Jay v Australian Settlements Limited
[2022] FedCFamC2G 872
Federal Circuit and Family Court of Australia
(DIVISION 2)
Jay v Australian Settlements Limited [2022] FedCFamC2G 872
File number(s): SYG 1847 of 2020 Judgment of: JUDGE GIVEN Date of judgment: 21 October 2022 Catchwords: PRACTICE AND PROCEDURE – application to file defence late in proceedings on basis of privileges previously claimed – whether party obliged to alert opponent to strategic errors – estoppel by silence
EVIDENCE – privilege against exposure to penalty and self-incrimination – assertion that individual’s claimed privileges waived by admissions and positive allegations in defence filed by corporate respondent
Legislation: Civil Procedure Act 2005 (NSW) s 56
Fair Work Act 2009 (Cth) s 70
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 190, 191
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law)Rules 2021 (Cth) rr, 1.04, 1.07, 4.04, 7.01
Federal Circuit Court Rules 2001 (Cth)
Federal Court Rules 2011 (Cth) rr 1.06, 16.08, 16.12, 16.32,
Uniform Civil Procedure Rules 2005 (NSW
Cases cited: AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Australian Securities and Investments Commission v Mining Projects Group Limited (2007) 164 FCR 32
Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499
Cai v Tiy Loy & Co Ltd (No 2) [2015] FCCA 2924
Commonwealth v Verwayen (1990) 170 CLR 394
Construction, Forestry, Mining and Energy Union v Clark (2008) 170 FCR 574
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543
Fair Work Ombudsman v Hu [2017] FCA 1081
Grochowski v Kearney [2020] FCA 1248
Hadgkiss v Construction, Forestry, Mining and Energy Union (2005) 146 IR 106
KMA Corp Pty Ltd v G & F Productions Pty Ltd (1997) 38 IPR 243
Maersk A/S v Patti [2022] FCA 663
Migration Agents Registration Authority v Frugtniet (2018) 259 FCR 219
National Union of Workers v Davids Distribution Pty Ltd (1999) 91 FCR 513
Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2013] FCCA 388
Re Australian Property Custodian Holdings Ltd (in liq) (recs and mrgs apptd) (controllers apptd) v Woolridge (No 2) (2012) 93 ACSR 130
Reid v Howard (1995) 184 CLR 1
Rich v Australian Securities and Investments Commission (2004) 220 CLR 129
Spencer v Commonwealth of Australia (2010) 241 CLR 118
Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96
Williams v Frayne (1937) 58 CLR 710
Zetta Jet Proprietary Ltd v Ship “Dragon Pearl” [2018] FCA 878
Division: Fair Work Division Number of paragraphs: 102 Date of hearing: 27 June 2022 Place: Sydney Counsel for the Applicant: Ms K Nomchong SC with Ms S McCarthy Solicitor for the Applicant: Kennedys (Australasia) Counsel for the Respondents: Mr R Jedrzejczyk Solicitor for the Respondents: Mills Oakley ORDERS
SYG 1847 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: DAVID CRAIG JAY
Applicant
AND: AUSTRALIAN SETTLEMENTS LIMITED (ACN 087 822 491)
First Respondent
GRAEME DOUGLAS WILLIS
Second Respondent
order made by:
JUDGE GIVEN
DATE OF ORDER:
21 October 2022
THE COURT ORDERS THAT:
1.Leave is granted to the second respondent to rely upon:
(a)a defence in the form served upon the applicant on 27 May 2022 (Defence); and
(b)the Affidavit sworn by him on 27 May 2022.
2.The second respondent must file the documents the subject of the grant of leave in order 1 on or by 28 October 2022.
3.The applicant must file and serve a Reply to the second respondent’s Defence on or by 25 November 2022.
4.The second respondent is to pay the applicant’s costs and disbursements thrown away occasioned by the grant of leave referred to in order 1.
5.The matter is referred for further mediation before a Registrar of the Court pursuant to s 169 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), at which:
(a)an officer of the first respondent who has full authority to mediate and effect a settlement must be present; and
(b)each person participating in the mediation including legal representatives, whether attending in person or by video/audio link, is to attend for the full duration of the mediation.
6.In the event that the mediation referred to in order 5 is unsuccessful, the parties must jointly approach the chambers of Judge Given within 7 days of the concluded mediation, with a view to the matter being relisted for a directions hearing.
7.The parties have liberty to apply on 3 clear 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).
REASONS FOR JUDGMENT
JUDGE GIVEN:
Before the Court is an application in a proceeding filed on 10 June 2022 for the second respondent, Mr Graeme Willis, (leave application) by which he seeks leave to file and rely upon a defence dated 27 May 2022 in a form served on the applicant on that date (Defence), together with an Affidavit sworn by him on 27 May 2022 and also served that day.
The leave application is opposed by the applicant in part on the basis it was brought “at the twelfth hour” by reference to (what was at that juncture) an impending final hearing, and also relies on an assertion that the second respondent waived the privileges much earlier in the proceedings such that he cannot utilise the maintenance of them as a basis to legitimise the lateness of the Defence by reference thereto. The second respondent was somewhat blindsided by that assertion. As a result, intermingled with the issues the Court must consider in relation to the determination of the leave application is what, in modern-day litigation, is an acceptable level of ambuscade.
The following Affidavits were read before me at the hearing of the leave application (which occupied a full day), without objection. The Affidavit of:
(a)Jessica Helen Elakis affirmed 7 June 2022 and read for the second respondent;
(b)Jessica Helen Elakis affirmed 9 June 2022 and read for the second respondent;
(c)Persephone Forster sworn 10 June 2022 and read for the applicant; and
(d)Persephone Forster sworn 14 June 2022 and read for the applicant.
In advance of the hearing of the leave application, written submissions were filed for each of the second respondent and the applicant, each of whom was represented by Counsel and Senior Counsel (respectively). I have been assisted by all the submissions made for the parties. The following background has been derived from those submissions, the Affidavits set out at [3] above, transcripts of interlocutory hearings in these proceedings and documents on the Court file. Where aspects of the background are in dispute, they will be identified.
Background
These proceedings were commenced by the applicant in 2020 and docketed to another Judge of this Court (first primary Judge). The applicant pursues an adverse action claim against the first respondent, Australian Settlements Limited (Company) which is a public company which is owned and controlled by a collective of Australia’s non-bank financial institutions. The applicant is the Company’s former Chief Executive Officer. The second respondent is the chairman of the Company, a role he held at the time that the applicant’s services were terminated.
Since the inception of the proceedings a number of case management events have occurred, some of which are of relevance to the leave application. In March 2022, due to the unavailability of the first primary Judge for the final hearing of the matter, the proceedings (which seemed predominantly on track for that hearing) were docketed to me. From the commencement of the proceedings, the first and second respondents have been jointly represented by the same solicitors and Counsel. The salient events from the various directions hearings relevant to the present application are as follows.
On 20 October 2020, being three days prior to the first directions hearing, the respondents filed an Application in a Case (as that process was then known pursuant to the Federal Circuit Court Rules 2001 (Cth) (Former Rules)), seeking an order that paragraphs [122] to [127] of the applicant’s Statement of Claim (SOC), be struck out (strikeout application). Those paragraphs related to the second respondent, and the question of his accessorial liability in relation to various actions alleged to have been taken by the Company.
The matter came before the first primary Judge for a directions hearing on 23 October 2020 on which occasion various timetabling orders were sought. One of the matters raised before the first primary Judge was how defences could be filed in light of the pending strikeout application. The exchange between Counsel and the Court on this topic seemed to reach a consensus, namely that the second respondent ought not imminently be required to file a defence because he had the right to invoke the privileges against self-incrimination and exposure to penalty. It was submitted by Counsel for the respondents that if the second respondent were to claim the privileges (something in respect of which Counsel for the respondents was yet to receive final instructions), this may preclude him from advancing positive defences. The resolution reached that day was that the second respondent would be absolved at that juncture from having to formally plead to the SOC. Senior Counsel for the applicant added that, given that the second respondent may well change that position and later seek to file a defence, there would be no opposition to that course “if it were done in a timely way” and after any pleading issues had resolved, by reference to the strikeout application.
Towards the end of the initial directions hearing, the first primary Judge said that while preserving the second respondent’s ability to claim the privileges (which her Honour accepted may change) his position must still be conveyed, even if only by correspondence. The applicant says the hiatus in relation to the second respondent’s defence was only to be understood in the context that the strikeout application was yet to be determined.
At the conclusion of the first directions hearing the first primary Judge made orders (October Orders) inter alia as follows (emphasis added):
1.The First Respondent by 6 November 2020, file and serve its Response and Defence.
2. The Second Respondent by 6 November 2020 file and serve his Response and Defence or by correspondence set out his position to such pleadings and NOTES that the Second Respondent reserves his position to amend, vary or otherwise supplement his pleading following hearing and determination of the Respondents’ Application in a Case dated 19 October 2020.
…
5.The proceedings be listed for a case management hearing and to obtain a date for hearing of the Respondents’ Application at 9.30 am on 12 February 2021.
In the interests of abundant clarity the reference to the respondents’ application in a case is a reference to the strikeout application.
On 6 November 2020, in accordance with order 1 of the October Orders, the Company filed its defence (Company Defence) and served it on the applicant.
On the same date, a separate letter was sent to the applicant’s solicitor by the solicitor for the respondents in the following terms (November letter):
We refer to the orders made on 23 October 2020 and the Respondents’ Application in a Case dated 19 October 2020.
In accordance with order 2 of the orders, we hereby set out the Second Respondent’s Position in relation to the Applicant’s Statement of Claim.
The Second Respondent admits paragraphs 2 to 6 of the Statement of Claim.
In response to the remaining paragraphs of the Statement of Claim, the Second Respondent claims the privilege against self-incrimination and the privilege against exposure to penalty and does not hereby admit each paragraph.
The applicant says (albeit only explicitly for the first time in the submissions filed for him opposing the leave application) that:
(e)the content of the Company Defence, which was prepared by the respondents’ joint solicitor and filed only for the Company, addressed allegations in the SOC about the second respondent as well;
(f)instructions pertaining to the aforementioned parts of the Company Defence could only have come from the second respondent; and
(g)accordingly, by the filing of the Company Defence the position set out in the November letter had been expressly overridden and any purported reliance by the second respondent on the privileges was therefore waived.
The second respondent now relies on there having been no response to the November letter (presumably in the sense that the applicant’s views as summarised at [14] above were not made clear to him). The applicant says the letter did not require such a response.
Despite the parties’ various interpretations of the October Orders as advanced before me, the next orders made in the proceedings are also relevant, although neither party took me to them. A review of the Court’s file demonstrates that on 1 December 2020 an email was sent the solicitors for the applicant to the chambers of the first primary Judge. The respondents’ solicitors were copied to this email which attached a signed version of the proposed minute. That document bears the signatures of each of the solicitors on the record for the respective parties and, in the case of the respondents states “Solicitor for the Respondents”. There is no suggestion that the second respondent did not consent, or know about, the proposed order.
The order sought by the parties was made without alteration and by consent on 9 December 2020 (December Orders). The December Orders had the effect varying order 3 of the October Orders by extending the timetable for the applicant to reply to the defence/s by an additional 8 days and said (emphasis added):
…the Applicant is to file and serve any Reply to the First Respondent’s Defence and to any defence filed by the Second Respondent by 27 November 2020.
Despite making the submission set out at [15] above, it seems that the second respondent has overlooked the fact that by the December Orders to which he consented, he acknowledged the possibility that he may still file a defence. From the applicant’s position, the terms of the order also signalled that he did not regard the November letter as being the last word on the issue of the second respondent’s intention to plead. So, to the extent there was no response to the November letter, while this may be technically true in terms of their being no direct correspondence on the issue, the December Orders provide something of an indication.
After the making of further orders in chambers by consent in February 2021, the matter next returned before the first primary Judge for directions on 30 April 2021, at which time the following order (inter alia) was made by consent:
5.BY CONSENT, DISMISSES the respondents’ application in a case dated 19 October 2020.
At the hearing of the leave application, I was told that the aforementioned dismissal was by consent upon the strikeout application being withdrawn by the respondents.
Whatever the reason for the respondents withdrawing their strikeout application, the effect of it was threefold:
(a)the relevant paragraphs of the SOC which made allegations against the second respondent remained extant;
(b)the accessorial liability claims therefore remained as against the second respondent; and
(c)the forbearance which had been included in order 2 of the October Orders was no longer in effect because the event to which it was linked had completed. While it is true that the strikeout application was not heard and determined, it was disposed of on a final basis, seemingly of the respondents’ own volition.
The latter of these consequences definitely resonated with the applicant, but does not appear to have occurred to the respondents. Again, the applicant did not alert the respondents to this, but says he was under no obligation to do so.
The matter then continued to be prepared for hearing, including a dispute between the parties which was ultimately resolved at a directions hearing on 18 February 2022 before the first primary Judge in relation to categories for discovery.
Events leading to the leave application
It was shortly after the matters pertaining to discovery were resolved, that the matter was transferred into my docket with a view that the hearing dates be preserved and the matter would be heard in May 2022. On 4 April 2022, I held a directions hearing to confirm with the parties that the extant hearing dates could be maintained and to otherwise receive assurances from them that the procedural orders which had been made by the first primary Judge could be adhered to. The parties were in agreement that the timetable (which contained self-executing deadlines referrable to any hearing fixture) could be met, but I was informed that the matter would take five days and not three. In order to accommodate that estimate, the hearing dates were changed to five days commencing on 27 June 2022.
During the course of the first directions hearing before me, I sought a broad explanation of the issues between the parties to ascertain the structure of the hearing which would be required. Counsel for the respondents informed me that the second respondent’s position up to that point in the proceedings was that he was claiming the privileges against self-incrimination and exposure to penalty. It was also said by the respondents’ Counsel (emphasis added):
…that the five day estimate may be more appropriate is in anticipation of the possibility there may need to be a short adjournment if it emerges that Mr Willis decides to go into evidence. I should say in fairness to my learned friend that is, as I understand it, going to be a point of contention between the parties.
The applicant, as I understand it, does not accept that Mr Willis is entitled to take that course of action. I certainly don’t think we’re asking your Honour to decide that today, but I should flag for your Honour that I’m told that may be an issue between the parties.
Later, it was said by Counsel for the respondents:
I’m not aware of the specific grounds on which the applicant will rely to say that Mr Willis is not entitled to take this course. So unless and until, perhaps, we’ve been provided with those contentions, it’s difficult for me to respond.
In submissions to the Court in relation to the hearing, Senior Counsel for the applicant stated (emphasis added):
As I understand the second respondent’s case, it is that he intends to wait until the applicant has closed his case to make a decision unto himself as to whether or not he will put on evidence. And we say – and that is based on the privilege against self-incrimination. I’ve been very clear with my learned friend that we don’t accept that that’s a course of action that can be taken. But I think that our preference would be to wait until that happens – that is, because that’s the argument. It is in – it’s literally sort of, you know, akin to a no case to answer. That is, that you wait until the other side has put on all of their evidence to see if there is a sufficient case that you have to meet and then put yourself there.
It’s not a preliminary question that can be answered because the stance taken by the second respondent is, well, he wants to see what we’ve got first. And so from that point of view, it’s something that really does have to wait to the hearing. And that’s probably another reason why it’s going to take the full five days, because there will be legal argument in relation to whether that course of action is, in fact, open to the second respondent.
Following these exchanges I expressed concern about the possible impact such a dispute may have if it occurred midway through the hearing and presaged that there were also risks involved in the second respondent waiting until such a late stage to make an election. The risk to which I adverted was focused on the disruptive effect to the hearing process itself, including if there arose a need for the second respondent to obtain separate legal representation to that of the Company. It transpires that the second respondent interpreted the Court’s reference to risk as being that he might not be successful in any late attempt to vary his position.
It seems from the submissions extracted at [25] to [27] above that despite the fact that there had been discussions between the respective parties’ Counsel prior to the directions hearing before me, and that Senior Counsel for the applicant had made clear both out of and inside the court room that there was a likely challenge to the ability of the second respondent to claim the privilege, the respondents chose to interpret the nature of that challenge for themselves. There does not appear to have been any attempt to make any further enquiries about the bases upon which the applicant said the course would not be available to the second respondent.
It is clear with the benefit of contextual hindsight that the applicant has not changed his position on this issue, though he has certainly adopted a conservative approach to explaining it. Nothing said before the Court previously contradicts the applicant’s current stance, nor suggests that the respondents were actively misled in any way. There is nothing to suggest that, if asked, the applicant would not have made the position clear. Rather, in the absence of having been asked, the applicant appears simply to have kept his strategic powder dry.
What followed the first directions hearing before me is somewhat contentious in relation to cause and effect.
The parties, having indicated that they were able to comply with the self-executing orders for the preparation of the matter had, in essence, agreed to the doing of certain things prior to the hearing including the filing of a joint consolidated statement of facts and issues, short form chronology and court book, lists of objections to Affidavits (after seeking to resolve them) and witnesses required for cross-examination. The timetable provided two sets of dates for many of those processes, namely a date for inter partes exchange of draft versions of their own positions, and a date by which mutually agreed versions were to be provided to the Court.
On 24 May 2022 correspondence was received by my chambers from the respondents’ solicitors, exercising liberty to apply and seeking that certain of their witnesses be granted leave to give evidence at the hearing of the matter remotely for a variety of personal reasons. As part of that correspondence, the Court was informed that the applicant’s position had been sought in relation to the request, but no reply received. My chambers asked the solicitors for the applicant for his position and also received no reply. Accordingly, on 30 May 2022 I made the orders sought by the respondents in relation to the witnesses in question.
On 7 June 2022, correspondence was again received by my chambers from the respondents’ solicitors seeking to exercise liberty to apply to the Court and have the matter listed for directions on the basis that the applicant had not complied with various orders. Unbeknownst to the Court at that time was that, on 27 May 2022, the second respondent had served on the solicitors for the applicant the proposed Defence and Affidavit which are now the subject of the leave application.
On 31 May 2022 the respondents wrote to the solicitors for the applicant regarding a non-compliance with orders and reserving the right to bring it to the Court’s attention without further notice if no response was received. By that email, the respondents’ list of Affidavits to be relied upon at trial was served on the applicant. The Court is told that no response was received to that correspondence. On 6 June 2022, the solicitors for the respondents again wrote to the solicitors for the applicant and attached (by way of service) the schedule of the respondents’ objections to the applicant’s Affidavit evidence in accordance with the Court’s orders. Again, noting that there had been relevant default in relation to the preparation of the matter for hearing by the applicant, the solicitors for the respondents said that the applicant’s ongoing breach orders was preventing the timely preparation of the matter for hearing. The solicitors for the applicant were told that unless a response was received by 9.30am on 7 June 2022, liberty to apply would be exercised to have the matter brought back before the Court.
Ultimately, that liberty was exercised by the respondents and I listed the matter for a directions hearing late in the afternoon of 10 June 2022. On the morning of 10 June 2022 the leave application was filed. Also in advance of the 10 June 2022 directions hearing, the parties sent competing sets of proposed orders to my chambers.
At the directions hearing, the applicant maintained that the matter was ready to proceed save and except for the question of the second respondent’s Defence. However, that position was at odds with the inclusion within the applicant’s proposed orders of an order seeking vacation of the hearing dates.
At the June directions hearing, the Court was told that the reason for the applicant’s default of the timetable and also the failure to reply to any correspondence from the respondents was because of the service of the second respondent’s proposed Defence and Affidavit.
Counsel for the respondents said that this objection by the applicant was new and that:
… when my friend complains about the second respondent’s proposal to file a defence, up until the service of the draft defence, the question of whether the second respondent ought to file a defence in the proceeding – notwithstanding his claim of privilege – had never been agitated by the applicant. And I think that’s an important point to make.
There was a piece of correspondence which is in the evidence, dated 6 November 2020 whereby my instructors wrote to the applicant’s solicitors stating – and this is in accordance with orders being made by Judge Baird – stating that the second respondent was not going to file a defence and rely on the – in reliance on the privileges, but he admitted a small number of paragraphs at the beginning of the statement of claim and then the – in respect of the rest – the statement of claim, he did not admit those facts in reliance on the privileges. And that letter was never responded to by the applicant. So if the applicant had an issue with the second respondent not filing the defence and relying on the privileges up until hearing, this is the first that we heard of it.
Counsel for the respondents also stated that:
In my submission, it’s a change of tack purely with respect to timing because the position that Mr Willis reserved was whether he would file a defence and go into evidence at the close of the applicant’s case.
I accept that it was the second respondent’s genuine belief that the position summarised in the preceding paragraph was the subject of consensus between the parties and, probably, that when the applicant had expressed reservations about whether it was a course of action that could be taken at law this might refer to a technical, legal argument about the availability of the privilege to the second respondent in some other sense. However, by reference to the October Orders, there was no equivocation that the second respondent’s position was reserved only until the resolution of the strikeout application, which had long since passed.
Accordingly, it seems that the respondents (and the Court to some extent) had been proceeding on a misapprehension about the position adopted by the second respondent in the November letter. Namely that the November letter substituted a defence such that the only question thereafter would be that, if the second respondent then elected to make a no case to answer application (upon the conclusion of the evidence in the applicant’s case in the substantive hearing), he would otherwise have preserved his right to rely upon the privilege against penalty and against self-incrimination. However, that position, which was in essence repeated by the submissions extracted at [39] and [40] above, mis-paraphrased the effect of order 2 of the October Orders. It also did not reflect the content of the November letter, which made very clear at the time that the second respondent was setting out his position in accordance with the October Orders.
By contrast, the applicant has taken a relatively precise position which he managed to preserve discreetly throughout the interlocutory phases of this matter. That position is that the second respondent did not initially file a defence, was not (after the withdrawal of the strikeout application) excused from doing so, therefore elected not to file a defence and, in any event, has waived his right to rely upon the privileges against penalty and self-incrimination by virtue of what is said to be his material assistance to the first respondent in the preparation of the Company Defence.
The obligation to plead
The second respondent maintains that his entitlement to wait until the close of the applicant’s case to elect whether or not to go into evidence is what the law says a party claiming the privilege against self-incrimination or exposure to penalty is entitled to do. He therefore says that, so understood, the question of any misunderstanding (which does not appear to be conceded) about the effect of the November letter and the withdrawal of the strikeout application is moot. There is some force to that submission in respect of preserving his position regarding evidence. However, and as the applicant notes, while the question of evidence is one matter, the question of whether the second respondent ought (by now) to have filed a defence, is quite another.
The parties agree that a person who is the subject of a claim which may result in the imposition of a penalty has an entitlement to claim privilege against self-incrimination or exposure to penalty: see Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [25] to [37]. The applicant relies upon Australian Securities and Investments Commission v Mining Projects Group Limited (2007) 164 FCR 32 at 36, [7] which was recently cited with approval in Migration Agents Registration Authority v Frugtniet (2018) 259 FCR 219 at [80] per Siopis, Robertson, and Bromwich JJ as combining to mean that the privileges operate to relieve a respondent from the need to deliver a defence which complies with the rules of pleading, if the rules would override those privileges.
The principle which underpins each of the privileges against self-incrimination and penalty is a substantive common law right which “serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it”: see Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 per Gleeson CJ, Gaudron, Gummow and Hayne JJ at 559 (citing in turn Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 per Burchett J at 129). Those privileges cannot be can be abrogated by any order or rules of the court: Reid v Howard (1995) 184 CLR 1 at 16 to 17 per Toohey, Gaudron, McHugh and Gummow JJ.
A personal respondent to a penalty proceeding is entitled to put the applicant to proof of their case: see Grochowski v Kearney [2020] FCA 1248 per O’Callaghan J at [3]. Accordingly, the second respondent could decline to admit matters which are alleged against him by the applicant in the SOC. However, the entitlement of the second respondent to decline to go into evidence (or to participate in related interlocutory processes such as responding to interrogatories, provided discovery or answering Notices to Produce) in order to preserve his privilege is separate. It is also largely dependent on, and consequential to, his having actually participated in the proceedings by formally defending them by the filing of a defence.
In Maersk A/S v Patti [2022] FCA 663, Rares J acknowledged that that the respondent’s right to invoke the privileges against self-incrimination and exposure to penalty reflects an important common law right, but said that this could not be “overstretched”, before finding as follows at [27] to [28]:
I am of opinion that [the respondent’s] assertion that he would be exposed to such a risk if he had to plead to virtually each and every paragraph of the statement of claim goes beyond any legitimate invocation of the penalty and self-incrimination privileges. It is likely that he will be entitled, if so advised, to invoke one or both of those privileges in respect of particular allegations in the statement of claim that he was party to the bringing into existence of the contracts of carriage, registrations of customers and the booking of cargoes in Maersk’s booking system. However, I am of opinion that there is no reason why he cannot plead to anodyne allegations by admitting, denying or stating that he does not know and cannot admit them. That is because, ordinarily, such a plea under the Federal Court Rules does not have the character of an admission but is merely a statement of what is in issue: Laws 170 CLR at 86, 98, Buckmaster 8 Exch at 637; 155 ER at 1507
In other instances, [the respondent] may be able to plead, by invoking one or both of the self-incrimination or penalty privileges but, stating that there is or is not is an issue about whether a fact exists independent of any admission that could be used to involve him in it. For example, it is difficult to see why [the respondent] could not plead to whether Maersk carried some or all of the containers to their ports of discharge, issued bills of lading that incorporated Maersk’s standard terms, provided containers for collection or that were carried but not collected and received payment of freight or not. It is difficult to understand how the pleading of an admission or denial of those matters would have any capacity to be used in a criminal or penalty proceeding against [the respondent], in the absence of any evidence or explanation giving rise to that possibility.
There is nothing to preclude a respondent from being required to plead while exercising a right to decline to make admissions in reliance upon their entitlement to the relevant privileges: see Hadgkiss v Construction, Forestry, Mining and Energy Union (2005) 146 IR 106 per Graham J at [30] to [32] citing Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 17 WAR 499 and Re Australian Property Custodian Holdings Ltd (in liq) (recs and mrgs apptd) (controllers apptd) v Woolridge (No 2) (2012) 93 ACSR 130 per Robson J at [119].
That being so, the applicant says that upon his having commenced these proceedings by the SOC, the respondents were unambiguously mandated to file their defence/s pursuant to r 4.04 (3) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law)Rules 2021 (Cth) (Rules).
The effect of r 1.06 and Items 10 to 16 of Schedule 1 to the Rules is that “Part 16 – Pleadings” of the Federal Court Rules 2011 (Cth) (FCA Rules) applies in this Court. The relevant effect of this is that:
(a)pleadings are taken to close between an applicant and respondents at the end of the latest time fixed by the FCA Rules for the filing of a defence, reply or other pleading between those parties: see r 16.12 of the FCA Rules; and
(b)the relevant date for the purposes of r 16.12 of the FCA Rules is 28 days after service of the SOC: see r 16.32 of the FCA Rules.
The aforementioned reckoning of time is of course subject to any discretionary variation or dispensation by the Court: see r 1.07 of the Rules. In the instant case, it is tolerably clear that the effect of order 2 of the October Orders was to suspend the requirement for the second respondent to file a defence until the happening of a particular event, being the resolution of the strikeout application. The period of suspension was not indefinite. In essence, the effect of order 2 of the October Orders was that the time for the second respondent to file a defence had not started to run. Accordingly, the time recommenced upon the cessation of the suspension, which was marked by the disposal of the strikeout application by its dismissal. There having been no further exemption from the Rules, the date by which pleadings could fairly be said to have closed (by reference to rr 16.12 and 16.32 of the FCA Rules) would be 28 days after the dismissal of the strikeout application on 20 April 2021.
Accordingly, by reference to the dismissal of the strike out application on 30 April 2021 the pleadings could not fairly be taken to have closed until 28 May 2021.
The obligation to notify
It is true that neither in the lead-up to 28 May 2021, nor after it, did the applicant bring to the second respondent’s attention his default. The applicant says that it was never incumbent upon him to advise the second respondent as to the manner in which he elected to run his case.
The second respondent says that the applicant has employed a strategy of ambush and that his having remained silent in his views about the combined effect of the November letter, the filing of the Company Defence and the impact of the withdrawal of the strikeout application, is unconscionable. The second respondent says that, accordingly, this is “a textbook case of estoppel”.[1]
[1] Transcript 27 June 2022 T26.22
Estoppel by silence is rare. A failure to speak will not give rise to an estoppel without there firstly being a duty to do so: see Williams v Frayne (1937) 58 CLR 710 at 736 per Dixon J. The existence of such a duty can be tested by whether a reasonable person would have expected the applicant to correct the second respondent’s mistaken assumption where it was known to have been made, and where the applicant had a duty (the second respondent) in conscience to do so: see Commonwealth v Verwayen (1990) 170 CLR 394 at 444 per Deane J and KMA Corp Pty Ltd v G & F Productions Pty Ltd (1997) 38 IPR 243 at 249 per Eames J.
I am not satisfied that the applicant owed a duty in conscience to the second respondent. The applicant also did not induce the mistaken assumption by his conduct. Rather, the second respondent at a certain point appears to have lost sight of the conditional nature of the position which was reflected by order 2 of the October Order. This is not a case where the applicant sought to resile from the positively asserted agreement that the second respondent could be permitted to file a Defence or go into evidence: Cf Verwayen (supra).
I am not satisfied that there was a duty owed to the second respondent such as to give rise to an estoppel by silence. The applicant was also not in breach of r 16.08 of the FCA Rules which requires that in a pleading subsequent to a statement of claim, a party must expressly plead a matter of fact or point of law that:
(a)raises an issue not arising out of the earlier pleading; or
(b)if not expressly pleaded, might take another party by surprise if later pleaded; or
(c)the party alleges makes another party’s claim or defence not maintainable
because the applicant was never required to file a reply pertaining to the second respondent by reason of the second respondent having first failed to file a defence.
Notwithstanding that I am not satisfied that the doctrine of estoppel applies, there were additional duties at play. This raises a question as to how, in modern times, parties engage with one another in relation to litigation strategy, the decisions which underpin that strategy and otherwise go about the business of litigation within the framework of a court’s rules and what is now entrenched within the Federal Circuit and Family Court of Australia Act 2021 (Cth) (Court Act) as the overarching purpose of this Court’s civil practice and procedure.
In eras past, an approach to litigation of “all is fair in love and war” was taken, particularly in matters of a commercial nature or where both parties were represented and neither was an entity to whom the model litigant obligation applied. However times change.
The respondents are significant stakeholders in this litigation, but their position is not the sole consideration for the applicant in relation to how he prosecutes his case: see AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 per Gummow, Hayne, Crennan, Kiefel and Bell JJ at [93]. In Priest v State of New South Wales [2007] NSWSC 41, which was delivered not long after the advent of Civil Procedure Act 2005 (NSW) (CP Act) and the associated Uniform Civil Procedure Rules 2005 (NSW), Johnson J said the following in relation to s 56 of the CP Act (which relevantly mirrors this Court’s overarching purpose provisions):
In a sense, s 56 has the result that every litigant in civil proceedings in this Court is now a model litigant.
The effect of this more civilised approach is not to prevent an individual citizen who seeks to pursue a cause of action from adopting a strategic, robust, unyielding and perhaps even ungenerous approach to their opponents in the conduct of litigation. However, where the consequences of doing so go beyond mere advantage and instead affect the administration of justice and, in particular, the efficient conduct of the business of the Court, it is not in keeping with the overarching purpose and should not occur. Any strategic success which might result from artful and cunning litigation tactics will be Pyrrhic if the effect of it is also to scuttle the conduct of a trial, cause unnecessary costs to parties and waste the resources and valuable time of busy courts which could be assigned to others who are ready to proceed with their hearings in an orderly manner. It is true that often prejudice or wastage in litigation, particularly commercial litigation, can be met by an inter partes costs order. For well-resourced litigants this may be a matter of little moment and part of the accepted risk (or even sport) of litigation. But even in such cases, there are less tangible and quantifiable costs which flow to the courts, their users and therefore the community as a whole: see AON (supra) per French CJ at [5] and [30]. All parties to litigation, and the legal professionals who represent them, are charged with a duty to safeguard those resources and processes, and to refrain from employing litigation strategies which cut against those principles.
As part of his resistance to leave being granted to the second respondent to file the Defence, the applicant says that he is prejudiced because he has been denied the benefit of a summary judgment being entered against the second respondent. This was, it seems, the projected outcome of the matter proceeding without having highlighted to the second respondent his mistake in having failed to file a defence.
However, given the background to this matter, the applicant securing summary judgment in such circumstances would not have been a fait accompli. The aforementioned matters which have now had to be traversed in the leave application would otherwise have arisen mid-way through the trial if the second respondent had elected at that juncture to seek leave to file a defence and go into evidence. The applicant appears to have known this better than anyone in this matter. While it was of course not a certainty that the second respondent would so elect, it was a very real possibility having been presaged from the outset of the litigation and most recently at both directions hearings before me.
The applicant’s strategy in this matter was undoubtedly clever, executed with precision and within ethical bounds. However, as ingenious as the point was, ultimately it would have been preferable for the misapprehension to have been brought to the Court’s attention so that proper case management could have been employed, and the matter could have remained on track towards its hearing. This would have been consistent with the applicant’s duty to conduct his proceedings in accordance with the overarching purpose.
Leave
Having regard to the foregoing background, the question before the Court is whether or not the second respondent should be granted leave to file his proposed Defence and Affidavit. In considering this issue as a whole I have had regard to the principles in AON (supra) at [30] per French CJ and [97] to [103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ.
In Zetta Jet Proprietary Ltd v Ship “Dragon Pearl” [2018] FCA 878 at [37] to [38] Burley J said the following, citing AON:
As the High Court made clear in AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 (AON), the types of matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; (c) the detriment to the court and other litigants, and; (d) the choices made by the parties as to the claims to be made and how they are to be framed. That, of course, is not an exhaustive list.
In the current context it is also apposite to note that in the exercise of its discretion it is appropriate for the Court also to consider the position of other litigants and confidence in the judicial system generally: AON at [5] (French CJ) and [111] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is for the plaintiffs to persuade the Court, on sufficient material, that an adjournment is appropriate. As the plurality in AON said at [103], [106], [107], if an application that would result in an adjournment is sought and no, or no sufficient explanation is given then the application should be refused. French CJ said (at [4]) that where an application is made “late in the day”, without adequate explanation and necessitating the vacation of a trial date, the applicant bears a heavy burden to show that the exercise of the Court’s discretion should be in its favour.
The leave application presently before me requires consideration of the relevant statutory, factual and case management context in which it is brought which includes the following.
The role and mode of operation of this Court as set out in ss 190 and 191 of the Court Act as referred to and reflected in r 1.04 of the Rules which provides:
(1)The overarching purpose of these Rules, as provided in section 190 of the Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
Note 1: The parties to a proceeding must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose (see section 191 of the Act).
Note 2: These Rules must be interpreted and applied, and any power conferred or duty imposed by them must be exercised or carried out, in the way that best promotes the overarching purpose (see subsection 190(3) of the Act).
Note 3: The Court may dispense with compliance with these Rules or make orders inconsistent with these Rules (see rule 1.07).
(2) To assist the Court, the parties must:
(a) avoid undue delay, expense and technicality; and
(b) consider options for primary dispute resolution as early as possible.
(3) If appropriate, the Court will help to implement primary dispute resolution.
Rule 7.01 of the Rules provides:
(1)At any stage in a proceeding, the Court or a Registrar may allow or direct a party to amend a document (other than an affidavit) in the way and on the conditions the Court or the Registrar thinks fit.
(2) Subject to rule 7.03, the Court or a Registrar may allow an amendment even if the effect would be to include a cause of action arising after the proceeding was started.
In Cai v Tiy Loy & Co Ltd (No 2) [2015] FCCA 2924, Judge Manousaridis held that the general principle to be employed when applying r 7.01 of the Rules in this Court is that:
… leave to amend should be granted unless the proposed amendment is obviously futile or would cause substantial prejudice or injustice which could not be compensated for. These considerations require the court to take account of the nature of the proposed amendment, whether it is made in good faith, the stage in the proceedings at which leave is sought, the nature of the prejudice that may be caused and the means by which such prejudice might be redressed. The question of delay is relevant to these considerations however it is not the purpose of the court to punish a party for delay in seeking an amendment.
As noted in Cai (supra) the question of the delay in seeking to amend (or in the instant case plead for the first time) is relevant, but not in the sense that refusing leave can be punitive. The question of at what stage in a proceedings leave is sought and any prejudice occasioned by the timing of it, are also factors to be considered, irrespective of whether costs might be an available remedy.
In the instant case, the relevant factors which arise for consideration in the exercise of the discretion as to whether leave should be granted are:
(a)whether or not the second respondent was obliged to file a defence such that his not doing so was either a forensic decision to abstain from so doing, or an unreasonable failure to do so;
(b)the delay in making the leave application and any explanation which attends it;
(c)the relevance of any waiver of the various privileges that the second respondent sought to invoke;
(d)any prejudice to the respective parties respectively; and
(e)any costs consequences.
Requirement to file a defence, delay and explanation
With the benefit of a thorough review of the history of this matter, and having regard to the authorities set out at [45] to [49] above, I am of the view that second respondent in this matter ought to have filed a defence, drafted in a manner conducive to maintaining his asserted position in respect of the privileges he claimed: see Maersk A/S (supra). Had he done so, the applicant would also have been required to disclose his assertions about waiver and/or any other basis upon which it is to be contended that the privileges were no longer available, (see r 16.08 of the FCA Rules and [54] above).
That the second respondent failed to plead is part mistake and part misapprehension, including to a small degree on the part of the Court. In saying this I make no criticism of the first primary Judge. The point was a nuanced one, the significance of which was being carefully preserved by the applicant. For the reasons outlined above in relation the overarching purpose of the Court’s practice and procedure, it was to the Court that the applicant owed the courtesy of raising the failure of the second respondent to rectify the pleadings. So raised, the relevant Rules pertaining to default (and the opportunity for rectification thereof) would have enabled an opportunity for the situation to be regularised.
In the event that the second respondent did not rectify matters, the applicant could have proceeded unhindered to an application for summary judgment. The appropriate juncture for that to occur would still have been at trial (noting that it would only proceed once the applicant had established the liability of the first respondent as a precondition). Given that the second respondent could then have been assumed to have specifically elected to not answer the pleaded case (see Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [22]) an application for summary judgment against him in those circumstances would have been unlikely to have disrupted the trial.
The corollary of this is that while it is technically accurate to say that the time for the filing of the Defence is late in the proceedings, the circumstances of how that delay came to be, and endure, cannot be disregarded. This dispute is one which ought to have been resolved either between the parties, or by an interlocutory application brought much sooner in time that it has been, so that the first primary Judge could have considered this in the more appropriate early stages of the proceedings, and not when the hearing was imminent before me.
Each of the parties bears a responsibility for the failure of that to occur. The full circumstances of the second respondent’s misapprehension of the state of the pleadings referable to the October Orders and November letter are somewhat explicable, but given that the second respondent has been legally represented throughout and that the applicant made no secret of the fact he disputed the second respondent’s right to proceed as foreshadowed, it was incumbent upon the second respondent to conduct his own case in a vigilant fashion. In a number of senses that did not occur.
In terms of the timing of the second respondent’s election to waive privilege and make the consequential leave application, while it is late in the proceedings it does not truly take the applicant by surprise and is in fact earlier than potentially anticipated. While the second defendant’s slightly more precipitous approach to this issue has expedited the disruption to the hearing process, there remains a disruption. Of course, the later in the proceedings that the election was made might have armed the applicant with greater arguments as to prejudice and wastage, but those disadvantages would in part have been of his own making by allowing this situation to endure. It is neither possible, nor useful, to speculate further about what may or may not have transpired. The Court will, in considering the various discretionary factors which inform a grant of leave, have regard to the present state of the litigation and the parties.
Accordingly, given the number of countervailing factors in relation to the parties, I will weigh this culpability and the question of the lateness of the second respondent’s application, and the explanation therefore as being neutral in terms of whether leave should be granted.
Waiver
While accepting that there is a right to avail oneself of the privileges, and that the applicant accepts the second respondent asserted that he had done so from 23 October 2020 until 27 May 2022, the applicant says that the second respondent’s forensic decision not to file a defence or an Affidavit on the basis of the privileges was misconceived because those privileges had already been waived by virtue of the matters set out at [14] above. I do not accept the characterisation that there was a forensic decision to not file a defence. It was, if anything, a misconceived omission. Even if construed as a forensic decision, it was not a fully informed one.
I have had regard to the decision of Fair Work Ombudsman v Hu [2017] FCA 1081. That case highlights, inter alia, the potential risks which may attend a corporate and individual respondent from utilising common legal representation while the individual seeks to maintain the privileges. This was a risk adverted to at the directions hearing on 4 April 2022. However, in my view it is unnecessary to determine paragraph by paragraph whether the second respondent waived the privileges at an earlier point.
The question of waiver and its impact on whether or not the Court should exercise a discretion to grant leave to the second respondent to file a defence at this juncture is another instance of the parties having mutually contributed to the present state of affairs. Further, the issue is also now otiose because the second respondent, whether or not he is taken to have waived the privileges as at the date of the November letter or not, has unequivocally done so now, as at 27 May 2022. In that sense, the applicant is in no different position than he asserts he was as at 6 November 2020. All the applicant has lost, it seems, is the opportunity for a “big reveal” of the point at a moment where it would have had a more spectacular (but also disruptive) effect. The second respondent’s timing has serendipitously had the unintended benefit of bringing this issue to light before the Court embarked upon the hearing.
Accordingly, I will also weigh the issue as being neutral between the parties.
Prejudice
In relation to prejudice the second respondent says that, ordinarily, where a party wishes to amend, or to go into evidence, the conventional forms of prejudice are usually those which can be met by costs or adjournment. The second respondent says that having now seen the Defence upon which the second respondent wishes to rely, the applicant can in no way be taken by surprise and that the only prejudice to which the applicant can truly point is his ability to ambush the second respondent in particular by a summary judgment application (see [63] above). That position is said to be problematic for a number of reasons. Firstly, because the applicant cannot proceed to obtain judgment against the second respondent without first establishing contraventions on the part of the Company. Given the applicant’s argument about prejudice necessarily assumes his success against the first respondent, the Court would not be able to assess any of the prospects of that success in the absence of the matter being heard, especially because there will be substantial issues of credit involved in doing so.
Further, the second respondent says that summary judgment is a discretion and that, had the applicant pursued the “ambush strategy” there would have been a strong basis upon which to decline it on discretionary grounds. The second respondent says that it would be extraordinary to grant summary judgment in relation to penalty only on a point of procedure when it could have actually been avoided by the second respondent being entitled to rectify the issue by filing a defence and going into evidence.
The applicant says that on the basis of the second respondent’s conduct, including that the privileges had been waived, the applicant has the benefit of having summary judgment entered against the second respondent at final hearing pursuant to r 13.10 of the Rules. For the reasons given at [62] to [63] above, I do not accept that this causes the applicant prejudice. Summary judgment was not a foregone entitlement. It remained discretionary and would have been informed by all the facts and circumstances of this case which were present at that time.
Overall, the prejudice to the second respondent if leave were to be refused weighs slightly more in his favour than the prejudice to the applicant if it is granted, particularly having regard to the contributory matters I have outlined above and the fact that the hearing dates have already been lost.
On balance, I am of the view that the second respondent ought to be granted leave to file and rely upon the Defence in the form dated 27 May 2022 and the Affidavit made by him on the same date.
Costs
In proceedings brought under the Fair Work Act 2009 (Cth) (Act), this Court is not empowered to order costs other than pursuant to certain provisions including s 570 of the Act, which provides:
570 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.
In terms of what constitutes “a matter arising under the Act”, the following was found by the Full Court of the Federal Court in National Union of Workers v Davids Distribution Pty Ltd (1999) 91 FCR 513 per Wilcox, Burchett and Cooper JJ at [16]:
However, it is well settled that the term “a matter arising under” an Act is not confined to a case in which a cause of action depends on a right conferred by the relevant Act. The word “matter” has been described as referring to a “justiciable controversy” between parties: see per Gummow and Hayne JJ in Abebe v Commonwealth (1999) 162 ALR 1 at [140]. As Callinan J said in the same case at [276], the word “means the subject matter for determination in a legal proceeding, and not necessarily the legal proceeding itself in exactly the form in which it was first presented”. A matter arises under an Act if it turns on the construction and operation of that Act: see per Windeyer J in Felton v Mulligan (1971) 124 CLR 367 at 391 . A justiciable controversy that involves a defence based on an Act is a “matter arising under” the Act: see per Menzies J at 382.
Accordingly, notwithstanding that that the leave application turns significantly on practice and procedure, it remains a matter arising under the Act. As such, the Court’s power to make a costs order consequent upon the determination of the leave application in this matter is only enlivened pursuant to s 570 of the Act if:
a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case. The second criterion is that the act or omission of one party must have “caused another party to the proceeding to incur costs in connection with the proceeding”. Once both criteria are satisfied, then the Court "may" in its discretion order the party which has engaged in the unreasonable act or omission to pay some or all of the costs of the other party.
see Construction, Forestry, Mining and Energy Union v Clark (2008) 170 FCR 574 per Tamberlin , Gyles and Gilmour JJ at 582, at which point the Court has a broad discretion: Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2013] FCCA 388 per Judge Driver at [4].
The second respondent does not seek costs of the leave application.
The applicant seeks an order pursuant to s 570(2) of the Act that the second respondent pay his costs thrown away occasioned by the vacation of the hearing dates and seeks costs of the leave application.
In my view neither the applicant nor the second respondent ought to have their costs of the leave application. This issue almost certainly is to be ventilated at a certain point in the proceedings at which stage the second respondent’s misunderstanding of the matter would have been discovered. For the reasons already given, the applicant is not without some responsibility.
While not expressly sought among the costs orders, I am of the view that the second respondent should pay the applicant’s costs thrown away occasioned by the grant of leave to him to file the Defence. While the second respondent has succeeded in obtaining the relief sought by the leave application, had there been greater vigilance by him in the course of the proceedings the need for the late filing might have been obviated.
It is not the case that simply because the addition of the second respondent’s Defence (as opposed, for example, to an amendment which has the effect of abandoning a cause of action) means that there has been no wastage on the part of the applicant. The ability to address matters together, and the economy of scale gained in not having to revise pleadings and evidence already filed, can give rise to costs thrown away.
In relation to the ultimate adjournment of the proceedings, the second respondent says that the applicant could not be said to be taken by surprise by the application, which I have accepted above as being accurate to a certain extent. However, the fact that an application is unsurprising does not ameliorate the fact that it must be met. It was highly possible, if not probable that upon the making of the leave application even if it were consented to, that the hearing would need to adjourn to enable the applicant to meet the second respondent’s pleading and evidence.
To the extent that the applicant says it is solely the making of the leave application which has resulted in the adjournment of the matter and that the second respondent’s criticisms of the applicant in relation to not complying with the preparation timetable between 27 May 2022 and 10 June 2022 is unwarranted, I disagree.
That the making of the leave application caused matters to derail was not unexpected, however, that disruption ought to have been brought to the Court’s attention much earlier than it was. If, as was contended on 10 June 2022, the applicant was so prejudiced by the making of the leave application that he could not continue to prepare for hearing, or took the view that such preparation should not be undertaken until the issue of the leave application was resolved so as to ensure that further time and costs were not unnecessarily expended, then the appropriate course would have been to exercise the liberty to apply granted to the parties by the first primary Judge on 30 July 2021 which remained extant. The applicant’s solicitors were relatively uncommunicative in the face of these events. Such conduct is again not in keeping with the duties of a party and their representatives’ duty to conduct themselves in accordance with the overarching purpose of the Court’s practice and procedure. In my view this unresponsiveness contributed to the inevitable adjournment which I note was sought by the applicant’s own proposed orders on 10 June 2022. Accordingly, in my view the applicant ought not have his costs of the adjournment.
However, in the circumstances of this case, I am of the view that overall the conduct of the second respondent in failing to properly understand and regularise the pleadings in this matter was an unreasonable omission. That he failed to apprehend the effect of a timetable to which he had agreed, and the impact that his own withdrawal of the strikeout application would have was unreasonable and by seeking and being given the indulgence of being able to plead at this late stage, has caused the applicant to incur costs. Accordingly, I am satisfied that s 570(2)(b) of the Fair Work Act applies and I will make an order to the effect that the second respondent pay the applicants costs thrown away occasioned by the grant of leave to file his Defence.
Further, given the advent of the second respondent as a full and participating party in the proceedings, I will make orders for the regularisation of the pleadings. I will then also order that the matter proceed again to mediation.
103 I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given.
Associate:
Dated: 21 October 2022
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