FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 3)

[2013] FCA 1391

THE COURT ORDERS THAT:

1.    The applicant have leave to file and serve, by 20 December 2013, a further amended application in accordance with the proposed further amended application attached to the applicant’s interlocutory application dated 26 September 2013.

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

REASONS FOR JUDGMENT

Overview

1    By an interlocutory application dated 26 September 2013, the applicant (the FWO) seeks leave to further amend her amended application dated 26 March 2013 and filed 3 April 2013 to seek the following additional relief:

3A.    An order that the second respondent pursuant to section 807(1)(b) of the WR Act and section 545(2)(b) of the FW Act, pay compensation to Bruce and Lynne Love for the loss suffered by these persons for the second respondent's contraventions of sections 792(1)(d), 796(5)(a) and/or (b) and 797(3)(a) and/or (b) of the WR Act and/or section 346(a) of the FW Act.

2    For reasons which will become apparent, no such relief was ever sought against the first respondent (OMS). The FWO in support of her application relies upon the affidavits of Carla Kovacevic sworn 26 September 2013 and 22 November 2013.

3    The application to amend is sought pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) (the Rules). The discretion is broad, permitting an application for leave to be made "for any reason". Specifically, the Court has a discretion to grant leave to amend an originating application, inter alia, to add a new claim for relief that arises out of the same facts or substantially the same facts as those already pleaded: r 8.21(1)(g).

4    However, the Court's discretion pursuant to r 8.21(1) is subject to the overarching purpose of civil procedure set out in s 37M of the Federal Court of Australia Act 1976 (the overarching purpose).

5    It would facilitate the just resolution of this issue if the relief sought was not confined to the imposition of penalties for the contraventions committed by the second respondent (the MUA) but also included relief by way of compensation for the victims of these contraventions. There is no reason that the amendment will increase the time or costs otherwise involved in this proceeding if such relief had been originally sought.

Procedural history

6    On 28 June 2011, the FWO filed an application against the respondents in respect of various contraventions of the Workplace Relations Act 1996 (Cth) (the WR Act) and the Fair Work Act 2009 (Cth) (the FW Act) and sought by way of relief declarations and penalties.

7    OMS admitted liability for its contraventions and, on 17 May 2012, the Court imposed a penalty on OMS in respect of those contraventions: Fair Work Ombudsman v Offshore Marine Services Pty Ltd (2012) 219 IR 435.

8    On 8 November 2012, the proceeding was fixed for trial in relation only to liability in respect of the MUA and was heard on 3, 4 and 5 April 2013. On the first day of the hearing, the FWO was granted leave to amend the application and accompanying statement of claim, including by adding new allegations that the MUA was directly liable for contraventions of ss 796(5)(a) and (b) and 797(3)(a) of the WR Act and s 346(a) of the FW Act. The FWO had previously alleged only that the MUA had been an accessory to the contraventions by OMS.

9    Judgment was delivered on the question of liability on 18 September 2013: Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 2) [2013] FCA 943 (the Liability Judgment). Declarations were made on 8 October 2013 that reflected the findings in the Liability Judgment.

Background to the application for leave

10    Prior to the events referred to below, neither the FWO nor the FWO's solicitors considered the issue of whether compensation should be sought by way of relief. This I accept was the result of an oversight.

11    Between 3 and 5 April 2013, during the course of the liability trial, it crossed the mind of senior counsel for the FWO as to whether the FWO's application should have included relief by way of compensation. However, he did not consider the issue of compensation in any meaningful way during the trial as he was preoccupied with dealing with the liability issues in the proceeding. During the weekend immediately following the liability trial, senior counsel again considered the issue of compensation and formed the conclusion that there was no impediment to compensation being sought for Mr and Mrs Love in the event the MUA was found liable under the WR Act and/or the FW Act.

12    On 8 April 2013, senior counsel recommended to the solicitors for the FWO that the MUA be put on notice that the FWO would seek to further amend her application to include relief that the MUA pay compensation to Mr and Mrs Love in respect of any contraventions that may be found proven.

13    After obtaining instructions from the FWO, the FWO's solicitors, on 12 April 2013, forwarded a letter to the MUA's solicitors seeking the MUA's consent to file a further amended application which included the additional relief of compensation.

14    The solicitors for the MUA, by letter on 16 April 2013, advised the solicitors for the FWO that the MUA would oppose any application to further amend the FWO's application to seek relief by way of compensation in favour of Mr and Mrs Love.

15    The solicitors for the FWO responded by letter on 8 May 2013 to the MUA's solicitors dealing with various matters raised by the MUA's solicitors, including by providing an explanation as to why the FWO was now seeking her proposed amendment.

Should leave be granted?

16    The MUA submits that leave ought not be granted because the further amendment sought by the FWO, and the circumstances in which it is sought, is contrary to the overarching purpose. It contends that the substantial and undue delay in seeking an order for payment of compensation to the Loves would result in irreparable prejudice to the MUA, and is not necessary for the just determination of the proceedings before the Court.

17    The MUA contends that the result of the delay in bringing such a claim is that it has no opportunity to contend that OMS should be liable to compensate the Loves for all or some part of their loss and that if the application for compensation had been made in a timely way, the MUA would have had an opportunity to contend for an order that OMS should be responsible for all or some part of the loss, or that OMS should be liable to contribute to any order for compensation made in favour of the Loves. This opportunity, it argues, is lost to it in circumstances where the Court has already found that OMS bears an appreciable measure of responsibility for the Loves' loss: Fair Work Ombudsman v Offshore Marine Services at [21] and [30].

18    The MUA also submits that the FWO has failed to give any or any adequate explanation for the delay in applying for the amendment. The exercise of the Court's discretion requires such an explanation to be weighed against the effects of the prejudice to the MUA identified above, and the overarching purpose: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [102]-[103] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. The explanation is one of oversight on the part of the FWO’s lawyers. Ironically, it is not the FWO who would suffer if leave were refused but rather Mr and Mrs Love who have already suffered significantly in a number of respects as a result of the matters giving rise to this litigation.

19    I do not consider that there is irreparable prejudice to the MUA. It is apparent that the MUA can, if they elect to do so, apply under r 15.01 of the Rules to make a cross-claim against OMS seeking contribution. There can be no question of Anshun estoppel as between the FWO and the MUA. Nor, in my opinion, does the so-called estoppel found in Henderson v Henderson (1843) 3 Hare 100 and discussed by French CJ in Aon Risk Services at [33] necessarily or self-evidently arise were that course to be adopted. Counsel for the MUA did not attempt to explain with any specificity whatsoever as to why such barriers exist.

20    In any event, issues of apportionment can be ventilated at the hearing of any cross-claim instituted by the MUA.

21    It is, I find, consistent with the just resolution of this proceeding that leave to amend be granted. Further, the inclusion of a claim for compensation conforms with the purposes of the applicable relief provisions in the FW Act and the predecessor legislation, the WR Act.

22    Were leave to be refused, Mr and Mrs Love who are the innocent victims of the contraventions, will be prejudiced in being denied relief in these proceedings by way of compensation for the losses they have suffered due to the contraventions. Such prejudice on the evidence could be very substantial.

23    I accept the FWO’s submission that it will facilitate the just resolution of the proceeding that the Court have a broader range of remedies available to it to respond to the contravening conduct, namely, by way of compensation as well as the imposition of penalties.

24    If relief by way of compensation had been sought from the outset, the course adopted for the trial to be split in terms of liability and relief would most likely have still been the most convenient course to adopt.

25    In any event, the losses caused to Mr and Mrs Love by reason of the contraventions would have been a relevant matter when determining the quantum of any pecuniary penalties as against the MUA.

Conclusion

26    The FWO will be granted leave to file and serve, by 20 December 2013, a further amended application in accordance with the proposed further amended application attached to its interlocutory application dated 26 September 2013.

27    I will not, at this stage, make the further orders sought by the FWO in order that the MUA may apply, if it so elects, to join OMS in a cross-claim.

28    The application will be otherwise adjourned to a date to be fixed for further directions. If an application to join OMS is made, the return date for that application should be the same as the date of the directions hearing.

Associate:

Dated:    17 December 2013