Khoury v Macquarie Air Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Khoury v Macquarie Air Pty Ltd [2023] FedCFamC2G 992

File number(s): SYG 1451 of 2022
Judgment of: JUDGE GIVEN
Date of judgment: 3 November 2023
Catchwords: INDUSTRIAL LAW – Security for costs – need to consider application of s 570 of Fair Work Act 2009 (Cth) prior to assessing security application – where respondent relied exclusively on s 570(2)(b) – where applicant resident outside Australia
Legislation:

Fair Work Act 2009 (Cth) ss 470, 611

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 215

Federal Circuit Court of Australia Act 1999 (Cth) s 80

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 22.01
Cases cited:

Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd (2020) 283 FCR 123

Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1

Bryan E Fencott Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497

Elshanawany v Greater Murray Area Health Service [2004] FCA 1272

Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972

Haley v Laing O'Rourke Australia Management Services Pty Ltd [2021] FCCA 257

Kiefel v State of Victoria [2014] FCA 604

Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377

Madgwick v Kelly (2013) 212 FCR 1

Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics) [2015] FCCA 2094

Sheather v Staples Waste Removals Pty Ltd [2012] FCA 998

United Voice v Secom Australia Pty Ltd [2015] FCCA2358

Waters v Commonwealth of Australia (Australian Taxation Office) [2014] FCA 1107

Woodhouse v McPhee (1997) 80 FCR 529

Zornada v St John Ambulance Australia (WA) Inc (2013) 237 IR 48

Zou v Superway Pty Ltd [2021] FedCFamC2G 144
Division: Division 2 General Federal Law
Number of paragraphs: 48
Date of hearing: 18 August 2023  
Place: Sydney
Solicitor for the Applicant: Mr C Shamsabad of Solve Legal Pty Ltd
Counsel for the Respondent: Mr I Latham
Solicitor for the Respondent: Priest Legal

ORDERS

SYG 1451 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

FAWZI KHOURY

Applicant
AND:

MACQUARIE AIR PTY LTD ACN 634 239 302

Respondent

ORDER MADE BY:

JUDGE GIVEN

DATE OF ORDER:

3 NOVEMBER 2023

THE COURT ORDERS THAT:

1.The application in a proceeding filed for the respondent on 18 July 2023 is dismissed.

2.The applicant must file and serve any further Amended Statement of Claim, on or by 24 November 2023.

3.The respondent must file and serve any Amended Defence, on or by 15 December 2023.

4.The proceedings are listed for further directions before Judge Given at 9.30am on 19 December 2023 at court 13.1 level 13, 80 William Street, Woolloomooloo.

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)),…

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Details
Case
[2023] FedCFamC2G 992
Decision Date

CaseChat Overview and Summary

In the matter of Khoury v Macquarie Air Pty Ltd, the respondent, Macquarie Air, applied for an order that the applicant, Khoury, provide security for costs in the proceedings. Khoury, a former employee of Macquarie Air, filed a claim for unpaid entitlements and superannuation in the Federal Circuit and Family Court of Australia. The dispute centres around the classification of Khoury's employment and his entitlements, as well as the appropriateness of ordering security for costs under the Fair Work Act 2009 (Cth). The court was required to decide whether there was a tangible prospect that section 570(2)(b) of the Act would be satisfied, which would exempt the applicant from the need to provide security for costs.

The court considered the applicant's residence in the USA and the lack of real property in Australia as factors that might typically support an order for security. However, the court found no evidence that Khoury was impecunious, and noted the general principle that a natural person who has commenced litigation will not be required to provide security merely because they are impecunious. Given that the respondent had not satisfied the court that there was a tangible prospect that section 570(2)(b) of the Act would be met, the application for security for costs was dismissed. The court emphasised that the circumstances in which an applicant should be ordered to provide security for a respondent’s costs in proceedings under the Act are likely to be exceptional.

In light of the above, the court dismissed the application for security for costs and made no order for security. The case underscores the exceptional nature of such orders in proceedings under the Fair Work Act and the importance of demonstrating a tangible prospect of the relevant section being engaged.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The next hearing fixture, being for further directions on 18 August 2023, was ultimately circumvented by the hearing of the application. Each of the parties has filed written submissions in respect of the application. At the hearing of the application the respondent was represented by its Counsel and the applicant was represented by his solicitor. EVIDENCE In support of its application, the respondent has filed the following Affidavits, each of which is deposed by its solicitor: (a)Affidavit of Jeremy Brigden affirmed 17 July 2023 (first Bridgen Affidavit); and (b)Affidavit of Jeremy Brigden affirmed 11 August 2023 (second Bridgen Affidavit). The applicant has filed no evidence to resist the application. By the first Brigden Affidavit, Mr Brigden deposes to: (a)his having practised in litigation for 16 years; (b)searches made of the Australian Securities and Investments Commission (ASIC) which indicate that the applicant holds an interest as a director and shareholder in a company “TRUCKNAVI Pty Ltd”, a current and historical extract for which is also annexed, and additional enquiries made appear to result in there being no records for said company; (c)having undertaken searches of Land Titles Offices which appears to indicate that the applicant does not own any real property in Australia; (d)having reviewed Facebook yielding a page which appears to be that of the applicant which says under a heading “Intro” that he “Lives in Chicago, Illinois”; (e)having reviewed LinkedIn yielding a page which appears to be that of the applicant which describes the applicant as being in “Greater Sydney Area”; (f)having written to the applicant’s solicitors on 13 July 2023 seeking that the applicant agree to pay the security now sought by the application, in order to obviate the filing of same (July letter); and (g)an estimate of the costs (on an ordinary basis) of the respondent defending the instant proceedings which is said to “conservatively” total $57,000.00. The second Brigden Affidavit deposes to the following: (a)the respondent, with the assistance of “an HR expert” undertook a review of payments made to the applicant, and his entitlements as at the date of termination of his employment based on him being classified as a permanent-part time employee. The outcome of that process was that the respondent accepted the applicant is owed: (i)$16,581.44 in outstanding entitlements (factoring in a leave payment already made in the sum of $5,250 and interest on the unpaid balance); and (ii)$1,093.25 in superannuation payments; (the calculations).(b)on 14 April 2023, details of the calculations were sent to the applicant’s solicitor by letter, requesting that the applicant nominate accounts (including any change to his superannuation account fund) to facilitate payment of the amounts the subject of the aforementioned calculations failing which, the amount referred to in [8(a)(i)] would be remitted by cheque sent to the solicitors, and the amount referred to in [8(a)(ii)] would be remitted to the superannuation fund nominated by the applicant in connection with his employment. LEGISLATION

Decision

Reasons for decision

I agree with the observations of Judge Cameron in Zou that, the applicant’s residence in the USA is a matter which would ordinarily weigh strongly in favour of security being ordered. So might the lack of real property in the jurisdiction. However, there was no evidence forthcoming from the respondent that the applicant is in fact impecunious. In the latter regard, I would take into account the general approach that a natural person who has commenced litigation will not be required to provide security for costs merely because they are impecunious: see Elshanawany v Greater Murray Area Health Service [2004] FCA 1272 at [11] per Jacobson J, Kiefel v State of Victoria [2014] FCA 604 at [34] and [51] per Mortimer J (as her Honour then was) and Sheather v Staples Waste Removals Pty Ltd [2012] FCA 998 at [18] per Nicholas J.CONCLUSION In the present matter, while there are factors present which might, in the absence of s 570(2)(b) of the Act being applicable weigh in favour of security being granted, because I am not satisfied on the material before me that at present there is a tangible prospect of s 570(2)(b) being satisfied,[11] the application for security should be refused and the application dismissed. I will so order. [11] See [26] above

Ratio Decidendi

Legal Principle Established

For the applicant it was submitted that while the ASOC was “opaque”, the applicant was employed under a casual employment contract. The applicant points to [5(a)] of the Defence filed for the respondent on 18 July 2023 by which the respondent:Denies paragraph 5(a) of the ASOC, and contends that the applicant was mistakenly described as a casual employee (‘Classification Error’), but was at all times a permanent part time employee subject to regular and fixed hours. as having the effect that the respondent accepts that the applicant was labelled a casual. Consideration There is no doubt as to the restraint cautioned for in the application of s 570 in cases in which security for costs is sought. In Augusta Ventures, the applicant in the proceedings was a representative applicant for a class of persons, whose litigation was being funded by a litigation funder. The primary Judge made an order that the litigation funder pay security for costs, and that the proceedings be stayed if security was not provided. On appeal, the Full Federal Court set the orders aside in circumstances where the potential liability for costs which attached to the representative applicant was governed by s 570 of the Act, there had been no suggestion that the proceedings had been brought other than reasonably (or without reasonable cause) and where the discretion of the litigation funder to pay the security or not would have the potential consequence that the representative applicant (and the class of litigants he represented) would be shut out of the proceedings through no action of their own. Those circumstances are not extant in the instant case which involves no such third-party funder. There are, however, some general observations made in Augusta Ventures which do not turn upon the third-party funding aspect of that case. In particular, at [127], White J said as follows: First, and perhaps most obviously, the circumstances (if any) in which an applicant in proceedings in relation to a matter under the FW Act should be ordered to provide security for a respondent’s costs are likely to be exceptional. An applicant should not ordinarily be required to provide security for costs which, in the absence of unsatisfactory conduct on his or her part, will never be payable. Other than the first instance judgment which was overturned by the Full Federal Court in Augusta Ventures and Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics) [2015] FCCA 2094, the Court has not located any judgment in which security for costs has been ordered in proceedings to which s 570 (or its antecedent) applied. Nor were the parties able to point to any. While that factor does not, in and of itself, resolve the question, it does somewhat underscore the exceptional nature of such an order in proceedings under the Act. While the respondent says that the applicant’s claim to be a casual employee and, consequently in relation to his superannuation is hopeless, what is really demonstrated is that there is a genuine dispute between the parties as to the nature of the applicant’s employment. At such an early stage in proceedings, there is nothing before the Court arising from the ASOC (particularly when read in light of [5(a)] of the Defence) which, infelicity of language aside, would lead the Court to conclude that there is presently a tangible prospect that s 570(2)(b) of the Act is, or would be, engaged on the basis advanced by the respondent.