Harman v Opus Recruitment Solutions - Australia Pty Ltd (Stay Application) - [2024] FCA 1356

FEDERAL COURT OF AUSTRALIA
Harman v Opus Recruitment Solutions – Australia Pty Ltd (Stay Application) [2024] FCA 1356

File number(s): NSD 939 of 2024

Judgment of: RAPER J

Date of judgment: 26 November 2024

Catchwords:
INDUSTRIAL LAW – application to declare restrictive covenants in an employment contract and shareholder agreement invalid – where each of the clauses are respectively the subject of exclusive jurisdiction clauses of New South Wales and England and Wales – applications for declarations that the employment ceased by reason of redundancy and also as to how the cessation of employment was recognised under the Articles of Association

PRACTICE AND PROCEDURE – application by the sixth and seventh respondents for a stay of proceedings as against them on the basis that the dispute is the subject of a foreign exclusive jurisdiction clause – whether there are strong countervailing circumstances to not order a stay

PRIVATE INTERNATIONAL LAW – Forum – Exclusive jurisdiction clause – Whether strong reasons not to grant stay of proceedings – whether a strong countervailing circumstance includes where there are two related exclusive jurisdiction clauses pertaining to different jurisdictions and the potential for common questions of fact and witnesses – application dismissed

Legislation:
Fair Work Act 2009 (Cth) s 570

Restraint of Trade Act 1976 (NSW)

Cases cited:
Global Partner Funds Ltd v Babcock and Brown Ltd [2010] NSWCA 196; 6 BFRA 1

Karpik v Carnival Plc [2023] HCA 39; 98 ALJR 45

Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; 165 CLR 197

Division: Fair Work Division

Registry: New South Wales

National Practice Area: Employment and Industrial Relations

Number of paragraphs: 29

Date of hearing: 15 November 2024

Counsel for the Applicant: Mr D Mahendra

Solicitor for the Applicant: Hamilton Locke

Counsel for the Sixth and Seventh Respondents: Ms V Bulut

Solicitor for the Sixth and Seventh Respondents Deutsch Miller

ORDERS

NSD 939 of 2024

BETWEEN:
CRAIG HARMAN

Applicant

AND:
OPUS RECRUITMENT SOLUTIONS – AUSTRALIA PTY LTD (ACN 601 349 464)

First Respondent

GRAPHITE CAPITAL CO-INVESTMENT IX LP

Sixth Respondent

HEXAGON TOPCO LIMITED

Seventh Respondent

ORDER MADE BY:

RAPER J

DATE OF ORDER:

26 NOVEMBER 2024

THE COURT ORDERS THAT:
1.The seventh respondent’s interlocutory application filed 7 August 2024, be dismissed.
2.The parties are to confer regarding appropriate short minutes of order as to the next steps in the proceeding and provide them to the Chambers of Justice Raper within 7 days of today’s date.
3.The matter is listed for case management at 9.30 am on Tuesday, 10 December 2024.

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

REASONS FOR JUDGMENT
RAPER J:

In November 2021, Mr Harman (the applicant) entered into an Employment Contract with the first respondent, Opus Recruitment Solutions – Australia Pty Ltd, as well as a Shareholders’ Agreement with the seventh respondent, Hexagon Topco Ltd (and its subsidiary undertakings), of which Hexagon Topco had ultimately control over Opus Australia. Both the Employment Contract…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Harman v Opus Recruitment Solutions - Australia Pty Ltd (Stay Application) [2024] FCA 1356
Case: [2024] FCA 1356
Decision Date: 26 November 2024

CaseChat Overview and Summary

In the case of Harman v Opus Recruitment Solutions - Australia Pty Ltd (Stay Application), the applicant, Mr Harman, sought declarations regarding the validity of restrictive covenants in his employment contract and shareholder agreement. The respondents, including Graphite Capital and Hexagon Topco, sought a stay of proceedings on the basis of exclusive jurisdiction clauses in both agreements, which specified that disputes should be resolved in New South Wales and England and Wales respectively. The court was required to determine whether there were sufficient countervailing circumstances to justify a stay of proceedings against the respondents, given the existence of two exclusive jurisdiction clauses pertaining to different jurisdictions and the potential for common questions of fact and witnesses.

The court considered the arguments presented by both parties, including the potential consequences of not adhering to the exclusive jurisdiction clauses and the possibility of compounded costs for the applicant. However, the court found that there were no strong countervailing circumstances to warrant a stay of proceedings. The court was not persuaded by the argument that the applicant had the protection of a no-costs jurisdiction in Australia, as there was no evidence as to the costs consequences in England and Wales. Additionally, the court noted that the Shareholders’ Agreement contained a clause concerning costs and expenses, which provided that each party would bear its own costs and expenses in connection with the agreement.

The court concluded that it should not exercise its discretion to stay the proceedings as against Graphite Capital and Hexagon Topco, and dismissed the application. The court ordered that the parties confer regarding the next procedural steps to be taken with respect to the proceedings and to provide the court with short minutes of order within 7 days. The matter was listed for case management at 9.30 am on Tuesday, 10 December 2024. Entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The seventh respondent’s interlocutory application filed 7 August 2024, be dismissed.

2. The parties are to confer regarding appropriate short minutes of order as to the next steps in the proceeding and provide them to the Chambers of Justice Raper within 7 days of today’s date.

3. The matter is listed for case management at 9.30 am on Tuesday, 10 December 2024.

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

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Decision

Reasons for decision

Further, to the extent that the sixth and seventh respondents refer to a potential consequence of this failure to adhere to the bargain being compounded by the fact that Mr Harman has the protection of the presumption of a no-costs jurisdiction with respect to the entire dispute by operation of s 570 of the Fair Work Act 2009 (Cth), I am not persuaded that this consequence has been established. There was no evidence before me as to what the costs consequences would be in England and Wales for such a proceeding. Further, I note that the Shareholders’ Agreement contains a clause concerning “Costs and Expenses” which states that each party will bear its own costs and expenses in connection with this Agreement (cl 29.1). No submission was made by either party as to what the effect this clause would have on any costs arising from proceedings in England and Wales. Conclusion For these reasons, the Court is satisfied that it ought not exercise its discretion in staying the proceedings as against Graphite Capital and Hexagon Topco and the application be dismissed. The Court will make orders for the parties to confer regarding the next procedural steps to be taken with respect to the proceedings and to list it for case management.

Ratio Decidendi

Legal Principle Established

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File number(s):	NSD 939 of 2024
Judgment of:	RAPER J
Date of judgment:	26 November 2024
Catchwords:	INDUSTRIAL LAW – application to declare restrictive covenants in an employment contract and shareholder agreement invalid – where each of the clauses are respectively the subject of exclusive jurisdiction clauses of New South Wales and England and Wales – applications for declarations that the employment ceased by reason of redundancy and also as to how the cessation of employment was recognised under the Articles of Association PRACTICE AND PROCEDURE – application by the sixth and seventh respondents for a stay of proceedings as against them on the basis that the dispute is the subject of a foreign exclusive jurisdiction clause – whether there are strong countervailing circumstances to not order a stay PRIVATE INTERNATIONAL LAW – Forum – Exclusive jurisdiction clause – Whether strong reasons not to grant stay of proceedings – whether a strong countervailing circumstance includes where there are two related exclusive jurisdiction clauses pertaining to different jurisdictions and the potential for common questions of fact and witnesses – application dismissed
Legislation:	Fair Work Act 2009 (Cth) s 570 Restraint of Trade Act 1976 (NSW)
Cases cited:	Global Partner Funds Ltd v Babcock and Brown Ltd [2010] NSWCA 196; 6 BFRA 1 Karpik v Carnival Plc [2023] HCA 39; 98 ALJR 45 Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; 165 CLR 197
Division:	Fair Work Division
Registry:	New South Wales
National Practice Area:	Employment and Industrial Relations
Number of paragraphs:	29
Date of hearing:	15 November 2024
Counsel for the Applicant:	Mr D Mahendra
Solicitor for the Applicant:	Hamilton Locke
Counsel for the Sixth and Seventh Respondents:	Ms V Bulut
Solicitor for the Sixth and Seventh Respondents	Deutsch Miller

ORDER MADE BY:	RAPER J
DATE OF ORDER:	26 NOVEMBER 2024