FEDERAL COURT OF AUSTRALIA

Linkhill Pty Ltd v Director of Fair Work Building Industry Inspectorate [2013] FCA 389

THE COURT ORDERS THAT:

1.    The application for leave to appeal is dismissed.

2.    The Applicant to pay the Respondent’s costs of the application.

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

REASONS FOR JUDGMENT

1    In this matter the applicant, Linkhill Pty Ltd (“Linkhill”) seeks leave to appeal from a decision of the Federal Magistrates Court (The Director of Fair Work Building Industry Inspectorate v Linkhill Pty Ltd (No 3) [2013] FMCA 165). The respondent, the Director of Fair Work Building Industry Inspectorate (“the Director”) brought proceeding MLG 1514 of 2011 in the Federal Magistrates Court (“the substantive proceeding”) alleging that Linkhill had engaged in sham contracting in contravention of ss 900 and 357 of the Workplace Relations Act 1996 (Cth), seeking civil penalties for the alleged contraventions and orders that Linkhill pay unpaid wages and allowances, leave, redundancy/severance pay and superannuation due to ten named workers it had engaged (“the workers”).

2    The substantive proceeding has been on foot since October 2011, and the trial commenced on 26 February 2013 before O’Sullivan FM (as he then was). Over the course of 26, 27 and 28 February the Court heard evidence from seven witnesses called by the Director. On 28 February 2013 counsel for Linkhill sought leave to file and serve a Second Further Amended Defence, withdraw admissions contained in the previous Amended Defence, and file and serve three further witness affidavits. His Honour adjourned the trial to hear the application and refused to grant the leave sought.

3    Linkhill now seeks leave to appeal from the judgment below and a stay of the substantive proceeding. The application is urgent as the trial in the substantive proceeding has been set to recommence on 13 May 2013. For the reasons I set out below the application must be refused.

The Procedural History

4    The substantive proceeding was filed in the Federal Magistrates Court on 20 October 2011 by way of an Application and Statement of Claim. Linkhill filed its Defence on 20 December 2011.

5    On 5 June 2012 O’Sullivan FM made interlocutory orders including that:

(a)    the matter be fixed for trial for five days on 25 February 2013, and two further days on 12 and 13 March 2013; and

(b)    any affidavits upon which either party proposed to rely be filed and served pursuant to a timetable fixed in the orders.

6    The Director filed and served ten affidavits in September and October 2012. On 6 December 2013 the Court made orders by consent, including that:

(a)    the Director have leave to file an Amended Application and Statement of Claim;

(b)    Linkhill file an Amended Defence by 21 December 2012; and

(c)    Linkhill file and serve any affidavits upon which it proposed to rely by 4 February 2013.

At that point Linkhill had not filed any affidavits. The trial date of 25 February 2013 was maintained.

7    On 6 February 2013 Linkhill filed one affidavit as the evidence upon which it proposed to rely, sworn by its director, Gary Morgan, on 5 February 2013.

8    The trial before O'Sullivan FM actually commenced on 26 February 2013, being delayed by one day due to an illness suffered by counsel. On the morning of the first day of the hearing Linkhill applied for an adjournment. Counsel for Linkhill had only recently been briefed and she advised the court that - while Linkhill was not in a position to provide the Director or the Court with either a proposed Further Amended Defence or further affidavit evidence - the Defence was defective and that further affidavit material would need to be filed.

9    His Honour rejected the application for an adjournment (The Director of the Fair Work Building Inspectorate v Linkhill Pty Ltd (No 2) [2013] FMCA 164), noting that:

(a)    the application was vague, being made at a level of abstraction and generality that made the basis for it difficult to understand;

(b)    Linkhill had been legally represented since the commencement of the proceeding;

(c)    Linkhill had put on an Amended Defence in December 2012;

(d)    Linkhill had made no application for leave to withdraw the admissions in the Amended Defence;

(e)    there was an obvious inconvenience to the Director and witnesses in the proposed adjournment; and

(f)    there was also inconvenience to the Court and other litigants as the court had strived to keep five days of hearing time free to accommodate the matter.

Linkhill made no complaint before me in relation to the refusal of the adjournment.

10    The trial then proceeded over the course of 26, 27 and 28 February. The Director opened its case and called seven of its ten witnesses, each of whom was cross-examined.

11    On the afternoon of 28 February 2013 Linkhill filed and served an application for leave to further amend its Amended Defence in a form attached to the application, withdraw admissions contained in the Amended Defence at paragraphs 2(g), 3(a) and 3(b), and file and serve affidavits of:

(a)    Michelle Levine, the CEO of Roy Morgan Research Ltd, affirmed 27 February 2013;

(b)    James Wallace sworn 27 February 2013; and

(c)    Gary Morgan sworn 28 February 2013.

The trial was adjourned and both parties filed written submissions. On 12 March 2013 his Honour dismissed the application.

12    On 14 March 2013 Linkhill filed the present application seeking leave to appeal from the judgment below, and a stay of the substantive proceeding until the hearing and determination of its application.

relevant legal principles REGARDING Leave to Appeal

13    It is uncontroversial that the judgment below is interlocutory and that leave is therefore required under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (“FCA”).

14    The decision under review involved an exercise of discretion. House v The King (1936) 55 CLR 499 at 505 provides that before an appeal from an exercise of discretion is to be allowed the appellate court should be persuaded that the decision involved an error by the primary judge in acting upon a wrong principle, allowing extraneous or irrelevant matters to guide or affect the decision, by mistaking the facts, or by failing to take into account some material considerations.

15    The test for a grant of leave to appeal is also uncontroversial. In Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 the Full Court, per Sheppard, Burchett and Heerey JJ, explained that before leave is granted the following two tests must usually be satisfied:

(a)    whether, in all the circumstances, the decision is attended by sufficient doubt to warrant its being reconsidered by the Federal Court; and

(b)    whether substantial injustice would result if leave were refused, supposing the decision to be wrong.

Both limbs of the list are required to be made out: Rawson Finances Pty Limited v Commissioner of Taxation [2010] FCAFC 139 at [5] per Ryan, Stone and Jagot JJ.

16    In Re CSR Ltd (2010) 265 ALR 703 at [5] the Full Court per Keane CJ and Jacobson J explained that the first limb of the test required the applicant to show that there is “a reasonably arguable case that the decision below is affected by appellable error”. Leave to appeal is not necessarily granted simply because the reviewing court does not agree with every aspect of the trial judge’s reasons: Energex Ltd v Alstrom Australia Ltd [2005] FCAFC 215 at [65], per French, Hely and Merkel JJ.

17    It is also well established that leave is more readily granted where substantive issues rather than questions of practice or procedure are at issue: Rivera v United States of America [2004] FCAFC 154 at [13], per Heerey, Sundberg and Crennan JJ. The High Court has accepted on many occasions that particular caution must be exercised by an appellate court in reviewing decisions pertaining to practice and procedure. In Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 at [9], per Gibbs CJ, Aickin, Wilson and Brennan JJ, their Honours quoted with approval the statement of Sir Frederick Jordon in In re the Will of F.B. Gilbert (dec.) (1946) 46 SR (NSW) 318 at 323:

“… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.:

See also Hogan v Australian Crime Commission (2010)240 CLR 651 at [34] per French CJ, Gummow, Hayne, Heydon and Kiefel JJ.

18    The Full Court too has often referred to the importance of keeping a short leash on appeals relating to questions of practice or procedure: Cement Australia Pty Ltd v ACCC (2010) 187 FCR 261 at [72], per Keane CJ, Gilmour and Logan JJ; Bufalo v Official Trustee in Bankruptcy [2011] FCAFC 111 at [35], per Mansfield, Besanko and Flick JJ.

19    In Oswal v Burrup Fertilisers Pty Ltd [2011] FCAFC 117 at [8] and [11] (“Oswal”) the Full Court, per Mansfield and Foster JJ, observed that an application for leave to appeal such as in the present case, involving a discretionary judgment on a question of practice or procedure placed a “heavy burden” on the applicant. In explaining this requirement their Honours said:

It avoids the risk of the pre-trial processes becoming fragmented, and so causing lengthier and more expensive litigation than is necessary. It avoids the risk of deferring or delaying the postponement of the final decision of the dispute between the parties. It avoids inappropriate intrusion into appropriate case management of cases by the primary judge, with a view to bringing the matter to a speedy, efficient, effective and just resolution. More generally, therefore, it may interfere with the proper administration of justice, as now reflected in s 37M of the FCA Act. For instance, in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564, French J at [42] said:

The time and resources of the Court and the parties should not be lightly taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties.

There are many judicial observations to the same effect.

I respectfully agree with their Honours’ observations.

20    In the present case the burden may also be seen as heavy because the decision under review was made in the course of a trial. As Lander J observed in Pampered Paws Connection Pty Ltd v Pets Paradise Franchising (Qld) Pty Ltd (No 8) [2010] FCA 682 at [22], the Court will be reluctant to grant leave to appeal from a decision relating to issues of practice or procedure made when a trial is running.

Consideration

21    In the judgment below the learned Federal Magistrate dealt with Linkhill’s application primarily by reference to its application to withdraw the admissions in its Amended Defence. Linkhill did not contend that his Honour was in error in taking this approach.

22    It is not in dispute that in Linkhill’s Defence filed in December 2011, and its Amended Defence filed in December 2012, it admitted:

(a)    in paragraph 2(g) - that at all relevant times it operated a business from its premises at 401 Collins Street, Melbourne, which included, from November 2006, the renovation and refurbishment of a property at 346-348 Flinders Lane, Melbourne (“the Flinders Lane property”) , defined as “the Renovation Works”;

(b)    in paragraph 3(a) - that the workers were engaged by it to perform, and did perform, the Renovation Works at the Flinders Lane property; and

(c)    in paragraph 3(b) - that the work performed by the workers was “building work” within the meaning of s 5(1) of the Building and Construction Improvement Act 2005 (Cth) (“BCII Act”).

23    It is not necessary to detail the text of each of the amendments in Linkhill’s proposed Further Amended Defence. For the present it suffices to note that Linkhill accepted that the proposed amendments increased the issues of controversy between the parties and conceded that its application was of “weighty importance”. It submitted:

The amendments proposed have the following effects on the respondent’ defence and the issues which the Court should determine, for example:

(a)    the timeframe in which the “renovation work” at Flinders Lane was undertaken, the extent to which the respondent can be held liable for such breaches, and the consequential quantum if the allegations are proven;

(b)    the nature of the work performed at Flinders Lane between 2006 and 2010 and whether it falls within the application of the relevant awards and whether that work was engaged in on a full-time basis. This will also have an effect on the quantum extent of the respondents’ liability if the allegations are proven;

(c)    whether the renovation work performed was for the benefit of Linkhill or Ms Levine;

(d)    whether the true nature of the engagement of the workers at Flinders Lane was a contract for services due to the use of Linkhill as the entity to supply Ms Levine with the resources that she required to undertake the renovation work.

24    While Linkhill argued that it had flagged a change in its position in Mr Morgan's affidavit of 5 February 2013, it accepted that it had not elucidated the change. It contended that the admissions were not being withdrawn but rather qualified, noting that it still conceded that renovation works occurred at the Flinders Lane property. It noted that the proposed amendments were consistent with its defence that the workers had always been engaged as contractors rather than employees. It sought withdrawal of the admissions on the basis that it was necessary if the court was to look at the real issues between the parties.

25    The Director opposed the withdrawal of the admissions in the Amended Defence. It contended that allowing their withdrawal would require the Director to meet, and the court to determine, issues which were previously uncontroversial between the parties, including:

(a)    the timeframe in which the Renovation Works at the Flinders Lane property was undertaken. That is, Linkhill previously admitted that this work started in November 2006 but now proposed to argue that it did not commence until late 2008;

(b)    the nature of the Renovation Works performed at the Flinders Lane property between 2006 and 2010. That is, Linkhill previously admitted that this work was “building work” within the meaning of the BCII Act (thereby attracting certain rates and conditions under the relevant industrial agreements), but now proposed to argue that only “some” of the work performed from “time to time” was such building work;

(c)    whether the Renovation Works were performed for the benefit of Linkhill or Ms Levine. That is, Linkhill previously admitted that it conducted a business which included the Renovation Works at the Flinders Lane property in which it engaged the workers, but now proposed to argue that:

(i)    this work was the ultimate direction of and for the benefit of Ms Levine; and

(ii)    Linkhill was merely an entity to supply Ms Levine with the resources that she required to undertake renovation work;

which went to the true nature of the engagement of the workers at the Flinders Lane property.

26    The Director contended that it would be prejudiced if leave to amend was granted because it would have prepared for and conducted its case differently if the issues now sought to be pleaded had previously been raised.

27    In this regard the Director said, firstly, that it would have made inquiries of witnesses and adduced evidence from them about the locations at which they worked at different times and the details about their work and duties at those times and locations. It noted that these matters were previously not in issue in the pleadings and that Linkhill had enjoyed the benefit of having cross examined the Director’s witnesses with those matters in mind (when the Director did not understand that those matters were in issue).

28    Secondly, the Director said that it would have examined in detail, through enquiries and interlocutory processes including subpoenas and discovery, the corporate and financial relationships between the various Roy Morgan Group entities (of which Linkhill is apparently a part) now proposed to be raised.

29    The Director argued that any capacity to redress the prejudice would inevitably result in delay, inconvenience and additional cost to it. In particular, it said it would need to recall witnesses and it would require to seek the production by different entities and persons in the Roy Morgan Group of various documents relevant to the new controversies sought to be raised.

30    The Director pointed also to the undeniable fact that the application was made very late. It argued that no satisfactory explanation for the delay had been provided, as the only explanation offered was that Mr Morgan, Linkhill’s moving mind, had failed to inform his lawyers of Ms Levine’s ownership of the Flinders Lane property until late January 2013, as had Ms Levine herself. The Director argued too that there was no satisfactory explanation for the one month delay between late January 2013 when the lawyers were first informed and the application for amendment in late February, which occurred when commencement of the trial was imminent.

31    His Honour considered various authorities regarding the withdrawal of admissions including Celestino v Celestino [1990] FCA 299 at [12] to [14] per Spender, Miles and von Doussa JJ; Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd [2000] FCA 1732 per Mansfield J, and in particular, Deangrove Pty Ltd (Receivers and Managers Appointed) v Commonwealth Bank of Australia [2003] FCA 268 per Sackville J (“Deangrove”).

32    His Honour cited with approval a lengthy passage from Deangrove at [29] to [35] in which Sackville J reviewed authorities including Coopers Brewery Ltd v Panfida Foods Ltd [1992] 26 NSWLR 738 per Rogers CJ, H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703 per Lord Denning MR, Ridolfi v Rigato Farms Pty Ltd [2000] 2 Qd R 455 per de Jersey CJ with whom McPherson JA and Williams J agreed, Drabsch v Switzerland General Insurance Co Ltd (unreported, 16 October 1996, Supreme Court of NSW) per Santow J, Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154 per Dawson, Gaudron and McHugh JJ, and Hanave Pty Ltd v LFOT Pty Ltd [1997] FCA 218 per Moore J.

33    In Deangrove at [34] to [35] Sackville J observed:

[34]    It seems to me that, having regard to the reasoning in Queensland v J L Holdings, questions of case management (in the sense of efficient court administration and use of court time), although not irrelevant, should not play a decisive or paramount role in determining whether or not to grant leave to a party to withdraw an admission. I do not, however, read the High Court’s decision as entitling a party to raise a fresh issue in litigation at any time of its choosing, regardless of the basis on which the litigation has been conducted or the stage the proceedings have reached. It must be remembered that in Queensland v J L Holdings, the application to amend the pleadings was made six months prior to the scheduled date of the trial and, according to the majority, the amendment raise no complex factual issues. The High Court was not concerned with an application in the course of a hearing to withdraw an admission made on a factual question within the knowledge of the party making the admission.

[35]     Consistent with what was said by Santow J in Drabsch v Switzerland Insurance, a party who makes a clear and distinct admission on a factual question, which is accepted and acted upon by the opponent, should not be permitted freely to withdraw that admission. Whether or not it is appropriate to grant leave will depend upon the particular circumstances of the case and an assessment of the interests of justice. The relevant circumstances include the nature of the admission, how it came to be made (for example, whether it was made deliberately or inadvertently), when and why the party seeks to withdraw the admission and the impact of any withdrawal on the other parties to the litigation.

34    In Deangrove Sackville J refused the application to withdraw an admission, noting that:

(a)    a grant of leave to withdraw the admission would open up fresh issues which would need to be determined at hearing;

(b)    if the admission was withdrawn an adjournment of the hearing, which had already run for three days, would be necessary;

(c)    it was not the first time that the proceedings had required to be adjourned at the fault of the party seeking to withdraw the admission;

(d)    another delay would work unfairness to the respondent notwithstanding that it was large and well resourced, including that it might incur further and possibly irrecoverable costs;

(e)    no satisfactory explanation for the making of the admission had been made; and

(f)    the history of the litigation, and that having regard to that history, there must come a point at which the interests of justice demand that a party to litigation take responsibility for its own conduct.

The learned Federal Magistrate cited Sackville J’s approach with approval. I respectfully endorse it too.

35    On considering the application the learned Federal Magistrate sought to apply the principles set out in Deangrove and the other authorities referred to.

36    Firstly, his Honour accepted that, on the pleadings as they stood, it was not a matter of controversy that at all relevant times Linkhill’s business included the Renovation Works at the Flinders Lane property, and that the workers were engaged by Linkhill and did work in that business. He accepted too that the Director had prepared for, opened and conducted its case on the basis that it would not be put to proof on these matters. I can see no error in his Honour’s conclusion in this regard as there is real force in the Director’s contentions -summarised at [25] above - regarding the effect of the proposed amendments.

37    Secondly, his Honour noted that Linkhill had at all times been represented by the same solicitor, and had made the same admissions in the two iterations of the Defence. He was not satisfied that there was any evidence that Linkhill was under any apparent disability at the times the admissions were made. He considered the admissions to be clear and distinct. His Honour dismissed the application, referring to the following matters as significant in his consideration:

(a)    the proceeding had been on foot since 2011;

(b)    the admissions were clear and distinct;

(c)    Linkhill was not under any disability when it made the admissions in its Defence, or when it maintained them in its Amended Defence;

(d)    Linkhill has been legally represented at all times;

(e)    Linkhill had led insufficient evidence of a solid and substantial character as to a sensible explanation for the making of the admissions. Despite evidence from its solicitor, Linkhill had not done enough to dispel the conclusion that the admissions were made after consideration and advice;

(f)    there was insufficient evidence to suggest that the admissions were made inadvertently or without due consideration of material matters.

(g)    the withdrawal of the admissions would open up fresh issues in the proceeding which had hitherto been agreed;

(h)    the fresh issues would be opened up for the first time in the circumstance that the case was part heard;

(i)    any detriment suffered by Linkhill by refusal of its application was “self induced”; and

(j)    that prejudice would flow to the Director in the conduct of its case that could not be sufficiently met by an order for costs, which would further delay the proceedings.

38    No error is apparent to me in the factual findings made by his Honour, or in his application of principle to the findings. In fact, Linkhill eschewed any complaint that, in relying on Deangrove and the other authorities as he did, the learned Federal Magistrate had acted upon any wrong principle.

39    Linkhill did not contend either that his Honour mistook the facts upon which he was obliged to act, and did not identify any facts which he wrongly took into account.

40    Case management considerations were plainly important in the decision below. His Honour’s decision was in my view consistent with the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 217, [111] to [112], where Gummow, Hayne, Crennan, Kiefel and Bell JJ explained:

[111] An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on application for leave to amend Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases [citations omitted]. On the contrary, the statements are not consonant with this Court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

[112] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly of litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

41    Linkhill largely confined itself to the contention that the court below failed to take into account some considerations which it argued were relevant, namely that:

(a)    a title search tendered by the Director showed that the registered proprietor of the Flinders Lane property in 2008 was Ms Levine;

(b)    invoices provided to Linkhill by the workers, and tendered by the Director, showed that they performed work at places other than the Flinders Lane property;

(c)    a refusal to allow the application may have the effect that the Court could make findings in a civil penalty proceeding that were manifestly untrue and not made out on the evidence;

(d)    the Director had breached its duty of probity and fairness as a model litigant; and

(e)    Linkhill could address any prejudice to the Director by an order for costs.

42    It must be accepted, as Linkhill contends, that the refusal of leave to withdraw the admissions and file further evidence will cause it detriment. Without seeking to set out the likely detriment in detail, it is at least found in Linkhill’s inability to call all the witnesses it considers necessary to properly present its defence and the limitation on its ability to run the defence in the way it wants. It might suffer prejudice in the outcome because of these matters. Real though this detriment is, the authorities as to withdrawal of admissions (including case management considerations) indicate that it is only one of the factors to be weighed in the balance.

43    It is significant too that there are weaknesses in the factors put forward by Linkhill and they should not, in my view, properly be seen to outweigh the considerations taken into account by the learned Federal Magistrate, summarised at [36] and [37] above.

44    Firstly, some of Linkhill’s complaints are, in reality, a complaint that the court below did not give sufficient weight to particular facts. Contrary to Linkhill’s submissions, the reasons for judgment below show that his Honour did not fail to take into account whether an order for costs could address the Director’s prejudice, and also show that his Honour was aware of the title search to the Flinders Lane property. Linkhill’s complaint can really only be that his Honour ascribed insufficient weight to those facts. In all the circumstances of this case a question of the weight to give these facts is not a sufficient basis for a grant of leave to appeal.

45    Secondly, in my view, Linkhill’s submissions somewhat overstate the detriment it will suffer by reason of refusal of its application because some of the purported detriment has been addressed by concessions made by the Director. For example, Linkhill sought to argue that it would be prohibited from arguing that the workers were not solely engaged in building work at the Flinders Lane property. While I am not persuaded that this evidence would be precluded in any event, a concession by counsel for the Director puts beyond doubt that it would not. In relation to the pleading in paragraph 3(a) of Linkhill’s Amended Defence of December 2012 the Director accepts that in performing work for Linkhill the workers did not exclusively perform renovation and refurbishment work at the Flinders Lane property. Senior Counsel for Linkhill accepts that this is an important concession.

46    In the same category is Linkhill's complaint that it will be confined in its plea in mitigation of penalty. Although there is no doubt that a disconformity between the evidence in the liability and in the penalty phases of the trial is undesirable, if Linkhill is found liable in the first phase the detriment to it in the penalty phase is partially addressed by another concession. Counsel for the Director informed the Court that if liability is found by the trial judge, and in a subsequent penalty hearing Linkhill seeks to adduce further relevant evidence going to the quantum of penalty, the Director will not oppose its receipt provided that the material falls within the scope of the proposed amendments and further affidavits. That is, insofar as the three excluded affidavits are relevant to the quantum of penalty Linkhill will be able to adduce that evidence in mitigation. Merkel J found a similar approach acceptable in Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847 at [6].

47    Linkhill also overstates the detriment in contending that it will be prohibited at the trial from arguing that the workers performed work other than building work at sites other than the Flinders Lane property. Insofar as this contention relates to the workers working elsewhere I have already dealt with the Director’s concession in that regard. The Statement of Claim makes no claim in relation to work conducted at properties other than the Flinders Lane property. Insofar as the contention relates to the workers performing work other than “building work” the invoices rendered to Linkhill by the workers are in evidence, and they indicate the types of tasks performed throughout the relevant period. While some of the tasks indicated on the face of the invoice do not look like building work, the invoices do not necessarily support Linkhill’s argument that the workers were not so engaged. This is so because the definition of “building work” in s 5 of the BCII Act is broad and includes any work “that is part of, or is preparatory to, or is for rendering complete” the building work specified in three other categories.

48    In fact, in seeking to open up this area of inquiry after the workers had already given their evidence one of the problems with Linkhill’s application is starkly illustrated.

49    Another example of Linkhill’s overstatement of the detriment it will likely suffer relates to its contention that it will be prohibited from arguing that the workers performed work at the direction of persons other than it. While the evidence to be admitted is a question for Federal Circuit Court Judge O'Sullivan when the hearing is resumed, it is not clear to me that Linkhill will be prohibited in the way it contends. I say this because Linkhill has filed and served Mr Morgan's affidavit sworn 5 February 2013, and the Director did not advise me of any objection to this evidence. Amongst other things, Mr Morgan deposes that:

(a)    the workers were also employed personally by Ms Levine to work at her personal premises at the Flinders Lane property;

(b)    the workers did other work within the tenancy of Roy Morgan Research Ltd, within Roy Morgan Research Centre Pty Ltd’s tenancy and in other parts of the building as directed by Ms Levine;

(c)    Linkhill received no benefit from or paid for the work performed for Ms Levine personally; and

(d)    when the workers were working at Ms Levine’s premises they were independent contractors to her.

50    Finally, Linkhill failed to make out its contention that the Director had failed to act with probity and fairness as a model litigant. No submission was advanced as to how this duty was breached save for the contention that the Director should have made the same concessions below as it made before me. I do not agree. One can well understand the Director’s stance in the application below, confronted as it was with an application to withdraw important admissions three days into a trial, and after seven out of its ten witnesses had already given evidence.

Conclusion

51    Linkhill failed to meet the burden that the authorities indicate is appropriate before leave be granted to appeal from an exercise of discretion on a matter of practice or procedure. The application must be refused and Linkhill should pay the respondent’s costs of the same.

Associate:

Dated:    29 April 2013