Ogbonna v Link Workforce Pty Ltd

Federal Court of Australia|2023-06-12|Before: Mr J, Feutrill J

The applicant's interlocutory application is dismissed.
Costs of the applicant's application are reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction and background 1 On 18 November 2022, the applicant filed an interlocutory application in which he requested that the Court make orders, amongst others, for judgment to be given in his favour pursuant to r 22.07 of the Federal Court Rules 2011 (Cth). These reasons concern that application. However, before addressing the substance of the application, it is necessary to explain the relevant background and context to it. 2 On 20 May 2022, the applicant commenced these proceedings by originating application for relief under the Fair Work Act 2009 (Cth) and for damages for defamation. On the same day, the applicant filed a statement of claim in which he pleaded the material facts upon which his claims are founded. On 23 August 2022, the respondent filed a notice of address for service identifying the respondent's solicitors' address as its address for service. 3 On 29 August 2022, the Court made orders, amongst others, requiring the respondent to file and serve its defence by 13 October 2022 and referring the matter to mediation. 4 On 20 September 2022, the applicant was made bankrupt by a sequestration order of a judge of the Federal Circuit and Family Court of Australia (Division 2). On the same day, the Official Trustee in Bankruptcy was appointed as trustee of the applicant's estate. 5 On 12 October 2022, the applicant served a document entitled 'Notice to admit', signed and dated 12 October 2022, on the respondent by sending a copy of the notice by email to the respondent's solicitors. On the same day, the notice to admit was lodged in the Court, but it was not accepted for filing and sealed until 18 October 2022. After it was accepted for filing, on 25 October 2022, the applicant served a copy of the sealed notice to admit on the respondent's solicitors by email. On 26 October 2022, the respondent served a document entitled 'Notice of dispute' on the applicant by its solicitor sending a copy of that document to the applicant by email. 6 On 26 October 2022, there was a case management hearing in the Court. At that hearing the respondent requested that the Court make orders, amongst others, to the effect that the proceedings be stayed pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth) until further order of the Court. The applicant opposed those orders. It was evident that there was a point of difference between the parties as to the extent to which the proceedings were stayed in whole or in part by operation of ss 60(2) and 60(4) of the Bankruptcy Act. I refused to make the orders the respondent requested at the time of the case management hearing as it was evident that there is a real question as to what extent, if any, the applicant's claims in the proceedings fall within the exception in s 60(4)(a) of the Bankruptcy Act; namely, that the proceedings are an action in respect of personal injury or wrong done to the applicant. Any cause of action for personal injury or wrong done to the applicant would also fall outside the property divisible amongst the applicant's creditors in accordance with s 116(2)(g)(i) and would not fall within the meaning of 'the property of the bankrupt' that vests in the trustee in bankruptcy in accordance with s 58(1) of the Bankruptcy Act. As the matter had been referred to mediation, I considered that the question of any stay of the proceedings could be dealt with in the context of that mediation, but it was then unnecessary for the respondent to file a defence given that all or part of the proceedings may be subject to a statutory stay. Accordingly, on 26 October 2022, I made orders vacating the order requiring the respondent to file a defence and for the exchange of position papers before the mediation. 7 By letter dated 2 November 2022, the Official Trustee wrote to the Court and gave notice of the sequestration order and its appointment as the applicant's trustee in bankruptcy. The letter was copied to the applicant and the respondent's solicitors. In the letter the Official Trustee expressed the view that the applicant's claim in the proceedings under the Fair Work Act was stayed pursuant to s 60(2) of the Bankruptcy Act and it gave notice that it elected to discontinue that element of the proceedings. However, the Official Trustee was of the view that the applicant's claim for damages for defamation fell within the exception in s 60(4) of the Bankruptcy Act and, as such, it was not subject to a stay and could be pursued by the applicant. Therefore, the Official Trustee made no election (one way or the other) regarding the continuation of the defamation element of the proceedings. 8 As already noted, on 18 November 2022, the applicant made the application for judgment. On 25 November 2022, I made orders administratively requiring the parties to file and serve outlines of submissions on the application. The parties filed and served submissions in accordance with those orders. 9 Although the matter was referred to mediation in August 2022, a mediation has not yet taken place. However, a mediation has been listed for 20 June 2023. 10 On 8 June 2023, the application was heard and the parties made oral submissions. At the commencement of the hearing I sought clarification of the parties' position concerning any stay of the proceedings under s 60(2) of the Bankruptcy Act. Neither party accepted the view of the Official Trustee. The applicant contends that none of the causes of action he pursues in the proceedings are the subject of a stay under s 60(2) because they all fall within the exception in s 60(4) of the Bankruptcy Act. The respondent contends that all causes of action are stayed and none fall within the exception. 11 It follows that there are three possibilities arising from the applicant's bankruptcy and the provisions of the Bankruptcy Act. The proceedings are wholly stayed by operation of s 60(2). The proceedings are partially stayed by operation of s 60(2) and 60(4)(a). The proceedings are not stayed at all by operation of one or more of ss 60(2)(a), 60(4), 58(1) and 116(2)(g)(ii) of the Bankruptcy Act. Therefore, in point of detail, it is necessary to determine the extent to which the proceedings are the subject of a statutory stay, if at all, as a preliminary step to determining the application because the applicant may have had no right to make the application and may have no right to proceed with the application in whole or in part. 12 Notwithstanding the potential impediments to the application, I proceeded to hear the application on the basis that if the respondent made the admissions alleged and the applicant would otherwise be entitled to judgment under r 22.07 of the Rules, it would then be necessary to hear further argument on the extent to which the Court could order such judgment in whole or in part due to the operation of the provisions of the Bankruptcy Act. I also took the view, consistently with the overarching purpose of the civil practice and procedure provisions described in s 37M of the Federal Court of Australia Act 1976 (Cth), that the merits of the application should be resolved before the mediation listed on 20 June 2023. Therefore, I decided to hear and determine, in effect, as a preliminary question on the application the question of whether the respondent made admissions of fact in accordance with rr 22.02 and 22.04 of the Rules and, if so, whether the Court should order judgment against the respondent in the proceedings on the facts so admitted under r 22.07 of the Rules.

Materials 13 The applicant relied on the following materials in support of his application. (a) An affidavit of Mr Celestine Ifeanyi Ceefyne Ogbonna sworn 11 October 2022. (b) An affidavit of Mr Ogbonna sworn 14 November 2022. (c) An affidavit of Mr Ogbonna sworn 16 December 2022. (d) An affidavit of Mr Ogbonna sworn 29 December 2022. (e) The originating application filed on 20 May 2022. (f) The statement of claim filed on 20 May 2022. (g) The applicant's outline of submissions filed on 2 December 2022. (h) The applicant's amended outline of submission filed on 4 January 2023. 14 The affidavits upon which the applicant relied contain a mixture of fact, submission, opinion, comment, conjecture and irrelevant material. To the extent the affidavits do not contain statements of facts that are relevant to the application I have taken the material in the affidavits as submission. On that basis, I consider the following paragraphs and exhibits to contain facts that are or may be relevant to the application. (a) Mr Ogbonna's affidavit sworn 11 October 2022: paras [29]-[30]; Exhibit CICO-01. (Although evidence of conferral between the parties, it is received as part of the background to the application.) (b) Mr Ogbonna's affidavit sworn 14 November 2022: paras [4], [5], [7], [15], [27], [28]; Exhibits CICO-02 to CICO-09. (c) Mr Ogbonna's affidavit sworn 16 December 2022: para [4]; Exhibits CICO-10 to CICO-14. (d) Mr Ogbonna's affidavit sworn 29 December 2022: paras [4]-[10], [12]-[14], [22]; Exhibits CICO-15 to CICO-25. (The facts stated in these paragraphs relate to the applicant's claims in his originating process and statement of claim and include facts he contends were admitted.) 15 The respondent opposed the requested orders and relied on a written outline of submissions dated 8 December 2022.

Issues 16 The applicant submitted that the notice to admit was served in accordance with Form 41 and r 22.01 of the Rules. He submitted that the notice of dispute was not served in accordance with Form 42 and r 22.02 because the notice of dispute stated: 'The Respondent objects to the Form 41 Notice to Admit filed by the Applicant on 18 October 2022 and served on the Respondent on 25 October 2022 (Notice) on the following grounds.' That is, the notice of dispute incorrectly referred to the notice to admit as that filed on 18 October 2022 and served on 25 October 2022 whereas, the relevant notice to admit was filed and served on the respondent on 12 October 2022. Thus, so the applicant submitted, the respondent failed to file a notice of dispute in accordance with r 22.02 and, thereby, is taken, by r 22.04, to have admitted the truth of each fact or the authenticity of each document specified in the notice to admit. 17 It follows that the principal issue upon which the success of the application depends is whether the respondent is deemed to have admitted the facts and authenticity of the documents specified in the notice to admit. There are other issues that would arise if the respondent is deemed to have made the admission such as: (a) what, if any, facts relevant to the relief sought are deemed to have been admitted; (b) is the applicant entitled to judgment as a consequence of any such deemed admissions; (c) is the applicant entitled to judgment on all, part or any of his claims by operation of ss 60(2) and 60(4) of the Bankruptcy Act; and (d) if so, is the applicant entitled to damages and, if so, in what manner are such damages to be assessed. However, for reasons I have given earlier, it is unnecessary to consider those other issues at this time and it may not be necessary to consider them at all if the respondent has not made or should not be taken to have made any admission of fact.

Part 22 - Admissions 18 Part 22 of the Rules contains a series of rules that provide a mechanism for one party to require another party to admit or dispute facts or the authenticity of documents. The purpose of that Part is to facilitate the narrowing of disputed facts and to place a party which disputes facts that are not really in dispute (or should not genuinely be in dispute) at risk of a costs order against that party for the costs the other party incurs proving those facts irrespective of the outcome of the proceedings. As part of that mechanism, facts not disputed are deemed to be admitted. Also, admissions may result in judgment on all or part of a claim or defence based on the admissions. However, the mechanism is not absolute and the Court may grant a party leave to withdraw an admission (deemed or voluntarily made). 19 The relevant rules are as follows (notes omitted). 22.01 Notice to admit facts or documents A party (the first party) may serve on another party (the second party) a notice, in accordance with Form 41 (the notice to admit), requiring the second party, for the purpose of the proceeding only, to admit the truth of any fact and the authenticity of any document specified in the notice to admit. 22.02 Notice disputing facts or documents The second party may, within 14 days after service of the notice to admit, serve on the first party a notice of dispute, in accordance with Form 42, disputing the truth of any fact or the authenticity of any document specified in the notice to admit. … 22.04 Facts or documents taken to be admitted if not disputed If the second party does not serve a notice of dispute in accordance with rule 22.02, the second party will be taken to have admitted the truth of each fact or the authenticity of each document specified in the notice to admit. … 22.06 Withdrawal of admissions A party may apply for the leave of the Court to withdraw an admission made under this Part. 22.07 Judgment on admissions If a party makes an admission, another party may apply to the Court for any judgment or order to which the party is entitled on the admission. 20 The key element of r 22.01 is that the notice to admit requires the party served 'to admit the truth of any fact and the authenticity of any document specified in the notice to admit'. The key element of r 22.02 is that the party served with the notice to admit may, within 14 days, serve on the party who served the notice to admit a notice 'disputing the truth of any fact or the authenticity of any document specified in the notice to admit'. It is the truth of the fact and authenticity of the document specified in the notice that is to be admitted or disputed. The notice to admit and notice of dispute are merely the instruments by which to identify the facts or authenticity of documents that are admitted or disputed. Relevantly, r 22.02 requires the specified facts or authenticity to be disputed within 14 days. If not, r 22.04 provides that the party served with the notice to admit will be taken to have admitted the truth of each fact or the authenticity of each document specified in the notice to admit. 21 Five further observations about the operation of Pt 22 are relevant. First, the Court may dispense with compliance with r 22.04: r 1.34 of the Rules. Second, the Court may extend the time for service of a notice of dispute specified in r 22.02 even after the time for service of that notice has expired: r 1.39 of the Rules. Third, as already noted, any admission made in accordance with Pt 22 is not absolute and the Court may grant a party leave to withdraw an admission under r 22.06. Fourth, the Court has power to make any order considered appropriate in the interests of justice: r 1.32 of the Rules. Last, the provisions of Pt 22, like any other civil practice and procedure provisions, must be interpreted and applied, and any power conferred or duty imposed by them must be exercised or carried out in the way that best promotes the overarching purpose of the civil practice and procedure provisions described in s 37M of the Federal Court Act. That is, according to law and as quickly, inexpensively and efficiently as possible and include the just determination of all proceedings before the Court.

Consideration 22 The applicant's submissions and application for judgment depend on an unduly technical and formalistic interpretation of the notice of dispute and rr 22.01 and 22.02 of the Rules. Such an interpretation is not consistent with the overarching purpose of the civil practice and procedure provisions referred to in s 37M of the Federal Court Act. 23 The contents of the notice to admit served on 12 October 2022 and the contents of the sealed notice to admit served on 25 October 2022 are identical. Each contains a notice to admit the same facts. While the notice of dispute only refers explicitly to the sealed notice to admit served on 25 October 2022, the notice in its terms disputes the facts and authenticity of the documents specified in both the notice to admit served on 12 October 2022 and the notice to admit served on 25 October 2022. That is, the respondent disputed the truth of the facts and the authenticity of the documents specified in the notice to admit (whether served on 12 October 2022 or 25 October 2022). In my view, the notice of dispute was in accordance with r 22.02 and it was served on the applicant within 14 days. Therefore, there has not been any deemed admission of any fact or the authenticity of any document specified in the notice to admit served on 12 October 2022 by operation of r 22.04 of the Rules. 24 Even if I were wrong in concluding that the notice of dispute is in accordance with r 22.02 of the Rules, it is clear that the respondent intended to dispute the facts and authenticity of the documents specified in the notice to admit served on 12 October 2022. Further, the respondent made that intention known to the applicant within 14 days of service of the notice to admit on 12 October 2022. In those circumstances, I would dispense with formal compliance with r 22.02 and the operation of r 22.04 of the Rules. I would treat the notice of dispute as a notice given in accordance with r 22.02 and, as such, none of the facts or authenticity of the documents specified in the notice to admit would be taken to have been admitted in accordance with r 22.04. Further, and in any event, in the circumstances, I would grant the respondent leave to withdraw any deemed admission under r 22.06 of the Rules. That is, it is not in the interests of justice that form be permitted to rule over substance in the circumstances of this case. 25 The just determination of the proceedings require that the respondent be permitted to dispute the facts and authenticity of the documents specified in the notice to admit. If and to the extent that the applicant subsequently proves the disputed facts, there may be cost consequences for the respondent. Alternatively, some of the facts may be admitted, if the proceedings are not stayed, when the respondent files and serves its defence. Subject to the question of the stay of the proceedings, the applicant will have an opportunity to adduce evidence and prove the facts upon which his causes of action are founded. Therefore, there is no real prejudice to the applicant arising from permitting the respondent to dispute the fact and authenticity of the documents.

Conclusion 26 The application will be dismissed. 27 The respondent has requested that the Court make an order to the effect that the applicant pay the respondent's costs of the application. In general, costs are not awarded in proceedings for claims made under the Fair Work Act. However, the respondent has applied for its costs of the application. The respondent has submitted that the Court should make such an order under s 570(2)(a) and s 570(2)(b) of the Fair Work Act on the grounds that the application was made vexatiously or without reasonable cause or otherwise the applicant acted unreasonably in bringing and continuing with the application and, thereby, caused the respondent to incur the costs of defending the application. 28 I am not prepared to make an order to the effect that the applicant pay the respondent's costs of the application at this time. I will reserve the question of the costs of the application until after the question of the stay of the proceedings has been heard and determined. Resolution of the stay question may have an impact on the jurisdictional basis, if any, for awarding costs against the applicant and, more broadly, on whether it would be appropriate to make a costs order against the applicant in the circumstances of this case I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.

Federal Court Rules 2011(Cth)rr 1.32, 1.34, 1.39, 22.01, 22.02, 22.04, 22.06, 22.07

Bankruptcy Act 1966(Cth)ss 58(1), 60(2), 60(2)(a), 60(4), 60(4)(a), 116(2)(g)(i), 116(2)(g)(ii)

Fair Work Act 2009(Cth)ss 570(2)(a), 570(2)(b)

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