Fair Work Ombudsman v Western Chinese Language School (No 2)
[2025] FedCFamC2G 580
•20 January 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Western Chinese Language School (No 2) [2025] FedCFamC2G 580
File number: MLG 383 of 2024 Judgment of: JUDGE CHAMPION Date of judgment: 20 January 2025 Catchwords: PRACTICE AND PROCEDURE – Application made by the First Respondent on first day of trial for leave to amend defence and withdraw admissions – Where the delay before the application is significant – Where application made at a time when all pre-trial orders had otherwise been complied with and trial was ready to commence – Where the explanation of the delay was outweighed by the substantial prejudice to the Applicant if permission were granted – Application dismissed – Ex tempore reasons for judgment Legislation: Fair Work Act 2009 (Cth) s. 716
Federal Circuit and Family Court of Australia Act 2021 (Cth) s. 190
Cases cited: Hartnett v Hynes [2009] QSC 225
Optical 88 Limited v Optical 88 Pty Limited [2010] FCA 310
Tamaya Resources (in liq) v Deloitte Touche Tohmatsu (A Firm) [2015] FCA 1098
Division: Division 2 General Federal Law Number of paragraphs: 23 Date of hearing: 20 January 2025 Place: Melbourne Counsel for the Applicant: Ms N Campbell Solicitor for the Applicant: Fair Work Ombudsman Counsel for the First Respondent: Mr M Garozzo Solicitor for the First Respondent: Irwell Law Second Respondent: In person ORDERS
MLG 383 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: WESTERN CHINESE LANGUAGE SCHOOL INCORPORATED (ABN 15 081 290 240)
First Respondent
BAOQUAN CHEN
Second Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
20 JANUARY 2025
THE COURT ORDERS THAT:
1.The application for leave to amend the defence is dismissed.
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).
EX TEMPORE REASONS FOR JUDGMENT
Revised from the transcriptJUDGE CHAMPION:
On the morning of the trial in this matter, Western Chinese Language School (WCLS), the First Respondent, made an application to amend its defence, foreshadowed in the days before trial. The Second Respondent, Mr Chen, supported the application. The Fair Work Ombudsman (FWO), the Applicant, opposed the application.
WCLS relied upon an affidavit of Mr Mohammad Kadir, made on 20 January 2025 in support of its application. The FWO relied on an affidavit of Ms Claire Toner, also made on 20 January 2025, in its opposition to the application.
In summary, WCLS’s proposed amendments were:
(a)at paragraph [11], WCLS sought to withdraw an admission that it had made in its defence that it did not take any of the specified actions set out in the compliance notice. In substitution for the withdrawn admission, it sought to amend its pleading to allege that it did in fact comply with certain specified actions required by the compliance notice, namely calculating outstanding amounts said to be owed to employees and some other matters; and
(b)in a proposed paragraph [12A], it sought to make further amendments to its defence to allege that it had a reasonable excuse under s. 716(6) of the Fair Work Act 2009 (Cth) for not complying with the notice. The proposed amendment was to seek to plead facts that, as of 14 November 2022, the date for the required actions set out in the compliance notice, the FWO had expressly told it that it should hold off taking the compliance actions. In particular, WCLS wished to plead that – as of 14 November 2022 – the FWO said to it that it should hold off making the alleged underpayments owed until the FWO had reviewed certain calculations. In fact, a representative of the FWO had directly said to WCLS that it ought not to make any remedial payment as of that date.
I do not propose to permit the amendment. My reasons follow.
BACKGROUND
In July 2024, this matter was set down for a three-day trial to commence today (20 January 2025), and to continue through until Wednesday 22 January 2025. As of July 2024, the matter had proceeded by way of pleadings with a statement of claim, a defence and a reply all having already been filed. Thereafter, trial directions were made for the exchange of evidence, among other matters.
Each of the factual matters that now comprise the matters which are proposed to be included in the new pleading as paragraph 12A are drawn from an exhibit to the affidavit of Fair Work Inspector Williams filed and served by the Applicant some months ago in September 2024.
As a result, WCLS has had all the material on which it now seeks to rely in its proposed amended pleading available to it since September 2024, and, in fact, earlier in time. It was only after September 2024 WCLS, having been granted an extension to which the FWO agreed for the filing of its evidence, filed its own evidence. The FWO, thereafter, filed evidence in reply. After that, the parties have filed very detailed written outlines based on the pleadings and evidence that had then been filed and served.
Towards the end of the week prior to trial, in undertaking preparation for trial, Counsel for WCLS gave detailed consideration to correspondence and file notes between the FWO and his client in November 2022, close to the 14 November 2022 deadline for the compliance with the compliance notice, which had been issued in September 2022. It was at that point in time – that is, last week – that a forensic decision was taken that another arguable defence was available to WCLS arising out of that correspondence. Counsel having realised the point, at that point in time, it is apparent that his client moved promptly to make the application I heard this morning.
PRINCIPLES
I must be guided by the interests of justice in the exercise of my discretion as to whether to allow the application for an amendment. I am guided by s. 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) which provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. I have a general discretion to allow a party to amend a document under Part 7 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth).
The relevant principles were not in dispute between the parties. I was referred to a decision of Tamaya Resources (in liq) v Deloitte Touche Tohmatsu (A Firm) [2015] FCA 1098, where Gleeson J summarised the relevant matters to be taken into account. It was common ground between the parties that the matters to be taken into account were as Gleeson J set out in Tamaya Resources at [127]. I next consider these relevant matters as Her Honour identified them.
The nature and importance of the amendment to the party applying for it
The amendment is important. The parties were completely polarised as to the prospects of success of the amended defence, but the importance of the amendment favours the grant of leave. Further, I am conscious that these proceedings concern a civil penalty sought against both WCLS and Mr Chen and are therefore inherently serious.
The extent of the delay
The extent of the delay is very significant. The matter has been listed for trial since July 2024. The facts that underpin the amendment application have been known to the First Respondent, by and large, since November 2022, before the commencement of the proceeding. That is so because the critical documents — putting to one side some file notes of officers of the FWO — are emails that were sent in November 2022 to officers of the First Respondent. The facts have been known to WCLS’ lawyers, whether they were closely considered or not, since, at the very latest, in September 2024. The application to amend has only been made in January 2025.
The prejudice that might be assumed to follow from the amendment, and that which is shown
The FWO has submitted to me that “forensic choices had been made” which were not now possible to unscramble. WCLS urged that these matters ought not to be “overstated”.
In the end, I place significant weight in my discretion not to permit the amendment on the fact that this matter has been so far advanced on a particular footing, and it is more likely than not that very significant forensic choices have been made and cannot be unmade. The parties have pleaded the matter, prepared and exchanged substantial evidence, and prepared detailed submissions. Although it might be accepted, as WCLS submitted, that limited additional evidence - in the small window of time on or about 14 November 2022 being the facts particularly canvassed in the proposed paragraph 12A of the amendment - is available, I am prepared to infer (as the FWO submitted) that because pleadings define the issues, significant and substantial forensic judgements have been made along the way on the basis that the FWO confronted a defence where there was an admission that specified actions had not been taken. The FWO has prepared its case accordingly.
On the morning of the trial, or very shortly before the morning of the trial, it is now proposed that a very significant and different case be run. That is, WCLS now denies that specified actions, at least in part, had not been taken. The denials and admissions in the pleadings before July 2024, of course, were likely to shape the evidence to be called, and the forensic decisions to be made. If permission for the amendment is now granted, the FWO has lost the opportunity to contextualise what may have been said on or about 14 November 2022, and to emphasise evidence as to what happened thereafter.
In terms of fairness between the parties, the critical documents on which the First Respondent now wishes to rely in its proposed amended defence have been long known to it. Also weighing against permitting the amendment is that the FWO submits that if I grant permission to amend the trial would have to be adjourned so that the FWO could consider its pleadings and whether it wished to call further evidence. The need for an adjournment, as a consequence of permission to amend being granted, weighs against granting WCLS permission to amend.
The explanation for any delay
The delay is very substantial. I accept the explanation given by Counsel for WCLS that the point only occurred to him last week, and he moved promptly once the point occurred to him and that any oversight by the legal representatives ought not to be visited on the client. However, in my view, the importance of that explanation for delay is outweighed by the prejudice, which might be assumed to follow from the amendment, and that which is shown by the FWO. This relates to subparagraph (5) of what Gleeson J identified in Tamaya Resources at [127], as to the party’s choices to date in the litigation and the consequences of those choices. I accept that substantial forensic choices have been made, which would be undone were the adjournment to be granted.
The detriment to other litigants
If the amendment is granted and a consequential adjournment is necessary, there will be a detriment to other litigants in the court because their cases will be delayed because new dates will need to be found for this case. I have to say that, although it is uncertain, it appeared to me, more likely than not, that if I granted permission to adjourn, both parties would seek to replead and call further evidence, which made uncertain whether the matter could be ready for the next available three-day listing in my docket on 7 May 2025.
As to the proposed withdrawal of admissions made, the FWO referred me to the decision of Optical 88 Limited v Optical 88 Pty Limited [2010] FCA 310, where Yates J set out at [27] (citing the unreported decision of Santow J in the Supreme Court of New South Wales, 16 October 1996, in Drabsch v Switzerland General Insurance Co Ltd) that where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon for reasons of policy in the due conduct of the business of the court an application to withdraw the admission should not be freely granted.
In this case, it appears that an admission – that it did not take any of the specified actions in the compliance notice – has been freely made by WCLS, even though now, in hindsight, different forensic judgments might have been made as to whether that was an appropriate admission to make.
CONCLUSION
On balance, in my assessment, the interests of justice weigh against the grant of permission to amend. Applegarth J said in Hartnett v Hynes [2009] QSC 225 at [27] (following the High Court’s decision in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27):
… parties should have proper opportunity to plead their case, but justice does not permit them to raise any arguable case at any point in the proceedings upon the payment of costs.
In my assessment, it is plain that the parties have made forensic choices along the way and prepared their cases accordingly. It is unfair in the interests of justice as between them to permit the First Respondent now to change course in such a significant way which will create irremediable prejudice to the Applicant at the commencement of the trial.
The application for permission to amend is dismissed.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Champion. Associate:
Dated: 20 January 2025
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