Stolz v Registered Clubs Association of New South Wales

INTRODUCTION 1 On 6 December 2022, I allowed part and disallowed part of an application by the applicant to amend his Second Further Amended Statement of Claim (2FASOC). Set out below are my reasons for doing so.

BACKGROUND 2 This proceeding was commenced on 10 February 2020. A number of the applicant's claims in the proceeding start from the premise that the applicant was an employee of the respondent during the period from about September 2011 until about September 2017. Relevantly, paragraphs 2 to 5 of the Statement of Claim filed on 10 February 2020 were in the following form: 2. At all material times in this action, the Respondent was: … e. the employer of the Applicant in the period from on or about 16 September 2011 to on or about 27 September 2019 (Employment Period). The Applicant 3. The Applicant was at all material times during the Employment Period the employee of the Respondent. THE EMPLOYMENT 4. In the period from on or about 16 September 2011 to on or about 25 June 2013, the terms and conditions of the Applicant's engagement were governed by an oral contract made between the Applicant and Anne Fitzgerald, the then Executive Manager of the Respondent (Ms Fitzgerald), for and on behalf of the Respondent on or about 16 September 2011, the terms of which included that: a. The Applicant would work for the Respondent; b. The Applicant's duties would be to perform the role of the Respondent's Club Safe Compliance Auditor; and c. The Applicant would be paid the sum of $500.00 per day; and d. The Applicant would be paid mileage, in accordance with the ATO guidelines. 5. On or about 19 July 2013 the terms and conditions of the Applicant's engagement were varied in that from on or about that date the Applicant was paid the sum of $600.00 per day with the employment otherwise remaining on the same terms and conditions. 3 Despite various changes made to the Statement of Claim over a series of amendments, those paragraphs remained unchanged. 4 On 3 December 2021, the proceeding was set down for hearing, commencing on 5 December 2022. 5 On 9 February 2022, the High Court of Australia delivered its judgments in Construction, Forestry, Maritime and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 96 ALJR 144. Those judgments provide guidance as to the approach to be taken in determining whether a relationship is a contract of employment. 6 On 29 November 2022, the applicant and the respondent filed Outlines of Opening Submissions. 7 On 5 December 2022, the hearing commenced. The applicant's counsel opened his case and the applicant gave some evidence in chief, before being cross-examined by counsel for the respondent.

THE PROPOSED AMENDMENT 8 On the morning of 6 December 2022, prior to the resumption of the cross-examination of the applicant, counsel for the applicant made an oral application for leave to file a Third Further Amended Statement of Claim (3FASOC). No evidence was adduced in support of that application. The only contested proposed amendment was the following amendment to paragraph 5: By on On or about 19 July 2013 the terms and conditions of the Applicant's engagement were varied. in that from on or about that date the Applicant was paid the sum of $600.00 per day with the employment otherwise remaining on the same terms and conditions. Particulars By at least 19 July 2013, the terms of the contract between the Applicant and the Respondent included: (i) That Mr Stolz would perform work for Clubs; (ii) Mr Stolz's duties would be to perform the role of Clubs' Club Safe Compliance Auditor; (iii) Mr Stolz would be paid the sum of $600.00 per day; (iv) Mr Stolz would be paid mileage on accordance with ATO guidelines. (v) Mr Stolz would be paid monthly; (vi) Mr Stolz was engaged on a permanent basis; (vii) Mr Stolz could not provide compliance audit services in competition with Clubs; (viii) Mr Stolz was to take direction from a Clubs employee (for most his engagement this was Mr Cameron); (ix) Mr Stolz was required to undertake twice-annual performance reviews; (x) Mr Stolz was required to undertake training at the direction of Clubs; (xi) Mr Stolz would have authority to represent Clubs in various industry working groups and vis-à-vis regulators (including AUSTRAC); (xii) Mr Stolz was required to perform work personally. The Applicant relies upon an express agreement as to Mr Stolz's remuneration. The Applicant otherwise relies upon the conduct of the parties as set out in paragraph 10 below and the Affidavits of Mr Stolz affirmed 27 January 2021 and 19 May 2021 together with the associated exhibits.

CONSIDERATION 9 The Court's discretion to allow an amendment, although broad, is to be exercised in a manner which best promotes the overarching purpose of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: s 37M(1) of the Federal Court of Australia Act 1976 (Cth); Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 at [43]; Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; (2016) 332 ALR 199 at [122] to [124]. The exercise of the discretion is informed by the principles enunciated by the High Court of Australia in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175: Tamaya Resources at [125]. The weight to be given to the considerations identified in Aon, individually and in combination, and the outcome of the balancing process, vary depending on the facts in the individual case: Cement Australia at [51]. 10 I refused to grant leave to amend paragraph 5 of the 2FASOC, for the following reasons. 11 First, there has been considerable delay in the making of the application. Paragraph 5 has been in its present form since the commencement of the proceeding in February 2020, and no application to amend that paragraph was made until the second day of the hearing despite: the applicant's affidavit evidence having been completed by August 2021; the proceeding having been set down for hearing since December 2021; and the applicant having provided written and oral opening submissions on 29 November 2022 and 5 December 2022 respectively. Whilst the applicant's written submissions did refer to a series of terms of the contract in terms similar to the proposed particulars to paragraph 5, there was no suggestion in those submissions (or in the subsequent oral submissions) that the applicant proposed to amend his pleading, nor was there any suggestion that such terms were the product of a variation of the contract pleaded, which variation had occurred in the almost two-year period from September 2011 to July 2013. 12 Secondly, no explanation was proffered for the delay, other than a suggestion from the bar table that the reason for the amendment was consideration of the effect of the decisions of the High Court of Australia in Personnel Contracting and Jamsek. However, as noted above, those decisions were delivered on 9 February 2022. No explanation has been provided as to why their effect did not produce an amendment application prior to the second day of the hearing. As noted at [9] above, the weight to be attributed to various factors in the exercise of the discretion to grant leave to amend varies from case to case. Where, as here, the delay extends to almost three years from the commencement of the proceeding and nine months from the decisions in Personnel Contracting and Jamsek and the application is made during the hearing, the absence of a satisfactory explanation for the delay is a factor of considerable importance. 13 Thirdly, if the amendment were to be allowed, it would likely cause substantial prejudice to the respondent in circumstances where: (1) the respondent had prepared its case on the basis of the extant pleading; (2) the proposed amendments would cause a substantial change to the applicant's case as pleaded. The effect of the extant paragraphs 4 and 5 is that a contract was entered into in September 2011, which contract was varied on or about 19 July 2013, such that the amount payable was $600 per day (rather than $500 per day as per paragraph 4 c.). In contrast, the proposed amendment posits that the contract was varied in a number of ways, including by the coming into existence of the terms set out in the proposed particulars, by "on or about 19 July 2013" or "at least 19 July 2013". Further, the additional terms other than the remuneration term are to be inferred from conduct pleaded in paragraph 10 and the affidavit evidence and associated exhibits; (3) consequently, the proposed particulars to paragraph 5 would require further interrogation on matters such as the parts of the voluminous affidavits and exhibits from which those terms should be inferred and the identity of the particular persons alleged to have engaged in, acquiesced in, or been aware of, the conduct relied upon to found the terms set out in those particulars; (4) it may then be necessary for the respondent to obtain instructions from some or all such persons for the purpose of the cross-examination of the applicant and perhaps for the respondent to adduce further evidence; and (5) it would be necessary for the respondent's counsel to consider the approach he wishes to take in cross-examination, in circumstances where that cross-examination has already commenced (including on topics relevant to the terms of the contractual relationship between the parties) and such cross-examination may well have taken a different course if the applicant's case had been cast in the manner in which it is now sought to be re-cast. 14 Fourthly, I do not accept the submissions of the applicant's counsel that the proposed amendment would simply bring the pleading into line with the evidence. As noted above, the proposed amendment would involve a substantial re-casting of the applicant's case and the metes and bounds of the proposed new case are not precisely identified in the proposed amended paragraph 5 and would require further interrogation. 15 Fifthly, I also do not accept the submissions of the applicant's counsel that there would be no prejudice to the respondent because the applicant's evidence, which is referred to in the proposed particulars to paragraph 5, has been filed for a considerable time. That submission overlooks that the preparation of the respondent's case has most likely been undertaken through the prism of the extant pleading and forensic decisions made on that basis. If the amendment were to be allowed, it would become necessary for the respondent to review the applicant's evidence, and its own, through a different prism, and make forensic decisions concerning cross-examination of the applicant and the possible adduction of further evidence by the respondent from that altered perspective. For example, it may be that particular evidence of the applicant is of marginal importance to the extant pleaded case but would assume considerable importance to the amended case if the amendment were to be allowed. 16 Finally, it may have been possible to overcome that prejudice by an adjournment (and perhaps a costs order against the applicant). However, it is not necessary to consider whether to grant the application on the basis that there be an adjournment because the applicant's position is that the application is not pressed if the price of leave is an adjournment. 17 In summary, the application to amend paragraph 5 must be dismissed because it was made following an extensive delay in circumstances where that delay was not explained in any satisfactory manner; the amendment, if allowed, would likely cause substantial prejudice to the respondent; and the applicant was not prepared to countenance an adjournment for the purpose of seeking to ameliorate such prejudice. 18 I turn now to the remaining proposed amendments. These are uncontroversial and relate primarily to the abandonment of the applicant's claims that the respondent contravened s 357 of the Fair Work Act 2009 (Cth) and that it failed to make superannuation payments for the benefit of the applicant. As I discussed with counsel for the applicant during the hearing of the amendment application, there are paragraphs other than those identified in the draft 3FASOC which should be deleted as a result of the abandonment of those claims. Counsel for the parties should confer with a view to providing an agreed 3FASOC to the Court which reflects the abandonment of those claims and the failure of the application to amend paragraph 5. 19 Counsel for the respondent sought a costs order consequent upon the abandonment of those claims at this stage of the proceeding. This issue can be considered most efficiently at the conclusion of the hearing as part of the consideration of any claims for costs that are propounded by either party. Accordingly I reserve the question of costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.