Fair Work Ombudsman v Doll House Training Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Doll House Training Pty Ltd [2022] FCA 604

File number(s): NSD 503 of 2021
Judgment of: GOODMAN J
Date of judgment: 24 May 2022
Catchwords:

PRACTICE AND PROCEDURE – Application for dispensation from the operation of r 4.01(2) of the Federal Court Rules 2011 (Cth), to allow a director to appear on behalf of the respondent – complexity of proceeding – director likely to be a material witness – absence of evidence of the financial ability of the respondent and those who stand behind it to fund legal representation – application refused

PRACTICE AND PROCEDURE – Application for leave to amend Statement of Claim to re-cast case following decisions of the High Court of Australia – application granted
Legislation:

Fair Work Act 2009 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)
Cases cited:

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261

Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 398 ALR 404

Francis (Trustee) v Oculus Accounting Pty Ltd [2021] FCA 448

Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21

Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098

Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; (2016) 332 ALR 199

ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 398 ALR 603

Division: Fair Work Division
Registry: New South Wales
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 49
Date of hearing: 18 May 2022
Counsel for the Applicant: Ms B Byrnes
Solicitor for the Applicant: Ms K Davies of Office of the Fair Work Ombudsman
Counsel for the Respondent: Ms H Meuwissen, director of the respondent, by leave

ORDERS

NSD 503 of 2021
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

DOLL HOUSE TRAINING PTY LTD (ACN 634 366 411)

Respondent

ORDER MADE BY:

GOODMAN J

DATE OF ORDER:

24 MAY 2022

THE COURT ORDERS THAT:

1.The Respondent’s application for dispensation pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) in respect of r 4.01(2) be dismissed.

2.The Applicant has leave to file and serve an Amended Statement of Claim, in the form of the Amended Statement of Claim which is Exhibit RP-1 to the affidavit of Rebecca Piechocki affirmed 13 April 2022, by 25 May 2022.

3.The Respondent file and serve a Defence to the Amended Statement of Claim by 22 June 2022.

4.The Applicant file and serve any Reply by 6 July 2022.

5.The Applicant file and serve affidavits upon which the Applicant intends to rely on the question of liability by 20 July 2022.

6.The Respondent file and serve affidavits upon which the…

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Details
Case
[2022] FCA 604
Decision Date

CaseChat Overview and Summary

The case of Fair Work Ombudsman v Doll House Training Pty Ltd involves a legal dispute between the Fair Work Ombudsman and Doll House Training Pty Ltd. The primary issue before the court was whether Doll House Training Pty Ltd should be allowed to be represented by its director, Ms Meuwissen, instead of a legal practitioner, in compliance with Rule 4.01(2) of the Federal Court Rules 2011 (Cth). Additionally, the court considered whether the Fair Work Ombudsman should be granted leave to amend the Statement of Claim to re-cast the case following recent High Court decisions.

The court was tasked with evaluating the merits of the application for dispensation from Rule 4.01(2) by Doll House Training Pty Ltd. This rule mandates that a corporation must be represented by a legal practitioner in court proceedings. The court assessed various factors, including the complexity of the case, the potential for Ms Meuwissen to be a material witness, and the financial capacity of Doll House Training Pty Ltd and those associated with it. The court also examined the rationale behind Rule 4.01(2) and the discretion under Rule 1.34 of the Federal Court Rules 2011 (Cth). After careful consideration, the court concluded that Ms Meuwissen was not a suitable representative for Doll House Training Pty Ltd due to the complexity of the case, the likelihood of her being a material witness, and her apparent lack of objectivity. Consequently, the court refused the application for dispensation.

The court further granted the Fair Work Ombudsman's application to amend the Statement of Claim. The court reasoned that the delay in filing evidence did not preclude the Ombudsman from seeking amendments, especially since the amendments were necessitated by recent High Court judgments beyond the Ombudsman's control. The court outlined a detailed timetable for filing evidence and scheduling a case management hearing.

In conclusion, the court dismissed Doll House Training Pty Ltd's application for dispensation and allowed the Fair Work Ombudsman's application to amend the Statement of Claim. The court provided specific directions for filing evidence and scheduling further court appearances.

Orders

Orders of the court

1. The Respondent’s application for dispensation pursuant to r 1.34 of the Federal Court Rules 2011 (Cth) in respect of r 4.01(2) be dismissed.

2. The Applicant has leave to file and serve an Amended Statement of Claim, in the form of the Amended Statement of Claim which is Exhibit RP-1 to the affidavit of Rebecca Piechocki affirmed 13 April 2022, by 25 May 2022.

3. The Respondent file and serve a Defence to the Amended Statement of Claim by 22 June 2022.

4. The Applicant file and serve any Reply by 6 July 2022.

5. The Applicant file and serve affidavits upon which the Applicant intends to rely on the question of liability by 20 July 2022.

6. The Respondent file and serve affidavits upon which the Respondent intends to rely on the question of liability by 31 August 2022.

7. The Applicant file and serve any affidavits in reply on the question of liability by 14 September 2022.

8. The proceeding be listed for a case management hearing on 16 September 2022 at 9:30am.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

A convenient summary of the rationale for r 4.01(2), and of the principles informing the exercise of the discretion in r 1.34, was set out by Derrington J in Francis (Trustee) v Oculus Accounting Pty Ltd [2021] FCA 448 at [35]-[47]:35.Rule 4.01(2) of the Rules provides that “[a] corporation must not proceed in the Court other than by a lawyer”. It was not in dispute that this rule applies absent the dispensation sought.36.The rationale for the imposition of like requirements in other courts and the need for a company to obtain leave to be represented other than by a lawyer has been examined at length previously: see e.g. Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12) [2012] FCA 289 (Pharm-a-Care) at [9] – [14]; Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104 (Bay Marine) at 105 – 106. The key reasons include:(1)The importance of ensuring that those who represent a corporation are authorised to do so and may thereby be subjected to orders of the court, in particular in relation to costs: Bay Marine at 105 – 106 (Kirby P) and at 110 (Samuels JA).(2)The aim of “ensuring that the officer seeking to represent the company truly represents the interests of the company and not his own”: Re G J Mannix Ltd [1984] 1 NZLR 309 (Mannix) at 315.(3)The courts require properly qualified assistance in the pursuit of the administration of justice: Mannix at 314. A person is generally unsuitable to speak for a company unless he or she has been accorded recognition by admission to practise: Hubbard Association of Scientologists International v Anderson [1972] VR 340 at 343 – 344.37.A discretionary power to permit an individual to represent a company is conferred by the rules of most superior and inferior courts. In this Court, r 1.34 confers a general discretion to dispense with compliance with any of the Rules.38.Practically speaking, an application for a dispensation in respect of r 4.01(2) is usually agitated by the individual seeking to represent the corporation, though formally it is an application by the corporation. It must, at the very least, be shown that the individual seeking to represent the company is authorised to bring the application and to represent it in the proceedings.39.The authorities identify that it is necessary to show that there is a “sufficient reason” why the company should be permitted to be represented other than by a lawyer in light of all “relevant considerations”: Pharm-a-Care at [9] – [12]; Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 73 – 75. The company seeking a dispensation carries the onus of establishing that there is such a reason.40.In this Court, it is not necessary to meet a “threshold requirement of special or exceptional circumstances”: Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 (Termi-Mesh) at [12]; Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2002] FCA 1002 (Checked-Out) at [9]. But what is a “sufficient reason”?41.In Damjanovic v Maley (2002) 55 NSWLR 149, Stein J (with whom Mason P and Sheller JA agreed) considered the principles that apply in relation to an application by an unqualified person for leave to represent another individual. His Honour identified the “guiding principle” for the exercise of the equivalent discretion as follows (at [83]):What runs through all of the authorities as the guiding principle in theexercise of the discretion is the public interest in the attainment of the ends of justice. The public has an interest in the effective, efficient and expeditious disposal of litigation in the courts. As a general rule this can best be achieved by parties employing qualified lawyers.42.The same “guiding principle” applies in respect of the discretion presently being considered: it is necessary for the company to show that there is a sufficient reason why it is in the interests of justice that it be permitted to be represented other than by a lawyer, in light of all relevant considerations.43.The Court’s discretion pursuant to r 1.34 is unconfined: Flightdeck Geelong Pty Ltd v All Options Pty Ltd [2020] FCAFC 138 (Flightdeck Geelong) at [166]. The authorities identify a number of considerations that may be relevant: Basetec Services Pty Ltd v CPB Contractors Pty Ltd (formerly Leighton Contractors Pty Ltd) [2017] FCA 510 (Basetec) at [8]; Worldwide Enterprises Pty Ltd v Silberman [2009] VSC 165 at [20]; Deputy Commissioner of Taxation v Compumark Pty Ltd [2012] FCA 583 at [20]; Flightdeck Geelong at [116].44.In Basetec, White J set out a non-exhaustive list of considerations relevant to the exercise of the discretion to dispense with the requirement in r 4.01(2) (at [8]):(a)the financial capacity of the company and those standing behind it and whether a lack of financial capacity would inhibit a company from obtaining legal representation: Deputy Commissioner of Taxation v Compumark Pty Ltd [2012] FCA 583 at [19]-[20]; TermiMesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [13]; Worldwide Enterprises Pty Ltd v Silberman [2009] VSC 165 at [20];(b) the factual complexities of the case and the capacity of the proposed representative to conduct it effectively having regard to the skills, training, qualifications and experience of that representative: Damjanovic v Maley (2002) 55 NSWLR 149 at [77]; Compumark at [19], TermiMesh at [13];(c) the overarching purpose of the civil practice and procedure provisions specified in s 37M of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) and the effect on the achievement of that purpose if the company proceeds with, or without, legal representation: Australian Competition and Consumer Commission v Adata (Vic) Pty Ltd (No 2) [2015] FCA 272; Compumark at [20]; Silberman at [20];(d) the ability of the proposed representative to exercise the objectivity expected of a legal practitioner: Pacific Air Freighters (Qld) Pty Ltd v Toller [2000] FCA 0343; (2000) 171 ALR 519 at [11];(e) whether a lack of available disciplinary measures in relation to the persons seeking to represent the company will affect the administration of justice: Compumark at [20]; Damjanovic at [76];(f) the manner in which the case has progressed to date and the manner in which it may progress without the party having legal representation: Compumark at [20]; Silberman at [20];(g)when the company in question is a respondent, a more liberal approach to the exercise of the discretion may be warranted: TermiMesh at [14].45.It is also relevant on an application of this nature to consider whether the person seeking to represent the corporation is likely to be a principal witness at trial, particularly if their credit may be in issue: Act General Cleaning Co Pty Ltd v Con Naoum [1996] FCA 1560 at [23]; Bay Marine at 113. The presentation and management of litigation may be practically unworkable without the assistance of solicitors and counsel where the representative is also a principal witness: Checked-Out at [12]-[13]; AA Shi Pty Ltd v Avbar Pty Ltd (No 4) [2010] FCA 878 at [33].46.The first consideration identified in Basetec has particular significance in this application. A lack of financial capacity of the company and of those standing behind it to afford legal representation would tend to weigh in favour of granting a dispensation. Even if that is shown, it is necessary to weigh that against all other relevant circumstances, including the capacity of the proposed representative to effectively represent the company in the proceeding: see e.g. ACCC v Dataline.net.au Pty Ltd [2004] FCA 1361 at [4].47.Furthermore, it is clear that establishing the impecuniosity of the company alone is insufficient: Termi-Mesh at [13]. It is necessary to also consider the financial capacity of those standing behind the company to fund its representation in the litigation. It is unlikely to be in the interests of justice to grant the indulgence sought where those who stand to benefit from it being granted can, themselves, afford to fund the company’s representation in the litigation: Termi-Mesh at [14].Doll House’s evidence and submissions

Decision

Reasons for decision

I have taken into account Doll House’s submission that the amendments should not be allowed because the proceeding is almost one year old and no evidence has yet been filed. I do not regard this as a reason to deny the Ombudsman leave to amend. In particular, I do not consider the Ombudsman to have been the cause of the delay, in circumstances where:(1)the orders made by the Court on 28 June 2021, 24 August 2021, 6 September 2021 and 21 September 2021 were all made by consent. Those orders included extensions of time for Doll House to file its Defence and for the parties to participate in a mediation; and(2)the catalyst for the amendments was the delivery of the judgments in Personnel Contracting and Jamsek, on 9 February 2022. The delivery of these judgments was a matter beyond the control of the Ombudsman. The Ombudsman acted promptly thereafter in seeking the proposed amendments.CONCLUSION For the reasons set out above, Doll House’s application for dispensation from r 4.01(2) should be refused, and the Ombudsman’s amendment application should be allowed. I have considered the competing timetabling orders provided by the parties and will make the orders sought by the Ombudsman but with a shorter period for the filing of the Ombudsman’s evidence than was sought by the Ombudsman. Doll House sought an order that it file a cross-claim. Leave is required to file a cross-claim at this stage of the proceeding. The nature of the cross-claim has not been articulated (beyond, perhaps, general suggestions that the Ombudsman has behaved improperly in her conduct of this proceeding). Given the need for leave and the absence of identification of a proposed cause of action, I do not propose to make an order for the filing of a cross-claim. If, properly advised, Doll House wishes to seek leave to file a cross-claim it may file such an application and it will be dealt with on its merits.

Ratio Decidendi

Legal Principle Established

The Ombudsman did not object to Doll House being represented by Ms Meuwissen on the hearing of the Ombudsman’s application to amend the Statement of Claim. However, the Ombudsman otherwise objected to Doll House being represented by Ms Meuwissen in the proceeding for the following reasons:(1)the matter is one of some complexity, involving questions of legal characterisation of the relationship between Doll House and the workers and whether those persons were employees; (2)her conduct on this application demonstrates that she is not a suitable representative for Doll House in this proceeding and in particular her conduct in:(a)seeking orders in this application for evidence to be filed within one day lest the Statement of Claim be struck out;(b)conflating evidence and submissions and including evidence of without prejudice discussions at the mediation;(c)making conclusionary assertions as to the contents of documents without annexing such documents;(d)including evidence irrelevant to the application; and(e)acting on a misconception that the proceeding includes not only a claim against Doll House but also a claim against her for accessorial liability. Consideration At the conclusion of the hearing of Doll House’s application, I granted leave to Ms Meuwissen to represent Doll House for the purposes of the Ombudsman’s application to amend the Statement of Claim and otherwise reserved my decision on Doll House’s application for dispensation from compliance with r 4.01(2). For the reasons set out below, Doll House’s application should be refused. I am satisfied that Ms Meuwissen, as the sole director of Doll House, is authorised by Doll House to bring the application. It is also apparent that Ms Meuwissen has considerable business experience and some familiarity with legal proceedings. However, I am not satisfied that Doll House should be represented by her, for the following reasons. First, this is a proceeding, as the Ombudsman submitted, of some complexity. I am not satisfied that Ms Meuwissen, despite her business experience and experience gained in this proceeding, has the skills necessary to effectively and efficiently represent Doll House. This would likely have a concomitant effect upon the conduct of any hearing as quickly, inexpensively and efficiently as possible (see s 37M of the Federal Court of Australia Act 1976 (Cth)). Secondly, it is apparent from the pleadings that Ms Meuwissen will most likely be a material witness at any hearing and there is a very real possibility that the veracity of her evidence will be in issue. As noted at [9] above, Doll House’s defence of the allegations that it contravened s 357(1) of the FW Act depends at least in part upon proof that Doll House, via Ms Meuwissen’s research and receipt of accounting advice, did not know, and was not reckless as to whether, the contracts with the workers were contracts of employment rather than contracts for services. Thirdly, it is apparent, particularly from her status as a likely witness and her expressed unhappiness with the conduct of the Ombudsman in connection with this proceeding, that Ms Meuwissen lacks the objectivity that would be expected of a legal practitioner.