Wood v Semantic Software Asia Pacific Pty Ltd (No 2)

[2021] FCCA 1518

FEDERAL CIRCUIT COURT OF AUSTRALIA

Wood v Semantic Software Asia Pacific Pty Ltd (No 2) [2021] FCCA 1518

File number(s):	SYG 1054 of 2020
Judgment of:	JUDGE MANOUSARIDIS
Date of judgment:	29 June 2021
Catchwords:	PRACTICE AND PROCEDURE – application for leave to file amended cross-claim and for a stay of orders requiring payment – application for adjournment of hearing of application in a case – whether there is any merit in adjourning application in a case – whether there is any merit in application to file amended cross-claim – whether there is merit in granting a stay – no merit in proposed cross-claim, or application for stay, or application for adjournment,
Legislation:	Fair Work Act 2009 (Cth) s 570(2)(b)
Number of paragraphs:	13
Date of hearing:	29 June 2021
Place:	Sydney
Counsel for the Applicant:	Ms A Perigo, by telephone
Solicitor for the Applicant:	Haywards Solicitors
Solicitor for the Respondent:	Mr S Gupta of Gupta & Co, by telephone

ORDERS

SYG 1054 of 2020

BETWEEN:

GRAEME WOOD

Applicant

AND:

SEMANTIC SOFTWARE ASIA PACIFIC PTY LTD ACN 134 067 691

Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	29 JUNE 2021

THE COURT ORDERS THAT:

1.The application for an adjournment of the hearing of the application in a case filed by the respondent on 21 June 2021 is dismissed.

2.The application in a case filed by the respondent on 21 June 2021 is dismissed.

3.Pursuant to s 570(2)(b) of the Fair Work Act 2009 (Cth) the respondent pay the applicant's costs of the application in a case including the application for an adjournment of the application in a case.

REASONS FOR JUDGMENT

(Revised from transcript)

1. There was listed before me today for hearing an application in a case filed by the respondent on 21 June 2021. In that application in a case the respondent applied for an order that the respondent be granted leave to file and serve an amended response, and an amended defence including a further cross-claim. The respondent also claimed an order that orders 4 and 5 of the orders I made on 14 May 2021 be stayed until the matter is heard on 16 August 2021.  Orders 4 and 5 require the respondent to pay to the applicant $274,103.39, and to pay to a superannuation fund nominated by the applicant the amount of $45,845.15.

2. At the commencement of the hearing of the application in a case Mr Gupta, who appeared on behalf of the respondent, applied for an adjournment of the hearing of the application in a case.  The factual basis of that application for an adjournment was that the Australian Securities and Investment Commission (ASIC) had obtained from the Supreme Court of New South Wales, on 28 June 2021, a freezing order. Although I have not admitted into evidence a copy of the orders that were made by the Supreme Court on that day, a copy has been provided, and I have cited it. In addition, Mr Gupta informed me, and I have no reason to doubt what he said, that the proceeding in which ASIC obtained the freezing order has been set down for the hearing of an application by ASIC on 21 July 2021 for the appointment of a provisional liquidator over the respondent.

3. Mr Gupta submitted that the matter should be adjourned until sometime after 21 July 2021 to take into account what orders, if any, would be made on the hearing of the application for the appointment of a provisional liquidator over the respondent. Mr Gupta submitted that, if the application in a case is adjourned, the parties would be saved incurring what may well end up being unnecessary costs.

4. I heard together the application for an adjournment and the application in a case.  Of course, as will become apparent in a moment, whether that adjournment should be granted is intimately linked to the merits of the orders sought in the application in a case.

5. I begin with the application for an adjournment. Whether an adjournment should be granted depends in large part on whether there would be any utility in the adjournment being granted.  In this particular case, whether there would be any utility in the application in a case being adjourned largely depends on whether there is any merit, or apparent merit, in the application in a case. That requires me, first, to consider the apparent merits of the application made by the respondent to seek leave to file an amended defence and cross-claim. 

6. The proposed amended defence and cross-claim is annexed to the affidavit of Mr Mount, the managing director of the respondent.  Although the draft that is annexed to that affidavit is not marked up. Mr Gupta informed me that the amendments are at paragraph 100 and onwards.  In essence, the proposed amendment is said to be a claim in the alternative to the claim that is in the current defence and cross-claim.  In particular, it is an alternative to the claim made in the current cross-claim that certain shares the applicant holds in the respondent are liable to be returned to the respondent.  The alternative claim is that, rather than the applicant being liable to return the shares, the applicant is, in fact, liable to pay the value of the shares. 

7. The most immediately noticeable feature of the proposed amendments is their lack of particularity, or at least their apparent lack of particularity. I will give some examples.  In paragraph 101 it is alleged that in resigning the applicant made disparaging remarks about the respondent to several internal and external parties. Those disparaging remarks are not the subject of any particulars or meaningful identification. Paragraph 102 baldly asserts that the applicant, if he is entitled to retain the shares in question, is “contractually liable to pay the respondent for the shares or in the alternative by way of damages compensate the respondent”.  The contract that is referred to there is not identified, and nor are the terms said to be breached, nor the manner in which the contract is breached.  In paragraph 103 there is a reference to a condition which is also unparticularised. 

8. There is no need to me to continue with the proposed amendments. The lack of particularity is manifest from the examples I have given. The lack of particularity by itself would be a sufficient reason for not granting leave to the respondent to file the amended defence and cross-claim in the form annexed to Mr Mount’s affidavit. 

9. Then there is the other order sought by the application in a case; and that is an order for a stay.  The basis for the stay is the assertion that the cross-claim as amended is a claim for an amount which exceeds the amount which the respondent is liable to pay under the orders I made on 14 May 2021.  There is no evidence, however, to support that, or that could arguably support that, submission.  As I understood Mr Gupta, the proposed cross-claim depends on there being evidence of the value of the shares.  Although there is an assertion by Mr Mount that the shares are currently valued at $3.04, Mr Mount’s assertion is not evidence on which I could rely, even on an interlocutory application. 

10. In any event, if the respondent does have a claim, or would have a claim, in an amount that exceeds the amount it was ordered to pay on 14 May 2021, and it wished to protect itself from the risk of it paying money it’s liable to pay but then not being able to recover it if it succeeds on its cross-claim, the respondent could protect itself. It could do so by offering to pay the amount it is liable to pay under the orders made on 14 May 2021 into court, or into some trust account jointly controlled by the parties.  No offer has been made by the respondent to pay into court the amount it is liable to pay as a condition to my granting the stay.  The application for a stay therefore also has no merit. 

11. Given I have found the application in a case for leave to file an amended defence and cross-claim and for a stay have no merit, I find there would be no utility in adjourning the application in a case until after 21 July 2021; and that is because, having regard to the lack of merit, it is inevitable that if the application in a case were adjourned until after 21 July 2021 it would fail.  In those circumstances, therefore, I do not accept that the application in a case should be adjourned.

12. Lastly, there is the question of costs. Mr Perigo, who appears for the applicant, seeks an order for costs pursuant to s 570 of the Fair Work Act 2009 (Cth). Mr Perigo submits that the bringing of the application in a case was unreasonable. Mr Perigo principally relied on the respondent giving no adequate explanation why an application to amend was not made earlier; and she also submitted there has been what she referred to as a “moveable feast” in relation to what it is that stands as the proposed amended defence and cross-claim. 

13. The relief sought in the application in a case, in my view, is so lacking in merit that it is appropriate to characterise the respondent’s filing it and proceeding with it today as an unreasonable act on its part.  For that reason alone I am satisfied that the costs incurred by the applicant by reason of that unreasonable act should be the subject of an order for costs. I therefore propose to make an order for costs, and that the costs that should be covered by the costs order are the costs of the application in a case.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.

Associate:

Dated:       6 July 2021