Lukies v S2V Consulting Pty Ltd
[2018] FCCA 1431
•1 June 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LUKIES v S2V CONSULTING PTY LTD | [2018] FCCA 1431 |
| Catchwords: PRACTICE AND PROCEDURE – Joinder of party – factors for consideration in joinder of a party – consideration of appropriate Court rules as to joinder – whether relevant Federal Court Rule ought to be applied. WORDS AND PHRASES – “necessary” – “must” – “matters in dispute”. |
| Legislation: Corporations Act 2001 (Cth) Fair Work Act 2009 (Cth), Part 2-2, ss.22, 44, 91, 119, 122, 368, 544, 545, 546, 550, 570 Federal Circuit Court of Australia Act 1999 (Cth), ss.3, 14, 23, 42 |
| Cases cited: A Bank v Coleiro & Anor [2011] FamCAFC 157; (2011) 252 FLR 359 Australian Building and Construction Commissioner v Parker [2017] FCA 564; (2017) 266 IR 340 Bognar v Skilled Offshore Pty Ltd & Anor [2016] FCCA 2962; (2016) 315 FLR 364; (2016) 68 AILR 102-721 Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Ltd & Ors [2010] FMCA 932; (2010) 244 FLR 335 |
| Applicant: | GRANT LUKIES |
| Respondent: | S2V CONSULTING PTY LTD (ACN 123 096 819) |
| File Number: | PEG 364 of 2016 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 26 March 2018 |
| Date of Last Submission: | 26 March 2018 |
| Delivered at: | Perth |
| Delivered on: | 1 June 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms K Stewart |
| Solicitors for the Applicant: | Culshaw Miller Lawyers |
| Counsel for the Respondent and the proposed Second Respondent: | Ms L Nickels |
| Solicitors for the Respondent and proposed Second Respondent: | DLA Piper Australia |
ORDERS
Leave is granted to the applicant pursuant to rr.11.01(1) and 11.02(2) of the Federal Circuit Court Rules 2001(Cth) (“FCC Rules”) to join Amec Foster Wheeler as second respondent in the proceedings, and the existing respondent is to be re-designated as the first respondent.
Leave is granted to the applicant to file the Proposed Amended Statement of Claim as filed with the Application in a Case on 21 December 2017, save for the proposed amendments at paragraphs 4(a) to (e), pursuant to r.7.01(1) of the FCC Rules.
The hearing dates set for 5 and 6 June 2018 be vacated.
The first respondent to file and serve any amended Defence by 15 June 2018.
The second respondent to file and serve a Defence by 29 June 2018.
The applicant to file and serve any Amended Reply by 13 July 2018.
The applicant to file and serve any further affidavits by 27 July 2018.
The first respondent to file and serve any further affidavits by 10 August 2018.
The second respondent to file and serve any affidavits by 24 August 2018.
The parties have liberty to apply for further mediation before a Registrar of this Court to be conducted on any date prior to the final hearing date.
The final hearing of the matter be otherwise adjourned to 10.15am on 4 and 5 October 2018.
Costs, if any, reserved.
Liberty to apply to all parties on 2 days’ notice.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 364 of 2016
| GRANT LUKIES |
Applicant
And
| S2V CONSULTING PTY LTD (ACN 123 096 819) |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of an Application in a Case filed 21 December 2017 (“Interlocutory Application”) the applicant, Mr Grant Lukies (“Mr Lukies”) seeks leave, said to be pursuant to rr.7.01 and 7.03 of the Federal Circuit Court Rules 2001 (Cth) (“FCC Rules”), to:
a)join Amec Foster Wheeler Australia Pty Ltd (ACN 008 992 694) (“Amec Foster Wheeler”) to these proceedings as a second respondent; and
b)file an amended Statement of Claim (“Proposed Amended Statement of Claim”) which, amongst other things, seeks to add a claim that Amec Foster Wheeler is accessorially liable for the alleged contraventions of the respondent, S2V Consulting Pty Ltd (ACN 123 096 819) (“S2V Consulting”).
S2V Consulting opposes the Interlocutory Application save that S2V Consulting does not oppose the proposed amendments to [2(a)], [5]-[8] inclusive, [13], [16], and [19]-[31] inclusive of the Proposed Amended Statement of Claim, except to the extent that the proposed amendments include reference to Amec Foster Wheeler as a second respondent. Proposed amendments to [4] were opposed, but are now no longer pressed by Mr Lukies. It follows that the issue which remains to be determined in these proceedings is whether Amec Foster Wheeler is to be joined to these proceedings as a second respondent.
The substantive application filed 11 August 2016 (“Substantive Application”) is an application alleging that:
a)Mr Lukies was terminated from his employment because he was made redundant by S2V Consulting; and
b)S2V Consulting has failed to pay Mr Lukies his redundancy entitlement pursuant to s.119 of the Fair Work Act 2009 (Cth) (“FW Act”). Mr Lukies estimates he is entitled to a redundancy payment of approximately $72, 307.73.
In the Substantive Application:
a)Mr Lukies seeks orders for:
i)payment of his redundancy entitlements;
ii)any other pecuniary penalty orders pursuant to s.546(1) of the FW Act; and
iii)costs; and
b)in response, S2V Consulting denies Mr Lukies is entitled to a redundancy payment.
The Proposed Amended Statement of Claim
In summary, the amendments in the Proposed Amended Statement of Claim are as follows:
a)at [4] are no longer pursued;
b)at [5]:
i)has been corrected to plead that Mr Lukies’ initial position with S2V Consulting was as pleaded by S2V Consulting in its Defence at [2]; and
ii)gives better particulars of the terms of the written agreement pursuant to which Mr Lukies was employed by S2V Consulting (“Employment Agreement”);
c)at [7] and [8] gives further particulars of Mr Lukies’ terms and conditions of employment under the Employment Agreement;
d)at [13] expands particulars already pleaded in relation to the variation of Mr Lukies’ Employment Agreement on 21 April 2016 (“Amended Employment Agreement”);
e)at [14]-[16] pleads with greater specificity the details of, and Mr Lukies’ concerns with (including with whom those concerns were raised), a proposed contract of employment with Amec Foster Wheeler (“Proposed Employment Contract”);
f)at [19] certain matters have been deleted as those matters are pleaded at [20];
g)at [23]-[25] there have been amendments to plead reference to s.122(3) of the FW Act and to the reasons for Mr Lukies claiming that the requirements of s.122(3) of the FW Act were not satisfied;
h)at [27] the amount of redundancy pay claimed has been amended (because the amount previously claimed was calculated in error);
i)at [30]-[31] pleads a contravention of s.44 of the FW Act which is necessary to found Mr Lukies’ claim for a civil penalty to be imposed against S2V Consulting, and which is also necessary to found his application for a civil penalty to be imposed against Amec Foster Wheeler pursuant to s.550(1) of the FW Act; and
j)generally, seeks to add Amec Foster Wheeler as a second respondent.
Factual Background
To the extent necessary for the purposes of the Interlocutory Application, the factual background is as follows:
a)pursuant to the Employment Agreement Mr Lukies, who is a chemical engineer, was employed by S2V Consulting from 25 February 2009 to 14 June 2016;
b)on 15 December 2015 S2V Consulting became a wholly owned subsidiary of Amec Foster Wheeler;
c)between March 2015 and March 2016 Mr Lukies took approximately 140 hours of unpaid leave;
d)in March 2016 S2V Consulting advised employees it wished to renegotiate their employment agreements;
e)on 21 April 2016 Mr Lukies and S2V Consulting agreed on the terms of the Amended Employment Agreement which provided that for one year the terms of Mr Lukies’ Employment Agreement could be varied to:
i)reduce his weekly working hours from 40 hours to 32 hours;
ii)reduce his salary by 20%; and
iii)incorporate a redundancy clause so that if Mr Lukies was made redundant before 1 April 2017 he would receive a payment under s.119 of the FW Act on the basis of his original salary under the Employment Agreement, if otherwise entitled to a redundancy payment (“Redundancy Clause”);
f)in May 2016 S2V Consulting notified Mr Lukies of an intention to transfer his employment to Amec Foster Wheeler (“Proposed Employment Contract”) effective from 1 June 2016;
g)negotiations took place between 24 May 2016 to 13 June 2016, during which time Mr Lukies was on annual leave from 1 June 2016 to 13 June 2016;
h)on Mr Lukies’ return from annual leave he attended a meeting with the Operations Manager and Human Resources Manager of Amec Foster Wheeler;
i)at the meeting he was advised no changes would be made to the Proposed Employment Contract as the Proposed Employment Contract was considered by Amec Foster Wheeler to be on terms and conditions of employment which were no less favourable than the terms and conditions of the Employment Agreement;
j)Mr Lukies was unwilling to, and did not, sign the Proposed Employment Contract; and
k)Mr Lukies was dismissed by letter dated 14 June 2016 and received no redundancy payment.
Litigation history
The earlier litigation history of this matter is as follows:
a)the Originating Application and a Statement of Claim were filed on 11 August 2016;
b)in the Statement of Claim at [5] Mr Lukies alleges that since late 2015 S2V Consulting had been a wholly owned subsidiary of Amec Australia Finance Company Pty Ltd (ACN 138 831 464) (“Amec Finance”);
c)the Statement of Claim at [10] refers to the Amended Employment Agreement, and in the particulars alleges that it was in writing and consisted of a letter dated 20 April 2016 from Ms Pia Engstrom (“Ms Engstrom”), who it was alleged was the “HR Manager” of S2V Consulting and Amec Foster Wheeler;
d)in the Statement of Claim at [12] Mr Lukies alleges that on 23 May 2016 S2V Consulting notified Mr Lukies that S2V Consulting proposed to transfer Mr Lukies’ employment from S2V Consulting to Amec Foster Wheeler, and provided Mr Lukies with a copy of the Proposed Employment Contract;
e)on 7 September 2016 S2V Consulting filed a Defence, and in that Defence says that Amec Foster Wheeler is an associated company to S2V Consulting within the meaning of the Corporations Act 2001 (Cth);
f)on 5 December 2016 orders were made for the filing and service of affidavits upon which the parties intended to rely at hearing, for the filing of objections to affidavit material, and for the filing of submissions, and the matter was listed for final hearing at 10.15am on 5 and 6 June 2018;
g)on 16 January 2017 time for filing of the various affidavits was extended by consent;
h)on 10 February 2017 the affidavits of Martin Burke (“Burke Affidavit”), Matthew Rawlings (“Rawlings Affidavit”) and Mr Lukies (“Lukies Affidavit”) were filed in support of Mr Lukies’ claim;
i)the Burke Affidavit sets out circumstances related to the transfer of Mr Burke’s employment to Amec Foster Wheeler, including his involvement with a HR advisor for Amec Foster Wheeler and the transfer of his employment to Amec Foster Wheeler on 14 June 2016;
j)in the Lukies Affidavit, Mr Lukies:
i)refers to S2V Consulting becoming a wholly owned subsidiary of Amec Finance on or about 15 December 2015: at [11];
ii)says that from about January 2016 the Perth office of S2V Consulting was relocated to the Perth offices of Amec Finance, and many forms and processes were subsequently required to be submitted on Amec Finance forms: at [20]-[22];
iii)says that in relation to proposed changes in his terms and conditions of employment, Mr Lukies arranged to meet with Amec Finance’s HR Manager, Ms Engstrom: at [31];
iv)refers to his being advised on or about 11 or 12 May 2016 at a team meeting that all employees of S2V Consulting would be required to sign new Amec Finance contracts, and that “a decision had been made to move everybody under the umbrella of Amec …. [Finance] and that … [S2V Consulting] would essentially be dissolved at some point in the future”: at [51];
v)says that on 24 May 2016 he received from Ms Robinson (an Amec Finance HR person) the Proposed Employment Contract with Amec Finance: at [57];
vi)says that on 13 June 2016 he met with Mr Hudson, the Operations Manager of Amec Finance, and Ms Engstrom, the HR Manager of Amec Finance, to discuss the Proposed Employment Contract, and at that meeting he indicated he was not prepared to sign the Proposed Employment Contract, and consequently Mr Hudson told him that he would be given notice as soon as possible: at [82]-[85];
vii)says that on 14 June 2016 he was handed a termination letter: at [88]; and
viii)although Mr Lukies refers to Amec Finance throughout the Lukies Affidavit it is apparent (from the other affidavit evidence filed in this matter) that from at least May 2016, and possibly earlier in 2016, it was Amec Foster Wheeler personnel with whom he was interacting and having negotiations concerning the Proposed Employment Contract;
k)on 17 March 2018 the affidavit of Maxwell John Goodwin (“Goodwin Affidavit”) was filed on behalf of S2V Consulting, in which Mr Goodwin says that:
i)he is the General Manager of S2V Consulting, which is a division of Amec Foster Wheeler: at [2(c)];
ii)from mid-2014 to early 2016 S2V Consulting made some significant monthly losses and implemented cost-cutting strategies, including reductions in entitlements and redundancies, and although it returned to profitability in April and May 2016 there were financial benefits to be gained by integrating certain administrative aspects of S2V Consulting with Amec Finance, including efficiencies in relation to invoicing, time writing, human resources, health and safety, payroll and sharing office space, and from a management point of view it made sense to integrate with Amec Finance: at [29]-[32];
iii)the S2V Consulting brand was retained, but was no longer used for contractual purposes: at [33];
iv)in January 2016 S2V Consulting relocated to Amec Foster Wheeler’s offices, and all S2V Consulting employees attended an induction and were provided with Amec Foster Wheeler’s policies: at [35]-[36];
v)S2V Consulting employees were informed of the harmonisation of benefits into their overall remuneration package on 17 March 2016, the harmonisation being the first step in the planned integration of all S2V Consulting staff with Amec Foster Wheeler: at [43];
vi)he agreed to the terms of the Amended Employment Agreement, but made it clear to Mr Lukies that he would have to seek approval from Amec Foster Wheeler, which was subsequently obtained: at [52];
vii)the process of transferring the employment of all S2V Consulting employees to Amec Foster Wheeler began in early May 2016, and on 24 May 2016 Mr Lukies was emailed a copy of the Proposed Employment Contract: at [72]-[73] and [75]; and
viii)Mr Lukies was issued with his employment termination letter on 14 June 2016 “because S2V Consulting was ceasing to operate as a stand-alone business” and that it ceased to operate its payroll function as at 31 May 2016: at [101];
l)on 24 March 2017 the affidavit of Ms Engstrom (“Engstrom Affidavit”) was filed on behalf of S2V Consulting, in which Ms Engstrom:
i)says she was employed by Amec Foster Wheeler as “Human Resources Manager for Australia West” from on or around 9 March 2015 to on or around 30 June 2016, and that she managed the human resources function for the Western Australian operations of Amec Foster Wheeler: at [1]-[2];
ii)says Ms Robinson was a Human Resources Advisor (with Amec Foster Wheeler) who reported to her: at [3];
iii)says S2V Consulting became part of the Amec Foster Group in 2015, but at the time of the acquisition, S2V Consulting did not have a Human Resources team, and in her role as Human Resources Manager Ms Engstrom assisted with the integration of S2V Consulting employees with Amec Foster Wheeler during the first half of 2016: at [4]-[6];
iv)refers to the process in March 2016 whereby S2V Consulting employees’ benefits were intended to be harmonised with those of Amec Foster Wheeler employees, and to meetings, including meetings with Mr Lukies concerning his employment terms and conditions: at [8]-[23];
v)refers to the Amended Employment Contract: at [24]-[25];
vi)refers to the process by which Mr Lukies was offered the Proposed Employment Contract on 24 May 2016: at [26]-[29], and to discussions and correspondence concerning proposed amendments to the Proposed Employment Contract: at [30]-[36];
vii)refers to a meeting on 13 June 2016 with Mr Lukies and Mr Hudson, the Operations Manager of Amec Foster Wheeler, concerning the Proposed Employment Contract: at [38]-[50]; and
viii)says that Mr Lukies did not sign the Proposed Employment Contract and that his employment was terminated by letter dated 14 June 2016 as S2V Consulting was ceasing to operate as a stand-alone business: at [53].
m)the parties having failed to resolve this matter at court ordered mediation, orders were made on 5 December 2016 programming the matter to a final hearing on 5 and 6 June 2018; and
n)on 22 March 2017 consent orders were made extending the time for the filing and service of affidavits by S2V Consulting, and by Mr Lukies in response.
Evidence in relation to the Interlocutory Application
The Interlocutory Application was supported by an affidavit of Mr Lukies’ solicitor, Charles David Clifton affirmed on 18 December 2017 (“Clifton Affidavit”), in which Mr Clifton says at [3]-[12] that:
3. In about October 2017, I read in the media that John Wood Group PLC had completed the acquisition of Amec Foster Wheeler PLC on 9 October 2017 which prompted a review of the claim to assess what impact the acquisition would have on the claim against the Respondent.
4. In November 2017, I conducted a general review of the claim with counsel to ensure that if it required to be amended in any way as result of the acquisition, the amendments would be included well before Trial on 5 - 6 June 2018.
5. On 30 November 2017, I conducted an ASIC search of both Amec Foster Wheeler Australia and Amec Australia Finance Company Ply Ltd (“Amec Australia Finance”) and found that the ultimate holding company of both companies changed from Amec Foster Wheeler PLC to John Wood Group PLC on 9 October 2017.
6. On 1 December 2017, I conducted an ASIC search of the Respondent and found that (unlike Amec Foster Wheeler Australia and Amec Australia Finance) the ultimate holding company of the Respondent had changed from Amec Foster Wheeler PLC to itself on 9 October 2017.
7. Notwithstanding that Amec Australia Finance continues to hold 100% of the shares in the Respondent, it is unclear from the ASIC searches and our enquiries into the operations of the Respondent whether it continues to trade following the acquisition by John Wood Group PLC of Amec Foster Wheeler PLC.
8. When the Applicant filed these proceedings with the Court, it was the Applicant's understanding at the time (based upon the fact that the Respondent continued to trade), that the Respondent would continue to trade in the immediate future and would therefore have sufficient assets to satisfy any judgment without having to include any of the Amec Foster Wheeler group of companies as a respondent.
9. Notwithstanding the issue of whether the Respondent continues to trade, Amec Foster Wheeler Australia and the Respondent were associated entities (within the meaning of section 50AAA (2) of the Corporations Act 2001 (Cth)) when the Applicant's employment with the Respondent was terminated.
10. Further, and in light of the fact that the parties have each now filed their evidence in the proceedings, it appears that Amec Foster Wheeler Australia ultimately made and/or was involved in the decision not to pay the Applicant his redundancy entitlement, which is the subject of these proceedings.
11. The contention that Amec Foster Wheeler Australia appeared to make and/or was involved in the decision not to pay the Applicant redundancy upon terminating his employment is based on the following:
a. The Respondent had been fully acquired by the Amec Foster Wheeler Group before the termination and all employees of the Respondent were either terminated or transferred to Amec Foster Wheeler Australia;
b. The majority of correspondence regarding the transfer of employment was from the Amec Foster Wheeler Australia Human Resources Department (See GRL-24, 25, 26, 27, 28, 29, 30, 36 and 37 of the Affidavit of the Applicant dated 8 February 2017);
c. The Applicant was advised on 13 Jun 2016 in person by Nigel Hudson (Operations Manager of Amec Foster Wheeler Australia) and Pia Engstrom (HR Manager of Amec Foster Wheeler Australia) that his employment with the Respondent was terminated (Paragraph 82-85 of the Affidavit of the Applicant dated 8 February 2017);
12. The Applicant now seeks leave to amend the application to include Amec Foster Wheeler Australia as a respondent pursuant to 550(1) of the Fair Work Act 2009 as a person “involved in” the alleged contravention, and to otherwise amend the statement of claim pursuant to the amended statement of claim annexed to the application.
In opposition to the Interlocutory Application the following evidence was relied upon by S2V Consulting:
a)the Engstrom Affidavit: see [7(l)] above; and
b)the affidavit of Ms Joanne Leveridge affirmed 9 February 2018 (“Leveridge Affidavit”).
In the Leveridge Affidavit, Ms Leveridge, who is a solicitor employed by S2V Consulting’s lawyers, says as follows:
a)Ms Engstrom was now the owner and director of a human resources business in Perth: at [9];
b)it was difficult for Ms Engstrom to find time to assist with the preparation of the Engstrom Affidavit as she also had a young family, ran her business, and was travelling regularly interstate, and was no longer employed by Amec Foster Wheeler: at [8] and [10];
c)that Mr Goodwin ceased employment with S2V Consulting on or about 1 June 2016 and with Amec Foster Wheeler on 17 November 2017, and was now employed full time by Jacobs, a competitor of Amec Foster Wheeler: at [11]-[12];
d)the availability of Ms Engstrom and Mr Goodwin to depose further affidavits was limited, and they no longer had direct access to the documents and records that were available to them in their previous roles: at [13]-[14]; and
e)granting leave may result in prejudice to S2V Consulting in preparing any further affidavits required as evidence: at [15].
Submissions
Mr Lukies’ submissions
In support of the Interlocutory Application, Mr Lukies submitted:
a)provisions in relation to accessorial liability are designed to ensure that persons involved in contravening conduct are held liable for their conduct and to ensure that liability is able to be imposed on persons involved in the contravening conduct insofar as it resulted in a contravention of the legislation: Bognar v Skilled Offshore Pty Ltd & Anor [2016] FCCA 2962; (2016) 315 FLR 364; (2016) 68 AILR 102-721 at [45] per Judge Lucev, citing Devonshire v Magellan Powertronics & Ors [2013] FMCA 207; (2013) 231 IR 198; (2013) 275 FLR 273; (2013) 65 AILR 101-892 AT [84] per Lucev FM (“Devonshire”);
b)Amec Foster Wheeler has undergone ownership changes since these proceedings were commenced and the evidence filed, and as a result of those changes it is unclear whether S2V Consulting continues to trade and to therefore be in a financial position to satisfy any judgment made against it: Clifton Affidavit at [6]-[8];
c)the central issue for the Court to determine in the substantive proceeding will be whether, in the context of a transfer of employment scenario pursuant to s.22(7)(a) of the FW Act, the Proposed Employment Contract was less favourable than Mr Lukies’ terms and conditions of employment with S2V Consulting so that the requirements of s.122(3) of the FW Act were not made out;
d)while a transfer of employment scenario is not of itself sufficient to make Amec Foster Wheeler accessorily liable, evidence which has been filed in these proceedings indicates that it is accessorily liable, therefore granting leave to amend to include Amec Foster Wheeler as a respondent and to plead that Amec Foster Wheeler is accessorily liable for the contravention of s.44 of the FW Act is in the interests of justice;
e)a forensic decision was made prior to filing the statement of claim in these proceedings that there was no need to include Amec Foster Wheeler as a respondent in circumstances where Mr Lukies reasonably believed that S2V Consulting continued to trade and would be in a position to satisfy any judgment made against it, however, that position changed following the acquisition of Amec Foster Wheeler and while the trading position of S2V Consulting is unclear, the Leveridge Affidavit does not allege that S2V Consulting does in fact continue to trade;
f)the Engstrom Affidavit provides a basis on which a finding of accessorial liability against Amec Foster Wheeler can be made, as it states that as Human Resources Manager:
i)part of her role was to assist with the integration between S2V Consulting and Amec Foster Wheeler as S2V Consulting did not have a dedicated human resources team: Engstrom Affidavit at [5]-[6];
ii)she had knowledge of Mr Lukies’ terms and conditions of employment with S2V Consulting: Engstrom Affidavit at [6]-[7], [11] and [24]-[25];
iii)she was aware of the reasons why Mr Lukies objected to the Proposed Employment Contract and has outlined the reasons why Amec Foster Wheeler was not prepared to alter it: Engstrom Affidavit at [33], [35] and [36]- [37]; and
iv)she attended a meeting with Mr Lukies and the then Operations Manager of Amec Foster Wheeler on 13 June 2016 to discuss Mr Lukies’ concerns about the Proposed Employment Contract: Engstrom Affidavit at [38];
g)there is no basis for the Court to conclude that Mr Lukies is not acting in good faith in making the Interlocutory Application or that the grounds for seeking to include Amec Foster Wheeler as a respondent lack merit;
h)pursuing a claim of accessorial liability against Amec Foster Wheeler will ensure satisfaction of any judgment found in Mr Lukies’ favour, and that has obvious utility;
i)the Proposed Amended Statement of Claim proposes to provide further particulars, greater specificity, correct an error in the redundancy amount claimed, and plead the contravention of the FW Act for a civil penalty to be imposed and, if leave is granted to join Amec Foster Wheeler, will plead the cause of action and liability against Amec Foster Wheeler, and there is obvious utility in each of those proposed amendments;
j)the Leveridge Affidavit fails to provide evidence of prejudice to S2V Consulting, and while it is acknowledged that the proposed amendments plead a new cause of action against Amec Foster Wheeler which will require an Amended Defence which will involve some additional cost, the application to amend has been made in good faith and for genuine reasons which are not attributable to Mr Lukies, and does not cause injustice to S2V Consulting; and
k)the Court Orders dated 5 December 2016 state the first pre-trial deadline the parties are required to meet occurs on 8 May 2018, when the parties are required to provide each other with any objections to affidavit material, and if leave for the amendments in the Interlocutory Application is granted any Amended Defence can be prepared and filed within a timescale which will not delay the timetable already set.
S2V Consulting’s submissions
In opposing the Interlocutory Application, S2V Consulting submitted:
a)it is likely to prejudice S2V Consulting by causing a delay in the hearing as it is likely further affidavit material including review of the business records of both S2V Consulting and Amec Foster Wheeler will be required from the two witnesses currently subpoenaed by S2V Consulting, neither of whom remain employed by S2V Consulting or Amec Foster Wheeler, and who therefore no longer have access to the business records of either Amec Foster Wheeler or S2V Consulting: Leveridge Affidavit at [7]-[15];
b)Amec Foster will have less than 10 weeks to prepare its response where those of its employees primarily engaged in dealing with Mr Lukies in respect of the matters alleged are no longer employed by Amec Foster;
c)there has been no satisfactory explanation for the delay in bringing the Interlocutory Application as the intention of S2V Consulting to ultimately cease trading was clear to Mr Lukies, at the earliest, prior to the proceedings being commenced and at the latest by March 2017 when S2V Consulting’s affidavit material was filed;
d)the FCC Rules are silent as to the criteria to be applied when determining whether leave to join a party should be granted or refused, and accordingly, r.9.05 of the FC Rules can be applied insofar as is necessary: FCC Rules, r.1.05(2), and Mr Lukies has offered no evidence or information that S2V Consulting is unable to satisfy a judgment or in support of Amec Foster Wheeler being joined in these proceedings for the purpose of its cooperation in enforcing a judgment against S2V Consulting;
e)joining Amec Foster Wheeler to the proceedings is not necessary to ensure that issues in dispute are heard and finally determined and the question for the Court is whether Mr Lukies’ employer, S2V Consulting, contravened s.44 of the FW Act by failing to pay Mr Lukies a redundancy payment, and assessment and determination of that issue does not require Amec Foster Wheeler to be joined as a respondent to these proceedings, and doing so would be unnecessary;
f)where there is a sale of a business and the subsequent transfer of employment s.91(1) of the FW Act provides that the “old employer” is liable for any applicable pay-outs of entitlements so if Mr Lukies was successful, S2V Consulting, not Amec Foster Wheeler, would be liable to pay the applicable amount; and
g)Mr Lukies’ Proposed Amended Statement of Claim fails to plead as a material fact the act or omission that Amec Foster Wheeler is alleged to have done or failed to do for accessorial liability to be established.
Mr Lukies’ submissions in reply
In reply to the submissions of S2V Consulting Mr Lukies submitted that:
a)no prejudice will be suffered as the affidavits already filed by S2V Consulting address the matters sought to be pleaded;
b)on the issue of delay, S2V Consulting continued to trade at the time proceedings commenced and the evidence filed does not suggest otherwise. Further S2V Consulting confirmed that it is the intention to cease operations entirely, but did not state whether this has in fact occurred;
c)it has been held by this Court that r.11.02(2) of the FCC Rules confers on the Court a broad discretion to decide whether to include a person as a party, and the rules are sufficiently wide to include circumstances provided for in rules of other courts for the joinder of parties who are not necessary parties, and while the provisions of r.9.05 of the Federal Court Rules 2011 (Cth) (“FC Rules”) are of relevance, the Court should not apply that rule and exercise its discretion without having regard to the objects of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”), s.14 of which recognises the obligation to grant such remedies as the Court thinks just, and to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward in the matter;
d)by virtue of the nature of the cause of action pleaded against Amec Foster Wheeler, it arises out of the same contravention in which the current Statement of Claim alleges liability against S2V Consulting, therefore, there is a high degree of overlap and duplicity between the factual and legal issues that arise out of the claim Mr Lukies currently makes against S2V Consulting and the proposed cause of action against Amec Foster Wheeler which advances the purpose set out in s.14 of the FCCA Act, as well as satisfying r.9.05(1)(b)(ii) of the FC Rules;
e)the Proposed Amended Statement of Claim pleads sufficient material facts on which a finding that Amec Foster Wheeler was knowingly concerned in the contravention and was a party to the contravention, within the meaning of s.550(2)(c) of the FW Act, could be made; and
f)alternatively, the Proposed Amended Statement of Claim pleads Amec Foster Wheeler aided, abetted, counselled or procured S2V Consulting’s contravention of s.44 of the FW Act pursuant to s.550(2)(a) of the FW Act.
Consideration
Accessorial liability under s.550 of the FW Act
In considering whether a party ought to have been joined it is necessary to have regard to the provisions of s.550 of the FW Act.
Section 550 of the FW Act provides as follows:
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Mr Lukies seeks to rely on a statement in Devonshire at [84] per Lucev FM that accessorial liability provisions “are designed to ensure … persons involved in contravening conduct … are held liable”. That statement assumes that those persons are named parties, and that if they are named parties involved in contravening conduct that they are held liable. Section 550 of the FW Act does not say who should be a party to an action, or who should be made a party to an action, and it certainly does not mandate that every person alleged to be accessorially liable at any stage of proceedings be made a party to those proceedings. It is, however, a legislative provision which is a factor to be considered when determining whether a person should be named as a party, or joined as a party, and a factor which suggests that if otherwise appropriate a person who is arguably accessorially liable for contravening conduct ought to be joined as a party. To that extent it weighs in favour of joining Amec Foster Wheeler as a party because it was arguably involved in the alleged contravention for reasons set out in greater detail at [68] below.
Legislative provisions concerning joinder – which applies?
The issue of the joinder of a party to proceedings in this Court might be dealt with by reference to various rules of this Court and the Federal Court, including:
a)rules 7.01 and 7.03 of the FCC Rules;
b)rules 11.01 and 11.02 of the FCC Rules; and
c)rule 9.05 of the FC Rules.
It is necessary to deal with rr.7.01 and 7.03 of the FCC Rules as they are the rules pursuant to which Mr Lukies purported to make the Interlocutory Application, and it was not until Mr Lukies Outline of Submissions in Reply was filed that he referred to the rules which deal expressly with joinder, namely rr.11.01 and 11.02 of the FCC Rules. Otherwise, the issue of what rule applies in relation to joinder of a party is not one which has admitted of a consistent answer in proceedings before this Court. The various legislative provisions, and their applicability in the case of joinder, are considered below.
Rules 7.01 and 7.03 of the FCC Rules
Rule 7.01 of the FCC Rules provides as follows:
(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.
Rule 7.03 of the FCC Rules provides as follows:
(1) This rule applies if an application in a general federal law proceeding for leave to make an amendment is made after the end of a relevant period of limitation current at the date when the proceeding was started.
(2) The Court may give leave to make an amendment correcting the name of a party, even if it is alleged that the effect would be to substitute a new party, if:
(a) the Court considers it appropriate; and
(b) the Court is satisfied that the mistake sought to be corrected was genuine and was not misleading or such as to cause reasonable doubt as to the identity of the party.
(3) …
(4) The Court may give leave to make an amendment even if the effect is to include a new cause of action, if:
(a) the Court considers it appropriate; and
(b) the new cause of action arises out of the same, or substantially the same, facts as a cause of action for which relief has already been claimed in the proceeding by the party seeking leave to amend.
Rules 7.01 and 7.03 of the FCC Rules are the rules under which the Interlocutory Application seeks the Court’s leave to amend the Statement of Claim, and in particular to add Amec Foster Wheeler as second respondent.
The Court has held that when determining if it should exercise its discretion pursuant to rr.7.01 and 7.03 of the FCC Rules to allow an amendment the Court should consider:
a)the interests of justice when considering the nature of the proposed amendment;
b)whether the party seeking the amendment is acting in good faith and not unnecessarily delaying proceedings;
c)whether the amendment sought and grounds for the amendment would be “obviously futile”;
d)whether any injustice, with particular focus on the stage in which the proceedings are at, cannot be adequately compensated for; and
e)the question of case management (with particular reference to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14 at [30] per French CJ and [97]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ).
See Pietrobon v BMD Constructions Pty Ltd & Ors [2017] FCCA 1730; Cai v Tiy Loy & Co Ltd (No 2) [2015] FCCA 2924 at [27] per Judge Manousaridis; Fair Work Ombudsman v Nerd Group Australia Pty Ltd [2010] FMCA 569; (2010) 197 IR 431 (“Nerd Group Australia”) at [19] per Lucev FM. In each of the above cases no issue of joinder was raised.
In Nerd Group Australia at [16]-[18] per Lucev FM this Court observed that the power given to the Court under r.7.01(1) of the FCC Rules:
a)has been described as one which is “extensive”: SZGTE v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 443 (“SZGTE”) at [33] per Graham J, from which an application for special leave to appeal was refused by the High Court: SZGTE v Minister for Immigration & Multicultural Affairs [2006] HCATrans 639;
b)a “general power”: Lydiard Financial Services Pty Ltd v Moran [2006] FMCA 1341 (“Lydiard”) at [43] per Riley FM, from which an appeal was dismissed in Moran v Lydiard Finance Services Pty Ltd [2007] FCA 872, in which Riley FM’s findings at [43] of Lydiard were not dealt with;
c)one upon which there is “no qualification”: Vijayakumar v Qantas Airways Ltd [2009] FMCA 736; (2009) 233 FLR 369 (“Vijayakumar”) at [42] per Scarlett FM, from which an application for leave to appeal was dismissed by the Federal Court in Vijayakumar v Qantas Airways Ltd [2009] FCA 1121;
d)which is capable of exercise at any stage of proceedings, although earlier is better than later: SZGTE at [34] per Graham J;
e)is not to be used to substitute an applicant for an existing applicant who lacks standing to bring the proceedings generally: Donnelly v Prentice [2003] FMCA 50; (2003) 1 ABC(NS) 205 (“Donnelly”), and in which it was said that the rule “would permit the amendment of an application to substitute a different applicant for the applicant initially instituting the proceedings, just as they could be used to substitute a different respondent”: Donnelly at [6] per Driver FM, save where the proceedings are instituted by a person who lacks standing to bring them: Donnelly at [7] per Driver FM; and
f)is clearly a discretionary one: SZGTE at [36] per Graham J.
Absent any other applicable rule, r.7.01(1) of the FCC Rules is sufficiently broad to be capable of being used to both amend generally, but also specifically to amend to include a party to proceedings by way of an amendment to a pleading. There are, however, no criteria set out as a basis for doing so (as there are in r.9.05 of the FC Rules: see [71] below).
Rule 7.01(2) of the FCC Rules is not applicable in the circumstances of this case, as it only deals with a new cause of action arising after proceedings had commenced. The accessorial liability of Amec Foster Wheeler was a potential cause of action that existed at the time the proceedings commenced and which, therefore, is not a cause of action which has arisen since the proceedings commenced. The cause of action against Amec Foster Wheeler was not pleaded at the time the proceedings commenced by reason of a forensic decision made on behalf of Mr Lukies, and thus while the amendment to include Amec Foster Wheeler as a respondent has the effect of adding a new cause of action, it is not a new cause of action in respect to which an amendment could be granted pursuant to r.7.01(2) of the FCC Rules.
Rule 7.03 of the FCC Rules relates to amendments made for which leave is sought after the end of a period of limitation current at the time the proceedings commenced. Rule 7.03 only applies in specific circumstances, and under r.7.03(2) of the FCC Rules, to “correct” the name of a party even if it is alleged that the correction has the effect of substituting a new party. That is not this case: in this case Mr Lukies seeks to add a new party, not to correct the name of an old or named party, and thereby to add a new cause of action. Rule 7.03(3) deals with the capacities in which parties appear in the proceedings and amendments related to that. Again, that is not this case. Rule 7.03(4) of the FCC Rules deals with leave to include a new cause of action, but not a new party.
On the basis of the plain meaning of rr.7.01 and 7.03 of the FCC Rules it would appear that only r.7.01(1) of the FCC Rules might be used to grant leave to include a new party by way of amendment to the Statement of Claim, but as noted above: see [24] above, it provides no criteria as a basis for doing so. The effect of r.7.01(1) of the FCC Rules is however subject to any other FCC Rules, and in this case rr.11.01 and 11.02 of the FCC Rules in particular which expressly deal with the issue of joinder (or inclusion) of parties to proceedings in this Court. The Court notes that there is, however, no direct inconsistency between r.7.01(1) and rr.11.01 and 11.02 of the FCC Rules.
Rules 11.01 and 11.02 of the FCC Rules
Rule 11.01 of the FCC Rules provides as follows:
(1) Subject to any order of the Court, a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding.
(2) The Court may require a person to be included as a party.
(3) A person required to be included as an applicant who does not consent to be included may be included as a respondent.
(4) The Court may decide a proceeding even if a person is incorrectly included or not included as a party.
Rule 11.02 of the FCC Rules provides as follows:
(1) A party to a proceeding may include any person as a party by:
(a) naming the person as a party in the application, response or reply; and
(b) serving on the person a copy of the application, response or reply and all other relevant documents filed in the proceeding.
(2) A party may not include a person as a party after the first court date without the leave of the Court.
(3) The Court may at any time order a party who has included a person as a party to file and serve on each other party in the proceeding an affidavit setting out the basis on which the person has been included.
When referring to rr.11.01 and 11.02 of the FCC Rules in Wayne & Dillon & Anor [2008] FamCAFC 204; (2008) 40 Fam LR 543 (“Wayne”) at [18]-[19] per Warnick J a single judge of the Family Court of Australia sitting as the Full Court of the Family Court of Australia observed that:
[18] The word “necessary” in rule 11.01(1) must mean something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.
[19] However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute”. Thus, in an application such as was before the Federal Magistrate, such a question falls for consideration.
Rules 11.01 and 11.02 of the FCC Rules were considered by the Federal Magistrates Court in the context of the approach to be taken to applications for joinder in McLaren v Retail Information Systems Pty Ltd [2011] FMCA 716 (“Retail Information Systems”) at [12] and [14]-[15] per Barnes FM where it was said that:
12. The applicant requires the leave of the court to join Mr Best as a party afer the first court date (see r.11.02(2) of the Federal Magistrates Court Rules 2001 (Cth)). He sought to rely on the court’s power to allow an amendment to any document under r.7.01 of the Rules as well as r.11.01(1) which provides that, subject to any order of the court, “a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding”.
14. Whether or not to grant the leave sought in this case is a matter within the discretion of the court having regard to all the circumstances of the case. The discretion to join a new party is “a wide one” (see Apotex Pty Ltd (ACN 096 916 148) v Les Laboratoires Servier and Others (No 4) (2010) 89 IPR 274; [2010] FCA 1202 at [8]). It is relevant to have regard to the objects of the Federal Magistrates Act 1999 (Cth) in s.3, the requirement in s.42 that in proceedings before it the court “must proceed without undue formality and must endeavour to ensure that the proceedings are not protracted” and the objects of the Rules (see r.1.03) (see Hogan v Riley & Ors [2008] FMCA 794 at [7] – [12]). As Lucev FM pointed out in Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd & Anor (No.4) [2009] FMCA 291 at [31], read together these provisions make it apparent that this court is intended to operate in as informal a manner as possible in the exercise of judicial power, that it is not to be protracted in its proceedings, that it is to resolve proceedings justly, efficiently and economically using streamlined procedures and that it is to avoid undue delay, expense and technicality.
15. Section 14 of the Federal Magistrates Act is of particular relevance. It recognises the obligation on the court to grant such remedies as the court thinks just “to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible”, all matters in controversy between the parties “may be completely and finally determined” and, importantly “all multiplicity of proceedings concerning any of those matters may be avoided”. This provision in similar to s.22 of the Federal Court of Australia Act 1976 (Cth) which, as the Full Court of the Federal Court observed in McLeish v Faure (1979) 25 ALR 403; [1979] FCA 38 at 413, is to be “construed liberally in order to achieve the object of the Act in attempting to prevent the necessity of a multiplicity of legal proceedings to be entered into by a party seeking relief”.
In Retail Information Systems there was no discussion in relation to the specific terms of rr.11.01 and 11.02 of the FCC Rules, and how, pursuant to rr.11.01 and 11.02 of the FCC Rules a person might be joined (or included) as a party to proceedings.
In Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488 (“Endeavour Industries”) the Federal Magistrates Court was dealing with an application to join three additional respondents to a substantive application alleging breaches of the FW Act. In Endeavour Industries the Federal Magistrates Court held that r.11.01(1) of the FCC Rules (as they now are) required the Court to consider whether a person was a “necessary” party, and that in order to determine whether the person was a “necessary” party the Court had to consider whether the orders sought in the proceedings would directly affect that person’s rights against, or liabilities to, a party in a proceeding, citing News Ltd & Ors v Australian Rugby Football League Ltd & Ors (1996) 64 FCR 410; (1996) 139 ALR 193; (1996) 21 ACSR 635; (1996) 35 IPR 446; [1996] ATPR 41-521, FCR at 523-525 per Lockhart, von Doussa and Sackville JJ (“News Ltd”). In Endeavour Industries the Federal Magistrates Court accepted a submission from the proposed parties that they were not necessary parties to the proceedings for the purposes of the relief sought, observing at [12] per Jarrett FM as follows:
In my view it cannot be said that the proposed parties are “necessary” parties to the present proceedings. The Court may grant the relief sought by Ms Benjamin against the respondent and it may do so without affecting any rights or liabilities possessed by it against the proposed parties, or they against it. The proposed parties are not “necessary” parties for the purposes of FMCR 11.01 [r.11.01 of the FCC Rules as they now are] and their joinder under that rule should be, and is, refused.
The Court notes that the same submission is put by S2V Consulting and Amec Foster Wheeler in these proceedings: as to which see [64] below.
In Endeavour Industries the Federal Magistrates Court went on, however, to consider what is now r.11.02 of the FCC Rules, observing at [13] per Jarrett FM that under r.11.02(1) of the FCC Rules:
a party may include another party to a proceeding in certain circumstances, notwithstanding that they may not be a necessary party for the purposes of … [FCC Rule 11.01].
In Endeavour Industries at [15] per Jarrett FM the Federal Magistrates Court observed that r.11.02(2) of the FCC Rules “reposes in the Court an unfettered discretion to grant leave to join a party which, no doubt, needs to be exercised judicially.” Considerations relevant to the exercise of the discretion, not intended to be exhaustive, were said to include the following: Endeavour Industries at [16] per Jarrett FM:
a)the purpose of the joinder;
b)any delay in making the application for the joinder and the explanation for that delay; and
c)whether any relevant period of limitation has passed.
In Endeavour Industries at [17] per Jarrett FM, the Federal Magistrates Court also held that the applicant for joinder must demonstrate a prima facie case against the proposed respondent to justify the joinder, citing, amongst other cases, Wayne at [17] per Warnick J, observing that because Wayne was a decision of the Full Court of the Family Court of Australia on appeal from the Federal Magistrates Court it was binding on that Court (and by extension upon this Court). It suffices, for present purposes, to note that in Wayne at [17] per Warnick J the Full Court of the Family Court in fact said that an applicant for joinder must demonstrate a case which is “arguable”, not a prima facie case.
The scheme of rr.11.01 and 11.02 of the FW Act was considered in Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Anor [2016] FCCA 2499 (“Northcoast Securities Services”) where it was said at [7]-[8] per Judge Manousaridis (with footnotes omitted) as follows:
7. The rules governing the joinder of persons as parties to a proceeding brought in this Court are contained in Division 11.1 of Part 11 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules). The scheme of Division 11.1 is as follows. First, a party may include a person as a party to the proceeding before the first court date by naming that person as a party in the application, or response, or reply, and serving a copy of the application, response, or reply on the person named. The Court may, however, at any time, require the party who has so named a person as a party to file and serve on each other party in the proceeding an affidavit setting out the basis on which the person has been included. Second, after the first court date, a party may apply for an order to join a person as a party who had not, before the first court date, been included as a party in an application, response, or reply. That follows from r.11.02(2) of the FCC Rules which provides that a person may not include a person as a party after the first court date without the leave of the Court. Third, subject to any order of the Court, a person “whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding”, and the Court may “require a person to be included as a party”. Fourth, a person who is not a party may apply to be included as a party to a proceeding. That person must support his or her application with an affidavit stating his or her interests in the proceeding or any matter in dispute between the person applying and the existing parties, and the orders, if any, such person will seek if he or she were to be included as a party.
8. It will be seen that these rules, and in particular r.11.02(2) of the FCC Rules, confer on the Court a broad discretion to decide whether to include a person as a party. The discretion is certainly broader than permitting the Court to order the joinder of “necessary” parties, as that expression has been understood in the cases. The rules are at the very least sufficiently wide to include circumstances provided for in rules of other courts for the joinder of parties who are not necessary parties. One such set of circumstances would be where all rights of relief that are claimed against the person that is sought to be joined arise out of the same transaction or event or series of events that give rise to the claims for relief the person seeking the joinder has against an existing party.
In Northcoast Securities Services at [11] per Judge Manousaridis it was also said that it was relevant to consider whether the applicant has a sufficiently arguable case against the person sought to be joined as a respondent to justify the joinder. That is seemingly consistent with what was said in Wayne at [17] per Warnick J: see [36] above.
In Lewin v Lewin [2014] FamCAFC 15; (2014) 283 FLR 53 (“Lewin”) a single Judge of the Family Court of Australia sitting as the Full Court of the Family Court of Australia was dealing with an application for leave to appeal from orders of the then Federal Magistrates Court joining the mother of the wife to property settlement proceedings between a husband and wife, in which it was alleged that the Federal Magistrates Court erred in making an order joining the wife’s mother, and also erred in law by doing so without first giving notice to the wife’s mother that there was an application for joinder.
In Lewin the Full Court of the Family Court set out its understanding of the FCC Rules concerning joinder at [15]-[16] per Ainslie-Wallace J as follows:
15. The Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) provide that any person who is “necessary” to the “complete and final determination” of all matters in dispute in a proceeding must be included in the proceeding. A plain reading of the FCC Rules makes it clear that the term “included” there used means joined as a party.
16. Rule 11.02 provides that a party may include another person as a party by naming the person as a party in the application and by serving on that person a copy of the application.
The Full Court of the Family Court noted that it was not suggested that the wife’s mother could not have been joined as a party to the proceedings with the wife from the outset: Lewin at [19] per Ainslie-Wallace J.
The Full Court of the Family Court in Lewin at [20]-[21] per Ainslie-Wallace J then made further observations on the FCC Rules as follows:
20. The FCC Rules clearly contemplate that before a matter can commence the moving party must file an application which nominates other parties. A nominated person becomes a party after being included in a filed application and on the application being served on that person (r 11.02).
21. Obviously the FCC Rules do not contemplate nor require a person who will be included as a party to proceedings be notified before the application is filed in order to be given an opportunity to appear and be heard in relation to whether he or she is to be joined as a party.
The Full Court of the Family Court dismissed the application, which was for leave to appeal, and in so doing observed that it was not necessary that notice be given of any amended application to join a party to proceedings under the FCC Rules: Lewin at [30] per Ainslie-Wallace J.
In Chien v Minister for Immigration & Citizenship [2013] FCAFC 124 (“Chien”) a delegate of the Minister had granted citizenship to a child who was a citizen of Taiwan without consulting the child’s father. When the father sought judicial review of that decision in his own name the then Federal Magistrates Court determined to join the child as a party to the application for judicial review, and sought that a litigation guardian be appointed for the child: Chien at [2]-[4] per Collier, Logan and Rangiah JJ.
The grounds of judicial review included that the Minister had breached the rules of natural justice in making the decision to grant the child citizenship by failing to consult with the father or seek his consent as the person with parental responsibility for the child, and that the decision was induced or affected by fraud because there was no disclosure to the Minister at the time the citizenship application was lodged that the child was living in Taiwan with the father: Chien at [12] per Collier, Logan and Rangiah JJ.
The Full Court of the Federal Court refused leave to appeal on the basis that the decision of the Federal Magistrates Court was an interlocutory decision for which leave was required and that leave should be refused: Chien at [34] per Collier, Logan and Rangiah JJ.
The Full Court of the Federal Court observed in Chien at [41]-[44] per Collier, Logan and Rangiah JJ as follows:
41 At [19]-[51] his Honour discussed, in considerable detail, principles relevant to the joinder of a party and the appointment of a litigation guardian. In particular, his Honour considered (and applied) the reasoning of the Full Court in News Ltd v The Australian Rugby Football League Ltd (1996) 64 FCR 410 at 524, 525 where the Court explained that:
An order which directly affects a third person's rights against or liabilities to a party should not be made unless the person is also joined as a party. If made, the order will be set aside …
…
The test involves matters of degree, and ultimately judgment, having regard to the practical realities of the case, and the nature and value of the rights and liabilities of the third party which might be directly affected. The requirement that a third party's rights against, or liability to, any party to the proceedings be directly affected is an important qualification that recognises that many orders of a court are likely to affect other people to a greater or lesser extent. This is particularly so with remedies in the nature of an injunction: see Silktone Pty Ltd v Devreal Capital Pty Ltd (1990) 21 NSWLR 317 at 322 per Kirby P. The requirement of a direct effect on rights or liabilities differentiates the case where a person ought to be joined, from other cases where the effect of the order on non-parties can be characterised as only indirect or consequential.
(Emphasis added.)
42 In this case it is not in dispute that Mr Chien had commenced proceedings in his own right. The subject of the application for judicial review before his Honour was the Australian citizenship of the child Joseph. While Counsel for Mr Chien submitted that there was no evidence before the Court that the child was seized of rights arising from his Australian citizenship, such a submission ignores a plethora of rights which exist as a matter of law, having regard to the statutory rights which attach to Australian citizens including the right to vote (s 93 Commonwealth Electoral Act 1928 (Cth)), the right to hold an Australian passport (s 7 Australian Passports Act 2005 (Cth)), the right to stand for Federal Parliament (s 163 Commonwealth Electoral Act 1928 (Cth), subject to s 44 of The Constitution) and the right to work in the Australian public service (s 22 Public Service Act 1999 (Cth)). Indeed, Counsel for Mr Chien conceded that the child Joseph was presently entitled to these rights (transcript p 18 ll 14-15).
43 French J (as his Honour then was) observed in Minister for Immigration and Multicultural Affairs v Perth City Mission [1999] FCA 670 that an application for a visa directly affects the applicants, who are entitled to be joined to proceedings concerning that application. Similar principles apply in relation to a citizen in respect of a Ministerial decision to confer that citizenship. Nothing could be clearer than that an application to quash a decision conferring citizenship upon Joseph affects Joseph’s rights.
44 In this light, a submission that his Honour erred in finding that the child Joseph was directly affected by the proceedings, and therefore was a necessary party to the application commenced by Mr Chien for the purposes of r 11.01(1) of the Federal Circuit Court Rules, cannot be sustained.
In A Bank v Coleiro & Anor [2011] FamCAFC 157; (2011) 252 FLR 359 (“Coleiro”) the Full Court of the Family Court dealt with an appeal from the Federal Magistrates Court in relation to the joinder of a bank to family law proceedings, the appeal being on the basis that the bank had been denied natural justice or procedural fairness in not being put on notice of the proposed joinder or given an opportunity to make submissions in relation to it, and it was also contended that the bank was not a necessary party to the proceedings for the purposes of r.11.01(1) of what are now the FCC Rules.
The Full Court of the Family Court found that the issues to be dealt with in relation to the bank could have been dealt with under a subpoena duces tecum which had been issued requiring the bank to produce certain documentation. The bank had produced certain documents, but seemingly not all of the documents, in response to the subpoena, and the Full Court of the Family Court further found that what was required was nothing more than for the wife in the proceedings to raise with the presiding judicial officer a claim that the bank had not complied with the subpoena and that further documents should be produced, and that that issue could have been dealt with by way of a further order of the Court rather than joining the bank to the proceedings which was neither appropriate nor necessary at that point: Coleiro at [122]-[123] and [131] per Finn and Strickland JJ (with whom Bryant CJ agreed).
In Simpson v Carroll Resources Pty Ltd [2016] FCCA 2430 (“Simpson”), the respondent sought to add a second respondent, being the general manager of the respondent, after the general manager had given evidence on the second day of the hearing to the effect that he had no involvement in making the decision to terminate the employee who was the applicant in the proceedings: Simpson at [4]-[5] and [7] per Judge Wilson. The joinder application was said to be made under r.11.01 of the FCC Rules, but the written submissions relied instead on r.11.02(2) of the FCC Rules, and called in aid r.9.05 of the FC Rules: Simpson at [25]-[26] per Judge Wilson. The Court’s rationale in Simpson does not depend in any way upon the terms of r.11.01 of the FCC Rules. The Court observed that r.11.02 of the FCC Rules and r.9.05 of the FC Rules were similar insofar as they both related to joining parties, but otherwise r.9.05 of the FC Rules differed markedly to r.11.02 of the FCC Rules: Simpson at [26] per Judge Wilson. Having referred to r.1.05 of the FCC Rules the Court then observed as follows in Simpson at [28] per Judge Wilson:
In this case, the provisions of r.11.02(2) of the Federal Circuit Court Rules are insufficient (as that word appears in r.1.05 of the Federal Circuit Court Rules) because r.11.02 merely provides for the addition of a party but not the basis for the grant of such an order. In my view, r.9.05 of the Federal Court Rules addresses the question of joinder in a manner that is of greater sufficiency and appropriateness (to use the words of r.1.05 of the Federal Circuit Court Rules) than is the operative provision of r.11.02(2) and so I have applied the criteria of r.9.05 of the Federal Court Rules in this application.
In Simpson the application for joinder was refused on several bases, including:
a)that the denial of involvement in the decision-making said to constitute an alleged change of position by the former general manager of the respondent was not in fact a change of position in relation to his involvement in the termination of the applicant: Simpson at [33]-[45] per Judge Wilson;
b)that the application was made far too late, especially in circumstances where the evidence was consistent with the proposed respondent having been involved in the lead-up to the termination of the applicant’s employment, and the question was therefore why the application for joinder was brought on the second day of the trial: Simpson at [49] per Judge Wilson; and
c)that granting the application would cause real prejudice, particularly in terms of costs, to the applicant: Simpson at [50] per Judge Wilson, with the Court also observing that the applicant ought not be penalised whilst “skirmishes between respondents are at full pitch”, and that the applicant should not have to suffer “at the hands of the respondent keen on tactical manoeuvring”: Simpson at [52] and [53] per Judge Wilson, and that the prejudice to the applicant could not be adequately addressed by a costs order: Simpson at [67] per Judge Wilson.
It is apparent that rr.11.01 and 11.02 of the FCC Rules provide separate bases for a party to be joined to proceedings in this Court, as was found expressly in Endeavour Industries at [12] and [13] per Jarrett FM, and as might be implied from Simpson at [25]-[26] per Judge Wilson.
It is therefore necessary when considering an application for joinder in this Court to determine if the application is made on the basis of r.11.01 or r.11.02 or both rr.11.01 and 11.02 of the FCC Rules. It is necessary to do so because plainly different tests apply for joinder under r.11.01 and r.11.02 of the FCC Rules.
In this case it is seemingly the case that the application for joinder was originally made pursuant to r.7.01 (and perhaps r.7.03) of the FCC Rules, and it was not until Mr Lukies’ submissions in reply were filed that it was observed that joinder of persons as parties to proceedings in this Court was dealt with in Div.11.1 of Pt.11 of the FCC Rules, and in particular rr.11.01 and 11.02 of the FCC Rules.
There is a difficulty in this case in that no amendment was made to the Interlocutory Application to indicate whether it was made pursuant to r.11.01 of the FCC Rules or r.11.02 of the FCC Rules, and the applicant says little more about r.11.01 than that it is “of relevance”: Lukies’ Outline of Submissions in Reply at [7]. Mr Lukies appears to have then argued that the matter ought to be primarily determined under r.11.02 of the FCC Rules, and in particular r.11.02(2) of the FCC Rules, and in that regard Mr Lukies opposed the submission of S2V Consulting contending for the application of r.9.05 of the FC Rules when determining the matter pursuant to r.11.02 of the FCC Rules.
To the extent necessary the Court can dispense with formalities in this regard: FCCA Act, s.3; FCC Rules, r.1.03, and treat the application as one made for joinder under rr.11.01 and 11.02 of the FCC Rules.
Rule 11.01(1) of the FCC Rules provides that “a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding”. That is “subject to any order of the Court”. In this case there is no order of the Court which would presently affect the Court dealing with the application for joinder other than as prescribed by the remainder of r.11.01(1) of the FCC Rules, and it is difficult to imagine that, other than in the most exceptional circumstances (which are not evident in this case), there would be any order of the Court requiring that r.11.01(1) of the FCC Rules not otherwise be applied.
In considering r.11.01(1) of the FCC Rules it is necessary to consider whether a person’s participation is “necessary for the Court to completely and finally determine all matters in dispute in a proceeding”. If that participation is “necessary”, then that person “must be included as a party in the proceeding”.
It is pertinent to observe that the use of “must” imposes certain obligations.
The Federal Court in Wang v Minister for Immigration & Multicultural Affairs (1997) 71 FCR 386; (1997) 151 ALR 717; (1997) 45 ALD 104, FCR at 391 per Merkel J (“Wang”) held that “must” is a word of absolute obligation, and went on to observe that “[s]uch an interpretation also accords with the principle that enactments requiring that a specified procedure be followed in courts are usually mandatory and not merely directory”: Wang FCR at 391 per Merkel J. The Federal Court cited:
a)Posner v Collector for Inter-state Destitute Persons (Vic) (1946) 74 CLR 461 (“Posner”) where one High Court Justice observed that “must” was a word of “absolute obligation” when used in legislation requiring personal service on a party: Posner at 490 per Williams J; and
b)Kosovich v Mancini (1982) 31 SASR 272 (“Kosovich”) where the South Australian Supreme Court was dealing with road transport legislation which provided that the mass of a vehicle “must be determined in accordance with the regulations”, and in relation to which it was observed that the phrase “must be determined” imposed an “obligation which cannot be regarded as directory only” and that the use of “must” in ordinary language was “imperative”: Kosovich at 275 per Millhouse J.
Other examples of federal courts finding that the use of “must” is indicative of an imperative command and that it expresses necessity in the sense of an obligation or requirement include Australian Fisheries Management Authority v PW Adams Pty Ltd (1995) 61 FCR 314; (1995) 22 AAR 261; (1995) 134 ALR 51; (1995) 39 ALD 481; FCR at 332 per Sheppard J (with whom Tamberlin J FCR at 334 and Lehane J FCR at 336 agreed); Hill v Compass Ten Pty Ltd [2012] FCA 761; (2012) 205 FCR 94; (2012) 223 IR 341; (2012) 64 AILR 101-672 at [29]-[31] per Cowdroy J; Pitrau v Barrick Mining Services Pty Ltd [2012] FMCA 186; (2012) 259 FLR 447; (2012) 219 IR 208; (2012) 64 AILR 101-563 at [23] per Lucev FM, and Gration v Remote King & Anor [2015] FCCA 2617; (2015) 302 FLR 53 at [31] per Judge Jones.
It is therefore necessary to determine whether the participation of Amec Foster Wheeler is necessary for the Court to completely and finally determine all matters in dispute in these proceedings. The phrase “all matters in dispute” has been held to be one of wide import and one not to be narrowly construed: Fina Research SA v Halliburton Energy Services Inc [2002] FCA 1281 at [5] per Moore J.
The provisions of r.11.01(1) of the FCC Rules are similar to those of r.9.05(1)(b)(ii) of the FC Rules. The difference would appear to be that the application of r.9.05(1) of the FC Rules is discretionary because of the use of the word “may” in the chapeau, whereas in r.11.01(1) of the FCC Rules if the condition as to participation of a person being necessary is met then the obligation to include them appears to be mandatory.
Neither of the parties or the proposed second respondent referred the Court to a most helpful judgment of the Full Court of the Federal Court in John Holland Pty Ltd v Comcare [2009] FCAFC 127; (2009) 190 IR 165; (2009) 260 ALR 106; (2009) 112 ALD 405 (“John Holland”) in which the Full Court of the Federal Court dealt with an application for leave to appeal from a decision of a single Federal Court Judge joining John Holland Pty Ltd (“John Holland”) to an action to which John Holland Rail Pty Ltd (“John Holland Rail”) was already respondent in civil penalty proceedings under Commonwealth occupational health and safety legislation in which there was a dispute as to whether John Holland or John Holland Rail were the occupiers of the relevant premises (and therefore liable for the breach of Commonwealth occupational health and safety legislation). The primary Judge joined John Holland as a respondent on the basis that there was a plea from John Holland Rail that it was not the occupier, but rather John Holland was the occupier. That led John Holland to submit on the application for leave to appeal that the applicant’s (Comcare’s) pursuit of an order that John Holland Rail pay to the Commonwealth a pecuniary penalty could have been effectually and completely determined and adjudicated upon without the joinder of John Holland. Effectively, the same submission is put in these proceedings by S2V Consulting. The same submission was put, and acceded to by the Federal Magistrates Court, in Endeavour Industries at [12] per Jarrett FM. In John Holland that submission was said by the Full Court of the Federal Court to be one which “propounds a narrow construction of the words “all matters in dispute in the proceeding””: John Holland at [19] per Sundberg, Edmonds and Tracey JJ, which were the words used in O 6, r.8(1)(b) of the Federal Court Rules 1976 (Cth) (“1976 FC Rules”). The Full Court of the Federal Court in John Holland at [19]-[24] per Sundberg, Edmonds and Tracey JJ, then went on to say, in a lengthy passage which is worth repeating, as follows:
19 …That reading of par (b) does not accord with the construction that has for a very long time been given to par (b) and its predecessors.
20 In Munro & Company v O’Hanlon (1889) 15 VLR 300 the Full Court of the Supreme Court of Victoria dealt with an earlier form of the second limb of r 8(1)(b) (O 16, r 11 of the Supreme Court Rules) which spoke of the joinder of any parties “whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the cause or matter”. In that case the plaintiff sued O’Hanlon for calls on shares of which he was the registered holder. O’Hanlon pleaded infancy, and in his answers to interrogatories stated that he had never bought the shares, but that they had been bought by one Moffatt, in whose office he was employed as a clerk, and that the shares had been transferred in his (O’Hanlon’s) name. The primary judge refused the plaintiff’s application to join Moffatt as a defendant. The Full Court upheld the plaintiff’s appeal. Higinbotham CJ said at 304-305:
What are the questions involved in any particular case when an application like this is made? In the present case we conceive that the particular question raised in the action originally commenced between the plaintiff and O’Hanlon is: “Who is liable to pay the calls to the plaintiff?”…
The words “question involved in cause or matter” have been the subject of legal decisions, and we think that these decisions show that these words include something more than the words “questions in the action”.
His Honour referred to Edward v Lowther (1876) 34 LT 255, which he said showed that not only may a claim against a new defendant be a claim involved in the cause or matter as between the plaintiff and the original defendant, but it may raise a claim although it be inconsistent with the claim as between the original parties. The Chief Justice referred to other cases to the same effect, and concluded:
Now, the questions involved in this action being: “Who is liable to pay to the plaintiff the amount of these calls?” and the plaintiff having the right to bring his action originally in the alternative form against either the registered holder of the shares or the person who is not registered, but who may be liable for damages for his acts in connection with his shares, we think that these are questions which require for their settlement the addition of the defendant Moffatt.
Holroyd J’s reasons were to the same effect. Kerferd J concurred.
21 Munro & Co 15 VLR 300 has been applied in many cases since. Birtles v Commonwealth [1960] VLR 247 is a well-known example. There Adam J rejected the contention that “all the questions involved” in O 16, r 11 meant the very questions raised in the action upon the answers to which depended the liability or otherwise of the original defendants; that the defendant to be added must be directly affected in the enjoyment of his legal rights by the order sought by the plaintiff in the action against the original defendant. Adam J adopted the construction that questions involved in an existing action included:
questions arising out of the transaction or series of transactions on which the cause of action was based. These would include the question whether, if the original defendant is not liable to compensate the plaintiff for damage suffered by him, some other person proposed to be added may be considered liable in the circumstances.
22 It will be observed that the construction Adam J rejected is John Holland’s very submission recorded at [19].
23 The wording of O 6, r 8(b) is not exactly the same as that in Munro & Co 15 VLR 300 and Birtles. Rule 8(b) employs the words “all matters in dispute” rather than “all questions involved”. But later cases on rules the same as r 8(b) have applied the earlier Victorian cases. Thus in Qantas Airways Ltd v AF Little Pty Ltd [1981] 2 NSWLR 34 at 38 Glass JA, with whom Samuels J agreed, said that where a plaintiff seeks to add a defendant:
the phrase “all matters in dispute in the proceedings” should not be construed as limited to matters arising on the existing pleadings. It may also properly include those disputed issues of fact which are subjacent to the pleadings. For present purposes the phrase in my opinion includes questions such as whose default caused the instability of the structure and who is liable to the plaintiff in damages for such instability. When the plaintiff asserts on tenable grounds that such matters of dispute cannot be completely determined without the joinder of the builder as a party, a ground for the exercise of the power given by r 8 is made out.
The observations of Mahoney JA at 54 are to the same effect.
24 The same approach has been taken by Supreme Courts in Queensland and Western Australia: Black v Houghton [1968] Qd R 179 and National Companies and Securities Commission v Monsoon Nominees Pty Ltd (No 3) (1990) 3 ACSR 491.
Having regard to:
a)the evident intent behind s.550 of the FW Act that persons involved in contraventions be able to be held liable for such contraventions;
b)the nature of the allegations made in the Proposed Amended Statement of Claim raise a sufficiently arguable case of accessorial liability on the part of Amec Foster Wheeler (a conclusion reinforced as to the issue of sufficient arguability by the evidence already tendered on behalf of the parties); and
c)the fact that lawyers acting prudently would have joined Amec Foster Wheeler as a respondent at the outset of these proceedings, irrespective of the financial position of S2V Consulting,
it follows that Amec Foster Wheeler ought to have been joined as a party to these proceedings at the outset of these proceedings, and on that basis it would be an appropriate exercise of the Court’s discretion under r.9.05(1)(a) of the FC Rules, for Amec Foster Wheeler to be joined as a party to these proceedings.
Cooperation required to enforce a judgment
Rule 9.05(b)(i) of the FC Rules provides that a person may be joined as a party to the proceeding if their cooperation might be required to enforce a judgment.
The arguments concerning Amec Foster Wheeler undergoing ownership control changes, and the effect of those changes on S2V Consulting, and the allegation by Mr Lukies that there might be an inability to pay on the part of S2V Consulting any sum by way of compensation or penalty, or that S2V Consulting is no longer trading, need to be considered in their proper context.
In Deputy Commissioner of Taxation v Hua Wang Bank Berhad & Ors [2010] FCA 1014; (2010) 80 ATR 449; (2010) 273 ALR 194 (“Hua Wang Bank Berhad”) the Federal Court, albeit in the context of the test for dissipation of assets upon an application for a Mareva injunction, made the following observations about the nature of the evidence required in relation to a possible dissipation of assets the ultimate effect of which would be to leave no or insufficient assets in the jurisdiction to facilitate payment of any award (which in a broad sense of S2V Consulting possibly having no or insufficient assets to pay any compensation or penalty is what appears to be alleged here). In Hua Wang Bank Berhad the Federal Court said as follows at [11]-[12] per Kenny J:
11 The existence of the danger, so the Commissioner argues in this case, is to be inferred from the evidence. Relying on the law as stated in Biscoe, the Commissioner apparently accepts that “… solid evidence is required”: see Biscoe (at 210 [6.20]), quoting a passage from the judgment of Mustill J in Ninemia Maritime, saying:
It is not enough for the plaintiff to assert a risk that the assets will be dissipated. He must demonstrate this by solid evidence. This evidence may take a number of different forms. It may consist of direct evidence that the defendant has previously acted in a way which shows that his probity is not to be relied on. Or the plaintiff may show what type of company the defendant is (where it is incorporated, what are its corporate structure and assets, and so on) so as to raise an inference that the company is not to be relied on. Or again, the plaintiff may be able to found his case on the fact that the inquiries about the characteristics of the defendant have led to a blank wall. Precisely what form the evidence take will depend on the particular circumstances of the case. But the evidence must always be there. Mere proof that the company is incorporated abroad, accompanied by the allegation that there are no reachable assets in the United Kingdom apart from those which it is sought to enjoin, will not be enough. (Emphasis added.)
12 The fact that assets within the jurisdiction are moveable, and that the respondent is incorporated outside the jurisdiction is not enough to warrant an inferential finding of danger of dissipation. Rather, there must be facts from which, to quote Lawton LJ in Third Chandris Shipping Corporation v Unimarine SA [1979] QB 645 at 671 “a prudent, sensible commercial” person can “properly infer a danger of default if assets are removed from the jurisdiction.” In this connection, Lawton LJ also said (at 672):
In my judgment an affidavit in support of a Mareva injunction should give enough particulars of the plaintiff’s case to enable the court to assess its strength and should set out what inquiries have been made about the defendant’s business and what information has been revealed, including that relating to its size, origins, business domicile, the location of its known assets and the circumstances in which the dispute has arisen. These facts should enable a commercial judge to infer whether there is likely to be any real risk of default. Default is most unlikely if the defendant is a long-established, well-known foreign corporation or is known to have substantial assets in countries where English judgments can easily be enforced either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) or otherwise. But if nothing can be found about the defendant, that in itself may be enough to justify a Mareva injunction.
See also Chandris (at 669) per Lord Denning MR, Raukura Moana Fisheries Ltd v The Ship Irina Zharkikh [2001] 2 NZLR 801 at 827 [122] per Young J, Hadid v Lenfest Communications Inc (1996) 67 FCR 446 at 449 per Lehane J and Reches Pty Ltd v Tadiran Pty Ltd (1998) 85 FCR 514 at 518; 155 ALR 478 at 482 per Lehane J. In Reches, Lehane J declined to grant a Mareva injunction where the respondent, though a foreign corporation that would remove or deplete its sole asset in Australia in the ordinary course of business, was “a major and profitable corporation with very substantial assets;” there was nothing to suggest that the respondent was likely to default; and the respondent resided and principally carried on business in a jurisdiction where enforcement was possible under a reciprocal regime for the registration of judgments.
In this case:
a)there is:
i)no evidence that S2V Consulting is no longer trading, and the highest that it can be put on the evidence for Mr Lukies is that it is “unclear” if S2V Consulting is still trading;
ii)in the circumstances set out in (i) above, there was no necessity for S2V Consulting or Amec Foster Wheeler to lead evidence as to the trading position of S2V Consulting, as Mr Lukies’ evidence did not rise to a sufficient level to require S2V Consulting to lead evidence as to its trading position;
iii)some evidence that at some stage S2V Consulting might cease to trade, but there is no evidence that it has done so, or that it is likely to do so in the near future; and
iv)insufficient evidence for the Court to draw any conclusion or inference about S2V Consulting’s trading position, and whether it is arguable that they are no longer trading;
b)there is no evidence at all as to the financial position of S2V Consulting, and whether it currently has, or will have in the future, the capacity to pay compensation or penalties, if ordered to do so by the Court;
c)it was evident from at least May 2016 that Amec Foster Wheeler were “in control” of the human resource functions at S2V Consulting, and the payroll function at S2V Consulting from at least the end of May 2016, and in that respect nothing appears to have changed since that time;
d)at the very least it would have, or should have, been evident to Mr Lukies from the time of the filing of the Goodwin and Engstrom Affidavits on 17 March 2017 and 24 March 2017 respectively that S2V Consulting and Amec Foster Wheeler had integrated certain functions, notably human resources and payroll, and that there was a possibility that S2V Consulting might cease trading at some future point in time;
e)the changes in the corporate structures and ultimate holding companies for S2V Consulting and Amec Foster Wheeler do not evidence an inability to pay on the part of S2V Consulting if compensation or penalties are ordered to be paid by it by the Court; and
f)the mere status of a company as a parent or holding company, or a major or only shareholder in another company, is not sufficient of itself to impose accessorial liability.
On the evidence as it stands it cannot be said that the changes in ownership, corporate structure and general control changes (save for human resources and payroll), or the trading and financial position of S2V Consulting, weigh in favour of the addition of Amec Foster Wheeler as a party to these proceedings on the basis that Amec Foster Wheeler’s cooperation might be required to enforce a judgment. Otherwise, there is no evidentiary basis to support the addition of Amec Foster Wheeler as a party to these proceedings on the basis that its cooperation might be required to enforce a judgment.
In the Court’s view there is no basis upon which it can be said that Amec Foster Wheeler’s cooperation might be required to enforce a judgment in these proceedings, and therefore no basis for joining them as a party to the proceeding under r.9.05(1)(b)(i) of the FC Rules.
Necessary to ensure each issue in dispute able to be heard and finally determined
Rule 9.05(1)(b)(ii) of the FC Rules refers to the joinder of persons where it is “necessary to ensure that each issue in dispute in the proceeding is able to be heard and finally determined”.
For practical purposes the meaning to be given to this phrase in r.9.05(1)(b)(ii) of the FC Rules is the same as that given to the phrase “necessary for the court to completely and finally determine all matters in dispute in the proceeding” in r.11.01(1) of the FCC Rules, and which is discussed above at [57]-[68], with particular reference to the judgment of the Full Court of the Federal Court in John Holland, and for the same reasons as there set out the Court is of the view that Amec Foster Wheeler ought to be joined to these proceedings as the second respondent.
Avoidance of multiplicity of proceedings
Rule 9.05(1)(b)(iii) of the FC Rules deals with the avoidance of multiplicity of proceedings.
In Australian Consumer & Competition Commission v Launceston Superstore Pty Ltd [2013] FCA 297; [2013] ATPR 42-436 the Federal Court also observed as follows at [31]-[35] per Edmonds J:
31 I agree with the respondents' submissions that the general principles guiding the exercise of the Court's discretion under former Federal Court Rule O 6 r 2(b) are relevant to guiding the exercise of the Court's discretion under Rule 9.05(1)(b)(iii).
32 In Robin Bishop v Bridgelands Securities Ltd and John Hyla Preston [1990] FCA 410, the Court stated at [14]:
(a) Regard should be had to the “desirability of limiting, so far as practicable, the costs and delay of the litigation”;
(b) “differences between the evidence intended to be relied upon in support of the claims … [may] make it inexpedient to join the claims”.
33 In Cheque One Pty Ltd v Cheque Exchange (Aust) Pty Ltd (in liq) [2002] FCA 593, the Court stated at [20] and [21] that where there should be separate hearings of various claims, this will be a factor against ordering a joinder.
34 In Knight v Beyond Properties Pty Ltd & Ors (No.2 ) (2006) FCA 192 the Court stated at [30] that the inconvenience of a respondent having to “participate in a hearing in which a substantial number of issues and a substantial part of the evidence would be of no concern of theirs, it must be weighed against the inconvenience to an applicant of having to prove [the common aspects of its claims] in separate proceedings”.
35 In CBI Contractors Pty Ltd v Abbott [No.2][2009] FCA 1129 the Court stated at [32] that:
“The Court's task in giving leave is to identify the advantages and the disadvantages to the parties as a whole in terms of the efficient use of the Court's resources, having regard to the commonality of issues raised by each claim and to the Court's ability to case manage the proceedings so as to minimise disadvantages.”
In Simpson at [65] per Judge Wilson this Court observed that no claim against a person whom the Court declined to join as a respondent gave rise to an estoppel which precluded that person from bringing further proceedings. The point made in Simpson was that there was the possibility of multiple proceedings still being brought in respect of a person not joined as a respondent: Simpson at [65] per Judge Wilson. The Court notes that there was no specific consideration of the provisions of r.9.05(1)(b)(iii) of the FC Rules which have as their purpose the avoidance of multiplicity of proceedings. Nor was there any consideration of s.14 of the FCCA Act, which provides as follows:
In every matter before the Federal Circuit Court of Australia, the Federal Circuit Court of Australia must grant, either:
(a) absolutely; or
(b) on such terms and conditions as the Federal Circuit Court of Australia thinks just;
all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible:
(c) all matters in controversy between the parties may be completely and finally determined; and
(d) all multiplicity of proceedings concerning any of those matters may be avoided.
The Court also observes that in Devonshire at [85] per Lucev FM the following was said:
Under a provision which provides for accessorial liability for breach of civil remedy provisions action may be taken against accessories without taking action against the principal: Australian Competition and Consumer Commission v Black on White Pty Ltd & Ors (2001) 110 FCR 1 at 14 per Spender J; [2001] FCA 187 at para.51 per Spender J. An action may continue against an accessory when discontinued against a principal: Torpia v Empire Printing (Australia) Pty Ltd (2009) 188 IR 306 at 319 per Barnes FM; [2009] FMCA 853 at para.65 per Barnes FM. An accessory may also be liable where a company has been deregistered: Fair Work Ombudsman v Proplas Industries Pty Ltd & Anor and Fair Work Ombudsman v Blacklight Investments Pty Ltd & Anor [2011] FMCA 506 at paras.21-26 per Lucev FM.
It is therefore plain that even if there was a refusal by this Court to join Amec Foster Wheeler, the possibility exists of Mr Lukies initiating new proceedings in relation to Amec Foster Wheeler. Those proceedings would no doubt be strenuously opposed, and there might be various technical and procedural points taken, and the proceedings might or might not be stymied by technical and procedural points which might be taken, and such further proceedings might or might not be successful. All of that is to make the point that this is an obvious case in which to join a respondent who might otherwise be the subject of the initiation of separate proceedings which would deal with the same issues and evidence, and which could be avoided by joining Amec Foster Wheeler to these proceedings at this time, consistent with the intent of r.9.05(1)(b)(iii) of the FC Rules, and s.14 of the FCCA Act.
In the Court’s view there is, therefore, a proper basis for joining Amec Foster Wheeler as a party to these proceedings under r.9.05(1)(b)(iii) of the FC Rules.
Other matters
Case management and delay
For reasons set out above: see [63] and [72] above, a decision to join a person as a party to proceedings in this Court pursuant to r.9.05(1) of the FC Rules is a discretionary one, as is the discretion exercised under r.11.02(2) of the FCC Rules (incorporating therein the discretion arising from r.9.05(1) of the FC Rules). The exercise of that discretion might also be influenced by other factors, particularly issues such as case management and delay. In that regard, the Court has observed, in the context of the provisions of ss.3 and 42 of the FCCA Act, and r.1.03 of the FCC Rules as follows:
Read together the objects of the FM Act in s.3, the mode of operation in s.42, and having regard to the objects of the FMC Rules in r.1.03, it is apparent that the Court is intended to operate in a manner:
(a) as informal as possible in the exercise of judicial power;
(b) which is not protracted in its proceedings;
(c)which resolves proceedings justly, efficiently and economically;
(d) uses streamlined procedures; and
(e) avoids undue delay, expense and technicality.
Devonshire at [34] per Judge Lucev.
In relation to case management issues it is apparent that if the application for joinder were to be granted there may be a necessity for S2V Consulting to file an amended Defence (also if leave is granted to file the proposed amended Statement of Claim). Likewise, there will also need to be a Defence filed by Amec Foster Wheeler. Notwithstanding what is said by Mr Lukies as to the matter being arguable on the basis of the evidence already submitted it is plain that a party in respect of whom a contravention is alleged by way of accessorial liability, when it was not previously alleged, is entitled to, and may wish to put on, their own evidence in relation to any alleged contraventions and in any Amended Defence must be given that opportunity. Depending upon the issues raised there may then need to be an Amended Reply filed by Mr Lukies, and evidence or further evidence filed by all parties.
Having regard to the fact that s.23(1) of the FCCA Act places an obligation on the Court to advise the parties to use a dispute resolution process which the Court considers may help the parties resolve the dispute, there is also the possibility that there will be a need for further mediation in these proceedings: Broad Spectrum Training Pty Ltd & Ors v Bidding Buzz Ltd & Ors [2010] FMCA 932; (2010) 244 FLR 335 at [44] per Judge Lucev.
Given that the matter was listed for hearing for two days on 5 and 6 June 2018, and had been so listed since 5 December 2016, it was never going to be practicable for the necessary programming orders to be made and to be complied with within the time from the hearing of this Interlocutory Application to the time at which the hearing of the matter had been listed, particularly in circumstances where as at the time of the Interlocutory Application there were more than 600 active applications in the presiding Judge’s docket, and significant listings between the date of the Interlocutory Application being heard and the final hearing date which had been set more than 15 months previously. The above case management issues weigh against the granting of leave to add Amec Foster Wheeler as a second respondent.
The Court must also take account of the delay in making the Interlocutory Application. It is evident from the Clifton Affidavit that on an unspecified date in October 2017 Mr Clifton read a press article referring to the acquisition of Amec Foster Wheeler by the Wood Group, an acquisition which had apparently been completed on 9 October 2017. Further, on that same unspecified date Mr Clifton’s search of the ASIC company database indicated that S2V Consulting appeared to have become its own ultimate holding company. It was then not until sometime in November 2017 that Mr Clifton conducted what is described as “a general review of the claim with counsel to ensure that if it required to be amended in any way as a result of the acquisition, the amendments would be included well before Trial on 5-6 June 2018”: Clifton Affidavit at [4]. There is no evidence as to what precisely transpired as a result of the consultations with Counsel. On 30 November 2017 and 1 December 2017, so at least one month, and seemingly probably more, after Mr Clifton had become aware that the Wood Group had acquired Amec Foster Wheeler, Mr Clifton conducted various ASIC searches and found on 1 December 2017 that S2V Consulting had become its own ultimate holding company: Clifton Affidavit at [6]-[7]. The Interlocutory Application was then not filed until 21 December 2017, a timeframe which effectively precluded the matter being dealt with until after the Christmas break, and thus it came before the Court for mention on 2 February 2018. That mention was adjourned and the parties consented to orders for the Interlocutory Application to be set down for hearing with the parties to provide unavailable dates. Consequently, the hearing of the Interlocutory Application was set down for 26 March 2018. As may be evident from the length of these Reasons for Judgment, and the fact that it has taken about nine weeks to prepare and deliver them, both because of the nature of the issues to be dealt with, and the nature of other applications, hearings and judgments with which the Court has had to deal during that period, the delay by those acting on behalf of Mr Lukies has been significant in terms of the overall case management of the proceedings.
It is evident from the facts set out above that:
a)there was a delay, the precise period of which it is not possible to determine, between Mr Clifton reading about the acquisition in October 2017 and having a general review of the claim with Counsel in November 2017;
b)there was then a further delay before ASIC searches were conducted on 30 November 2017 and 1 December 2017; and
c)a still further delay until 21 December 2017 when, three weeks after the ASIC search had been conducted, and possibly anywhere between three and seven weeks after Counsel had been consulted, and possibly anywhere between seven and 10 weeks after Mr Clifton had read about the acquisition, the Interlocutory Application seeking to amend the Statement of Claim was filed, at a time at which Mr Lukies’ lawyers must have known there would then be further delays.
The conduct of Mr Lukies and Mr Lukies’ lawyers in relation to the Proposed Amended Statement of Claim, and in particular the time that it took for action to be taken by way of the making of the Interlocutory Application, and the fact that the Interlocutory Application was then made at a time which engendered further delay, exhibited no sense of urgency on the part of Mr Lukies in relation to the filing of the Interlocutory Application to amend the Statement of Claim. As such, that factor must weigh in the balance against exercising any discretion to grant leave to file the Proposed Amended Statement of Claim.
Ordinarily, any delay caused by having to add a further respondent and take the necessary procedural steps set out above would have resulted in this hearing having to be adjourned until at least May 2020. There is, however, a two day hearing slot available on 4 and 5 October 2018 in to which this matter can be listed, and in respect of which the relevant procedural orders can be tailored to facilitate such a listing. It follows from that that whilst the case management and delay issues still weigh against leave being granted to join Amec Foster Wheeler, the weight to be given to that issue is not as great as it might otherwise have been.
The Court is also cognizant of the submission on behalf of S2V Consulting that if further evidence is required from, in particular, Mr Goodwin and Ms Engstrom, there may be difficulties in obtaining that evidence. In the Court’s view those difficulties are overstated: the two witnesses concerned both reside in Perth, and can both be subpoenaed (as they already have been), to attend any future final hearing. Furthermore, the fact that people are in employment, or now working for a competitor, or are running small businesses, or have busy family lives, cannot be given too much weight as they are no more than the ordinary incidents of everyday life for those who are working or running a small business or have a family, or one or more of those things. It follows that the Court places little weight on those matters in relation to the exercise of its discretion as to whether Amec Foster Wheeler ought to be added as a second respondent to the proceedings.
Granting leave to join a further respondent will no doubt incur further costs in these proceedings. It is relevant to observe that generally speaking because of the provision of s.570 of the FW Act proceedings of this type are no costs proceedings. But, for reasons set out above, it might be that whilst further costs are incurred in these proceedings as a result of any joinder of Amec Foster Wheeler, if Amec Foster Wheeler are not joined, there may be additional costs in other separate proceedings which might be brought by Mr Lukies: see [89]-[91] above. One arguably balances the other. In the circumstances, whilst the issue of costs does weigh against the grant of leave to join Amec Foster Wheeler, it does not do so to any significant degree.
The case management and delay issues do weigh against the exercise of the Court’s discretion to grant leave for Amec Foster Wheeler to be joined as a second respondent, but not so heavily as to outweigh those discretionary matters which weigh in favour of joinder under the criteria in r.9.05(1) of the FC Rules.
Orders that may be made under s.545 of the FW Act
In Northcoast Securities Services at [10] per Judge Manousaridis reference was made to the “[a]lso relevant” judgment of the Court in Fair Work Ombudsman v Step Ahead Security Services Pty Ltd & Anor [2016] FCCA 1482 (“Step Ahead Security Services”) at [69] and [70] per Judge Jarrett where it was said that:
69. But should the Court make the orders sought against Mr Jennings? The discretion conferred by s.545(1) is plainly unfettered but, no doubt, must be exercised judicially. In that respect, it seems to me that the following matters are likely to be relevant matters for consideration in most cases:
a) whether such an order is unnecessary given the capacity of the employer to make the compensation payments;
b) the nature and extent of the accessory’s involvement in the contravention;
c) any relevant public policy reasons; and
d) the nature of the order sought, including whether the accessory is to be made solely liable, or jointly liable.
70. That list is not intended to be exhaustive. It will vary from case to case depending on the circumstances of each.
Section 545(1) and (2) of the FW Act provides as follows:
(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(c) an order for reinstatement of a person.
To the extent that Northcoast Security Services might suggest that Step Ahead Security Services is authority for the proposition that s.545(1) of the FW Act can be used as a relevant basis for the grant of an order for joinder the Court, as presently constituted, does not consider that to be the case. It is plain that s.545(1) requires a finding that a person “has contravened, or proposes to contravene, a civil remedy provision” before the discretion to make an order under s.545(1) (and it follows s.545(2)) of the FW Act has any work to do. Section 545(1) and (2) of the FW Act is simply not intended to deal with orders on interlocutory procedural issues, but rather with orders on the substantive question of whether there has been a contravention, or perhaps on an injunction application, as to whether a party proposes to contravene, a civil remedy provision.
Section 91 of the FW Act
S2V Consulting submitted that there should be no joinder of Amec Foster Wheeler as a party on the basis that where there is a sale of business and the subsequent transfer of employment, s.91(1) of the FW Act, read with s.122(1) of the FW Act, provides for the “old” employer, in this case S2V Consulting, to be liable for any applicable payout of entitlements where an employee of the “old” employer, S2V Consulting, elects not to transfer their employment to the putative “new” employer, Amec Foster Wheeler: Respondent’s Outline of Submissions at [16]-[17]. Even if that be a correct interpretation of the provisions of the FW Act, and that is open to doubt, the submission misses the point. On the case as presently pleaded it is sufficiently arguable that Amec Foster Wheeler was engaged in conduct which resulted in, or led to, the alleged contravention by S2V Consulting. In those circumstances, even if the liability to pay compensation for any proven contravention is restricted to S2V Consulting, the accessorial liability provisions are still broad enough to allow for an argument that if Amec Foster Wheeler was accessorially liable for the contravention as alleged, then that conduct should attract, at least, some form of penalty independent of any obligation on any other party to pay compensation for the alleged failure to make a redundancy payment to Mr Lukies. For the above reasons this submission by S2V Consulting can be disregarded for present purposes.
Conclusion and exercise of discretion in relation to joinder
Having weighed the various criteria in relation to r.9.05(1) of the FC Rules discussed above, and the various other matters also discussed above, the Court is of the view that leave can be granted pursuant to r.11.02(2) of the FCC Rules for Mr Lukies to join Amec Foster Wheeler as a second respondent to the proceedings.
In arriving at the above conclusion the Court is aware of, and has had regard to, the proximity in which these orders are being made to the current hearing dates, and the effect of the vacation of those hearing dates at such late notice.
Conclusion and orders
The Court has concluded that:
a)leave is to be granted pursuant to rr.11.01(1) and 11.02(2) of the FCC Rules for Mr Lukies to join Amec Foster Wheeler as a second respondent in the proceedings;
b)pursuant to r.7.01 of the FCC Rules leave is granted to Mr Lukies to file the Proposed Amended Statement of Claim making the other amendments to the Statement of Claim, save for the proposed amendments at [4(a) to (e)];
c)the hearing dates set for 5 and 6 June 2018 be vacated;
d)further procedural directions are necessary, and in that regard there will be orders for:
i)Amec Foster Wheeler to file a Defence;
ii)S2V Consulting to file any Amended Defence;
iii)Mr Lukies to file any Amended Reply;
iv)Mr Lukies to file any further affidavits;
v)S2V Consulting to file any further affidavits;
vi)Amec Foster Wheeler to file any affidavits; and
vii)the parties to have liberty to apply for further mediation before a Registrar of this Court to be conducted on any date prior to the revised final hearing date;
e)the steps in (i) to (vii) above are to be undertaken within a timeframe to facilitate the revised final hearing date referred to in (f) below;
f)the final hearing of the matter is to be adjourned to dates to be fixed in October 2018.
On the face of it this is a no costs matter: FW Act, s.570(1). If, however, any party considers that they might be entitled to costs: FW Act, s.570(2), that is a matter which the Court proposes to address at the finalisation of the liability, and penalty (if any) hearings. Therefore, there will be an order that costs, if any, be reserved. There will also be liberty to apply.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 1 June 2018
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