Kearney v Accrue Property Pty Ltd
[2020] FCCA 74
•21 January 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEARNEY v ACCRUE PROPERTY PTY LTD & ANOR | [2020] FCCA 74 |
| Catchwords: INDUSTRIAL LAW – PRACTICE AND PROCEDURE – Application for leave to file a further amended statement of claim where claims arise out of employment relationship – Adequacy of pleading – Application by Respondents to strike out claims against Second Respondent in Amended Statement of Claim – Alternative application by Respondents to compel further response to Respondents’ Request for Further and Better Particulars of Amended Statement of Claim – Application to strike out claims against Second Respondent refused – Application for Further Particulars of Amended Statement of Claim refused – Leave to further Amended Statement of Claim granted. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth), ss.3, 34, 42, 43 |
| Cases cited: ABL Nominees Pty Ltd v MacKenzie (No.2) [2014] VSC 529 |
| Applicant: | JOSEPH KEARNEY |
| First Respondent: | ACCRUE PROPERTY PTY LTD |
| Second Respondent: | JEFFREY JAMES GROCHOWSKI |
| File Number: | MLG 3058 of 2018 |
| Judgment of: | Judge Kirton |
| Hearing date: | 9 December 2019 |
| Date of Last Submission: | 9 December 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 21 January 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms Preston |
| Solicitors for the Applicant: | Gil Boffa & Associates |
| Counsel for the Respondents: | Mr Galbraith |
| Solicitors for the Respondents: | DSS Law |
ORDERS
The Applicant have leave to file and serve a Further Amended Statement of Claim on or before 3 February 2020.
Order 2 of the Orders made on 9 December 2019 is discharged.
Orders 8, 9 and 10 of the Orders made on 7 October 2019 are discharged.
The Respondents file and serve their Defences to the Further Amended Statement of Claim on or before 17 February 2020.
The Applicant file and serve any Reply to the Defences to the Further Amended Statement of Claim or before 2 March 2020.
The Applicant to file and serve Further and Better Particulars of loss on or before 2 March 2020.
For the avoidance of doubt, Orders 6 and 11 to 21 of the Orders made on 7 October 2019 otherwise remain in full force and effect.
The Applicant’s costs of and incidental to the Applicant’s Application filed on 19 November 2019 (Applicant’s Application) and responding to the Respondents’ Application filed on 4 December 2019 (Respondents’ Application) are reserved.
The Applicant’s Application is otherwise dismissed.
The Respondents’ costs of and incidental to the Respondents’ Application and responding to the Applicant’s Application are reserved.
The Respondents’ Application is otherwise dismissed.
General liberty to apply to the parties.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 3058 of 2018
| JOSEPH KEARNEY |
Applicant
And
| ACCRUE PROPERTY PTY LTD |
First Respondent
| JEFFREY JAMES GROCHOWSKI |
Second Respondent
REASONS FOR JUDGMENT
Introduction and Background
The Court has before it two interlocutory applications. The Applicant, Mr Joseph Kearney, seeks leave to file a Further Amended Statement of Claim (FASC)[1]. The Respondents object to that leave being granted on the basis of asserted deficiencies in the FASC.
[1] Application in a Case, filed by the Applicant on 19.11.19, at [1] and Annexure “GB-2”.
The Respondents seek:
a)To strike out a number of paragraphs in the Amended Statement of Claim, filed on 6 October 2019 (ASC) and to have dismissed or struck out the claims against the Second Respondent, Mr Jefferey James Grochowski[2]; or alternatively
b)That the Applicant file a further response to the Respondents’ Request for Further and Better Particulars of the Applicant’s Amended Statement of Claim, filed on 22 October 2019 and that such response provide proper particulars of the allegations made in the paragraphs of the ASC that the Respondents assert are deficient[3].
[2] Application in a Case, filed by the Respondents on 4.12.19, at [1] and [2].
[3] Application in a Case, filed by the Respondents on 4.12.19, at [3].
The Respondents’ applications are opposed by the Applicant.
This case arises out of the Applicant’s employment by the First Respondent as a real estate salesperson for over two years, from 13 June 2012 until 7 October 2014[4]. The Applicant makes claims against:
[4] ASC at [1(b)(ii) and (iii)].
a)The First Respondent for:
i)The failure to pay minimum commission-only entitlements pursuant to clause 16.5(b) of the Real Estate Industry Award 2010 (Award) and s.323 of the Fair Work Act 2009 (Cth) (Fair Work Act)[5];
[5] ASC at [11]–[19].
ii)The failure to ensure that copies of the Award and the National Employment Standards were available to the Applicant as required by clause 5 of the Award, in contravention of s.45 of the Fair Work Act[6];
iii)The failure to pay the Applicant’s base rate of pay for ordinary hours of work on public holidays, in contravention of s.116 and s.44 of the Fair Work Act[7];
iv)The failure to pay to the Applicant accrued and untaken annual leave on termination of his employment, in contravention of s.90(2) and s.44 of the Fair Work Act[8];
v)The failure to pay agreed commissions on the sale of particular properties, in breach of an agreement between the Applicant and the Second Respondent and s.323 of the Fair Work Act[9];
vi)The failure to pay commission in relation to John Chapman’s purchase of real estate through the First Respondent, in breach of the Applicant’s employment contract and s.323 of the Fair Work Act[10].
b)The Second Respondent:
i)Pursuant s.550(1) and (2) of the Fair Work Act, as being a person involved in a contravention of a civil remedy provision of the Fair Work Act[11];
ii)For accessorial liability pursuant to the Fair Work Act for each of the claims against the First Respondent referred to in sub-paragraphs 4(a)(i) to (vi).
[6] ASC at [26]-[28].
[7] ASC at [29]-[34].
[8] ASC at [42]-[47].
[9] ASC at [48]-[52].
[10] ASC at [4], [53]-[59].
[11] ASC at [60]-[61].
Synopsis
I have determined that:
a)The Applicant is to have leave to file and serve a further amended statement of claim.
b)The Respondent’s Application is dismissed.
Procedural History
The procedural history of this matter is of some importance to the present applications before the Court. The key procedural events are as follows.
On 11 October 2018 the Applicant filed an Application-Fair Work Division, a Genuine Steps Statement and a Statement of Claim.
On 30 October 2019 the Respondents’ current solicitors DSS Law, filed a Notice of Acting – Appointment of Lawyer.
On 13 December 2018 Judge Hartnett (as Her Honour then was) Ordered (in chambers), that the Respondents file and serve their defences on or before 15 February 2019 and that the Applicant file and serve any reply to the defences by 15 March 2019. The Respondents were to provide discovery of specific documents on or before 22 March 2019. The proceeding was referred to a Registrar pursuant to s.34 of the Federal Circuit Court of Australia Act 1999 (Cth) (Federal Circuit Court Act) for a mediation, which was not to be conducted before 12 April 2019.
At a directions hearing on 4 April 2019 both the Applicant and the Respondents were represented by Counsel. Counsel for the Respondents advised the Court that he had been unable to complete the Respondents’ defences as he had not been able to obtain instructions from his clients and the Respondents’ discovery had not taken place.
On 4 April 2019 I ordered that the proceeding be adjourned to 29 April 2019 for a further directions hearing and that the mediation listed for 17 April 2009 be vacated, due to the Respondents’ failure to file their defences or make discovery. I also ordered that the Second Respondent attend in person on the adjourned directions hearing date.
On 29 April 2019 the Respondents had still not complied with the Orders made on 13 December 2018 to file their defences or to provide discovery[12]. At the directions hearing on 29 April 2019 the Second Respondent attended in person. Both the Applicant and the Respondents were represented by Counsel. The Second Respondent was required to give evidence to explain the reason for the Respondents’ failure to file their defences and to make discovery. The Second Respondent was also cross-examined by Counsel for the Applicant in relation to these issues.
[12] Orders 2 and 4 of the Orders made by Judge Hartnett (as Her Honour then was) on 13.12.18.
On 29 April 2019 I ordered that the Respondents make discovery by 1 July 2019, that they file their defences by 12 July 2019 and that the Applicant serve any reply by 2 August 2019. The proceeding was again referred to a Registrar for mediation, which was not to be conducted before 16 August 2019. The Respondents were also ordered to pay the Applicant’s costs thrown away fixed in the sum of $3,000.
On 2 July 2019 the First Respondent filed a List of Documents. On 14 July 2019 each of the Respondents filed a Defence.
On 30 August 2019 after this proceeding failed to settle at mediation that day, Judicial Registrar Ryan, ordered that the proceeding be listed for directions on 7 October 2019.
On 6 October 2019 the Applicant filed the ASC, a Reply to the Defence of the First Respondent and a Request for Further and Better Particulars of the Defence of the First Respondent.
On 7 October I ordered that:
a)The proceeding be listed for final hearing on 27 April 2020 to 1 May 2020 and 11 May 2020, with an estimated hearing time of six days.
b)The Applicant have leave to file and serve an Amended Statement of Claim.
c)The Respondents have leave to file and serve a Request for Further and Better Particulars of the Amended Statement of Claim on or before 22 October 2019.
d)The Applicant file and serve any response to the Request for Further and Better Particulars of the Amended Statement of Claim on or before 31 October 2019.
e)The Respondents file and serve their Defences to the Amended Statement of Claim on or before 22 November 2019.
f)The Respondents make discovery by affidavit, of the documents referred to in Order 6 of the Orders, on or before 7 February 2020.
g)The Respondents’ costs thrown away by reason of the amendment of the Statement of Claim were reserved.
h)Trial directions.
On 22 October 2019 the Respondents filed a Request for Further and Better Particulars of the Amended Statement of Claim and on 7 November 2019 the Applicant filed a Response to the Request for Further and Better Particulars of the Amended Statement of Claim.
On 19 November 2019 the Applicant filed an Application in a Case (Applicant’s Application) relating to this application and an affidavit in support, being the Affidavit of Gilbert Boffa (Boffra Affidavit).
On 22 November 2019 the First Respondent and the Second Respondent each filed an Amended Defence.
On 4 December 2019 the Respondents filed an Application in a Case (Respondents’ Application) relating to this application and an affidavit in support, being the Affidavit of Amy Ronit Weiner (Weiner Affidavit)[13].
[13] The Affidavit of Amy Ronit Weiner was also filed again on 6.12.19 with the complete Annexures.
On 4 December 2019 the Applicant filed a Request for Further and Better Particulars of the Amended Defence of the First Respondent.
On 9 December 2019 this matter came before the Court again for the hearing of the Applicant’s Application and the Respondents’ Application. I reserved my decision with respect to each application and also ordered that Order 8 of the Orders made on 7 October 2019 be suspended until further order.
Applicable Legal Principles
The objects of this Court are described in the Federal Circuit Court Act. These objects include the objective that the Court is:
[…] to operate as informally as possible in the exercise of judicial power[14];
[14] Section 3(2)(a) of the Federal Circuit Court Act.
Section 42 of the Federal Circuit Court Act also provides:
In proceedings before it, the Federal Circuit Court of Australia must proceed without undue formality and must endeavour to ensure that the proceedings are not protracted.
In relation to practice and procedure, the Federal Circuit Court Act provides in s.43:
(1)The practice and procedure of the Federal Circuit Court of Australia is to be in accordance with Rules of Court made under this Act. However, this subsection is subject to any provision made by or under any other Act with respect to practice and procedure.
(2)In so far as the provisions applicable in accordance with subsection (1) are insufficient:
[…]
(b)the Rules of Court made under the Federal Court of Australia Act 1976 apply, with necessary modifications, so far as they are capable of application and subject to any directions of the Federal Circuit Court of Australia or a Judge, and procedure of the Federal Circuit Court of Australia in relation to the jurisdiction of the Federal Circuit Court of Australia under the laws of the Commonwealth […].
The practice and procedure of this Court is also governed by the Federal Circuit Court Rules 2001 (Cth) (Rules). Rule 1.05 of the Rules provides:
(1)It is intended that the practice and procedure of the Court be governed principally by these Rules.
(2)However, if in a particular case the Rules are insufficient or inappropriate, the Court may apply the Family Law Rules, the Federal Court Rules or […], in whole or in part and modified or dispensed with as necessary.
(3) Without limiting subrule (2):
(a) […]
(b)the provisions of the Federal Court Rules set out in Part 2 of Schedule 3, apply, with the necessary changes, to general federal law proceedings.
Part 2 of Schedule 3 of the Rules specifies that the following rules from the Federal Court Rules 2011 (Cth) (Federal Court Rules) apply to this Court:
a)Item 10 – rr.16.03 to 16.12.
b)Item 11 – r.6.21.
c)Item 12 – rr.16.31 to 16.45.
Rule 16.07 of the Federal Court Rules provides as follows:
Admissions, denials and deemed admissions
(1)A party pleading to an allegation of fact in another party’s pleading must specifically admit or deny every allegation of fact in the pleading.
(2)Allegations that are not specifically denied are taken to be admitted.
(3)However, a party may state that the party does not know and therefore cannot admit a particular fact.
(4)If a party makes a statement mentioned in subrule (3), the particular fact is taken to be denied.
Rule 16.21 of the Federal Court Rules relates to an application to strike out pleadings and provides as follows:
Application to strike out pleadings
(1)A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:
(a) contains scandalous material; or
(b) contains frivolous or vexatious material; or
(c) is evasive or ambiguous; or
(d)is likely to cause prejudice, embarrassment or delay in the proceeding; or
(e)fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f) is otherwise an abuse of the process of the Court.
(2)A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1) (a), (b) or (c) or is otherwise an abuse of the process of the Court.
The Federal Court Rules also makes provision for particulars of pleadings as follows:
16.41 General
(1)A party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim, defence or other matter pleaded by the party.
(2)Nothing in rules 16.42 to 16.45 is intended to limit subrule (1).
[…]
16.43 Conditions of mind
(1)A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies.
(2)If a party pleads that another party ought to have known something, the party must give particulars of the facts and circumstances from which the other party ought to have acquired the knowledge.
(3) In this rule:
condition of mind, for a party, means:
(a) knowledge; and
(b) any disorder or disability of the party’s mind; and
(c) any fraudulent intention of the party.
[…]
16.45 Application for order for particulars
(1) If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct of the party's case, the party may apply to the Court for an order that the party who filed the pleading serve on the party:
(a)particulars of the claim, defence or other matter stated in the pleading; or
(b)a statement of the nature of the case relied on; or
(c)if there is a claim for damages -- particulars of the damages claimed.
(2)An application under subrule (1) may be made only if:
(a)the particulars in the pleading are inadequate; and
(b)the party seeking the order could not conduct the party's case without further particulars.
(3) A respondent who applies to the Court for an order under subrule (1) before filing the respondent's defence must satisfy the Court that an order is necessary or desirable to enable the respondent to plead.
Respondents’ Application - Consideration
I turn first to consider the Respondents’ Application, which was filed on 4 December 2019.
The Respondent’s Application was filed after the:
a)ASC was filed on 6 October 2019.
b)Trial directions were made at the directions hearing on 7 October 2019.
c)The Respondent’s Request for Further and Better Particulars of the Applicant’s Amended Statement of Claim was filed on 22 October 2019.
d)The Applicant’s Response to the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim was filed on 7 November 2019.
e)The Applicant’s Application and the Boffra Affidavit were filed on 19 November 2019.
f)The Amended Defence of the First Respondent was filed on 22 November 2019 (First Respondent’s Amended Defence).
g)The Amended Defence of the Second Respondent was filed on 22 November 2019 (Second Respondent’s Amended Defence).
The Weiner Affidavit was made in support of the Respondents’ Application. The Weiner Affidavit makes no reference to the filing of the First Respondent’s Amended Defence or the Second Respondent’s Amended Defence, although it annexes the documents referred to in sub-paragraphs (a), (c) and (d) of the preceding paragraph.
The Respondents make two complaints concerning the ASC and the FASC.
Failure to Identify Involvement in the Contraventions Pursuant to Section 550(2)(a) to (d) of the Fair Work Act
The Respondents’ first compliant is that in both the ASC and the FASC, there is a failure to identify which of the subsections of s.550(2)(a) to (d) of the Fair Work Act the Applicant is relying upon with respect of each of the claims for accessorial liability.
Paragraph 60 of the ASC and the FASC pleads the provisions of s.550(1) of the Fair Work Act. Paragraph 61 of the ASC and the FASC pleads the provisions of s.550(2)(a) to (d) of the Fair Work Act. The ASC and the FASC otherwise do not identify which of the provisions of s.550(2)(a) to (d) are relied upon to found each of the individual claims made against the Second Respondent, referred to in paragraph 4(b)(ii) above.
Counsel for the Respondents referred to paragraph 61B of the ASC and the FASC as an example. This paragraph states:
By reason of one or more of the matters pleaded in paragraph 3 above, the second respondent participated in the contraventions of the first respondent in respect of the underpayment of minimum commission entitlements under the Award.
Counsel argued that in paragraph 61B there should have been a specific pleading as to the type of accessorial liability that was alleged by reference to individual sub-sections of s.550(2)(a) to (d) of the Fair Work Act. Counsel submitted that where there was a pleading for each of the separate claims against the Second Respondent, the same deficiency existed[15].
[15] Transcript (9.12.19) T 24:4-25.
Counsel for the Respondents did not refer to the Second Respondent’s Amended Defence in submissions. Paragraph 61B of the Second Respondent’s Amended Defence pleads:
As to paragraph 61B:
(a)He does not plead to paragraph 61B as he claims the privilege against self-exposure to a penalty;
(b)Further, the allegations in paragraph 3 of the Amended Statement of Claim do not sustain the allegation that the Second Respondent participated in the alleged contraventions of the First Respondent in respect of minimum commission entitlements under the Award[16].
[16] Amended Defence of the Second Respondent, at [61B].
In the Second Respondent’s Amended Defence, the response to each of the claims made against the Second Respondent is substantially the same. The response is to not plead to the relevant claim and then to claim privilege against self-exposure to a penalty.
By reason of r.16.07(1) of the Federal Court Rules, a party pleading to an allegation of fact on another party’s pleading must specifically admit or deny every allegation of fact in the pleading. Pursuant to r.16.07(2) of the Federal Court Rules allegations that are not specifically denied are taken to be admitted. Therefore by not specifically denying the relevant facts pleaded, the Second Respondent is deemed to have admitted the relevant facts.
Therefore, as the Second Respondent has not denied the relevant facts in paragraph 61B of the Second Respondent’s Amended Defence, he is deemed to have admitted the facts in paragraph 61B pursuant to r.16.07(2) of the Federal Court Rules. The Second Respondent is therefore not entitled to further particulars of material facts which are admitted. This also applies to each paragraph referred to in paragraph 1 of the Respondent’s Application.
I note also that in the Respondent’s Request for Further and Better Particulars of the Applicant’s Amended Statement of Claim, particulars of paragraph 61B of the ASC were not sought by the Respondents. This was notwithstanding that the Respondent’s Request for Further and Better Particulars of the Applicant’s Amended Statement of Claim was 12 pages in length and had 95 requests for further particulars of the ASC.
Nevertheless in submissions during the hearing on 9 December 2019, Counsel for the Applicant agreed to include in the FASC a pleading that referred to the relevant sub-sections of s.550(2) of the Fair Work Act, in relation to each of the claims made for accessorial liability against the Second Respondent[17]. In my view that was a prudent position for Counsel for the Applicant to have adopted. This is on the basis of r.16.41(1) of the Federal Court Rules and also taking into consideration the cases referred to by Counsel for the Respondents.
[17] Transcript (9.12.19) T 38:11-18.
Counsel for the Respondents referred to Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors [2010] FMCA 863. In that case reference was made to s.728 of the Workplace Relations Act 1996 (Cth)[18], which has been replaced by s.550 of the Fair Work Act. In Fair Work Ombudsman v Centennial Financial Services Pty Ltd, Cameron FM said:
Involvement in a contravention under s.728 can only be made out if it is proved that a person has engaged in conduct specified in s.728(2). Thus, to make out involvement it is necessary to allege that a person has engaged in such conduct. In the present proceedings, the further amended statement of claim made no reference to conduct specified in s.728(2). It is also necessary to particularise which acts or set of acts constituted conduct amounting to involvement but the further amended statement of claim did not do this. Further, to form the requisite intent the respondent must have had knowledge of the essential matters which have gone to make up the contravention in question: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661. Consequently, an allegation of accessorial liability requires a pleading that the accessory had actual knowledge of each and every element of the principal’s contravening conduct and an election to engage in the relevant conduct; the pleading must assert as material facts that the accessory was sufficiently aware of all the relevant facts going to the contravention: Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (AMWU) v John Holland Pty Ltd (2009) 180 IR 350 at 359-360 [44], [45]. The further amended statement of claim did not make such allegations[19].
[18] Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors [2010] FMCA 863, at [16].
[19] Fair Work Ombudsman v Centennial Financial Services Pty Ltd [2010] FMCA 863, at [151].
Therefore in my view the FASC should have included, in relation to each claim against the Second Respondent, a pleading of the relevant sub-section of s.550(2) of the Fair Work Act, which the Second Respondent is alleged to have contravened. These are material facts that should have been pleaded specifically in the ASC. The pleading of these material facts in the revised FASC will assist the Court in understanding the case that is being made against the Second Respondent.
Failure to Particularise Knowledge or Condition of the Mind
The second complaint is that in both the ASC and the FASC there is a failure to give particulars relevant to the knowledge or condition of mind of the Second Respondent.
Counsel for the Respondents referred to the following paragraphs in the ASC and the FASC: 61A, 61B, 61C and 61D to 61G, 61H to 61K, 61M to 61P, 61Q and 61U, 61V to 61Z and 62[20]. The Respondents’ Application sought that each of these paragraphs be struck out from the ASC and also paragraphs 3, 60, 61 and 61L[21].
[20] Transcript (9.12.19) T 25:1-31.
[21] Respondent’s Application, at [1].
Counsel for the Respondents relied upon Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307. In that case Cameron FM said:
[149]Section 550 of the FWA is quoted above at [21]. It is drawn in terms very similar to those of s.75B of what was the Trade Practices Act 1974 and is now the Competition and Consumer Act 2010. The latter section has been considered in a number of decisions which provide guidance as to the meaning of the same terms where they are found in s.550(2). Those Trade Practices Act authorities show that in order that a person may be “involved in” a contravention of a civil remedy provision it is necessary to demonstrate that the person in question was a knowing participant in the contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 668-670.
[150]Section 550(2)(a) of the FWA provides for accessorial liability on the basis that a person has “aided, abetted, counselled or procured” a contravention. That paragraph is identical to s.75B(1)(a) of the Competition and Consumer Act and it can be inferred that they have the same meaning. In Yorke v Lucas it was said that “aided, abetted, counselled or procured” where used in s.75B(1)(a) have the same meaning as in the common law where they designate participation in a crime as a principal in the second degree or as an accessory before the fact. “Aiding” and “abetting” refer to a person who is present at the time of the commission of an offence and “counselling” and “procuring” refer to a person who, although not present at the commission of the offence, is an accessory before the fact: Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 per Gibbs CJ at 480; Australian Securities & Investments Commission v Australian Investors Forum Pty Ltd (No 2) [2005] NSWSC 267 at [115].
[151] A person counsels a contravention by another if he or she urges its commission, advises its commission or asks that it be committed and procures a contravention if he or she causes it to be committed, persuades the principal to commit it or brings about its commission; there must also be a causal connection between that action and the conduct impugned: Australian Securities & Investments Commission v Somerville [2009] NSWSC 934; (2009) 259 ALR 574 at 588 [41]; Western Australia v Burke (No 3) [2010] WASC 110 at [18]- [19]; see also Truong v R [2004] HCA 10; (2004) 223 CLR 122 at 142 [30] per Gleeson CJ, McHugh and Heydon JJ.
[152] A person is “knowingly concerned” in a contravention if he or she has knowledge of the essential facts constituting the contravention and is an intentional participant in it, the necessary intent being based on knowledge of the essential elements of the contravention: Yorke v Lucas; Australian Competition & Consumer Commission v Giraffe World Australia Pty Ltd [1999] FCA 1161; (1999) 95 FCR 302; Rural Press Ltd v Australian Competition & Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236; Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1. The accessory need not know that the conduct constituted a contravention: ACCC v Giraffe World at 346 [186]; Rural Press v ACCC at 282-283 [159]-[160]; Heydon v NRMA at 109 [334].
[153] In Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17, speaking of s.75B(1)(c), the Full Court of the Federal Court said:
For a person to be involved in a contravention within the meaning of s.75B(1)(c) of the Act, a person must be an intentional participant in the contravention, the necessary intent being based upon knowledge of the essential elements of the contravention: see Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 670. Thus, while it is not necessary to establish that the individual Respondents had knowledge that there was a contravention of a provision of Pt V of the Act, it is necessary to demonstrate that each individual Respondent had knowledge of each of the essential elements of the contravention.
In order to establish whether any of the individual Respondents was involved in a contravention, it is necessary to examine the state of mind of each of them separately in relation to each alleged contravention. ...
It is not necessary to establish any subjective element in relation to a contravention of Pt V of the Act. A contravention may be committed unintentionally. That is to say, a person may contravene a provision of Pt V even though that person does not have knowledge of all of the essential elements that constitute the contravention. However, before any accessorial liability will arise, it is necessary to establish the subjective element of knowledge of each of the essential elements of the contravention. That knowledge may be constructive in the sense that it may be possible to show wilful blindness in relation to the elements of a contravention. However, absent a finding of wilful blindness, it is necessary to establish actual knowledge on the part of a person to whom it is sought to sheet home accessorial liability in respect of a contravention of Pt V. (at [133]-[135])[22].
[22] Guirguis v Ten Twelve Pty Ltd & Anor [2012] FMCA 307, at [149]-[153].
Counsel for the Respondents submitted that the FASC did not rectify the deficiencies in the ASC as it failed to comply with Rules 16.41 and 16.43 of the Federal Court Rules. It was submitted that the FASC did not plead the necessary particulars alleged of the Second Respondent’s condition of mind (r.16.43(1)) or relevant state of knowledge (r.16.43(2)).
In response Counsel for the Applicant submitted that:
a)The Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim was oppressive on the basis of being prolix and also for making impermissible requests for particulars.
b)The Respondents’ Application to compel the Applicant to provide a further response to the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim was also oppressive[23].
c)Many of the particulars sought in the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim were not within the knowledge of the Applicant, as the Applicant was still awaiting discovery from the Respondents. In this regard Counsel for the Applicant relied upon Keshi Pty Ltd v Firefly Press (Australia) Pty Ltd [2008] FCA 440. In that case McKerracher J said:
25.A significant function of particulars in cases which are tried on pleadings in the ordinary way is that they limit and define the issues for the purposes of discovery: Mann v Board of Health (ACT) (1996) 67 FCR 383 at 391. On the other hand it has been said ‘it is good practice and good sense that where the defendant knows the facts and the plaintiff’s do not, the defendant should give discovery before the plaintiff delivers particulars’: Millar v Harper (1888) 39 Ch D 110 at 112; see also Egg & Egg Pulp Marketing Board v KH Korp Tocumal Trading Co Pty Ltd [1963] VicRp 52; (1963) VR 378 at 382; Castlemaine Perkins Ltd v Queen Street Hotels Pty Ltd (1968) Qd R 501.
26.Counsel for the applicants submits that the following four principles apply to the requests that have been made in these proceedings:
1.The general object of particulars is to inform the opponent of the nature of the case it has to meet as distinguished from the way in which such case will be proved: Duke v Wisden (1897) 77 LT 67 at 68; G W Young & Co Ltd v Scottish Union & National Institute Insurance Co (1907) 24 TLR 73 at 74; R v Associated Northern Collieries [1910]HCA 61; (1910) 11 CLR 738; Aga Khan v Times Publishing Co [1924] 1 KB 675; McAndrew v Gray [1920] NSWStRp 67; (1920) 20 SR (NSW) 635; Philliponi v Leithead (1959) 76 WN (NSW) 150.
2. Furthermore, whilst a party should be required to provide the best particulars it can (having regard to the object of particulars), an order will not be made for particulars which the Court is satisfied the party cannot give: Higgins v Weekes (1889) 5 TLR 238; Marshall v Inter Oceanic Steam Yachting Co (1885) 1 TLR 394; Cyril Leonard & Co v Simo Securities Trust Ltd [1972] 1 WLR 80.
3. In appropriate circumstances the Court can decline to order a party to provide particulars until after discovery and/or interrogatories, for example where the particulars are solely within the knowledge of the other party: Jingellic Minerals NL v Abigrouop Ltd (1992) 7 WAR 566 at 570, 575 (FC) […][24].
[23] Transcript (9.12.19) T 32:35-37.
[24] Keshi Pty Ltd v Firefly Press (Australia) Pty Ltd [2008] FCA 440, at [25] and [26].
In the Applicant’s Response to the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim, the Applicant has already provided responses to the Respondents’ Request for Further and Better Particulars of the Applicant’s Amended Statement of Claim. I have read the particulars that have been provided by the Applicant in the Applicant’s Response to the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim. I have considered the information provided in the document as a whole and I consider that the particulars provided of the Second Respondent’s knowledge or state of mind are sufficient. In forming my opinion I have taken into account r.16.45 of the Federal Court Rules and concluded that the Second Respondent is on fair notice of the case that is to be made against him. I have also taken into account s.42 of the Federal Circuit Court Act, which requires that proceedings before this Court must proceed without undue formality and requires that I must endeavour to ensure that proceedings are not protracted.
I have also taken the following matters into account.
a)On 7 October 2019 the Court made orders that the Respondents make discovery by affidavit, of the documents referred to in Order 6 of the Orders, on or before 7 February 2020. Therefore the Applicant is still awaiting discovery from the Respondents.
b)On 7 October 2019 the Court made trial directions ordering that:
i)The Applicant file and serve Further and Better Particulars of loss by 28 February 2020;
ii)Should the Second Respondent waive his privilege against self-exposure to penalty, he must by 3 April 2020 at the conclusion of the Applicant filing and serving his further and better particulars of loss, file and serve:
A.An Amended Defence;
B.Any affidavit and all other material on which he proposes to rely at the liability hearing; and
C.An Outline of Submissions addressing the relevant statutory considerations;
iii)The Applicant file and serve any affidavits and other material to be relied upon for the purposes of the liability hearing by 6 March 2020;
iv)The Applicant to file and serve an Outline of Submissions on or before 6 March 2020;
v)The Respondents to file and serve any affidavits to be relied upon the purposes of the liability hearing by 3 April 2020;
vi)The Applicant to file and serve an Outline of Submissions in Reply on or before 17 April 2020;
vii)The parties exchange with each other and forward by email to the chambers of Judge Kirton at associate.judgekirton@federalcircuitcourt any objections to the admissibility of evidence in tabular form which identifies the affidavit, the particular paragraph or part thereof or an annexure objected to and the reasons for the objection on or before 17 April 2020;
viii)The Applicant and the Respondents to file a joint Court book by 20 April 2020[25].
[25] Orders 10 to 18 of the Orders made on 7.10.19.
As this proceeding is to be conducted with Applicant’s trial affidavits and Outline of Submissions to be filed prior to the commencement of the trial, the Second Respondent will be further informed as to the Applicant’s case well prior to the commencement of the trial.
Having considered the matters discussed in paragraphs 48 to 55, I do not propose to either strike out the Applicant’s pleadings or require further particulars from the Applicant, as sought in the Respondent’s Application.
Applicant’s Application – Consideration
I turn now to consider the Applicant’s Application which was filed on 19 November 2019. The Applicant seeks leave to file and serve the FASC[26]. The Applicant seeks leave to file the FASC to include allegations that in substance claim that each of the underpayment contraventions are continuing contraventions. The proposed amendments relating to these allegations are contained in the following paragraphs of the FASC: 3(e), 3(f), 19A, 19B, 34A, 34B, 47A, 47B, 52A, 52B, 59A, 59B, 61A, 61A(a), 61A(b), 61A(l), 61I, 61I(d), 61M, 61Q, 61Q(e), 61(v), 61V(f) and 61W (Continuing Contravention Amendments)[27]. In the FASC there are some amendments other than the Continuing Contravention Amendments, however these were not controversial as between the parties.
[26] Applicant’s Application, at [1].
[27] Transcript (9.12.19) T 10:3-13:32.
The Applicant’s position in relation to the Continuing Contravention Amendments was articulated in correspondence from the Applicant’s solicitors to the Respondents’ solicitors, dated 7 November 2019, as follows:
The proposed amendments should not be taken in any way to convey that our client is unable to provide the relevant particulars of knowledge, as existed at the time of the initial contraventions.
[…]
It also appears that you have misunderstood the nature of the amendments. The amendments plead continuing contraventions of payment provisions under the Award and s 323 of the FW Act. To be clear, the effect of a continuing contravention is that the contravention continues day to day. It is not a single point in time contravention at the time the payment was initially due, but continues thereafter, such that the employer remains in continuing breach each day. The relevant knowledge must of course be held at the time of the contravention, in accordance with the established principles to which you refer, but the time of the contravention is not frozen at the original due date for payment.
The concept of a continuing contravention is not a new one. Its interaction with the knowledge element of accessorial liability has not, to our knowledge been raised or tested. As you are clearly unaware of supporting authorities, we attach for your benefit the decision of the Full Court in Brammer v Deery Hotels Pty Ltd.[28]
[28] Boffa Affidavit, at [9] and Annexure “GB-6”.
Counsel for the Applicant relied upon Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, a case concerning an underpayments claim under the Conciliation and Arbitration Act 1904-1972 (Cth). Counsel submitted that in that case the Full Federal Court upheld the argument of a continuing breach. The Full Court said:
He says the initial breach was one which continued from day to day until payment and consequently that he is entitled to rely on the failure to pay at the later date and thus comply with the provisions of the subsection[29].
[…]
There has been a number of decisions in the New South Wales Industrial Commission concerning failure to pay wages or allowances and it has been held that the failure to pay is a continuing act and the duty to pay goes on from day to day and Jones v Lorne Saw Mills Pty Ltd[30] has been relied on […][31].
[…]
The duty is one which operates throughout the period from the time fixed for payment until actual payment. The breach of it begins at the time fixed for payment but continues on. And when an information is laid the employer is to be regarded as having committed a single offence, consisting of a failure to pay down to the date of the information or, if payment has by then been made, then of a failure to pay down to the date of such payment. The distinction is between, on the one hand, an offence constituted by a continuing breach of a duty to take action to put an end to a forbidden state of affairs, in this case that wages which have become payable under a determination are unpaid: see Jones v Lorne Saw Mills Pty Ltd[32]; J. Robins & Sons Ltd v Maloney (No 2)[33]; Schreiber v Santora[34]; Slaggett v Adams[35] […]
[29] Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, 277.
[30] [1923] VLR 58; 29 ALR 8.
[31] Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, 278.
[32] [1923] VLR 58; 29 LR 8.
[33] [1935] AR (NSW) 155, at pp. 157-158, 163.
[34] [1935] AR (NSW) 168.
[35] (1953) 70 WN (NSW) 206.
[…]
In view of this line of authority I am unable to conclude that sub-s (4) would have been drafted as it has been if it were intended to get rid of this line of authority but consider that it would have expressly provided that the time limit for taking proceedings in respect of a continuing act or breach would commence from the date when it first arose or was committed and conclude on the expiration from that date of the period of limitation[36].
[36] Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, 278-279.
Counsel also referred to s.544 of the Fair Work Act which relates to the time limits on applications as follows:
A person may apply for an order under this Division in relation to a contravention of one of the following only if the application is made within six years after the day on which the contravention occurred:
(a) a civil remedy provision;
(b) a safety net contractual entitlement;
(c) an entitlement arising under subsection 542(1).
In relation to time limits on orders relating to underpayments Counsel submitted that sub-section 545(5) of the Fair Work Act applied. This section provides as follows:
A court must not make an order under this section in relation to an underpayment that relates to a period that is more than six years before the proceedings concerned commenced.
Counsel for the Applicant submitted that s.544 of the Fair Work Act was concerned with the time when the contravention occurred, however s.545(5) was concerned with the time when the work was actually performed. Counsel submitted that the Continuing Contravention Amendments proposed in the FASC concerned the interaction between the concept of continuing breach as articulated in Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, the limitation of actions provision in the Fair Work Act and the knowledge requirements for contravention. Counsel accepted that this was not an argument that had been litigated previously and was novel, however it was submitted that there was a proper basis for the argument[37].
[37] Transcript (9.12.19) T 8:12-47.
Counsel for the Applicants also submitted that the Respondents had not suggested that there was any relevant prejudice that arose from the Continuing Contravention Amendments. Counsel also submitted that the Continuing Contravention Amendments addressed a legal argument and did not raise any new facts. It was submitted that the Applicant should not be prevented from raising this legal argument and making the other ancillary amendments that were sought to be made to the ASC.
Counsel for the Applicant relied upon the recent decision of Connock J of the Supreme Court of Victoria in the case of In the matter of Pulitano Investments Pty Ltd [2019] VSC 178. In that case Connock J considered the principles relating to the grant or refusal of leave to amend pleadings. In that case His Honour said:
As observed in Cargill Australia[38], a helpful summary was also set out in ABL Nominees Pty Ltd v MacKenzie (No.2)[39], as follows:[40]
[38] Cargill Australia Ltd v Viterra Malt Pty Ltd (No.18) [2018] VSC 439.
[39] [2014] VSC 529.
[40] [2014] VSC 529, at [17]-[22].
[…]
It is common ground that an amendment which is futile because it is obviously bad in law will not be allowed: Commonwealth v Verwayen[41]. Similarly, if a proposed pleading would be liable to be struck out if it had been contained in an original pleading, either because the pleading is bad in law or is defective as a pleading, then leave to file the proposed pleading will not be allowed: Horton v Jones (No.2)[42]; Grimson v Victorian WorkCover Authority[43]. The court, on this type of application, will not engage in an examination of the merits of the case foreshadowed by the proposed amendment, but where that amendment introduces a patiently hopeless issue for determination then its inclusion will be futile and that will be a significant, and probably decisive, matter in the exercise of the court’s discretion[44] (emphasis added).
[41] (1990) 170 CLR 394, 456.
[42] (1939) 39 SR NSW 305, 310.
[43] (1995) 1 VR 209, 215.
[44] Matthews v SPI Electricity Pty Ltd (Ruling No 6) [2012] VSC 70, [33]; In the matter of Pulitano Investments Pty Ltd v Filippo Pulitano & Ors [2019] VSC 178, at [7].
Connock J also referred to the decision of Vickery J in Namberry Craft Pty Ltd v Watson[45] where Vickery J:
[45] [2011] VSC 136.
[…] summarised the relevant factors to be considered, as a result of the decision in AON Risk Services Australia v Australian National University,[46] as follows:
[46] (2009) 239 CLR 175.
(a)Whether there will be substantial delay caused by the amendment;
(b)The extent of wasted costs that will be incurred;
(c)Whether there is any irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for, whatever costs may be awarded;
(d)Concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;
(e)Whether the grant of the amendment will lessen public confidence in the judicial system; and
(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought[47].
[47] Namberry Craft Pty Ltd v Watson, at [38]; In the matter of Pulitano Investments Pty Ltd v Filippo Pulitano & Ors [2019] VSC 178, at [7].
Connock J then said:
This list of factors is not exhaustive. It is made against the background of the earlier decision of the High Court in Queensland v JL Holdings Pty Ltd[48], and the authorities that preceded it including the famous case of Cropper v Smith[49], where the liberal approach to the amendment of pleadings finds its lead in the dissenting judgment of Bowen LJ.
On the other hand, pleadings are not an end in themselves they are a means of ensuring that real issues of controversy are raised for determination in a way that is procedurally fair, both to a plaintiff and a defendant. This allows claims and defences to be clearly articulated granting parties an opportunity to present their cases properly prepared, on clear notice of allegations and defences raised in the proceedings. On this basis the authorities clearly establish that absent extraordinary circumstances, leave to amend will be granted[50].
[48] (1997) 189 CLR 146.
[49] (1884) 26 Ch D 700.
[50] ACN 074 971 109 v The National Mutual Life Association of Australia Ltd [2010] VSC 186, [28]; In the matter of Pulitano Investments Pty Ltd v Filippo Pulitano & Ors [2019] VSC 178, at [7].
In response Counsel for the Respondent submitted that the Continuing Contravention Amendments should not be allowed. It was submitted that the decision of Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276 had not found any favour in relation to cases concerning the Fair Work Act. Counsel conceded that Brammer v Deery Hotels Pty Ltd stood for the proposition relating to the existence of continuing contraventions, but Counsel denied that it stood for separate individual contraventions[51]. It was submitted that for the purposes of s.550(1) and (2) of the Fair Work Act, the authorities were clear that a person had to be an accessory before he fact, not an accessory after the fact[52]. Counsel for the Respondent otherwise submitted that the Applicant had failed to provide proper particulars of knowledge, as discussed in paragraphs 48 to 51, in relation to the Continuing Contravention Amendments.
[51] Transcript (9.12.19) T 27:12-16.
[52] Transcript (9.12.19) T 28:9-18.
I am unable to conclude that the Applicant’s case in the FASC with the Continuing Contravention Amendments included is futile and obviously bad at law[53]. The Court on this type of application will not engage in an examination of the merits of the case foreshadowed by the Continuing Contravention Amendments or the FASC[54]. Furthermore:
a)The Respondents have not identified any prejudice that could not be adequately compensated by a costs order[55].
b)There will be no substantial delay caused by granting leave for the Applicant to file a further amended statement of claim.
c)The costs which will be wasted will be limited to the parties’ respective costs associated with the Applicant’s Application, the Respondent’s Application and the Respondents defence to the further amended statement of claim.
d)In my opinion the Applicant has provided a satisfactory explanation for wanting to amend the ASC.
e)The filing of a further amended statement of claim will not result in the adjournment of the trial date.
[53] Commonwealth v Verwayen (1990) 170 CLR 394, 456; Horton v Jones(No.2) (1939) 39 SR NSW 305, 310; Grimson v Victorian WorkCover Authority (1995) 1 VR 209, 215.
[54] Cargill Australia Ltd v Viterra Malt Pty Ltd (No.10) [2018] VSC 439; ABL Nominees Pty Ltd v MacKenzie (No.2) [2014] VSC 529, at [17]-[22].
[55] Noting that I have rejected the Respondents’ arguments referred to in paragraphs 47 to 50 which claim prejudice.
I have therefore determined that the Applicant should be given leave to file and serve a further amended statement of claim. As discussed at paragraphs 45 to 47 above, the FASC should to be revised to identify the relevant sub-sections of s.550(2) of the Fair Work Act. It should also include the Australian Company Number (or ACN) of the First Respondent.
Costs
The Applicant seeks costs against the Respondents and the Respondents seek costs against the Applicant[56].
[56] Applicant’s Application, at [2]; Respondents’ Application, at [4].
The Fair Work Act provides the following in relation to costs in s.570:
(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.
(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.
I have determined to reserve both the Applicant and the Respondents’ costs of their respective applications. This will allow the parties to read this Judgment and consider any submissions that they may wish to make after considering s.570 of the Fair Work Act. I will hear any submissions in relation to the costs of the Applicant’s Application and the Respondent’s Application during closing submissions at trial.
Conclusion
Applicant’s Application
I have therefore determined in relation to the Applicant’s Application:
a)The Applicant have leave to file and serve a further amended statement of claim.
b)The Applicant’s costs of and incidental to the Applicant’s Application and responding to the Respondents’ Application are reserved.
c)The Applicant’s Application is otherwise dismissed.
Respondents’ Application
I have therefore determined in relation to the Respondents’ Application that:
a)The application pursuant to r.16.21 of the Federal Court Rules to strike out the paragraphs of the ASC referred to in paragraph 1 of the Respondent’s Application, is dismissed.
b)The application pursuant to r.16.21 of the Federal Court Rules to strike out and/or dismiss the claims against the Second Respondent, referred to in paragraph 2 of the Respondents’ Application, is dismissed.
c)The application pursuant to r.16.45 of the Federal Court Rules that the Applicant file a further response to the Respondents’ Request for Further and Better Particulars of the Amended Statement of Claim, referred to in paragraph 3 of the Respondents’ Application, is dismissed.
d)The Respondents’ costs of and incidental to the Respondents’ Application and responding to the Applicant’s Application are reserved.
e)The Respondent’s Application is otherwise dismissed.
Ancillary Orders to Trial Timetable
As a result of the Orders that I intend to make there will need to be some adjustment to the timetable in the lead up to the trial which will commence on 27 April 2020. I have accordingly made some adjustments to the Orders made on 7 October 2019 in the orders that I have made. Liberty to apply has been reserved to the parties.
I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Judge Kirton
Associate:
Date: 21 January 2020