Rochecouste v Tasman Rope Access Pty Ltd

COLVIN J: 1 In October 2020, each of Mr Marc Rochecouste and Mr Micheal Atwell commenced proceedings in this Court against Tasman Rope Access Pty Ltd (TRA) and Mr Brendan Halstead, formerly the operations manager and now general manager for TRA. Each of the applicants claimed to have been employees of TRA and to have standing under the Fair Work Act 2009 (Cth) to bring the claims to relief which included damages and pecuniary penalties. Orders were made for the two proceedings to be heard together. 2 Detailed defences and cross-claims were then filed by the respondents in early December 2020. By orders made on 4 March 2021, the parties were directed to file statements of material facts, bundles of documents and affidavits to be relied upon at the hearing. Both applications were listed for final hearing on 21, 22 and 23 July 2021. The final hearing was to be of all issues other than the quantum of penalty and factual matters relevant only to penalty. 3 Both parties filed statements of material facts. The applicants filed their affidavits. 4 TRA then appointed new solicitors. The filing of affidavit evidence by TRA was delayed. Eventually on 15 June 2021 a long affidavit of Mr Halstead with many annexures was filed. On 17 June 2021, leave was sought to rely upon the affidavit of Mr Halstead despite it being filed out of time. 5 On 28 June 2021, Mr Baldwin, the solicitor for the respondents, sent an email to the solicitor for the applicants. It said that the respondents would be seeking to amend their pleadings and possibly adduce further evidence. The email explained that since May 2021, the respondents had engaged three separate sets of lawyers and also new counsel. New counsel, appointed in early June, had formed the view that the defences are 'deficient' and 'potentially non­compliant with the Federal Court Rules' and also that they 'require substantial amendment' so that the Court may determine the real issues between the parties. The email said that it was proposed to provide proposed amended defences and cross claims in both matters in the next 10 to 14 days. The email also said that counsel was also 'currently considering the respondents' position including in relation to the question of further evidence' and there may be an application to seek to adduce further evidence soon. 6 On 29 June 2021, the matter came on for case management. The respondents foreshadowed an application to amend their defences in both claims and to file further evidence. In the result the application for an extension of time to file the affidavit of Mr Halstead was not opposed by the applicants. It was apparent that by reason of the delays by the respondents the matter was not ready to proceed to final hearing on the allocated dates. It was accepted by the applicants that the result would be that the hearing dates would be vacated. The hearing dates were vacated and orders were made for any application to amend the defences and for leave to file additional evidence to be brought by 16 July 2021. 7 On 16 July 2021, the respondents filed an interlocutory application seeking leave to amend their defences and to file further evidence. The affidavit in support of the application was deposed by Mr Baldwin. It appended minutes of the proposed amended defences. The amendments were not marked up to show the changes from the existing defence. The amendments included changes to withdraw admissions. There was no explanation provided as to the reason why aspects of the case that had been admitted were now proposed to be denied. 8 The affidavit also contained no description of the nature or extent of the further proposed evidence. As to the additional evidence it said simply: I am instructed and verily believe the Respondents wish to seek leave to file additional affidavit evidence in relation to a number of matters raised in the proposed Amended Defences. The matters proposed to be raised in the additional affidavit evidence are briefly summarised in annexure MDB 3. 9 Annexure MDB 3 was an email from Mr Baldwin to the solicitors for the applicants. It was expressed in the following terms: 1. Please find enclosed copies of our clients' Amended Defences and cross claims for your review. 2. Be advised that the purpose of additional evidence via affidavit will be to more fully explain: a. the banking arrangement; b. availability to work; and c. reasonable notice of a swing. 10 Mr Baldwin was informed that the application was opposed because no legitimate basis had been articulated for the filing of the proposed amended defences and further affidavit material. Bravely, by way of response, Mr Baldwin maintained that the reasoning for the amendments to the defences and the additional evidence had been explained. He provided a further affidavit in which he said, amongst other things: The danger and prejudice is that if the Amended Defences are not permitted, the Respondents' [sic] would be obliged to go trial reliant upon an existing artificial pleading, which [Mr Baldwin's firm] did not prepare and which does not reflect the evidence we would seek to adduce. The arguments put in the pleadings prepared by others would in all likelihood not survive, thereby prevented the Respondents' [sic] from presenting more robust and legitimate arguments in what is relatively complex litigation. 11 As to the additional evidence, the further affidavit said: On or about mid-June 2021, having reviewed the available material including the original defences filed in November 2020 and the matters referred to in paragraph 14 above, counsel and I formed the view that additional evidence would need to be filed in order to provide the respondents with an opportunity to agitate all of the issues the respondents seek to contest. All additional affidavit evidence will deal with discreet [sic] issues raised in the Amended Defences that require further explanation. 12 As to the matters to be addressed in the additional evidence reference was made to the email which formed Annexure MDB 3 to the earlier affidavit of Mr Baldwin. No other articulation of the proposed scope of the additional evidence or reasons as to why it had not been included when the late affidavit of Mr Halstead was provided.

Matters raised in written submissions for applicants in opposition 13 The applicants filed short written submissions in opposition to the respondents' interlocutory application. The submissions advanced the following contentions: (1) the proposed defences sought to withdraw admissions previously made, abandon certain allegations previously made and introduce allegations to support a new case; (2) the amendments sought were not confined to the matters raised by the existing evidence; (3) the respondents sought to advance an entirely new case based on new pleadings and new evidence; (4) if leave was given to allow the amendments, the applicants would need to retrace the interlocutory steps in the proceedings by seeking discovery, filing amended replies, filing extensive further evidence including as to matters previously admitted and considering the additional evidence when filed and preparing reply evidence; (5) there is no explanation as to why the pleadings and evidence to date were filed in error and now need to be amended and supplemented; (6) the change by the respondents in their legal representation was not an explanation; (7) the proposed amendments will considerably increase the length, cost and complexity of the proceedings; (8) the applications are personal litigants and will be significantly prejudiced in what is a no costs jurisdiction; (9) whilst no hearing dates are currently allocated, the proposed amendments will unduly postpone the hearing; (10) there has been unexplained delay in bringing the interlocutory application; (11) the amendments sought concern matters that would have been apparent to counsel and solicitors previously who arranged the filing of the defences with the relevant certifications and therefore represented a considered forensic decision; and (12) no leave was sought to withdraw the admissions and there was no evidence of the requisite character to support such an application, noting that the Court will not lightly grant leave. 14 As to the extent to which the proposed amendments to the defences would have the effect of withdrawing admissions, the solicitor for the applicants deposed to the extent to which admissions expressly made in the defence would be withdrawn if leave to amend was given. The matters alleged by the applicants and admitted by the present defences which were said to be admissions that would be withdrawn if leave was given to file the amended defences include: (1) the applicants are employees of TRA; (2) the applicants are affected by the contraventions as alleged; (3) Mr Halstead engaged in conduct within the scope of his actual or apparent authority to act on behalf of TRA; (4) other employees of TRA named in the pleading acted within the scope of their actual or apparent authority; (5) a contract was brought into existence by the signing of a letter of offer and agreement; (6) TRA knows the need of its clients within enough time to be able to provide reasonable notice of working hours; (7) the ordinary hours of work for the applicants; (8) Mr Rochecouste had accrued annual leave and TRA did not pay Mr Rochecouste annual leave; (9) Mr Atwell had completed at least two years and one month of service by February 2020; (10) the quantum of the fortnightly salary claimed by the applicants; (11) TRA was able to usefully employ the applicants, stand down was not authorised under s 524 of the Fair Work Act; and (12) certain contraventions of the Fair Work Act had occurred. 15 The above list is not a complete list of the admissions that the applicants say will be withdrawn if leave is given to amend the defences in the terms proposed. It should be noted that some of the matters are said to be deemed to have been admitted by operation of r 16.07(2) of the Federal Court Rules 2011(Cth). In addition it was said that there were a number of affirmative allegations made in the existing defences that were no longer to be advanced and many new affirmative allegations introduced by the defence.

The submissions for the respondents in support of the application 16 The respondents did not file written submissions. At the commencement of the hearing counsel for the respondents confirmed that they wished to proceed with the hearing of the application based upon the evidence that had been filed. Therefore, faced with the matters raised by the applicants and the matters deposed to concerning the admissions, the respondents did not seek to provide any further explanation. 17 Counsel for the respondents outlined four grounds that were said to support the application: (1) the importance to the respondents of the proposed amendments; (2) there was an explanation for delay; (3) prejudice to the applicants could be ameliorated by a costs order; and (4) it could not be said by the applicants that leave would be futile on the basis that the proposed amendments would be liable to be struck out. 18 It can be seen that these grounds fail to recognise the long established requirement that leave is needed to withdraw the admissions and leave will not be granted without proper explanation: as to which see Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309 at [18]-[23] (Hill, Madgwick and Conti JJ); Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 3) [2020] FCA 222 at [34]-[38] (Yates J); Carna Group Pty Ltd v The Griffin Coal Mining Company (No 5) [2020] FCA 970 at [10]-[14] (McKerracher J); and Selvaratnam v St George - A Division of Westpac Banking Corporation (No 2) [2021] FCA 486 at [27] (Stewart J).

Summary of outcome 19 For the following reasons, the respondents have not demonstrated a proper basis for the withdrawal of many admissions in the present defences that would result if leave was given to amend the defences in the terms proposed. For that reason alone the present application for leave to amend and the consequent application to adduce further evidence to support the proposed new defences should be refused. In addition there are other reasons (addressed below) as to why the application should be refused. 20 It would be open to the respondents to bring a further application. As will be apparent from these reasons, any such application would need to be brought promptly and would need to address the deficiencies with the present application. It would need to have an eye to the prejudice to the applicants that would result from further delay of the hearing (which would have occurred by this point in time but for the indulgence already extended to the respondents).

Withdrawal of admissions 21 Significantly, counsel for the respondents accepted that the application to amend the defence and to adduce further evidence was made in order to now run a case which is inconsistent in substantial respects with the case that is presently pleaded. 22 No issue was taken by the respondents with the list of admissions advanced by the applicants as admissions that would be withdrawn if the amendments were allowed. Rather, it was submitted that one of the problems that the amendments sought to rectify was the fact that there was no pleading in response to some allegations which then operated as a deemed admission under the Federal Court Rules. However, that submission was unsupported by any explanation for what had occurred and provided no explanation for the many other admissions that had been made expressly that were to be withdrawn if leave was given, including admissions as to fundamental matters such as whether the applicants were employees of TRA and whether there had been contraventions of particular provisions of the Fair Work Act. 23 The only explanation advanced for the withdrawal of the admissions was the change in legal representation for the respondents. It was said that the reason for the withdrawal was a matter that could be explored in cross-examination in due course. This is not an approach that is supported by the authorities. It is certainly not a reason why leave should be given to withdraw an admission without any explanation. 24 It follows that there is no adequate explanation that would support the withdrawal of admissions made by the defences.

Other proposed amendments 25 It is not possible from the way in which the submissions for the respondents were advanced to determine the significance for the overall conduct of the case of the changes that are sought to be made or the additional evidence that is proposed. As has been noted the amendments were not marked up on the proposed new defences. No explanation or overview was provided as to the nature of the proposed amendments. Their nature and importance cannot be evaluated. All that can be said is that the respondents propose to chart a substantial change in course and therefore the submission for the applicants that what is sought to be done is to run a different case should be accepted. 26 As to the additional evidence, counsel for the respondents referred to Annexure MDB 3 as identifying topics that were not addressed by the evidence that had been filed. The submission was put in terms that there were aspects of the existing defences where there was unlikely to be evidence to support the defence. No specific examples were provided. The submission suggested that the existing terms of the defences were not consistent with the evidence available to the respondents. 27 It was then submitted, in effect, that it was proposed to file additional evidence to support the amended defences. It was submitted that evidence that is before the Court at present does not support the case as currently pleaded. Again that was a submission advanced at a high level of generality. 28 When pressed to explain the significance of the proposed additional evidence, counsel identified, in general terms, three issues to which the evidence was intended to relate. However, that general description was advanced on the basis that it was not exhaustive, but did cover the 'main evidence'. No explanation was able to be provided as to why the proposed additional evidence could not be identified with any particularity.

Reasons for further evidence 29 As the only explanation for the application for time to put on further affidavit evidence was the proposed application to amend the defences, it follows that if leave is not granted to amend then the basis for the application for further affidavits falls away.

Prejudice 30 As to prejudice it was said that final hearing dates had not been allocated and therefore there was no prejudice to the applicants. However, that submission fails to address the fact that hearing dates had been allocated and were only vacated by reason that the respondents had delayed in filing affidavits and had foreshadowed the present application. The fact that the applicants accepted that the Court was likely to extend some indulgence to the respondents in those circumstances by not opposing the vacation of the allocated hearing dates is not a matter that can be called in aid by the respondents. But for the respondents' conduct, the final hearing of the matter would have been completed by now. In those circumstances, any steps by the respondents that occasion the revising of steps already taken will be prejudicial to the applicants and will be productive of delay, the responsibility for which should be laid squarely at the feet of the respondents. 31 Further, now that the foreshadowed application to amend the defences and provide further affidavits is brought what is apparent is that it seeks a more radical outcome than was suggested at the time the hearing dates were vacated. The respondents now seek to completely recast their case and abandon a considerable number of admissions that were made formally by way of the existing defences as settled by counsel. They seek to adduce evidence to support that new case. The respondents do not seek to refute the submissions by the applicants as to the extent to which the new course will require further costs to be incurred by the applicants and that there will be delay while substantial further forensic preparation is undertaken to meet the proposed new case of the respondents. 32 It is not possible to know the full ambit of what would be involved because the respondents have not explained the differences and have not provided any real information about the extent of the proposed additional affidavits. 33 I accept that there will be real prejudice to the applicants in the form of a considerable delay in the hearing of the proceedings if leave was to be given. Further, there will be additional costs and costs thrown away by reason of forensic steps having to be undertaken afresh by the applicants. 34 The respondents indicated that they would be willing to submit to an order for costs even though the proceedings were being conducted within a no cost jurisdiction. However, even if an appropriate costs order was to be made there would be burdens in identifying the extent to which costs were occasioned by the amendments and, more importantly, any such order could not compensate for the significant delay that was likely to result in a matter that otherwise would have been heard.

Delay 35 I do not accept the submission that there has been delay by the respondents in bringing the present application. On the evidence, the respondents' current legal representatives have been taking active steps since assuming the conduct of the proceedings to finalise the affidavit of Mr Halstead, identify what they consider to be the relevant issues (and any further evidence that may be required) and bring the present application.

Deficiencies in the current defences 36 It was submitted for the respondents that it would be unfair for them to be required to proceed on the basis of what the current legal representatives consider to be deficiencies in the defences. Those deficiencies were not articulated in any way. It was said that the respondents would be deprived of the opportunity to agitate key issues. Those issues were not identified in any way. It was submitted that there would be injustice to the respondents as result. It is simply not possible to assess whether there is any foundation to that submission because counsel for the respondents did no more than waive the phrase as if it were a magic wand. 37 If indeed there are aspects of the case that the respondents seek to run which meet the epithets given to them by counsel then amendments may be sought as to those particular aspects and an application may be sought for leave to amend to be justified on that basis. 38 It was submitted that the applicants would be able to apply to strike out or to request further particulars and that was a reason to allow the amendments. However, in the absence of any explanation as to the reason for the amendments and why they are said to be reasonable, necessary and significant, it is not appropriate to turn all of the burden on to the applicants to take such steps on the basis that all of the amendments have been allowed. The respondents must first demonstrate a proper basis for the amendments.

Futility 39 It was submitted that the proposed amendments were not said by the applicants to be futile in the sense that they would be liable to being struck out if allowed. No submission was advanced to that effect by the applicants. It is a submission that fails to engage with the contentions advanced by the applicants as to why the application should be refused.

Interests of justice 40 It may be accepted that on an application for leave to amend to expose the real issues in the proceedings that is made at a time where the other party has sufficient time to respond will generally be allowed in the interests of justice. However, for reasons that have been given, there are many aspects of the present application that mean that it would not be in the interests of justice to accede to the application.

Conclusion and costs 41 For the reasons given, the application should be refused. In refusing the application I do not foreclose the possibility of a further application to amend and adduce further evidence brought without delay that is confined to what is reasonable and necessary as a matter of fairness. It is too late for the respondents to be starting again with an entirely new case. There must be identification of the amendments that are sought and why they should be allowed despite the fact that the case has proceeded to this point on the basis of the current defences. To the extent that admissions are proposed to be withdrawn there must be an adequate explanation. 42 The concession made by the respondents in relation to costs presupposed that the interlocutory application was successful. There was no consideration of the appropriate course as to costs if the application was refused. Without expressing any view, I note that there are circumstances in which orders for costs may be made in respect of interlocutory applications where they have been brought about by the unreasonable acts or omissions of one party which take the costs outside the boundaries of those which might usually be expected to be incurred in the present no costs jurisdiction: see, for example, Fitness Systems United Pty Ltd v Goldberg [2020] FCA 638 at [18] (Wigney J). Therefore, I will reserve liberty to the applicants to apply as to any costs order. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.