section 33c - IS THERE A SUBSTANTIAL COMMON ISSUE OF LAW OR FACT?
62 In a typical representative proceeding, the common issue of law or fact arising from the claims of the representative party and group members is one that can be determined without regard to the individual or particular circumstances of the representative party or group members. For example, in a representative proceeding in which the group members claim that they suffered loss or damage arising from their acquisition of a defective product, the common question of law or fact is, generally speaking, whether the particular product in question was defectively designed or manufactured, or unfit for the purpose for which it was supplied. That question almost invariably does not depend on the individual circumstances of the group members. The product was either defective or unfit for purpose, or it was not. The group members are generally described simply as persons who acquired or were exposed to the relevant product. If the common question is resolved in favour of the group members and the product is found to be defective or unfit, the group members then simply have to prove that they acquired or were exposed to the product and suffered loss or damage as a result.
63 Similarly, in a representative proceeding where current or former shareholders in a company claim that they suffered loss or damage because they acquired shares in the company as a result of a misleading statement in a prospectus, or at a time when the company had failed to comply with its disclosure obligations, the common issue of fact or law almost invariably does not depend on the individual circumstances of the group members. The common question, in general terms, is whether the statement in the prospectus was misleading or not, or whether the company failed to comply with its disclosure obligations. That common question does not depend at all on the individual circumstances of the group members. The prospectus was either misleading or deceptive, or it was not; the company either did, or did not, comply with its disclosure obligations. If those issues are resolved in favour of the group members, the remaining issues generally involve the group members proving that they acquired the shares at a particular time or during a particular period and that they suffered loss or damage arising from that acquisition. It may also be necessary for individual group members to prove that they relied on the prospectus, or the publicly available information in relation to the relevant company.
64 Those are, of course, not the only types of representative proceedings. They do, however, serve to illustrate the differences and potential difficulties when it comes to this representative proceeding.
65 Mr Bywater contended that this representative proceeding was no different from the examples just given. His submissions in that regard focussed almost entirely on common questions 1 and 2. In his submission, common questions 1 and 2 in the Application do not depend on either his, or any other group member's, individual circumstances. That is because questions 1 and 2 are to be determined solely on the basis of paragraphs 3 to 16 of the Claim which simply plead what, on Mr Bywater's case, was Appco's standardised and highly prescriptive system for the engagement of persons to undertake its sales business. The conclusions pleaded in paragraphs 17 and 18 of the Claim, which are the conclusions that mirror questions 1 and 2, are to be drawn solely from paragraphs 3 to 16 of the Claim. They do not flow from the facts pleaded in paragraphs 19 to 36, which relate to Mr Bywater's particular circumstances.
66 Importantly, Mr Bywater also contended that if common questions 1 and 2 are resolved in his and the group members' favour, in any subsequent proceedings relating to the group members' individual claims, the group members would only be required to prove that they were engaged in accordance with the "standardised system" the subject of paragraphs 3 to 16 of the Claim. In Mr Bywater's submission, that showed that the factual and legal issues arising from the "standardised system" were common to the group members' claims. If the group members' claims were not included in a representative proceeding, the statement of claim in each group member's separate action would commence with the pleading of the alleged system.
67 Mr Bywater conceded that there will be some factual differences between the group members. It is, for example, likely that they carried out Face to Face Selling pursuant to the alleged system at different times and on different Campaigns. They also no doubt entered into Independent Contractor Agreements with different Marketing Companies. They may also have reached different levels in the alleged career hierarchy that was part of the system. Mr Bywater's case in respect of the common questions, however, was that the differences in the minutiae would not alter or impact upon the conclusions in relation to the individual group member's employment status that would otherwise flow from their engagement pursuant to the "standardised system" alleged in paragraphs 3 to 16 of the Claim.
68 Mr Bywater's contentions in that regard would appear to be correct, at least at a relatively superficial level. Common questions 1 and 2 are undoubtedly framed in such a way that they are to be resolved solely on the basis of the facts and circumstances pleaded in paragraphs 3 to 16 of the Claim. Those facts and circumstances do not involve the individual or particular circumstances of either Mr Bywater himself, or any specific group member or members.
69 Subject to one potential qualification, it would also appear to be correct that, as the group member claims are presently pleaded, if common questions 1 and 2 are answered in the manner contended by Mr Bywater, group members would subsequently only have to prove that they were engaged to perform the relevant work in accordance with the "standardised system" alleged in paragraphs 3 to 16 of the Claim. That is clear not only from the terms of common questions 1 and 2, but also from the terms of paragraphs 52 and 53 of the Claim. To qualify as a group member as described in paragraph 52, a person need only prove, relevantly, that he or she undertook Face to Face Selling on the basis of Independent Contractor Agreements or as a Managing Director. Importantly, however, the effect of paragraph 53 appears to be that to make or qualify for a claim, a group member will also have to prove that he or she entered into the agreement, and undertook the activities, in the circumstances pleaded in paragraphs 3 to 16 of the Claim: in other words, that they entered into, or were subject to the alleged "standardised system". The qualification to that conclusion arises from the additional allegation or requirement in paragraph 53, which is that the arrangements were entered into in circumstances "similar" to those pleaded in paragraphs 19 to 35 of the Claim. That feature of paragraph 53 is discussed later.
70 While Mr Bywater's contentions concerning the pleading would appear to be correct, the critical issue is whether, having regard to the nature of the legal and factual issues raised by the common questions and the terms of the Claim, it is open to determine common questions 1 and 2 and, ultimately, the group members' claims, on the somewhat narrow basis contended by Mr Bywater.
71 Upon close analysis, there would appear to be two potential problems or issues with the proposed common questions. The first potential problem or issue arises from the nature of the legal test that applies when determining whether a person who performs work does so as an employee or an independent contractor. The issue is whether a test which requires consideration of the "totality of the relationship" can be addressed without considering the individual circumstances of the persons in that relationship. The second relates to some parts of the Claim which would tend to suggest that, contrary to the way that common questions 1 and 2 have been framed, the claims of both Mr Bywater and the group members in fact depend on a consideration of their individual circumstances.
72 As has already been established, the question whether a person is an employee or an independent contractor, which is the question that lays at the heart of common questions 1 and 2, must be determined on the basis of the "totality of the relationship" between the parties. The test is multi-factorial and involves a wide range of indicia, none of which are necessarily determinative. The weight to be given to each of the relevant indicia or factors will depend on the particular circumstances of the parties in question.
73 Paragraphs 3 to 16 of the Claim and common questions 1 and 2, however, are such that the question whether the group members were employees, as opposed to independent contractors, can only be determined on the basis of the alleged system employed by Appco to engage persons to provide services for the purposes of its business. Indeed, having regard to the way the questions are framed, they must be determined on the basis of the alleged system without reference to the individual facts and circumstances relating to any group member, not even those relating to Mr Bywater.
74 The issue is whether the questions can properly be answered on that limited basis. It should be noted, in that context, that the group member claims may involve many hundreds of people who performed work in respect of Appco's Campaigns, at different levels in the alleged career progression, over a period that may exceed eight years. Can the question whether all those group members were employees or independent contractors be determined on the basis of the pleaded system alone?
75 Appco contended that the common questions could not properly be determined on the basis of the system alone. In its submission, in light of the legal test, the only way the questions could properly be determined would be for the individual circumstances of each group member to be pleaded and in due course proved. That is because the legal test involves the consideration of the totality of the relationship between the alleged employee and the alleged employer. In Appco's submission, because the individual circumstances of each of the group members might differ in material respects, the nature of the relationship between Appco and each of the group members might also differ. The pleaded system does not permit a consideration of each group member's individual circumstances and, therefore, the totality of their relationship with Appco.
76 In that context, Appco contended that common questions 1 and 2 were, in effect, based on an assumption or hypothesis that the circumstances of the individual group members were identical. Appco submitted that, in those circumstances, it would not be permissible to decide the alleged common questions because the judicial determination of issues or questions on the basis of assumed or hypothetical facts is impermissible: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 357 and 359.
77 Mr Bywater relied, in support of his contention that it was possible to rely on a system to prove an employment relationship, on some observations made by Perram J in ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532. In that case, five travelling insurance agents performed work for an insurer (referred to in the judgment as "Combined") pursuant to contracts which declared the agents to be independent contractors. The agents, however, claimed that they were employees and were therefore entitled to annual leave and long service leave requirements. The agents were retained in a hierarchical structure or system, in the sense that some agents worked as sales representatives, some worked as territory representatives and some worked as sub-regional representatives. It is readily apparent there are some factual parallels between Trifunovski and this case, though Trifunovski was not a representative proceeding.
78 An issue arose in Trifunovski concerning the admissibility of evidence that concerned whether sales representatives retained by Combined in general - not just the five in question in the proceeding - were employees. Perram J addressed that issue as follows (at [34]-[35]):
Combined submitted that the issues which arose had to be considered on a contractor-by-contractor and period-by-period basis: the question which arose in every case was whether this contractor at this time was an employee. As a corollary it was inutile to investigate the broader question of whether, for example, sales representatives in general were Combined's employees. It followed that attention had to remain focused on each agent's account and evidence of a general kind should not be resorted to; similarly, it was not appropriate to introduce conclusions reached in relation to one agent as bearing on the situation of another.
I do not accept the general thrust of this submission. It is possible that at a theoretical level different answers on the employment question could be given in respect of different agents. This is certainly the case where the agents fill different positions within the pyramid. That observation, however, is more reflective of the differences between the positions than differences between circumstances of individual agents. I do not discount that in appropriate cases the situations of individuals alleged to be employees might fluctuate depending on particular circumstances. But when the basal question is in whose business was the putative employee toiling, it is likely, in very many cases, that this will invite an examination of the business structures involved and this, in turn, suggests that systemic issues are likely to be relevant.
79 The point to note about this passage is that Perram J said only that an examination of business structures and systemic issues is likely to be "relevant". His Honour did not suggest that the structures and systems would be determinative. Yet, if common questions 1 and 2 can properly be answered on the basis of paragraphs 3 to 16 of the Claim, Mr Bywater's case must necessarily be that the agreements, structures and systems pleaded in those paragraphs are determinative. His case must be that any person who was retained pursuant to, or was subject to, the pleaded system, was an employee of Appco, not an independent contractor.
80 For the alleged "standardised system" to be determinative in this sense, however, it would seem that the Court would need to be satisfied of at least two things in relation to the application and operation of the alleged system.
81 First, it is likely that the Court would need to be satisfied that the application and operation of the agreements, systems and structures pleaded in paragraphs 3 to 16 was invariable. It would need to be demonstrated, at the very least, that the agreements or arrangements between Appco and every Marketing Company, and the agreements and arrangements between every Marketing Company and every Independent Contractor, were in relevantly identical terms. It would also most likely have to be demonstrated that other important aspects of the system which were not directly or expressly provided for in those agreements, particularly those concerning remuneration, financial arrangements, the wearing of uniforms or photo identification, and discipline and termination, did not relevantly vary as between individual Independent Contractors.
82 Second, it is likely that the Court would have to be satisfied that the agreements, systems and structures pleaded in paragraph 3 to 16 were so highly prescriptive and all-encompassing, insofar as the relationship between the parties was concerned, that no other facts or circumstances relating to individual group members would or could materially affect the conclusions that would otherwise flow from the agreements, systems and structures. It would most likely need to be shown, in effect, that the individual facts and circumstances of a person who entered into, or was subject to, the alleged agreements, systems and structures, could not alter the nature of the relationship otherwise established by the agreements, systems or structures. For example, it may be necessary to establish that minor differences in the facts relating to individual group members, such as the names of the particular Marketing Companies who were parties to the relevant Independent Contractor Agreements, or the types of Campaigns worked on, or the length of service and the level of the career hierarchy reached by individual group members, would not or could not alter the conclusions that would otherwise flow from the "standardised system".
83 The reason that the Court would need to be satisfied of those two elements of the claims before answering common questions 1 and 2, is that, once answered, the common questions bind not only Mr Bywater and Appco, but all the group members who had not opted out of the proceeding: s 33ZB(b) of the Federal Court Act: Timbercorp Finance Pty Ltd v Collins (2016) 339 ALR 11, 23; [2016] HCA 44 at [52]. If common questions 1 and 2 were answered in the affirmative, as Mr Bywater would have it, Appco would be bound by the finding that every group member who could prove that they entered into, or were subject to, the alleged agreements, systems and structures pleaded in paragraphs 3 to 16 of the Claim, was an employee of Appco. It would not be open to Appco to contend, at some later stage of the proceeding, that such a person was not an employee because of some other fact or circumstance relating specifically to them. Equally, if the questions were answered in the negative, it would not be open to a group member who entered into or was subject to the alleged agreements, systems and structures, to subsequently contend that he or she was an employee of Appco because of some fact or circumstance relating specifically to them.
84 It is perhaps not too difficult to imagine that Mr Bywater may ultimately have some difficulties in establishing these two elements which appear to be implicit in paragraphs 3 to 16 of the Claim and common questions 1 and 2. How, it might be asked rhetorically, will he go about proving that the "standardised system" was invariable and so highly prescriptive that facts and circumstances peculiar to any individual group member could not materially alter the conclusions otherwise to be drawn from the system? Can that be proved without, in effect, adducing evidence concerning the facts and circumstances relating to all of the group members? Can it be proved by calling evidence concerning Mr Bywater's circumstances alone?
85 As has already been noted, however, the question whether the group members' claims give rise to a substantial common issue of law or fact for the purposes of s 33C of the Federal Court Act must be considered and determined on the pleadings. The Court should not speculate or hypothesise about what the evidence and issues at trial may turn out to be.
86 The critical question, then, is whether the Claim properly pleads these implicit elements of Mr Bywater's case, such that it can be concluded that the common questions properly arise from, and can be determined on the basis of, the general or "standardised system" pleaded in paragraphs 3 to 16 of the Claim.
87 Appco pointed to two features of the Claim which it contended undermined Mr Bywater's contention that the common questions can be determined on the basis of the agreements, systems and structures pleaded in paragraphs 3 to 16 of the Claim, without regard to the facts and circumstances peculiar to individual group members. Those two features of the Claim, in Appco's submission, showed not only that Mr Bywater relied on facts and circumstances peculiar to him, but also that he accepted that the circumstances of other group members may not be identical to his circumstances.
88 The first feature of the Claim relied on by Appco relates to what has been referred to as the fourth part of the Claim. That part of the Claim, which comprises paragraphs 37 to 51, contains the conclusions and alleged contraventions relating to Mr Bywater. The important point to note from those paragraphs is that the conclusions and alleged contraventions insofar as Mr Bywater is concerned are claimed to flow not only from facts and circumstances relating to the system pleaded in paragraphs 3 to 16, but also facts and circumstances specific to Mr Bywater (paragraphs 19 to 36 of the Claim). Those facts and circumstances, in Appco's submission, do necessarily relate to or arise from the alleged "standardised system".
89 In Mr Bywater's case, for example, it is alleged that Mr Danny Lawrence, of Onshore Sports Group Pty Limited, made various representations to Mr Bywater and others at a "training session" held on 1 May 2014 (see paragraphs 19, 20 and 23 of the Claim). Mr Bywater was also given a document during the training session which contained representations (see paragraphs 21 and 23 of the Claim) and was required to undergo a test at the conclusion of the session (see paragraphs 22 and 23 of the Claim). Those oral and written representations are alleged to be amongst the facts and circumstances which compel the conclusion that Mr Bywater was an employee of Appco (see paragraph 37 of the Claim). It is not entirely clear whether it is alleged that the same representations were made to all group members, though paragraph 55(2) of the Claim would suggest that it is alleged that at least some of the representations were.
90 Other examples of facts and circumstances peculiar to Mr Bywater which are relied on to support the conclusion that he was an employee are that he was remunerated pursuant to an agreement entitled "Growth Incentives Payment" and that his career progression was in strict compliance with a document entitled "Career Scheme" (see paragraph 35 of the Claim). It is not entirely clear from the pleading whether it is alleged that all group members were remunerated on the basis of an agreement in the same or similar terms to the "Growth Incentives Payment" agreement, or that the career progression of all group members was determined by the terms of the "Career Scheme" document. It is, however, alleged that Appco fixed the terms and rate of the remuneration of all Independent Contractors, as well as persons who progressed to higher levels in the hierarchy (see paragraphs 11 and 14 of the Claim).
91 In Appco's submission, the fact that Mr Bywater's claims rely on facts and circumstances which are, or might be, specific to him, and do not appear to be part of the alleged "standardised system" pleaded in paragraphs 3 to 16 of the Claim, is significant. It is inconsistent with the contention that common questions 1 and 2 can be answered on the basis of the agreements, systems and structures in paragraphs 3 to 16 alone.
92 The second feature of the Claim relied on by Appco relates to what has been referred to as the fifth part of the Claim. The fifth part of the Claim, which comprises paragraphs 52 to 58, contains not only the description or definition of the group members (paragraph 52), but also the claims of the group members, as opposed to Mr Bywater. Appco contended that this part of the Claim undermines the implicit contention that the agreements, systems and structures were invariable and that the facts and circumstances of each group member were relevantly identical.
93 Paragraph 52 of the Claim suggests that a person will be a group member if, relevantly, he or she undertook "Face to Face Selling on Campaigns for Client Product" from 20 October 2010 on the basis of Individual Contractor Agreements or as a Managing Director. Importantly, however, it would also appear, having regard to the terms of paragraph 53 of the Claim, that the group member claims rely on the contention that each group member undertook the relevant activities (Face to Face Selling on Campaigns for Client Product) and entered into the relevant arrangements (Individual Contractor Agreements or arrangements relating to them being a Managing Director), not only in the circumstances pleaded in paragraphs 3 to 16 of the Claim, but also in circumstances which were "similar" to the circumstances in which Mr Bywater undertook those activities and entered into those arrangements as pleaded in paragraphs 19 to 35 of the Claim.
94 In Appco's submission, the allegation or requirement in paragraph 53 that group members entered into arrangements in circumstances "similar" to Mr Bywater effectively means that the individual circumstances of each group member will need to be considered in order to determine each of the group member's claims. That, in Appco's submission, is at odds with the contention, implicit in the way that paragraphs 3 to 16 and common questions 1 and 2 have been framed, that the material facts and circumstances relating to each group member are identical, and that common questions 1 and 2 can accordingly be answered on the basis of the system alone.
95 Appco's criticisms of these two aspects of the pleading appear to have some merit. There is a certain lack of consistency and clarity in those parts of the Claim. The two-stage manner in which the claims are pleaded is rather unusual for a pleading in a representative proceeding. On balance, however, the issues with the pleading raised by Appco in that regard do not compel the conclusion that the pleading does not satisfy the threshold requirement in s 33C of the Federal Court Act.
96 While the clarity of the pleading could no doubt be improved, it would appear that it is fairly and properly alleged that Appco had put in place an invariable set of agreements, systems and structures that applied to all persons who were to engage in Face to Face Selling on its behalf, and that the agreements, systems and structures were so prescriptive and all-encompassing that they compel a conclusion that all individuals who were party to, or engaged pursuant to, that system were employees of Appco. It is also tolerably clear that the case in respect of the common questions, as pleaded, relies entirely on the system. To the extent that Mr Bywater pleads facts and circumstances specific or peculiar to him, those facts and circumstances are relied on to prove the alleged system by way of example. It follows that the claims of the group members as framed in the pleading give rise to common questions 1 and 2. Those questions comprise or constitute substantial common issues of fact and law for the purposes of s 33C.
97 Paragraphs 3 to 16 of the Claim and common questions 1 and 2 do not expressly allege or contend that that the agreements, systems and structures, referred to in those paragraphs comprised an invariable system that applied to all persons who were retained to engage in Face to Face Selling for the purposes of Appco's Campaigns. Nevertheless, the language that is used in paragraphs 3 to 16 is sufficiently clear to convey that Mr Bywater's case is that there was such an invariable system. It is, for example, pleaded that: "every" Marketing Company entered into arrangements with Appco, which included that it was required to conduct its business in accordance with structures imposed by Appco, including in relation to bank accounts (paragraph 7 of the Claim); Marketing Companies were utilised by Appco to provide the services in accordance with "standard" terms specified by Appco (paragraph 9 of the Claim); "every" individual seeking to undertake Face to Face Selling was required to sign a "standard form" Independent Contractor Agreement prepared by or for Appco (paragraph 10 of the Claim); the Independent Contractors were required to undertake the relevant services in a manner determined by Appco including, for example, by wearing photo identification which identified the individual as a representative of Appco (paragraph 11 of the Claim); the duties and remuneration of each individual, at every level of the relevant career hierarchy, were fixed and determined by Appco (paragraph 14 of the Claim); "all" Independent Contractors and Managing Directors could be terminated or disciplined in accordance with a single scheme imposed by Appco (paragraph 15 of the Claim).
98 It is also tolerably clear from the pleading that Mr Bywater's case is that the agreements, systems and structures particularised in paragraphs 3 to 16 of the Claim were sufficiently prescriptive and all-encompassing as to compel the conclusion that persons who were engaged and performed work pursuant to those agreements, systems and structures were employees of Appco, not independent contractors. There is nothing in paragraphs 3 to 16, which are the paragraphs which provide the basis for common questions 1 and 2, to suggest that any facts or circumstances that might be peculiar or specific to individual group members could alter the conclusions that would otherwise flow from the nature of the alleged invariable agreements, systems and structures.
99 It is true that the Claim alleges various facts and circumstances that are specific to Mr Bywater (paragraphs 19 to 36 of the Claim). It is also true that the conclusions and alleged contraventions relevant to Mr Bywater (paragraphs 37 to 51 of the Claim) are alleged to depend, at least in part, on those facts and circumstances. It is, however, equally clear that Mr Bywater's case is that the facts and circumstances pleaded in paragraphs 19 to 36 are simply relevant to proving the invariable agreements, systems and structures that he contends all group members were subject to. His case is that the facts and circumstances relating specifically to him are simply an illustration or demonstration of how the agreements, systems and structures applied to him. He contends that if the facts and circumstances specific to him compel a conclusion that he was an employee of Appco, they will similarly compel a conclusion that anyone else who was a party to, or subject to the same agreements, systems and structures was also an employee of Appco.
100 At first blush, it might appear that some of the pleaded facts and circumstances that relate specifically to Mr Bywater appear to travel beyond what is said to be the standard or invariable agreements, systems and structures identified in paragraphs 3 to 16. It is, for example, somewhat unclear whether the representations allegedly made to Mr Bywater by Mr Lawrence at the training session in early May 2014 (paragraph 20 of the Claim) and the representations contained in the document given to Mr Bywater during or at the end of that session (paragraph 21 of the Claim) fall within the alleged invariable systems and structures. It would appear, however, that Mr Bywater's case is that representations of this sort were made, or required to be made, to all persons who entered into, or became subject to, the alleged agreements, systems and structures. That is because the making of representations of that sort were required by, or were part of, the "standardised system" whereby Marketing Companies were required to operate in accordance with terms and by means specified by Appco (paragraph 9(2) of the Claim), and that the functions and duties of Independent Contractors were determined by Appco (paragraph 11 of the Claim). That is the effect of what Mr Bywater alleges he was told by Mr Lawrence.
101 Equally, while the pleaded facts and circumstances relating to Mr Bywater include his remuneration pursuant to the agreement called the "Growth Incentives Payments Agreement" (paragraph 35(1) of the Claim), it is also tolerably clear that Mr Bywater's case is that this agreement or arrangement was part of the pleaded "standardised system". The system that applied to all group members is alleged to include arrangements whereby the rates and terms of the remuneration of Independent Contractors was fixed by Appco (paragraphs 9 and 11(1) of the Claim). The same applied when an Independent Contractor progressed to higher levels in the career hierarchy (paragraph 14 of the Claim).
102 Other paragraphs of the Claim also make it sufficiently clear that Mr Bywater's case is that he was engaged pursuant to the alleged "standardised system" pleaded in paragraphs 3 to 16. Paragraphs 27, 28 and 32, for example, allege that Mr Bywater undertook his Face to Face Selling activities on the bases pleaded in paragraphs 10 to 16 of the Claim. Appco failed to point to any specific fact or circumstance relating to Mr Bywater that was unequivocally outside the pleaded "standardised system", or that would necessarily require the consideration of the individual circumstances of each group member.
103 In any event, even if there is some uncertainty about whether the alleged facts and circumstances relating specifically to Mr Bywater fell within the alleged system that applied to all group members, it is sufficiently clear from the pleading that, in seeking to make out his case in relation to common questions 1 and 2, Mr Bywater can only rely on those facts and circumstances that relevantly fall within paragraphs 3 to 16 of the Claim. If evidence specific to Mr Bywater is adduced and admitted, having regard to the way common questions 1 and 2 are framed, that evidence could not be relied on in relation to determining common questions 1 and 2 unless it could be said to fall within the general system and structures pleaded in paragraphs 3 to 16 of the Claim.
104 As for paragraph 53 of the Claim, the additional allegation or requirement that group members entered into the alleged systemic arrangements in circumstances "similar" to Mr Bywater is not necessarily inconsistent with the contention that common questions 1 and 2 can be answered on the basis of the facts and circumstances pleaded in paragraphs 3 to 16 of the Claim. Rather, it appears to reflect the fact that, if the common questions are answered as contended by Mr Bywater, group members may then be required, in effect, to demonstrate that they entered into the same systemic arrangements in materially the same way that Mr Bywater did. The use of the word "similar", in paragraph 53, was most likely intended to engage with, or satisfy the requirement in, s 33C(1)(b) of the Federal Court Act that the claims of the group members arise out of the same or similar or related circumstances. The critical point, insofar as compliance with the threshold requirement in s 33C(1)(c) is concerned, however, is that the question whether the group members entered into the systemic arrangements in circumstances similar to Mr Bywater would appear to arise only after common questions 1 and 2 have been determined. It accordingly does not compel a finding that common questions 1 and 2 do not properly or genuinely raise common issues of law or fact as required by s 33C.
105 Paragraph 53 could perhaps be criticised for its lack of clarity or precision. It might, for example, be said that it is unclear exactly what circumstances have to be similar and what differences might be said to be material or immaterial in determining whether the circumstances of the group member and Mr Bywater were relevantly similar. Such criticisms, however, amount to little more than complaints about the pleading. That might be relevant if this was an application to strike out that part of the Claim. Criticisms concerning the particularity or clarity of the proceeding do not, however, necessarily go to the question whether the Claim satisfies the threshold requirement in s 33C of the Federal Court Act. It should also perhaps be noted that these types of complaints can be dealt with by requiring further particularisation at an appropriate stage of the proceeding.
106 It follows from what has been said about the way that the claims of the group members and the common questions have been framed that there is no merit in Appco's contention that the common questions are based on an assumption or hypothesis concerning the alleged agreements, systems or structures employed by Appco, or the way they were applied to the group members. Mr Bywater's case, as pleaded, is that the agreements, systems and structures alleged in paragraphs 3 to 16 applied to all group members and that those agreements, systems and structures compel the conclusion that all the group members were employees of Appco. That is not an assumption or hypothesis. Rather, it is something that must in due course be proved if the alleged common questions are to be answered in Mr Bywater and the group members' favour.
107 It is not to the point that Mr Bywater may ultimately not be able to adduce evidence which is capable of proving the elements of the Claim that are necessary before common questions 1 and 2 can be answered in the way he contends they should. It may turn out to be the case that Mr Bywater is unable to prove that the agreements, systems and structures pleaded in paragraphs 3 to 16 were invariable and sufficiently prescriptive and all-encompassing to compel a finding that all persons who were subject to them were employees, irrespective of other facts and circumstances that may be peculiar to some of those persons. As discussed later in these reasons, if that does turn out to be the case, it may in those circumstances be appropriate, at that stage of the proceeding, to make an order under ss 33N(1) and 33P(a) that the proceeding not continue as a representative proceeding, and continue instead as a proceeding by Mr Bywater on his own behalf. Alternatively, the Court could potentially reframe the common questions having regard to the issues and evidence that emerge at trial. It would also be open to the Court to simply dismiss the Application. It does not follow, however, that common questions 1 and 2 are not properly raised for the purposes of s 33C of the Federal Court Act. As has already been emphasised, compliance with the threshold requirement in s 33C must be addressed on the basis of the pleadings, not on the evidence, actual or assumed.
108 Appco did not dispute that if common questions 1 and 2 were properly raised by the pleadings, they were "substantial" common issues for the purposes of s 33C. Appco also conceded that if common questions 1 and 2 were properly raised on the pleadings, it was unnecessary, at least for present purposes, to examine common questions 3 to 6 in any detail.
109 It follows that the Claim meets the threshold requirement in s 33C of the Federal Court Act. The pleaded claims of the group members give rise to a substantial common issue of law or fact. The declaration to the contrary sought by Appco in its interlocutory application should not be made.