Mr Leylan Neep v Garda Capital Limited

[2019] FWC 4560

[2019] FWC 4560

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

Mr Leylan Neep
v
Garda Capital Limited
(C2019/2228)

DEPUTY PRESIDENT CROSS SYDNEY, 1 JULY 2019

Application for recusal – right of a party to object to a Member arbitrating a matter once they have been involved in conciliation – question of whether application to amend application to correct an error made with respect to the legal name of the Respondent involves exercise of arbitration power.

Application to deal with contraventions involving dismissal – application to amend application to correct an error made with respect to the legal name of the Respondent – application granted.

[1] This decision concerns an application made on 29 April, 2019, by Mr Leylan Neep (“the Applicant”) for the Fair Work Commission (“the Commission”) to amend his general protections application pursuant to s.586 of the Fair Work Act 2009 (“the Act”) to correct an error made with respect to the legal name of the Respondent (“the Application”).

[2] This decision also concerns an application made on 17 May, 2019, by the Respondent that I exercise my discretion to not hear and decide the Application on 11 June, 2019 (“the Recusal Application”).

The Relevant Facts

[3] Brief evidence was received from the Applicant, the Applicant’s Solicitor, the Solicitor for the Respondent, and Mr Lachlan Davidson, who was the Company Secretary and General Counsel for GARDA Capital Group. There were no real disputes in the evidence, which outlined that the relevant factual background to the Applicant’s employment, and the filing of the Application, was as follows:

(a) On 3 July, 2012, the Applicant was employed by Opus Services Pty Ltd as Chief Financial Officer and Company Secretary. His employment contract was on “Opus Capital Group” letterhead.

(b) The entity of Opus Services Pty Ltd changed its name to GARDA Services Pty Ltd (ACN 109 910 894) (“GARDA Services”) on 6 May, 2015. From that point onwards the Applicant was employed by GARDA Services. In addition to his role as Chief Financial Officer and Company Secretary for GARDA Services, the Applicant was a director of GARDA Services from 31 July, 2014, to 18 March, 2019.

(c) GARDA Services is a 100% subsidiary of GARDA Capital Limited (ACN 095 039 366) (“GCL”). GARDA Capital Group (“GARDA Capital”) is the name under which the entities trade but is not a legal entity. It is a stapled security comprising of shares in GCL and units in GARDA Capital Trust (ARSN 150 164 790).

(d) GARDA Services was the only entity during the relevant period that employed employees.

(e) The Applicant had specific and detailed knowledge of the relevant entities, including the identity of the employing entity, by virtue of not only his employed position as Chief Financial Officer, but further gained through the discharge of his duties as the Company Secretary of GARDA Services, and from 31 July 2014 until his termination, as Director of GARDA Services.

(f) In the performance of his role as the Chief Financial Officer, the Applicant's duties included financial reporting, including statutory accounts, and signing off the payroll run, historically and on a fortnightly basis.

(g) The Applicant’s pay slips, including his final pay slip, provided on 25 March, 2019 (11 days prior to filing his general protections application), show GARDA Services as the employer. The Applicant's PAYG Summary for 1 July, 2017 to 30 June, 2018 also identified the payer's name as GARDA Services.

(h) On 11 March, 2019, the Applicant received e-mails from Lachlan Davidson that related to his employment. Mr Davidson’s email address, and all other addresses, conclude with “@gardacapital.com.au”. There were also what appeared to be automatic signature and address blocks at the base of Mr Davidson’s emails that identified “GARDA Capital Group”.

(i) On 11 March, 2019, the Applicant’s Solicitor sent a letter addressed to “Garda Capital Group” for the attention of Mr Davidson. That letter asserted that the Applicant had exercised a workplace right, and that any adverse action against the Applicant would contravene Part 3-1 of the Act.

(j) On 11 March, 2019, Mr Davidson responded to the above correspondence. He, curiously, referred to “Mr Madsen of my client…” notwithstanding that Mr Madsen was his co-worker, and referred generically three times to an entity as “GARDA”.

(k) On 15 March, 2019, the Applicant and his Solicitor received his termination letter. That letter contained a letterhead of “GARDA Capital Group”, and was signed by “Matthew Madsen, Executive Chairman, GARDA Capital Group”.

(l) The Applicant’s Solicitor thereafter drafted the Form F8 application in relation to general protections for the Applicant intending to name the Applicant’s employer as the Respondent. She states that she named GARDA Capital as the Respondent because she mistakenly believed it to be the employing entity after performing an ABN search for “GARDA Capital”.

(m) The Applicant’s Form F8 application in relation to general protections was filed on 4 April, 2019. The contraventions of the Act alleged were said to relate to s.340 - protection, s.344 - undue influence or pressure, and s.351 - discrimination on the ground of a physical or mental disability.

(n) The Respondent’s Form 8A response was filed on 16 April, 2019, which, if service of the Form F8 was effected on 4 April, 2019, would have been five (5) days late. No issue regarding late response was taken.

(o) On 16 April, 2019, Mr Hodgens of M&K Lawyers Group wrote to the Applicant’s Solicitor. Mr Hodgens inter alia:

(i) Stated that he acted for GARDA Capital, and attached a Form F8A response;

(ii) Stated that GARDA Capital was never the employer of the Applicant;

(iii) Stated “We and our client trust that the proceedings have not been deliberately commenced against the wrong entity…”.

(iv) Foreshadowed resistance to any application to amend and that reliance would be had on Sinden v HDR Inc T/A HDR [2018] FWC 5643 (though I note that an appeal of that decision had been upheld on 21 November, 2018, almost five months earlier);

(v) Advised that his client reserved the right to seek costs against the Applicant; and

(vi) Suggested that the Applicant’s Solicitor “…contact your insurer without delay”.

That letter concluded with a request for withdrawal of the Form 8 application, and a reservation of rights to seek costs on an indemnity basis against the Applicant, the firm of solicitors acting for the Applicant, and the Applicant’s Solicitor personally should an application to amend be made.

(p) Later that day, 16 April, 2019, the Applicant’s Solicitor applied to the Commission by e-mail, seeking to amend the name of the Respondent in this matter. The Respondent replied to that e-mail and stated that application ought be denied because of its factual similarity to Lili Sinden v HDR Inc. T/A HDR [2018] FWC 5643. Again, the Respondent did not refer to the Full Bench decision.

[4] I conducted a conciliation of the Applicant’s general protections application on 8 May, 2019. That matter did not settle. At that conciliation, M&K Lawyers Group appeared for both GARDA Services and GARDA Capital, and thereafter represented both entities.

[5] At the conclusion of the conciliation on 8 May, 2019, directions for the filing and service of submissions and evidentiary materials regarding the Application were made.

[6] On 17 May, 2019, the Respondents’ Solicitor wrote to my Chambers inviting me to exercise my discretion not to hear and decide the Application, and recuse myself from the matter. The basis for that application was outlined in the “Background” section of that correspondence, as follows:

“A. Background

1. It is not contentious that on 8 May, 2019 that the present matter was the subject of Conciliation which was presided over and managed by Deputy President Cross.

2. As is the normal practice for the hearing of conciliations the matter was dealt with in the usual way involving the use of open joint sessions and separate private closed sessions between each party and Deputy President Cross.

3. Neither the Respondent nor the Applicant or their respective representatives, have any insight as to the nature or detail of the secretive matters raised or discussed with the other in private session, which is specifically contemplated for in the process of Conciliation.

4. As such our client is concerned, in the circumstances, that the unintended consequence of conducting the Conciliation and now hearing the Application is the creation of an unquantifiable and unknown risk of bias.

5. Matters raised in private session, which cannot be divulged, may, we respectfully submit, now tend to potentially prejudice a fair hearing of the scheduled Application. In other words there is serious and reasonable apprehension of bias which arises.

6. We set out below for the assistance of the Deputy President a brief outline of the relevant considerations.”

[7] On 4 June, 2019, a Full Bench of the Commission delivered a decision in the matter of CFMEU v Watpac Construction Pty Ltd T/A Watpac Construction ([2019] FWCFB 3855) (“Watpac”).

[8] On 10 June, 2019, the Applicant wrote to my Chambers noting the “potentially relevant” decision in Watpac, and indicating that the Applicant did not oppose the recusal application being granted. That position was confirmed in proceedings. 1

Watpac

[9] At the hearing, both the Respondent and the Applicant relied upon Watpac as authority for the proposition that, having conciliated the Applicant’s general protections matter, I should recuse myself from determining the Application.

[10] In Watpac, the Full Bench was dealing with decisions of a Commissioner made in the course of dealing with a dispute under s.739 of theAct, in accordance with a dispute settlement procedure. The enterprise agreement provided for conciliation and arbitration by the Commission of certain disputes.

[11] The Appellant, the Construction Forestry Maritime Mining Energy Union (“CFMMEU”), had applied for the Commissioner to recuse herself from arbitrating the dispute on the basis of a reasonable apprehension of bias. The CFMMEU’s initial recusal application was based on certain things the Commissioner had said and done whilst she was conciliating the dispute. A subsequent recusal application related to access to a Facebook site. The Commissioner declined to recuse herself.

[12] The Full Bench dismissed the appeal as it was not satisfied that the Commissioner made any appealable error in refusing to recuse herself on the grounds of a reasonable apprehension of bias 2. The Full Bench went on, however, to make certain observations relating to the legislative history of the predecessors of s. 739 of the Act. It observed at [34] to [37]:

“[34] For many years, the Conciliation and Arbitration Act 1904 (Cth) contained s.22(2), which provided that a Member of the Commission who had conciliated an industrial dispute could not arbitrate that dispute if a party to the arbitration proceedings objected. This enabled a party to object to a given arbitrator if it thought that the arbitrator might have formed an opinion in the conciliation proceedings which could prejudice its case in arbitration.

[35] The 1985 Australian Industrial Relations Law and Systems: Report of the Committee of Review (the Hancock Report) considered whether that provision should be retained. It concluded that:

‘…the right of objection should be retained. …we do not agree with the view that parties should have a choice of arbitrator; but we think it fundamental that a party should be able to object to having its case arbitrated upon by a person who, by reason of his earlier involvement in conciliation proceedings, may have formed an opinion which is prejudicial to its case. We understand Sir John Moore’s point that conciliation and arbitration cannot, in practice, be put neatly into separate boxes but… the processes are distinctive and need to be expressed as such in the legislation.’ 

[36] The provision was retained in the Industrial Relations Act 1988 (Cth) (IR Act) as s.105. It remained unchanged through all the various iterations of the federal industrial and workplace relations legislation until the enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). At that time, most of the specific provisions governing the role of the Commission in the conciliation and arbitration of industrial disputes were removed.

[37] The current FW Act does not contain provisions equivalent to s.105 of the IR Act. The role of the Commission in dealing with disputes that arise under DSPs is dealt with in s.739.”

[13] The Full Bench found 3 that although the provisions of s.105 of the Industrial Relations Act 1988 (Cth) (“the IR Act”)no longer form part of the Act, the public policy considerations underlying those provisions remained relevant. In particular, there were good reasons why it would often be inappropriate for a member of the Commission to arbitrate a matter where he or she has previously been involved in conciliation proceedings about the same matter.

[14] The Full Bench then provided the following guideline statements:

“[45] It is essential for the proper functioning of the Commission that parties feel they may speak openly in conciliation, either in plenary session or in private with the member, without fearing that what they say might subsequently adversely affect their interests in arbitration if the matter does not settle. That is one reason why conciliation proceedings are confidential and not recorded.

[46] This is not to say that there will not be cases where the parties themselves prefer a matter to be arbitrated by a member who has been involved in conciliation. However, either party should be free to object to a member subsequently arbitrating a matter which he or she has conciliated.

[47] In our view, once a party to a dispute objects to a member of the Commission who has been involved in conciliating that dispute from undertaking arbitration, that by itself should generally be enough to persuade the member to arrange for the matter to be reallocated to another member for arbitration. This is particularly the case where the member has participated in private discussions separately with the parties in conciliation, the member has expressed views in conciliation about the merits of the dispute, the member has been made aware of without prejudice settlement offers made in conciliation, or one or more parties have made concessions in conciliation which they are not willing to make in a subsequent arbitration.

[48] This can occur without holding the sort of recusal hearing the Commissioner conducted in this case. We note that such hearings are fraught with difficulty.”

[15] Both the Respondent and the Applicant considered the above guideline statements as apposite to the Application.

Consideration

(a) Recusal

[16] The principles relating to disqualification on the ground of apprehended bias were summarised by Middleton J in Kirby v Centro Properties Limited (No 2) 4. Of particular relevance to this matter is the following:

“The principles respecting disqualification for apprehended bias represent a balance between two competing policy considerations, namely the maintenance of public confidence in the judicial system, by ensuring that the public perceive that cases are decided only by reference to the evidence before the court, and the need for judges to discharge their duties unless good reason is shown.

…

In Ebner, the majority in the High Court affirmed that the application of this test involves two steps. First, there must be identification of what it is that might lead a judge to decide the particular questions before him or her other than on the merits. Second, having identified the factors or circumstances that might influence a departure from meritorious decision-making, it is “no less important” to articulate the “logical connection” between those factors and the fear that the judge might not apply proper judicial method (that is, merits based decision-making) in resolving the controversy on the facts and the law (at [8]).

…

Needless to say, disqualification of a judge by reason of prejudgment must be “firmly established”: Cabcharge at [25]; Re JRL at 352. Judges should not accede too readily to recusal by reason of apprehended bias.”

(Emphasis added).

[17] While both parties submitted, with varying levels of force, that I should recuse myself, I do not consider that any good reasons for such recusal were advanced, and so the application that I recuse myself was rejected.

[18] Insofar as the parties relied upon the guideline statements from Watpac, that reliance was misplaced. Watpac involved, and those guideline statements related to, dispute proceedings pursuant to s.739 of the Act, not to all proceedings in which the Commission may be required to make a decision or determination.

[19] In Watpacthe Full Bench relied on the underlying public policy considerations of s.105 of the IR Act. However it is clear that s. 105 of the IR Act was seen to be limited in its application. In Coal & Allied Operations Pty Ltd v Construction, Forestry, Mining and Energy Union 5 (“Coal & Allied”), a Full Bench of the Australian Industrial Relations Commission held that s.105 had no application requiring a member to stand aside from the hearing of proceedings to consider whether bargaining periods should be terminated or suspended under s.170MW of the Workplace Relations Act 1996 (Cth). That Full Bench held6:

“Section 105, on which this appeal turns, with its references to “conciliation powers” and “arbitration powers” follows the sections to which we have referred. In this context, we are of the view that the arbitration powers referred to in s 105 are the powers in relation to arbitration as that term is used in sections such as 89, 100(1), 102, 103 and 104(1); that is, in short, powers, other than conciliation powers, to prevent and settle industrial disputes. This view is, we think, supported by the High Court's judgment in R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 CLR 163; 7 IR 201 in which Brennan and Deane JJ said (at 176) that the Commission's “arbitration functions are directed to preventing and settling industrial disputes not resolved by amicable agreement … ”. Having regard to these considerations, we are of the opinion that the powers conferred on the Commission by s 170MW(1) to consider whether it is satisfied that the circumstances set out in s 170MW(3) exist or existed are not arbitration powers as that term is used in s 105.

…

For the purposes of this decision it is necessary only that we conclude (as we have) that the powers Boulton J exercised were not arbitration powers as that term is used in s 105. It is not, therefore, necessary for us to form a view as to whether the powers exercised by his Honour under s 170MW were conciliation powers or some category of powers other than arbitration powers or conciliation powers.”

[20] Coal & Allied also highlights the need to focus on what the power is that is being exercised. The Respondent submitted that their “Primary Submission” was that s. 793 was no different to s. 386. 7 However, the Application simply seeks the amendment of the general protections application pursuant to s.586 of the Act to correct an error made with respect to the legal name of the Respondent. The power under s.586 is certainly not the exercise of arbitration powers, but simply a procedural power. No legal rights and obligations are created, and no dispute settled.8

[21] It is also clear the issues the subject of the conciliation, being the grounds advanced in the Form F8 general protections application, and the factors considered in determination of the Application, are different. Even at a hypothetical level, it is impossible to articulate a logical connection between the particular question before me, being amendment of the Respondent’s name, and anything that may have been said in conciliation of the general protections application.

(b) Amendment

[22] Thegeneral principles regardingamendment to the name of a party were suscinctly stated by O’Callaghan J in Knight v Visionstream Australia Pty Ltd 9, as follows (at [20] and [21]):

“There are many reported cases in which some difficulty arises about whether an applicant should be permitted to substitute one respondent for another. Some of the older cases are discussed in detail in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 238-245 (per Dawson J), 249-251 (per Toohey J), 254-259 (per McHugh J).

Modern rules of court in all Australian jurisdictions, and in the United Kingdom, permit amendments to the name of a party which have the effect of substituting one party for another, if the mistake was genuine and was not relevantly misleading.”

[23] The discretion conveyed by s.586(a) of the Act is even broader, and not confined to simply mistakes. As the Full Bench observed in Lili Sinden v HDR Inc.; HDR Pty Limited 10(at [11]):

“Section 586(a) of the FW Act provides that the Commission may “allow a correction or amendment of any application, or other document relating to a matter before the FWC, on any terms that it considers appropriate”. The discretionary power conferred by s 586(a) is self-evidently broad, and encompasses but is not expressed as confined to the correction of mistakes. In respect of the amendment power in a previous iteration of the federal legislative scheme for industrial relations, the High Court treated it as having a wide field of operation so as to give effect to the statutory intention that proceedings should be directed to the merits and that technicalities and legal forms should not be regarded. The same approach is applicable under the FW Act having regard to the requirements in s 577(b) for the Commission to perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities and in s 578(b) for the Commission in performing functions and exercising powers in relation to a matter to take into account equity, good conscience and the merits of the matter. In the context of the Commission’s unfair dismissal jurisdiction, the s 586(a) power has been used to correct the identification of a respondent employer to the extent of substituting one corporate entity for another.”

[24] As the cases were finally put at the conclusion of the evidence, each party characterised the error in the name of the Respondent on the Form F8 as a “mistake”. The Respondent’s Counsel submitted that there was an inference that the Applicant intentionally misnamed the Respondent to pursue a claim to some shares, but it could be put no higher than an inference. 11

[25] While not relevant to the question of amendment, that final characterisation as a mistakehighlighted the inappropriateness of the suggestion that the Applicant’s Solicitor “…contact your insurer without delay”, and the reservation of rights to seek costs on an indemnity basis against the Applicant, the firm of solicitors acting for the Applicant, and the Applicant’s Solicitor personally, that was expressed in the correspondence of 16 April, 2019.

[26] As to the gravity of the mistake, it can be characterised as no less than egregious. The Applicant was no “run of the mill” employee. He was the Chief Financial Officer, Company Secretary and a Director of GARDA Services. He conceded in cross-examination, in a very open and honest way, that he knew GARDA Services was the only employing entity, that he had discrete and expert knowledge of GARDA Services, that he was involved in payroll, and that he had no doubt GARDA Services was the proper Respondent.

[27] The mistake as to the proper name of the Respondent arose through mis-communication, or lack of any proper communication, between Mr Neep and his Solicitor. The Respondent submits that the mistake is a “foundational error arising out of a lack of properly instructing one’s solicitor”, and in those circumstances the Commission should not exercise the discretion to allow the amendment. 12

[28] The mistake occurred when Applicant’s Solicitor relied upon the letterhead of the 11 March and 15 March, 2019, letters that identified “GARDA Capital Group”. Clearly, a prudent way to correctly identify an employer for the purposes of commencing proceedings would involve a consideration of contractual documentation and pay records. While an egregious mistake, that gravity does not alter the appropriate characterisation as a mistake. 13 No submission was finally advanced that there was any intention in the mistake.

[29] There is no issue between the parties that GARDA Services was Mr Neep’s former employer. The grant of the amendment sought would therefore serve to ensure that the dispute which actually exists, and which was the subject of conciliation, can proceed further. It also avoids an approach to the legislative scheme that would result in “a regime providing potential technical defects or traps that would deny a person’s access to justice”. 14 

[30] No prejudice would result to either GARDA Services or GARDA Capital. GARDA Capital will be removed from any possibility that it was involved in the matter. GARDA Services has at all relevant times been aware that its dismissal of Mr Neep has given rise to this general protections dispute. In fact on 11 March, 2019, four days before the termination letter, the Applicant’s Solicitor sent a letter addressed to the attention of Mr Davidson. That letter asserted that the Applicant had exercised a workplace right, and that any adverse action against the Applicant would contravene Part 3-1 of the Act. The Applicant made the Application on the same day that it was advised that it had incorrectly named the Respondent.

[31] The interests of justice run entirely in favour of the grant of the Application. For the above reasons I exercise my discretion to amend Mr Neep’s general protections application to name GARDA Services Pty Ltd (ACN 109 910 894) as the Respondent. A certificate under s.368 of the Act will be issued in conjunction with this decision.

DEPUTY PRESIDENT

Appearances:

Mr S Mackie of Counsel, for the Applicant.

Ms C Hartigan of Counsel, for the Respondent.

Hearing details:

2019.

11 June:

Sydney (via videolink with Brisbane)

Final written submissions:

Applicant: 31 May 2019

Respondent: 7 June 2019

Printed by authority of the Commonwealth Government Printer

<PR709887>

 1   Transcript PN24.

 2   Watpac at para [32]

 3 At [39].

 4 (2011) 202 FCR 439, at [8] to [23].

 5 76 IR 234.

 6   At P. 237.

 7   Transcript PN 96.

 8   Re Ranger Uranium Mines Proprietary Limited and Others; Ex parte Federated Miscellaneous Workers' Union of Australia.(1987) 163 CLR 656, at P. 663.

 9 [2017] FCA 1513.

 10   [2018] FWCFB 6934.

 11   Transcript PN 539.

 12   Transcript PN 540.

 13   Sinden v HDR Inc; HDR Pty Limited[2018] FWCFB 6934, at [14].

 14   Knight v Visionstream Australia Pty Ltd [2017] FCA 1513, at [38].