Rolfe v Pinnacle Act Pty Ltd

Case [2024] FedCFamC2G 285

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Rolfe v Pinnacle ACT Pty Ltd [2024] FedCFamC2G 285

File number(s): CAG 33 of 2023
CAG 35 of 2023
Judgment of: DEPUTY CHIEF JUDGE MERCURI
Date of judgment: 28 March 2024
Catchwords:

FAIR WORK – PRACTICE AND PROCEDURE – respondents’ application for joinder – where proposed respondents seek to commence cross-claim for breach of director’s duties under the Corporations Act 2001 (Cth) – where applicants did not consent to or oppose application – joinder granted.

FAIR WORK – PRACTICE AND PROCEDURE –respondents’ application for transfer to the Federal Court of Australia – relevance of the wishes of the parties and the interests of the administration of justice – where applicants did not consent to or oppose application – where there is doubt as to whether the Federal Circuit and Family Court of Australia (Division 2) has jurisdiction in relation to the proposed cross-claims – transfer order made.

Legislation:

Corporations Act 2001 (Cth), ss 180, 181, 182, 183, 1317H

Fair Work Act 2009 (Cth), s 566

Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 131, 134, 153, 154

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), rr 8.02, 8.04, 11.01

Cases cited:

Brant v BLK International Pty Ltd [2021] FCCA 688

Hyne v Concourse Golf Pty Ltd [2021] FedFCFamC2G 301

Ioakimidis v Lygon Court Travel Pty Ltd trading as Hello World Lower Templestowe & Ors [2020] FCCA 1687

Mortenson v Enviro Tanks Pty Ltd & Anor [2020] FCCA 1951

News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410

Ogawa v Federal Magistrate Phipps (2006) 151 FCR 311

Rana v Google Inc [2017] FCAFC 156

Sims v Thomas [2016] FCCA 1752

Wu v United Overseas Bank Ltd, Sydney Branch (No 2) [2021] FedCFamC2G 264
Division: Division 2 General Federal Law
Number of paragraphs: 50
Date of last submission/s: 5 March 2024
Date of hearing: 5 March 2024
Place: Melbourne
In CAG 33 of 2023:
Counsel for the Applicant: Ms T Wong
Solicitor for the Applicant: MV Law
Counsel for the Respondents: Ms P Bindon
Solicitor for the Respondents: HR Legal
In CAG 35 of 2023:
Counsel for the Applicant: Ms T Wong
Solicitor for the Applicant: MV Law
Counsel for the Respondents: Ms P Bindon
Solicitor for the Respondents: HR Legal

ORDERS

CAG 33 of 2023

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

SCOTT ROLFE

Applicant
AND:

PINNACLE ACT PTY LTD (ACN 165 487 669)

First Respondent

KURT JAKS

Second Respondent

ORDER MADE BY:

DEPUTY CHIEF JUDGE MERCURI

DATE OF ORDER:

28 MARCH 2024

THE COURT ORDERS THAT:

1.Pursuant to section 153 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and rule 8.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) proceeding CAG33/2023 be transferred to the Federal Court of Australia.

ORDERS

CAG 35 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION…

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AGLC
Rolfe v Pinnacle Act Pty Ltd [2024] FedCFamC2G 285
Case
[2024] FedCFamC2G 285
Decision Date

CaseChat Overview and Summary

In the matter of Rolfe v Pinnacle Act Pty Ltd, the Federal Circuit and Family Court of Australia (Division 2) was tasked with addressing applications from the respondents, Pinnacle Act Pty Ltd and others, to join additional parties and transfer the proceedings to the Federal Court of Australia. The applicants, Mr Timothy Rolfe and Mr Scott Rolfe, neither consented to nor opposed these applications. The dispute arose from claims by the applicants that they were employees and directors of the respondents and involved allegations of breaches of directors' duties under the Corporations Act 2001 (Cth).

The primary legal issues before the court were whether to permit the joinder of additional parties and whether to transfer the proceedings to the Federal Court. The respondents sought to join Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd to the proceedings and aimed to file cross-claims against the applicants for breaches of directors' duties under the Corporations Act. Additionally, the respondents applied to transfer the proceedings to the Federal Court, citing uncertainty over the Federal Circuit and Family Court’s jurisdiction over the proposed cross-claims under the Corporations Act.

The court found that the applicants neither opposed nor consented to the joinder of additional parties or the transfer of proceedings. The court recognised that the wishes of the parties were neutral, and therefore, the focus shifted to the interests of the administration of justice. The court considered the provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and concluded that there was a doubt regarding the Federal Circuit and Family Court’s jurisdiction over the cross-claims under the Corporations Act. Given this uncertainty, and in the interests of ensuring a proper and efficient resolution of the matter, the court determined that a transfer to the Federal Court was warranted. Consequently, the court granted the respondents' applications for joinder and transfer.

The court ordered that Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd be joined as parties to the proceedings and that the proceedings be transferred to the Federal Court of Australia.

Orders

Orders of the court

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Background

Background to the litigation

The applicants neither consent to nor oppose the applications for joinder or transfer.[6][6] Applicant’s Response to Application in a Proceeding filed on 15 February 2024. FACTUAL BACKGROUND Before turning to the key issues for consideration, it is appropriate to briefly summarise the factual background to these matters. It is common ground that broadly speaking, both matters arise from the same substratum of facts. As stated, both applicants claim that they were employees of the first respondent. Both applicants also claim that they were directors of the first respondent, in the case of Mr Timothy Rolfe, from 2017,[7] and in the case of Mr Scott Rolfe, from 2019.[8][7] Amended Statement of Claim of Mr Timothy Rolfe filed on 11 October 2023 at paragraph [1(c)].[8] Amended Statement of Claim of Mr Scott Rolfe filed on 11 October 2023 at paragraph [1(c)]. The applicants make various claims against the respondents, which it is not necessary for present purposes to set out in detail. In circumstances where the respondents have sought a transfer of the proceedings to the Federal Court, they have not yet filed a defence to the applicants’ amended statements of claim at this stage. Relevantly, for present purposes, however, in CAG35/2023, the applicant, Mr Timothy Rolfe, pleads at paragraphs [21] to [26] of his Amended Statement of Claim, that he was a director of both Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd. Moreover, at paragraphs [44] to [49], he makes various claims about his removal from those companies. As stated, in CAG35/2023, the respondents seek the joinder of Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd as they seek to pursue a claim against Mr Timothy Rolfe in the terms set out in the cross-claim annexed to the affidavit of Mr David Sztrajt affirmed and filed in that proceeding on 11 December 2023. To the extent that the first respondent seeks the joinder of Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd, those companies also seek to pursue a claim against Mr Timothy Rolfe for breaches of his director’s duties under sections 180(1) and 181(1)(a) of the Corporations Act, and seeks relief, among other things, in the form of compensation under section 1317H of the Corporations Act. In CAG33/2023, the respondents seek to file a cross-claim against Mr Scott Rolfe in the terms of the draft notice of cross-claim annexed to the affidavit of Mr David Sztrajt affirmed and filed in that proceeding on 11 December 2023.[9][9] Affidavit of Mr David Sztrajt affirmed and filed on 11 December 2023. In summary, both cross-claims raise allegations, among other things, that each of the applicants (in the substantive proceedings) breached their respective duties as directors under the Corporations Act. In particular, the first respondent, by its proposed cross-claim, alleges breaches of sections 180(1), 181(1)(a), 181(1)(b), 182(1) and/or 183(1) of the Corporations Act. In addition, the first respondent seeks relief, inter alia, in the form of compensation under s 1317H of the Corporations Act.JOINDER APPLICATION

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Nor does the matter raise issues of general importance, beyond issues of this court’s jurisdiction which have been considered above.CONCLUSION For each of these reasons, I make the orders set out at the commencement of these reasons.

Ratio Decidendi

Legal Principle Established

As to the wishes of the parties, as stated, the applicants in the substantive proceedings have indicated that they neither consent to, nor oppose that application. The respondents, for the reasons set out earlier, seek a transfer to the Federal Court.Interests of the administration of justice Moreover, it is argued that the interests of the administration of justice warrant a transfer in circumstances where there is doubt as to whether the Federal Circuit and Family Court of Australia (Division 2) (‘FCFCOA’) has jurisdiction in relation to the cross-claims which the first respondent proposes to commence against the applicants. For the following reasons, I agree that there is doubt as to whether the FCFCOA has jurisdiction to hear and determine such a claim, and as such, it is in the interests of the administration of justice that a transfer order be made. Section 131 of the FCFCOA Act relevantly provides:(1)The Federal Circuit and Family Court of Australia (Division2) has such original jurisdiction as is vested in it:(a) by laws made by the Parliament:(i) by express provision; or(ii)by the application of section 15C of the Acts Interpretation Act 1901 to a provision that, whether expressly or by implication, authorises a civil proceeding to be instituted in the Federal Circuit and Family Court of Australia (Division 2) in relation to a matter; or(b) by a legislative instrument made under section 133.(2) …(3) … In this case, in each proceeding, the applicants initially claimed a breach by the respondents of the FW Act. Relevantly, by virtue of section 566 of the FW Act, which relevantly provides that the FCFCOA has jurisdiction ‘in relation to any civil matter arising under the’ FW Act, this court therefore has jurisdiction. As stated, the first respondent seeks to commence a cross-claim in which it alleges that the applicants in each matter, among other things, have breached their respective directors’ duties under sections 180, 181, 182 and/or 183 of the Corporations Act, and by which it seeks relief, among other things, in the form of compensation under section 1317H of the Corporations Act. The first respondent acknowledges that, on its face, its proposed cross-claim under the Corporations Act may be said to form part of the one justiciable matter before the FCFCOA and may therefore arguably fall within the FCFCOA’s ‘associated jurisdiction’ under section 134 of the FCFCOA Act.[11][11] Respondents’ Outline of Submissions filed on 15 February 2024 at paragraphs [5] and [6]. Section 134 of the FCFCOA Act relevantly provides that:To the extent that the Constitution permits, jurisdiction is conferred on the Federal Circuit and Family Court of Australia (Division 2) in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Circuit and Family Court of Australia (Division 2) is invoked. However, it is submitted for the respondents that these provisions must be read subject to any contrary intention in Commonwealth legislation.[12] In particular, it is submitted that the Corporations Act itself evinces a clear intention that the jurisdiction of the relevant claims under the Corporations Act was exclusively determined to rest with the Federal Court. Consequently, it is argued that there is a lack of clarity over whether the FCFCOA has the jurisdiction to hear the first respondent’s proposed cross-claim under the Corporations Act.[12] Respondents’ Outline of Submissions filed on 15 February 2024 at paragraph [7].