FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Maclean Bay Pty Ltd [2010] FCA 1378

THE COURT ORDERS THAT:

1.    The second respondent’s motion dated 7 September 2010 is dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    The second respondent, Ms Wells, applies pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”) to dismiss the instant proceeding in so far as it concerns her. Alternatively, Ms Wells seeks an order, pursuant to O11 r16 of the rules of this Court, striking out the second further amended Statement of Claim of the applicant, in so far as it concerns Ms Wells. In final addresses, counsel for Ms Wells stated that the O11 r16 and the s 31A claims were related, in that, if not successful on the s 31A application Ms Wells’s O11 r16 claim would also fail. In this judgment I will refer to that current form of the Statement of Claim as “the pleading”.

The parties

2    The Fair Work Ombudsman (“the applicant”) is a statutory office holder who is entitled to bring the current proceeding. The applicant issued the proceeding in the Federal Magistrates Court on 24 December 2009. In recent months, that court transferred the proceeding to this Court. As the proceeding relates to events prior to 1 July 2009, the applicant relies on the transitional provisions of the Fair Work Act 2009 (Cth) (“the Act”) in respect of alleged breaches of the Workplace Relations Act 1996 (Cth) (“the WR Act”).

3    The first respondent (“Maclean Bay”) is a body corporate within the meaning of the Corporations Act 2001 (Cth) Part 5B.1 and was the employer of certain persons referred to in the pleading, including Ms Sharon Williams and Mr Geoffrey Golding. The applicant alleges that Maclean Bay has contravened the WR Act in several respects including by conduct affecting Ms Williams and Mr Golding.

4    Ms Wells (as second respondent) is alleged to have been involved in four contraventions of the WR Act by Maclean Bay concerning Ms Williams and Mr Golding.

5    The pleading makes the following allegations with respect to Ms Wells, amongst others:

    she has been a director of Maclean Bay since October 2007;

    she is the holder of a law degree and was admitted to practise as a solicitor in Queensland from about 1986 to 2000;

    she understands, and at all material times understood, the difference in law between a contract of service and a contract for services;

    since about November 2007, she has been involved in managing the operations of a resort (“Diamond Island”) run by Maclean Bay at Bicheno in the State of Tasmania. Such management is alleged to have included being the principal point of contact between the directors of Maclean Bay and the manager of Diamond Island, responsibility for hiring and firing of staff and offering contracts.

6    Conduct of Ms Wells relevant to the pleading is alleged to be conduct engaged in on behalf of Maclean Bay within the scope of Ms Wells’ actual or apparent authority. In this respect the applicant relies on s 826 (2)(a) of the WR Act. That provision provides:

Section 826 provides:

…

(2) Any conduct engaged in on behalf of a body corporate by:

an officer, director, employee or agent of the body corporate within the scope of his or her actual or apparent authority; or

any other person at the direction or with the consent or agreement (whether express or implied) of an officer, director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the officer, director , employee or agent;

shall be taken, for the purposes of this Act or the BCII Act (as the case requires), to have been engaged in also by the body corporate.

Summary dismissal and striking out of pleadings

7    Section 31A of the Federal Court Act provides:

s 31A:

(1)       The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)       the first party is prosecuting the proceeding or that part of the proceeding; and

(b)       the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

(2)      The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)       the first party is defending the proceeding or that part of the proceeding; and

(b)       the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)       For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)       hopeless; or

(b)       bound to fail;

for it to have no reasonable prospect of success.

(4)       This section does not limit any powers that the Court has apart from this section."

8    As set out at s 31A (3) above, a proceeding need not be “hopeless” or “bound to fail” for it to have no reasonable prospect of success. For a proceeding to have a “reasonable prospect of success” it must have real prospects of success as opposed to merely fanciful or arguable prospects; see Field v Perpetual Ltd [2010] FCA 1001 at [9] per Gordon J. In Spencer v The Commonwealth of Australia (2010) 269 ALR 233, French CJ and Gummow J said, at [23]:

Accepting that there are a number of ways in which s 31A may be applied to empower the Federal Court to dismiss a proceeding, it is to be distinguished, in its application to deficient pleadings, from rules (such as O 11 r 16 of the Federal Court Rules) which provide for the striking out of pleadings.

9    Counsel for Ms Wells submits that the disposition of proceedings under s 31A of the Federal Court Act “will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable”, per French CJ and Gummow J in Spencer at [22]. Counsel for Ms Wells further submits that the present application is one where only matters of law are to be resolved and as such is an appropriate proceeding to exercise the discretion under s 31A of the Federal Court Act. Nevertheless, at [25] in Spencer their Honours French CJ and Gummow J said that where a case requires the resolution of law and facts, or mixed law and facts, the considerations in dismissing an application under s 31A are amplified. As will be made clear below, the present case before this Court is one which concerns questions of law and fact. At [25] their honours stated:

Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings has no reasonable prospect of success.

10    As noted by the Full Court of this Court, in Keynes v Rural Directions Pty Ltd [2010] FCAFC 100, where questions of law are raised in an application for summary dismissal, it is a matter for the judge hearing such an application to exercise his or her discretion as to whether those questions should be decided summarily. The discretion in s 31A should only be exercised in the clearest of cases, where there is a high degree of certainty that there are no reasonable prospects of a case being prosecuted successfully.

11    The present case is one concerning areas of law which Counsel both contend have not previously been ventilated. Consequently, there is no authority on the application of s 902 (1)(b) of the WR Act and the way the section is to be applied to accessorial liability. In the current circumstances, it would be an erroneous exercise of power to invoke s 31A concerning issues which have not previously been raised before a Court in relation to a statutory provision, the interpretation of which remains untested.

The contraventions alleged against Ms Wells

12    Part 22 of the WR Act came into force on 1 March 2007. It introduced four new civil remedy provisions contained in ss 900, 901, 902 and 903 of the WR Act. Section 901 prohibits an employer from misrepresenting a proposed independent contractual relationship as a proposed employment relationship. Section 902 prohibits an employer from taking certain adverse action against an employee for the sole or dominant purpose of engaging the employee as an independent contractor to perform the same or substantially the same work as that performed by him or her as an employee.

13    Amongst other contraventions, the applicant alleges that Maclean Bay committed eight contraventions of provisions of Pt 22 of the WR Act concerning “sham arrangements”. The four contraventions alleged against Ms Wells concern alleged breaches by her of provisions found in Pt 22 of the WR Act. One of the four contraventions concerns an alleged breach of s 901 of the WR Act. The other three alleged breaches claimed in respect of Ms Wells by the applicant concern s 902 of the WR Act. Amongst other allegations, the applicant alleges that Maclean Bay breached ss 901 and 902 of the WR Act.

14    The claims made concerning Ms Wells invoke s 728 of the WR Act. Section 728 provides:

Section 728:

(1)    A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.

(2)    For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced the contravention, whether by threats or promises or otherwise; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    has conspired with others to effect the contravention.

15    Ms Wells claims that the applicant has no reasonable prospect of successfully prosecuting those parts of the proceeding which concern her. She contends that the applicant is not able to establish an element of the causes of action alleged against her.

The competing contentions regarding s 902(1) and Ms Williams

16    Ms Wells refers to those parts of the pleading which allege that she was involved in a contravention of s 902(1) of the Act in respect of Ms Williams. In that part of the pleading, the applicant alleges that Maclean Bay dismissed Ms Williams for the sole or dominant purpose of engaging her as an independent contractor to perform the same work she had been performing as an employee.

17    Ms Wells submits that the applicant has abandoned all means of establishing her actual knowledge of Maclean Bay’s alleged purpose other than by reference to the “deeming provision” contained in s 902 (3). Section 902(3) of the WR Act provides:

In proceedings alleging a contravention of sub-section (1), it is presumed, other than in relation to the granting of an interim injunction, that the employer’s sole or dominant purpose was the purpose referred to in paragraph 1(b), unless the employer proves otherwise.

18    Sub-sections (1) and (2) of s 902 provide:

Section 902:

(1)    An employer contravenes this subsection if:

(a)    the employer dismisses, or threatens to dismiss, an individual who:

    (i)    is an employee of the employer; and

    (ii)    performs particular work for the employer; and

(b)    the employer’s sole or dominant purpose in dismissing or threatening to dismiss the individual is to engage the individual as an independent contractor to perform the same work, or substantially the same work, under a contract for services.

(2)    Sub-section (1) is a civil remedy provision.

19    Ms Wells contends that s 902(3) does not assist the applicant in proving “involvement” by her in the alleged contravention by Maclean Bay. She submits that s 902 (3) only creates a presumption about “the employer’s sole or dominant purpose”, whilst saying nothing of the knowledge of that purpose by the alleged accessory.

20    Ms Wells relies on the judgment of the Full Court in Quinlivan v Australian Competition and Consumer Commission [2004] FCAFC 175, concerning the operation of the deeming provision contained in s 51A (2) of the Trade Practices Act 1974 (Cth) (“the TP Act”).

21    Section 51A of the TP Act provides:

Section 51A:     

(1)        For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

    (2)    For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

    (3)    Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

It is immediately apparent that the section is a deeming provision concerned with conduct of a corporation in respect of future representations. It is not concerned with conduct of an accessory.

22    Ms Wells further submits that the presumption in s 902 (3) does not extend to an accessory as the section relates to an “employer”. The applicant responds to Ms Wells’s contention by submitting that the presumption in s 902 (3) does extend to an accessory’s purpose and is not confined to an employer’s purpose. The applicant claims that the proper construction of s 902 (3) involves construing the reference to “employer” as extending to include an accessory in the context of a claim for accessorial liability. The applicant further claims that if s 902 (3) extends to an accessory’s purpose, the employer and the accessory will be presumed to have the same purpose and thereby be “linked in purpose”. In this respect the applicant relies on the judgment of a Full Court of this Court, in Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299; [2007] FCAFC 87 at [26] and also Australian Building & Construction Commissioner v Construction Forestry Mining and Energy Union (2010) 187 FCR 293 at [183], per Barker J.

23    Those cases examine the proper approach to the construction of accessorial provisions, including a provision in the ABCC case which is relevantly identical to s 728 of the WR Act.

24    Counsel for Ms Wells further submits that s 728 of the WR Act is a provision which imports the requirements of the criminal law. However, section s 728 is a civil penalty provision and as such the threshold test to meet the requirements of accessorial liability is not at the higher criminal standard. The rules of evidence to be applied are at the civil standard, as s 729 of the WR Act states:

A Court hearing a proceeding under a civil remedy provision must apply the rules of evidence and procedure for civil matters.

Counsel for Ms Wells further submits that if the instant proceeding is to proceed to trial Ms Wells would face difficulties in giving evidence due to privilege against self-incrimination. As the rules of evidence to be applied are of a civil standard this would have no bearing on the question of whether Ms Wells was “linked in purpose” as an accessory to the alleged contravening conduct, which question is a matter of fact capable of determination at trial.

25    Ms Wells relies on the judgment of Greenwood J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v John Holland Pty Ltd [2009] FCA 274 (“John Holland”). John Holland is the only judgment, of which the parties are aware, which concerns the operation of s 728 of the WR Act. Ms Wells relies, in particular, on [45] which says the following:

The pleading asserts conduct on the part of Mr Sasse in his capacity as an employee of John Holland and in every relevant sense he was acting within the scope of his authority. It is not said that the conduct of Mr Sasse gave rise to a contravention by John Holland. The pleading asserts that Mr Sasse aided, abetted, counselled and procured the contravention of the sections by John Holland. In order to establish that case, the pleading must assert as material facts that Mr Sasse was sufficiently aware of all of the relevant facts going to the contravention by the company, that is, intentional participation. In this case, it must be established that Mr Sasse had knowledge that the permit holders enjoyed a right of entry and notwithstanding that knowledge, he set about engaging in the contravening conduct. To form the requisite intent he must have had “knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime”…

26    At [46], Greenwood J noted that the paragraphs of the pleading in that case which asserted that Mr Sasse aided, abetted, counselled or procured the contravention by John Holland of s 767 of the WR Act had no reasonable prospect of success, “having regard to the conduct asserted on the part of Mr Sasse”.

27    The applicant submits that Greenwood J upheld the s 31A application in John Holland because the pleading did not allege that Mr Sasse had actual knowledge of every element of John Holland’s contravening conduct and that Mr Sasse set out about engaging in such conduct with such actual knowledge. The applicant says that no such complaint is made by Ms Wells in the instant matter and refers to [13] of her written submissions concerning her s 31A of the Federal Court Act application. In those submissions, Ms Wells says:

In this case, the Applicant asserts knowledge of the essential matters which go to make up the contraventions she is alleged to have been involved in. The Applicant also provides particulars of the manner in which it [sic] seeks to prove those allegations of knowledge.

28    The pleading asserts that Ms Wells pursued a strategy of engaging staff working at Diamond Island as independent contractors and engaging future staff on the same basis. It also alleges that Ms Wells requested the General Manager of Diamond Island, Ms Robinson, to implement the strategy. The pleading alleges that Ms Williams was employed by Maclean Bay as a casual receptionist and café/restaurant employee. The pleading alleges that Ms Robinson told Ms Williams that Ms Wells wanted all casual staff employed at Diamond Island to become independent contractors.

29    The pleading further alleges that Ms Williams told Ms Robinson that she did not want to become an independent contractor. It is then alleged that Ms Wells told Ms Robinson to dismiss Ms Williams from her employment, saying:

Please tell Sharon we just don’t require her anymore.

30    At [52-57] of the pleading as amended, the following is set out:

52. On 1 December 2008, the company dismissed Williams from her employment with the company.

PARTICULARS

The dismissal was oral and communicated by Wells to Williams in a telephone conversation during Williams’ work shift on the above date. The conversation was to the following effect:

Wells:    What are you doing there?

Williams:    What do you mean?

Wells:    Well I didn’t think you agreed with changing to contract work.

Williams:    I haven’t discussed my decision with Julie yet.

Wells:    All my staff in Brisbane are contractors and I am going to change all the Diamond Island staff to contractors. So are you going to be happy to change?

Williams:    No I won’t be.

Wells:    Julie has been very happy with you and we’ll be sorry to lose you and we’ll give you a great reference, but business is business and as from this moment we won’t be paying you.

53. The sole or dominant purpose for the company’s dismissal of Williams was to engage Williams as an independent contractor to perform the same work, or substantially the same work, under a contract for services.

PARTICULARS

The Applicant refers to and relies on s 902(3) of the Act.

54. By reason of the matters referred to in paragraphs 39, 40, 48, 52 and 53 in dismissing Williams on 1 December 2008, the company contravened s 902(1) of the Act.

55. As a result of her dismissal in contravention of s 902(1) of the Act, Williams has suffered loss and damage.

PARTICULARS

Williams has suffered loss and damage in the amount of $6,260.15. This amount is calculated on the basis set out below.

(a)    As set out in paragraph 52 above, the company dismissed Williams from her employment with the company on 1 December 2008.

(b)    Williams did not obtain alternative employment until approximately three months after her dismissal from employment with the company.

(c)    In her employment with the company prior to her dismissal, Williams earned ordinary wages at the rate of $19.262 per hour.

(d)    Had Williams not been dismissed from her employment with the company, she would likely have, in the period between her dismissal and obtaining alternative employment:

(A)    continued to perform an average of 50 ordinary hours’ work per fortnight for the company;

(B)    continued to earn ordinary wages at the rate of $19.262 per hour; and

(C)    earned ordinary wages of approximately $6,260.15 (50 hours x $19.262 x 6.5 fortnights).

55 A Wells had actual knowledge of:

(a)    Williams’ dismissal; and

PARTICULARS

The Applicant refers to and relies on paragraph 49(b) above and the particulars to paragraph 52 above.

(b)    the sole or dominant purpose for the decision to dismiss Williams referred to in paragraph 53 above.

PARTICULARS

    (i)    The Applicant refers to and relies on s 902 (3) of the Act.

55B. Wells intended to participate in the company’s contravention of s 902(1) of the Act referred to in paragraph 54 above.

PARTICULARS

The Applicant refers to paragraphs 22(e), 22(f), 22(g), 37 and relies on the particulars to the previous paragraph.

56. By reason of the matters referred to in paragraphs 49(b), 52, 55A and 55B, Wells:

(a)    aided, abetted, counselled or procured the contravention of the Act referred to in paragraph 54;

(b)    induced the contravention of the Act referred to in paragraph 54; or

(c)    was, by her acts and omissions, knowingly concerned in or a party to the contravention of the Act referred to in paragraph 54.

57. By reason of the matters referred to in the previous paragraph, Wells:

(a)    was involved in the contravention of the Act referred to in paragraph 54 within the meaning of s 728(2) of the Act; and

(b)    is accordingly treated as having herself contravened s 902 (1) of the Act.

Conclusion about alleged contravention of s 902(1) regarding Ms Williams

31    It is readily apparent that the instant proceeding concerning Ms Wells is distinguishable from the John Holland case in so far as it concerned Mr Sasse. As set out above the pleading does assert, at least in respect of Ms Williams, that Ms Wells was sufficiently aware of all of the relevant facts going to the alleged contravention by Maclean Bay, and indeed, intentionally participated. In this matter, it is contended that Ms Wells had knowledge that Ms Williams was an employee and, notwithstanding that knowledge, she actively took steps to engage in the contravening conduct. It is alleged that Ms Wells had knowledge of the essential matters which constituted the contravention.

32    In so far as Ms Wells relies upon the judgment of the Full Court in Quinlivan, I accept the contention of the applicant that that case does not purport to lay down any general principle concerning the approach to be adopted to reverse onus provisions in the context of accessorial liability. See also [21] above.

33    In light of the foregoing, I am unable to form the view that the proceeding, in so far as it alleges a breach by Ms Wells of s 902 (1) of the WR Act, has no reasonable prospect of being successfully prosecuted by the applicant. I am not satisfied that the applicant is incapable of establishing Ms Wells’ actual knowledge of the purpose of Maclean Bay in dismissing Ms Williams, in the context of the pleading.

The alleged contravention of s 901(1) concerning Ms Williams

34    Section 901 of the WR Act provides:

(1)    A person contravenes this subsection if:

(a)    the person offers to enter into a contract with an individual; and

(b)    the person makes a representation to the individual that the contract, if entered into, would be a contract for services under which the individual would perform work for the person as an independent contractor; and

(c)    the contract, if entered into, would be a contract of employment under which the person would be the employer of the individual, rather than a contract for services under which the individual would perform work as an independent contractor.

(2)    A person does not contravene subsection (1) if the person proves that, at the time the person made the representation concerned, the person did not know that, and was not reckless as to whether, if the contract were entered into, the contract would be a contract of employment rather than a contract for services.

(3)    Subsection (1) is a civil remedy provision.

35    At paragraph [65] of the pleading, the applicant alleges that Ms Wells authorised a proposal by Ms Robinson to offer a contract to Ms Williams. The pleading goes on to allege that Maclean Bay offered Ms Williams a contract for services which she did not accept. The pleading alleges that Ms Wells knew about the proposed contract and knew that it was one for services which were identical to the duties Ms Williams had performed as an employee. The pleading also alleges that Ms Wells knew Ms Williams was not operating her own business or involved in the provision of services to third parties. The pleading further alleges that Ms Wells had actual knowledge of:

    the offer made by Maclean Bay to Ms Williams to enter into the contract;

    the representation to Ms Williams that she would perform work as an independent contractor.

36    At paragraph [73B], the applicant alleges that Ms Wells intended to participate in Maclean Bay’s breach of s 901 (1) of the WR Act.

37    Ms Wells submits that the applicant is incapable of proving actual knowledge by her of Maclean Bay’s offering to “enter into a contract with” Ms Williams. Ms Wells draws a distinction between making an offer to a person to enter into a contract, and “inviting a person to treat”. Ms Wells contends that an email chain relied on in particulars provided by the applicant in support of the allegation that Ms Wells had knowledge of the proposed contract can only, at best, lead to an inference that Ms Wells authorised an invitation to treat to Ms Williams. Ms Wells submits that it shows, at best, that she was willing to discuss a proposed contract with Ms Williams. Ms Wells further contends that she was not aware as to the precise terms of the contract. Consequently, she contends that the applicant cannot establish actual knowledge by her of any contravention of s 901 (1) by Maclean Bay. In reply written submissions, Ms Wells conceded that even if she had knowledge of the offer to Ms Williams of a contract, she did not have knowledge that it would be entered into, as the terms might have been open to discussion.

38    The applicant counters by contending that Ms Wells’ reliance on the distinction between offers and invitations to treat finds no support in the WR Act and is inconsistent with the contemporary common law approach to the elements of formation of contracts of employment.

39    In this context the applicant relies on the comments of Beazley JA in Ormwave Pty Ltd v Smith [2007] NSWCA 210 at [66], concerning the inappropriateness of the concept of invitation to treat in respect of employment contracts. There her Honour, with whom Santow and Ipp JJA agreed, said:

…An invitation to treat, in the language of traditional contract theory, occurs where one party, usually a seller of goods, has requested others to make offers or to engage in negotiations with a view to an ultimate contract being entered into. Where a communication or series of communications is properly categorised as an invitation to treat, the response to it is properly categorised as an offer to the invitor, who may accept the offer. The analogy to invitation to treat in this situation is inappropriate for the simple reason that it would not be a usual situation for an employee to make an offer of his services following an invitation to treat by an employer. If anything, the position is usually the reverse.

40    The applicant also referred to authorities such as Damevski v Giudice (2003) 133 FCR 438, where it was held that the existence of a contract of employment could be implied notwithstanding the absence of any formal offer.

41    The applicant submits that there is a triable issue as to whether, in the email exchange, Ms Wells authorised the making of an offer to Ms Williams and thereby had knowledge of that offer. The applicant refers to the following aspects of that exchange:

    on 6 December 2008, Ms Robinson provided Ms Wells with “a contract for Sharon [Williams]”;

    Ms Wells having received the “contract” did not object to it but said she was “happy to meet with Sharon to discuss”. (The applicant says this shows Ms Wells assented to the terms of the contract and its provision to Ms Williams);

    it is immaterial that Ms Robinson did not say expressly that she was going to offer the contract to Ms Williams or provide copy of it to her. (The applicant says that an intention on behalf of Ms Robinson to offer the contract can be inferred from the provision of the contract in complete terms to Ms Wells).

    at [30] of the written submissions of the applicant the following is set out:

Whether the Second Respondent is found to have authorised the making of the offer as alleged will depend upon findings by the Court about the email exchange. Those findings will be made in the context of any other evidence at trial relating to any communications between the Second Respondent and Robinson at the time of the email exchange and the specific circumstances which led to the making of the offer to Williams. In such circumstances, it is inappropriate to enter summary judgment in favour of the Second Respondent in relation to this claim.

42    In light of the foregoing, I am unable to form the view that the applicant cannot sustain her case on the current pleadings, on this aspect of the matter. There are contestable issues of fact and law that are appropriate for determination at trial. I also see no practical significance, especially in the context of a s 31A application, in the possibility that Ms Williams may have been able to negotiate the terms of the proposed contract in discussions with Maclean Bay management. That is a factual issue best left for determination at trial.

The alleged contravention of s 902 (1) concerning Mr Golding raised at paragraphs [99A] to [101] of the pleading

43    The applicant alleges that Mr Geoffrey Golding was employed by Maclean Bay at Diamond Island from 17 March 2008, until about December 2008, to perform gardening and maintenance work. The applicant alleges that Maclean Bay contravened s 902 (1) by making a threat, via Ms Robinson, to Mr Golding to the effect that his contract of employment would be terminated if he did not sign a contract for services. The applicant alleges that Ms Wells was involved in the contravention because she had actual knowledge of the threat and of its sole or dominant purpose.

44    Ms Wells repeats her submissions about the way s 902 (3) should be interpreted. Ms Wells also says that the allegations made against her in the pleading do not lead to any inference that she knew of the threat to Mr Golding, the subject of the pleading. Ms Wells contends that “threat” in the WR Act means a communication to an employee that “action will be taken”.

45    At [38] of her outline of submissions filed on 10 September 2010, Ms Wells says:

Here, it is alleged that the Second Respondent conceived and implemented a strategy to place staff on contracts for services, instructed Robinson to offer a contract to Golding and told her and Holmes that Golding could only continue working if he signed such a contract. It is not alleged that she intended any of that be communicated to Golding or that the circumstances were such that her communications were likely to be passed on to Golding. Most importantly, the particulars give rise to no inference that she knew what she is alleged to have said was communicated to Golding. In the absence of any of those things there is no prospect of establishing actual knowledge of the “threat” (i.e. the communication made to Golding to “influence him by menaces”).

46    In response, at [34] of the applicant’s outline of submissions dated 10 October 2010, the following is said:

34.    However, contrary to the Second Respondent’s submissions, the particulars relied upon to establish her knowledge of the threat made to dismiss Golding, clearly extend to include a basis for the Court to find that she was aware that the alleged threat to his employment was communicated to Golding.

1.1    The Second Respondent’s knowledge of the communication of the threat is able to be inferred from the allegations that, she directed Robinson to offer the contract to Golding, the threat was made when the offer was made and shortly prior to the making of the threat, the Second Respondent told Robinson and the assistant manager Holmes that she wanted Golding to “go under contract” and that he could “only continue working at the resort” if he went on to “contract work”.

1.2    This allegation is capable of grounding a finding that the Second Respondent directed or instructed her managers to inform Golding that he could only continue working at the resort if he went on to “contract work”. This is particularly so in the context of the other matters relied upon, namely, that the Second Respondent had devised a strategy whereby staff working at the resort would be engaged pursuant to contracts of services rather than contracts of employment and the communication of that strategy by the Second Respondent to Robinson.

1.3    There is accordingly a sound basis for the allegation that the Second Respondent was aware that the threat made to Golding was to be communicated to him.

47    These competing submissions illustrate that it would be premature to dismiss this part of the proceeding on the basis that it has no prospect of being successfully prosecuted. There are sufficient matters raised on the pleading as referred to in the applicant’s written submissions, which are capable of constituting material facts that Ms Wells was sufficiently aware of all the relevant facts going to the contravention of s 902 (1) of the WR Act by Maclean Bay in respect of Mr Golding, as raised at [99A] to [101] of the pleadings.

Alleged contraventions of s 902 (1) in respect of Mr Golding paragraphs [110A] to [112] of the pleading

48    Paragraphs [110A] to [112] of the pleading raise allegations against Ms Wells concerning her actual knowledge of Maclean Bay’s second alleged contravention of s 902 (1) in respect of Mr Golding and its sole or dominant purpose for that alleged contravention. They also allege that Ms Wells intended to participate in the contravention and was involved in the contravention.

49    The related alleged contravention by Maclean Bay concerns the dismissal of Mr Golding. The assistant manager of Diamond Island, Ms Holmes, effected the dismissal, according to the pleading. The pleading also alleges that Ms Wells directed Ms Holmes to dismiss Mr Golding. It further alleges that the sole or dominant purpose of Maclean Bay in dismissing Mr Golding was to engage him as an independent contractor to perform the same work, or substantially the same work under a contract for services.

50    At paragraph 110A of the pleading it is alleged that Ms Wells had actual knowledge of Mr Golding’s dismissal (having directed it) and actual knowledge of Maclean Bay’s sole or dominant purpose for the decision to dismiss Mr Golding. The pleading also alleges that Ms Wells intended to participate in the contravention and amongst other matters was involved in the contravention.

51    Ms Wells’ submissions in respect of this aspect of the pleading call in aid submissions made in respect of earlier parts of the pleading in which she contends that the applicant is incapable, on the pleading, of proving intent by her to contravene the Act. Those submissions were not accepted as ones which were sufficiently strong to invoke the provisions of s 31A of the Federal Court Act. The Court takes the same approach with respect to this aspect of the motion.

52    When the Court reserved its judgment on the motion it indicated that it would adjourn the directions hearing in the proceeding to 20 December 2010, at 9.30 am EST (daylight saving time), in Melbourne (via telephone to Brisbane, if requested). At the time the Court informed the parties that it would publish these reasons on 9 December 2010. I encourage the parties to agree on appropriate consent orders to progress the proceeding, commencing with the defences of the respondents and possibly a referral to mediation. The directions listing for 20 December 2010 may then become unnecessary and further adjourned by consent, to a mutually convenient time for the Court and the parties.

Ultimate conclusion and order

53    The Court is not satisfied that the applicant has no reasonable prospect of successfully prosecuting the proceeding in so far as it concerns alleged contraventions by Ms Wells. I am, on the contrary, satisfied that the pleading raises triable issues in respect of Ms Wells’s liability for the alleged contraventions. Paragraph 1 of Ms Wells’s motion dated 7 September 2010 for an order under s 31A of the Federal Court Act will be dismissed.

54    Paragraph 2 of the motion sought an order that, in the alternative, the pleading be struck out in so far as it concerns Ms Wells. No basis has been established for the making of any such order, either as to the pleading generally or specific aspects of it that affect Ms Wells.

55    The Court will order as follows on the motion:

1.    The second respondent’s motion dated 7 September 2010 is dismissed.

Associate:

Dated:    9 December 2010