Hartnett Legal Services Pty Ltd v Ballantyne

1. The application for leave to appeal is dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

RANGIAH J: 1 This is an application for leave to appeal against an interlocutory judgment of the Federal Circuit Court of Australia. On 1 August 2016, the primary judge ordered the parties to make discovery in accordance with Div 14.2 of the Federal Circuit Court Rules 2001 (Cth) ("the FCC Rules"). The application to this Court is listed as a matter of urgency because the trial of the substantive proceeding has been listed for hearing in the Federal Circuit Court on 2 September 2016. 2 The present respondent, James Cameron Ballantyne, commenced proceedings in the Federal Circuit Court pursuant to the Fair Work Act 2009 (Cth) seeking payment of amounts for unpaid annual leave and long service leave and seeking the imposition of pecuniary penalties against his former employer. I will refer to Mr Ballantyne as the present respondent. 3 The present applicants are Hartnett Legal Services Pty Ltd and Beau Timothy John Hartnett. The present respondent alleges that Hartnett Legal Services Pty Ltd was his employer, but the present applicants claim that Mr Hartnett was the sole employer. The present applicants cross-claim for breach of restraint of trade clauses in the employment agreement and breach of fiduciary duty. 4 The present applicants describe the issues between the parties in the proceeding before the Federal Circuit Court as: (a) the identity of the present respondent's employer or employers; (b) the validity, interpretation and effect of restraint of trade clauses in the employment contract; (c) whether the present respondent resigned in accordance with the terms of the employment contract; and (d) whether there has been any breach of fiduciary duty on the part of the present respondent. 5 The present respondent does not demur from this description of the issues. 6 This is not the first time this matter has found its way to the Federal Court of Australia. I previously allowed an application for leave to appeal and an appeal against an order of the Federal Circuit Court for default judgment against the present applicants: Hartnett Legal Services Pty Ltd v Ballantyne (2015) 236 FCR 535. 7 In an application for leave to appeal, the primary considerations are: (a) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court; (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong. Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 ("Décor") at 398 (Sheppard, Burchett and Heerey JJ). 8 Leave to appeal is less readily given where the issue is one of practice and procedure: Décor at 400; Minogue v Williams [2000] FCA 125 at [19] (Ryan, Merkel and Goldberg JJ). 9 It is necessary to set out some aspects of the procedural history of the proceeding in the Federal Circuit Court before considering the issues involved in the application for leave to appeal. 10 On 6 October 2015, the applicant filed an application for discovery generally, or, in the alternative, for discovery of specific classes of documents. There was full argument in the hearing of that application. In reasons delivered on 6 May 2016, the primary judge declined to make an order for discovery because his Honour was "not persuaded that a declaration and order for discovery is presently appropriate in the interests of the administration of justice in this matter". The application for discovery was adjourned to the registry. His Honour made directions for the delivery of further pleadings and affidavits and for mediation. 11 On about 23 May 2016, the present applicants filed a further amended defence and cross-claim. On about 1 June 2016, the present respondent filed a reply to the further amended defence and a defence to the cross-claim. On 8 June 2016, the present applicants filed their reply to the present respondent's defence to the cross-claim. The parties subsequently filed affidavits of their evidence-in-chief. On 28 July 2016, the parties attended mediation before a registrar of the Federal Circuit Court. The mediation was not successful. 12 The matter was listed for directions before the primary judge on 1 August 2016. At the directions hearing, the present respondent sought to have his discovery application re-listed. The present applicants agreed that the present respondent's application should be re-listed and foreshadowed their own application for discovery. However, the primary judge proceeded to declare that discovery was appropriate in the administration of justice and to order that the parties make discovery. 13 The present respondent was represented by Mr Kidston of Counsel. The present applicants were represented by Mr Sara, as town agent for Hartnett Lawyers, the solicitors for the present applicants. Relevantly, the following exchanges took place between the legal representatives and the primary judge: MR KIDSTON: …The disclosure application remains adjourned to the registry. Your Honour will recall that your Honour found all the matters necessary for a disclosure order to be made were satisfied save that at that point in the proceeding it was not necessary because - to make the order because the respondent had an opportunity to put on its material and the material may be found - may be put - may then be put on. Regrettably the position is that the material asked for has been studiously avoided in the material that has been put on, so we will respectfully seek today a direction that that disclosure application be relisted. … HIS HONOUR: What do you [Mr Sara] say about the discovery application? MR. SARA: Your Honour, we say that the - I am instructed that the application for discovery should be listed for hearing at a date to be notified by the registrar or your Honour. HIS HONOUR: Sure. Yes. MR SARA: And in fact we will be - my instructors will be bringing a cross-application for discovery, and they would seek that that be heard on the same date as well. HIS HONOUR: So everybody agrees there should be discovery. MR SARA: Indeed. HIS HONOUR: What are we having a hearing about? MR. SARA: Your Honour, I'm in the hands of my instructors. HIS HONOUR: Make a declaration under section 45(1) of the Federal Circuit Court Act that it's appropriate in the interests of the administration of justice that there be disclosure between the parties. Everybody wants it. There will be general disclosure. These lawyers want to play lawyers and waste all of their money, they're going to do it, so we will make it a general order for disclosure. Part 14 of the Federal Circuit Court rules applies. That gives you 14 days, gentlemen, to file your affidavits of documents. Inspection I think under the rules happens seven days thereafter, but I'm not sure about that. In any event, you will need to be ready for a trial on 2 September. I'm giving you one day. There's two witnesses in this case and two minor witnesses. You can't complete in one day, there's something wrong. And if it doesn't complete in one day, it will go part-heard. But I haven't seen a more nonsense piece of litigation for a long time. So we will deal with it in a day. Thank you.