Murphy v Australian Shark and Ray Centres Victoria Pty Ltd

REASONS FOR JUDGMENT 1 The applicant, Ms Tenille Murphy, was employed as an animal attendant by the respondent, Australian Shark and Ray Centres Victoria Pty Ltd, from 31 March 2012 to 23 December 2013, when she was dismissed from that position. On 11 March 2014, the applicant brought an application in this Court under the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act), claiming the respondent took adverse action against her on the basis of her having exercised certain workplace rights. The applicant also alleges breaches of her employment contract by the respondent. The applicant seeks damages, compensation and reinstatement pursuant to s 545 of the FW Act, and pecuniary penalties, payable to the applicant, pursuant to s 546 of the FW Act. 2 On 1 April 2014, solicitors for the respondent filed a Notice of Address for Service, pursuant to r 11.06 of the Federal Court Rules 2011 (Cth). On 6 June 2014, prior to the filing of any defence, the solicitors for the respondent filed a Notice of Ceasing to Act pursuant to r 4.04 of the Federal Court Rules. On 27 June 2014, in compliance with orders made by the Court by consent of the parties on 29 May 2014, the respondent sought to file its defence. Filing of the respondent's defence was not accepted, because the respondent corporation was not represented by a lawyer as required by r 4.01(2) of the Federal Court Rules. 3 On 27 June 2014, an interlocutory application was filed on behalf of the respondent company by Mr Andrew Tindale, seeking dispensation from r 4.01(2) of the Federal Court Rules. Mr Tindale is the sole Director of the respondent. The orders sought in the application were expressed in the following terms: 1. Due to the financial inability to afford legal representation by the Australian Shark and Ray Centres Vic, Andrew Tindale, as Director of the afore mentioned company, to receive permission to represent the company in this matter. 2. I have documentation from my accountant verifying this financial position available upon request. 3. I wish to delay the filing of the defence in this matter as I was unaware that these interlocutory orders needed to be in place prior to the filing of the defence. The defence was attempted to be filed on this day but due to this administrative error on my behalf was not able to be received by the court. 4 Mr Tindale filed an affidavit in support of the interlocutory application. In that affidavit, dated 1 July 2014, Mr Tindale deposed that the business commenced trading in December 2011. He provided evidence of what he described as the "recorded profit" of the business for the financial years 2011-2012 and 2012-2013. He also gave evidence of estimates he had been given by the respondent's former legal representatives as to the legal costs likely to be incurred by the respondent in defending this proceeding. He deposed further that: I believe it is imperative for the survival of the business and for the fairness of proceedings that I be allowed to represent the business. … I believe that the issues in this case are very simple, and that I can represent the facts to the court in a manner that deals with the issues in a way that allows for fairness to both parties and a removal of complications for the court. 5 Annexed to Mr Tindale's affidavit was a letter from Tony Smith & Associates, dated 24 June 2014. Signed by Mr Tony Smith, relevantly it states: This firm acts for [the respondent] in the capacity of Accountants and Taxation Consultants. In this capacity I hereby advise that the business is classified as a small business within the meaning of the tax act. I also advise that I feel that the costs of defending the claim by Tenille Murphy would be financially crippling to the business. It would severely impede the cashflow of the business and as a possible consequence place the business in a position where it would not be able to pay its debts when they become due. 6 On 16 July 2014, the applicant confirmed in correspondence with the Court that she did not intend to oppose this application. The parties consented to the Court determining the matter on the papers, without further submissions. 7 In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [12]-[13], French J set out the applicable principles for the exercise of the dispensation power: The position under the Federal Court Rules however is not as restrictive as that under the English Rules and various of the State Supreme Court Rules. In this respect I refer to what I said in Simto Resources Limited v Normandy Capital Limited (1993) 11 ACLC 856. Although the rationale for the restriction is basically the same in all jurisdictions, the power of the Federal Court to grant leave to a corporation to carry on a proceeding, otherwise than by a solicitor, is conferred as an integral part of the Rules in O 4 r 14 and O 9 r 1. There is no threshold requirement of special or exceptional circumstances. As Smithers J said of O 4 r 14(2) and O 9 r 3 in Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 73: Those rules proceed on the basis that there is a discretion in the court to permit a company to commence and carry on any proceedings other than by a solicitor and to enter an appearance or defend any proceeding without a solicitor and, it would seem, it is a discretion to be exercised by reference to all relevant considerations. Nevertheless the policy of the rule is clear that ordinarily a corporation will be required to be represented by a solicitor. Relevant factors for dispensing with that requirement include the financial capacity or lack of capacity of the corporation and those standing behind it, the effect of diverting company resources to paying legal expenses, the nature of the company's undertaking, its financial structure, its ability to retain and pay its staff and the identity and spread of its shareholders. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively are also relevant - VN International Video Pty Ltd v West End HK TVB Video & Others (1996) 14 ACLC 1308. 8 One of the relevant factors identified by his Honour is the financial capacity of the corporation (or lack thereof) including the financial position of those standing behind it. Mr Tindale's evidence as to the financial position of the respondent is limited. There is no evidence about his own financial position. The evidence extends only to statements made by Mr Tindale about the profits reported by the company in the past two financial years, and a letter from the respondent's accountant, who states "I feel that the costs of defending the claim by Tenille Murphy would be financially crippling to the business". No financial records for the company were provided. 9 Nevertheless, in the absence of any objection to the application by the applicant, I am prepared to accept this evidence as disclosing limited financial capacity in the respondent. I am also prepared to find that there is a real possibility that funding the legal costs of this proceeding, if the respondent were required to be legally represented, could have significant and deleterious consequences for the respondent's business. 10 In the passage extracted above, French J also identified the factual complexities of the case, and the capacity of the proposed representative to conduct the proceeding effectively, as factors relevant to exercise of the discretion. Ordinarily, these factors would be of considerable significance because of their potential impact on the course of the proceeding, the costs to the parties and the Court's ability to perform its functions consistently with the objectives in s 37M of the Federal Court of Australia Act 1976 (Cth). 11 On the basis of the statement of claim, this proceeding appears legally and factually straightforward. It involves issues concerning the common law contract of employment and the relevant provisions of the FW Act. However, what is straightforward for those with legal training is not necessarily so for those without such training. Whether Mr Tindale adequately could conduct the whole proceeding on behalf of the respondent is a matter about which I am not currently satisfied on the basis of the evidence. What can be said, in favour of allowing the application, is that Mr Tindale has so far made every effort to comply with the requirements of the Court with respect to the conduct of the proceeding. He sought to file the respondent's defence on time, and has complied with Court requirements with respect to the conduct of this interlocutory application. 12 The parties have agreed that there is utility in further mediation of this proceeding, and orders were made on 25 July 2014 referring the matter for further mediation before a Registrar of this Court, on a date to be fixed. I am satisfied that granting dispensation to the respondent to allow Mr Tindale to appear on behalf of the company at this mediation may facilitate the timely and efficient resolution of the dispute between the parties. In all of the circumstances of this case, I am prepared to grant limited dispensation to the respondent, in favour of Mr Tindale, so as to enable the filing of the respondent's defence, as well as the preparation for and conduct of a further mediation. The dispensation will remain in place until the mediation is concluded. 13 Should the matter not resolve at mediation, the application for leave will need to be re-agitated by the respondent in relation to the remainder of the proceeding. At that point, if it is reached, I will consider on fresh evidence and, if necessary, submissions from the parties, whether the dispensation should continue. 14 Accordingly, there will be orders granting dispensation to the respondent from the operation of r 4.01(2), limited to the period until the further mediation ordered by the Court is concluded. There will be no orders as to the costs of the interlocutory application. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.