McEvoy v Wagglens Pty Ltd

Judgment

1. HIS HONOUR: On 11 February 2019, the plaintiff, Fentin McEvoy, filed a summons seeking an order to extend the time to file an appeal from a decision of the Local Court. The plaintiff also seeks leave to appeal that decision, and orders either setting aside the Local Court's decision or remitting the matter back to the Local Court for determination.

Background

1. On 25 May 2011, the plaintiff entered into an employment contract with Wagglens Pty Ltd, the first defendant ("the employment contract"). Wagglens Pty Ltd is a real estate agency trading as Mosman First National Real Estate. Roderick Marr, the second defendant, was the sole director and secretary of the first defendant at all relevant times when the plaintiff was employed by the first defendant.
2. On 19 April 2012, the plaintiff ceased to attend the office of the first defendant and did not return. The circumstances of him doing so, and whether it was in the context of him resigning his employment, are matters of dispute between the parties.
3. In order to better understand the application, it is appropriate to briefly trace the relevant Local Court history. Throughout the proceedings in the Local Court and in this Court, the plaintiff has appeared without legal representation, although he informed the Local Court that he has a law degree.

Local Court history

1. On 24 May 2018, the plaintiff filed a statement of claim in the Local Court, seeking damages from the defendants in the sum of $26,250.12. The damages were expressed to be "for breach of employment contract dated 25 May 2011 by way of under-payment". The pleading identified the second defendant as a director of the first defendant, but did not identify a cause of action against him.
2. By letter dated 7 June 2018, the defendants' solicitors sought particulars from the plaintiff. In that correspondence, the defendants expressed an assumption that the plaintiff would allow 14 days from receipt of his response for them to file a defence or apply to strike out his claim. Exchanges of letters and emails ensued. By email dated 21 June 2018, the plaintiff purported to provide particulars and declined to provide an assurance that he would allow a period of 14 days for the defendants to file a defence.
3. On 22 June 2018, the plaintiff filed a motion for default judgment against the defendants, which was entered on the same date. On 26 June, the plaintiff sought and was granted a garnishee order by the Local Court against the defendants to the amount of $26,494.12. On 28 June, the plaintiff was paid $348.70 by the first defendant consequent to the garnishee order. On 29 June, the defendants became aware of the default judgment and invited the plaintiff to consent to it being set aside. By email dated 2 July, the plaintiff declined, expressing the view that the defendants had "sufficient time to file their Defences".
4. On 4 July 2018, the defendants filed a notice of motion seeking orders that the default judgment be set aside, the plaintiff repay the garnished amount of $358.70, and costs. An affidavit in support, sworn by the second defendant, was filed at the same time. On 27 July 2018, the Local Court set aside the default judgment, conditional upon the defendants filing a defence on or before 10 August 2018. The defence was filed on 9 August 2018, pleading that the plaintiff was barred from bringing the action as the claim was filed more than six years after the cause of action accrued.
5. On 10 September 2018, the defendants filed a notice of motion, together with an affidavit in support, sworn by the second defendant on the same date. The notice of motion sought orders that the plaintiff's statement of claim be struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") or the proceedings be dismissed, presumably pursuant to r 13.4 (though this is not explicitly stated), that the amount garnished be repaid, and costs.
6. The plaintiff did not file any material in response. The notice of motion was set down for hearing before Magistrate Reiss on 25 September 2018. At the hearing, the plaintiff submitted that, firstly, the six year limitation period expired on 25 May 2018, and therefore the statement of claim was filed one day within the expiration of the six year period. Secondly, the contract of employment was "embodied in a deed" and therefore, pursuant to the 12 year limitation period applying to actions arising from a cause of action in a deed, he was well within the statutory period within which to seek enforcement of a term of it. Thirdly, he submitted that the second defendant was liable pursuant to s 550 of the Fair Work Act 2009 (Cth).
7. The defendants submitted that the plaintiff had not given prior notice of any of these contentions, other than in discussions immediately before the court hearing. The magistrate determined that the plaintiff should be afforded an opportunity to file an affidavit in reply setting out his evidence, and stood the hearing over to 23 October 2018, directing that any affidavits in the plaintiff's case be filed and served by 16 October. Following discussion between the magistrate and the plaintiff as to how long he should have to file an affidavit in reply, his Honour said: "All right so file and served by 16 October and back before the Court on 23 October, is that suitable, 23 October? Is that suitable? [Solicitor for the defendants]): I am just checking your Honour, yes your Honour it is." The plaintiff did not expressly acknowledge the suitability of the next hearing date. The matter was then adjourned.
8. On 16 October 2018, the plaintiff filed an affidavit in reply with 100 pages of annexures ("the plaintiff's October 2018 affidavit"). On 22 October 2018, the defendants filed two further affidavits, in response to claims made in the plaintiff's October 2018 affidavit. According to the defendants' counsel at the hearing on 23 October 2018 ("the October 2018 hearing"), they had been forwarded by email to the plaintiff's email address at 4:55pm on 22 October 2018.
9. The plaintiff did not appear at the October 2018 hearing. The reasoning in his Honour's brief judgment did not include the relevant principles or distinguish between the application for the statement of claim to be struck out and the application for the proceedings to be dismissed. In making that observation, I do not mean to be critical; I am conscious of the severe time constraints on magistrates in dealing with their work-load. His Honour dismissed the plaintiff's claim, principally on the basis that it was barred by the statute of limitations ("the October 2018 judgment"). In providing his reasons, his Honour stated that he had read the plaintiff's affidavit "very closely". His Honour said: "It does appear that [the first defendant] was fairly well organised. There are a number of signed documents there. There are written contracts of employment, there are follow-up letters. Everything is fairly well documented and fits together well, against whereas [the plaintiff] has just made a number of assertions that are not backed up by anything contemporaneous. There does not appear on the material before the Court that the employment relationship ended in April 2012 due to resignation by [the plaintiff]. Again, there is a further contemporaneous record of the email which is attached to [one of the affidavits filed by the defendants] that further verifies by way of business records and there is little by way of contradiction of that, just unsupported assertions by [the plaintiff]. … The issue here is that it is claimed that the 6 year limitation period has expired, that the employment relationship ended in April and that these proceedings having been commenced in this Court in late May of this year are said to be statute barred. So does it appear on the evidence reasonably clear and strongly that the relationship did end in April 2012 so it is statute barred, that is over the 6 year period. The references by way of submissions in a sense by [the plaintiff] about the deed and its connection with the contract of employment does not make much sense to me. The deed might make reference to the contract of employment but that does not mean that somehow the contract of employment becomes a deed. In the face of it he has not produced a signed deed but in any event … I cannot see how the contract of employment incorporates and becomes a deed in the way that [the plaintiff] has asserted."
10. On 6 November 2018, the plaintiff filed a notice of motion pursuant to rr 36.15 and 36.16(2)(b) of the UCPR, seeking to stay the orders made in the October 2018 judgment and to set aside or vary those orders. He also filed a supporting affidavit with the notice of motion, in which he explained that he has a hearing disability and, although he heard the magistrate's direction as to the date by which he was to file an affidavit in reply, he did not hear the date on which the matter was adjourned for hearing and assumed that, based on his past experience with courts, he would receive written advice of the fresh hearing date. Annexed to his supporting affidavit was a medical certificate that corroborated his submission concerning his hearing disability. When he attended the Supreme Court registry on 16 October 2018 to file his affidavit, he inquired about "any other dates which may have been ordered for any further court procedures" but was not advised of the hearing date. He learned of the hearing date when he received an email advising him that the Court had made ex parte orders. Further, he stated in his affidavit that he had intended to "argue [his] case in Court" by reference to the material annexed to his affidavit.
11. The plaintiff filed two further affidavits, one sworn by his brother John McEvoy on 30 November 2018, and another by him, sworn on 3 December 2018. Both affidavits advanced further material in support of his statement of claim, and the plaintiff also prepared seven pages of written submissions in support of his application, which focused primarily on the merits of his claim for damages.
12. On 4 December 2018, the magistrate heard the plaintiff's motion to set aside the October judgment. After hearing from the parties and referring to the plaintiff's written submissions, his Honour dismissed the plaintiff's notice of motion, finding that he had been given the opportunity to present his material to the Court, and had done so, in affidavit form ("the December 2018 judgment"). Therefore, the judgment was: "… not a default judgment that was entered in his absence simply because he wasn't here. This was a considered position based on the extensive materials he had filed."
13. His Honour disregarded r 36.15 of the UCPR as being inapplicable, and it appears from the terms of the judgment that his Honour proceeded on the assumption that r 36.16(2)(b) was the basis of the application, which is that: "(2) The court may set aside or vary a judgment or order after it has been entered if: … (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order."
14. The relevant parts of his Honour's judgment are as follows: "… Going to some hearing issues that [the plaintiff] has - it may explain not hearing the hearing date when it was made at the same time as the other direction. There is some material in support of that. Certainly one is entitled to their day in court, and entitled to put forward their case, their material. [The plaintiff] was given that opportunity to put forward his material, it had been filed, it was taken into account by the Court. He, it seems, perhaps viewed as some misunderstanding, mishearing, he didn't have or take up the opportunity to attend in person, but he did effectively have written submissions before the Court in any event. This is not a default judgment that was entered in his absence simply because he wasn't here. This was a considered position based on the extensive materials he had filed. So it was a considered position. [The plaintiff] has filed a whole lot of additional material which seems to, to a large extent, go to the core of the argument. He says here today he was not aware that perhaps he could have - it was suggested it was perhaps some simple interlocutory step and he did not need to approach it in such a fulsome way; he did approach it in a fulsome way, number one, by the way of the original affidavit, and [the plaintiff is] intelligent and worldly enough to know that it was not just a simple interlocutory matter but it was actually an application which went to the core of his claim and might well strike out an[d] end his claim if not properly met. He put material on in that light. The material was quite clear and overwhelming in support of the then applicant company [sic] in terms of content, but there was a considered position there and [the plaintiff], in a sense, had his day in court there by way of his written affidavit and submissions. It is certainly too late to be putting on and trying to put on further affidavits and additional material after the event in relation to that. Again, the case is referred to; it is not a default judgment, it is not an issue of a denial of procedural fairness or natural justice. He had the opportunity as indicated and did present material that was considered by the Court. Certainly [the plaintiff] does have other avenues, it is up to him a[s] to what avenue he takes, whether he goes back to the position he was taking up for about five, five and a half, six years, prior to the commencement of these proceedings on whether he wishes to proceed them further, but there are certainly rights of appeal in relation to the decision that was made in his absence if he feels that in substance there are issues that were wrongly decided of me to be further agitated."
15. I assume the reference in the judgment to "applicant company" was either intended to be to the first defendant as the applicant on the notice of motion filed by the defendants on 4 July 2018, or to "defendant company". The summons subject of these proceedings was filed on 11 February 2019, being 69 days after 4 December 2018.
16. Under the heading "Appeal Grounds", the plaintiff set out an explanation as to why the summons was filed out of time. That explanation was to the following effect. On 31 December 2018, the plaintiff filed a summons and notice of motion in the Supreme Court registry, appealing the Local Court's decision. On the same day, the plaintiff lodged an application to postpone, remit or waive payment of a court fee. The plaintiff allegedly saw the Duty Registrar on that same date, who confirmed that if the application was approved and any required fees paid, the summons would be deemed to have been filed on 31 December 2018. On 23 January 2019, the Business Support Coordinator to the Supreme Court emailed the plaintiff regarding postponement of part of the filing fees and the need to receive a re-drafted summons from the plaintiff with an additional order extending time to appeal. However, on 30 January 2019, he received an email from the Business Support Coordinator of the Supreme Court, indicating that the filing would not be backdated to 31 December 2018.

Extension of time to appeal

1. Rule 50.3 of the UCPR sets out the time within which a summons commencing an appeal must be filed. It provides as follows: "(1) A summons commencing an appeal must be filed - (a) within 28 days after the material date, or (b) if the appeal relates to the decision of a judicial officer, within such further time as the judicial officer may allow so long as the application for such further time is filed within 28 days after the material date, or (c) within such further time as the higher court may allow. (2) An application for an extension of time under subrule (1)(c) must be included in the summons commencing the appeal."
2. The relevant deadline for the filing of an application to appeal or to apply for an extension of time to appeal would have been up to 1 January 2019. The plaintiff seeks an order that the time within which to file an appeal be extended, so as to allow him to appeal the December 2018 judgment out of time, presumably pursuant to r 50.3(1)(c). The principles governing the discretion to extend the time to for the filing of a notice of appeal are set out by McColl JA in Jingalong Pty Ltd v Todd [2014] NSWCA 330. Her Honour said: "39 The discretion to extend time for the filing of a notice of appeal is given for the sole purpose of enabling the court to do justice between the parties … In order to determine whether the rules will have that effect, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 (at 459) per McHugh J. 40 The four factors of general relevance to an application to extend time within which to appeal are the length and reason for the delay, whether the applicant has a fairly arguable case and the extent of any prejudice suffered by the respondent to the application: Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 (at [55]) ('Tomko') per Basten JA (Hodgson and Ipp JJA agreeing)."

Leave to appeal the Local Court's decision

1. Leave is required to appeal an interlocutory judgment or order of the Local Court, in accordance with s 40(2)(a) of the Local Court Act 2007 (NSW). The conditions for granting such leave are stated in Gibson v Drumm [2016] NSWCA 206 by the Court of Appeal. At [19], Beazley P and Simpson JA stated: "There are no exhaustive or rigid rules of practice or criteria governing the grant of leave to appeal: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; 148 CLR 170. However, it has been consistently stated that leave should only be granted where there are substantial reasons that call for appellate review: Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572; 104 FCR 564, and, in particular, where there is an error of principle, a matter of public importance, or injustice which is reasonably clear in the sense of going beyond what is merely arguable: see Darrell Lea (Vic) Pty Ltd v Union Assurance Society of Australia Ltd [1969] VR 401; Niemann v Electronic Industries Ltd [1978] VR 431; BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VR 756; Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69; Minogue v Williams (2000) 60 ALD 366; Jaycar Pty Limited v Lombardo [2011] NSWCA 284; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164; Clarke v State of New South Wales [2015] NSWCA 27. In Collier v Lancer (No 2) [2013] NSWCA 186, the Court reiterated that appellate review will be warranted where, for instance 'there is an error of principle which, if uncorrected, will result in substantial injustice'."

Applications for striking out pleadings or dismissing proceedings

1. A further consideration is the law concerning an application to strike out pleadings or dismiss proceedings, which were the bases of the defendants' notice of motion of 10 September 2018. Rules 13.4 and 14.28 of the UCPR are in the following terms: "13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, The court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1). … 14.28 Circumstances in which court may strike out pleadings (1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. (2) The court may receive evidence on the hearing of an application for an order under subrule (1)."

The plaintiff's allegations and the defendants' responses

1. The plaintiff's filings are sometimes enigmatically brief, and at other times unduly expansive. His affidavits frequently cross the line between evidence and submissions, perhaps unsurprisingly, given his lack of legal representation. A particular difficulty with understanding his case is that he has not given his version of events in a cohesive narrative, but rather as counterpoints to aspects of the defendants' narrative.
2. In order to better understand the material, I have condensed the plaintiff's pleaded allegations of fact and the defendants' responses, as set out in their affidavits filed in the Local Court.

Relevant documentation

1. There are certain undisputed facts and documents. On 25 May 2011, the first defendant purchased shares in two companies, John F McEvoy Real Estate Pty Ltd and McEvoy & Bird Pty Ltd. The vendor, John McEvoy, was the plaintiff's brother. The agreement for sale was executed as a deed on that date. There were five parties to the deed: John McEvoy, John F McEvoy Real Estate Pty Ltd, McEvoy & Bird Pty Ltd, the first defendant and, as a guarantor, the second defendant. The first defendant employed the plaintiff and his brother, pursuant to separate contracts of employment, which were referred to in the deed at cl 12: "12 Employees … 12.2 As to the Employees being the Vendor and [the plaintiff] upon the Completion Date they shall each resign as Employees and be re-employed by [the first defendant] as and from the date following the Completion Date pursuant to the terms of the employment agreements annexed hereto and marked as ANNEXURE 'D' for the Vendor and marked as ANNEXURE 'F' for [the plaintiff]."
2. The employment contract concerning the plaintiff was signed by him and the second defendant on 25 May 2011. It contained provisions as to various conditions of employment, including the hours to be worked and the power of the employer to terminate the employment. It provided that the plaintiff's salary would be $75,000, inclusive of superannuation. Those provisions including the following: "3 Duration Your appointment shall be for the Term of 12 months provided that the term can be reduced to a period of no less than 6 months at the discretion of the Employer provided that the Employer gives You 1 months notice in writing at any time as and from 5 months after the commencement date. … 6 Hours of duty You should carry out the Duties during the Hours [sic] however your Hours will deem to be varied six (6) months from the Commencement Date as follows: (a) You will be required to work 5 days in lieu of 5.5 days with the days which you will work shall be determined at the discretion of the Employer. … 15 Termination of employment 15.1 As and from five (5) months following the Commencement Date the Employer can terminate your employment by giving You one (1) month's notice in writing. In those circumstances, the Employer may elect to pay You one (1) month's pay in lieu of notice (in which case your employment will terminate immediately). Alternatively, the Employer may require You to perform reduced or modified duties during your notice period. 15.2 The Employer may terminate your employment by giving You the notice (or payment in lieu thereof) referred to in Clause 15.1 above. During any notice period, the Employer may require You to perform reduced or modified duties."
3. The "commencement date" was defined as being 25 May 2011. The term "employer" was defined to be the first defendant. There were no provisions governing the obligations and rights of the parties in the circumstance that the employee resigned.
4. The deed named the plaintiff and his brother as "key persons" in a part concerning restrictions against competition, which purported to restrain them from trading in competition with the first defendant. A clause in that section provided that the vendor agreed to: "… procure the execution of a Restraint of Trade Deed by such of the Key Persons as the Purchaser requires and informs the Vendor and the Principal within seven days after the date of this Agreement."
5. A form of the restraint of trade deed was annexed to the deed of sale. The plaintiff was to be a party to that deed. It referred to the "Employment Agreement" in a clause that referred to the vendor and key persons covenanting with the purchaser that they would not carry on or be engaged in certain businesses within certain geographical areas during certain periods, "other than at the request of the Purchaser for the benefit of the Purchaser pursuant to an Employment Agreement during the term of the Employment Agreement". The plaintiff did not annex an executed copy of the deed to any of his affidavits.

The disputed history of the events concerning the plaintiff's cessation of employment

1. The plaintiff's affidavit evidence is to the effect that on or about 29 March 2012, the defendant gave him permission to attend a doctor's appointment later that day. On his return, they had a conversation. The plaintiff deposed as to what then occurred as follows: "Second Defendant: 'Where have you been?' Plaintiff: 'I've been at the doctor's.' Second Defendant: 'I don't believe you. Show me some proof. I think you've been out seeing other agents.' I felt pressured to produce the tax invoice and other documentation the doctor had given me in order to defend myself. I had been on prescribed medication for some years for anxiety and depression and regularly practised cognitive behavioural therapy in consultation with doctors. The Second Defendant read the documents I had handed him and said: 'Mate this says you're a mental defective. I don't know if I can afford to have you around here anymore. This explains why you've been stealing stuff. I know you knocked off some computers and other stuff after the fire. And I know you've taken my rent roll and been flogging it off to other agents. And I want the number plates you stole returned to me on my desk like yesterday'. Plaintiff: 'That's total nonsense. Have you gone to the police about any of this?' The Second Defendant did not reply."
2. At some point the same day, the second defendant handed him a letter on the topic of the plaintiff working reduced hours. There was a discussion, the letter was not acted upon and he continued working his normal hours. The plaintiff did not indicate what was stated in the letter on the topic of "reduced hours", or what his "normal" hours were.
3. On or about 19 April 2012, the second defendant called the plaintiff into his office where the following conversation occurred: "Second Defendant: 'Look you're going on leave as of today. I don't want you in the office. You still haven't returned all the stuff you've taken. You're to remain on leave until you return everything, especially the rent roll and the stolen number plates. Once they're all returned you can come back to work.' Plaintiff: 'No, not this garbage again. This is absurd. I've taken nothing. The number plates aren't yours. You signed the car over to me. Do I still get paid to the end of May?' Second Defendant: 'Yes you'll get your pay to the end of May. Now get out of here'."
4. I assume the plaintiff infers that the reference to "the end of May" was to 25 May 2012, in view of the terms of cl 3 of the employment contract.
5. The plaintiff stated that, on this understanding, he did not return to the workplace and his employment ceased on 25 May 2012. His annual salary was $75,000 and for his employment between 25 May 2011 and 25 May 2012, he was paid a total of $48,749.88, leaving a balance owing of $26,250.12. The plaintiff stated that the defendants never issued him with any wage slips or group certificates, and therefore he was unable to produce any such documents to prove the underpayment. Instead, he produced what was purported to be a summary table demonstrating the alleged underpayment, which he had created, based on his banking records.
6. The defendants' case, as derived from the second defendant's affidavits, was as follows. As of 19 March 2012, the plaintiff was working five days per week. On that date, the second defendant met with the plaintiff and his brother, John McEvoy, in the first defendant's offices. The following conversation occurred: "[The second defendant]: There have been too many lost managements. I can't afford to keep you both on full time. The employment agreements provide for a termination with 30 days notice. However, rather than terminating one of you and retaining the other perhaps John could work 4 days and [the plaintiff] 3 days. Which option do you prefer? [John McEvoy]: I [am] happy to work 4 days. [The plaintiff]: I will work 3 days. [The second defendant]: Ok, Great. Your salary will be prorated accordingly. We will work out a roster commencing today."
7. The plaintiff expressly denied there was any meeting on 19 March 2012 with the second defendant, or agreement to vary his working hours or reduce his salary.
8. The second defendant's affidavit evidence was that on 29 March 2012, he handed the plaintiff a letter of the same date. This letter was annexed to one of his affidavits, addressed to the plaintiff from him as director of the first defendant, which stated: "We refer to our meeting which took place on 19 March 2012. We note in that meeting you agreed that the days which you work would be reduced from 5 days to 3 days per week and that this would become effective as from 19/03/2012. We confirm that your salary will be prorated accordingly. Kindly acknowledge your agreement by signing a copy of this letter."
9. At the same time, the plaintiff handed the second defendant a tax invoice from a doctor, together with information on relaxation and depression, which was annexed to the affidavit. It referred to a consultation with the plaintiff on that date. At the time, the plaintiff said to the second defendant: "I cannot commit to working 3 days per week". The second defendant responded: "Well, that could change everything. Maybe we need to go back to the option of only retaining John [McEvoy]". I note that in his affidavits, the plaintiff did not admit or deny that the letter annexed to one of the second defendant's affidavit was the one he referred to.
10. By way of corroboration of his version of events, the second defendant relied upon an email dated 30 March 2012, which he annexed to one of his affidavits, from him and addressed to Leslie Coulcher, who he described as the first defendant's accountant at that time. It states, in part: "I had a meeting on 19/03/2012 with John [McEvoy] & [the plaintiff] where the following was agreed: 1.) The days which [the plaintiff] worked would be reduced from 5 days to 3 days per week effective as from 19/03/2012 and that salary will be prorated accordingly. 2.) The days which John McEvoy worked would be reduced from 5 days to 4 days per week effective as from 19/03/2012 and that salary will be prorated accordingly."
11. The plaintiff worked the three days per week pursuant to the agreement. On 31 March 2012, the second defendant handed the plaintiff a letter of that date, addressed to the plaintiff from the second defendant as director, purporting to be a notice of termination of the plaintiff's employment: "We refer to your employment agreement dated 25 May 2011. In accordance with Clause 3 of your employment agreement we hereby give you one months notice of our intention to reduce your employment term to terminate on 30 April 2012." The plaintiff stated in his affidavit evidence, in response to this contention, that he did not "receive" the letter.
12. On 19 April 2012, whilst at his workplace, the second defendant heard the plaintiff yelling, but could not make out what he was saying. He walked to the part of the office where he heard the commotion. Another employee, Isabelle Swarts, said: "[The plaintiff] was very upset and angry. He resigned. He says he is leaving and not coming back". The plaintiff did not attend the office again.
13. In a letter dated 24 April 2012 and posted on the same date, the second defendant, as director, wrote to the plaintiff: "We refer to your verbal resignation provided to Isabelle Swarts of our office on the morning of 19 April 2012 effective immediately. We note you failed to give the requisite notice period under your Employment Agreement. In any event we note your employment was to cease with our company on 30 April 2012. We were informed by Isabelle [Swarts] that you are asserting that you have not been paid wages for several months. This statement is erroneous as your wages are paid up to 19 March 2012 following a cheque in the sum of $4,935.86 being paid into your superfund by Curwoods Lawyers, on our behalf, from the retention monies. Your monthly wages would have been paid on 19 April 2012 however in light of your resignation we are now calculating your entitlements as we will need to take into account your failure to give notice under the Employment Agreement and the parking fine which you incurred in the name of John F McEvoy Real Estate Pty Limited. We will remit to you your entitlements following this calculation being undertaken and you returning to us of any property which you have in your possession which is owned by our company."
14. The second defendant said he did not receive a reply and heard nothing further from the plaintiff, until he attended the office on 24 May 2018 and served the second defendant with his statement of claim.
15. An affidavit sworn by Ms Swarts on 22 October 2018 was filed and read at the October 2018 hearing. She stated that she did not recall the circumstances of the plaintiff's resignation. She carried out a search of her company email account, which yielded an email she had sent to the second defendant on 20 April 2012. It reads, in part: "[The plaintiff] called me yesterday, Thursday 19 April 2012 at approximately 9:00am, to let me know that he has resigned with immediate effect from Mosman First National. He stated various reasons for his decision, the main being that he has not been paid for various months and is unable to financially sustain himself."

The parties' submissions concerning liability

1. In his October 2018 affidavit, the plaintiff submitted that the defendants were liable on alternative bases. These were as follows:
2. The employment contract, at cl 3, provided that the term of the plaintiff's employment was a period of 12 months from 25 May 2011, and that it could only be varied by the employer by giving one month's notice in writing after the expiration of five months from the commencement date. The first defendant had not done so, and indeed, the second defendant had expressly stated that the plaintiff would be paid "until the end of May".
3. The contract was part of the deed, by virtue of cl 12.2 of the deed. Pursuant to the deed, the second defendant was a guarantor. Accordingly, the second defendant was liable for the failure of the first defendant to comply with its obligations pursuant to the employment contract. The provisions in the deed setting out his responsibilities as guarantor were as follows: "17 PERSONAL GUARANTEE 17.1 In this clause unless the contrary intention appears: a) 'Guaranteed Money' means all amounts which at any time for any reason or circumstances are payable, are owing but not currently payable, are contingently owing or remain unpaid (or which are reasonably foreseeable as likely, after that time, to fall within any of those categories) by the Purchaser to the Vendor in connection with this Agreement or any transaction contemplated by it, either at law, in equity, under statute or otherwise; and b) 'Guaranteed Obligations' means all express or implied obligations of the Purchaser to the Vendor in connection with this Agreement or any transaction contemplated by it. 17.2 The Guarantor gives this guarantee and indemnity in relation to the Guaranteed Money and the Guaranteed Obligations and in consideration of the Vendor agreeing to enter into this Agreement with the Purchaser. The Guarantor acknowledges the valuable consideration received from the Vendor for the Guarantor incurring obligations and giving rights under this guarantee and indemnity (including the agreement of the Vendor to enter into this Agreement). 17.3 This Guarantee and Indemnity is a principal obligation of the Guarantor and is not collateral to any other obligation. 17.4 The liability of a Guarantor is not affected by: a) the granting to the Purchaser or to any other person of any time, waiver, indulgence, consideration or concession or the-discharge or release of the Purchaser; b) the death, bankruptcy or liquidation of the Purchaser, the Guarantor or any of them; c) reason of the Vendor becoming a party to or bound by any compromise, assignment of property or scheme of arrangement or composition of debts or scheme or reconstruction by or relating to the Purchaser, the Guarantor or any other person; d) the Vendor exercising or refraining from exercising any of the rights, powers or remedies conferred on the Vendor by law or by any contract or arrangement with the Purchaser, the Guarantor or any other person or any guarantee, bond, covenant, mortgage or other security; or e) the Vendor obtaining a judgment against the Purchaser, the Guarantor or any other person for the payment of the moneys payable under this Agreement. 17.5 This Guarantee and Indemnity will continue notwithstanding: a) the Vendor has exercised any of the Vendor's rights under this Agreement including any right of termination; b) the Purchaser is wound up; or c) this Guarantee and Indemnity is for any reason unenforceable either in whole or in part."
4. The plaintiff submitted that the second defendant: "… has thereby also assumed personal liability for any unpaid or underpaid wages in relation to the plaintiff's contract of employment."
5. The plaintiff further submitted that s 550 of the Fair Work Act 2009 (Cth) applies. As at March - April 2012, s 550 provided: "550 Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. (2) A person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention."
6. In his October 2018 affidavit, the plaintiff submitted that the "contraventions" by the second defendant for the purposes of s 550 were an underpayment of wages, a failure to provide pay slips and group certificates, a failure to make and keep employee records, his "unlawful or wrongful dismissal", "[h]arsh, unjust or unreasonable dismissal" and "adverse action … by injuring the employee in his employment", which allegedly involved the second defendant not giving him his "legal entitlements such as pay" and alleging he was guilty of stealing from the business.
7. The defendants submitted in the Local Court that the plaintiff's claim should be dismissed as statute-barred, pursuant to s 14(1)(a) of the Limitation Act 1969 (NSW), which provides as follows. "14 General (1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims: (a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed."
8. The plaintiff's response was that, since his employment ceased on 25 May 2012 and the statement of claim was filed on 24 May 2012, it was filed within time. Alternatively, the employment contract was an integral part of the deed and, pursuant to s 16 of the Limitation Act, the limitation period for an action on a cause of action founded on a deed is 12 years. That section provides: "16 Deed An action on a cause of action founded on a deed is not maintainable if brought after the expiration of a limitation period of twelve years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims."
9. The plaintiff's submissions as to how the employment contract was a part of the deed appeared to depend on the integral nature of the employment relationship to the value of the business to the purchaser, the liability of the vendor if the anticipated earnings from the vendor's goodwill were not met, references to the "employment agreement" in the deed and the form of the restraint of trade deed.
10. The plaintiff submits that, although he was not a party to the deed, pursuant to s 36C of the Conveyancing Act 1919 (NSW), he is in the same position in law as if he was a party to the deed. Section 36C provides: "36C Persons taking who are not parties (1) A person may take an immediate or other interest in land or other property, or the benefit of any condition, right of entry, covenant, or agreement over or respecting land or other property, although the person may not be named as a party to the assurance or other instrument. (2) Such person may sue, and shall be entitled to all rights and remedies in respect thereof as if he or she had been named as a party to the assurance or other instrument."
11. Section 7 of the Conveyancing Act defines "instrument" and "property" as follows: "'Instrument' includes deed, will, and Act of Parliament. … 'Property' includes real and personal property, and any estate or interest in any property real or personal, and any debt, and any thing in action, and any other right or interest."
12. A further alternative argument advanced by the plaintiff was that the employment contract was for a term of 12 months, and therefore any underpayment of wages could not be ascertained until it had expired. Therefore, the cause of action did not arise until on or after 25 May 2012, which was the earliest date on which any underpayment could be ascertained, and the 12 month period runs from that date, in which case the statement of claim was filed in time.

The parties' submissions on this application

1. The plaintiff filed written submissions on the application, which were 46 pages in length.

Extension of time to appeal

1. The plaintiff's written submissions did not address the preliminary issue of whether leave should be granted to extend the time within which the appeal may be filed. However, the appeal grounds set out in the summons suggest that the plaintiff's position is that he was not at fault; the "original version" of his summons was filed within time and he had been assured that once the filing fee issue was clarified, the filing would be retrospectively accepted. In support of this position, in an affidavit filed on 22 July 2019, the plaintiff annexed copies of correspondence with the Supreme Court registry.
2. In their oral submissions, the defendants accepted that the plaintiff had an evidentiary basis for the delay in filing his summons, but submitted that the plaintiff should not be granted an extension of time to appeal, as the plaintiff did not have a "fairly arguable case" (see Jingalong Pty Ltd v Todd, quoted at [22] above) for seeking leave to appeal the decision. Although the plaintiff's annexed correspondence did not corroborate his claim that he was advised the filing would be accepted retrospectively, for the purposes of his application, I nevertheless accept that he was so advised.

Leave to appeal the Local Court's decision

1. The part of the appeal grounds of the summons that referred to the subject of the appeal for which leave was sought, focused exclusively on the October 2018 judgment. The plaintiff alleged that the magistrate made errors of law in the October 2018 judgment, in that he failed to properly consider the following: 1. the plaintiff's claim that the employment contract had lasted for 12 months and therefore the statement of claim was filed in time; 2. the evidence as to the fact and quantum of the plaintiff's loss of wages; 3. the defendants' repudiation of the contract had not been accepted by the plaintiff, and 4. that the employment contract was a deed.
2. In his written submissions, the plaintiff essentially submitted, irrelevantly, that in the December 2018 judgment, the magistrate erred in law, by failing to find that the second defendant's late payment of wages was a breach of the employment contract that gave rise to an election to terminate the contract, but the plaintiff did not elect to terminate.
3. In his oral submissions, the plaintiff agreed that an encapsulation of his complaint was that the magistrate did not have due regard to the injustice that would be occasioned to the plaintiff by the October 2018 judgment not being revisited. He submitted that the magistrate, in exercising his discretion, did not sufficiently take into account the consequences of the plaintiff's absence on 23 October 2018 to put arguments to the Court in relation to his affidavit material that he had filed prior to that date. Had he been present at the October 2018 hearing, he could have assisted the magistrate with understanding his written submissions on the difficult area of the application of the principles of constructive dismissal and repudiation of the employment contract.
4. The defendants submitted that leave should only be granted if there are: "… substantial reasons that call for appellate review … in particular, where there is an error of principle, a matter of public importance, or injustice which is reasonably clear in the sense of going beyond what is merely arguable …" (See Gibson v Drumm, quoted at [23] above.)
5. The plaintiff's evidence and written submissions were before the Court and considered by the magistrate, so there was no "substantial reason" to set aside the judgment.
6. The defendants submitted that if leave is granted, then as the December 2018 judgment involved an exercise in discretion, the plaintiff must establish an error in that exercise: see House v The King (1936) 55 CLR 499; [1936] HCA 40 per Dixon, Evatt and McTiernan JJ at 504-505: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." The defendants submitted that no such error was apparent.

Consideration

1. The first matter for consideration is whether to grant an extension of time within which to file an appeal from the decision of the magistrate of 4 December 2018. The December 2018 judgment was an interlocutory judgment: Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246; [1981] HCA 20 per Gibbs CJ at 248. As noted earlier, leave is required to appeal an interlocutory judgment or order of the Local Court, in accordance with s 40(2)(a) of the Local Court Act.
2. The starting point for that consideration are the "four factors of general relevance to an application to extend time within which to appeal", identified by McColl JA in Jingalong Pty Ltd v Todd. The third factor, "whether the applicant has a fairly arguable case", is clearly crucial, and in view of the plaintiff's plausible explanation for his late filing of the summons, I will move directly to an examination of the basis of the plaintiff's claim concerning the December 2018 judgment and the defendant's response to it.
3. The magistrate's December 2018 judgment, which was delivered ex tempore, was brief. His Honour noted there was "some material" to support the plaintiff's explanation that he had not heard the magistrate set a hearing date at the 25 September 2018 hearing, which was an acknowledgement of the medical report annexed to the plaintiff's affidavit, confirming his hearing disability.
4. During the October 2018 hearing, the magistrate said that he had read the plaintiff's filings and that they had been taken into account. His Honour observed that the plaintiff had appreciated the significance of the October 2018 hearing, and there was an obligation placed on him to make his case if it was to survive the defendant's notice of motion. In relation to the instant hearing, the magistrate adverted to the further material relied upon by the plaintiff in support of his original claim.
5. In neither the December 2018 judgment, nor the October 2018 judgment, did the magistrate mention the nature of the proceedings in the October 2018 hearing, which was a part-heard application to either strike out the statement of claim pursuant to r 14.28 of the UCPR, or dismiss the proceedings. Further, he did not consider the principles that applied to strike out applications. The October 2018 judgment reads as if it was exclusively a consideration of the application to dismiss the proceedings, although that is not explicitly stated as such.
6. The power to strike out a pleading should be deployed sparingly. In State of New South Wales v Williams (2014) 242 A Crim R 22; [2014] NSWCA 177, Emmett JA (Macfarlan JA and Simpson J agreeing) stated, at [71]: "… the power to strike out a pleading on the basis that it discloses no reasonable defence, or is an abuse of process, should be exercised only in plain and obvious cases. The power should not be exercised in cases of doubt or difficulty or where the pleading raises a debatable question of law. Once it appears that there is a real issue, whether of fact or law, and that the rights of the parties depend upon it, a court should not dismiss a defence raising such an issue, either on the basis that no reasonable defence is disclosed or as an abuse of process (see Dey v Victorian Railways Commissioners [1949] HCA 1; 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125 at 129-130; Commonwealth v Griffiths [2007] NSWCA 370; 70 NSWLR 268 at [11]-[12] and Spencer v Commonwealth [2010] HCA 28; 241 CLR 118 at 139-140)."
7. On a hearing to strike out pleadings, the function of the court is not to evaluate the evidence on disputed issues of fact, as that is a matter for trial. The evidence of the party opposing the application is to be accepted at face value, and it is tenability of the cause of action pleaded that is in question: see, for example, Empire Shipping v Owners of the Ship "Shin Kobe Maru" (1991) 32 FCR 78; [1991] FCA 641 at 80.
8. The summary dismissal of proceedings should only occur if there is a high degree of certainty about the ultimate outcome of the proceedings, and that power must always be exercised with caution: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] per Gaudron, McHugh, Gummow and Hayne JJ; Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [24] per French CJ and Gummow J.
9. In this case, there was a disputed issue of fact as to whether the plaintiff had resigned on 19 April 2012, that bore directly on the basis of the plaintiff's statement of claim and the defendants' notice of motion on both aspects of the orders sought, which was that the plaintiff's action was statute-barred by s 14(1)(a) of the Limitation Act.
10. The defendants' evidence that the plaintiff had resigned on 19 April 2012 was consistently to the effect that he had resigned on that date, corroborated by documentation generated in the following days. The only significant inconsistency in that material was as to whether the plaintiff had communicated his resignation in person or by telephone. Whereas the second defendant's affidavit evidence was that the plaintiff had resigned in person to Ms Swarts, her affidavit evidence was that she had no recollection of the circumstances. However, an email composed by her on 20 April 2012 stated that the plaintiff had tendered his resignation by phone. The plaintiff's affidavit evidence before the magistrate at the October 2018 hearing was that "[t]he alleged conversation between the plaintiff and Isabelle Swarts did not occur". The import of that contention, for the purposes of the hearing, was a simple denial of both versions with no corroborating evidence of his version.
11. In my opinion, it was open to the magistrate at the October 2018 hearing to dismiss the proceedings, which his Honour did. It is inevitable that a determination of the factual dispute as to whether the plaintiff resigned, and if so, whether he did so on 19 April 2012, would be determined to the appropriate standard in favour of the defendants, with the effect that the action would be statute-barred by s 14(1)(a) of the Limitation Act.
12. The plaintiff's alternative submission, that the employment contract was for these purposes to be treated as part of the deed and therefore subject to a longer limitation term, would also inevitably be rejected. The employment contract does not purport to be a deed. It is expressed to be an "employment agreement" and is in the form of a contract. Although referenced in the deed, it is not expressed to be part of it. The fact that the deed references the "restraint of trade deed" is indicative that the parties were conscious at the time of differentiating between the separate forms of, and obligations of, a deed and contract.
13. The factual dispute between the parties as to whether the first defendant had complied with the terms of the contract requiring one month's notice would be determined in favour of the defendants, in view of the second defendant's evidence and the corroborating documents generated shortly after the events in question.
14. The plaintiff's submission that the second defendant was liable for the failures of the first defendant is inconsequential, since liability of the first defendant could not be established. Whether the terms of the "personal guarantee" clause of the deed, cl 17, on a correct interpretation, extends as far as the plaintiff submits, is unnecessary to determine.
15. As noted earlier, the plaintiff's submissions based on the Fair Work Act, in his October 2018 affidavit, were made on a multitude of bases. There is a paucity of evidence in support of this claim of non-payment or underpayment of his salary, the non-issuance of pay slips or group certificates or the failure to keep employment records by the first defendant, which could have been advanced by the issuing of subpoenas, but that option has not been exercised. The basis of unlawful or wrongful dismissal would appear to depend on the same body of evidence as that which is relevant to the alleged breach of the employment contract, and therefore would not succeed.
16. In his October 2018 judgment, in dismissing the statement of claim, the magistrate did not address all of the plaintiff's submissions that he had set out in his October 2018 affidavit.
17. At the December 2018 hearing, the magistrate did not address this shortcoming arising from his October 2018 judgment. That was a matter that was not expressly identified by the plaintiff in his submissions at the December 2018 hearing. In this sense, given the incompleteness of the magistrate's examination of the plaintiff's case in his October 2018 judgment, the plaintiff did have a "fairly arguable case" in relation to the December 2018 judgment and I would therefore grant leave to extend the time to appeal.
18. However, despite those shortcomings, the ultimate dismissal of the plaintiff's statement of claim is inevitable, when all the material the plaintiff has filed in both the Local Court and in this Court is considered. That being so, there is little utility in addressing that failure by remitting the matter for rehearing of the plaintiff's notice of motion, since the remedy of a re-hearing of the defendants' notice of motion would be futile; the dismissal of the plaintiff's statement of claim is inevitable. In the words of the Court of Appeal in Gibson v Drumm, there is not an "injustice which is reasonably clear in the sense of going beyond what is merely arguable". In Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54, the High Court (Mason, Wilson, Brennan, Deane and Dawson JJ) said, at 145: "… an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility. For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial."

Conclusion

1. In these circumstances, it is appropriate to grant leave to extend the time within which the plaintiff may file an appeal, but to refuse leave to appeal.

Orders

1. I make the following orders: (1) Grant leave to extend the time within which the plaintiff may file an appeal from the decision of the magistrate of 4 December 2018, so the plaintiff's application filed on 11 February 2019 is deemed to be filed in time; (2) Refuse leave to appeal the order made in the Local Court at Hornsby on 4 December 2018 dismissing the plaintiff's notice of motion; (3) Plaintiff to pay the defendants' costs.

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