Wang v Odyssey Travel Pty Ltd

[2020] FCCA 925

FEDERAL CIRCUIT COURT OF AUSTRALIA

WANG v ODYSSEY TRAVEL PTY LTD [2020] FCCA 925

Catchwords:
INDUSTRIAL LAW – Application pursuant to r 16.05 of the Federal Circuit Court Rules – application dismissed for non-attendance of the applicant – whether or not non-attendance adequately explained – merits of application considered – prejudice to respondent considered – application granted.

Legislation:

Federal Circuit Court Rules 2001, r.16.05.

Cases cited:

Wint v Medimobile Pty Ltd [2016] FCCA 102

Applicant: JIMEI WANG

Respondent: ODYSSEY TRAVEL PTY LTD

File Number: MLG 2554 of 2019

Judgment of: Judge Burchardt

Hearing date: 14 April 2020

Date of Last Submission: 14 April 2020

Delivered at: Dandenong

Delivered on: 27 April 2020

REPRESENTATION

Counsel for the Applicant: Ms Kelly

Solicitors for the Applicant: Esser Legal

Counsel for the Respondent: Mr Levine

Solicitors for the Respondent: Maciel Pizzorno & Co

ORDERS

1. The parties are to confer and forward agreed Minutes of Orders that give effect to these Reasons for Judgment within 7 days.

2. In default of agreement, the parties file and serve written submissions no more than 5 pages in length within 7 days.

3. Unless otherwise ordered, the matter is to be determined on the papers.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 2554 of 2019

JIMEI WANG

Applicant

And

ODYSSEY TRAVEL PTY LTD

Respondent

REASONS FOR JUDGMENT

(as corrected)

Introductory

1. The matter before the Court is an application pursuant to rule 16.05 of the Federal Circuit Court Rules 2001 by which the applicant seeks to set aside a judgment entered in default of appearance on 2 December 2019.  The application is strongly resisted by the respondent, but, for the reasons that follow, I am going to grant the applicant the relief that she seeks.

The Procedural History

1. The applicant lodged an application together with a statement of claim and Form 2 claim alleging dismissal in contravention of a general protection on 7 August 2019.  That matter was allocated a first return date of 2 December 2019.

2. On 12 November 2019, there was no appearance by the applicant, and Mr Levine of counsel appeared on behalf of the respondent.  In the light of the applicant’s non-appearance (attempts by my associate to contact the solicitors on the record for the applicant proved unsuccessful), the matter was dismissed for non-attendance.

3. From the affidavit of Kurt William Esser sworn 29 November 2019, it is apparent that on 13 November 2019, Mr Esser discovered the Order made the previous day and notified the Court and the respondent that he had instructions to seek to apply to set the Order aside.  That application, which is the application presently before the Court, was filed on 2 December 2019.

4. Mr Esser filed an affidavit on 2 December 2019, to which it will be necessary to return, and Christine Zhang, a director of the respondent, swore an Affidavit on 10 December 2019.  That affidavit will also need to be returned to, but it should be noted that the affidavit was not, apparently, formally filed until the hearing before the Court.

The relevant test

1. The parties agree about the relevant test. Both counsel referred me to decisions of Judge Jarrett. In the matter of Wint v Medimobile Pty Ltd [2016] FCCA 102 (“Wint”), His Honour set out at paragraphs [5] – [7] a helpful indication of how the Court should approach such matters as follows:

   5. The Court has power to set aside an order made in the absence of a party: rule 16.05(2)(a) Federal Circuit Court Rules 2001. To set aside an order made in the absence of a party is a discretionary exercise. The discretion is unfettered, but nonetheless is to be exercised judicially and bearing in mind the public interest in there being an end to litigation.

   6. There are three criteria, each of which should usually be demonstrated before a judgment or order is set aside under FCCR 16.05(2)(a), namely:

   a. a reasonable explanation for the applicant's absence at the trial or hearing;

   b. material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside;  and

   c. no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court.

   7. Matters relevant to the three criteria set out above will include, but will not necessarily be limited to:

   a. whether a party with notice of the proceedings disregarded the opportunity of appearing at and participating in the trial;

   b. delay, if any, in bringing the application to set aside and whether, if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it;  and

   c. the conduct of the applicant since the judgment or order sought to be set aside was made.

The arguments of the parties

1. It should be noted that the proceedings were heard wholly by telephone, given the present COVID-19 restrictions.  What follows is taken from my notes. 

2. Counsel for the applicant referred the Court to rule 16.05(2) and the Order made on 12 November 2019. Counsel read the affidavit of Mr Esser and supplied the draft orders sought. Counsel noted that the applicant had applied to the Fair Work Commission seeking remedies in April 2019 which had led to a certificate on 22 July 2019. The application was filed in this Court on 5 August 2020, within the 14 day time limit prescribed.

3. There are two key claims.  It was submitted that the applicant was an employee subject to the benefits of an award.  Paragraphs 2 to paragraphs 20 of the Statement of Claim dealt with entitlements said to arise therefrom.  Counsel readily conceded that the matter was not properly pleaded.

4. Counsel submitted that at paragraphs 21 and following adverse action was pleaded.  It was noted that there was an alleged typographical error in the statement of claim at paragraph 23, which erroneously asserted the date of alleged dismissal as 14 February 2019 when it ought to have been 2 April 2019.  Counsel referred to the judgment of Judge Jarrett in Wint. 

5. First, it was submitted that the delay was wholly explained by Mr Esser’s affidavit.  It was representative error, not an error by the applicant.

6. Counsel then turned to the material arguments that might have been advanced.  She referred to the failure of the respondent to provide pay slips.  She referred to the affidavit of Ms Zhang at paragraph 4 which conceded that the applicant was treated as a contractor.  This axiomatically meant that she was not treated as an employee.  Ms Zhang had exhibited a complaint which itself followed the Fair Work Ombudsman’s inquiry.  The employee relationship ended in about April 2019.  It was submitted that there was a clear contest between the parties on these materials.

7. Counsel turned to the question of prejudice.  It was submitted that there was no prejudice to the respondent.  The applicant had six years to bring the proceeding and did not need to go to the Fair Work Commission, save for the adverse action component.  If the matter is dismissed, the applicant can still bring a claim.  Adverse action was different.  There would be prejudice to the applicant, because if she were now to have to start again, she would now be out of time.  The only prejudice to the respondent was the necessity to defend the proceeding.

8. It was submitted that the applicant moved quickly after the default and filed this application within two weeks, on 2 December 2019.  The fact that the applicant herself had not attended the first hearing was irrelevant.  There were no third-party concerns.  The respondent was notified the day after the hearing of the intention to set aside and consent was sought but not given.  Finally, counsel noted that the correct name of the respondent should be Odyssey Trading, not Travel.

9. Counsel for the respondent was content largely to rely upon his written submissions.  It was submitted that there was no reasonable explanation for the non-attendance. 

10. If one turns to Ms Zhang’s Affidavit, it is noteworthy that the respondent’s solicitor sent Mr Esser an email at 4:06pm on 11 November 2019 (Annexure “CZ3”) in which, relevantly, the solicitor for the respondent wrote, “Please note that we will be appearing at the directions hearing tomorrow.”

11. It was submitted that Mr Esser had not responded to that matter at all.  Counsel referred to the endeavours by my associate to call Mr Esser. 

12. Counsel objected to the oral amendment, as it were, to the statement of claim with a dismissal date of 2 April 2019.  Counsel pointed to the Form 8 filed in the Fair Work Commission which suggested employment at paragraph 10.  There was no affidavit verifying the statement of claim and no material to justify a different outcome before the Court.

13. It was submitted that there was no contest in this matter because there is simply no affidavit from the applicant.  No amendments to the statement of claim were before the Court.  There was prejudice to the respondent because these proceedings are required to be quickly and competently dealt with.  Counsel also pointed to the conduct of the applicant since the judgment.  There was no affidavit from the applicant and no new statement of claim.  He submitted that new solicitors would require to be retained and referred to allegations made by the police at “CZ4”.

14. In reply, counsel pointed to the Form 8 which had a termination date of 2 April 2019.  She submitted that there was no need for an affidavit on the merits.  At present, the proceeding has dismissed and there would be no point in having an amended statement of claim.

15. The respondent’s written submissions essentially traverse the matters I have already dealt with in the oral submissions above.  It was submitted that the applicant was given an opportunity to be heard but did not take advantage of it.  The written submissions point to the absence of any affidavit material to convince the Court that there are material arguments available to it that might reasonably lead to the making of an order different to the one sought to be set aside (paragraph 9). 

16. There has been no response to Ms Zhang’s Affidavit asserting that the applicant has not been dismissed (paragraph 10).  Furthermore, Ms Zhang had denied that one of the reasons motivating the Respondent’s conduct was the applicant’s complaint of which they had no knowledge at the relevant time (paragraph 11).

17. The prejudice complained of essentially that was described earlier, namely, that such a complaint should be brought expeditiously and in a competent manner.

Consideration

Was there a reasonable explanation for the non-attendance?

1. Mr Esser was well aware that the matter was listed for 12 November 2019.  So much is apparent from his email of 24 October 2019 to Mr Angelatos on behalf of the respondents, annexed as “KWE-2” in Mr Esser’s affidavit. 

2. Nonetheless, Mr Esser has sworn that he misdiarised the date and that he did not attend his office on 12 November 2019 as he had taken a day of leave.  It is true that he has not responded in terms to the assertion made by the respondent that Mr Angelatos sent him an email reminding him of the hearing date the following day at 4:06 pm on 11 October 2019.

3. Despite his incompetence on this occasion, Mr Esser is nonetheless an officer of the Court.  To the extent that the respondent’s submissions ask me to infer that Mr Esser has deliberately failed to respond to the matter of the 4:06pm email and that it might be, in a sense, sinister, I would say that I am not prepared to draw such an inference.  The fact is that Mr Esser has said that it is his fault that he did not attend.  I would infer that he had, in fact, left early on the previous day to take the extra day’s leave.  He appears on this occasion to have conducted his affairs in a somewhat insouciant manner.  Nonetheless, it is plainly an error by the representative, not by the applicant, and I accept that in a general way the Court is loath to visit upon the client the error of the legal practitioner.

4. While the respondent has asserted in correspondence that the applicant has a case in negligence against her solicitor, that may well be the case, but the difficulties in such a proceeding are all too well known.  The applicant has not just to prove the negligence, but has to prove that it caused loss, with all the attendant difficulties that that might be said to give rise to. 

5. In my view, the explanation for the delay, which is a simple mea culpa by Mr Esser, is in my view acceptable, notwithstanding the criticisms advanced by the respondent.

Would the outcome have been likely to have been different?

1. Had Mr Esser attended on the first date, the Court would have been confronted by the statement of claim and, assuming it was tendered, the Affidavit of Ms Zhang.  The statement of claim asserts relevantly that the Applicant commenced employment on a permanent basis on 17 June 2013.  She goes on to assert, inter alia, never having received any pay slips or overtime. 

2. There are other complaints relating to non-provision of annual leave or sick leave entitlements and various ancillary claims, some of which may fall away when the matter is repleaded.  On any view, however, the overarching position for which the applicant contended was that she was an employee who was entitled to the benefit of award provisions and/or the Fair Work Act 2019 (Cth).

3. The claim for overtime amounted to $175,000 and the claim for annual leave $21,000.  Given that the application was filed, according to the electronic lodgement slip, on 7 August 2019, it is immediately apparent that claims in excess of six years before that would have to fall away, but, that anomaly aside, the gravamen of the claim was clear.

4. The affidavit of Ms Zhang, by way of contrast, asserts that as at February 2019 the applicant was not an employee of the respondent but an independent contractor.  It then goes on to assert that the respondent did not terminate the applicant’s contract but that she left voluntarily in February 2019.  The affidavit does not in terms state that the applicant was never an employee, but that is the tenor of the material.

5. It is immediately apparent that the matter, as it would have stood when it came before the Court, would have given rise to a justiciable controversy, albeit that, as the applicant concedes, the statement of claim would need to be redrawn.  I accept the submission from the applicant’s counsel that the Court would have been more likely than otherwise (it would have been inevitable in my view) to permit a repleading as there would plainly have been a genuine controversy.

6. As the pleadings stood at the time, the adverse action claim would have faced a real difficulty.  That is because the date of 14 February 2019 as the date of termination in the statement of claim plainly pre-dated at least arguably the matters of which complaint was eventually made.  While counsel for the respondent understandably objects to counsel for the applicant seeking, as it were, to amend the statement of claim without notice and on the run during the currency of the proceeding before me, both parties seem to agree that the Fair Work Commission documents earlier filed by the applicant had asserted a date in April. 

7. That being so, this amendment does not smack of being of recent invention.  Indeed, had the applicant been represented and the argument developed, I rather suspect that the error in the statement of claim would have been corrected at the hearing before me.  In either event, I would have given the applicant leave to replead.  The notion that this matter does not involve a justiciable controversy is, in my view, utterly unarguable.  While there is an unpleasant and vivid dispute between the parties, it is clear that a dispute there indeed is.  That would have been apparent on 12 November 2019.

8. I would note in parenthesis that while it would seem from Ms Zhang’s material that the police entertained real questions about Mr Esser’s conduct, those are matters for other authorities and are, in my view, of no relevance to what I am being required to determine in this application.

Prejudice

1. There is always prejudice to a respondent if a matter is reinstated in these circumstances.  From having judgment effectively in its favour, it would now have to defend the proceedings.  However, in my view, the applicant acted promptly upon becoming aware of the default judgment and took reasonably timely steps to remedy it.  Indeed, the respondent’s failure to agree to set aside the judgment, in my view, was misconceived.

2. Having said that, were the application to remain dismissed, on any view of the matter the applicant could file her proceeding again.  There might no doubt be issues as to whether or not this was an abuse of process, but given that she was within time at least in relation to what were described as the employee claims, it would be hard to see that that could be sustained.  Furthermore, there is plainly prejudice to the applicant in the matter not being reinstated, because it would indeed, as counsel submitted, be a matter of trying to extend time for her application, at least in relation to the adverse action claims.

Conclusion

1. In my view, it is quite clear that the failure of Mr Esser to attend the Directions Hearing was a negligent oversight on his part.  It should not give rise to his client being shut out from pursuing a claim, the ultimate merits of which are wholly, in my view, unascertainable at this stage.  To the extent that there is any prejudice to the respondent, it is wholly outweighed by the underlying fact that, as I repeat, whatever its merits or otherwise may be ultimately found to be, there is a claim which on the face of it gives rise to a justiciable controversy.

2. Counsel for the respondent did not seek to be heard in terms as to the particular relief that the applicant sought, understandably enough in the circumstances.  I confess that I am minded to make the orders that the applicant has sought, but I will give the parties an opportunity to confer and forward proposed orders in any event.  

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date: 27 April 2020

Correction

The name of the respondent was changed on the coversheet and first page of reasons from “Odyssey Trading Pty Ltd” to “Odyssey Travel Pty Ltd”