Haire v WorkCo Australia Pty Ltd

Other orders 4. Each of the third and fourth respondents file a notice of address for service within 14 days of the date of service of these orders. 5. By 4.00pm on 12 July 2024, each respondent is to file and serve a defence to the applicant's amended statement of claim. 6. By 4.00pm on 2 August 2024, the applicant is to file and serve any reply to the defences filed by each of the respondents. 7. The matter be listed for a further case management hearing on 16 August 2024 at 9.30am. 8. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

HORAN J 1 By an amended interlocutory application dated 5 June 2024, the applicant seeks orders for deemed service under r 10.48 of the Federal Court Rules 2011 (Cth), or alternatively substituted service under r 10.24 of the Rules. 2 The applicant seeks orders for deemed service of the amended originating application and statement of claim, each of which is dated 13 March 2024, together with genuine steps statements dated 8 December 2023 and 13 March 2024, on the second to fourth respondents, each of whom is based overseas. Alternatively, the applicant seeks orders for substituted service of the above documents, along with a notice in accordance with Form 26A and r 10.43B of the Rules and a copy of any interlocutory orders made on this application. 3 In the substantive proceeding, which was commenced by originating application filed on 8 December 2023 following conciliation before the Fair Work Commission (FWC) (and subsequently amended on 13 March 2024), the applicant claims relief in relation to alleged contraventions of the Fair Work Act 2009 (Cth) (FW Act) by the first respondent, WorkCo Australia Pty Ltd and the fourth respondent, Filecoin Foundation. 4 WorkCo is a company incorporated in Australia which provides labour-related services to cryptocurrency businesses, as an affiliate in a global enterprise known as "Toku". Filecoin is alleged to be a legal entity established in the United States of America. 5 The second respondent is Mr Kenneth O'Friel, who is a director and chief executive officer of WorkCo and a co-founder of Toku. The third respondent is Ms Megan Klimen, who is alleged to be an officer of Filecoin. It appears that each of Mr O'Friel and Ms Klimen resides or is based in the United States. 6 In broad terms, the allegations in the amended statement of claim arise from the applicant's engagement by Filecoin, and, in particular, her employment by WorkCo under a labour hire arrangement from 1 June 2023 to 25 September 2023, to provide services in relation to Filecoin's business, which relates to the development of a cloud-based storage system using an open-source public cryptocurrency and digital payment system. The dispute relates to alleged underpayments in breach of the applicant's entitlements under her employment contract, and the responses by WorkCo and Filecoin respectively to the applicant's complaints in which she raised concerns about such underpayments. 7 The applicant alleges that she was dismissed from her employment by WorkCo in contravention of Pt 3-1 of the FW Act, and that each of WorkCo and Filecoin took non-dismissal adverse action against her in contravention of that Part. The applicant alleges that each of Mr O'Friel, Ms Klimen and Filecoin were involved in the contraventions by WorkCo, and that Ms Klimen was involved in the contravention by Filecoin. 8 WorkCo has filed a notice of appearance and is represented by Lander & Rogers. 9 I was informed at the hearing that Lander & Rogers has received instructions to act for the second respondent, Mr O'Friel. Accordingly, it is expected that a notice of appearance will be filed by the second respondent in due course.

Attempts at service on the second, third and fourth respondents 10 The applicant's solicitor, Mr Simon Kang, has filed three affidavits affirmed by him on 18 March 2024, 25 March 2024 and 5 June 2024 in support of the application for deemed and substituted service, respectively. In those affidavits, Mr Kang deposes to the following facts. 11 On 18 December 2023, the applicant's solicitor sent an email to an email address they understood to be that of Ms Klimen (megan@fil.org) enclosing, by way of service, a copy of the applicant's originating application and statement of claim, along with a genuine steps statement and FWC certificate. 12 On 19 December 2023, the applicant's solicitor sent an email to an email address they understood to be that of Mr O'Friel (kenneth@toku.com) enclosing, by way of service, a copy of the above documents. Mr Kang explains that, although he did not have Mr O'Friel's email address, he had "followed the pattern" of an email address of a different person associated with Toku who had previously sent correspondence to the applicant. Mr Kang received a "bounce-back message" in relation to this email indicating that it had not been delivered. 13 On 6 February 2024, Ms Klimen accepted an invitation for a video conference scheduled for 7 February 2024 at 10.00 am (Sydney time) to discuss the matter. Ms Klimen provided notification of her non-attendance by "declining" the invitation on the morning of the meeting, notification of which was received by Mr Kang by email. The video conference proceeded and was attended by Mr Kang and Ms Preston (counsel for the applicant) and Mr Matthew Zimmerman (inhouse counsel for Filecoin), but did not reach a resolution of the matter. 14 Following the video conference, on 9 February 2024, Mr Zimmerman sent an email to Mr Kang in which he stated "we are going to require additional time to consult following our conversation on Wednesday" (that is, the 7 February video conference), and indicated that he planned "to circle back with you regarding the information we discussed next week". On 16 February 2024, Mr Zimmerman sent a further email to Mr Kang in which he made reference to the information shared during "our recent call" (that is, the 7 February video conference) and stated that "[f]ollowing a discussion with our team, … we do not believe that it would be productive to pursue a negotiated resolution at this time". Mr Zimmerman invited Mr Kang to reach out to him "directly" if he wished "to discuss any matters going forward". 15 On 13 March 2024, the applicant's solicitors served on WorkCo by email to its solicitors a copy of the amended originating application, amended statement of claim and genuine steps statement. The applicant's solicitors sent a separate email to WorkCo's solicitors requesting confirmation whether they accepted service of those documents on behalf of Mr O'Friel, who, as noted above, is a director of WorkCo. 16 A copy of those documents was sent by email dated 13 March 2024 to Mr Zimmerman as counsel for Filecoin. In response to a request by the applicant's solicitors for confirmation whether the email was accepted as service of the documents attached, Mr Zimmerman replied by email on 15 March 2024, stating that Filecoin and Ms Klimen "do not consent to service by email at this time". 17 On 25 March 2024, noting the "bounce-back message" that had been received in relation to the email dated 19 December 2023 to Mr O'Friel, Mr Kang forwarded his email of 13 March 2024 to WorkCo's solicitors including the attachments to a different email address (ken@toku.com) based on his discovery that Mr O'Friel was referred to as "Ken" on a website for Toku. Mr Kang did not receive any "bounce-back message" in respect of the second email. 18 Mr Kang has viewed Mr O'Friel's "LinkedIn" profile, which is said to place him in "New York City Metropolitan Area". However, the applicant has no further information about Mr O'Friel's address or location. 19 Mr Kang deposes that he is aware that Ms Klimen works from a serviced office in San Francisco when she is not travelling. 20 Mr Kang deposes that both WorkCo and Filecoin, as "businesses that operate in the High-Tech industry", have "highly mobile workforces". Further, the applicant has informed Mr Kang that, when she was recruited by Filecoin, it was represented as a "remote first company", and she was made aware that "a large proportion of its total approximate workforce of 60 people were people who did not reside in or around the San Francisco area, let alone within the United States of America". Members of Filecoin's workforce, including the applicant, would frequently travel internationally to attend Filecoin events. 21 The applicant was based in Australia while engaged by Filecoin, including while she was employed by WorkCo, and her normal place of work was at her home office in Victoria. Her employment agreement was governed by the law of New South Wales.

Service outside Australia 22 Division 10.4 of the Rules deals with service outside of Australia. Rule 10.42 provides for the circumstances in which an originating application may be served outside Australia without leave of the Court. The current proceeding is capable of falling within one or more of sub-rr 10.42(b)(iii), (j) and (p): that is, a proceeding in relation to a contract that was to be wholly or partly performed in Australia; a proceeding arising under a law of the Commonwealth in relation to an act or omission that was done or occurred in Australia or loss or damage that was sustained in Australia; or a proceeding that relates to the construction, effect or enforcement of a law of the Commonwealth, a State or a Territory. 23 Under r 10.43B, a person who is to be served outside Australia with an originating application must also be served with a notice in accordance with Form 26A which informs the person of the scope of the Court's jurisdiction, the grounds alleged by the applicant to found jurisdiction, and the person's right to challenge service or the jurisdiction of the Court or to file a conditional appearance. 24 A document other than an originating application may be served outside Australia with the leave of the Court, which may be given with any directions that the Court considers appropriate: r 10.44. 25 In general, a document to be served outside Australia need not be personally served on a person so long as it is served on the person in accordance with the law of the country in which service is effected: r 10.46. 26 The United States is a party to the Hague Convention. As such, service on its residents is ordinarily to be effected in accordance with the articles of that Convention and Div 10.6 of the Rules, which sets out the process for effecting service in a Hague Convention country. In his affidavit affirmed on 13 March 2024, Mr Kang annexed a copy of the relevant authority under the Hague Convention in respect of the United States, which indicates that personal service is the method used in executing all requests for formal service.

Deemed service 27 Rule 10.48 provides as follows: 10.48 Deemed service A party may apply to the Court without notice for an order that a document is taken to have been served on a person on the day mentioned in the order, if: (a) it is not practicable to serve the document on the person outside Australia in accordance with a convention, the Hague Convention or the law of the country in which the person resides; and (b) the party provides evidence that the document has been brought to the attention of the person. Note: Without notice is defined in the Dictionary. 28 Rule 10.48 is in substantially similar terms to r 10.23, which deals with deemed service on persons in Australia. The "Hague Convention" referred to in r 10.48 is defined as the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, to which the United States is a party (see r 1.51 and Schedule 1). 29 In order to obtain an order for deemed service, the party seeking the order must establish that it is not practicable to serve the document on the person outside Australia, and must provide evidence that the document has been brought to the person's attention.

Practicability of service 30 The term "practicable" has a wide meaning which depends on the nature of the particular proceedings, including the relief sought and the requirement that litigation be progressed quickly and efficiently: see Sanum Investments Limited v ST Group Co., Ltd (No 2) [2019] FCA 1047 at [149]-[150] (Foster J), referring to bCode Pty Ltd (in liq) v Holford [2018] FCA 798 at [10]-[12] (Gleeson J) and Australian Securities and Investments Commission v China Environment Group Ltd [2013] FCA 286 at [11]-[12] (Besanko J), in relation to the meaning of the same term used in r 10.24 (which concerns substituted service). 31 While mere inconvenience is not enough to establish that service is not practicable, it is unnecessary to show it would be impossible or futile to effect service as required. Rules such as rr 10.23 and 10.48 are wide enough to capture circumstances where further attempts at service would not be "sensible or realistic", even if possible or feasible: Heenan (Receiver), in the matter of Ruby Apartments Pty Ltd (in liq) v Ralan Paradise No 1 Pty Ltd (in liq) [2020] FCA 1878; 149 ACSR 205 at [17] (Reeves J); DHI22 v Qatar Airways Group Q.C.S.C [2023] FCA 616 at [23] (Halley J). 32 As Foster J stated in Sanum Investments Limited at [148]: The cases to which I have referred support the proposition that, in order to prove that service is impracticable, an applicant is not required to prove that it is impossible or futile to effect service as required. In addition, in the context of r 10.48 FCR, an applicant for relief under that rule is not required to undertake service in accordance with the strict requirements of the relevant law before seeking relief pursuant to r 10.48. It should also be remembered that, although mere inconvenience may not be enough to constitute "impracticability", r 10.48 FCR is intended to ameliorate the stultification of cases against foreign defendants caused by an unduly cumbersome and uncertain set of requirements governing service of this Court's process in a foreign country. In my judgment, once this court is satisfied that its process and other documents have come to the attention of the foreign defendants, it should not hesitate to deem service to have been effective if there is any suggestion that the law of the relevant foreign country as to service will unreasonably delay or even frustrate the progress of the proceeding. 33 Evidence of attempts to effect service, attempts to speak by telephone, and lack of knowledge of whereabouts may be relevant to the question of practicability of service: Kosmos Capital Pty Ltd v Turiya Ventures LLC [2019] FCA 528 at [50] (Jackson J). The question is whether the applicant, using reasonable efforts, is unable to serve the respondent in accordance with the applicable requirements, whether under the Hague Convention or the law of the country in which service is effected. 34 As earlier noted, in light of the fact that Lander & Rogers now has instructions to act for the second respondent, Mr O'Friel, it is unnecessary to deal with the application for deemed service or substituted service of documents on Mr O'Friel. 35 In my view, the evidence of Mr Kang establishes that it is not practicable to serve the relevant documents on the third and fourth respondents outside Australia in accordance with the Hague Convention, for the following reasons. 36 While the applicant understands that Ms Klimen is based in the United States, neither the applicant nor her solicitors is aware of a physical address or location at which Ms Klimen works or resides. There is evidence that the workforce of FileCoin is "highly mobile" and works remotely. 37 FileCoin is described in the applicant's statement of claim as a United States based entity. The evidence filed on the interlocutory application does not identify whether any attempts have been made to ascertain the address of the registered office of Filecoin in the United States. Nevertheless, even if such an address were ascertained, it would still take some time and effort to effect service on FileCoin at that address, in circumstances where there is evidence that FileCoin's inhouse counsel has already engaged with the applicant's solicitors in relation to the matter (see further below). 38 It is not necessary to establish that personal service of the documents would be impossible or futile. In the circumstances, I consider that it is not sensible or realistic to attempt to serve the documents personally on the third and fourth respondents in the United States. The steps required to effect service would involve more than mere inconvenience and would be unduly cumbersome. This would be likely to cause delay in circumstances where the proceeding has been foot since December 2023, following a conciliation before the FWC. It can be readily inferred that each of the third and fourth respondents is aware of the existence of the claim.

Whether the documents have been brought to the attention of the person 39 Rule 10.48(b) requires evidence that the document has been brought to the person's attention, but does not require that the person has accorded the document attention or has acknowledged the document: see British American Tobacco Australasia Limited v Taleb (No 1) [2012] FCA 1065 at [46] (Dodds-Streeton J), referred to in Heenan at [18]-[19]. It is sufficient if "there is evidence of actions, steps and circumstances which alone or in combination support, on the balance of probabilities, an inference that the documents have been brought to the relevant person's attention": British American Tobacco at [50]. 40 I find that that there is ample evidence that the relevant documents have been brought to the attention of each of the third and fourth respondents. 41 In relation to Ms Klimen, while there is evidence that the original documents were sent in December 2023 to an email address that was understood to belong to Ms Klimen, there does not appear to have been any direct email to Ms Klimen in relation to the relevant amended documents in March 2024. However, there is evidence that the applicant's solicitors sent a copy of the relevant amended documents to Mr Zimmerman by email on 12 March 2024, requesting confirmation of acceptance of service. Mr Zimmerman's responded that neither Filecoin nor Ms Klimen consented to service. This indicates that Mr Zimmerman had received instructions from Ms Klimen in relation to whether she accepted service of the documents, and provides a basis on which to infer that the documents were brought to Ms Klimen's attention, noting that it is not necessary to show that she accorded the documents attention or acknowledged their contents. 42 In relation to FileCoin, Mr Zimmerman in his capacity as inhouse counsel for FileCoin has previously participated in a video conference and has exchanged correspondence with the applicant's solicitors in relation to the matter. It is clear that the relevant documents have been brought to Mr Zimmerman's attention in that capacity, and it may therefore be inferred that they have been brought to FileCoin's attention, either because Mr Zimmerman has held himself out as the agent and representative of FileCoin or because he is likely to have passed the relevant documents on to officers of FileCoin, or at least informed them of the existence and nature of the documents. Again, in stating in his email to the applicant's solicitors that FileCoin did not consent to service of the documents "at this time", it may be inferred that Mr Zimmerman obtained instructions from FileCoin in relation to the documents and brought them to the attention of FileCoin for that purpose. 43 Accordingly, I am satisfied that the requirements of r 10.48 have been met and that it is appropriate to make orders for deemed service of the documents on the third and fourth respondents in the form sought by the applicant.

Substituted service 44 Rule 10.24 provides that an order for substituted service may be made "[i]f is not practicable to serve a document on the person in a way required by these Rules". 45 There is a separate rule providing for substituted service in circumstances where service outside Australia was not successful: see r 10.49. However, it is accepted that r 10.49 does not displace or limit the power to order substituted service under r 10.24: Tax Practitioners Board v Buckland [2022] FCA 1376 (Charlesworth J) at [49]-[53]; Ford, in the matter of Careers Australia Group Limited (in liq) v Mansfield [2022] FCA 173 at [25]-[33] (O'Bryan J). 46 The term "not practicable" in r 10.24 has the same meaning as in rr 10.23 and 10.48 of the Rules. Accordingly, r 10.24 does not require impossibility, or even extraordinary difficulty, in effecting service in the manner otherwise required by the Rules, but rather a "state of affairs which is practically impossible to navigate without substantial difficulty": Cuzzubbo v Solgold Plc [2024] FCA 594 at [13] (Rangiah J); Commissioner of Taxation v Caratti (No 2) [2018] FCA 1500 at [10] (Colvin J). 47 The method of substituted service should be one which, in all reasonable probability, will be effective to bring the documents to the attention of the person to be served. 48 In the light of my conclusions in relation to deemed service of the amended originating application, amended statement of claim and genuine steps statements, it is unnecessary to reach a conclusion on the application for substituted service under r 10.24 of those documents. 49 However, the applicant also seeks orders for substituted service of additional documents, namely a Form 26A notice and a copy of the interlocutory orders made today. 50 For the reasons set out above in relation to deemed service, I find that service of the relevant documents on the third and fourth respondents in the way required by the Rules is not practicable for the purposes of r 10.24, and that the methods of substituted service proposed by the applicant would be likely to bring the documents to the attention of the third and fourth respondents. 51 Accordingly, I make orders under r 10.24 for substituted service of the additional documents in the manner suggested by the applicant, which reflects the manner in which the other documents have already been sent to and brought to the attention of the third and fourth respondents. I also make orders providing for substituted service on the third and fourth respondents of any further documents in the proceeding in a similar manner until such times as they file and serve a notice of address for service, or until further order. 52 I will otherwise make timetabling orders for the filing of notices of address for service and pleadings, and adjourn the case management hearing to 16 August 2024 at 9.30 am. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Horan.