Helm v Sapphireone Pty Ltd
[2023] FedCFamC2G 915
•6 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Helm v Sapphireone Pty Ltd [2023] FedCFamC2G 915
File number(s): SYG 2940 of 2020 Judgment of: JUDGE LAING Date of judgment: 6 October 2023 Catchwords: PRACTICE AND PROCEDURE – application for dismissal of the applicant’s application – whether proceedings should be dismissed for want of prosecution and/or failure to comply with orders of the Court – where proceedings were commenced in 2020 – where the applicant’s case had not meaningfully progressed in over a year – where the applicant’s solicitor on the last occasion had been unable to obtain instructions and the applicant did not subsequently respond to the foreshadowed dismissal application, or the application when made, prior to the morning of its hearing – where the applicant’s response gave the Court no confidence that the proceedings would be prosecuted in a timely fashion – order made that the proceedings be dismissed Legislation: Fair Work Act 2009 (Cth) s 570
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 192
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.04, 13.05
Cases cited: Professional Administration Service Centres Pty Ltd v Commissioner for Taxation [2012] FCAFC 180; (2013) 295 ALR 52
Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107
Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190
Walker v Fedex Express Australia Pty Ltd (No 2) [2023] FedCFamC2G 160
Division: Division 2 General Federal Law Number of paragraphs: 44 Date of hearing: 6 October 2023 Place: Sydney Solicitor for the Applicant: Ms P Forster of Kennedys Law Counsel for the Respondents: Mr N Furlan Solicitor for the Respondents: Sasphire Legal ORDERS
SYG 2940 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: LINDA MAXINE HELM
Applicant
AND: SAPPHIREONE PTY LTD (ACN 003 419 930)
First Respondent
JOHN WILLIAM ADAMS
Second Respondent
ORDER MADE BY:
JUDGE LAING
DATE OF ORDER:
6 OCTOBER 2023
THE COURT ORDERS THAT:
1.The proceedings be dismissed pursuant to rr 13.04(1)(e) and 13.05(1)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2.The costs of the application in a proceeding filed on 21 August 2023 be reserved.
3.The respondents have leave to file and serve an application for costs generally pursuant to s 570(2) of the Fair Work Act 2009 (Cth) in respect of the substantive proceedings, together with any supporting affidavits, by 27 October 2023.
4.The applicant has leave to file and serve any affidavits in response and submissions in relation to the costs argument by 17 November 2023.
5.The respondents have leave to file and serve any evidence in reply and written submissions in relation to the costs argument by 1 December 2023.
6.The matter be listed for hearing of any application for costs at 10.00 am on 13 December 2023.
7.Liberty to apply on three days’ notice.
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 transcript)JUDGE LAING:
By an Application in a Proceeding filed on 21 August 2023 (Dismissal Application), the respondents to these proceedings (respondents) seek dismissal of the substantive proceedings pursuant to r 13.04(1)(a) and (e) and 13.05(1)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules).
PROCEDURAL HISTORY
These proceedings have a lengthy procedural history. Much of that history is set out in affidavits affirmed by Dean George Tolkin on 11 May 2023 and 21 August 2023.
Proceedings were commenced by Application on 22 December 2020. A Statement of Claim was filed on 14 April 2021. The applicant sought compensation and penalties regarding what she contended were a number of breaches by the respondents of the Fair Work Act 2009 (Cth) (FW Act), as well as breach of contract by the first respondent.
Various procedural orders have been made over the course of the proceedings, including providing timetabling regarding any disclosure of documents sought. Material was filed by the parties, including evidence and submissions. On 16 February 2022, the matter was listed for a 3-day hearing before Judge Driver, commencing on 2 May 2022.
At the commencement of the hearing on 2 May 2022, there appears to have been some dispute in relation to the production of certain documents by the respondents, which were sought by the applicant. The respondents agreed to produce certain documents by 3 May 2022 and the hearing was adjourned to 5 May 2022. On 3 May 2022, the respondents produced the documents sought by the applicant, by providing a secure weblink to the first respondent’s cloud-based storage IT system. On 5 May 2022, a further adjournment was granted at the applicant’s request to allow her (inter alia) to consider the material produced. The hearing was adjourned to 9 May 2022.
The respondents submit that the parties agreed to settle the proceedings, although the correspondence between the parties indicates that this was subject to a settlement deed being agreed. Orders made by Judge Driver on 9 May 2022 stated that the “parties have reached a settlement which will be reflected in a deed and the parties will provide short minutes to reflect that settlement in due course”. The respondents’ position is that there was a binding settlement agreement. This was disputed by the applicant during the hearing today.
In any event, on 20 May 2022, the respondents provided a proposed settlement deed to the applicant. After no response was received, the respondents sent a letter to the applicant on 25 July 2022 stating that the failure to respond was a repudiation of the “Settlement Agreement” and that the repudiation was accepted, bringing the settlement to an end.
On 28 October 2022, the matter was listed before me for directions. Orders were subsequently made on 7 November 2022, at the parties’ request, setting the matter down for a 5-day hearing commencing on 3 July 2023. Timetabling orders were made at that time, providing for the filing and service of further evidence.
Between 7 November 2022 and 31 January 2023, a dispute arose between the parties regarding the applicant’s inability to regain access to the documents produced by the respondents on 3 May 2022. The secured link had expired and it seems that the applicant had not downloaded the material produced within the time available. The respondents indicated in a letter dated 3 March 2023 that they had upgraded their IT systems, with the result that restoration of the link would not be a straightforward task. Costs of replicating the process under the new systems were estimated to be between $15,000 to $20,000 plus GST. The letter expressed that it was not reasonable to expect the respondents to bear that cost, in circumstances where the applicant chose not to download the documents when the original link was established and had acknowledged “repudiation of a settlement agreement”, resulting in the situation. The respondents sought agreement from the applicant that their reasonable costs of reproducing the link would be met.
No Application in a Proceeding was filed by the applicant seeking resolution of the dispute. Evidence was not filed in accordance with the November 2022 orders. Instead, the parties waited until the next listing date, on 12 May 2023, to raise their disclosure dispute with the Court. This was after dates within the timetable for the filing and service of further evidence had expired.
This approach, it must be said, was not a suitable one for either the applicant or the respondents to have taken. The parties ought to have brought the matter back before the Court prior to May 2023. Their delay in doing so meant that the listed hearing dates were compromised. The parties at the listing on 12 May 2023 acknowledged the potential for the hearing dates to be in jeopardy. As such, the hearing scheduled for July 2023 was vacated at the parties’ request, whilst there was still time for those dates to be reallocated to other matters. The parties were directed to confer and provide proposed short minutes of order regarding the applicant’s foreshadowed disclosure application and the associated costs application that was foreshadowed by the respondents.
On 18 May 2023, the following orders were made in Chambers:
1.The Applicant is to file and serve any application in a proceeding (including affidavit evidence and submissions in support) by 9 June 2023 regarding production of and access to the documents produced by the Respondents on 3 May 2022 (Application).
2.The Respondents are to file and serve their submissions and any affidavit evidence in response to the Application by 7 July 2023, including any evidence relied upon in relation to costs.
3.The Applicant is to file and serve any affidavit evidence and submissions in reply by 21 July 2023.
4.The matter be listed for directions and the hearing of the Application, if made, on 26 July 2023 at 10am.
5.Orders 1 to 3 and 6 to 13 of the orders made by Judge Laing on 7 November 2022 be vacated.
6. Liberty to apply on 3 days’ notice.
No Application in a Proceeding was filed on behalf of the applicant.
On 26 July 2023, the applicant’s legal representative informed the Court that she did not have instructions from the applicant and had been unable to obtain them. The respondents foreshadowed seeking dismissal of the matter if the applicant continued to decline to engage regarding the matter’s progress. This was in circumstances where, in the respondents’ submission, no meaningful progress in the matter had been made since the hearing was vacated in May 2022. The following orders were consequently made:
1.The respondents have leave to file and serve any application for dismissal of the proceedings, by 23 August 2023, together with any supporting affidavits.
2.The applicant has leave to file and serve any affidavits in response by 6 September 2023.
3.The respondents have leave to file and serve any evidence in reply and written submissions by 15 September 2023.
4.The applicant has leave to file and serve any written submissions in response by 29 September 2023.
5.The matter be listed for directions and hearing of any application for dismissal at 10am on 6 October 2023.
6. The parties have liberty to apply on 3 days’ notice.
7. The costs of and associated with the listing today be reserved.
The reasonably generous period for filing the dismissal application was intended to give the applicant some further opportunity to re-engage with her legal representatives and the respondents.
On 4 August 2023, the respondents’ representatives wrote to the applicant’s representatives requesting an update regarding the applicant’s position and how she wished to proceed in relation to the proceedings. The letter observed that it was unclear to the respondents whether the applicant intended to prosecute her claims in the proceedings any further. A response was sought by 5 pm on 11 August 2023. The letter indicated that in the absence of a response, the respondents would have no choice but to commence preparing an application for dismissal of the proceedings, together with supporting evidence in accordance with the Court’s orders on 26 July 2023.
No response was provided by the applicant.
On 21 August 2023, the respondents filed the Dismissal Application, together with supporting evidence.
On 14 September 2023, the respondents filed submissions in support of the application.
At the hearing of the Dismissal Application, the applicant sought to rely upon an affidavit made by her shortly before the listing. The respondents, understandably, objected to this evidence being admitted in circumstances where they were prejudiced by it having been served shortly before the listing, and noting that the applicant was not available for cross examination. I expressed to the applicant’s representative that there was some difficulty in allowing the affidavit to be admitted for the purposes of the listing today in these circumstances.
I also observed that there were significant limitations to the evidence proposed. Although the affidavit stated that the applicant had ongoing medical issues following pelvic fractures sustained in February 2023, no independent medical evidence was provided in support of this. Even on the applicant’s proposed evidence, she did not explain how the medical and financial issues that she claimed had followed had prevented her from instructing her solicitors and/or responding to the respondents’ correspondence and application. This was also not explained by the balance of the affidavit, which referred generally to strain that had been placed upon the applicant’s mental health and wellbeing due to her medical issues as well as a further termination of full-time employment that she experienced in August 2023, following which she had only been able to secure part-time employment 3 days per week.
I stood the matter down to allow the applicant’s representative an opportunity to obtain instructions on how the applicant asked the Court to proceed, given the limitations in the evidence and unfairness to the respondents that had been identified. On return, the applicant’s representative did not seek any adjournment of the hearing to allow the applicant to rectify the issues that had been identified in her evidence. Instead, the applicant did not press reliance upon her affidavit.
RELEVANT PRINCIPLES
Section 192(4) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) empowers the Court to dismiss proceedings in the event of a party’s failure to comply with a direction.
Rule 13.04(1) of the FCFCOA Rules provides:
When a party is in default
(1)For the purposes of rule 13.05, an applicant is in default if the applicant fails to:
(a) comply with an order of the Court in the proceeding; or
(b) file and serve a document required under these Rules; or
(c) produce a document as required by Part 14; or
(d) do any act required to be done by these Rules; or
(e) prosecute the proceeding with due diligence.
Rule 13.05(1) provides:
Orders on default
(1) If an applicant is in default, the Court may order that:
(a)the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant; or
(b)a step in the proceeding be taken within the time limited in the order; or
(c)if the applicant does not take a step in the time mentioned in paragraph (b)--the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the applicant.
The principles applicable to determination of an application of this nature were considered by Judge Symons in Walker v Fedex Express Australia Pty Ltd (No 2) [2023] FedCFamC2G 160. Applying Professional Administration Service Centres Pty Ltd v Commissioner for Taxation [2012] FCAFC 180; (2013) 295 ALR 52 at [44], the following non-exhaustive considerations were identified as likely to be relevant to the exercise of discretion (at [31]):
(a) the nature of the default involved;
(b) the duration of the default and whether it is continuing;
(c) the circumstances in which the default occurred;
(d)what has happened since the default, including whether any attempt was made by the defaulting party rectify the situation;
(e)whether the continuing default is occasioning unnecessary delay, expense or other prejudice or unacceptable burden on the respondent;
(f)the attitude of the applicant, as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period;
(g) the stage that the proceedings have reached;
(h) the likely disruption of possible trial dates; and
(i) the consequences to the applicant of dismissing the proceeding.
In relation to the issue of costs, s 570 of the FW Act provides:
Costs only if proceedings instituted vexatiously etc.
(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note:The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i)the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
The discretion to award costs under s 570 of the FW Act is to be exercised with caution, recognising its exceptional nature in an otherwise no-costs jurisdiction: Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8]. However, s 570 is not a “a licence to parties to ignore the requirements” of the Court’s case management provisions: see Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107 (Ryan) at [66]. The reconciliation between access to justice provisions such as s 570(1) of the Act, and the parties’ obligations to assist the Court with its case management obligations, “occurs through a focus on the reasonableness of parties’ conduct, the appropriateness of the Court processes undertaken by them, the timeliness of their compliance with Court orders or steps in the proceeding, and the existence of a substantive legal and factual basis for the claims made and arguments put”: Ryan at [66].
Should the application be dismissed?
The respondents submitted that the present situation had arisen in circumstances where the parties had settled the matter in 2022 on terms that they would enter into a deed of settlement. It is not clear to me how final or binding this settlement was, given that the terms are undisclosed and it appears to have been subject to a deed of settlement being agreed. It is therefore not clear to me whether or not the applicant actually repudiated any binding settlement agreement. Regardless, I accept that the applicant appears to have ceased meaningful communication with the respondents on the issue after multiple adjournments and eventual vacation of the scheduled hearing in 2022.
The respondents submitted that the applicant failed to comply with the Court’s orders of 7 November 2022 in that she failed to file and serve any additional affidavits by 31 January 2023. The respondents submitted that the applicant also failed to comply with the Court’s order of 18 May 2023 that she file and serve any Application in a Proceeding seeking disclosure of documents by 9 June 2023.
I am unable to accept these submissions. The orders made on 7 November 2022 and 18 May 2023 were expressed in permissive terms. They did not require the applicant to file and serve further evidence or any Application in a Proceeding. They simply required that if this were done, that it be done by a certain date. The applicant therefore did not breach these orders by declining to file and serve further material.
Of greater concern is the applicant’s failure to take meaningful steps to prosecute these proceedings. This is in circumstances after a hearing listed in 2022 was twice adjourned and then vacated in circumstances where a settlement agreement was indicated, which the applicant does not appear to have taken steps to follow through on. The further hearing scheduled in July 2023 similarly had to be vacated, in circumstances where the applicant had not downloaded material she had previously been provided, had not filed evidence in accordance with the timetable that had subsequently been sought, and had foreshadowed prosecuting a disclosure application that she submitted was necessary in order for her to prepare her case for hearing. The applicant then did not follow through on this and, instead, ceased engaging with the respondents and providing instructions to her legal representatives regarding further conduct of the matter.
A timetable was then set for the respondents’ proposed Dismissal Application. That timetable afforded ample opportunity for the parties to correspond regarding the future conduct of the matter, had the applicant have wished to prosecute it. Correspondence was also sent to the applicant by the respondents prior to the Dismissal Application being filed, observing that if the applicant did not respond then the respondents would have no option but to commence preparing the application in accordance with the timeframes that had been ordered. Costs would therefore be incurred, which may be sought from the applicant. The applicant nonetheless appears to have provided no response to this communication prior to today.
The dismissal application and supporting material has been filed and served in accordance with the Court’s orders. Despite being given the opportunity through the Court’s orders made on 26 July 2023 to file and serve evidence and submissions in response to the application, no material was filed or served by the applicant before the morning of the hearing.
I am conscious the proceedings are at a late stage, having been ongoing since 2020. They have been listed for hearing on more than one occasion. Both times, vacation of the hearing dates has been required.
At the hearing today, the applicant’s representative submitted that the applicant had experienced difficulties over the course of the year that had impacted upon her ability to prosecute the matter. As explained earlier, the applicant’s proposed evidence in this regard has not been admitted, in circumstances where its admission would have prejudiced the respondents without adjournment of the hearing. No adjournment of the hearing was sought by the applicant in response to the issues with her proposed evidence being raised.
Even taken at its highest, the applicant’s proposed evidence did not adequately explain why the applicant has adopted the approach that she has taken in these proceedings. It did not demonstrate that the applicant was incapable of providing instructions or responding in some manner to the respondents’ communications. The applicant did not seek an adjournment to allow evidentiary material to be placed before the Court. There was no clear proposal from or on behalf of the applicant regarding any meaningful progression of the matter in the future, on any timely basis or at all. This is notwithstanding the general references made in the affidavit she sought to rely upon today regarding prosecution of the proceedings, their importance to her, and to wanting to be heard at a final hearing. The applicant did not propose that any orders be made by the Court, other than dismissal of the respondent’s application.
I expressed some concern at this during the hearing. I have considerable reluctance to dismiss an application that has been the subject of previous active participation by the applicant to the extent that this matter has in preparation for hearing. However, the applicant has not sought further hearing dates or other timetabling. She has previously indicated that further evidence and disclosure is required to allow her case to be prepared for hearing, but has not followed through on advancing any application in this regard and has provided no further proposal regarding progression of these issues.
I am not satisfied that the applicant intends for this matter to go to trial within a reasonable period. The applicant has been given multiple opportunities to progress her prosecution of this matter. The unavoidable conclusion is that she has failed to prosecute the proceedings with due diligence, within the meaning of r 13.04(1)(e) of the FCFCOA Rules. She is therefore in default.
I acknowledge that the Court’s discretion under r 13.05(1)(a) of the FCFCOA Rules to dismiss an application is not to be exercised lightly. The applicant has, in the past, filed evidence and other material in support of her application which has allowed it to be listed (on more than one occasion) for hearing, although those hearings did not proceed for reasons earlier discussed. The applicant has no doubt incurred costs in doing so, which will be wasted if the application is dismissed.
However, the applicant’s conduct in this matter fills me with no confidence that the proceedings will be progressed on the applicant’s behalf in a meaningful or timely fashion if the matter is not dismissed. Opportunities have been given to the applicant to reconsider her approach. Those opportunities have not been taken. Continuing to require the respondents to participate in proceedings that the applicant does not meaningfully prosecute places an unacceptable burden on the respondents. This is in circumstances where the respondents have been involved with this matter for some years. It would also be unacceptable from a case management perspective, considering the limited resources of the Court.
Having regard to these considerations, I accept that it is appropriate to dismiss the application under r 13.05(1)(a) of the FCFCOA Rules. This, it seems to me, is the only course in these proceedings that would be consistent with the “overarching purpose” identified in s 190 of the FCFCOA Act.
Costs
The respondents sought that a costs order be made pursuant to s 570(2)(b) of the FW Act. However, the respondents also sought a timetable for making an application under this provision for costs more generally in the proceedings.
In my view, determination of the issue of costs ought to await any evidence and submissions that the parties put forward in respect of that application. For this reason, I will reserve the question of costs relating to the Dismissal Application and provide a timetable for hearing from the parties in relation to costs.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Laing. Associate:
Dated: 13 October 2023
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