Parker v HG Innovations Pty Ltd

COLLIER J: 1 The applicant, Mr Parker, seeks leave to appeal from an interlocutory judgment of the Federal Circuit Court of Australia of 11 February 2019 in Parker v HG Innovations [2019] FCCA 278 wherein the primary Judge summarily dismissed the matter on the basis that the applicant had no reasonable prospects of successfully prosecuting his claim should the matter proceed to trial. His Honour also awarded costs in favour of the respondents. 2 Relevantly, leave to appeal will be granted where in all the circumstances the decision at first instance is attended by sufficient doubt to warrant its reconsideration, and where substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; (1991) 104 ALR 621; Re CSR Ltd [2010] FCAFC 34; (2010) 183 FCR 358.

Background 3 In an application filed in the Federal Circuit Court on 17 August 2018, Mr Parker had claimed declarations and compensation for alleged breach of s 340 of the Fair Work Act 2009 (Cth). Mr Parker claimed, inter alia, that he was an employee of one or all of the respondents because: Mr Michael Gleeson offered him a position of General Manager of the first respondent at a meeting on 18 October 2017; Mr Gleeson and Mr Parker also discussed engagement of Mr Parker as a broker and locum business manager with the second respondent, and on 21 October 2017 Mr Gleeson sent an email outlining a proposal for him to act as a contracted broker and receive a retainer for his employment with the first respondent; Mr Parker caused an email to be sent to Mr Gleeson on 21 October 2017 asking questions of the contractor's agreement but received no response; Mr Parker began employment and attended work on or about 24 October 2017, and was provided a desk, stationery, access to various documents and a work phone; Mr Parker was directed to answer calls and speak to customers obtaining referrals, and to arrange to rent cars owned by the first respondent to customers that could not be financed by the second respondent; By 2 November 2018, it had become clear that he would not be provided with any opportunity to act as a broker, and that the Rideshare Management role was his sole employment role; In a meeting in the following days Mr Gleeson showed Mr Parker an employment contract of a third party who had been a full time employee of the first respondent, and Mr Parker agreed that that would be the best way forward; On 17 November 2018 Mr Parker and other staff were told by Mr Gleeson that they had no authority to act independently; On 20 November 2018 Mr Gleeson told Mr Parker that he was to be a contractor paid by the second respondent even though the work he was doing was for the first respondent, or his employment would have to be terminated; Mr Parker's weekly payment continued on a regular weekly basis including sick days, public holidays and personal leave; Mr Gleeson agreed that Mr Parker would be paid a commission each month referable to the total revenue he produced for the first respondent; Mr Parker had access to company vehicles throughout the period of his employment, for the purposes of his role; In his termination email Mr Gleeson said "Sounds like a job to me…"; Mr Gleeson agreed to pay Mr Parker a period of notice; and Mr Parker had no control over the entities controlled by Mr Gleeson which were paying his salary. 4 Mr Parker also claimed: He had complained to Mr Gleeson on 31 May 2018 because he believed that the respondents were unfairly subjecting him to unfair working hours; and He was dismissed because of his complaint, in breach of his workplace rights under s 341 (1)(c)(ii) of the Fair Work Act. 5 On 4 October 2018 the respondents filed an Application in a Case pursuant to s 17A (2) of the Federal Circuit Court of Australia Act 1999 (Cth). Section 17A (2) provides that the Federal Circuit Court may give judgment for one party against another in relation to the whole or any part of a proceeding if the first party is defending the proceeding or part, and the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. The Application in a Case was listed for hearing on 7 February 2019. 6 On 5 November 2018 at the case management hearing in the Federal Circuit Court before another Judge of that Court (case management Judge), the case management Judge ordered that: (i) The Applicant to file and serve no later than 4.00pm on 3 December 2018 an Affidavit particularising why he was employed as an employee and not a contractor and annexing any supporting evidence as well as his written submissions; and (ii) The Respondent to file and serve any written submissions by no later than 4.00pm than 10 December 2018 7 At the hearing before me, Mr Parker submitted that, on 5 November 2018 at the case management hearing he was physically handed written submissions by Counsel for the respondents, however Mr Parker returned those written submissions to Counsel in light of the case management orders of the case management Judge. This submission is not disputed by the respondents. 8 Mr Parker filed his written submissions and affidavit with exhibits on 3 December 2018. 9 Mr Michael Green, the solicitor for the respondents, deposed in his affidavit affirmed 10 April 2019 that the respondents filed their joint outline of written submissions on 4 November 2018. Counsel for the respondents submitted, in summary, that those written submissions were the same as had been handed to Mr Parker on 5 November 2018. 10 Mr Parker submits that there is no record of the respondents' joint submissions ever appearing on the Commonwealth Courts' Portal. Insofar as my Chambers is able to ascertain, there is no record in the electronic Court file of the Federal and Federal Circuit Courts of any submissions ever being filed by the respondents in the Federal Circuit Court proceedings in this matter. 11 I am not satisfied that any submissions were ever filed by the respondents in these Federal Circuit Court proceedings. 12 Mr Parker further submitted that, at the commencement of the hearing before the primary Judge, the respondents physically handed his Honour and Mr Parker their hard copy written submissions in support of the Application in a Case. Counsel for the respondents submitted that those submissions were the same as had been shown to Mr Parker on 5 November 2018. I am unable to form a view about this in the absence of evidence to this effect.

Decision of the primary Judge 13 His Honour identified a key question as being whether, at material times, Mr Parker was an employee or contractor. His Honour examined cases discussing the characteristics distinguishing a person as being an employee as opposed to an independent contractor, in particular Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [24], [43] and [44] and On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No.3) [2011] FCA 366; (2011) 279 ALR 341. His Honour noted: 6. In evidence filed on behalf of the applicant, the applicant asserted that the nature of tasks performed by him ought to give rise to an inference that at all material times he was employed rather than acting independently as a contractor. He stated that he was provided with a desk, stationery, a work phone and that he was given access to computing and document systems. He said that he was given instructions as to how to perform various tasks, including the answering of telephone calls, speaking to customers, obtaining referrals, and arranging the rental of cars owned by the parent company HG Holdings Pty Ltd to the subsidiary third respondent and other entities. All of those allegations are not contested by the respondents, but rather, the respondents submit that those indicia alone, with others, are not probative of the applicant being an employee. 14 His Honour noted that the applicant and Mr Michael Gleeson, a director of each of the respondents, first spoke concerning the applicant's possible involvement in Mr Gleeson's businesses on or about 11 October 2017, and that the documentary evidence adduced on behalf of the respondents in the affidavit of Michael Gleeson filed on 4 October 2018 (which his Honour summarised at length) painted a different picture to that asserted by the applicant. 15 His Honour concluded: 9. It is a question of fact, in any given situation, whether a person is an employee or a contractor. In this case, the applicant, during the entirety of his period of engagement with the respondents, either made it clear that he was content to be regarded as a contractor, or actively promoted himself as an independent contractor. He was damned by his own words in that regard. His claims to the contrary are a contrivance. His whole engagement was in the nature of the provision by him of services as part of a personal services business. 10. To the extent that the applicant, on occasion, adverted to his possibly wanting to arrange his affairs vis a vis the company differently, either by utilising a company, trust, or partnership structure, the use of each was inconsistent with him being an employee as opposed to an independent contractor. The arrangement that the applicant had with Mr Gleeson was that he would be remunerated by way of the payment of a weekly retainer, supplemented by the payment of commission, whilst carrying on the business of a sole trader under his registered business name in and for that business as the representative of that business. 11. The applicant has no reasonable prospects of successfully prosecuting his claim should the matter proceed to trial. His claim is without merit and, in the exercise of the court's discretion, is summarily dismissed in its entirety. 12. The respondents have succeeded in resisting the applicant's claims. Costs ought properly to follow the event. (Footnotes omitted.)

The application FOR LEAVE TO APPEAL 16 It is common ground that Mr Parker requires leave to appeal from the primary judgment, being an interlocutory decision. In his application filed on 25 February 2019 the applicant relies on four grounds. In summary those grounds are: Ground 1 - The applicant was denied procedural fairness, for reasons including: • The primary Judge accepted the respondents' submissions notwithstanding that they were not filed in accordance with the case management orders of Judge Vasta, and notwithstanding that Mr Parker did not see them until the actual hearing; • The primary Judge relied heavily - and possibly only - on the respondents' submissions; and • The primary Judge has not considered the filed evidence and submissions of Mr Parker. Ground 2 - The primary Judge made findings of fact on important issues where the facts were contested, without regard to evidence of Mr Parker, including: • In respect of ownership of rented vehicles; • In respect of the earliest documented evidence of the discussions between Mr Parker and Mr Gleeson, and in particular his Honour did not have regard to the evidence that on 11 October 2017 Mr Parker sent the respondents an employment resume; • The nature of the $1,000 retainer paid to Mr Parker in the context of the automotive industry; • The nature of the main business activity of the respondents; and • The nature of an email dated 31 May 2018 relied on by the respondents, which was actually entirely about the employment of another employee. Ground 3 - The primary Judge erred in finding that the case was hopeless and bound to fail in circumstances where his Honour did not have regard to evidence of the applicant, and: • Where Mr Parker had, in written submissions, proposed to plead an alternative basis for his claim that he had a contract of services rather than employment; and • Where his Honour failed to have regard to the bargaining powers of the parties. Ground 4: His Honour did not regard to s 570 of the Fair Work Act which limits when a party may be ordered to pay costs. 17 The current proposed grounds of appeal appear identical to the grounds of Mr Parker's application for leave to appeal. 18 At the hearing before me Mr Parker appeared in person. The respondents were represented by Counsel.

Consideration 19 In my view leave to appeal against the decision of the Federal Circuit Court should be granted. I have formed this view for the following reasons. 20 In respect of the question whether the primary judgment is attended by sufficient doubt to warrant its reconsideration, I note first that there appears to be substance to Mr Parker's claim that he was denied procedural fairness in circumstances where: The respondents' written submissions were never filed; This failure was itself in contravention of the orders of the Federal Circuit Court of 5 November 2018; The primary Judge accepted the respondents' written submissions on the day of the hearing and proceeded to hear the case having regard to those submissions; The applicant had no opportunity to examine the respondents' written submissions prior to hearing and properly address them; It is not in dispute that the applicant was unaware - and could have no reason to be aware - that the hard copy version of the respondents' written submissions that he had returned to their Counsel on 5 November 2018 were the same submissions that the respondents would ultimately rely on at the hearing before the primary Judge; Mr Parker was not legally represented; and It is not disputed that Mr Parker had raised the issue of contravention of orders by the respondents in respect of their failure to file written submissions, and fairness, before the primary Judge at the hearing. 21 I consider there to be a reasonably arguable case that the likelihood of prejudice to Mr Parker in those circumstances was high, noting in particular that Mr Parker was a litigant in person who had complied with the Court's directions and had every reason to expect that the Federal Circuit Court would require the respondents to similarly comply. 22 Second, while his Honour refers in detail in the primary judgment to authorities and legal principles relevant to a determination of whether an employment relationship exists, I consider that Mr Parker has a reasonably arguable case that the primary Judge did not have regard to Mr Parker's evidence and/or written submissions supporting Mr Parker's claim of an employment relationship with one or more of the respondents. The mere absence of reference by the Court to evidence or issues raised by a party does not necessarily mean that the Court has failed to have regard to that evidence or those issues: I note for example the following observations of the Court of Appeal of New South Wales in Housing Commission of New South Wales v Tatmar Pastoral Company Pty Ltd [1983] 3 NSWLR 378 at [385]-[386]: In order to determine this submission, it is necessary to consider what is the duty of a judge in this regard and whether the learned judge, in this case, discharged that duty. There is, in my opinion, an established course of decision in this State that, in certain circumstances, it is the duty of the judge to state his reasons for deciding as he does and that his failure to do so may constitute an error of law… However, such a duty does not exist in respect of every matter, of fact or of law, which was or might have been raised in the proceeding. It is not the duty of the judge to decide every matter which is raised in argument. He may decide a case in a way which does not require the determination of a particular submission: in such a case he may put it aside or, as Lord Scarman said, merely salute it in passing: R v Barnet London Borough Council; Ex F parte Nilish Shah [1983] 2 AC 309, at 350. A judge will, of course, appreciate the possibility of points being taken or decided on appeal which were not taken or decided below and for this reason he may decide, and give reasons for his decision on, matters which in strictness he need not decide. 23 I note that the decision of the Court of Appeal was upheld by the Privy Council in Tatmar Pastoral Company Pty Ltd v Housing Commission of New South Wales (1984) 54 ALR 155. 24 (See also IFTC Broking Services Ltd v Commissioner of Taxation [2010] FCAFC 22 at [4] and M Beazley, P Vout and S Fitzgerald Appeals and Appellate Courts in Australia and New Zealand (Lexis Nexis, 2014) [5.26]) 25 However in circumstances where the applicant has filed submissions and extensive evidence to which there appears to be no reference by the primary Judge, a question arises as to whether the primary Judge has had regard to them. In this case I note in particular paragraph 7 of the primary decision, where his Honour notes that the: …documentary evidence adduced on behalf of the respondents in the affidavit of Michael Gleeson filed on 4 October 2018 paints a different picture to that asserted by the applicant. (Emphasis added.) 26 His Honour proceeds to list a large number of documents, being exhibits attached to Mr Gleeson's affidavit of 4 October 2018. However it is not clear from his Honour's judgment that regard has been had to the material filed by Mr Parker, and his Honour does not identify the "different picture" asserted by Mr Parker. So, for example, Mr Parker relied on an email of 17 November 2017 in which he referred to "why I thought I was hired" and "my future employment". Similarly, it is unclear how his Honour reconciled the position of Mr Parker as "General Manager" with a contract of services. The fact that his Honour only refers, in detail, to evidence of the respondents in finding that Mr Parker's claims were "a contrivance" potentially supports a finding that his Honour had not considered Mr Parker's evidence or submissions. 27 Third, I am satisfied that there is a reasonably arguable case that his Honour erred at [12] of the primary judgment in finding that "costs ought properly follow the event". No reference was made by his Honour to s 570 of the Fair Work Act which provides: Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569. Note: The Commonwealth might be ordered to pay costs under section 569. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) the court is satisfied of both of the following: (i) the party unreasonably refused to participate in a matter before FWA; (ii) the matter arose from the same facts as the proceedings. 28 Counsel for the respondents submitted that the costs order of his Honour was supported by [9] of the primary judgment, which provided: It is a question of fact, in any given situation, whether a person is an employee or a contractor. In this case, the applicant, during the entirety of his period of engagement with the respondents, either made it clear that he was content to be regarded as a contractor, or actively promoted himself as an independent contractor. He was damned by his own words in that regard. His claims to the contrary are a contrivance. His whole engagement was in the nature of the provision by him of services as part of a personal services business. (emphasis added) 29 In particular, the respondents submit that the finding of his Honour that Mr Parker's claims were a contrivance meant that his Honour found in the respondents' favour in accordance with s 570 (2). 30 Section 570 of the Fair Work Act is clear in its limitation of cases where an unsuccessful applicant in Fair Work proceedings is required to pay costs. As Mortimer J explained in Ryan v Primesafe [2015] FCA 8; 323 ALR 107 at [64]-[68], and in particular at in Richens v Commonwealth of Australia (as represented by the Commissioner of Australian Federal Police) [2018] FCA 1276 at [23]: 23. …the discretion in s 570 (2) should be exercised cautiously and the case for its exercise should be clear, in part to avoid discouraging parties from completely and robustly pursuing claims of contravention under the Fair Work Act, or in equally robustly pursuing their defence of such claims. However, I also observed that s 570 was an access to justice provision in the sense that the ordinary position would be that parties may pursue these claims without the apprehension of adverse costs orders if they are unsuccessful. 31 In the primary judgment there is no identification by his Honour of s 570, and no examination by his Honour as to whether the applicant had commenced the present proceedings vexatiously or without reasonable cause, or whether an unreasonable act or omission of Mr Parker caused the respondents to incur costs. His Honour's finding of a "contrivance" on Mr Parker's part in paragraph [9] of the primary judgment does not necessarily mean that his Honour considered costs should be ordered against Mr Parker pursuant to s 570 (2) of the Fair Work Act, particularly in circumstances where there is no material before me indicating that the respondents had sought such costs or that his Honour had specifically had regard to s 570. I consider it reasonably arguable that his Honour did not direct his mind to s 570, but rather ordered costs to "follow the event" as is usual in litigation other than Fair Work proceedings. 32 In conclusion I consider that Mr Parker has advanced a reasonable argument that the decision of the primary Judge is affected by appellable errors. In circumstances where the effect of the primary judgment is not only to terminate Mr Parker's application in the Federal Circuit Court, but also to order costs against him contrary to s 570 of the Fair Work Act, I consider that Mr Parker would suffer substantial injustice if leave were refused, supposing the decision of his Honour to be wrong. 33 The appropriate order is to grant leave to appeal. I will hear the parties in respect of further case management orders to take this matter to appeal. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.