New v Edition Coffee Roasters Pty Ltd

Case [2021] FCCA 777

FEDERAL CIRCUIT COURT OF AUSTRALIA

New v Edition Coffee Roasters Pty Ltd [2021] FCCA 777

File number(s): SYG 2622 of 2018
Judgment of: JUDGE BAIRD
Date of judgment: 20 April 2021
Catchwords:

INDUSTRIAL LAW – Default judgment application against second respondent – second respondent aware of proceeding and had previously participated – default judgment ordered against second respondent – application for joinder of proposed sixth respondent – no arguable case against the proposed sixth respondent – joinder refused – removal application of third, fourth, and fifth respondents – removal application granted.

COSTS – costs application brought by the third, fourth, and fifth respondents – respondents bear their own costs.

Legislation:

Corporations Act 2001 (Cth) ss 58AA, 500

Fair Work Act 2009 (Cth) ss 44, 45, 62, 340, 361, 536, 550, 570

Fair Work Regulations 2009 (Cth) reg 1.07

Federal Circuit Court of Australia Act 1999 (Cth) s 45

Federal Court Rules 2011 (Cth) r 9.08

Federal Circuit Court Rules 2001 (Cth) rr 11.01, 11.04, 13.03A, 13.03B, 16.07(2)

Cases cited: Dudley (Liquidator) v RHG Construction Fitout & Maintenance Pty Ltd [2019] FCA 1355
Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No 2) [2018] FCCA 1935
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
King v Patrick Projects Pty Ltd (No 2) [2017] FCA 388
Knight v Visionstream Australia Pty Ltd [2017] FCA 1513
Lotus Development Corporation v Mayne Nickless Ltd [1991] FCA 106
Lukies v S2V Consulting Pty Ltd [2018] FCCA 1431
McCluskey v Karagiozis [2002] FCA 1137
Qualify Me Pty Ltd v Get Me Qualified Australia Pty Ltd [2016] FCA 192
RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504
Review Australia Pty Ltd v Redberry Enterprise Pty Ltd [2003] FCA 1009
Singh v Super City Home Loans Pty Ltd [2011] FCA 646
Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
Veeraragoo v Goldbreak Holdings Pty Ltd (No 2) [2018] FCA 1448
Number of paragraphs: 201
Date of last submission/s: 16 September 2019
Date of hearing: 15 February 2019, 1 March 2019 and 29 March 2019
Place: Sydney
Solicitor for the Applicant: Ms K Lewis
No appearance by or on behalf of the First Respondent
No appearance by or on behalf of the Second Respondent
Counsel for the Third, Fourth, Fifth, and proposed Sixth Respondents: Ms A Campbell for the Third, Fourth, Fifth, and proposed Sixth Respondent
Solicitor for the Third, Fourth, Fifth, and proposed Sixth Respondents: Gilbert + Tobin

ORDERS

SYG 2622 of 2018
BETWEEN:

JACK ROBERT NEW

Applicant
AND:

EDITION COFFEE ROASTERS PTY LTD (IN LIQ)

First Respondent

DANIEL JACKSON

Second Respondent

EDITION COFFEE HOLDINGS PTY LTD (ACN 169 714 452) (and others named in the Schedule)

Third Respondent

ORDER MADE BY:

JUDGE BAIRD

DATE OF ORDER:

20 APRIL 2021

THE COURT:

1.DECLARES THAT the First Respondent, Edition Coffee Roasters Pty Ltd (in liq), has contravened:

(a)s.44 of the Fair Work Act 2009 (Cth) by, in breach of s.117, failing to…

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AGLC
New v Edition Coffee Roasters Pty Ltd [2021] FCCA 777
Case
[2021] FCCA 777
Decision Date

CaseChat Overview and Summary

This matter concerned an application by Mr New for judgment against Mr Jackson, and an application by the Edition Group entities for removal as parties. Mr New had initially commenced proceedings against Edition Coffee and Mr Jackson, alleging that Mr Jackson was involved in Edition Coffee's contraventions of the Act. Edition Coffee was subsequently placed in voluntary liquidation, which limited the ability to proceed against it in the current court. New companies, the Edition Group entities, had taken over the business operations.

The court was required to determine whether Mr New had established the primary contraventions claimed against Edition Coffee, which was a prerequisite for succeeding in his application for judgment against Mr Jackson. Additionally, the court had to consider the application by the Edition Group entities to be removed as respondents, and Mr New's application to join Mr Latorre Canon as a sixth respondent.

Justice Baird considered that for Mr New to succeed against Mr Jackson, the primary contraventions by Edition Coffee needed to be established. The court noted that being present or copied into correspondence was insufficient to establish involvement in contraventions under s.550(2) of the Act. The material did not demonstrate that Mr Latorre Canon was involved in the alleged adverse actions against Mr New, as emails and references to his power to direct termination related to potential future employment with another entity, not his current role with Edition Coffee. The court found no arguable basis that Mr Latorre Canon was involved in the adverse action decisions made by Edition Coffee and/or Mr Jackson.

The court granted Mr New leave to file a notice of discontinuance against the third respondent, Edition Coffee Holdings Pty Ltd, as no claim had been identified against it. The court was not satisfied that there was an arguable factual basis for any claim against Mr Latorre Canon, nor that he was a necessary party for the final determination of the matter.

Orders

Orders of the court

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Background

Background to the litigation

In order for Mr New to succeed in his application for judgment against Mr Jackson, I must be satisfied that Mr New has established the primary contraventions claimed against Edition Coffee.Procedural background and pleadings Mr New commenced this proceeding initially against the first and second respondents, Edition Coffee, since voluntarily placed in liquidation, and Mr Jackson. Mr New identified Edition Coffee as his former employer, and Mr Jackson as the person who directed him in the course of his employment as head chef/executive chef with Edition Coffee, and through whom the company acted in its conduct with regard to Mr New. As I have said, Mr New alleges that Mr Jackson was involved in Edition Coffee’s contraventions of the Act, within ss.550(1) and (2) of the Act. On the first return date of the proceeding, 16 November 2018, Mr New appeared by his solicitor, Ms Lewis, and Mr Jackson appeared in person, and with leave, for Edition Coffee. Mr Jackson advised the Court that Edition Coffee was no longer trading (that is, the café and the wholesale coffee business), but that he had not yet decided to put the company into liquidation, that new companies – Edition Wholesale Pty Limited, and Edition Haymarket Pty Ltd – have arisen in its place, and have taken over the coffee roasting business and café restaurant premises at Steam Mill Lane, Haymarket, Sydney (also, known as Darling Square), and that the café restaurant at which Mr New had principally worked, in Liverpool Street, Darlinghurst, Sydney (Darlinghurst premises), had now closed. Having regard to the matters Mr Jackson disclosed to the Court concerning additional companies he advised are or would be continuing the businesses formerly conducted by Edition Coffee, and also that Ms Lewis identified to the Court (namely, the Edition Group entities), inter alia, I granted leave to Mr New to amend his application, and to join all necessary parties. I made orders for the filing of defences, and that Mr Jackson provide discovery to Mr New. Pursuant to that leave, on 28 November 2018, by the November pleading (see below), Mr New joined the Edition Group entities: Edition Coffee Holdings Pty Ltd as third respondent, Edition Coffee Darling Square Pty Ltd (ACN 624039 532) as fourth respondent, and Edition Coffee Wholesale Pty Ltd as fifth respondent. Mr Jackson prepared and filed a document entitled Defence on 13 December 2018 on his behalf and for Edition Coffee. I consider the Defence further at [70]-[73], [78], [91] and [105] below. In breach of my orders, Edition Coffee and Mr Jackson did not provide discovery. The Edition Group entities filed defences in January 2019. On 10 January 2019, Mr Jackson resolved to wind up Edition Coffee and on 11 January 2019, Edition Coffee voluntarily entered liquidation. Because of the limitation provided by s.500(2) Corporations Act 2001 (Cth), the proceeding against Edition Coffee cannot proceed any further in this Court; leave to proceed must first be sought and obtained by way of a separate proceeding, and further expense, in either the Supreme Court of New South Wales, or the Federal Court of Australia: see s.500(2) and s.58AA of the Corporations Act 2001 (Cth).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

This judgment is concerned with the determination of several applications: (a)application by Mr New for judgment against Mr Jackson (Judgment application).Judgment is sought against Mr Jackson because of his several defaults and non‑participation in the proceeding, and also (or alternatively) on the basis that there is evidence of the facts on which the claim is based, and either evidence that Mr Jackson has no answer to the claim or part, that is, default judgment pursuant to r.13.03B(2) of the Federal Circuit Court Rules 2001 (Cth). As this application was argued by Ms Lewis, solicitor for Mr New, it appears to me that in substance Mr New also seeks summary judgment on the basis that the evidence before me is sufficient to satisfy the Court that Mr Jackson has no reasonable prospect of successfully defending the claim or part, that is, pursuant to r.13.07(2) of the Rules;(b)application for removal as parties by the Edition Group entities (Removal application).Ms Campbell, counsel for the Edition Group entities, submits that her clients are ‘putative’ respondents on the basis that they are not properly encompassed in leave granted on 16 November 2018 (see further below), or alternatively, that they are not proper parties and should be removed as respondents. In the present case, save possibly on the question of costs, nothing of substance, however, turns on the distinction. Having been joined as respondents, I consider Ms Campbell’s oral application as a removal application. Before me on 1 March 2019 Ms Lewis conceded that no claim had been identified against the third respondent, and I granted leave to Mr New to file a notice of discontinuance against the third respondent. No notice of discontinuance has been filed;(c)application by Mr New to join as a sixth respondent, Mr Latorre Canon, and Mr Latorre Canon’s (and the Edition Group entities’) opposition to that joinder (Joinder application). In order for Mr New to succeed in his application for judgment against Mr Jackson, I must be satisfied that Mr New has established the primary contraventions claimed against Edition Coffee.Procedural background and pleadings Mr New commenced this proceeding initially against the first and second respondents, Edition Coffee, since voluntarily placed in liquidation, and Mr Jackson. Mr New identified Edition Coffee as his former employer, and Mr Jackson as the person who directed him in the course of his employment as head chef/executive chef with Edition Coffee, and through whom the company acted in its conduct with regard to Mr New. As I have said, Mr New alleges that Mr Jackson was involved in Edition Coffee’s contraventions of the Act, within ss.550(1) and (2) of the Act. On the first return date of the proceeding, 16 November 2018, Mr New appeared by his solicitor, Ms Lewis, and Mr Jackson appeared in person, and with leave, for Edition Coffee. Mr Jackson advised the Court that Edition Coffee was no longer trading (that is, the café and the wholesale coffee business), but that he had not yet decided to put the company into liquidation, that new companies – Edition Wholesale Pty Limited, and Edition Haymarket Pty Ltd – have arisen in its place, and have taken over the coffee roasting business and café restaurant premises at Steam Mill Lane, Haymarket, Sydney (also, known as Darling Square), and that the café restaurant at which Mr New had principally worked, in Liverpool Street, Darlinghurst, Sydney (Darlinghurst premises), had now closed.

Ratio Decidendi

Legal Principle Established

A deficiency in pleadings ought not to shut out a reasonable cause of action: Qualify Me Pty Ltd v Get Me Qualified Australia Pty Ltd [2016] FCA 192. I also note I am not limited to matters arising under the pleadings: see Lukies at [67]. I have considered the materials before me to determine if there is an arguable factual basis for any claim under the Act against Mr Latorre Canon. Consideration – Joinder Application For the reasons I expand upon below, I am not satisfied that there is any reasonable cause of action against Mr Latorre Canon nor that he is a “necessary party” for the determination of this matter finally and completely. None of the matters that Mr New has referred to indicate that Mr Latorre Canon was “involved in” raise any arguable basis at law that Mr Latorre Canon was involved in the contraventions within the meaning of s.550(2) of the Act. Being present, or copied in correspondence, is not sufficient. Mr Latorre Canon was not a director, and held no shares in Edition Coffee. Even if he had any material interest in the operations, resources and affairs of Edition Coffee (which is not discernible on the material) that would not by itself mean that he was involved in Edition Coffee’s contraventions of the Act. More is needed. I observe that the Liquidator’s Report to creditors dated 19 April 2019 concerning Edition Coffee raises a concern that the third, fourth, and fifth respondents had been using the equipment, and business name, of Edition Coffee without consideration. There is however, no connection drawn by the liquidator, nor apparent from the material, between that concern and the alleged adverse actions and breaches that took place before 3 June 2018. It is not apparent when the use of Edition Coffee’s equipment or business name was said to have commenced, nor, if established, how it impacted upon, or was any way related to, the conduct concerning Mr New’s employment that I have found contravened the Act. The material at its highest shows that Mr Latorre Canon was arguably “involved in” matters which concerned Mr New’s potential future employment with another entity. The emails that Mr Latorre Canon was included in, and the reference to Mr Latorre Canon having the power to “direct the termination” of Mr New’s contract all arose in the context of the negotiations surrounding the offer made on 6 May 2018 to work for the fifth respondent (of which Mr Latorre Canon was a director): see [30]-[32] above. They were not in relation to Mr New’s current role or position with Edition Coffee. No reference is made to Mr Latorre Canon in any of the alleged incidences of adverse action. I am not satisfied that there is an arguable basis that Mr Latorre Canon was involved in the adverse action decisions that were made by Edition Coffee and/or Mr Jackson relating to Mr New. Mr New’s claim in relation to Mr Latorre Canon goes no further than allegations and conclusions. I am not satisfied that these could be “cured” by providing Mr New with another opportunity to re-plead.