearing.
The initiating Application and the accompanying Statement of Claim was filed on 9 July 2024. The matter has been before this Court on three occasions now, with Orders having also been made in Chambers on two occasions, and has not yet been mediated. It is listed to come back before me on 4 March 2025 for case management directions. This matter is proceeding at a pedestrian pace.
As I have already noted the Amended Defence is not responsive to the Amended Statement of Claim and as such issues have not been narrowed and an affirmative case has been pleaded that has little or no bearing on the allegations made in the Amended Statement of claim.
During his submissions in response to my question as to what legal principles apply to the proceedings against 2Cloud and Mr Liao, Mr Liao said to me words to the effect that he was not able to answer my question right now and that he could send my chambers an email after the hearing. I also asked Mr Liao whether he understood what was meant by the term onus. After some time and periods of silences Mr Liao conceded he did not understand the term. He submitted that the FWO could provide him with a list of legal terms so he could research them. A hearing cannot be run in such a manner it is not an efficient use of Court time and is not conducive a quick resolution of the dispute between the parties.
The manner in which the proceedings has so far progressed weighs against the grant of leave.
Financial considerations
Mr Liao submitted that 2Cloud is expending time and resources in this matter.
Annexed to the Affidavit of Mr Liao of 21 November 2024 was a profit and loss statement for the financial year ending 30 June 2024 that shows an operating loss. This document does not discharge the onus imposed on 2Cloud regarding establishing its financial position.[3] I agree with the submissions of the FWO that there is no detail of the business operations or the capacity to pay expenses. In any event a corporation which is impecunious is not automatically entitled to non-legal representation: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2004] FCA 1361, [4].
[3] Slattery v Canard Consolidated Pty Ltd [2023] FedCFamC2G 198.
Effectiveness of representation
Mr Liao submitted that he that he is best placed to represent 2Cloud as he is intimately familiar with the facts of the case and the business. Being intimately familiar with the facts of the case is, as stated by Judge Champion in Fair Work Ombudsman v VicPro Security Pty Ltd [2024] FedCFamC2G 1040 at [30], a matter that is conceptually distinct from whether it is appropriate to grant leave.
In my view it is the very intimacy with his view of the facts of the case that has skewed Mr Liao’s objectivity, indicative of this is the content of the Amended Defence that has been pleaded. I do not believe that Mr Liao will be in the position to exercise the objectivity of a legal practitioner at the hearing.[4] Mr Liao will have to wear, as the FWO submitted “multiple hats”, that of advocate, principal witness and second respondent. This is not conducive to the efficient disposal of the proceedings.
[4] Slattery v Canard Consolidated Pty Ltd [2023] FedCFamC2G 198.
Considering the fact that this matter has not progressed beyond the pleading stage there is adequate time for 2Cloud to obtain legal representation before further steps are taken in the proceeding.
CONCLUSION
I accept that 2Cloud engaging legal representation will be more expensive than representation by Mr Liao and therefore place a financial impost on the business. I not convinced that Mr Liao can bring to the proceedings the necessary objectivity that a legal practitioner will.
I have taken into account the overarching objectives in s 190 of the FCFCOA Act. I am of the view that the objectives will be best served and the matter will proceed more efficiently if a lawyer is engaged by 2Cloud to assist it and consequently the Court by defining and narrowing the issues that must be considered at final hearing.
I dismiss Mr Liao’s application to represent 2Cloud. 2Cloud must appear in this proceeding by way of legal representation.
I will adjourn the Directions from 4 March 2025 to 16 April 2025 at 9:30am to enable 2Cloud time to acquire legal representation. At the next listing 2Cloud should be legally represented and I will make orders timetabling the progression of this matter.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bingham. Associate:
Dated: 13 February 2025
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