Marcus Wheeler Jones v Charsam Textiles Pty Limited and Others

THIRD RESPONDENT: Susan Lupica FILE NUMBER: IRC 943 of 2004 CORAM: Schmidt J CATCHWORDS : Practice and Procedure - notice of motion - respondents' summonses for production of documents - section 106 claim raising underpayment of award wages - documents sought prior to conciliation - Rule 18A of the Court's Rules - summonses set aside until after conciliation LEGISLATION CITED : Industrial Relations Act 1996 Industrial Relations Commission Rules Collins v Dr Horvath Central Sydney Area Health Services & Ors (2004) NSWIRComm 153 CASES CITED : Fish & Anor v Solution 6 Holdings Limited & Ors [2002] NSWIRComm 93 Marks v Jones Lang LaSalle Australia Limited & Anor [2002] NSWIRComm 175 HEARING DATES: 07/28/2004 DATE OF JUDGMENT: 07/28/2004

APPLICANT: Mr J Pearce of counsel SOLICITORS: Adams & Partners LEGAL REPRESENTATIVES: RESPONDENT: Mr J Dupree of counsel SOLICITORS: Russo and Partners

JUDGMENT: - 10 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

MARCUS WHEELER JONES v CHARSAM TEXTILES PTY LIMITED AND OTHERS Application under section 106 of the Industrial Relations Act 1996 JUDGMENT

1 By notice of motion filed on 3 June 2004, the applicant sought to have summonses for production issued by the respondents to the applicant and to a company owned and operated by the applicant, Solution Workwear Pty Ltd, set aside. The Registrar had earlier made consent directions that the summonses be returnable on 29 June. It was alleged that the production sought would be oppressive and involved a fishing expedition, as well as being of no relevance and lacking a forensic purpose.

2 The proceedings had been brought under s106 of the Industrial Relations Act 1996 ('the Act') in February 2004. That summons was directed to the contract of employment between the applicant and the first respondent, under which the applicant was employed as an outdoor salesman. That employment was alleged to have been regulated by the provisions of the Shop Employees (State) Award. It was alleged that the applicant had not been paid his entitlements under that award during the course of his employment, which came to an end in June 2003. Over $36,000 in unpaid wages and superannuation was claimed.

3 The summonses sought production of documents such as income tax returns, bank records, credit card accounts, hire purchase and leasing agreements, travel documents and correspondence connected with any business conducted by the applicant, company records for the corporation and information in relation to suppliers and customers.

4 The parties' argument was dealt with in written submissions, with the respondents submitting that the summonses were regularly issued for a proper forensic purpose, being directed to issues raised in the summons initiating the proceedings. The material sought impacted upon the preparation of a reply to the summons and upon preparation for the conciliation conference. In any event, the applicant did not have standing to question the summons directed to Solution Workwear Pty Limited. That summons was issued to a non-party for a bona fide purpose and was not oppressive.

5 The applicants pointed to the width of the classes of documents sought, extending well before and after the times in respect of which any complaint was made in the initiating summons. This was argued to be contrary to the Court's usual approach (Marks v Jones Lang LaSalle Australia Limited & Anor [2002] NSWIRComm 175; Fish & Anor v Solution 6 Holdings Limited & Ors [2002] NSWIRComm 93 and Collins v Dr Horvath Central Sydney Area Health Services & Ors (2004) NSWIRComm 153.) It was also submitted that this made questionable the forensic relevance of much of the material sought. In the case of Solution Workwear Pty Ltd, it was not a corporation to which any reference had been made in the pleadings and was of no obvious relevance to the case advanced. The summonses should be set aside, without prejudice to the respondents' rights after the conciliation.

6 In response, it was submitted that the applicant's summons pleaded a number of critical allegations in general terms, making it 'impossible for the Respondent to respond with appropriate particularity'. Various matters were pointed to, including that the summons did not identify the time, place or terms of a refusal to pay entitlements due under relevant legislation; the amount or basis of the allegation that there had been a failure to pay in accordance with the award was not provided; the nature and extent of complaints about stress, impairment of employment prospects and reduction in quality of life was unclear; and that there were no details provided as to when alleged representation had been made, or their nature. It was submitted that there was insufficient information to permit the respondents to formulate their reply and for there to be a meaningful conciliation.

7 It was also argued that the summonses were not too wide, either in relation to material sought or the time period in question. The material sought was both relevant and sensibly likely to enhance the prospect of conciliation.

8 The operation of the Court's Rules in relation to conciliations conducted under s109 of the Act have been considered in a number of cases. Production of documents prior to conciliation was sought in Solution 6 Holdings, as the result of particulars of the applicant's claim which the respondents there sought. The applicant's resistance to what was sought was upheld, at that stage of the proceedings. At [25] to [34] observed: 25 I am satisfied in this case, that the applicants' resistance to the provision of further particulars must be upheld. The pleadings in the summons and the answers given in relation to the particulars sought, in my view, are adequate to meet the obligations imposed upon them by Rule 18A.

26 Rules 57 and 64 have general application to proceedings brought under the Act. They are not dissimilar to the Supreme Court Rules in relation to particulars, but their application in a particular case, must be considered, having in mind the proceedings before this Court in which they are relied upon and the other of the Court's Rules which apply to such proceedings. Whether a discretion will be exercised in favour of a respondent seeking further particulars of an applicant's claim or affidavit, thus depends in a particular case, not only on the particulars sought, but also why. In this case the provisions of Rule 18A and its purpose cannot be overlooked.

27 Here, voluminous particulars were sought by the respondents, in order for it to put on its response to the summons. While an order for all of the particulars not provided by the applicants in answer to the original request was sought in the motion, it was not pressed at the hearing. That was certainly a proper approach, given that Rule 18A(4) requires that: (4) Within 21 days after the date of expiry of the time limited for the respondent's appearance the respondent must file and serve its reply. Such reply must be in Form 12B and must: (a) answer each of the matters raised in the application, and (b) specify in summary any additional matters of fact and law upon which the respondent will rely in opposition to the application, but not the evidence by which those facts are to be proved, and (c) contain sufficient information to allow the Commission to carry out its duty to conciliate under section 109 by a succinct summary.

28 This system introduced by Rule 18A for initiating s106 claims and preparing them for conciliation, involved a significant departure from that encompassed by Rule 18 which provides: 18. Proceedings under section 106 (Void contracts) and section 111 (Regulated contracts )

(1) An application to the Commission to exercise the powers conferred on it by section 106 or by section 111 must be accompanied by affidavits, stating briefly but specifically the facts, matters and circumstances relied upon in support of the application.

(3) Unless otherwise ordered by the Registrar, the application, together with a copy of the affidavits in support, must be served on the respondent.

(4) Where, within the required period, an appearance has not been entered by a respondent, the applicant may proceed to have the matter determined in the absence of that respondent.

29 Under the Rule 18 procedures, the Court then issued directions to the parties to file their affidavit evidence, which also often involved discovery and inspection of documents, as a part of the preparation process. This was an expensive and time consuming process, in which parties incurred considerable costs and delay before any attempt was made to conduct the conciliation required by s109 of the Act. The new Rule 18A procedure was designed to alleviate some of this burden, so as to maximise the prospects which parties had to settle their differences, before significant legal fees had been incurred. 30 The applicants complained that the end result of the type of particulars here sought by the respondents, was to result in this streamlining and cost reduction being avoided. The result sought to be achieved was provision of information formerly provided in the applicant's affidavits and through the discovery process, at considerable cost to an applicant.

31 Given the voluminous nature of the particulars here sought, the application made in the motion and the limited further particulars actually pressed at the hearing, one must have some sympathy for that concern. The respondents, of course, asserted that this was not their aim, but rather to ensure that the allegations made by the applicants were properly understood, in order to identify from the outset, what truly was in issue between the parties. This would also facilitate the conciliation process. Those too are aims with which one must have sympathy.

32 It is obvious that there must be a balance between the two views. Indeed, that is what Rule 18A itself seeks to achieve, by the requirement that the matters of fact and law which form the basis of the claim must be specified in the summons by an applicant, but not the evidence - that having formerly been provided by affidavit sworn prior to the conciliation. Now these matters are to be provided in the summons by a 'succinct summary', so as to enable the Commission 'to carry out its duty to conciliate under s109 of the Act'. Likewise, a respondent is obliged to answer each matter raised, to specify additional matters of fact and law which it will rely upon in opposition to the claim, but not the evidence. Again, this is to be done by provision of a succinct summary, to enable the Commission 'to carry out its duty to conciliate under s109 of the Act'.

33 If the conciliation does not succeed, those succinct summaries of the facts will be fleshed out by the affidavits which will be filed by the parties prior to the hearing. In that process, the provisions of Rule 64 will also be available to the parties, if further particulars are required in relation to the matters contained in the pleadings or the affidavits.

34 Having this balance in mind, it must be accepted that at this point, the necessary particulars of a s106 claim, as required by Rule 57, are in fact those specified by Rule 18A. Thus it is that the details of alleged conversations and what is contained in documents are not required to be given in a summons, if the representations alleged have been sufficiently provided in summary form. Nor are copies of documents in which representations were made required to be provided. What is required is a statement of the matters of fact which form the basis of the claimed unfairness, sufficient to enable the Commission 'to carry out its duty to conciliate under s109 of the Act'.

9 In Jones Lang Lasalle consideration was given to production of documents prior to conciliation pursuant to notices to produce, provided for in the Court's Rules. At [16] to [21] I observed: 16 I turn then firstly to the operation of Rule 18A. The rule is designed to ensure that the compulsory conciliation required by s109 of the Act, is conducted expeditiously and without the parties incurring avoidable costs. In my view, the way in which the Rule was intended to operate, was that parties are not now required to provide any evidence to each other at the time that the summons, the response and the reply are prepared and filed. (Rule 18A(1)(a) and (4)(b)). Formerly under Rule 18, the applicant was obliged to provide affidavit material at the time the summons was filed. Directions were then usually given by the Court as to the filing of all of the parties' affidavit material, prior to conciliation being conducted. Often, though not always, discovery and production of documents also occurred prior to conciliation. This process has been altered by Rule 18A.

17 Now, Rule 18A(7) cannot be overlooked when consideration is being given to the proper operation of the Rule, especially in relation to the provision of evidence. There is a distinction, which cannot be ignored, in Rule 18A(7) between production of documents under Rule 86, sought for the purpose of evidence and the wider class of documents which a party might be required to be produced under Rule 161. This distinction flows from the use of the words 'Nothing ….is to be taken to derogate from or otherwise limit the requirements of or the Commission's powers under Parts 9 and 13 … .' Rule 86 appears in Part 13 and Rule 161 in Part 22.

18 Rule 18A contemplates that relevant documents, which will become evidence in the proceedings if the matter does not settle, which are under the control of another party to the proceedings, may be required to be produced prior to the conciliation. (Rule 18A(7) and Rule 86). The rule does not, however, envisage that the wider production of the kind provided for in Rule 161, will generally be required prior to conciliation. (Rule 18A(7) and Rule 161). It must follow from the absence of any reference in Rule 18A(7) to Part 22, that the Rule was intended to 'derogate from or limit' the requirements of that Part and the exercise the Court's powers under that Part, prior to conciliation.

19 That view does not lead to the conclusion that the other parts of the Rules have no operation at all prior to conciliation. That possibility appears to be preserved by Rule 18A(8), which requires that once the applicant's reply has been filed, or the time for its filing has expired, the matter be referred to a Member of the Commission for conciliation or directions (or to the Registrar in the latter case). It appears that there is a discretion reserved to the Member to whom the matter is then allocated, as to other matters which might arise prior to conciliation.

20 The explanation for the approach adopted in the Rules would appear to lie in the balance which the Rule seeks to establish between streamlining and cost reduction prior to conciliation on the one hand and the identification of what is truly in issue between the parties, so as to increase the likelihood of a settlement at conciliation, on the other.

21 As I have held, Rule 18A does not appear to entirely exclude the operation of Rule 161 in a particular case, prior to conciliation. Nevertheless, its operation prior to conciliation, in my view, must necessarily be limited.

10 In this case, it is summonses to produce documents which have been served upon the applicant and Solution Workwear Pty Limited. Summonses are dealt with in Part 14 of the Court's Rules. Rule 18A, which established the new procedure adopted in 2000 for s109 conciliations, provides in Rule 18A(7), that nothing in the new Rule is 'to be taken to derogate from or otherwise limit the requirements or the Commission's powers under Parts 9 and 13 of these Rules'. Those parts deal with particulars and general procedures. It is notable that Part 14 is not there referred to.

11 This is of some importance, given that Rule 18A is designed to ensure that parties put on their pleadings promptly and that costs incurred prior to conciliation are kept to a minimum.

12 Here, the respondents have not complied with the requirements of Rule 18A. They have not filed the response to the applicant's summons, which was required to be filed within 21 days of the time limited for the respondents' appearance (Rule18A(4)). Service of a summons to produce documents, upon an applicant or a third party to the proceedings, does not relieve a respondent of that obligation. That could only follow from an application being made and granted by the Court. Here, the consent directions originally contemplated the filing of a reply, after the documents dealt with in the summonses were produced. The summonses themselves have, however, now been challenged in the motion. The parties were unable to resolve their differences about the matters raised, which now fall to the Court to determine.

13 The Court must balance what Rule 18A is itself designed to address - namely ensuring that sufficient information is provided in the parties' pleadings, to enable the Court to undertake its statutory obligation to conduct the conciliation required by s109 of the Act and ensuring that the parties have not incurred avoidable costs, which might provide an impediment to an agreement being achieved in the conciliation.

14 Under the scheme established by the Rules, parties are not entitled to require production of documents, as a matter of course prior to conciliation. Nor do the Rules envisage that documents, which are in the hands of third parties, will routinely be pursued by the parties prior to the conciliation. That exercise, if required, will usually be undertaken during the preparation of the matter for hearing, if the conciliation fails.

15 In this case, I am satisfied that any pursuit of the summonses in question must await the outcome of the conciliation proceedings. The documents sought travel well beyond what might reasonably be required to enable the respondents to respond to the applicant's summons, both in terms of what material is sought and the timeframe referred to. It is difficult to see that all of the documents are relevant to the matters lying between the parties. Even those which appear to be potentially relevant, are in many cases unlikely to address the complaints made by the respondents in their submissions. Such matters are more likely to be addressed by the pursuit of particulars, if the conciliation fails and the information sought is not adequately provided in the applicant's affidavit material.

16 Despite this conclusion, it must be observed that any s106 claim which proceeds, as this one does, upon an allegation that there has been an underpayment of award entitlements, will be more likely to be settled at conciliation, if the applicant clearly identifies which award provisions he or she says have not been observed and why. The proof of such allegations at any hearing, usually lies in the hands of the respondent employer, upon whom the statutory obligation to keep accurate time and wages records falls. The respondent is usually not obliged to provide such documents prior to the conciliation. Nor is the applicant obliged to produce the documents upon which he or she might rely, to otherwise prove the claim.

17 For an applicant, some sensible consideration of the provision of a short statement indicating what the precise award breaches relied upon are and how the money claims made have been calculated, can nevertheless be of considerable assistance in the pursuit of a settlement at conciliation, if that information is not already made clear in the initiating summons. In this case, however, there is a schedule attached to the summons which identifies the alleged hours worked, the rate paid, the award rate, as well as information relevant to the claims made in relation to a travel allowance, over the period in question. How the superannuation claim has been calculated is also set out.

18 I am well satisfied that the information provided in the summons is adequate to enable a proper reply to be provided, as the Rules require.

19 For the reasons given, I order that the respondents' summonses be set aside until after the conciliation. The respondents' response to the summons should now be put on forthwith. Any reply should be filed before the conciliation fixed for 2pm on 26 August 2004. ------------------------

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