Rolfe v Pinnacle Act Pty Ltd
[2024] FedCFamC2G 285
•28 March 2024
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 2023Judgment 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 2)
BETWEEN: TIMOTHY 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 rule 11.01 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) Flexible Property Group Pty Ltd (ACN 620 748 503) and Pinnacle ACT Property Pty Ltd (ACN 621 531 315) be joined as respondents to the proceeding.
2.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 CAG35/2023 be transferred to the Federal Court of Australia.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MERCURI:
INTRODUCTION
Before the court are two Applications in a Proceeding filed by the first and second respondents on 11 December 2023 in the related matters CAG33/2023 and CAG35/2023.
Both proceedings relate to claims for various breaches of the Fair Work Act 2009 (Cth) (‘FW Act’), breach of employment contract, promissory estoppel, breaches of the Australian Consumer Law and the Corporations Act 2001 (Cth) (‘Corporations Act’).
In CAG33/2023, the applicant, Mr Scott Rolfe, claims that he was employed as the Head Operations Manager of the first respondent, Pinnacle ACT Pty Ltd, between 26 August 2013 and 17 April 2023.[1] In CAG35/2023, the applicant, Mr Timothy Rolfe, claims that he was employed as the General Manager of the first respondent between 26 August 2013 and 17 April 2023.[2] The first and second applicants (‘the applicants’) are brothers.[3]
[1] Amended Statement of Claim of Mr Scott Rolfe filed on 11 October 2023 at paragraphs [1] and [10(b)].
[2] Amended Statement of Claim of Mr Timothy Rolfe filed on 11 October 2023 at paragraphs [1] and [10(b)].
[3] Amended Statement of Claim of Mr Scott Rolfe filed on 11 October 2023 at paragraph [1(d)]; Amended Statement of Claim of Mr Timothy Rolfe filed on 11 October 2023 at paragraph [1(d)].
Both applicants bring their claims against Pinnacle ACT Pty Ltd and Mr Kurt Jaks (‘the respondents’). Mr Jaks, the second respondent, was and is a director and controlling mind of the sole shareholder of the first respondent.[4]
[4] Amended Statement of Claim of Mr Scott Rolfe filed on 11 October 2023 at paragraph [3]; Amended Statement of Claim of Mr Timothy Rolfe filed on 11 October 2023 at paragraph [3].
Orders were made on 4 September 2023, which included a notation in the following terms:
A.Counsel for both parties agreed files CAG33/2023 and CAG35/2023 could “proceed together”.[5]
[5] Orders of Judge W J Neville dated 4 September 2023.
Accordingly, both matters have been dealt with together by this court since September 2023.
In the Application in a Proceeding filed in CAG33/2023, in respect of Mr Scott Rolfe, the first and second respondents seek:
(a)a transfer of the proceedings to the Federal Court of Australia pursuant to section 153 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCOA Act’) and rule 8.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (‘FCFCOA Rules’) (‘transfer application’).
In the Application in a Proceeding filed in CAG35/2023, in respect of Mr Timothy Rolfe, the first and second respondents seek:
(a)the joinder of Flexible Property Group Pty Ltd and Pinnacle ACT Property Pty Ltd as third and fourth respondents to the proceedings, pursuant to rule 11.01 of the FCFCOA Rules (‘joinder application’); and
(b)the transfer of the proceeding to the Federal Court of Australia pursuant to section 153 of the FCFCOA Act and rule 8.02 of the FCFCOA Rules.
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
Rule 11.01 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) relevantly provides:
(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 to the proceeding.
It has been recognised that the purpose of such a rule is to avoid, where reasonably practicable, a multiplicity of proceedings.[10]
[10] News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 524 in considering a similar rule in the Federal Court Rules.
As stated, the applicant in CAG35/2023 pleads that he was a director of each of the proposed additional parties and makes various allegations about his removal as a director of those entities. In addition, as stated, each of the proposed parties seek to bring proceedings against the applicant in CAG35/2023 alleging a breach of his director’s duties and seek compensation under the Corporations Act.
Each of the proposed parties seek to participate in these proceedings so that all issues between them can be completely and finally determined.
I am satisfied that it is appropriate in all the circumstances for the joinder application to be granted. In coming to this view, I have also had regard to the fact that the applicant does not oppose (although neither does he consent to) the joinder application.
It is in the interests of the administration of justice and consistent with the overarching purpose of civil practice and procedure for the joinder application to be granted, and I therefore so order.
TRANSFER APPLICATION
Pursuant to section 153 of the FCFCOA Act, the court may transfer a proceeding before it to the Federal Court. Relevantly, that provision provides that:
(1) If:
(a)a proceeding is pending in the Federal Circuit and Family Court of Australia (Division 2); and
(b) the proceeding is not a family law or child support proceeding;
the Court may, by order, transfer the proceeding from the Court to the Federal Court.
(2)The Federal Circuit and Family Court of Australia (Division 2) may transfer a proceeding:
(a) on the application of a party to the proceeding; or
(b) on its own initiative.
(3)In deciding whether to transfer a proceeding to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) must have regard to:
(a) any Rules of Court made for the purposes of subsection 154(2); and
(b)whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c)whether the resources of the Federal Circuit and Family Court of Australia (Division 2) are sufficient to hear and determine the proceeding; and
(d)the interests of the administration of justice.
Relevantly, section 154(2) of the FCFCOA Act provides:
(2)In particular, the Rules of Court may set out factors that are to be taken into account by the Federal Circuit and Family Court of Australia (Division 2) in deciding whether to transfer a proceeding to the Federal Court under subsection 153(1).
The relevant rule for the purposes of sections 153 and 154 of the FCFCOA Act is rule 8.02 of the FCFCOA Rules. This provides that:
(1)Unless the Court otherwise orders, an application under paragraph 153(2)(a) of the Act to transfer a proceeding from the Court to the Federal Court must:
(a) be made on or before the first court date for the proceeding; and
(b)be included in an application or a response in accordance with the approved form; and
(c) be supported by an affidavit.
(2)…
(3)…
(4)In addition to the factors to which the Court must have regard under subsection 153(3) of the Act in deciding whether to transfer a proceeding to the Federal Court, the Court must take the following factors into account:
(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding were not transferred;
(c) whether the proceeding will be heard earlier in the Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e) the wishes of the parties.
(5)…
(6)…
The respondents particularly point to two of those factors as being determinative, namely, the wishes of the parties and the interests of the administration of justice.
Wishes of the parties
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].
The first respondent points to the reasoning in Ogawa v Federal Magistrate Phipps (2006) 151 FCR 311 in which his Honour Justice Finkelstein considered a similar issue, albeit arising under the Trade Practices Act 1974 (Cth) (‘TP Act’) in which his Honour held that the associated jurisdiction of the Federal Magistrates Court (as it was then known) did not extend to jurisdiction under the TP Act, other than for matters in respect of which section 86(1A) of the TP Act expressly conferred jurisdiction.
In that case, the issue was whether the Federal Magistrates Court had jurisdiction to deal with a proceeding brought under the TP Act.
Relevantly, at paragraphs [11] to [12], Justice Finkelstein said:
11.Immediately before the establishment of the Federal Magistrates Court, the Federal Court had jurisdiction to deal with any matter arising under the Trade Practices Act. The jurisdiction was conferred by s 86(1) of the Trade Practices Act. When the Federal Magistrates Court was established s 86 was amended to give that court jurisdiction “in any matter arising under Division 1 or 1A of Part V in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission …
12.It is now necessary to notice s 86(4). This subsection relevantly provides that the jurisdiction of the Federal Court conferred by s 86(1) is “exclusive of the jurisdiction of any other court other than: (a) the jurisdiction of the Federal Magistrates Court under subsection (1A)”. I think the intent of this provision is clear. Parliament has laid down that the Federal Magistrates Court is precluded from exercising jurisdiction in a matter arising under any part of the Trade Practices Act apart from a matter under Pt V. … Moreover, it would subvert Parliament's intention if one were to accept the University's contention that s 18 of the Federal Magistrates Act (the “associated jurisdiction” provision) has the effect of giving to the Federal Magistrates Court jurisdiction over a federal claim that is within the exclusive jurisdiction of the Federal Court. In my view whatever claims may be picked up as part of the Federal Magistrates Court's associated jurisdiction they do not include claims that are within the exclusive jurisdiction of another federal court. (emphasis added)
The first respondent submits that a similar issue arises in this matter, namely whether this court has jurisdiction to grant the relief sought under section 1317H of the Corporations Act, or whether at the very least there is sufficient doubt as to the existence of that jurisdiction to warrant the transfer of this matter to the Federal Court for determination. It is submitted for the respondents that to the extent that there is doubt over this issue, it is in the interests of the administration of justice that the matter be transferred to the Federal Court for determination.
The first respondent relies upon a number of decisions in this court (and its predecessors) which have concluded that this court does not have jurisdiction to determine such matters.[13]
[13] See Brant v BLK International Pty Ltd [2021] FCCA 688 at [58]; Hyne v Concourse Golf Pty Ltd [2021] FedFCFamC2G 301 at [102].
There are some earlier decisions which suggest that this court could potentially have jurisdiction to deal with the issues raised in the proposed cross-claim, however, at the very least, this issue has not been conclusively decided.[14]
[14] Sims v Thomas [2016] FCCA 1752 at [25]-[26] and the decisions referred to therein. See, also, Ioakimidis v Lygon Court Travel Pty Ltd trading as Hello World Lower Templestowe & Ors [2020] FCCA 1687 at [26]-[29].
In response, as stated, the applicants neither consent to nor oppose the application for a transfer. Relevantly, their submissions are made to assist the court’s determination of the first respondent’s transfer application.[15]
[15] Applicant’s Outline of Submissions filed on 15 February 2024 at paragraph [2].
The applicants submit that section 134 of the FCFCOA Act is in similar terms to section 32 of the Federal Court of Australia Act 1976 (Cth), which was judicially considered in Rana v Google Inc [2017] FCAFC 156 at paragraph [23] where the Full Court said:
23.The ‘associated jurisdiction’ conferred under s 32 of the Federal Court of Australia Act is not concerned with the conferral of jurisdiction to determine non-federal matters that are said to be associated with a federal matter … It is not a synonym for ‘accrued jurisdiction’. The effect of s 32 is to confer jurisdiction to deal with a federal matter for which jurisdiction has not been conferred upon the Court where it is associated with another federal matter for which jurisdiction has been so conferred …
In addition, the applicant noted that in Wu v United Overseas Bank Ltd, Sydney Branch (No 2) [2021] FedCFamC2G 264 and Mortenson v Enviro Tanks Pty Ltd & Anor [2020] FCCA 1951, Judge Manousaridis appears to have taken a different view on the effect of section 134 of the FCFCOA Act and its predecessor and the court’s power to deal with a claim for breaches of directors’ duties under the Corporations Act.[16]
[16] Applicant’s Outline of Submissions filed on 15 February 2024 at paragraphs [5] to [7].
Having regard to the state of the authorities, there is a lack of clarity regarding the jurisdiction of the FCFCOA (Division 2) to deal with all of the issues in dispute between the parties (and the proposed parties). In those circumstances, I am satisfied that it is in the interests of the administration of justice that the whole of the proceeding in each matter be transferred to the Federal Court, which clearly does have jurisdiction.
Other factors
No party has indicated that there are any other proceedings in respect of an associated matter currently pending in the Federal Court of Australia.
This matter does not particularly raise issues of resourcing, ability to afford the parties a timely hearing and determination of their dispute, or the availability of particular procedures appropriate to the matter. However, it is submitted for the respondents that given the view taken in this court about its jurisdiction to deal with issues arising under the relevant provisions of the Corporations Act which are sought to be agitated, that the Federal Court has greater expertise in dealing with such matters.[17] There is some force to this submission.
[17] Respondents’ Outline of Submissions filed on 15 February 2024 at paragraph [11].
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.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge Mercuri. Associate:
Dated: 28 March 2024
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