Should summary judgment be granted?
31 I will approach that question in accordance with the principles I have summarised above, so that it is necessarily a preliminary assessment of the evidence. Along with the threshold question under s 31A(2)(b) of the Federal Court Act is an evaluation of whether, in all the circumstances and having regard to the purpose of s 31A, the case is one which should be permitted to go to trial. Any conclusion that it should not go to trial must be reached with due caution and regard to the fundamental principle that ordinarily a person who, in a regular way, invokes the jurisdiction of the court to determine a dispute is entitled to have it determined after a trial on the merits.
32 Ultimately, the onus of persuading the court that this matter should not be permitted to go to trial falls on JH Group. But the reality of this case is that, as I have described, JH Group has given reasons why, on the face of the evidence before the court, Mr Revill has simply sued the wrong company. Those reasons have substance. Therefore it is Mr Revill who has the practical onus here of persuading me that JH Group's liability should nevertheless only be determined after a trial.
33 The basis on which Mr Revill seeks to do so presents him with an ambitious task. In Pioneer Concrete, on which Mr Revill relies, Young J referred (at 264D) to 'massive problems in performing the exercise commonly called lifting the corporate veil'. His Honour addressed four possible bases on which that could be done in the context of a corporate group. One was that the company was in fact and law acting as agent for the other company in the corporate group. His Honour swiftly discounted that possibility on the evidence before him: at 264-265. Then his Honour considered certain authorities, in particular DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852, after which he held (at 267A):
In my view the plaintiff's submissions take the DHN case too far and it is only if the court can see that there is in fact or in law a partnership between companies in a group or alternatively where there is a mere sham or facade that one lifts the veil. The principle does not apply in the instant case where it would appear that there was a good commercial purpose for having separate companies in the group performing different functions even though the ultimate controllers would very naturally lapse into speaking of the whole group as 'us'.
Thus the second and third possibilities his Honour considered were partnership, and a sham or façade. The fourth possibility was that it would be inequitable not to lift the corporate veil, because the company was formed or used to facilitate the evasion of legal obligations: see at 267C to 267G. Young J held that this depends on a finding that one of the reasons for the creation of the intervening company was to evade a legal or fiduciary obligation: see at 267E. There was no question of that in the case before his Honour: at 267G.
34 Returning to this case, JH Group submits that the reasons for piercing the corporate veil which Mr Revill gave in his written submissions 'amount to no more than a collection of unanchored legal propositions devoid of any evidentiary support, or an application to such evidentiary support'. As I have said, the written submissions were not supported by references to evidence. But Mr Revill's counsel did rely on some specific evidence, so it is necessary to assess that in light of the summary of the relevant aspects of Pioneer Concrete which I have just given.
35 By the affidavit of its in house counsel, Ms Ward, JH Group accepts that JHPL is its wholly owned subsidiary and that all three companies have the same ultimate holding company, China Communications Construction Company Ltd. Mr Revill also relied on historical company searches showing that when he made the insurance claim in 2013, the ultimate holding company for all three companies was ACS Actividades De Construccion y Servicios SA.
36 Counsel for Mr Revill submitted that this shows that JH Group was the 'main shareholder and owner' of both JHPL and JHG Mutual. But while JH Group does own all the shares in JHPL, the evidence does not establish that JH Group is the main shareholder and owner of JHG Mutual. For one thing, JHG Mutual is a company limited by guarantee, so there are no shares. It appears from the rules and protection schedules I have mentioned that JH Group, JHPL and other John Holland companies are the members of JHG Mutual. The fact that JH Group and JHG Mutual have the same ultimate holding company does not mean that JH Group owns or controls JHG Mutual. Ms Ward's affidavit does not say anything different; while (in para 6) she mentions other John Holland companies and says 'They too are wholly owned subsidiaries of JH Group', she is referring back to her description (in para 3) of JHPL, not JHG Mutual, as a wholly owned subsidiary of JH Group.
37 Mr Revill also relied on common directors between the three companies. But while there are some common directors, the company searches in evidence reveal that there are many other directors of each company that are not common.
38 So far, all this establishes is that the companies are part of the same corporate group, have some common directors, and that JHPL is a subsidiary of JH Group. That is an unremarkable structure for a large commercial enterprise and could be said of many other corporate groups in Australia. In Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549, after a survey of the authorities about piercing the corporate veil in corporate groups, Rogers AJA concluded (at 577D to E):
In the result, as the law presently stands, in my view the proposition advanced by the plaintiff that the corporate veil may be pierced where one company exercises complete dominion and control over another is entirely too simplistic. The law pays scant regard to the commercial reality that every holding company has the potential and, more often than not, in fact, does, exercise complete control over a subsidiary. If the test were as absolute as the submission would suggest, then the corporate veil should have been pierced in the case of both Industrial Equity [Ltd v Blackburn (1977) 137 CLR 567] and Walker v Wimborne [(1976) 137 CLR 1].
The fact that a parent company exercises control over its subsidiary does not itself justify treating acts of the subsidiary as those of the parent: Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 at 451F (Steytler J). Hence some further facts would need to be established here for the court to conclude that JHPL or JHG Mutual were agents or partners of JH Group, or that the John Holland corporate group was a sham or otherwise structured to avoid some obligation.
39 Counsel for Mr Revill sought to enlist the case of JHG v CoT in support of the last contention, that the John Holland corporate group was, in fact, structured to avoid legal obligations. He submitted that it was an example of how 'John Holland Group avoids its employment responsibilities by using its subsidiary companies to divide its workforce'. This submission does not address the rule that evidence of a finding of fact in an Australian proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding: Evidence Act 1995 (Cth) s 91(1). But even disregarding that rule (which counsel for JH Group was essentially prepared to do), JHG v CoT does not suggest that the structure of the John Holland corporate group was a sham or designed to avoid an obligation.
40 The relevant findings of fact, which are in the judgment of Edmonds J, concern an aspect of the John Holland corporate group's business known as JH Rail, which is not the part of the business where Mr Revill was employed: at [14]. Employees were designated as either 'workforce' (who were paid by an hourly rate) or 'staff' (salaried workers): at [16]. JHPL employed all workforce employees and JH Group employed all staff employees: at [18].
41 Counsel for Mr Revill relies on JHG v CoT as support for the proposition that the group is structured in that way for the purpose of evading or minimising liabilities which JH Group would otherwise have to employees such as Mr Revill, including an obligation to provide income protection insurance. One problem with this is that the very idea is incoherent. If there was an obligation to provide income protection insurance, it was an obligation which only arose voluntarily. Neither JH Group nor any other company would have the obligation unless it agreed to provide the insurance, whether through the mechanism of the EA or through private legally binding agreement in the usual way. There is no suggestion in the materials that JH Group has ever agreed with Mr Revill to provide the insurance. Perhaps JHPL so agreed, by way of the EA. Perhaps JHG Mutual agreed to act as the relevant insurer. But that is simply the way in which the affairs of the group are structured as a result of choices by the relevant companies to undertake certain obligations. It appears that JH Group has not made that choice, at least in so far as Mr Revill is concerned. It does not make sense to say that JH Group is evading obligations where there is no suggestion that it ever had them or ever should have had them.
42 Similarly, the fact that JH Rail was structured in the way outlined in JHG v CoT simply reflects the choices that have been made. One category of employees was employed by one company; a different category of employees was employed by a different company. That does not suggest any evasion of obligations. After all, JH Group did undertake direct obligations to the 'staff' employees, by employing them. JHPL employed the 'workforce' employees but there is nothing to suggest that somehow JH Group would have, or should have, employed them too. And nothing in the case suggests that one company was the agent of another, or that they were in partnership in relation to JH Rail, let alone in relation to the Wheatstone project at which Mr Revill was employed.
43 Apart from the group structure, in JHG v CoT Edmonds J also says at [21] that '[t]he terms of employment of both workforce and staff employees required them to act in accordance with directions from John Holland and to observe certain codes of conduct'. Also, 'John Holland' could direct employees to fly to particular sites at particular times: at [22]. Mr Revill relies on these statements as indicating that 'workforce' employees (presumably those equivalent to him as an employee of JHPL) must follow directions from JH Group, which is evidence of its 'dominant control' over JHPL. But earlier, at [14], Edmonds J defined 'John Holland' to mean JH Group and JHPL collectively. So his Honour's general statements at [21]-[22], when the question of the distinction between JHPL and JH Group was not an issue before him (the case was about the deductibility of the cost of flights), provide no support for a submission that JH Group controlled JHPL's employees.
44 Of more direct relevance to the present case was a document called 'John Holland Workforce Employment Agreement Permanent' which Mr Revill signed on 4 April 2013 and which formed part of his terms of employment. Clause 7.1 of that document provided that the employee ('you') was:
bound by, and must comply with and remain familiar with, the Company's policies and procedures, as amended. The policies and procedures are available for you to view on the Company's intranet.
Counsel for Mr Revill readily accepted that 'the Company' was defined to mean JHPL. But he went on to submit that 'John Holland Pty Ltd doesn't have a website. John Holland Group Pty Ltd have a website with their policies and procedures that must be followed by the subsidiaries'. There was no evidence of this. Counsel could only refer to a document which had the internet address www.johnholland.com.au written on it. There was no evidence that this was owned or operated by JH Group, or as to the contents of the website. Nor was there any evidence equating it to the 'intranet' referred to in cl 7.1.
45 Counsel for Mr Revill also referred to Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 118 FCR 1. That was a cartel case where the issue said to be relevant for present purposes was whether overseas parent companies carried on business in Australia through their subsidiaries. Counsel appeared to be relying on [64]-[69] in which Merkel J summarised authorities such as Smith, Stone & Knight Ltd v Lord Mayor, Aldermen and Citizens of the City of Birmingham [1939] 4 All ER 116 and Spreag v Paeson Pty Ltd (1990) 94 ALR 679 as explicable as cases where 'the subsidiary was not maintained as a distinct and separate entity because the parent had disregarded the corporate boundaries'. But Merkel J went on to find that this was not the case in the matter before him. In the course of doing so his Honour observed (at [79]) that an arrangement where parent companies, in a practical and commercial sense, had a general capacity to direct and control the commercial operations of subsidiaries 'reflects a quite unexceptional commercial and legal relationship which commonly exists between overseas parent and regional companies and their Australian subsidiaries in a vertically integrated worldwide group of companies'. None of the evidence Mr Revill's counsel has pointed to is capable of making the structure and operations of the John Holland corporate group any more exceptional than that. None of it suggests that there was any disregard of corporate boundaries.
46 To the contrary, the evidence suggests that the corporate boundaries were observed. For example, while Mr Revill submitted that the form he used to make his original injury claim was directed to JH Group, care was taken in the form to state the precise position. Immediately under its title on its first page there appears (albeit in small print):
Note, throughout the claim form 'John Holland' refers to John Holland Group Pty Ltd; John Holland Rail Pty Ltd; John Holland Pty Ltd or John Holland Queensland Pty Ltd (whichever is the applicable employer for the person completing this claim form).
47 The only real exception to this careful delineation of the roles of the different entities that appears in the evidence is the correspondence in which Mr Revill's insurance claim was rejected. The EFSP says that financial support in cases including non-work related injury will be assessed on a case by case discretionary basis by 'John Holland' (defined as JH Group, JHPL, John Holland Rail Pty Ltd and John Holland Queensland Pty Ltd) based 'on the advice of JHG Mutual and it's [sic] manager, Regis Mutual Management Pty Ltd'. The correspondence with Mr Revill and his solicitors which followed the submission of his claim was sent on JH Group letterhead. But that letterhead also said 'Correspondence to: Regis Mutual Management Pty Ltd' and was signed by a person as 'Claims Supervisor, Regis Mutual Management Pty Ltd for and on behalf of John Holland Group Pty Ltd'. The letters said that correspondence should be addressed to Regis Mutual Management Pty Ltd at their address (Mr Revill's solicitors did not address subsequent letters that way) and one of the letters from Regis/JH Group (dated 21 November 2013) referred to Regis as 'Managers of the John Holland Employee Financial Support Plan'.
48 So it was quite clear that the correspondence was coming from the claim manager who had been appointed by JHG Mutual to advise on claims in respect of all the members of the group. Perhaps that claims manager was mistaken when it said it was writing on behalf of JH Group. But even if its letters are evidence that JH Group had some involvement in making a decision about coverage under the group-wide protection plan, that hardly rises to the level of 'dominant control' or thoroughgoing disregard of corporate boundaries which would justify the extraordinary step of dispensing with the separate legal personalities of the different companies. In my view the following comments of Steytler J in Heytesbury Holdings at 451A-451B could be made in a similar way here:
The fact that correspondence was, from time to time, sent to the City [of Subiaco] on [Heytesbury] Holdings' letterhead, or signed by persons described as employees or officers of Holdings, is simply irrelevant. The same is true of the fact that the two companies had overlapping directorships and shared a registered office and that Holdings consolidated the accounts of its subsidiaries into its own accounts. Those facts, taken individually or together, cannot alter the fact that it was [Heytesbury] Properties, and not Holdings, which was the lessee of the Humes site, which owed the money to the City and which lodged the development proposal.
49 Counsel also relied on an email dated 14 October 2014 from the Chief Operating Officer of Regis Mutual Management Pty Ltd to the Financial Ombudsman Service which said that 'JHG Mutual Ltd is a controlled entity of the employer which administers the income protection provided by the employer'. But that was immediately after referring to what appear to be the relevant clauses of the EA. So the reference to the 'employer' is a reference to JHPL. This provides no support for the proposition that there was a disregard of corporate boundaries or that JH Group had such dominant control over JHPL or JHG Mutual that JH Group is somehow legally liable for such obligations to Mr Revill as the other companies may have had.
50 In my view none of the evidence to which Mr Revill's counsel has referred provides any reasonable basis to think that at trial he may be able to establish that the JH Group should be equated with its related companies JHPL and JHG Mutual for the purposes of his claim. There is simply no cogent basis in the evidence to assert that the John Holland corporate structure is a sham or that it was designed in order for JH Group to evade liabilities. Nor is there any basis to think that JHPL or JHG Mutual acted as partners to or agents of JH Group when they undertook such obligations as they are alleged to owe to Mr Revill.
51 There are further difficulties with the case which have not yet been mentioned, which arise from the fact that both pleaded causes of action are statutory in nature. Under the provisions of the FWA that are described above, Mr Revill would need to persuade the court that, here, the reference in s 53(1) to an enterprise agreement being 'expressed to cover (however described) … the employer' encompasses an entity that is not named in the EA at all (that is, JH Group). He would need to persuade the court that the reference in s 48 of the ICA to 'the insurer' in connection with 'a contract of general insurance' is a reference to an entity which, on Mr Revill's newly proposed case, is insuring itself. That is because under that case, both the insurer of the employer (with Mr Revill as third party beneficiary) and the employer who is the insured should be taken to be JH Group. These are further examples of the incoherence of the case now sought to be put.