Slattery v Canard Consolidated Pty Ltd
[2023] FedCFamC2G 198
Federal Circuit and Family Court of Australia
(DIVISION 2)
Slattery v Canard Consolidated Pty Ltd [2023] FedCFamC2G 198
File number(s): MLG 1636 of 2022 Judgment of: JUDGE SYMONS Date of judgment: 16 March 2023 Catchwords: PRACTICE AND PROCEDURE – application for leave under rule 11.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) to join a third respondent to proceedings – where applicant proposes to include related corporation as accessory to alleged contravention of the Fair Work Act 2009 (Cth) – where it is alleged that the second respondent was the controlling mind of the proposed third respondent – whether the applicant has an arguable case against the proposed third respondent – leave granted to include proposed third respondent – application for leave under rule 9.04 to dispense with requirement that corporation be represented by a lawyer – where proposed non-lawyer is the second respondent – whether proposed non-lawyer able to impartially conduct proceeding – interests of justice best served if corporate respondents legally represented Legislation: Fair Work Act 2009 (Cth) ss 90, 340, 361, 535, 550, 793
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 175, 190, 191
Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 rr 9.04, 11.01, 11.02
Long Service Leave Act 2018 (Vic)
Cases cited: Apotex Pty Ltd (ACN 096 916 148) v Les Laboratoires Servier and Others (No 4) (2010) 89 IPR 274; [2010] FCA 1202
Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2004] FCA 1361
Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488
Birtles v Commonwealth [1960] VLR 247
John Holland Pty Ltd v Comcare (2009) 190 IR 165; [2009] FCAFC 27
Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Anor [2016] FCCA 2499
Lukies v S2V Consulting Pty Ltd (2018) 333 FLR 226; [2018] FCCA 1431
Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd & Anor (No. 4) [2009] FMCA 291
Wayne v Dillon & Anor (2008) 40 Fam LR 543; [2008] FamCAFC 204
Division: Division 2 General Federal Law Number of paragraphs: 52 Date of last submission/s: 2 February 2023 Date of hearing: 2 February 2023 Place: Melbourne Counsel for the Applicant: Mr D. Murphy Solicitor for the Applicant: Maurice Blackburn Lawyers First Respondent: Mr D. Dunn (Director) Second Respondent: In Person Proposed Third Respondent Mr D. Dunn (Director) ORDERS
MLG 1636 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CONNOR SLATTERY
Applicant
AND: CANARD CONSOLIDATED PTY LTD
First Respondent
DAVID DUNN
Second Respondent
order made by:
JUDGE symons
DATE OF ORDER:
16 March 2023
THE COURT ORDERS THAT:
1.The applicant has leave pursuant to rule 11.02(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (the Rules) to include Canard Solutions Pty Ltd (ACN 151 646 150) as third respondent in the proceedings.
2.The application in a case filed by the first respondent on 31 January 2023 seeking leave for the second respondent to appear as a non-lawyer for the first respondent and, if necessary, the proposed third respondent, be dismissed.
3.The first respondent file and serve an address for service, being the address of a lawyer acting for the first respondent, by 13 April 2023.
4.The third respondent (Canard Solutions Pty Ltd – ACN 151 646 150) file and serve an address for service, being the address of a lawyer acting for the third respondent, by 13 April 2023.
5.The matter be listed for a directions hearing on 26 April 2023 commencing at 10.00am.
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
JUDGE SYMONS:
introduction
This matter came before me for directions on 2 February 2023. On that date, both the applicant and the first respondent moved on applications which I considered it necessary to determine prior to making any further programming orders in the proceeding.
The first (in time) application filed was an application in a proceeding filed by the applicant on 27 January 2023 by which he sought leave pursuant to r 11.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (the Rules) to include Canard Solutions Pty Ltd (ACN 151 646 150) (Canard Solutions) as the third respondent to this proceeding. The applicant relies in support of this application on the affidavit of lawyer Paul Sutton made on 27 January 2023 (Sutton affidavit).
The second application, filed on 31 January 2023, was an application in a proceeding filed by the first respondent, Canard Consolidated Pty Ltd (Canard Consolidated) seeking leave pursuant to r 9.04 of the Rules to carry on a proceeding otherwise than by a lawyer. The “non-lawyer” was identified as the director of Canard Consolidated, Mr David Dunn. Mr Dunn is also the second respondent to this proceeding. The first respondent relies in support of this application on the affidavit of Mr Dunn made on 1 February 2023.
In each case the application was opposed, and I heard submissions at the directions hearing from the parties as to their respective positions.
background
These proceedings were commenced by the applicant filing an originating application and statement of claim on 13 July 2022. By his substantive application, the applicant alleges that he was dismissed by Canard Consolidated in contravention of s 340(1) of the Fair Work Act 2009 (Cth) (FW Act). The applicant makes further claims that include a failure to make and keep employee records as required under s 535(1) of the FW Act, a failure to pay annual leave as required under s 90(2) of the FW Act. The applicant claims that by operation of s 550 of the FW Act, Mr Dunn as director of Canard Consolidated, was involved in and therefore liable as an accessory, for each of these alleged contraventions.
By his substantive application, the applicant, Mr Slattery, alleges (in summary and adopting the terminology used in the statement of claim) that:
(a)he was employed by Canard Consolidated from 14 November 2014 to March 2015 as a casual employee, and from March 2015 until 14 January 2022 as a full-time employee. From around March 2021, the applicant was employed as General Manager, Canard Solutions;
(b)on 4 August 2021, during a conversation with Mr Dunn, Mr Slattery made inquiries regarding $25,000 in unpaid remuneration for the year 2019-20, whether he would be paid any bonus for the year 2020-2021, and whether he could take paid parental leave (the First 4 August 2021 inquiries).
(c)later, on 4 August 2021, during a telephone conversation with Mr Dunn, Mr Slattery inquired about (amongst other things) whether he could take long service leave (the Second 4 August 2021 inquiries) and he advised Mr Dunn that he proposed to take 16 weeks of paid leave once his wife had given birth (the 16 Weeks Paid Leave).
(d)on the same date, Mr Dunn emailed Mr Slattery proposing to pay him $18,000 to rectify the unpaid remuneration instead of the $25,000 as previously agreed. Mr Slattery responded via email that he did not agree to this proposal (the 4 August 2021 complaint).
(e)On 10 August 2021, Mr Dunn and Mr Slattery agreed that:
(i)Canard Consolidated would back-pay Mr Slattery $25,000 for unpaid salary;
(ii)Canard Consolidated would pay Mr Slattery 8 weeks of annual leave accrued across his period of employment prior to the current year;
(iii)Mr Slattery was additionally entitled to any annual leave he had accrued during 2021;
(iv)Mr Slattery was entitled to long service leave, and his entitlement to long service leave crystallised on 14 November 2021 being the point at which Mr Slattery reached 7 years continuous service;
(v)Canard Consolidated would pay Mr Slattery 2 weeks full time and 4 weeks part time paternity leave;
(vi)Mr Slattery would be covered by a 12-month restraint of trade;
(vii)a draft contract sent by Mr Dunn to Mr Slattery on 26 April 2021 would be amended to reflect the above terms
(the 10 August 2021 agreement).
(f)On 13 October 2021, Mr Slattery commenced taking the 16 Weeks Paid Leave.
(g)On 14 December 2021, Mr Dunn sent Mr Slattery an email informing him that Canard Consolidated would shortly make its last payment for Mr Slattery’s 16 week period of leave, and that Mr Slattery would be on leave without pay from then on until his return.
(h)On 15 December 2021, Mr Slattery sent Mr Dunn an email:
(i)indicating that Mr Slattery had understood that he would be on paid leave for the entire duration of the 16 week leave period, given that he had accrued further annual leave during 2021 and Mr Dunn had agreed he could take long service leave and paid parental leave;
(ii)asking Mr Dunn to review the emails setting out the 10 August 2021 Agreement and to advise him which part of his understanding was inconsistent with the 10 August 2021 Agreement
(the 15 December 2021 inquiry).
(i)On 15 December 2021, Mr Dunn replied to Mr Slattery’s email and stated that Mr Slattery had at that time only accrued half of his yearly annual leave entitlements.
(j)On 16 December 2021, Mr Slattery responded, stating that Mr Dunn’s email was inaccurate and that he had continued to accrue paid annual leave entitlements during the paid leave, attaching a link to information on the Fair Work Ombudsman website (the 16 December 2021 complaint and inquiry).
(k)On 16 December 2021, Mr Dunn emailed a notice of termination to Mr Slattery which informed him that his employment with Canard Consolidated was terminated, effective on 14 January 2022, after a period of 4 weeks’ notice.
(l)Mr Slattery has not received any further payments from Canard Consolidated since he was paid his usual weekly salary payment on 15 December 2022.
The applicant claims that his dismissal was motivated by reason of his possession and exercise of workplace rights, including the various complaints and inquiries referred to above. He seeks damages for economic and non-economic loss (including lost income and outstanding leave entitlements) and pecuniary penalties.
In a single defence filed on 7 September 2022, the respondents admit that Canard Consolidated dismissed the applicant from employment on 16 December 2021 and that his employment came to an end on 14 January 2022.
The respondents admit that the applicant exercised workplace rights when he made the first and second 4 August 2021 inquiries, the 4 August 2021 complaint, and the 15 December 2021 and 16 December 2021 complaint and inquiry. The respondents also admit that the applicant had workplace rights in respect of annual leave and long service leave under the FW Act and the Long Service Leave Act 2018 (Vic), respectively. The respondents admit that Mr Dunn was the person to whom the applicant reported at all material times during his employment and although the respondents do not accept the detail of all of the interactions alleged, agree in substance that Mr Dunn was the person with whom the applicant was communicating when the alleged complaints and inquiries were made.
The respondents deny however that they have breached any provisions of the FW Act. In particular, the first respondent states in the defence that the applicant’s employment was terminated because it formed the view that it had been deliberately deceived and misled by the applicant regarding its (the first respondent’s) paternity leave and annual leave obligations to him. The respondents contend that the applicant, in his role as General Manager of Canard Solutions, had responsibility for all matters relating to employee conditions and entitlements and that he was responsible for the maintenance of his own employment records. They say in this regard that no demarcation existed (either physically or operationally) between the applicant’s and the Administration Manager’s duties for the first respondent or Canard Solutions.[1]
[1] See particulars to paragraph 4 of the respondent’s defence.
As far as Mr Dunn is concerned, both he and the first respondent deny his involvement as an accessory in any of the alleged contraventions, including because (on their pleaded case) Mr Dunn had no knowledge of the essential elements of the alleged contraventions.
The applicant’s case for joinder
The applicant’s case acknowledges that as the first court date has passed, he requires leave to include Canard Solutions as the third respondent to the proceeding (r 11.02(2)).
The applicant proposes to include Canard Solutions as an accessory to the first respondent’s alleged contravention of s 340(1) of the FW Act and foreshadows that if permitted to amend his statement of claim, he will rely primarily on s 550(2)(c) of the FW Act and allege that Canard Solutions was “knowingly concerned” in that contravention.
The applicant submits that although s 550 of the FW Act requires the accessory to have actual knowledge of the essential facts constituting the contravention that knowledge may, in the case of a body corporate, be imputed to it where it resides in an officer, employee or agent of that body corporate (s 793(2) of the FW Act).
The applicant identifies the following facts as giving rise to Canard Solutions’ involvement in the first respondent’s contravention:
(a)Canard Consolidated was the employing entity and Canard Solutions was the trading entity;[2]
(b)Mr Slattery was employed by Canard Consolidated but worked solely in the business of Canard Solutions;[3]
(c)Mr Slattery was the General Manager of Canard Solutions and attended its executive meetings.[4] He reported to the second respondent, Mr Dunn.
(d)At the time of Mr Slattery’s dismissal on 15 December 2021, the second respondent, Mr Dunn, was a director of Canard Consolidated and the sole director of Canard Solutions.[5] For this reason, Mr Dunn was also the controlling mind of Canard Solutions;
(e)On behalf of Canard Consolidated, Mr Dunn decided to terminate Mr Slattery’s employment.
[2] See paragraph [11] of Sutton affidavit and the admission to this effect contained in paragraph 4 of the respondents’ defence.
[3] Ibid.
[4] Ibid.
[5] See annexures “PS-1” and “PS-2” to the Sutton affidavit.
The applicant submits that for the purpose of determining its joinder application, the Court is required to consider only whether the applicant has a prima facie or “arguable” case against the third respondent (referring to Wayne v Dillon & Anor [2008] FamCAFC 204). The applicant submits that it is at least arguable that when Canard Consolidated dismissed Mr Slattery:
(a)Canard Solutions was “knowingly concerned” in the dismissal because it assented to its sibling company (Canard Consolidated) terminating the employment of its own General Manager. This assent was said to be obvious in circumstances where Mr Dunn made the decision (on behalf of Canard Consolidated) to terminate Mr Slattery’s employment, the decision had a major impact on Canard Solutions’ business, and Mr Dunn was the sole director and controlling mind of Canard Solutions. Mr Dunn, as director of Canard Solutions, can be taken to have agreed with the decision that he himself made on behalf of Canard Consolidated. By virtue of his office, Mr Dunn’s conduct is Canard Solutions’ conduct, under s 793(1) of the FW Act;
(b)Canard Solutions had actual knowledge of the essential facts constituting the contravention because Mr Dunn had that knowledge and s 793(2) of the FW Act imputes that knowledge to Canard Solutions. The various exercises of workplace rights that the applicant alleges caused Canard Consolidated to terminate his employment each occurred in direct communication with Mr Dunn.
In support of this analysis, the applicant took the Court to the notice of termination that was annexed to the Sutton affidavit.[6] That notice, which was written by Mr Dunn, included the following statement upon which the applicant relies to establish a connection between Canard Solutions and the first and second respondents:
To the extent that formalities are required, please note this advice is being provided by both Canard Consolidated with whom you have your employment agreement, and Canard Solutions to whom you have been providing services at Canard Consolidated’s direction.
[6] See annexure “PS-8” to the Sutton affidavit.
The applicant invited the Court to consider the purpose of the joinder, consistent with the approach identified in Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488 at [16]. This purpose was said to be responsive to the position adopted by Canard Consolidated in its application made under r 9.04 of the Rules, namely, that it could not afford legal representation. The applicant made the submission that if he was to succeed against Canard Consolidated and Canard Consolidated was unable to meet the judgment debt, he would propose then to commence a further action against Canard Solutions. If the Court was to permit the joinder of Canard Solutions now – in contemplation of this eventuality - this would save cost, time, and judicial resources.
The first and second respondent and the proposed third respondent oppose joinder
The second respondent, Mr Dunn, made submissions on behalf of the first respondent (Canard Consolidated) and the proposed third respondent (Canard Solutions) opposing the applicant’s joinder application.
Mr Dunn described the application as involving “substantial overreach” on the part of the applicant. He asserted, from the “Bar table”, that Canard Solutions was in no way involved in the resolution of employment arrangements, either with respect to the applicant, or more generally. He told the Court that all decisions concerning employee relations, including those regarding the payment of employee entitlements, were made by Canard Consolidated. Mr Dunn submitted that “extending the net” wider to comprehend a claim against Canard Solutions would simply result in the parties having to undertake additional work.
CONSIDERATION
The applicable principles governing an application for joinder pursuant to r 11 of the Rules were extensively surveyed by Judge Lucev in Lukies v S2V Consulting Pty Ltd (2018) 333 FLR 226. The following principles can be distilled from his Honour’s analysis of the relevant authorities:
(a)Whether or not to grant leave is a matter within the discretion of the court having regard to all the circumstances of the case. The discretion to join a new party is “a wide one”;[7]
(b)In exercising discretion it is relevant to have regard to the objects of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (the Act) including that the Court is intended to operate in as informal a manner as possible in the exercise of judicial power, that it is not to be protracted in its proceedings, that it is to resolve proceedings justly, efficiently and economically using streamlined procedures and that it is to avoid undue delay, expense and technicality;[8]
(c)Rules 11.01 and 11.02 provide separate bases for a party to be joined to proceedings in this Court. It is therefore necessary when considering an application for joinder to determine if the application is made on the basis of r 11.01 or r 11.02 (or both). This is because different tests apply for joinder under these different provisions;
(d)While, for the purpose of considering r 11.01(1) it is necessary to consider whether a person’s participation is “necessary for the Court to completely and finally determine all matters in dispute in a proceeding”, under r 11.02(1) of the Rules, a party may include another party to a proceeding in certain circumstances, notwithstanding that they may not be a necessary party;[9]
(e)Questions involved in an existing action include questions arising out of the transaction or a series of transactions on which the cause of action was based. These would include the question of whether, if the original defendant is not liable to compensate the plaintiff for damages suffered by him, some other person proposed to be added may be considered liable in the circumstances;[10]
(f)An applicant for joinder must demonstrate a case which is “arguable”, not a prima facie case;[11] and
(g)The exercise of the Court’s discretion under r 11.02 might also be influenced by other factors, particularly issues such as case management and delay.
[7] Apotex Pty Ltd (ACN 096 916 148) v Les Laboratoires Servier and Others (No 4) (2010) 89 IPR 274; [2010] FCA 1202 at [8].
[8] Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd & Anor (No. 4) [2009] FMCA 291 at [31].
[9] See Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488 at [13]; Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Anor [2016] FCCA 2499 at [8].
[10] See Birtles v Commonwealth [1960] VLR 247 as cited in John Holland Pty Ltd v Comcare (2009) 190 IR 165 at [21].
[11] See Wayne & Dillon & Anor [2008] FamCAFC at [17]; Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Anor [2016] FCCA 2499 at [11].
Having given careful consideration to the submissions of the parties I am persuaded that it is appropriate to grant leave to the applicant to include Canard Solutions as a third respondent to his application.
In terms of corporate structure, there is a close relationship between the first respondent and Canard Solutions. They share the same director, Mr Dunn. There is also a close relationship between their activities. The uncontroverted evidence is that the first respondent is the employment vehicle for Canard Solutions. While Mr Dunn contends that the employment activities (and I infer, decision-making) is quarantined because of this structure, this submission ignores the fact that Mr Dunn was directly involved in the inquiries and complaints relied upon by the applicant and the person who made the decision to terminate the applicant’s employment. It is also a position that is not easily reconciled with the statement contained in particulars to the respondents’ defence concerning the lack of demarcation between employment supervision activities carried out by the applicant and the Administration Manager for the first respondent and for Canard Solutions (refer [10] above).
I accept that just because Mr Dunn was sole director of Canard Solutions while he was making decisions on behalf of the first respondent does not mean automatically or necessarily that (because of common directorship) responsibility for those decisions should be attributed also to Canard Solutions. However, I consider that there is an arguable case that because of the close relationship between the first respondent, Mr Dunn and Canard Solutions, the requisite knowledge would be imputed and accessorial liability established. The arguable case is reinforced by the wording employed in the letter of termination that makes clear that Mr Dunn wished to communicate that the decision to end the applicant’s employment was being made on behalf of both the first respondent and Canard Solutions.
I have considered Mr Dunn’s submission that the joinder of Canard Solutions would result in the parties having to undertake additional work. While undoubtedly there would be some additional work, the overwhelming burden of this would most likely fall on the applicant. Even then, given the nexus between the case sought to be raised against Canard Solutions and the existing cause of action, I consider it unlikely that the parameters of the dispute would broaden in a way that would offend the injunction against protracted proceedings. Instead I consider, given the legitimate concerns held by the applicant about the first respondent’s capacity to service any judgment debt, that the joinder of Canard Solutions would more likely achieve the objectives of efficiency and economy of proceedings by avoiding the necessity for a separate proceeding.
The first respondent’s case seeking leave pursuant to r 9.04 of the Rules to be represented by a non-lawyer
The first respondent’s case for leave was largely articulated in the affidavit of Mr Dunn filed on 1 February 2023. Mr Dunn also confirmed at the hearing that if the applicant was granted leave to join Canard Solutions to the proceeding, then his submissions should be understood as directed at an application that it too (as proposed third respondent) be granted leave to carry on proceedings with Mr Dunn as its representative. Given the decision that I have made concerning the applicant’s case for joinder, I will therefore consider the application on this enlarged basis.
In his affidavit, Mr Dunn deposed to his twenty years’ experience working as a lawyer (between 1976 and 1996), the last ten as a partner and his subsequent employment in senior roles at Merrill Lynch and KPMG before commencing his own businesses in 2010, which had included Canard Consolidated and Canard Solutions.
As far as the financial position of Canard Consolidated and Canard Solutions was concerned, Mr Dunn’s affidavit contained the following paragraphs:
4In 2014, in collaboration with my sister Susan Vincent and the Applicant, I commenced a house clearing business through a special purpose company Canard Solutions Pty Ltd (Cansol). Vincent and the Applicant were at all times employed by Canard and sub-contracted to Cansol
5Cansol has never made a profit in any year of operations, applying Generally Accepted Accounting Principles. Profits are recorded in the years 2016, 2019, 2020, and 2021, but were achieved without recording compensation for Director time contributed to the business...
6Following acquisition by my wife of a farm property from my family company, the First Respondent leased this property and took a transfer of relevant assets (including cattle) (funded by family companies) to conduct a farming operation
7From 2014 to 2020, our family, through various entities provided funding to each of Canard and Consol to enable the employment of employees and the operation of both Cansol and the farming business.
8In 2020, Cansol closed its business by reason of Covid-19, re-opening through parts of 2020 and 2021 on limited bases, where possible. Canard applied for and received JobKeeper for all its employees (including those sub-contracted to Cansol).
….
19Following receipt of the Applicant’s claim and after my wife resigned as Director of Canard, my wife and companies in our group determined to terminate funding of Canard, and to terminate the farm lease, and Canard therefore terminated all employees. These employees were subsequently offered and accepted employment by relevant operating businesses. The Applicant was also offered re-employment on a different basis owing to the long-term family relationship and the fact that he and his wife were expecting a child.
20To meet its debt obligations the assets of Canard were liquidated for full market values, and liabilities were discharged in full save for approximately $23,000 owed to my wife…Canard has no ongoing income.
21As identified in its financial statements…Cansol has a net negative position and is in a position to continue operations only with the continued support of the family.
Mr Dunn’s affidavit annexed the profit and loss statements and balance sheets for Canard Solutions for the years 2015 to 2020 and what was described as “the current balance sheet” for Canard Solutions dated 31 December 2022.[12] The affidavit also annexed the balance sheet of Canard Consolidated dated 31 December 2022.[13]
[12] See annexure “DD-1” of the Dunn affidavit.
[13] See annexure “DD-3” of the Dunn affidavit.
On the issue of previous efforts to obtain legal representation, Mr Dunn deposed that Canard Consolidated had approached “various providers of employment advice” all of whom had indicated a requirement for the payment of funds. The Dunn affidavit annexed what was described as “an advice to this effect” from HR Legal which consisted of an email sent by a representative of that firm to Mr Dunn on 22 August 2022 which requested payment of a deposit in the amount of $15,000 before work could commence.[14]
[14] See annexure “DD-4” of the Dunn affidavit.
Mr Dunn explained that although the issues in the proceeding were not complex, he had formed the view, having regard to the extensive history and facts relevant to the claim, that even if “competent pro bono lawyers” could be found, the exercise of instructing them adequately would add significant delay to the resolution of the claim. In oral submissions he anticipated that it would take him “months” to properly brief a lawyer.
Mr Dunn identified the legal issues to be addressed in resolving the claim as:
(a)the applicant’s actual leave entitlements;
(b)the first respondent’s basis and intentions in dismissing the applicant;
(c)the applicant’s purpose in misleading Canard Consolidated regarding:
(i)paternity leave entitlement
(ii)annual leave entitlement; and
(d)the applicant’s role as an employee of Canard Consolidated and a subcontractor to Canard Solutions.
Mr Dunn made the submission that as he was “invested with the knowledge of the facts and records of the application” he would be in a position to present them in a just, efficient and economical manner and with a view to resolving the dispute. This was said to be consistent with the objects and purposes of the Act and the Rules.
The applicant opposes the r 9.04 application
The applicant opposed the application to dispense with the requirement that the first respondent and (if necessary) the proposed third respondent, be legally represented.
The opposition reflected the following considerations:
First, it was said that if the first respondent was to be legally represented this would assist in the expeditious progress of the application through the Court and facilitate settlement of the matter. Appointment of a legal representative would have the result that an officer of the Court would be in a position to give proper advice to the first respondent, including as to the risks of litigation. The applicant contrasted this with the position of Mr Dunn who, it was submitted, had “obvious skin in the game”.
Second, as far as the financial position of the first respondent was concerned, the applicant accepted that it was experiencing financial difficulty. However, it was submitted that this situation should be considered in its proper context, being that both the first respondent (and the proposed third respondent) were emanations of Mr Dunn given that he was the sole director of both companies.
The applicant drew the Court’s attention to the Dunn affidavit and submitted it was clear from Mr Dunn’s evidence that he and his family had engaged in the practice for some years of funding the businesses of both the first respondent and the proposed third respondent and drawn profits when they were able. The applicant submitted that there was no evidence that Mr Dunn or his family were impecunious but rather they were exercising a choice whether to allocate (or not) funds to the family companies. It was said, by reference to [19] of the Dunn affidavit that Mr Dunn (and his family) had made a conscious determination, after the applicant had provided his claim, to effectively starve the first respondent of funding and to quarantine it from funds for the purpose of this litigation. The applicant submitted that the first (and proposed third) respondent’s current impecunious state should be understood as an artificial contrivance.
Third, as for whether any prejudice would accrue to the first respondent (or the proposed third respondent) if they were not legally represented, the applicant noted that potential prejudice could be discerned from the manner in which the respondents had chosen to defend the claim for accessorial liability against Mr Dunn. The applicant took the Court to paragraph [55] of the respondents’ defence where, in answer to the allegation that Mr Dunn was liable as an accessory because of his involvement in the dismissal, the failure to make and keep records and/or the failure to pay annual leave, the respondents had pleaded a denial of any contravention and, in the alternative, that Mr Dunn had no knowledge of the essential elements of the contravention and was not involved in the contravention, within the meaning of s 550(2) of the FW Act.
The applicant submitted that this aspect of the pleading gave rise to a real potential for conflict of interest between the first respondent and the other respondent/s because if a primary contravention was established against the first respondent, it would be precluded (on the current defence) from asserting that one or other of the other respondents had the requisite knowledge, and would be denied the opportunity to seek contribution in respect of any award of damages. This was said to be injurious to the first respondent’s proper interests in the litigation.
Fourth, addressing the complexity of the proceeding, the applicant submitted that the matter was not straightforward including because the first respondent would be required to confront the reverse onus in s 361 of the FW Act which would involve interrogating the state of mind of the first respondent in the search for the true reason why the alleged adverse actions had been taken. The applicant submitted that the issues to be resolved did not extend to an assessment of the applicant’s character and to the extent that Mr Dunn foreshadowed an intention to focus on such issues, this would frustrate the objective that the Court’s time and resources be used efficiently.
Fifth, by reference to the Sutton affidavit, which referred to and annexed an email from the applicant’s lawyer sent on 27 July 2022 that brought r 9.04 to the attention of the respondents[15], the applicant submitted that the first respondent had had sufficient time to obtain legal representation.
[15] See Sutton affidavit paragraph [9] and annexure “PS-4” to that affidavit.
Consideration
Section 175 of the Act provides as follows:
Representation
A party to a proceeding before the Federal Circuit and Family Court of Australia (Division 2) is not entitled to be represented by another person unless:
(a)under the Judiciary Act 1903, the other person is entitled to practise as a barrister or solicitor, or both, in a federal court; or
(b)under the regulations, the other person is taken to be an authorised representative; or
(c)another law of the Commonwealth authorises the other person to represent the party.
Rule 9.04 of the Rules provides as follows:
Corporation must be represented
Except as provided by or under an Act or regulations made under an Act, or with the leave of the Court, a corporation may not start or carry on a proceeding otherwise than by a lawyer.
In considering and applying the Rules, it is important to note the obligations contained in ss 190 and 191 of the Act. Section 191 requires the parties to a civil proceeding to act consistently with the overarching purpose in section 190 of the Act. Section 190 requires, amongst other things, the civil practice and procedure provisions to be exercised in a way that best promotes the overarching purpose. This, broadly speaking, emphasises the just and efficient management and resolution of disputes.
The many authorities on the exercise of the discretion to dispense with compliance with rule 9.04 disclose that the following considerations, among others, are relevant: the complexity of the case; the manner in which the case has progressed at the time application is made and the manner in which it may proceed in the future; financial considerations that would inhibit a company from obtaining representation (noting the onus is on an applicant seeking to dispense with the requirement of legal representation to provide evidence of incapacity); the ability of the representative to exercise the objectivity of a practitioner; whether the matter can be conducted in an orderly manner without a solicitor; whether the person seeking to represent the company is likely to be a principal witness in the trial particularly if credit is an issue and the effect, if any, that a grant of leave will have on the Court resources and the effect upon other litigants in the Court.
There is no doubt that Mr Dunn is an intelligent and resourceful individual who occupied very senior positions within the legal profession before directing his energies to business ventures. There is no suggestion that Mr Dunn has to date been anything other than attentive to court dates and that he has facilitated the first respondent’s active participation in the proceeding. To this point in time, his representation of the first respondent has not materially undermined the case management objectives of the Court although I note the submission made by the applicant that efforts at mediation (that was conducted in November 2022) were hampered by Mr Dunn’s lack of objectivity. I cannot comment on what occurred at mediation but the topic of objectivity is one to which I will return.
As far as the complexity of the proceeding is concerned it strikes me – on a review of the pleadings – that it will throw up for consideration the usual range of issues that arise where adverse action is alleged. Although concessions have been made in relation to the making of some complaints and inquiries and that they involved the possession and/or exercise of a workplace right, the parties, and more especially the first respondent, will need to grapple with the reverse onus in s 361 of the FW Act. If this case is defended according to the orthodox approach, the direct testimony of Mr Dunn as decision-maker, will be integral to this response. Mr Dunn will effectively be “a witness in his own defence and also making submissions and presenting evidence for the companies”, a situation described by the Federal Court in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2004] FCA 1361 at [3] as “hardly….a satisfactory state of affairs”.
Although Mr Dunn’s professed investment in the facts and the records of the application might mean that he is well placed to provide instructions to a lawyer, it also operates to impair his objectivity about the case that the first respondent (and now, the third respondent) will be required to answer. This is not meant as a criticism of Mr Dunn but rather an acknowledgement of the challenges and tensions that inhere in a situation such as this one.
The lack of objectivity reveals itself, for example, in the manner in which Mr Dunn has identified the legal issues in this case. The fruits of this exercise (referred to at [32] above) betray an unnecessary focus on the applicant’s role in identifying employee entitlements and the character of Mr Slattery. It was apparent to me during the directions hearing that Mr Dunn feels strongly aggrieved by the behaviour and attitude of the applicant and I apprehend that this view will, as the proceeding continues, impair his ability to impartiality conduct proceedings on the first (and third) respondent’s behalf. This has the real potential to translate to prejudice to either or both corporate respondents.
I accept that the first respondent and Canard Solutions have produced financial records that indicate a lack of liquidity. However, the authorities recognise that a corporation that is impecunious is not automatically entitled to be represented by a non-lawyer: Dataline at [4]. I also accept that there is a degree of fluidity in the fiscal health of both corporate respondents that can be connected directly to Mr Dunn and his family and which tends to undermine the picture of financial distress created by the balance sheets.
When all of these matters are considered, in my view, it is not in the interests of justice that compliance with r 9.04 be dispensed with. Instead, the interests of justice will be better served if the first respondent and Canard Solutions are both legally represented. For these reasons, I will dismiss the application in a proceeding filed by the first respondent on 31 January 2023 and make orders that require both corporate respondents to take steps to ensure that they are properly represented before the matter returns for a directions hearing. On that occasion the Court will discuss with the parties the further timetabling of the matter including so as to accommodate steps arising from the disposition of these two applications.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons . Associate:
Dated: 16 March 2023
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