Direct Home Loan Corporation Pty Limited v Wiltshire

FILE NUMBER: IRC 171 of 2004 CORAM: Wright J President; Walton J Vice-President; Kavanagh J CATCHWORDS : Appeal - Unfair contract - Appeal from interlocutory judgment - Practice and procedure - Summonses to produce documents - Alleged "fishing" exercise - Approach to be adopted re interlocutory appeals - Leave to appeal refused - Appeal dismissed - Costs. LEGISLATION CITED : Industrial Relations Act 1996 s 106 HEARING DATES: 07/26/2004 EXTEMPORE JUDGMENT DATE : 07/26/2004

APPELLANT No appearance (Former solicitors: Nash O'Neill Tomko Mr T Popper) LEGAL REPRESENTATIVES: Mr P C Moorhouse of counsel Solicitors: Rockliffs Mr G Thiele

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH

CORAM: WRIGHT J, President WALTON J, Vice-President KAVANAGH J

Matter No IRC 171 of 2004 DIRECT HOME LOAN CORPORATION PTY LIMITED AND OTHERS v JOHN WILTSHIRE

Application by Direct Home Loan Corporation Pty Limited and others for leave to appeal and appeal against an interlocutory judgment of Justice Schmidt given on 16 December 2003 in Matter No IRC 4579 of 2001.

JUDGMENT OF THE COURT [2004] NSWIRComm 217 (Extempore)

1 The appellants seek leave to appeal and, subject to leave being granted, appeal from an interlocutory judgment of Schmidt J in Wiltshire v Direct Home Loan Corporation Pty Limited [2003] NSWIRComm 463, which was given on 16 December 2003.

2 In her Honour's interlocutory judgment Schmidt J dealt with the Notice of Motion filed by the respondents in the proceedings before her (the present appellants) in the proceedings under s 106 of the Industrial Relations Act 1996, which Notice of Motion sought to set aside two summonses directed to the second and third respondents, on the basis that the documents sought in the summonses amounted to a "fishing" exercise.

3 The further amended summons for relief filed under s 106 is brought by the respondent, Direct Home Loan Corporation Limited, the former employer of the applicant, Mr Wiltshire (the respondent to the appeal), and certain individuals (the second and third respondents) who were and are Directors of the first respondent. The further amended summons pleads the individual respondents were directors of the first respondent at all material times and it is alleged: 1. The second respondent, Mr Coppin, managed the affairs of the first respondent; made various representations to the applicant; controlled the applicant's performance; materially benefited from the alleged non-payment of notice, commissions, salary, holiday pay and superannuation and benefited from the non-fulfilment of the promises of rewards and a share of the business.

2. The third respondent, Mr Mark Hosking, provided capital funds to the first respondent; made various representations to the applicant and controlled the applicant's performance. 4 We interpolate here that the appeal proceedings have one unusual element. Although the appellants filed detailed submissions in relation to the appeal, there was no appearance today for the appellants. Earlier this month the then solicitors for the appellants filed a Notice of Ceasing to Act in the proceedings and, as a result of that circumstance, and certain other matters, the matter was listed for directions before the Court last week.

5 Mr Coppin, one of the appellants, appeared at the directions hearing to advise that the former solicitors were no longer retained and as he would be overseas there would be no appearance before the Court today. He, therefore, sought an adjournment. The adjournment application was declined because of the circumstances outlined, because of the nature of the appeal proceedings and in the exercise of discretion to deal with the procedures appropriate to the appeal.

6 At the time of the adjournment application Mr Thiele, the solicitor for the respondent, advised the Court that the appeal books were deficient in a material respect and also advised that, in the circumstances, he would take steps to remedy that deficiency and would be seeking a specific order for costs in relation to it.

7 When the matter was called on today before the Full Bench, there was no appearance for or on behalf of the appellants. The proceedings then proceeded by the members of the Full Bench, having read the appellants' detailed submissions, then calling on Mr Moorhouse of counsel for the respondent to address on the question of leave to appeal. Mr Moorhouse prefaced his submissions by emphasising that his primary application was that the proceedings should be dismissed for want of prosecution. He then, in doing so, referred to the circumstances which have been partially referred to earlier. Counsel then made his alternative submission, namely, that the application for leave to appeal should be refused.

8 We have decided to determine this matter as a matter of leave to appeal, rather than as sought by the respondent as a matter relating to want of or failure to prosecute the proceedings. Having read the submissions of the appellants, and read and heard those of the respondent, we have decided to refuse leave to appeal, although we should specifically indicate that we have also concluded that the appellants have also failed appropriately to prosecute the appeal.

9 Turning to the leave to appeal aspect of the proceedings, as earlier observed, the proceedings before her Honour related to two summonses to produce documents and the allegation made by the present appellants that they should be set aside because they amount to a "fishing" exercise. We understood it was agreed before her Honour that, if production was required, access should only be granted to the present respondent's legal representatives until further order of the Court. In determining the application her Honour expressed the following reasons: 9. I am satisfied that the summonses should not be set aside. I cannot see that it can here properly be concluded that the summonses are merely speculative, or that they will not bring forth material relevant to the case.

10. At issue between the parties is that the second and third respondents derived a personal benefit from the unfairness complained of. The basis of the claim being made is explained in the further amended summons and the affidavit material. The applicant seeks the production of documents to assist in the proof of the allegations.

11. The information sought is plainly exclusive to the respondents. As Rolfe J observed in Lakatoi Universal Pty Limited & Ors v Walker & Ors [1998] NSWSC 470 (31 July 1998), parties are entitled to build up a mosaic of evidence. The documents in questions are obviously relevant to any cross examination of these respondents on these issues. I am not satisfied that the circumstances are such that it can properly be concluded that the documents are sought by the applicant to ascertain whether he has a case at all.

12. It is relevant to this conclusion that these are not documents sought from third parties. They are sought from the respondents, who were apparently not only working directors in the business, but also each had an interest in it, albeit through other corporate entities. It needs to be recollected that one of the purposes of the section is to unravel subterfuge, including that which results from the use of corporate vehicles to run businesses which employ people, in circumstances where the contracts which they enter are proven to be unfair. In those circumstances, it may readily be seen how persons in the position of these respondents, may derive a benefit from a corporate respondent's failure to make payments due to an applicant which it employed. At the least, the corporate respondent would have had the use of that money, while ever it remained unpaid. This can lead to a variety of benefits for those who ultimately own the corporation as well as those who hold directorships. The same can be said in relation to a failure to deliver a promised shareholding. 10 Her Honour also noted, however, that the matters last referred to in the above citation were not questions which needed to be determined at the present stage of the proceedings. Her Honour said it was sufficient that she was not able to conclude that the documents sought were clearly irrelevant to the issues lying between the parties or that the exercise was one of mere "fishing". Mr Moorhouse made detailed and helpful submissions on the issue of leave to appeal. Those submissions included the following: 4. This Court, along with the [other] Courts of the State, has generally depreciated and discouraged interlocutory appeals: Caltex Petroleum Pty Ltd v Harmer (1999) 92 IR 264, and the cases cited therein; Crewdson v New South Wales Department of Community Services and Anor [2003] NSWIRComm 417. Leave to appeal will rarely be granted from an interlocutory decision of a procedural nature: Metrocall Inc v Electronic Tracking Systems Pty Ltd (No 2) (2000) 102 IR 309. An appellate court should be loathe to interfere in a matter of practice and procedure; Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 at 176 - 177.

5. This appeal does not raise a jurisdictional issue, or any matter of general importance or otherwise raise any matter of sufficient public interest to justify a grant of leave to appeal in accordance with the principles expressed in Knowles v Anglican Church Property Trust (No 2) (2000) 95 IR 380. 11 We consider Mr Moorhouse's approach is correct and relevant to the present application for leave to appeal. We consider that leave to appeal should be refused with costs because the present matter is not one where, in terms of the applicable principles, leave to appeal should be granted. Counsel has appropriately emphasised the policy considerations which tell against leave to appeal being granted in a case such as the present. In any event, we consider that her Honour did not relevantly err. [Counsel for the respondent addressed on costs]

12 Before issuing formal orders, we note that an application has been made by counsel for the respondent for indemnity costs for the period subsequent to the adjournment application on 22 July 2004, essentially on the basis that, although an adjournment was sought (which was not granted), there was no indication by Mr Coppin, or the other appellants, that the appeal was not being pressed. We consider that, in all the circumstances, it is appropriate to grant indemnity costs for the period the subject of the present application.

13 We therefore make the following orders in disposition of the appeal: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. The stay granted by consent on 2 January 2004 is dissolved. 4. The appellants shall pay the respondent's costs of the leave proceedings (that is the application for leave to appeal and appeal) subject to the following additional conditions: (a) the costs of the application for leave to appeal and appeal subsequent to 22 July 2004 shall be paid on an indemnity basis. (b) the costs shall include the costs of the preparation by the respondent of the supplementary appeal book or appeal papers. 5. The respondent shall have leave to: (a) seek the relisting of the summonses for return of documents in relation to Matter No IRC 4579 of 2001 either before Schmidt J or in the Registrar's list as soon as it is practicable to do so. (b) the respondent shall have leave to relist the proceedings in Matter No IRC 4579 of 2001 for directions before Marks J on a date earlier than the date for which the matter is otherwise listed before his Honour, if it is practicable to do so. 14 We note that the respondent's solicitor has undertaken to inform the former solicitors for the appellants of this order within seven days of receiving a copy of the Court's revised reasons for decision.

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