Fair Work Ombudsman v Konsulteq Pty Ltd
[2013] FCCA 1315
•26 September 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v KONSULTEQ PTY LTD & ORS | [2013] FCCA 1315 |
| Catchwords: PRACTICE AND PROCEDURE – Representation – revocation of leave granted to represent corporation – principles. |
| Legislation: Fair Work Act 2009 (Cth), ss.3(a) and (j), 44, 45, 323, 336(a), 340(1), 357, 361, 535, 536, 550, 570(2) Federal Court Rules 2011 (Cth), r.16.42 |
| Alcantara v Buildpower Pty Ltd (2010) 199 IR 73; [2010] FMCA 626 AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR; [2009] HCA 27 Australian Consumer and Competition Commission v Dataline.net.au [2004] FCA 1361 A Stewart, Stewart’s Guide to Employment Law (Sydney: The Federation Press, 2008) |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | KONSULTEQ PTY LTD |
| Second Respondent: | KONSULTEQ UPSKILLING & TRAINING SERVICES PTY LTD |
| Third Respondent: | PRADEEP GAUR |
| File Number: | MLG 1531 of 2012 |
| Judgment of: | Judge Lucev |
| Hearing date: | 13 September 2013 |
| Date of Last Submission: | 13 September 2013 |
| Delivered at: | Perth |
| Delivered on: | 26 September 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms S Richards |
| Solicitors for the Applicant: | Office of the Fair Work Ombudsman |
| For the First, Second and Third Respondents: | Mr P Gaur |
ORDERS
That the leave granted in the Court’s orders of 17 June 2013 to the Third Respondent to appear on behalf of the First and Second Respondents be revoked, and that the Third Respondent not be given leave to appear for, or on behalf of, the First and Second Respondents.
The Reasons for Judgment in relation to order (1) are to be delivered in Chambers on a later date.
If the matter does not resolve at mediation, then the matter be listed for a further directions hearing before Judge Riethmuller on a date to be fixed.
Costs, if any, be in the cause.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1531 of 2012
| FAIR WORK OMBUDSMAN |
Applicant
And
| KONSULTEQ PTY LTD |
First Respondent
| KONSULTEQ UPSKILLING & TRAINING SERVICES PTY LTD |
Second Respondent
PRADEEP GAUR
Third Respondent
REASONS FOR JUDGMENT
(Published in Chambers pursuant to s.13(3)(a) of the Federal Circuit Court of Australia Act 1999 (Cth))
Introduction
In an application in a case filed on 29 August 2013 the applicant, the Fair Work Ombudsman,[1] sought to revoke leave granted by the Court’s orders of 17 June 2013 to the third respondent to appear on behalf of the first and second respondents. The application for revocation of leave was opposed by each of the first, second and third respondents, Konsulteq Pty Ltd, Konsulteq Upskilling & Training Services Pty Ltd and Pradeep Gaur respectively.[2]
[1] “FW Ombudsman”.
[2] “Konsulteq”, “Konsulteq Upskilling” and “Mr Gaur” respectively, collectively “the respondents”.
Following a hearing on 13 September 2013 the Court made orders, including the following:
(1) That the leave granted in the Court’s orders of 17 June 2013 to the Third Respondent to appear on behalf of the First and Second Respondents be revoked, and that the Third Respondent not be given leave to appear for, or on behalf of, the First and Second Respondents.
(2) The Reasons for Judgment in relation to order (1) are to be delivered in Chambers on a later date.
What follows are the Reasons for Judgment in relation to order (1) above.
The proceedings thus far
In an Application and Statement of Claim filed on 30 November 2012 the FW Ombudsman alleges that Konsulteq and Konsulteq Upskilling have underpaid employees and taken adverse action against an employee, failed to maintain accurate employment records and failed to issue payslips. There is a dispute as to whether the persons concerned are employees or independent contractors. It is alleged that Mr Gaur was involved in the alleged contraventions by Konsulteq and Konsulteq Upskilling.
A Notice of Address for Service for each of the respondents was filed on 18 March 2013, with the firm of K & L Gates acting as lawyers for the respondents. On 7 April 2013 K & L Gates withdrew as lawyers for each of the respondents. On 13 May 2013 Mr Gaur filed a Notice of Address for Service at what is presumably his home address as the address for service.
At the directions hearing on 17 June 2013 the Court granted Mr Gaur leave to represent Konsulteq and Konsulteq Upskilling. No reasons appear to have been given for that grant of leave, but, in any event, the FW Ombudsman did not then oppose the grant of leave to Mr Gaur to represent Konsulteq and Konsulteq Upskilling.
On 12 August 2013 the respondents filed a Response to the FW Ombudsman’s claims. On 19 August 2013 the respondents filed a further Response to the FW Ombudsman’s claims.[3] It suffices for present purposes to observe that the respondents oppose the making of the orders sought in the application, and dispute that the persons concerned were employees of Konsulteq or Konsulteq Upskilling. Further, Mr Gaur personally claims from the FW Ombudsman an amount of $10,000,000 for mental and physical suffering, and an amount of $50,000 from one of the purported employees for causing troubles to Mr Gaur and Konsulteq and Konsulteq Upskilling.
[3] “Second Response”.
The FW Ombudsman filed an application in a case on 29 August 2013 seeking, amongst other things, an order revoking the leave granted to Mr Gaur to represent Konsulteq and Konsulteq Upskilling.
At a directions hearing on 30 August 2013, the Court ordered the parties to file submissions in respect of the issue of Mr Gaur’s leave to appear.
The FW Ombudsman’s submissions concerning the revocation of Mr Gaur’s leave to represent Konsulteq and Konsulteq Upskilling were filed on 4 September 2013. In support of these submissions, the FW Ombudsman relies on the affidavit of Alexander Charles Roy affirmed and filed on 29 August 2013.[4]
[4] “Roy Affidavit”.
A “Response” to the FW Ombudsman’s submissions concerning revocation of leave was filed by Mr Gaur on 10 September 2013, but in reality these are submissions, with various bank statements for Konsulteq and Konsulteq Upskilling annexed to the submissions. No affidavit evidence was filed on behalf of the respondents, and no separate submissions were filed by Konsulteq or Konsulteq Upskilling.
Principles regarding leave to represent
The relevant principles in relation to non-lawyers being granted leave to represent corporations are well settled in this Court.[5] The general rule is that corporations may only be represented before federal courts by legal practitioners.[6] 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.[7] 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.[8]
[5] See Fair Work Ombudsman v Finetune Holdings & Anor [2010] FMCA 889 (“Finetune Holdings”); Alcantara v Buildpower Pty Ltd (2010) 199 IR 73; [2010] FMAC 626 (“Alcantara”); Hall v Cadillac Transport Repairs Pty Ltd [2011] FMCA 189 (“Cadillac Transport”). The principles applied by this Court are consistent with those applied in other jurisdictions. See, for example, Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595 (“Worldwide Enterprises”) in respect of r.1.17 of the Supreme Court (General Civil Procedure) Rules2005 (Vic).
[6] Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”), s.44; Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”), r.9.04.
[7] Alcantara IR at 76 per Lucev FM; FMCA at para.10 per Lucev FM; Worldwide Enterprises at para.35 per Weinberg JA.
[8] Worldwide Enterprises at para.76 per Bongiorno JA; Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at para.14 per French J, cited in Finetune Holdings at para.27, fn.68 per Lucev FM.
The Court has a discretion to depart from the general rule, having regard to all of the relevant considerations. In Finetune Holdings the Court identified the following considerations in determining whether to permit a director respondent to represent the corporate respondent in the matter:
a)the relative complexity or simplicity of the matter;
b)whether a non-lawyer appears or has previously appeared for any of the parties;
c)the objects and purposes of the FCCA Act and the FCC Rules, including the impact of those objects and purposes on case management considerations;
d)whether a party can be effectively represented without a lawyer appearing, and whether prejudice will be suffered by any party by reason of the appearance or non-appearance of a lawyer for the party;
e)whether there has been an appropriate opportunity for a party to arrange legal representation;
f)the financial position of a party; and
g)whether the granting of leave to appear is opposed.[9]
[9] Finetune Holdings at paras.24-47 per Lucev FM. See also Alcantara IR at 76-77 per Lucev FM; FMCA at para.11 per Lucev FM and Cadillac Transport at para.24 per Lucev FM.
This list of factors is not exhaustive. The Court may have regard to any consideration relevant to the exercise of its discretion.[10]
[10] Alcantara IR at 76-77 per Lucev FM; FMCA at paras.11 and 12 per Lucev FM, referring to Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 74 per Smithers J.
Nature of the matter
The Statement of Claim runs to 36 pages and 107 paragraphs. It is properly pleaded and not prolix or embarrassing. The breadth and complexity of the issues raised can, on a broad level, be ascertained from the relief sought. That relief is as follows:
F RELIEF SOUGHT
F.1 Declarations
107.The Applicant seeks:
(a)declarations that the First Respondent contravened:
(i) section 323(1) of the FW Act as alleged in paragraph 46;
(ii) section 357(1) of the FW Act as alleged in paragraph 31; and
(iii) section 535(1) of the FW Act as alleged in paragraph 94(a);
(b)declarations that the Second Respondent contravened:
(i) section 44(1) of the FW Act, in relation to contraventions of sections 90(2), 116 and 117(2) of the FW Act as alleged in paragraphs 68, 59 and 64 respectively;
(ii) section 45 of the FW Act, in relation to contraventions of clause 29.3(a) and clauses A2.3, A.2.5 and A.5.2 of Schedule A of the Modern Award as alleged in paragraphs 71 and 54 respectively;
(iii) section 340(1) as alleged in paragraph 77 or alternatively paragraphs 80, 83, and 86.
(iv) section 357(1) of the FW Act as alleged in paragraph 39;
(v) section 535(1) of the FW Act as alleged in paragraph 94(b);
(vi) section 536(1) of the FW Act as alleged in paragraph 97;
(vii) regulation 3.44(1) of the FW Regulations as alleged in paragraph 91(a); and
(viii) regulation 3.44(6) of the FW Regulations as alleged in paragraph 91(b).
(c)declarations that the Third Respondent was involved in each of the contraventions of the First and Second Respondents as alleged in paragraphs 107(a) and 107(b);
F.2Rectification Orders
(d)orders pursuant to section 545(1) of the FW Act that:
(i) the First Respondent pay Venkataramanan the underpayment amount referred to in paragraph 46 and set out in Annexure B; and
(ii) the Second Respondent pay Laeeq the underpayment amounts referred to in paragraphs 54, 59, 64, 68, 71 and set out in Annexure A;
F.3Interest Orders
(e)an order pursuant to section 547(1) of the FW Act that:
(i) the First Respondent pay Venkataramanan interest at the applicable prejudgment rate on the amounts ordered to be paid pursuant to paragraph 107(d)(i);
(ii) the Second Respondent pay Laeeq interest at the applicable prejudgment rate on the amounts ordered to be paid pursuant to paragraph 107(d)(ii);
F.4Penalty Orders
(f)an order pursuant to section 546(1) of the FW Act that the First Respondent pay pecuniary penalties in respect of its contraventions of the following civil remedy provisions of the FW Act:
(i) section 323(1) as alleged in paragraph 46;
(ii) section 357(1) as alleged in paragraph 31; and
(iii) 535(1) as alleged in paragraph 94(a); and
(g)an order pursuant to section 546(1) of the FW Act that the Second Respondent pay pecuniary penalties in respect of contraventions of the following civil remedy provisions:
(i) section 44(1) of the FW Act, in relation to contraventions of sections 90(2), 116 and 117(2) of the FW Act as alleged in paragraphs 68, 59 and 64 respectively;
(ii) section 45 of the FW Act, in relation to contraventions of clause 29.3(a) and clauses A2.3, A.2.5 and A.5.2 of Schedule A of the Modern Award as alleged in paragraphs 71 and 54 respectively;
(iii) section 340(1) as alleged in either of paragraph 77 or alternatively paragraphs 80, 83, and 86.
(iv) section 357(1) of the FW Act as alleged in paragraph 39;
(v) section 536(1) of the FW Act as alleged in paragraph 94(b);
(vi) section 536(1) of the FW Act as alleged in paragraph 97;
(vii) regulation 3.44(1) of the FW Regulations as alleged in paragraph 91(a); and
(viii) regulation 3.44(6) of the FW Regulations as alleged in paragraph 91(b);
(h)an order pursuant to section 546(1) of the FW Act that the Third Respondent pay pecuniary penalties in respect of his involvement in the contraventions of the First and Second Respondents alleged in paragraphs 107(a) and 107(b) respectively;
F.5Compensation Orders
(i)an order pursuant to section 545(2)(b) of the FW Act that the Second Respondent pay compensation to Laeeq for the loss that Laeeq has suffered as a result of the Section (sic) Respondent’s contraventions of section 340(1) of the FW Act as alleged in either of paragraph 77 or alternatively paragraphs 80, 83, and 86.
F.6Ancillary Orders
(j)an order pursuant to section 546(3) of the FW Act that the pecuniary penalties payable by the Respondents be paid into the Consolidated Revenue Fund of the Commonwealth;
(k)an order that any amounts the Respondents are ordered to pay are paid within 30 days; and
(l)such further orders as the Court deems necessary.
The Statement of Claim therefore alleges contraventions of:
a)the National Employment Standards[11] contrary to s.44 of the FW Act;
b)a Modern Award contrary to s.45 of the FW Act;
c)failure to pay employees an amount payable in relation to the performance of work, contrary to s.323 of the FW Act;
d)taking adverse action against a person contrary to s.340(1) of the FW Act;
e)misrepresenting employment as an independent contracting arrangement contrary to s.357 of the FW Act;
f)failure to keep employee records, contrary to s.535 of the FW Act, and in relation to records which were kept, keeping false and misleading employee records, and using those false and misleading employee records contrary to reg.3.44(1) and (6) of the Fair Work Regulations 2009 (Cth); and
g)failure to give payslips to employees, contrary to s.536 of the FW Act.
[11] “NES”.
Additionally, orders for rectification, penalties, compensation and interest are all sought.
The Statement of Claim also includes allegations that Mr Gaur was an accessory to the contraventions by Konsulteq and Konsulteq Upskilling, by reason of being a person knowingly involved in or party to contraventions by Konsulteq and Konsulteq Upskilling, by reason of s.550 of the FW Act.
The contraventions alleged against Konsulteq and Konsulteq Upskilling in the Statement of Claim are complex, both legally and factually.
A central issue is the status of the two persons concerned, namely whether they were employees or independent contractors. The determination of who is or is not an employee or a contractor is notoriously difficult, and at common law there is no single definition or definitive test to determine who is an employee. Australian courts have resorted to using what has been characterised as an “impressionistic” test, based on a multi-factorial approach.[12] The leading cases are Stevens v Brodribb Sawmilling Co[13] and Hollis v Vabu Pty Ltd.[14] There are numerous factors to be considered in an assessment of whether a person is an employee or a contractor including:
[12] A Stewart, Stewart’s Guide to Employment Law (Sydney: The Federation Press, 2008), page 47.
[13] (1986) 160 CLR 16 (“Brodribb Sawmilling”).
[14] (2001) 207 CLR 21; [2001] HCA 44 (“Vabu”).
a)who has the right of control of the performance of work by the person;
b)whether the person has the right to perform work for others;
c)whether the person has a separate place of work and is able to advertise their services to others;
d)whether the person provides and maintains significant tools and equipment;
e)whether the person has the right to delegate or subcontract work;
f)whether the person is represented to be part of the business in which they are, or by which they are, engaged;
g)the nature of the remuneration afforded to the person, and in particular whether it is a regular wage-type payment, or if remuneration is based upon completion of tasks or results;
h)whether income tax deductions are made from the payments made to the person;
i)whether or not the person can be suspended or dismissed by the hirer;
j)whether or not holidays and sick leave and other leave payments are made to the person by the hirer; and
k)the nature of any expenditure by the person, and the ratio of expenses to income.[15]
[15] See Brodribb Sawmilling and Vabu; and, more generally, C Sappideen & Ors, Mackens Law of Employment (7th Edn) (Pyrmont: Thomson Reuters (Professional) Australia Limited, 2011) pages 26-49.
That Mr Gaur has not understood the nature of the contraventions alleged in the Statement of Claim, including the elements that must be proven to establish liability, is clear from the Second Response which:
a)does not respond to basic allegations of fact in the Statement of Claim – for example paragraphs 1 to 16, concerning the parties and the employees, and paragraphs 17 to 22, which set out the indicia of employment status;
b)misconceives the multifactorial test of employment status;[16]
c)includes admissions that Mr Gaur represented to the persons concerned that they were engaged as independent contractors, which is an essential element of a contravention of s.357(1) of the FW Act;[17]
d)does not address the adverse action allegations in section C7 of the Statement of Claim, despite the FW Ombudsman’s reliance on the reverse onus in s.361 of the FW Act; and
e)does not address Mr Gaur’s involvement as an accessory to the contraventions by Konsulteq and Konsulteq Upskilling.
[16] See paras.3(a) and (e), in relation to Ms Venkataramanan, and para.3(g) in relation to Ms Laeeq.
[17] See paragraphs 3(a) to 3(g).
The complexity of the issues in relation to whether or not the persons concerned are employees or independent contractors, are probably legally sufficient on their own to warrant a lawyer appearing on behalf of Konsulteq and Konsulteq Upskilling. Likewise, the number and nature of the other claims are such, in the circumstances of this case, when taken together with the employment – independent contractor issue, to warrant a lawyer appearing because of their nature and complexity.
In the Second Response the respondents:
a)raise allegations of fraud and conspiracy against one of the employees, Ms Laeeq;[18] and
b)raise a cross-claim[19] which includes allegations that the FW Ombudsman has:
i)“harassed and tortured” Mr Gaur;
ii)shown bias against Mr Gaur;
iii)targeted Mr Gaur; and
iv)caused Mr Gaur to contract intestinal tuberculosis,
and in respect of which, Mr Gaur claims compensation of $10,000,000.
[18] See paragraph 3(h) of the Second Response.
[19] “Cross-Claim”.
The allegations raised against Ms Laeeq and the FW Ombudsman add further legal and factual complexity to the proceedings.
The factual basis for the claims against Ms Laeeq is unclear, and, further, she is not presently a party to the proceedings, and there is presently no application to join her to the proceedings. Both of those facts indicate that the respondents are under a misapprehension or misconception as to the nature of, and parties to, these proceedings. In respect of both Ms Laeeq and the FW Ombudsman the Second Response raises allegations of fraud by each of them. Allegations of fraud ought not be lightly made. An allegation of fraud is not a kind of legal lubricant which makes the words of a response read better.[20] In this case the allegations of fraud are not particularised by the respondents, again indicating a lack of appreciation of the legal requirement to do so.[21] Furthermore, the making of allegations of harassment and torture, bias, targeting and causation of illness, again without any real particularisation, and the claiming of an extraordinary sum in damages, again without particularisation, again reveals a lack of understanding or appreciation of what is necessary to support allegations of this kind. But, in any event, allegations of fraud and conspiracy, add significantly to the complexity of the proceedings.
[20] Rondel v Worsley [1967] 1 QB 443 at 453 per Lawton J.
[21] Federal Court Rules 2011 (Cth), r.16.42.
The balance of the FW Ombudsman’s application in a case seeks to have the Second Response struck out, and the Cross-Claim summarily dismissed. Determination of that part of the application in a case (which has been adjourned pending determination of the representation issue) will require consideration of the adequacy of the Second Response and the tenability of the Cross-Claim. Given the nature of the Statement of Claim, and of the Second Response (including the Cross-Claim) the argument on the strike-out and dismissal applications will necessarily be a technical legal argument of a kind which a non-lawyer would not ordinarily be equipped to argue. Having regard for the content of both the Response and the Second Response, and having seen Mr Gaur argue this part of the application in a case concerning representation, and in doing so raising all matter of irrelevancy (including, by way of small example, that the government of the Commonwealth had changed and that the government supported small business) it is apparent to the Court that Mr Gaur is not equipped to argue these issues, and ought not argue them on behalf of Konsulteq and Konsulteq Upskilling.
In circumstances where:
a)the Statement of Claim is complex, both legally and factually;
b)neither the Response nor the Second Response properly plead to the allegations in the Statement of Claim, and, indeed, do not respond to basic allegations made in the Statement of Claim;
c)the Second Response raises significant allegations, including fraud and conspiracy, which (if they have any substance) are again legally, and likely to be factually, complex; and
d)there is a pending part of the application in a case for strike-out of the Second Response and summary dismissal of the Cross-Claim,
the Court is of the view that on the basis of the nature of the proceedings alone, it is inappropriate for Mr Gaur to appear for another party, and in this case, inappropriate for him to appear for Konsulteq and Konsulteq Upskilling.
The complex nature of the allegations on either side of the proceeding, the pending interlocutory hearing of the strike-out and summary dismissal application, the number and nature of the legal and factual matters put into issue by the Second Response, and the allegation that Mr Gaur was an accessory to the contraventions by Konsulteq and Konsulteq Upskilling, all suggest that this is matter where it would be inappropriate for Mr Gaur to represent Konsulteq and Konsulteq Upskilling.[22]
[22] Finetune Holdings, at paras.26 and 27 per Lucev FM.
Appearance or previous appearance of a non-lawyer for any party
Mr Gaur was granted leave at the directions hearing on 17 June 2013 to appear on behalf of the Companies. The FW Ombudsman did not oppose the grant of leave on that occasion.
Mr Gaur subsequently filed the Response and the Second Response on his own behalf and on behalf of Konsulteq and Konsulteq Upskilling, and appeared on behalf of Konsulteq and Konsulteq Upskilling at a directions hearing on 20 August 2013. The latter was purely a procedural hearing.[23]
[23] Finetune Holdings, at para.28 per Lucev FM.
The fact that Mr Gaur has appeared previously for Konsulteq and Konsulteq Upskilling is as a consequence of the FW Ombudsman not opposing leave for him to appear for Konsulteq or Konsulteq Upskilling when that leave was first sought. Significant weight ought not attach to the non-opposition of the FW Ombudsman to leave being granted at that stage. What is more significant is how Mr Gaur has, both on his own behalf and on behalf of Konsulteq and Konsulteq Upskilling, responded since then. It is fair for the Court to observe that he has responded in a manner which indicates a lack of understanding of the necessary requirements for the proper conduct of these proceedings, for reasons otherwise spelt out in these Reasons for Judgment. In the circumstances, the Court does not propose to place any significant weight on the fact of Mr Gaur’s previous appearance for Konsulteq and Konsulteq Upskilling in its consideration of the matter.
Objects of the FCCA Act, FCCA Rules and case management considerations
The objects and purposes of the FCCA Act and the FCC Rules were summarised in Fair Work Ombudsman v Nerd Group Australia Pty Ltd,[24] in which it was said that the Court (then the Federal Magistrates Court of Australia) is to operate in a manner which:
a)is as informal as possible in the exercise of judicial power;
b)is not protracted in its proceedings;
c)resolves proceedings justly, efficiently and economically;
d)uses streamlined procedures; and
e)avoids undue delay, expense and technicality.[25]
[24] (2010) 197 IR 431; [2010] FMCA 569 (“Nerd Group”).
[25] Nerd Group IR at 432 per Lucev FM; FMCA at para.20 per Lucev FM.
This Court observed in Finetune Holdings that this approach:
… reflect[s] much of the modern approach to case management, and especially the need to take into account the paramount consideration of doing justice between the parties whilst observing that a just resolution must have regard to any relevant legislative purpose or object.[26]
[26] Finetune Holdings at para.29 per Lucev FM, citing Nerd Group IR at 438 per Lucev FM; FMCA at para.21 per Lucev FM; AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 192 per French CJ and 213 per Gummow, Hayne, Crennan, Kiefel and Bell JJ; [2009] HCA 27 at para.30 per French CJ and paras.97 and 98 per Gummow, Hayne, Crennan, Kiefel and Bell JJ.
If Konsulteq and Konsulteq Upskilling continue to be represented by Mr Gaur there is every likelihood that the proceedings will become protracted, time-consuming and costly. The Second Response prepared by Mr Gaur does not admit non-controversial facts or identify the real issues in dispute. Instead, very serious allegations are made against Ms Laeeq and the FW Ombudsman, without any discernible basis. The time and resources of the FW Ombudsman and Court will be diverted by the need to address these allegations, at the cost of giving effect to the legislative objects of ensuring a guaranteed safety net of fair, relevant and enforceable terms and conditions of employment, protecting workplace rights and providing effective compliance mechanisms.[27]
[27] FW Act, ss.3(a) and (j); 336(a).
Revoking Mr Gaur’s leave to represent Konsulteq and Konsulteq Upskilling would not significantly delay the proceedings. Future programming of the matter, including the pending interlocutory application, can allow time for Konsulteq and Konsulteq Upskilling to obtain legal representation.[28]
[28] Finetune Holdings at para.31 per Lucev FM; Alcantara at para.20 per Lucev FM.
Mr Gaur is the sole director and shareholder of both Konsulteq and Konsulteq Upskilling. Mr Gaur may be required to appear as a witness in his own defence, as well as making submissions and presenting evidence in defence of Konsulteq and Konsulteq Upskilling. Allowing Mr Gaur to continue to represent Konsulteq and Konsulteq Upskilling may affect the interests of justice and a just resolution. This is because there is a risk that he may seek to put his own interests ahead of Konsulteq and Konsulteq Upskilling.[29] Further, it is evident from the Second Response, and from having seen Mr Gaur argue this aspect of the matter, that he may find it difficult to discern when the interests of Konsulteq and Konsulteq Upskilling differ from his interests. The risk of any conflict of interest can be minimised by requiring Konsulteq and Konsulteq Upskilling to be represented by a lawyer.
[29] Finetune Holdings at para.26 per Lucev FM (referring to Australian Consumer and Competition Commission v Dataline.net.au [2004] FCA 1361 at para.3 per Kiefel J).
The allegations of fraud, conspiracy and causation of injury made in the Second Response and Cross-Claim[30] also indicate that the interests of justice would be best served by Konsulteq and Konsulteq Upskilling being represented by a lawyer who is bound to observe professional rules of conduct and who has duties to the Court.[31]
[30] The FW Ombudsman refers to paragraphs 3(g) to 3(r) of the Second Response in particular.
[31] Alcantara IR at 76 per Lucev FM; FMCA at para.10 per Lucev FM.
Effectiveness of representation and prejudice
As to the effectiveness of Mr Gaur’s representation, and possible prejudice to the interests of Konsulteq and Konsulteq Upskilling, the Court notes that:
a)the respondents served and filed a Response on 12 August 2013 which contained communications that may have attracted legal professional privilege. The FW Ombudsman drew this matter to the attention of the respondents. The respondents subsequently withdrew the Response.[32] But for the FW Ombudsman’s action, the respondents’ legal professional privilege would have been lost;
b)the Second Response demonstrates that Mr Gaur has not understood the elements, both legal and factual, that constitute the contraventions alleged in the Statement of Claim;[33]
c)the Second Response does not respond to each allegation made by the FW Ombudsman in the Statement of Claim, and, consequently, the Second Response does not identify the real issues in dispute; and
d)Mr Gaur’s conduct of the proceeding thus far, both in the drafting of responses and his advocacy at the hearing on 13 September 2013, indicate that Konsulteq and Konsulteq Upskilling may be unnecessarily exposed to the risk of adverse costs orders, notwithstanding the limitations on costs in proceedings under the FW Act.[34]
[32] Roy Affidavit, paras.3-6.
[33] Finetune Holdings at paras.32-36 per Lucev FM.
[34] FW Act, s.570(2).
These matters demonstrate that Mr Gaur is unable to understand the facts and competing contentions, and succinctly articulate a defence on behalf of the respondents to the allegations in the Statement of Claim. This could result in unnecessary delays in the determination of matters in issue and lead to costs being incurred by the parties and the Court in doing so. Further many of the issues in dispute may require direct evidence from Mr Gaur, as the person responsible, seemingly solely, for the conduct of Konsulteq and Konsulteq Upskilling at the time of the alleged contraventions. The subjective nature of many of the contentions in the Second Response, prepared by Mr Gaur, may impact on his capacity to objectively consider and address issues relating to Konsulteq and Konsulteq Upskilling’s cases.[35]
[35] Cadillac Transport at paras.34-37 per Lucev FM.
Mr Gaur has demonstrated:
a)an inability to comprehend the nature of the allegations against the respondents; and
b)an incapacity to properly plead a response on behalf of the respondents.
Mr Gaur would not be prejudiced by Konsulteq and Konsulteq Upskilling being legally represented. Whether Konsulteq and Konsulteq Upskilling are represented or not, Mr Gaur would be able to present and challenge evidence and make submissions, insofar as the evidence and submissions affect his interests.[36]
[36] Finetune Holdings at para.37 per Lucev FM.
Having regard to the above matters, and in particular the content of the Second Response, and the quality of Mr Gaur’s advocacy at the hearing on 13 September 2013, it is evident to the Court that Mr Gaur is not in a position to effectively represent Konsulteq or Konsulteq Upskilling, and that the interests of those two respondents might be prejudicially affected, and significantly so, were Mr Gaur to represent them. Further, Mr Gaur’s interests are not adversely affected if Konsulteq and Konsulteq Upskilling are represented by lawyers. In the circumstances, representation by lawyers is necessary for the effective representation of Konsulteq and Konsulteq Upskilling.
Opportunity to obtain legal representation
The respondents were represented by lawyers (K & L Gates) between March and April 2013.[37] The respondents have had the opportunity since then to obtain legal representation. The respondents have chosen not to obtain legal representation, and Mr Gaur sought, and was granted, leave to represent Konsulteq and Konsulteq Upskilling in June 2013. Mr Gaur indicated by email when requesting that the Response be returned that he had obtained legal advice in that regard.[38] The respondents have been on notice since 23 August 2013 that the FW Ombudsman considered there were significant issues with the Second Response,[39] and have been on notice since 29 August 2013 that the FW Ombudsman seeks to have Mr Gaur’s leave revoked. If Mr Gaur’s leave is revoked, further time could reasonably be allowed in any timetable to allow lawyers to properly prepare the matter for Konsulteq and Konsulteq Upskilling.
[37] The FW Ombudsman refers to the Notice of Address for Service filed on 18 March 2013 and the Notice of Withdrawal of Lawyer filed on 8 April 2013 in this matter.
[38] Roy Affidavit, para.7 and Annexure “ACR-3”.
[39] Roy Affidavit, para.9.
Financial position of the companies
A company that is impecunious is not automatically entitled to be represented by a non-lawyer.[40] Assertions of impecuniosity do not suffice: evidence is required.[41] Both Konsulteq and Konsulteq Upskilling remain registered,[42] and may still be trading.[43]
[40] Finetune Holdings at para.41 per Lucev FM, citing Dataline, at para.4 per Kiefel J.
[41] Finetune Holdings at paras.42-45 per Lucev FM.
[42] Roy Affidavit, annexure ACR-5.
[43] Second Response, attachment [10].
There is no evidence on affidavit as to the financial position of Konsulteq or Konsulteq Upskilling. Those statements attached to the Second Response, and purporting to be bank statements for Konsulteq and Konsulteq Upskilling do not, in any event, indicate impecuniosity, but rather ongoing trading and a capacity to bring the account within appropriate limits by the injection of funds from various sources. The accounts for Mr Gaur, another Mr Gaur, Mrs Gaur and Miss Gaur, are not, on the face of the evidence and the Second Response as it stands, of any relevance to the financial position of Konsulteq or Konsulteq Upskilling. The failure to file evidence in affidavit form in relation to the financial position of Konsulteq and Konsulteq Upskilling, and the seeming reliance placed upon irrelevant accounts of Mr Gaur and what the Court presumes are other members of his family, goes further to highlight the relative incapacity of Mr Gaur to properly represent the interests of Konsulteq or Konsulteq Upskilling at any hearing, particularly a hearing which is likely to be as complex as the hearing in this matter.
There is insufficient evidence to demonstrate that the financial position of Konsulteq and Konsulteq Upskilling is such as to prevent their being legally represented.
Whether leave is opposed
The FW Ombudsman did not initially oppose Mr Gaur having leave to represent Konsulteq and Konsulteq Upskilling. The FW Ombudsman now submits that leave should be revoked. In so doing, the FW Ombudsman points to the conduct of the proceeding since Mr Gaur was granted leave on 17 June 2013, in particular the very serious allegations made in the Second Response and the Cross-Claim.
The Court notes that the position of the FW Ombudsman has changed in this matter. It appears to have changed for good reason. The Court notes that the FW Ombudsman is obliged to act as a model litigant. Opposing leave for Mr Gaur to appear is not contrary to its obligations as a model litigant, and, in the circumstance, is appropriate, particularly having regard to the obligations of a model litigant to the Court. The fact that leave for Mr Gaur to appear to represent Konsulteq and Konsulteq Upskilling is now opposed is a factor that the Court must weigh in determining whether leave ought to be revoked or not.
Conclusion
The Court has considered all of the above circumstances, and arrived at a considered view, that it is inappropriate and not in the interests of the administration of justice for Mr Gaur to appear for Konsulteq and Konsulteq Upskilling. Consequently, his leave to do so ought to be revoked, and there ought to be an order accordingly revoking that leave, and indicating that Mr Gaur does not have leave to represent or appear for or on behalf of either of Konsulteq or Konsulteq Upskilling.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Lucev
Associate:
Date: 26 September 2013
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