Panagiotidis v IProsper Financial Planning Pty Ltd

Introduction 1 On 2 May 2022 and 5 May 2022, a judge of the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) ordered that proceeding no. MLG4068/2020 and proceeding no. MLG2439/2021 (together the FCFCOA proceedings) respectively be transferred to the Federal Court of Australia. 2 Those orders cannot take effect unless it is confirmed by a judge of this Court pursuant to s 32AD of the Federal Court of Australia Act 1976 (Cth).

Relevant provisions 3 Section 153 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) provides as follows: 153 Discretionary transfer of proceedings (1) If: (a) a proceeding is pending in the Federal Circuit and Family Court of Australia (Division 2); and (b) the proceeding is not a family law or child support proceeding; the Court may, by order, transfer the proceeding from the Court to the Federal Court. (2) The Federal Circuit and Family Court of Australia (Division 2) may transfer a proceeding: (a) on the application of a party to the proceeding; or (b) on its own initiative. (3) In deciding whether to transfer a proceeding to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) must have regard to: (a) any Rules of Court made for the purposes of subsection 154(2); and (b) whether proceedings in respect of an associated matter are pending in the Federal Court; and (c) whether the resources of the Federal Circuit and Family Court of Australia (Division 2) are sufficient to hear and determine the proceeding; and (d) the interests of the administration of justice. (4) If an order is made under subsection (1), the order takes effect on the day that the order is confirmed by the Federal Court under section 32AD of the Federal Court of Australia Act 1976. (5) The Federal Circuit and Family Court of Australia (Division 2) may make such orders as it considers necessary pending the order transferring the proceeding being confirmed by the Federal Court. (6) An appeal does not lie from a decision of the Federal Circuit and Family Court of Australia (Division 2) in relation to the transfer of a proceeding under this section. (7) This section does not apply to proceedings of a kind specified in the regulations. 4 Section 154 of the FCFCOA Act provides: 154 Rules of Court (1) The Rules of Court may make provision in relation to transfers of proceedings to the Federal Court under subsection 153(1), including in relation to the scale of costs that applies to any order made in respect of proceedings that are transferred. (2) In particular, the Rules of Court may set out factors that are to be taken into account by the Federal Circuit and Family Court of Australia (Division 2) in deciding whether to transfer a proceeding to the Federal Court under subsection 153(1). (3) Before Rules of Court are made for the purposes of this section, the Chief Judge of the Federal Circuit and Family Court of Australia (Division 2) must consult the Chief Justice of the Federal Court. 5 Rule 8.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules) provides: 8.02 Transfer to Federal Court (1) The Court may, at the request of a party or on its own initiative, transfer a proceeding to the Federal Court. (2) Unless the Court otherwise orders, a request for transfer must be made on or before the first court date for the proceeding. (3) Unless the Court otherwise orders, the request must be included in a response or made by application supported by an affidavit. (4) In addition to the factors to which the Court must have regard under subsection 153(3) of the Act in deciding whether to transfer a proceeding to the Federal Court, the Court must take the following factors into account: (a) whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue; (b) whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding were not transferred; (c) whether the proceeding will be heard earlier in the Court; (d) the availability of particular procedures appropriate for the class of proceeding; (e) the wishes of the parties. 6 Section 32AD of the Federal Court Act provides: 32AD Confirmation of civil proceedings transferred from the Federal Circuit and Family Court of Australia (Division 2) (1) If the Federal Circuit and Family Court of Australia (Division 2) makes an order under subsection 153(1) of the Federal Circuit and Family Court of Australia Act 2021 transferring a proceeding to the Court, the Court may, by order, confirm the transfer of the proceeding to the Court. Note: The transfer of a proceeding takes effect on the day the Court makes an order under this section in relation to the proceeding: see subsection 153(4) of the Federal Circuit and Family Court of Australia Act 2021. (2) The Court may, in its discretion, receive further evidence to decide whether to make an order under subsection (1). Such evidence may be taken in any of the ways mentioned in section 27. (3) The Court has jurisdiction in a matter that: (a) is the subject of a proceeding transferred to the Court by the Federal Circuit and Family Court of Australia (Division 2); and (b) is a matter in which the Court does not have jurisdiction apart from this subsection. To avoid doubt, the Court's jurisdiction under this subsection is not subject to limits set by another provision. (4) An appeal does not lie from a decision of the Court in relation to an order made under subsection (1) confirming the transfer of a proceeding.

Background 7 The Chief Justice referred this matter to me to hear and determine whether this Court should, pursuant to s 32AD(1) of the Federal Court Act, confirm the transfer of the FCFCOA proceedings. 8 Mr Panagiotidis is the applicant in VID 249 of 2022 and one of the applicants (together with Mr Sayers) in VID 250 of 2022. In the VID 249 of 2022 proceedings, Mr Panagiotidis alleges that he was employed by IProsper Financial Planning Pty Ltd alternatively from various points in time between 2017 and 2019. 9 Prior to this time, Mr Panagiotidis claims he was engaged as a "Financial Advisor" in companies controlled by Mr Tzouvelis (the third respondent in VID 249 of 2022). Mr Panagiotidis claims that it was a term of his engagement that he had "the right to be paid three times his annual trail commission payments as a lump sum" (Lump Sum Payment). Mr Panagiotidis claims that when offered employment with IProsper, he exercised a "workplace right" under Pt 3-1 of the Fair Work Act 2009 (Cth) (FW Act) (sought clarification from the second respondent as to the effect of the Lump Sum Payment if he entered into the contract). He further claims representations were made to him that he had a right to the Lump Sum Payment. Mr Panagiotidis claims various breaches of the FW Act for subsequent "adverse action" under Pt 3-1 of the FW Act taken against him by the respondents and also contraventions of the Australian Consumer Law (contained within Sch 2 to the Competition and Consumer Act 2010 (Cth)). 10 Mr Panagiotidis seeks the following relief in VID 249 of 2022: (a) declarations that IProsper has breached s 340 of the FW Act; (b) declarations that the second and third respondents were involved in the first respondent's contraventions within the meaning of s 550 of the FW Act; (c) orders for compensation (pursuant to s 545 of the FW Act) and pecuniary penalties (pursuant to s 546 of the FW Act) arising from (a) and (b); and (d) compensation, damages and penalties arising from breaches of the Australian Consumer Law. 11 In VID 250 of 2022, Mr Panagiotidis and Mr Sayers allege, inter alia, to have been employed by Golden Financial Group Pty Ltd and then by IProsper as trustee for the IProsper Unit Trust. Arising from these allegations, they claim Golden Financial and IProsper failed to pay them wages in accordance with the Banking, Finance and Insurance Award 2010, their leave entitlements and commissions. They claim various breaches of the FW Act and breach of contract. 12 Mr Panagiotidis and Mr Sayers seek the following relief in VID 250 of 2022: (a) declarations that the applicants were employees of Golden Financial and IProsper and were classified under Sch A Level 6 of the Banking Award; (b) declarations that Golden Financial and IProsper contravened ss 44, 45, 323(1), 323(3), 345, 357, 535(1) and 535(2) of the FW Act; (c) declarations that the third and fourth respondents contravened 345(1)(a) of the FW Act; (d) declarations that the third and fourth respondents were involved in Golden Financial's and IProsper's contraventions within the meaning of s 550 of the FW Act; (e) declarations against the respondents pursuant to s 557 of the FW Act; (f) declarations against IProsper, Golden Financial and the fourth respondent pursuant to s 557B of the FW Act; (g) the payment of outstanding wages, overtime payments, accrued leave and superannuation contributions; (h) orders for compensation and pecuniary penalties arising from (a) to (f) above; and (i) damages for breach of contract. 13 The applicants' pleadings in both proceedings are lengthy, comprising 60 pages in each proceeding. The respondents have not filed defences to the amended statements of claim and have filed interlocutory applications seeking for them to be struck out.

The judge's reasons 14 During a directions hearing in the FCFCOA, the judge made the following observations regarding the transfer of proceedings (extracted from the transcript of the hearing before Judge Symons on 12 April 2022): HER HONOUR: … So one of the things that had occupied my mind in thinking about it this morning was whether or not, in conjunction with an order that the matters be heard together, that an order - or, the steps at least to be taken to get an order in place for the matter to be transferred to the Federal Court. Now, the benefit, as far as I can see - and I say this, of course, without any knowledge as to whether in fact the court could hear the matter fairly promptly, but I don't think it's controversial to say that the Federal Court generally can give parties an earlier hearing date and that it would certainly be better placed to allocate hearing days beyond four or five days; they do that routinely. On the other hand, this court fairly unusually hears matters that extend beyond four or five days. Now, that's not a hard and fast rule, but it does reflect the efficiencies of this court and our principles of case management, which in turn reflect a different level of resource allocation and the busyness of this particular court. So it would be a matter that I couldn't make an order about today, but I could certainly make a recommendation to that effect and then there's a protocol that needs to be followed between our court and the Federal Court. And if that protocol is followed to conclusion and the Federal Court considers that it's also appropriate the matter is transferred, then an order would be made to that effect. And then of course, the matter would be docketed to a judge for the Federal Court and procedural orders would be made by either he or her. So I would like submissions from each of you as to that as a potential course, having heard what I had to say about the possibility of further trial dates this year. And then I can make a decision as to what is the next order to make. 15 The parties then made short submissions as to their respective positions regarding transfer. Counsel for the applicant noted that it was a matter of "discretion" for which a "major concern" was the costs of an individual litigating in the Federal Court. Counsel accepted it was less than ideal if the matter was heard for initially four days (commencing 30 May 2022) and then there would be a lacuna until February 2023 when the hearing would recommence. Counsel for the applicants stated he did not have instructions on transfer but "fully accept[ed] it can be done…[and] there are good reasons in this case why that might be so". 16 Counsel for the respondents did not oppose transfer, however counsel did express concern regarding inefficiency and that it would not be desirable if there was a split hearing. 17 The judge concluded by noting that her Honour was not in a position to make the order for transfer given there were protocols between this Court and the FCFCOA that needed to be adhered to and stated that her Honour's chambers would set those processes in motion and then advise the parties in due course. 18 The applicants' solicitors sent a further communication regarding the transfer of proceedings to the judge's Associate the day after the directions hearing after receiving instructions. The email is extracted as follows: Dear Associate Following the directions hearing before Her Honour yesterday, I have had the opportunity to confer with my clients. They have expressed concerns regarding the proposed transfer of proceedings to the Federal Court of Australia with respect to the following matters: 1. The greater formality of the proceedings. 2. Increased costs. 3. Alteration to appeal processes, being an appeal to a Full Court rather than a single Judge of the Federal Court. 4. Possible further delay if the Federal Court does not have capacity to hear the matter until a date later than the earliest dates available in the Federal Circuit Court. My clients have been advised, understand and appreciate, the reasons for Her Honour's decision as they also wish to have their matters heard and completed at the earliest opportunity. Without wishing to impede Her Honour's proposed next steps, we respectfully ask if Her Honour would consider making inquiry within the Court about whether there is another judicial member who may have capacity to hear these matters this year. If Her Honour has already made that inquiry and it informed her decision, or she does not consider it appropriate to do so, we do not press the request. This email has been copied to the solicitors for the respondents. … 19 Her Honour made an order on 2 May 2022 transferring proceeding no. MLG4068/2020 to this Court pursuant to s 153(1) of the FCFCOA Act, noting that the proceeding be heard together with proceeding no. MLG2439/2021. On 5 May 2022, the trial judge made a similar order transferring proceeding no. MLG2439/2021 to this Court.

The parties' submissions 20 When this matter was allocated to me to determine this issue in November 2022, the parties consented to the matter being determined on the papers once they had filed written submissions. 21 The applicants maintain in their submissions the view they had expressed in their email to the FCFCOA judge (extracted at [18] above) opposing transfer and submitted that: (a) there was a denial of procedural fairness, as the parties were given no opportunity to provide their views before the orders were made, relying on KDSP v Secretary of the Department of Home Affairs [2022] FCA 1406 at [29]; (b) the transfer would impose greater formality and increased costs (being particularly so given the limited ability to recover costs pursuant to s 570 of the FW Act), alter the appeal processes to their detriment and incur delay; (c) the quantum of the claim is not a matter listed as a relevant consideration in r 8.02(4) of the FCFCOA Rules, and there is no jurisdictional impediment to the FCFCOA hearing the claim; (d) whilst the case has some factual complexities, they are not beyond the ability of the FCFCOA given: (i) VID 250 of 2022 is largely a case about the status of the relationship between the applicants and the respondents at different points in time, be that as employee or otherwise, and then following this, the determination of either underpayment of wages or other contractual obligations dependent on the decisions regarding relationship status; (ii) VID 249 of 2022 is a confined adverse actions and consumer law claim, where during the relevant time period the applicant and respondents agree the concerned applicant was an employee of IProsper; and (iii) the complexity of fact in VID 250 of 2022 mostly arises from the various business structures and companies of the respondents over time, which are matters the FCFCOA ordinarily deals with; and the applicants are ready to proceed with the trial in the FCFCOA "save for minor supplementary affidavits and minor amendments" to the Originating Application (about which the respondents are on notice). 22 The respondents submit that this Court cannot be satisfied that the court below had regard to the mandatory considerations required for a transfer order (s 153(3) of the FCFCOA Act and r 8.02(4) of the FCFCOA Rules) and that the Court should not confirm the transfer order. Rather, the respondents contend that this Court should "uplift" the matter pursuant to s 32AC of the Federal Court Act and transfer the FCFCOA proceedings, having regard to the factors in r 27.12(3) of the Federal Court Rules 2011 (Cth) by reason of the following: (a) as to the interests of justice - While the transfer was never confirmed, the proceedings have been overseen by the Federal Court for more than six months. Procedural orders have been made by the Federal Court and interlocutory applications are pending. It is in the interests of the administration of justice that the proceedings are formally transferred to the Court and not returned to the FCFCOA; (b) as to the proposed complexity of the matter - The hearing length is estimated at 10 days. The applicants seek more than $6 million in damages and compensation. The applicants seek penalties for serious contraventions of the FW Act. The applicants also make claims for breach of contract, misleading and deceptive conduct, sham contracting, and many factually complex allegations of adverse action. As such, the respondents submitted that the Federal Court should give significant weight to the length, quantum and factual complexity of the trial; and (c) Neither court is likely to be able to hear the trial for quite some time. If the matters are heard in the FCFCOA, the parties' interlocutory applications will need to be re-listed, which is likely to cause further delay. 23 The respondents rightly conceded that the hearing would be more expensive should it be transferred, that the proceedings do not involve questions of particular general importance and that both courts have adequate resources and appropriate procedures available to hear this matter. 24 The respondents submitted, in summary, that the FCFCOA proceedings should be uplifted to this Court, "having regard to the quantum, complexity and estimated length of the trial, and the clear benefit in not returning this matter to another court six months after the original transfer order".

Consideration 25 For the following reasons, I decline to make an order confirming the transfer of the FCFCOA proceedings to this Court. I also decline, for the same reasons, apparently by submission of the respondents rather than application, to transfer the proceedings pursuant to s 32AC of the Federal Court Act. 26 A review of the transcript reveals that the judge did seek submissions from the parties as to whether her Honour make the transfer order. The parties were represented by counsel, who made submissions on their behalf and who did not seek further time to seek instructions. Accordingly, I do not accept the submission of the applicant that the judge did not have regard to the wishes of the parties as mandated by statutory command under r 8.02(4)(e) of the FCFCOA Rules. These circumstances are not akin to those in KDSP: at [29]. 27 However, it is clear that the judge did not give consideration to each of the other factors her Honour was required to give consideration to under the FCFCOA Act and the FCFCOA Rules. Her Honour confined her consideration to the parties' estimate that the matter would go for longer than five days, the possibility of a split hearing, and her consequent view that the Federal Court was better placed to allocate hearing dates beyond four or five days. 28 Where the Court uses its uplift powers, pursuant to s 32AC of the Federal Court Act, the factors it must take into account are prescribed in s 32AC(6), namely the rules of court setting out the factors that are to be taken into account in deciding whether to transfer a proceeding from the FCFCOA to this Court, whether any associated proceedings are pending in this Court, whether the resources of this Court are sufficient to hear and determine the matter and the interests of the administration of justice. 29 I am of the view that with proper case management, including requiring the parties to file an agreed statement of facts, it may be that an estimate of ten days' hearing is overstated. However, I accept given there are two proceedings which raise different causes of action and do not involve all the same parties nor entirely the same factual matrix (though it overlaps in some respects), that it is likely that the proceedings could go for more than five days. Nevertheless, contrary to the view of the judge, the fact that the trial dates are likely to exceed five days is not a sufficient basis, on its own, for ordering a transfer: Van den Berg v Monash Health [2022] FCA 796 at [16]. 30 Relevantly, neither party submits that the proceedings are likely to involve questions of general importance whereby it is desirous of there being a decision in the Federal Court on one or more of the points in issue, nor that the FCFCOA has insufficient resources to hear and determine the matter. 31 Furthermore, both parties accept that there will be additional costs borne by the parties if the matters are transferred. 32 In addition, both parties accept the unfortunate reality that it is unlikely that the matter will be heard and determined more quickly if the transfer occurs. 33 When considering the question of the "interests of the administration of justice", the factors taken into account are not confined by those matters in the FCFCOA Rules and will depend on the nature of the case and do include (not exhaustively), as identified Van den Berg at [19]-[22], whether the proceeding involves any properly identified, serious and substantial issue of legal principle or significant question of public interest (which these proceedings do not), whether the estimates of hearing times given by the parties are justified (which is difficult to discern in the absence of a defence but where it is accepted that it is possible that these matters combined could take more than five days to be heard), whether the issues apparently in dispute can be limited or more narrowly focussed and whether there is a need for expedition (which is not suggested here). 34 I note the respondents' submission that it is in the interests of the administration of justice that the proceedings be confirmed given the transfer was never confirmed and the matter has been overseen by the Victorian Registry of this Court for more than six months. During that time procedural orders have been made and there are interlocutory applications pending. I accept that certain procedural orders have been made including regarding the filing of amended pleadings. However, one assumes that those procedural orders would have been made by the FCFCOA had the matter remained there and I note that none of the interlocutory applications have been determined by this Court nor do the respondents suggest that they could not be determined by the FCFCOA. I accept that there may be delay in determining the interlocutory applications given new dates may need to be obtained in the FCFCOA. However, this is not a sufficient basis for confirming the transfer. 35 As to the quantum of the claim, the respondents do not submit that there is any limit on the FCFCOA's jurisdiction to hear and determine a claim of this size. As to purported "factual complexity", it is routine for the FCFCOA to hear and determine underpayment cases involving multiple respondents, claims of accessorial liability, adverse action, breach of contract and Australian Consumer Law contraventions. Furthermore, the FCFCOA does hear and determine matters involving serious contraventions under the FW Act.

Conclusion 36 For these reasons, I decline to confirm the transfer of the proceedings. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Raper.