Phillips v Strasser (No 2)

Case [2023] FedCFamC2G 151

Federal Circuit and Family Court of Australia

(DIVISION 2)

Phillips v Strasser (No 2) [2023] FedCFamC2G 151

File number: MLG 3375 of 2021
Judgment of: JUDGE FORBES
Date of judgment: 10 March 2023
Catchwords: PRACTICE AND PROCEDURE – Fair Work – application for leave to file amended pleading – contract of employment – claims relating to underpayments and leave entitlements over 40 year period – where statutory, contractual and equitable remedies sought – whether pleading identifies reasonable causes of action – consideration of statutory limitation periods – whether pleading amenable to being struck out – whether flaws in pleading capable of being cured
Legislation:

Fair Work Act 2009 (Cth), s 45, 46, 47, 323, 544, 545, 570

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, r 1.04, 1.06

Federal Court Rules 2011, r 16.21

Limitations of Actions Act 1958 (Vic), s 5

Religious and Successory Trusts Act 1958 (Vic), Part II

Workplace Relations Act 1996 (Cth)

Cases cited:

Abela v Minister for Home Affairs [2021] FCA 96

Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1994) 217 226

Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; 2018) 261 FCR 347

Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629

Construction, Forestry, Mining and Energy union v BHP Coal Pty Ltd [2015] FCAFC 25; (2015) 230 FCR 298

Devaynes v Noble (1816) 35 ER 781

Fair Work Ombudsman v Eastern Colour Pty Ltd (2011) 209 IR 263

Gerace v Auzhair Supplies Pty Ltd (2014) 87 NSWLR 435

H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242

Phillips v Strasser [2022] FedCFamC2G 410

Richens v Commonwealth of Australia (as represented by the Commissioner of the Australian Federal Police) [2018] FCA 1276

Saxena v PPF Asset Management Ltd [2011] FCA 395

Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393

Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164

Transport Workers Union of Australia v Coles Supermarkets Australia Pty Ltd (2014) 284 FLR 238

Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190

Wride v Schultz [2004] FCAFC 216

Division: Division 2 General Federal Law
Number of paragraphs: 115
Date of hearing: 9 December 2022
Place: Melbourne
Counsel for the Applicant: Mr I Upjohn CSC, KC with Ms M Hardinge
Solicitor for the Applicant: Mann Lawyers Pty Ltd
Counsel for the Respondents: Mr J Tracey
Solicitor for the Respondents: Perry Maddocks Trollope Lawyers

ORDERS

MLG 3375 of 2021

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

MARK FRANCIS PHILLIPS

Applicant
AND:

AARON STRASSER

First Respondent

MICHAEL MOSHE FRIEDMAN

Second Respondent

BENYOMIN KLEIN

Third Respondent

order made by:

JUDGE FORBES

DATE OF ORDER:

10 march 2023

THE COURT ORDERS THAT:

1.Leave to file the Proposed Amended Statement of Claim dated 21 October 2022 (PASOC) is refused.

2.The applicant has leave to file and serve any amended statement of claim no later than 28 days after the…

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AGLC
Phillips v Strasser (No 2) [2023] FedCFamC2G 151
Case
[2023] FedCFamC2G 151
Decision Date

CaseChat Overview and Summary

In the case of Phillips v Strasser (No 2), the applicant sought leave to file a Particulars of Suit of Claim (PASOC) in an action against the respondents. The primary dispute centres on the validity and sufficiency of the PASOC, specifically regarding the allegations of fraud and the knowledge of such fraud by the respondents. The Federal Court of Australia was tasked with deciding whether the PASOC was sufficiently particularised to proceed with the litigation. The central legal issues revolved around the necessity for the PASOC to clearly and unambiguously detail the alleged fraud, the requisite knowledge of the respondents, and the impact of the alleged fraud on the current trustees.

The court held that the PASOC suffered from significant pleading deficiencies and failed to sufficiently particularise the elements of the alleged fraud and the knowledge of such fraud by the respondents. The court emphasised that the pleading must directly and unambiguously engage the respondents, and any ambiguity or vagueness in language, such as the use of phrases like “the trustees from time to time,” could lead to confusion. The court further noted that the PASOC was complex and could not proceed in its current form. Consequently, the application for leave to file the PASOC was refused. However, the court recognised the potential merits of the applicant's claims if they were properly pleaded. It allowed the applicant an opportunity to amend the PASOC to address the deficiencies identified in the court's reasons.

In light of the above, the court ordered that the applicant must file and serve an amended statement of claim within 28 days of the publication of the orders. A directions hearing would then be scheduled to determine the future course of the proceedings. The court also ruled that the respondents were entitled to their costs of the application, given the applicant's failure to prepare a sufficiently particularised pleading despite clear prior correspondence highlighting the deficiencies.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In my view the respondents are correct to require that the elements of the alleged fraud and their knowledge thereof should be squarely and fairly pleaded as material facts. If it is to be alleged that the conduct of others in the conduct of the Adass business is binding on current trustees, that should be pleaded and particularised. As I have remarked frequently in these reasons, the pleading must engage the respondents directly and unambiguously. The use of language such as “the trustees from time to time” (e.g. in para 35) which depending on context might or might not include the respondents only tends to confuse matters.Conclusion The PASOC suffers from numerous and significant pleading deficiencies. If the PASOC were filed and objections raised I would find that numerous paragraphs would be amenable to being struck out for the reasons I have given. It is not appropriate for leave to be given to file a defective pleading unless it can be cured by simple amendment or the provision of further particulars. The PASOC is not of that ilk. It is a complex pleading which cannot go forward in its current form. The application for leave to file the PASOC is refused. While I am not prepared to grant leave for the PASOC to be filed, I am of the view that the applicant should be afforded a further opportunity to craft an acceptable statement of claim. The deficiencies in the pleading should not deprive the applicant an opportunity to bring a case. While at a high level some of the claims advanced by the applicant appear novel or ambitious, I do not presently regard any of them as being unarguable if pleaded correctly and in a manner which affords the respondents an opportunity to plead a defence. It is regrettable that this litigation remains caught in a vacuum of pleading contests. The situation in which the applicant finds himself is possibly not all of his own making and I accept that his inability to particularise some matters may be due to the absence or inaccessibility of relevant records. It is the expectation of the Court, consistent with the overarching objective of civil procedure and practice, that the respondents will provide documents and offer concessions where reasonable requests are made. However, while I am not unsympathetic to the applicant’s conundrum, the respondents are entitled to know how the case is put against them. It remains for the applicant to plead his case in a manner which does not give rise to embarrassment. The respondents are entitled to demand precision in a case which alleges fraud or seeks the imposition of civil penalties for alleged contraventions of the FW Act. Any future pleading must be precise in its language and internally coherent. The applicant should file and serve any amended statement of claim no later than 28 days after the publication of my orders. A directions hearing will then be held shortly thereafter to determine the future course of these proceedings.Costs The respondents seek their costs of the application. The respondents have been successful in opposing the application for leave to file the PASOC. The respondents submit that the applicant engaged in an unreasonable act or omission, within the meaning of s 570(2)(b) of the FW Act, by failing to prepare a pleading which does not address the deficiencies which had been clearly raised in correspondence between the parties’ solicitors. It is submitted that the applicant’s act or omission has caused the respondents to incur the costs of opposing the application for leave.

Ratio Decidendi

Legal Principle Established

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