FEDERAL COURT OF AUSTRALIA

ATS (Asia Pacific) Pty Ltd v Dun Oir Investments Pty Ltd [2012] FCA 1004

THE COURT ORDERS THAT:

1.    The Respondent’s Interlocutory Application be allowed.

2.    Pursuant to cl 16.21(1)(f) of the Federal Court Rules 2011 these proceedings be struck out.

3.    The Respondent’s cost of the proceedings in this Court together with the Respondent’s costs of the Interlocutory Application be paid by the Applicant, ATS (Asia Pacific) Pty Ltd.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    Before the Court is an application brought by Dun Oir Investments Pty Ltd (‘Dun Oir’) seeking orders, inter alia, that proceedings commenced against it by ATS (Asia Pacific) Pty Ltd (‘ATS’) in this Court be struck out as an abuse of process or alternatively that the proceedings be stayed permanently.

2    Following the conclusion of the hearing in these proceedings, ATS indicated that it may wish to refer the questions of law arising in this application to a Full Court. As such reference was opposed by Dun Oir, the Court directed that written submissions be provided on this question. The Court has received written submissions from both parties but is satisfied that there is no basis for the matter to be so referred. Since the application was made after the conclusion of the hearing, it would be otiose for the matter to be reagitated before a Full Court. Accordingly the Court declines to make any order for such referral.

FACTS

3    On 18 January 2012 Dun Oir commenced proceedings in the District Court of NSW (proceedings no. 12/17732) (‘the District Court proceedings’) against ATS claiming that a written agreement described as ‘Business Consulting & Services Agreement 28 January 2011’ existed between the parties and that ATS had failed to make outstanding payments under such agreement. The Statement of Claim alleged that although various payments had been made as they fell due, no monthly payments of $55,000 had been paid for the months commencing 1 September 2011 to 1 January 2012 inclusive. The total amount claimed in the District Court proceedings is $275,000.

4    By letter dated 3 February 2012 lawyers acting for ATS sought particulars of the alleged agreement and foreshadowed that it had received instructions to prepare an application to this Court seeking declarations and orders under the Independent Contractors Act 2006 (Cth) (‘the Act’). On 14 February 2012 ATS filed its defence to the District Court proceedings. Thereafter by letter dated 17 February 2012 the particulars sought by ATS were provided.

5    On 16 February 2012 ATS commenced proceedings in this Court (‘the federal proceedings’) by filing an originating process, statement of claim and genuine steps statement.

6    In its statement of claim in the federal proceedings ATS has referred to the alleged agreement and has raised numerous issues in opposition to the claims raised by Dun Oir in the District Court proceedings. Significantly for the present purposes ATS claims as an alternative to its defences that the agreement constitutes a ‘services contact’ as defined in the Act and seeks relief pursuant to the Act.

7    On 27 June 2012 Dun Oir has filed its interlocutory application which is the subject of this judgment. To consider and comprehend the submissions of the parties it is necessary to refer firstly to the provisions of the Act and thereafter to consider the provisions of the alleged agreement.

THE ACT

8    The principal objects of the Act are stated in s 3(1) of the Act:

(1)    The principal objects of this Act are:

(a)     to protect the freedom of independent contractors to enter into services contracts; and

(b)     to recognise independent contracting as a legitimate form of work arrangement that is primarily commercial; and

(c)     to prevent interference with the terms of genuine independent contracting arrangements.

…

9    Section 5(1) of the Act defines a ‘service contract’ as follows:

Services contract

General meaning

(1)    A services contract is a contract for services:

(a)    to which an independent contractor is a party; and

(b)    that relates to the performance of work by the independent contractor; and

(c)    that has the requisite constitutional connection specified in subsection (2).

Note: Conditions or collateral arrangements relating to a services contract may be taken to be part of the services contract: see subsection (4).

10    The term ’independent contractor’ is defined in s 4 as follows:

Independent contractor is not limited to a natural person.

11    Such definition provides no assistance in resolving the question of whether a person or entity is an independent contractor or not.

12    Significantly, part 3 of the Act is entitled ‘unfair contracts’. The application of the part is relevantly described in s 11(1) as follows:

Application of Part

(1)    This Part applies to a services contract, other than:

(a)    a services contract to the extent that the contract relates to the performance of work by the independent contractor for the private and domestic purposes of another party to the contract; or

(b)    without limiting paragraph (a), a services contract to which an independent contractor that is a body corporate is a party, unless the work to which the contract relates is wholly or mainly performed by:

(i)    a director of the body corporate; or

(ii)    a member of the family of a director of the body corporate.

13    It appears to be common ground between the parties that the services under the agreement were performed by Mr Conlon, a director of Dun Oir. Whilst the nature of such services has not been made known, for present purposes the requirement in s 5(1)(b)(i) of the Act would be satisfied.

14    Section 12 empowers the Court to review a services contract on either or both of the grounds that the contract is unfair (s 12(1)(a)) or harsh (s 12(1)(b)). In the event that the Court finds that the contract is either unfair or harsh, it may order the setting aside the whole or part of the contract or may order a variation of the contract: see s 16(1) of the Act.

15    ATS submits that if it is established that in fact an agreement exists between the parties, then this Court could grant relief under s 16(1). Such relief can only be granted by this Court or the Federal Magistrates Court in view of the definition of ‘court’ as found in s 4 of the Act and cannot be granted in the District Court proceedings.

16    Dun Oir contends that the agreement relied upon does not constitute a ‘services contract’ as defined in s 5(1) of the Act and accordingly the Act has no application. For these reasons it submits that the proceedings instituted in this Court by ATS constitutes an abuse of process in view of the existing District Court proceedings. A question to be determined accordingly is whether the alleged agreement would constitute a ‘services contract’ as defined in s 5(1) of the Act.

THE AGREEMENT

17    It is clear that the existence and validity of the agreement is an issue in dispute. On this application the Court expresses no finding on this issue, but for the sake of its analysis of the issue presently before the Court it will assume that the agreement exists and is binding.

18    The agreement allegedly made between the parties is unexecuted, but the parties have apparently proceeded on the basis that the agreement exists. As referred to above, it is described as ‘Business Consulting & Services Consultant 28 January 2011’. The Recitals state, inter alia: ‘ATS has requested Dun Oir to perform the services the subject of this Agreement. Clause 1 of the document is described as Definitions and interpretations’. In the definitions portion contained in cl 1.1 the definition of ‘services’ is as follows:

Services means the business advisory services relating to the running of the business of ATS on the following basis:

(i)    Be available to, subject to paragraph (ii below, attend a meeting (either in person or by teleconference) with representatives of ATS for a maximum of 2 hours per month;

(ii)    The time and place of the meeting each month is to be mutually agreed upon by the Parties.

19    The term of the contract was stated to be 14 months from 1 March 2011 and the total contract value was stated to be $750,000 plus GST. ATS was required to pay Dun Oir monthly payments of $50,000 plus GST together with an initial retainer fee of the same amount.

20    The provisions of services is contained in s 3 of the document as follows:

Dun Oir shall provide the Services to ATS during the Term or until such time as the Contract Value has been paid in full in accordance with this Agreement (for example, in accordance with clause 4.4).

21    Clause 4.4 made provision for termination upon payment of 80% of the balance of the contract value and incidental provisions.

22    In summary, the document relied upon as constituting the alleged agreement establishes an obligation by ATS to make minimum monthly payments of $50,000 plus GST throughout the duration of the agreement in consideration of Dun Oir holding itself available to provide to ATS the services as defined during the existence of the contract. Under the contract, ATS was obliged to make such monthly payments to Dun Oir regardless of whether services were in fact provided to ATS by Dun Oir.

DUN OIR’S SUBMISSION

23    Dun Oir submits that the document constituting the agreement does not constitute a service agreement and submits that to constitute a services contract for the purposes of the Act one party is required to be an independent contractor and the other to be a person contracting for the services of the independent contractor. Dun Oir submits that it is not an ‘independent contractor’ and that consequently the Act has no application; and submits that ATS is not contracting for the services of an independent contractor. There is no employer and independent contractor relationship which is essential for the agreement to constitute a ‘services contract’.

24    Further, Dun Oir submits that the agreement does not require any services to be provided and that the obligation to make payment is not predicated upon the actual performance of any work. Therefore, the agreement does not relate to the performance of work by the independent contractor as required by s 5(1)(b) of the Act and for this reason alone is not a ‘services contract’.

25    Further, and alternatively, Dun Oir submits that the purpose of the Act is intended to protect independent contractors in those instances where it is found that the agreement made between the parties is harsh or unconscionable. It is not intended to assist the party that contracts for the supply of the services from the independent contractor.

ATS’ SUBMISSIONS

26    ATS submits that Dun Oir is an independent contractor. Further, ATS refers to s 12(2) of the Act, which states that an application to review a services contract may be made by ‘a party’ to the contract, and relies upon such words to show that the relief available under the Act may be called upon by either the employer or the independent contractor.

27    ATS also submits that if the Act applies to this agreement in the manner contended by ATS, the Court is not prohibited from making a retrospective order. ATS has already paid some $360,000 under the agreement. As part of the relief it claims under the Act, ATS seeks an order that Dun Oir repay such sum. ATS acknowledges that a retrospective order was refused in Informax International Pty Ltd v Carios Limited (No 2) (2012) 282 ALR 405. However ATS submits that such decision is in error and wishes to have this question referred to a Full Court for determination in the event that the Court finds that the Act applies to the dispute.

CONSIDERATION

28    The Court must interpret s 5 of the Act to determine whether the agreement was a contract for services that related to the performance of work. Such interpretation is to be considered in the context of s 15AA of the Acts Interpretation Act 1901 (Cth) (‘the Interpretation Act’) which provides:

In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.

29    If a court considers that a statutory provision has more than one potential construction, it must then consider the purpose of the legislation, even if no ambiguity exists in the drafting of the legislation: see Mills v Meeking (1990) 169 CLR 214 at 235. Further, as the High Court stated in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed. [Footnotes omitted]

30    In determining the purpose of legislation, a court must also consider any statement of purpose found within the legislation. However, such statements must be understood by reference to other provisions in the legislation and should be interpreted in context: see IW v City of Perth (1997) 191 CLR 1 at 12. A statement of purpose is also not the sole determinant of the intent of the legislature and a court must determine Parliament’s intention from the whole of the Act: Municipal Officers’ Association v Lancaster (1981) 37 ALR 559 at 579. A statement of purpose cannot operate to minimise the plain and unambiguous meaning of a provision if that meaning in its textual and contextual surroundings is clear: S v Australian Crime Commission (2005) 144 FCR 431 at 439. Further, as Cole JA stated in Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31 at 78:

Whilst regard may be had to an objects clause to resolve uncertainty or ambiguity, the objects clause does not control clear statutory language, (see DC Pearce and RS Geddes, Statutory Interpretation in Australia, 4th ed (1996) section 4.34) or command a particular outcome of exercise of discretionary power.

31    Section 15AB(1)(a) of the Interpretation Act permits the Court to consider extrinsic material, including explanatory memoranda to confirm that the meaning of a provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act. Explanatory memoranda have been used to establish the intention of Parliament in cases such as Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 99-100 and 112-113.

32    The Explanatory Memorandum to the Independent Contractors’ Bill 2006 (‘the EM’) provides guidance as to Parliament’s intention with respect to the intention of the Act. Significantly, under the heading of ‘Background’ the following is stated:

Who is an independent contractor?

An ‘independent contractor’ is a person who contracts to perform services for others without having the legal status of an employee. The term is generally used to refer to a person who is engaged by a principal, rather than an employer, on a labour only contract. Under such a contract, the principal pays the independent contractor a one-off flat rate. There are generally no legislatively prescribed minimum entitlements or other employee-style benefits and the independent contractor is responsible for a number of aspects of the relationship that would usually be the responsibility of an employer (for instance, remitting income tax to the Australian Tax Office and contributing to a superannuation fund). Independent contractors' work arrangements take a variety of forms, for example, they may have a direct relationship with another enterprise or work through an intermediary (such as a labour hire firm), and they may or may not employ staff.

The common law has traditionally maintained a distinction between ‘employees’ and ‘independent contractors’. Employees are engaged under a contract of service (an employment contract), whereas independent contractors are engaged under a contract for services. Historically, independent contractors have been perceived as running their own business and working under commercial, not employment, contracts. In contrast, employees have been seen as subject to control and direction. The courts have adopted a multi-factor test to determine whether a person is an employee or independent contractor. No single issue concerning control, economic independence or the description of the relationship in a contract will be determinative, however, courts will place greater weight on some matters, in particular, on the right to control the manner in which the work is performed.

33    Under the heading ‘Benefits of Independent Contractors’ the following is stated:

Benefits of independent contractors

The flexibility that independent contractors provide is essential to Australian business. Businesses can use specialist contractors for a range of non-core activities, as needed, allowing them to focus on their core business more effectively. This can enable business to compete more effectively in Australian and international markets and to adapt to changing economic conditions. It also facilitates businesses engaging workers on a short-term basis to address fluctuating work levels.

For the independent contractor, it can provide more freedom to choose working hours, to decide when to take holidays, who to work for and what type of work to undertake. High demand for specialist contractors in particular industries contributes to higher wages and ease of worker mobility. These factors can make independent contracting attractive to many workers. For professionals and tradespeople, this may equate to gaining higher pay without the managerial responsibility that tends to accompany higher paying jobs in large organisations.

34    Each of the above extracts demonstrate that in enacting the Act Parliament intended that it apply in circumstances in which a party chooses to contract for another party’s services, rather than engage them on the basis of a contract of employment. Further, the work comprised work in the industry or enterprise in which the ‘employer’ is directly engaged.

35    Such is evident from three significant indicia, namely: the use of the term ‘labour’; the emphasis upon the independent contractor not being an employee of the employer; and the concern of Parliament to provide independent contractors with access to workplace entitlements to which employees might be eligible, and which would be otherwise denied to contractors.

36    Further, the EM refers to the fact that in both the Federal jurisdictions and in the States of New South Wales and Queensland, unfair contracts legislation provisions exist ‘in their industrial relations laws’ and discusses the need for legislation solely in an industrial context. There is a reference to Workplace Relations Amendment (Work Choices) Act 2005 (Cth) and to the fact that ‘state unfair contracts regimes have been overwritten by the federal system as far as they extend to employees of constitutional corporations. This does not, however, apply to independent contractors’. The EM further refers to ‘current unfair contracts arrangements’ in both state and federal jurisdictions and states that a harmonised system is proposed ‘whereby one federal jurisdiction’ would be available ‘towards a unified workplace relations system in Australia’. That is, to include independent contractors to the same or similar benefits which apply to direct employees engaged in the workplace.

37    Reference is also made in the EM to ‘sham arrangements’ and that the question of ‘whether an arrangement is one of employment or independent contracting can involve complex and unravelling factual situations’ and continues that there is a need to balance ‘the need to uphold and protect the parties’ rights in genuine independent contracting arrangements with a need to protect workers from sham arrangements’.

38    The tenor of the EM shows that the purpose of the Act is to ensure that protection is provided to workers engaged as independent contractors who might otherwise be exposed to exploitation in an industrial context because their services are not the subject of industrial laws. Within the definition of ‘services contract’ is a reference to the ‘performance of work by the independent contractor’ and s 8 deals with the identification of ‘workplace relations matter’. One of the grounds for unfairness contained in s 9(1) is that the contract is designed to avoid the provisions of the Fair Work Act 2009; (Cth) the Workplace Relations Act 1996 (Cth) and/or state or territory industrial laws. These indicia confirm the object of ensuring minimum workplace conditions for independent contractors.

39    There are several authorities which seek to draw a distinction between an independent contractor and an employee. For example in On Call Interpreters & Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 279 ALR 341, Bromberg J said at [208]:

Simply expressed, the question of whether a person is an independent contractor in relation to the performance of particular work, may be posed and answered as follows:

Viewed as a “practical matter”:

(i)    is the person performing the work an entrepreneur who owns and operates a business; and,

(ii)    in performing the work, is that person working in and for that person’s business as a representative of that business and not of the business receiving the work?

If the answer to that question is yes, in the performance of that particular work, the person is likely to be an independent contractor. If no, then the person is likely to be an employee.

FINDINGS

40    A purposive approach to the interpretation of the Act leads the Court to conclude that the Act does not extend to the agreement entered into between ATS and Dun Oir. The parties did not contract for the provision of labour by Dun Oir for the benefit of ATS’ business on an independent contractor basis in contradistinction to an employer-employee relationship. The agreement concerned the provision of services which Dun Oir would generate for the benefit of its own business and which it would provide to ATS in consideration of payment by ATS of the stated monthly fee. There is no evidence to suggest that the ‘services’ could have related to the workplace or provision of labour.

41    After considering the provisions of the Act, its statement of purpose and the EM, the Court considers that it was not the intention of Parliament to expand the scope of the Act to cover all circumstances where services are provided under an agreement to ‘Party A’ by a person who is independent of ‘Party A’. In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297, Mason and Wilson JJ stated at 321:

On the other hand, when the judge labels the operation of the statute as “absurd”, “extraordinary”, “capricious”, “irrational” or “obscure” he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions.

42    The intention of the Act is, inter alia, to provide protection to persons who enter into independent contracting as a form of work arrangement. This intention does not apply to the agreement the subject of this dispute.

43    Insofar as ATS submits that ‘independent contractor’ extends to any person providing any form of services to an employer, such submission is rejected. In a sense all contracting parties are ‘independent’ of the other. The term ‘independent contractor’ has uniquely been confined to the workplace environment where such contractor is undertaking work which would otherwise be required to be performed by an employee. To extend the concept of ‘independent contractor’ in the manner suggested by ATS would have the consequence that, for example, contracts for the provision of legal services, accounting services or logistical or transport services would be subject to scrutiny under the Act. This would result in an unwarranted extension of the Act’s purview.

44    The distinction that the Court draws is more clearly expressed in s 54(3) of the National Minimum Wage Act 1998 (UK), which states:

(3)    In this Act “worker” (except in the phrases “agency worker” and “home worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)–

(a)    a contract of employment; or

(b)    any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. [Emphasis added]

45    In the Court’s finding, the Act is excluded from application to clients or customers of profession or business undertakings. Other statutes such as the Contracts Review Act 1980 (NSW) may potentially assist consumers of professional services (although not ATS, by virtue of the limitation in s 6(2) of such Act). However, the Act is not intended to do so.

46    The Court is also not satisfied that the agreement meets the terms of s 5(1)(b) of the Act, in that it is not an agreement for services involving the performance of work. In this respect the Court obtains some guidance from cases concerning the application of s 106(1) of the Industrial Relations Act 1996 (NSW), which states:

The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

47    The relevant phrase for consideration is ‘whereby a person performs work in any industry’. This phrase is similar to the wording of s 5(1)(b) of the Act – ‘that relates to the performance of work’.

48    In Caterpillar of Australia Ltd v Gough & Gilmour Holdings Ltd (2008) 170 IR 185, the NSW Industrial Court considered the interpretation of s 160 of the Industrial Relations Act 1996 (NSW). The Court stated at [147], inter alia:

The “reformulation” of the jurisdictional test recognises that there is a limit to the scope of the jurisdiction of the Industrial Court to review contracts under s 106 and that it is not appropriate for the Industrial Court to purport to exercise its jurisdiction to review contracts which can more accurately be described as commercial contracts rather than contracts whereby work is performed. [Emphasis added]

49    The same sentiment applies to Part 3 of the Act. The purpose of this Act is not to permit review of every commercial contract, but instead to limit the Act to a review of contracts and agreements where work is performed.

50    In Fish v Solution 6 Holdings (2006) 225 CLR 180 at [18], the High Court considered a share purchase agreement. The agreement provided that a buyer would purchase shares in a company at a particular price. Mr Fish guaranteed the buyer’s obligations under the share agreement. However, in order to become a guarantor, the seller required that Mr Fish enter into a contract of employment with the company for a minimum of three years. The agreement was concluded, but the share price collapsed before the buyer finished acquiring the shares. Mr Fish applied to the NSW Industrial Relations Court for relief on the basis that the absence of a price floor in the share purchase agreement made the contract unfair. The question was whether the NSW Industrial Relations Court had jurisdiction to determine the dispute. Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ stated:

The [Industrial Relations Act 1996 (NSW)] is concerned with matters industrial. The power given to the Commission by s 106(1) to declare wholly or partly void or to vary certain contracts should be understood as hinged about the reference to performance of work in any industry. The first inquiry required by s 106(1) is whether a person “performs work in any industry”. What may be declared wholly or partly void or varied is any “contract” whereby a person performs that work.

51    Further at [41] their Honours stated:

The second consideration was mentioned earlier in these reasons and is not unrelated to the first. Performance of work in an industry is the hinge about which s 106 turns. It is the arrangements (contractual and non-contractual) whereby a person performs work in an industry that the Commission may avoid or vary. That is, it is the arrangements (contractual and non-contractual) according to which a person performs the work (or in consequence of which or in fulfilment of which a person performs that work) which may be avoided or varied. And although the notion of “avoiding” an arrangement that is not enforceable may be awkward, determining that some new arrangement will obtain for the future (thus “varying” the arrangement) presents no such awkward juxtaposition of ideas. Further, to focus attention upon the arrangements whereby a person performs work in an industry, no matter whether the arrangement is found in the contract the parties have made or only in some related condition or collateral arrangement, sufficiently meets the need, identified by Barwick CJ in Brown v Rezitis, to recognise that these provisions of the Act have, as one important purpose, dealing with subterfuges which take workers outside the operation of industrial instruments intended to protect workers in an industry. At the same time, to read s 106 as hinged about performance of work in any industry and empowering the Commission to deal only with such of the arrangements between parties as can be described as a contract whereby a person performs work in any industry confines the jurisdiction of the Commission to declare a contract void or to vary it within bounds that leave intact the jurisdiction of the Supreme Court over other kinds of contractual obligations.

52    At [43] their Honours concluded:

After the two agreements were made and the share purchase agreement was completed, Mr Fish performed work in an industry. But when one asks what was the “contract” whereby he performed that work, the answer does not include the share purchase agreement. Neither the share purchase agreement as a whole, nor the particular provisions of it which are now said to be or to have become unfair or against the public interest, constituted a contract, an arrangement, a related condition or a collateral arrangement whereby Mr Fish performed work in an industry. That being so, the Commission has no jurisdiction to declare the share purchase agreement or any of its particular provisions void, or to vary that agreement or any of those provisions.

53    A similar consideration applies in this case. In the present proceedings it is apparent from the terms of the agreement that the obligation of ATS to pay Dun Oir the sums stated in the agreement arose irrespective of the performance by Dun Oir of any services or work whatsoever. Section 5(1)(b) of the Act states that the Act applies to a contract for services involving the performance of work. Given that ATS’ obligation to pay Dun Oir arises independently of the performance of work, it cannot be said that this agreement involves the performance of work and thus s (5)(1)(b) excludes the Act’s application.

54    For the above reasons, the Court concludes that the Act does not extend to the alleged agreement, since it is not a ‘services contract’ as defined. It does not need to consider the question of whether the other party to an agreement with an independent contractor can avail itself of the relief offered under the Act or the question of retrospectivity of orders under the Act.

ORDERS

55    Rule 16.21 of the Federal Court Rules 2011 (‘the Rules’) provides:

16.21    Application to strike out pleadings

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

(a)    contains scandalous material; or

(b)    contains frivolous or vexatious material; or

(c)    is evasive or ambiguous; or

(d)    is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e)    fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f)    is otherwise an abuse of the process of the Court.

(2)    A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1) (a), (b) or (c) or is otherwise an abuse of the process of the Court.

56    Stripped of any claim under a Commonwealth statute the question arises whether these proceedings duplicate the existing District Court proceedings. As was observed in Henry v Henry (1996) 185 CLR 571 by the majority at 591:

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. [Footnotes omitted]

57    For other examples applying the same principle see Moore v Inglis (1976) 9 ALR 509; Logan v Bank of Scotland (No 2) [1906] 1 KB 141 at 150; Slough Estates Ltd v Slough Borough Council [1968] Ch 299 at 314 – 315.

58    The District Court proceedings were instituted before ATS commenced proceedings in this Court and ATS has appeared and filed its defence to those proceedings. No steps have been taken in this Court by Dun Oir other than to dispute the entitlement of ATS to commence the proceedings. Accordingly, the Court is satisfied that the continuation of ATS’ claim in this Court constitutes an abuse of process.

59    The Court is satisfied that the originating application and statement of claim of ATS should be struck out pursuant to r 16.21(1)(f) of the Rules.

Associate:

Dated:    13 September 2012