FEDERAL COURT OF AUSTRALIA

Carbone v James McConvill and Associates Pty Ltd [2019] FCA 1305

ORDERS

THE COURT ORDERS THAT:

1.    The date for compliance by the Respondents with Orders 1 and 2 made by the Court on 16 July 2019 be extended to 4.00pm on 26 August 2019.

2.    If the Respondents do not comply with Order 1 of these Orders:

(a)    The Respondents’ Further Amended Defence be struck out; and

(b)    Judgment be entered in favour of the Applicant.

3.    The Applicant file any application for a formal Order giving effect to Order 2 of these Orders by 4.00pm on 30 August 2019.

4.    The Respondents pay the Applicant’s costs of and incidental to this interlocutory application and the case management hearing on an indemnity costs basis, in a lump sum payment to be fixed by the Registrar and paid forthwith.

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

REASONS FOR JUDGMENT

COLLIER J:

1    Before me is an interlocutory application filed by the applicant, Mr Carbone, on 31 July 2019 in which he seeks the following orders:

1.    The Interlocutory Application be heard on an urgent basis.

2.    The time for service of the Interlocutory Application and affidavit in support be dispensed with.

3.    The Respondents comply with Orders 1 and 2 made by the Court on 16 July 2019 within five (5) days of the date of these Orders failing which, without further order:

  a)    The Respondents’ Further Amended Defence be struck out;

  b)    Judgment be entered in favour of the Applicant; and

c)    A date be set for a case management hearing to provide directions for a hearing on remedies and penalties.

4.    The Respondents pay the Applicant’s costs of and incidental to this application and the case management hearing on an indemnity costs basis, in a lump sum payment to be fixed by the Registrar and paid forthwith.

2    Essentially, Mr Carbone seeks a self-executing order (also known as a “springing” or “guillotine order”) against the respondents, in light of what he submits is repeated want of compliance with case management orders regarding discovery and the filing of a defence in this matter which complies with the Federal Court Rules 2011 (Cth).

BACKGROUND FACTS

3    On 29 October 2018 Mr Carbone filed an originating application under the Fair Work Act 2009 (Cth) (the Fair Work Act) alleging dismissal in contravention of s 340(1)(a)(ii) of the Fair Work Act. I understand that he had been a paralegal, and subsequently a lawyer, working for the first respondent James McConvill & Associates Pty Ltd. The principal of the first respondent is Mr James McConvill, who is the second respondent in these proceedings.

4    Mr Carbone complains that he was dismissed because he made complaints or inquiries in relation to his employment which were exercises of workplace rights within the meaning of s 341. In his originating application those complaints or inquiries include raising ethical issues and practice management issues throughout his employment, raising outstanding unpaid fee share entitlements and reimbursement of expenses, raising concerns about his role answering telephones, reporting a workplace injury, complaining about discrimination and segregation, and complaining about false allegations about him. Mr Carbone also claims injury in his employment (being adverse action within the meaning of s 342(1) of the Fair Work Act), coercion not to exercise a workplace right within the meaning of s 343 of the Fair Work Act, and failure of the first respondent to provide him with pay slips or proper payslips contrary to ss 535 and 536 of the Fair Work Act.

5    Mr Carbone filed a statement of claim on 25 January 2019, and subsequently another statement of claim on 22 February 2019. In summary, Mr Carbone claims that, at material times, Mr James McConvill was a partner in a law firm which conducted the legal practice in the name of James McConvill and Associates. The firm practises law in Melbourne. Mr Carbone also pleads, inter alia, that he was employed as a paralegal from February 2014 until March 2015 and, following his admission, as a lawyer by the firm from March 2015 until 1 July 2015 during which time Mr Carbone claims that he was not remunerated at the rate agreed by him and the second respondent. Mr Carbone pleads that from July 2015 until August 2016 he was employed as a lawyer by the first respondent in accordance with the terms of a written employment agreement executed by the parties on or about 8 August 2015, and from about August 2016 until 2 July 2018 in accordance with the terms of a new written employment agreement.

6    The respondents have filed defences on 22 March 2019, 5 July 2019, 23 July 2019 and 26 July 2019 (the most recent version being a further amended defence which was filed at 4.37pm on 26 July 2019, meaning it was technically filed on 27 July 2019).

7    The docket Judge in this matter is Justice Logan. His Honour has made numerous orders in these proceedings. In particular I note the following:

    On 12 November 2018 his Honour ordered, inter alia, that pursuant to rr 20.11 and 20.14 of the Federal Court Rules 2011 (Cth), the parties make discovery of documents on or before 15 March 2018 (order 3).

    On 5 March 2019 his Honour ordered:

1.    The Applicant file and serve an Amended Statement of Claim on or before 22 February 2019.

2.    The Respondents file and serve a Defence on or before 22 March 2019.

3.    Pursuant to Rules 20.11 and 20.14 of the Federal Court Rules 2011 (Cth), the parties make discovery of documents on or before 19 April 2019.

4.    The matter to be referred to Mediation and conducted by a Registrar of this Court on a date after 17 May 2019 but no later than 14 June 2019, subject to a Registrar’s availability.

5.    In the event that the matter does not settle at the conclusion of the initial Mediation, the matter be listed for a Case Management Hearing on the next available date.

6.    There be liberty to apply.

7.    There be no order as to costs

    On 28 May 2019 his Honour ordered:

1.    The Applicant file and serve a Further Amended Statement of Claim on or before 14 June 2019.

2.    The Respondents file and serve an Amended Defence on or before 5 July 2019.

3.    The Applicant file and serve any reply to the Amended Defence on or before 12 July 2019.

4.    The Interlocutory Application filed 7 May 2019 is adjourned to a date to be fixed on or after 14 June 2019.

5.    There be liberty to apply.

6.    There be no order as to costs

    On 28 June 2019 his Honour ordered:

1.    The Respondents make further discovery pursuant to Rules 20.11 and 20.14 of the Federal Court Rules 2011 (Cth), including, but not limited to, the categories set out in the 12 June 2019 letter being Annexure ‘JAC1’ to the affidavit of Joseph Anthony Carbone affirmed 27 June 2019, on or before 12 July 2019.

2.    Order 4 of the Orders of the Court dated 5 March 2019 be varied so that the mediation be conducted by no later than 21 August 2019.

3.    The matter be listed for a Case Management Hearing at 10.15 am on 22 August 2019 with appearances by video link permitted subject to the availability of the link.

4.    The Respondents pay the Applicant’s costs of and incidental to the Interlocutory Application filed on 7 May 2019 and today’s Case Management Hearing, to be fixed in a lump sum by the Registrar and paid forthwith.

8    I understand that a mediation was scheduled for 28 May 2019, however the matter did not resolve. I further understand that the mediation was adjourned to 18 July 2019, and further adjourned to 21 August 2019.

9    On 15 July 2019 the applicant filed an interlocutory application seeking the following orders:

1.    The Interlocutory Application be heard on an urgent basis.

2.    The time for service of the Interlocutory Application and affidavit in support be dispensed with.

3.    The Respondents comply with the Orders of 5 March 2019, 28 May 2019 and 28 June 2019 (Orders) regarding discovery within 7 days of the date of these orders.

4.    In default of compliance with order 3 of the Orders made on 28 May 2019, the Respondents' Amended Defence filed on 5 July 2019 be struck-out.

5.    The Respondents pay the Applicant's costs of and incidental to this application and the Case Management Hearing on an indemnity costs basis, in a lump sum payment to be paid forthwith.

10    The matter came before me as duty Judge urgently on 16 July 2019. After hearing the parties I was not prepared to make the orders sought by the applicant, rather I ordered as follows:

1.    The Respondents comply with the Orders of 5 March 2019, 28 May 2019 and 28 June 2019 regarding discovery within 14 days of the date of these Orders.

2.    The Respondent file and serve a further amended defence within 7 days of the date of these Orders.

3.    The Applicant file and serve any reply to the further amended defence within 21 days of the date of these Orders.

4.    The Respondents pay the Applicant’s cost of and incidental to this application and the case management hearing on an indemnity costs basis, in a lump sum payment, to be fixed by the Registrar and paid forthwith.

11    The parties have returned before me because the applicant claims that the respondents continue to fail to comply with the orders of the Court.

12    The interlocutory application currently before me was listed for hearing on 7 August 2019 by video from Melbourne. The parties filed submissions prior to the hearing. The hearing could not be concluded within the time available, and accordingly I made the following orders on 7 August 2019:

1.    Today’s interlocutory hearing be adjourned to 9.30am on 15 August 2019.

2.    By 4pm on 8 August 2019, the Applicant file and serve submissions providing particulars of the deficiencies in discovery alleged in paragraph 10 of the Applicant's outline of submissions filed 5 August 2019.

3.    By 4pm on 12 August 2019, the Respondent file and serve submissions responding to the submissions referred to in Order 2 of these Orders.

4.    By 4pm on 14 August 2019, the Applicant file and serve any submissions in reply.

13    The matter resumed on 15 August 2019 and both parties made further oral submissions.

Submissions and material of the applicant

14    In summary, Mr Carbone submits that the respondents continue to breach the orders of this Court in respect of their filing a defence and their discovery obligations, which prejudices his case preparation and further means that he is unable to fully address issues in mediation.

15    In relation to the respondents’ defence, Mr Carbone submits, in summary, that although the respondents served an amended defence on his lawyers on 23 July 2019, the defence did not comply with Order 2 of my orders of 16 July 2019. Subsequently on 26 July 2019 the respondents served a further amended defence (FAD), however that FAD does not comply with r16.58 of the Federal Court Rules, and more generally continues to be non-compliant with the Federal Court Rules. For example, the FAD continues to have two versions of paragraph 30 notwithstanding the fact that this is the latest in a sequence of defences filed.

16    In respect of discovery Mr Carbone’s complaints are extensive. He submits that the list of documents in an affidavit affirmed by Mr McConvill on behalf of the respondents and filed on 30 July 2019 did not substantially comply with Order 1 of the 16 July 2019 orders. By reference to earlier orders of the Logan J, Order 1 of 16 July 2019 required the respondents to make discovery of documents by reference to categories of documents set out in the 12 June 2019 letter from Mr Carbone’s lawyers to the respondents, marked as annexure “JAC1” to the affidavit of Mr Carbone of 27 June 2019. These categories of documents were as follows:

•    (Paragraph 1) Defence para 4A Invoices and receipts issued to the Partnership by the Applicant for ‘expenses’ as per clause 7 of the Paralegal Contract Agreement referred to therein and bank records for the expenses paid to the Applicant for the same. We note that the records must give enough detail to allow the Applicant to identify the expenses he was reimbursed.

•    (Paragraph 2) Defence para 4A The ‘relevant insurance (certificates and policies) including public liability insurance, professional indemnity insurance and workers’ compensation insurance and/or personal accident/salary continuance insurance’ the Second Respondent was required to hold and a copy of the same from the Applicant as per Clause 9 of the ‘Paralegal Contract Agreement’ referred to in paragraph 4A of the Defence.

•    (Paragraph 4) Defence para 4B (a) Emails, text messages and work rosters, for the period referred to in paragraph 4A of the defence, that detail requests from the Partnership (or its agents) to the Applicant to work ‘as a Consultant Paralegal… on an as needed basis as required by the Firm’, as per SCHEDULE Item 1 of the ‘Paralegal Contractor Agreement’, referred to in paragraph 4A of the Defence, and timesheets that show the hours the Applicant worked per week in the same period.

•    (Paragraph 5) Defence para 8B (a) Emails, text messages and leads rosters that detail requests from the Partnership (or its agents) of the Applicant to perform ‘Legal Services… (which we take to be as a lawyer given the Applicant was admitted as a lawyer during this period and was under the supervision of the Second Respondent) as and when required’ during the period referred to in paragraph 8A of the Defence.

•    (Paragraph 6) Defence para 8B (b) Invoices issued to clients and bank records for income received and/or banked by the Partnership for clients listed in client list A attached, for the period referred to in paragraph 8A of the Defence. We note that the records must give enough detail to allow the Applicant to identify which fees relate to which client in client list A.

Defence para 8B (b) Invoices and receipts issued to the Partnership by the Applicant for ‘expenses’ and bank records for payment of those expenses reimbursed to the Applicant for the period referred to in 8A of the Defence. We note that the records must give enough detail to allow the Applicant to identify each expense the Partnership reimbursed the Applicant.

•    (Paragraph 7) Defence para 8B (b) Records of all the ‘disbursements’ as referred to in paragraph 8B (b) of the Defence, as follows:

a.    the invoices issued to the Partnership;

b.    the receipt issued to the Partnership

c.    and the bank records for the receipt

of each disbursement in relation to the client list A attached for the period referred to in paragraph 8A of the Defence. We note that the records must give enough detail to allow the Applicant to identify which disbursement relates to which client in client list A.

•    (Paragraph 9 (c)) Defence para 12. All records relating to the transfer of the law business from the Partnership to James McConvill and Associates Pty Ltd, as follows:

…

(c)    the records the Second Respondent was required to provide the Applicant pursuant to sections 307-316 of the Fair Work Act (including the ‘Fair Work Information Statement;)

…

we note that the records should provide enough detail to allow the Applicant to be satisfied that the Partnership had ceased to provide legal services and the First Respondent was in a position to enter into a contract of employment with the Applicant, in the manner and in the terms referred to in paragraph 12 (b) of the Defence, as an incorporated legal practice as per Part 3.7 of the Legal Profession Uniform Law Application Act 2014 (VIC) having conformed with Rule 28 of the Legal Profession Uniform General Rules 2015.

•    (Paragraph 10) Defence para 12 (b) The complete Employment Contract as referred to therein, in particular, the attached position description referred to in Schedule: A item B.

•    (Paragraph 11) Defence para 13 (b) Emails and text messages from the First Respondent (by the Second Respondent or the First Respondent’s his [sic] agents) to the Applicant that request him to work at the ‘Employer’s premises’ as set out in Item G of Schedule A pursuant to clause 11.2 of the ‘Employment Contract’ referred to in paragraph 12 (b) of the Defence for the period referred to in paragraph 12 (a) of the Defence to 20 July 2018.

•    (Paragraphs 13 (a) and 13 (d)(i – vii)) For the sake of clarity and to facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible; the Applicant has expanded his request for documents in paragraph 13 (c) ii of the Defence, to precise documents and/or categories of documents to be discovered as follows:

a.    Schedule ‘B’ as per the Employment Contract referred to in paragraph 12 (b) of the Defence, that shows the commission was ‘40%’,

…

d.    ‘Employment Costs’ as defined in Schedule B of the Employment Contract referred to in paragraph 12 (b) of the Defence, that directly relate to clients listed in client list B attached, as follows:

i.    remuneration;

ii.    salary;

iii.    superannuation records,

iv.    fringe benefits tax records,

v.    annual, personal and long service leave entitlements;

vi    annual leave loading;

vii.    overtime, penalties and allowances,

the cost per hour of the of [sic] lawyers, paralegals and administrative staff, or the proportion or contribution towards such costs if they relate to a number of employees,

We note that the records must give enough detail to allow the Applicant to identify the Employment Cost/s that relate to each client in client list B.

•    (Paragraph 14 (i – iii)) Defence para 14. Emails, text messages from the First Respondent (by the Second Respondents or the First Respondent’s agents) requesting the Applicant to travel interstate and the US, and flight records and itineraries for the period referred to in paragraph 12 (a) of the Defence to 20 July 2018. We note that the records must provide enough detail to allow the Applicant to identify the purpose of the travel as follows:

   i.    hiring staff;

ii.    building new markets for the First Respondent’s business in Australia and the US; and

iii.    engaging with clients for the purpose of building new markets for the First Respondent’s business and/or appearing in court on behalf of a client listed in client list B attached.

•    (Paragraph 15) Defence para 17 (b) Without conceding that the ‘Employment Contract remained in place, provide all records for the period referred to in paragraph 12 (a) to 20 July 2018 of the Defence, as per 13 (c) ii above.

•    (Paragraph 16) Defence para 17A (a) Emails and text messages between the Applicant and the First Respondent (by the Second Respondent or the First Respondent’s agents) relating to the variation of the ‘Employment Contract’ referred to in paragraph 12 (b) of the Defence, that the Applicant would be ‘paid ad hoc lump sum commission amounts as agreed from time to time’ as referred to in paragraph 17A (a) of the Defence prior to or after the date referred to in paragraph 17 (c) of the Defence to 20 July 2018.

•    (Paragraph 17) Defence para 17A (b), emails and text messages between the Applicant and the First Respondent (by the Second Respondent and/or the First Respondent’s agents) that confirms the Applicant agreed to the variation of the ‘Employment Contract’ referred to in paragraph 12 (b) of the Defence, in particular, Schedule A: Item D, prior to, or after, the period referred to in paragraph 17 (c) of the Defence. We note that all records should include those requested at 13 (c)(i) above that relate to the ‘Employment Contract’ in paragraph 12 (b) of the Defence, in particular, the Employment Costs as per Schedule B.

•    The Tax Ruling as referred to by Mr McConvill in an email of 22 October 2015 (12.41) to the applicant

•    Missing pay slips.

17    In submissions filed on 8 August 2019 Mr Carbone expanded on his claim that the respondents have failed to comply:

    In relation to Paragraph 1: it is not clear whether the ‘Invoices and Receipts’ deposed by the second respondent at paragraph 1 of the List are for ‘expenses’; and the bank records were not discovered.

    In relation to Paragraph 3: the respondents discovered BAS Statements and Taxation records for the partnership for the period 10 September 2014 – 1 December 2016. At paragraph 14 of the List Mr McConvill deposed that documents discovered for the period March – July 2015 were not in the respondents’ control, but according to the ‘Date/Period’ column at Paragraph 3 of the List (10 September 2014 — 1 December 2016) they have been discovered.

    In relation to Paragraph 4: at paragraph 4B (a) of the Defence the respondents pleaded that the applicant would work on an as ‘needed basis’. This would imply that there would be some written requests from the partnership or its agents to the applicant to work, or at least a roster detailing dates and times the partnership required the applicant to carry out work, but no such documents have been discovered.

    In relation to Paragraph 5: at paragraph 8B (a) of the Defence, the respondents pleaded that the applicant would provide ‘Legal Services… as and when required’. Given the applicant was admitted as a lawyer during this period and was under the supervision of Mr McConvill, by virtue of the Legal Profession Uniform Law (Vic) Mr McConvill would be required to keep written records of when Mr Carbone carried out work and on which files. There should be written requests and/or a roster kept by the respondents, but no such documents have been discovered.

    The respondents have discovered invoices sent by the applicant to the respondents with specific times and dates he performed work. The applicant would not have performed the work without a request in writing which detailed the work, as he would have had to be emailed/texted instructions or have electronic access to the file/s (evidenced in writing), especially given that he worked remotely from home.

    In relation to paragraph 6 – these are purportedly discovered at paragraph 4 of the List, but the documents need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019 and whether the ‘records give enough detail to allow the Applicant to identify which fees relate to which client in client list A.’

    In relation to the second paragraph of Paragraph 6: it is not clear whether the ‘Invoices and Receipts’ discovered at paragraph 1 of the List are for ‘expenses’; and the bank records are not discovered.

    In relation to paragraph 7: at paragraph 8B(b) of the Defence the respondents refer to ‘disbursements’ deducted from the applicant’s remuneration in accordance with the Legal Contractor Agreement for the period 14 March – July 1 2015. None of the invoices, receipts and bank records for the period referred to have been discovered regarding client list A.

    In relation to paragraph 8: at paragraph 14 of the List Mr McConvill deposes that documents discovered for the period March – July 2015 are not in the respondents’ control, but according to the ‘Date/Period’ column at Paragraph 3 of the List (10 September 2014 — 1 December 2016) they have been discovered.

    In relation to paragraph 9 (a - c); at paragraph 13 of the List Mr McConvill deposes these documents are privileged, however:

i.    In relation to (a) Bank records: the grounds of privilege have not been properly made out by Mr McConvill. Under the ‘State grounds of privilege’ column Mr McConvill affirms they are not privileged;

ii.    In relation to (b) Heads of Agreement: the grounds of privilege have not been properly made out by Mr McConvill. Under the ‘State grounds of privilege’ column Mr McConvill affirms they are not privileged

iii.    In relation to (c):

•    Under the ‘State grounds of privilege’ column Mr McConvill deposes ‘This occurred prior to the Applicant commencing’. The respondents at paragraph 8A of the Defence plead that the applicant was working for the partnership at the time the Partnership ceased to continue and the First Respondent (James McConvill and Associates Pty Ltd) took over the law business of the Partnership;

•    As part of the transfer of the business to the First Respondent, as pleaded at para 12 of the Defence, Mr McConvill (on behalf of the First Respondent) offered Mr Carbone an employment contract, which he accepted, to work for the First Respondent; and

•    Mr Carbone performed the same work as a lawyer for the First Respondent as he did for the Partnership. In fact, he not only worked on the same files he was working on for the Partnership, but now for the First Respondent, but he also assumed new files of which the departing partner (Mark Stanarevic) had previously had carriage.

    In relation to paragraph 9(d): the documents are discovered at paragraph 5 of the List, but need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019 and whether the ‘records give enough detail to allow the Applicant to be satisfied the Partnership had ceased to provide legal services’.

    In relation to paragraph 10: At paragraph 12(b) of the Defence the respondents depose there is a written Employment Contract, it is unclear from the ‘Description of documents’ column at para 6 of the List whether the complete Employment Contract has been discovered, including ‘the position description referred to in Schedule: A item B of the Employment Contract.’ The documents will need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019.

    In relation to paragraph 11: At 13(b) of the Defence the Respondents deny that the Applicant worked remotely from home. Pursuant to cl 11.2 of the ‘Employment Contract’ referred to in paragraph 12(b) of the Defence, however, the applicant was entitled to work from home, which he did, unless required at the office. No documents requesting the applicant to work at the office, as per the Order of 16 July 2019, have been discovered.

    In relation to paragraph 12: the Respondents claim privilege over the file at paragraph 12 of the List, but the treatment of the ‘Salary’ component in relation to ‘Employment Costs’ is referred to in an email discovered in the List of documents filed on 7 May 2019 (document No. 37) and is discussed in emails (dated 18, 20, 21 and 23 July 2015), between Mr Richard Scougall, a solicitor in the employ of Meerkin and Apel Lawyers at the relevant time, and Mr McConvill that were shared with the Applicant, thereby waiving privilege. Such documents should be discovered.

    In relation to paragraph 13(a): At paragraph 12(b) of the Defence the respondents plead that there is a written Employment Contract, it is unclear from the ‘Description of documents’ column at paragraph 6 of the List whether the complete Employment Contract has been discovered, including ‘Schedule ‘B’ as per the Employment Contract referred to in paragraph 12(b) of the Defence that shows the commission was ‘40%’. The Schedules are not referred to, despite the express reference to Schedule ‘B’ in paragraph 13(a) of JAC1. The discovery provided in the List therefore does not, on its face, comply with the Order of 16 July 2019. Mr Carbone deposes the documents will need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019.

    In relation to paragraph 13(b): The documents are purportedly discovered at paragraph 4 of the List, but will need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019, namely that the records must give enough detail to allow the applicant to identify the fee that relates to the client in client list B.

    In relation to paragraph 13(c): the documents are purportedly discovered at paragraph 7 of the List, but will need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019, namely that the records must give enough detail to allow the applicant to identify which disbursement relates to each client in client list B.

    In relation to paragraph 13(d)(i)-(vii):

i.    remuneration records (not discovered);

ii.     superannuation records (not discovered);

iii.     fringe benefit tax records (not discovered);

iv.    annual, personal and long service leave entitlements (not discovered);

v.     annual leave loading (not discovered);

vi.    overtime; penalties and allowances (not discovered); and

vii.     The cost per hour of the of lawyers - if they relate to ‘a number of employees’ referred to at para 8 of the List, will need to be inspected to assess the extent that the discovered documents comply with the Order of 16 July 2019, namely, that the documents give enough detail to allow the applicant to identify the Employment Cost/s that relate to each client in client list B.

    In relation to paragraph 14: The respondents have not discovered documents, or at least they have not provided a description of them that complies with the Order of 16 July 2019 by reference to paragraph 14 of JAC1, including specifying whether the documents pertain to the following purposes of the travel as referred to in that paragraph:

•    hiring staff;

•    building new markets for the First Respondent’s business in Australia and the US; and

•    engaging with clients for the purpose of building new markets for the first respondent’s business and/or appearing in court on behalf of a client listed in client list B.

    In relation to paragraph 15: the respondents discovered BAS Statements and Taxation records for the partnership for the period 10 September 2014 – 1 December 2016. At paragraph 14 of the List Mr McConvill deposed that documents discovered for the period March – July 2015 were not in the respondents’ control, but according to the ‘Date/Period’ column at Paragraph 3 of the List (10 September 2014 — 1 December 2016) they have been discovered. The applicant repeated his submissions in relation to paragraph 13 (a)-(d) of JAC1.

    In relation to paragraph 16: no documents discovered.

    In relation to paragraph 17: no documents discovered.

    In relation to paragraph 18: no documents discovered as per paragraph 17B of the Defence.

18    Mr Carbone also submitted:

    In relation to pay slips, at the hearing of 7 August 2019 Counsel for the respondents submitted that the respondents have discovered all pay slips, however by email dated 17 May 2019 Mr Carbone put the lawyers for the respondents on notice that there were missing and incomplete pay slips which are required to be kept under the Fair Work Act.

    In one of the versions of paragraph 30 of the FAD the respondents deny subparagraph 30(c) of the amended statement of claim but plead “Save to admit that ad hoc payments were not included on the pay slips and can be provided upon request”. This suggests that pay slips for the ad hoc payments exist, which could be supplied upon request provided upon request

    Mr Carbone deposes in his affidavit filed on 6 August 2019, at [6], ‘We have never received a "Tax Ruling"’, however this is contrary to the email of 22 October 2015 where he states, ‘There is apparently a Tax Ruling specifically on this which can be obtained if needed?’.

19    In relation to the appropriateness of a self-executing order Mr Carbone relies on Tenement Administration Services Pty Ltd v Hodson [2013] FCA 610 and Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203 at [106], and in particular submitted that:

    The respondents’ non-compliances with orders of the Court were not minor, but were consistent and serious;

    It could not be argued that the respondents have demonstrated lack of fault for their non-compliance;

    Although the prejudice to the respondents from a self-executing order is serious, it is important that parties to litigation and the general public have confidence in orders made by the Court; and

    Until the respondents rectify and file an amended Defence or FAD in proper form, the applicant is unable to file a reply as he is entitled to do in accordance with Order 3 of Orders of 16 July 2019, further delaying the resolution of the proceeding.

20    Mr Carbone submits that r 5.21 of the Federal Court Rules allow a party to seek self-executing orders.

21    Finally, Mr Carbone submits that the respondents’ consistent failure to comply with Court orders without justification constitutes a series of unreasonable acts or omissions which have caused him to incur costs within the meaning of s 570(2)(b) of the Fair Work Act, and he seeks an order for indemnity costs fixed in a lump sum.

Submissions of the respondents

22    The respondents deny non-compliance with discovery obligations. In particular they rely on the affidavit of Mr McConvill filed on 16 July 2019 in which Mr McConvill deposed, in summary, as follows:

    Materials requested for discovery by the applicant can be accessed via a link to the Dropbox file the respondents had created to provide the materials requested for discovery. The lawyers for the applicant were emailed the details of that link.

    The respondents filed an amended defence on 5 July 2019 and served a copy on the lawyers for the applicant. The only amendment in that version of the defence was paragraph 29.

    Given the volume of discovery documents requested by the applicant, compliance was proving a very time-consuming process, and the respondents were trying their best to comply.

    The respondents were progressively adding material to the Dropbox link provided to the applicant, and alerted the applicant’s lawyers to this on 13 July 2019.

    He had “made substantial efforts to provide the applicant with all discovery documents and are awaiting to hear back from my old Accountants, Maxwell Powell, who have records for the BAS statements. Once we receive the requested documents they too will be added to the file.”

23    In this affidavit Mr McConvill also deposes:

9.    It would be appreciated if we could have an extension in time to be able to provide the further documents. We have provided the majority of the documents, however, for reasons out of our control, we have been unable to provide all of them.

24    The respondents also submit that they complied with the most recent discovery order, and if there is any remaining compliance that non-compliance is minor only. They refer to Annexure A to their submissions filed on 6 August 2019 and their written submissions filed on 12 August 2019, and say in summary:

    In respect of paragraphs 1 and 2 of JAC1 and paragraph 4A of the Defence: the respondents have discovered the relevant documents under Items 1 and 2 of the respondents’ List of Documents, and bank records were discovered at item 12 of the proposed Amended Document List;

    In respect of paragraph 3 of JAC1: the respondents say that all BAS statements and tax records within the respondents’ possession and control have been discovered at Item 3 of the respondents’ List of Documents;

    In respect of paragraph 4 of JAC1 and paragraph 4B(a) of the Defence: for the period referred to (from March 2015 until July 2015) the respondents say that there is no document to be discovered;

    In respect of paragraph 5 of JAC1 and paragraph 8B of the Defence: for the period referred to (from March 2015 until July 2015) the respondents say that there is no document to be discovered. However in their written submissions filed on 12 August 2019 the respondents submit that they have discovered a further six files, but there are no further documents to be discovered;

    In respect of paragraph 6 of JAC1 and paragraph 8B(a) of the Defence: for the period referred to (from March 2015 until July 2015) the respondents have discovered the relevant documents under Item 4 of the respondents List of Documents;

    In respect of paragraph 7 of JAC1 and paragraph 8B(b) of the Defence: for the period referred to (from March 2015 until July 2015) the respondents have discovered the relevant documents under Item 7 of the respondents List of Documents, and bank records are discovered at Item 12 of the proposed Amended Document List;

    In respect of paragraph 8 of JAC1: the respondents are unable to understand the particular non-compliance alleged;

    In respect of Paragraph 9(a)-(c) of JAC1 and paragraph 12 of the Defence: the respondents say that there is no document to be discovered, however in their written submissions filed on 12 August 2019 they concede that the claiming of privilege in relation to Item 13 of the original List of Documents was in error; that there are no bank records to be discovered; that no “Heads of Agreement” document exists; and that claims of privilege will be corrected in the proposed Amended Document List;

    In respect of Paragraph 10 of JAC1 and paragraph 12(b) of the Defence: the respondents have discovered the relevant documents under Item 6 of the respondents List of Documents and say that there is no further document to be discovered in relation to the Employment Contract;

    In respect of Para 11 of JAC1 and paragraph 13(b) of the Defence: for the period referred to (1 July 2015 to 20 July 2018) the respondents say that there is no further document to be discovered in relation to the Employment Contract;

    In respect of paragraph 13(a) of JAC1 and paragraph 12(b) of the Defence: the respondents say that there is no further document to be discovered and the relevant documents are at Item 6 of the respondents’ List of Documents;

    In respect of paragraph 13(d)(i)-(vii) of JAC1 and paragraph 12(b) of the Defence: the respondents have discovered the relevant documents under Item 8 of the respondents’ List of Documents, however in their written submissions filed on 12 August 2019 the respondents say that they have discovered a further 48 documents relating to superannuation under Item 8 of the proposed Amended Document List;

    In respect of paragraph 14(i)-(iii) of JAC1 and paragraph 14 of the Defence: the respondents have discovered the relevant documents under Item 9 (in relation to taxation records) and Item 10 (in relation to the applicant’s travel in the period referred to from 12 July 2015 to 20 July 2018; however in their written submissions filed on 12 August 2019 the respondents say that they have discovered a further 4 documents under Item 10 of the List of Documents;

    In respect of paragraph 15 of JAC1 and paragraph 17(b) of the Defence: the respondents noted that the applicant sought “all records” for the period 15 July 2015 to 20 July 2018 as per paragraph 13(c)(ii) of JAC1, however they later submitted that they were unable to understand the particular non-compliance alleged and that they have discovered all relevant documents at item 4 of the list of documents;

    In respect of paragraph 16 of JAC1 and paragraph 17A(a) of the Defence: the respondents say that there is no document to be discovered

    In respect of paragraph 17 of JAC1 and paragraph 17A(b) of the Defence: the respondents say that there is no document to be discovered;

    In respect of paragraph 18 of JAC1 the respondents say that ad hoc payments were not included on pay slips at the time payments were made and that relevant bank records have been discovered at Item 12 of the proposed Amended Document List;

    In respect of “the Tax Ruling”: the respondents say that there is no document to be discovered. However, the respondents have discovered the relevant tax advice under Item 11 of the respondents’ List of Documents; and

    In respect of “missing pay slips”: the respondents say that there is no document to be discovered.

25    The respondents submit further that:

    The orders sought by the applicant are not in precise and unambiguous terms, and are not capable of being granted on a self-executing basis;

    A self-executing order would deny the respondents an opportunity to be heard on the merits; and

    The respondents have, in good faith, attempted to comply with the latest discovery order but have fallen short due to the ambiguous scope of the documents requested in JAC1.

Consideration

26    The case before me, and the orders sought, raise very serious issues relating to the progress of litigation in this Court and the administration of justice.

27    The Court has made case management orders in these proceedings relating to discovery and the filing of a defence (which complies with the Federal Court Rules), with which the parties are required to comply. It is a public interest of the highest order that citizens have confidence that orders of the Court will be enforced (cf observations of Smithers J in Re Tradestock Pty Ltd Pty Ltd, Frewen and Stock v TNT (Management) Pty Ltd [1983] FCA 248; Lockhart J in Mudginberri Station Pty Ltd v the Australasian Meat Industry Employees Union [1985] FCA 330 at [6]; In the Marriage of G and G [1981] FamCA 38; (1981) 7 Fam LR 267 at [144]; Lander J in Jones v Toben (No 2) [2009] FCA 477 at [77]).

28    In this respect:

    Insofar as concerns compliance with discovery orders: as Kirby J observed in Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49:

107.    The importance of discovery and of subpoenas for ensuring that parties, and thereby eventually courts, can gain access to relevant documents cannot be overstated. Quite apart from the documents themselves, and the matters which they reveal on their face, the lines of inquiry which they open up can often be crucial. The information secured in this way frequently means the difference between success and failure in litigation…

(Emphasis added.)

    Insofar as concerns filing of a defence: pleadings define the issue for trial and perform the function of ensuring that each party has a fair opportunity to meet the case which is put against it: Banque Commerciale SA En Liquidation v Akhil Holdings Limited [1990] HCA 11; (1990) 169 CLR 279 at 286; Fuller v Toms [2012] FCAFC 155 at [17]; Commissioner of Taxation v Normandy Finance and Investments Asia Pty Ltd [2016] FCAFC 180; (2016) 344 ALR 589 at [139] It is of the utmost importance that the respondents file a defence, complying with the Federal Court Rules, to enable the applicant to understand the case he is meeting.

29    On the other hand, in this case the applicant seeks an order for strike out of the respondents’ defence and entry of judgment in his favour without further intervention by the Court. The Courts have consistently referred to the great caution which must be exercised in regard to summary determination of a case: see for example Dixon J in Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62, Barwick CJ in General Steel Industries Inc. v. Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 and Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 at [25]-[26].

30    Turning now to the specific issues of which the applicant complains. I note that the applicant submits that the respondents have, repeatedly, failed to comply with case management orders relating to discovery and the filing and service of a proper defence, and continue to fail to comply. In my view he has cause to complain.

31    First, it is clear that, notwithstanding the respondents’ denial of non-compliance with discovery orders of Logan J and myself, they have and continue to be in default of such orders. Earlier in this judgment I set out the orders made by his Honour and myself, over a period of months on 5 March 2019, 28 May 2019, 28 June 2019 and 16 July 2019, requiring discovery of documents by the respondents. From their written submissions of 12 August 2019, not only do respondents concede previous improper claims of privilege in respect of documents which they have not disclosed, they now refer to further new documents they have found and have not previously discovered. They also refer to a proposed “Amended List of documents” which appears to include these further new documents. I note for example the submissions of the respondents in relation to:

    Paragraphs 1 and 2 of JAC1 and paragraph 4A of the Defence: the respondents have discovered the relevant documents under Items 1 and 2 of the respondents’ List of Documents, and bank records were discovered at item 12 of the proposed Amended Document List;

    Paragraph 7 of JAC1 and paragraph 8B(b) of the Defence: for the period referred to (from March 2015 until July 2015) the respondents have discovered the relevant documents under Item 4 of the respondents List of Documents, and bank records are discovered at Item 12 of the proposed Amended Document List;

    Paragraph 9(a)-(c) of JAC1 and paragraph 12 of the Defence: the respondents in their written submissions filed on 12 August 2019 concede that the claiming of privilege in relation to Item 13 of the original List of Documents was in error; that there are no bank records to be discovered; that no “Heads of Agreement” document exists; and that claims of privilege will be corrected in the proposed Amended Document List;

    Paragraph 13(d)(i)-(vii) of JAC1 and paragraph 12(b) of the Defence: the respondents have discovered the relevant documents under Item 8 of the respondents’ List of Documents; however in their written submissions filed on 12 August 2019 the respondents say that they have discovered a further 48 documents relating to superannuation under Item 8 of the proposed Amended Document List; and

    Paragraph 18 of JAC1 the respondents say that ad hoc payments were not included on pay slips at the time payments were made and that relevant bank records have been discovered at Item 12 of the proposed Amended Document List.

32    At present, the filing and serving of an “Amended List of documents” would not be authorised by any case management orders of the Court. Certainly, insofar as I am aware, the respondents have not sought any orders allowing them to file and serve such a list on the applicant.

33    The reference by the respondents to a proposal for an “Amended List of documents” is a clear concession by them that their discovery to date does not substantially comply with previous orders for discovery. In my view the applicant has every reason to be concerned that the drip feed of documents to date will continue, with even further documents to emerge.

34    In relation to a defence, the respondents have filed defences on 22 March 2019 (ordered by Logan J), 5 July 2019 (ordered by Logan J), 23 July 2019 (ordered by me) and finally 26 July 2019 (filed after 4.30pm on that day, meaning it was filed 27 July 2019). The latest version of the Defence does not appear to have been filed pursuant to any orders of the Court, and certainly was out of date if the respondents purported to file it pursuant to my orders of 16 July 2019 (which allowed them to file and serve a further amended defence within 7 days of that date).

35    Further, and notwithstanding the multiple attempts the respondents have made to file a defence compliant with the Federal Court Rules, it is apparent from a cursory examination of the latest version filed on 27 July 2019 that it does not. It is sufficient to simply note that:

    For unexplained reasons, the document contains two paragraphs numbered “30”

    The meaning of paragraph 30(c) is entirely unclear to the extent that the respondents plead that “ad hoc payments” could “be provided upon request”. This is a statement more appropriate to provision of particulars.

    The applicant submits that the latest version does not comply with r 16.59 regarding comprehensive tracking of amendments compared with earlier versions (for example, with respect to paragraph 31 of the defence). The respondents do not address this submission other than by reference to paragraphs 29, 29A and 30 of the defence.

36    The respondents submit that these are minor issues, however I do not accept this proposition in circumstances where the respondents appear to have been unable to properly finalise a defence to which the applicant can reply.

37    The question which now arises is: what is the appropriate approach by the Court?

Self-executing orders

38    That the Court has power to make a self-executing or “guillotine” order in the terms sought by the applicant does not appear to be in dispute.

39    Rule 5.21 of the Federal Court Rules provides:

Self-executing orders

A party may apply to the Court for an order that, unless another party does an act or thing within a certain time:

(a)    the proceeding be dismissed; or

(b)    the applicant's statement of claim, or alternative accompanying document referred to in rule 8.05, be struck out; or

(c)    a pleading of the respondent be struck out; or

(d)    the party have judgment against the other party.

40    Rule 5.22 provides:

When a party is in default

A party is in default if the party fails to:

(a)     do an act required to be done, or to do an act in the time required, by these Rules; or

 (b)    comply with an order of the Court; or

 (c)    attend a hearing in the proceeding; or

 (d)    prosecute or defend the proceeding with due diligence

41    Rule 5.23 relevantly provides:

Orders on default

…

(2)    If a respondent is in default, an applicant may apply to the Court for:

…

(b)     if the claim against the respondent is for a debt or liquidated damages--an order giving judgment against the respondent for:

(i)    the debt or liquidated damages; and

(ii)    if appropriate, interest and costs in a sum fixed by the Court or to be taxed; or

(c)     if the proceeding was started by an originating application supported by a statement of claim or an alternative accompanying document referred to in rule 8.05, or if the Court has ordered that the proceeding continue on pleadings--an order giving judgment against the respondent for the relief claimed in the statement of claim or alternative accompanying document to which the Court is satisfied that the applicant is entitled; or

(d)    an order giving judgment against the respondent for damages to be assessed, or any other order; or

(e)    an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order.

Note 1: The Court may make any order that the Court considers appropriate in the interests of justice--see rule 1.32.

42    The power of the Court to make a self-executing order is clearly discretionary (Welsh v Digilin Pty Ltd [2008] FCAFC 149; (2008) 250 ALR 13 at [12]-[13], Strategic Financial and Project Services Pty Limited v Bank of China [2012] FCA 701 at [12]. In Welsh v Digilin the Full Court considered that similar principles applied to those discussed in Lenijamar Pty Ltd v AGC (Advances) Ltd [1990] FCA 520; (1990) 27 FCR 388 at 396, namely:

…(T)wo situations are obvious candidates for the exercise of the power: cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period, and cases - whatever the applicant’s state of mind or resources - in which the non-compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent.

43    Principles relevant to the grant of self-executing orders referable to want of compliance with case management orders were explained by French J in Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203. His Honour observed at [102]:

The summary dismissal of a proceeding for non-compliance with directions is a drastic measure, particularly where, as in this case, it would raise the real possibility that a cause of action relied upon would thereafter be statute barred – see s 82 Trade Practices Act 1974 (Cth). Where compliance requires, as in this case, filing of the applicant’s evidence, the failure to file anything at all would have the clear consequence that the application would stand dismissed. Where the evidence filed could be characterised as so incomplete in material respects as to be a derisory or colourable compliance then again there would be little difficulty in concluding that the self-executing order had not been complied with and that the application stood dismissed.

44    In particular, his Honour continued at [106]:

In considering whether an action should stand dismissed without extension of time pursuant to a self-executing order or otherwise be dismissed under O 10 r 7, there is a number of relevant factors to be considered including:

  1.     The seriousness of the non-compliance.

  2.     The reason for the non-compliance.

3.     The history of delay or breach of orders in the past on the part of the applicant.

4.     Any prejudice to the [respondents] arising from the dismissal of the proceedings.

5.     Any prejudice to the [applicant] from permitting the proceedings to continue.

  6.     The authority of the Court.

(Amendments added.)

45    Applying these principles to the case before me, I consider:

    The ongoing failure of the respondents over several months to make discovery and articulate a defence in accordance with the Federal Court Rules and case management orders of both the docket Judge and myself is serious. The litigation has been delayed, to the prejudice of the applicant. The applicant remains in a position where he is unable to file a Reply, such that the pleadings can be closed. Notwithstanding the general rule in s 570 of the Fair Work Act, costs orders have been made by both Logan J and myself against the respondents for want of compliance with relevant case management orders on the basis that the respondents’ unreasonable acts or omissions have caused the applicant to incur costs.

    No reason other than a large volume of documents has been given by the respondents for their failure to complete discovery. No reason at all has been given for their want of compliance with the Federal Court Rules in respect of their defence. The respondents are a law firm and the principal of that law firm. They are represented by another law firm. Multiple extensions of time have been given by the Court to the respondents to comply with their legal obligations. In respect of documents to be discovered, it is inexplicable for example that such documents as pay slips could not be provided by the respondents. These factors in themselves emphasise the seriousness of the non-compliance.

    I have already set out, in detail, the lengthy history of non-compliance by the respondents with case management orders in this matter. In circumstances where the respondents have had multiple opportunities to file a defence which complied with the Federal Court Rules, it is puzzling to say the least that they have not done so. Further, the reference by the respondents to a new Amended List of documents is concerning, and suggests not only that new documents are to be discovered, but that the respondents may find more should they search further.

    An order in the terms sought by the applicant would clearly prejudice the respondents. However, the applicant is entitled to have confidence that his case will progress in an ordered fashion. Public confidence in the administration of justice similarly demands. In this respect I further note the provisions of s 37M of the Federal Court of Australia Act 1976 (Cth), and principles articulated by the High Court in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. As recently reiterated by the Kiefel CJ and Bell and Keane JJ in UBS AG v Tyne [2018] HCA 45; (2018) 360 ALR 184 at [38]:

The timely, cost effective and efficient conduct of modern civil litigation takes into account wider public interests than those of the parties to the dispute. These wider interests are reflected in s 37M(2) of the FCA. As the joint reasons in Aon Risk Services Australia Ltd v Australian National University explain, the “just resolution” of a dispute is to be understood in light of the purposes and objectives of provisions such as s 37M of the FCA. Integral to a “just resolution” is the minimisation of delay and expense.

(Citations omitted.)

46    The authority of the Court in this case to make a self-executing order in the terms sought is questioned by the respondents to the extent that they submit that the order would deny them an opportunity to be heard, and further that terms of any such order would not be precise and unambiguous. They rely in particular on the decision of the Full Court in NBGI v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 233; (2005) 147 FCR 565. In that case the primary Judge had relevantly made an order in terms that if the appellant did not comply with the first order – which required him to file an amended application giving complete particulars of each ground of review being relied upon by 28 February 2005 – "the application will be automatically dismissed by [the Federal Magistrate] in Chambers." Black CJ observed:

11.    First, although the third order made by the Federal Magistrate – that in default of compliance with the first order, "the application will be automatically dismissed ... in Chambers" – bears some resemblance to a "self-executing" or "self-operating" order (see Broers v Forster [1981] FCA 111; (1981) 36 ALR 605 at 612-614 (Bowen CJ and Ellicott J), 620-621 (Deane J); Abalian v Innous [1936] 2 All ER 834; Reiss v Woolf [1952] 2 All ER 3; [1952] 2 QB 557), an order in these terms was inherently liable to cause trouble. A self-executing order should provide in precise and unambiguous terms that judgment may be entered on the occurrence or non-occurrence of a very clearly defined event. Being self-executing, such an order requires no further judicial intervention. This means, however, that if there could be a legitimate conflict of opinion about whether or not the event said to be the appropriate subject of such an order has in fact occurred, which could only be resolved by further adjudication, there will be no occasion for the making of a self-executing order. As Greene LJ (as he then was) said in Abalian v Innous (at 838):

If an order is to be made in the form that, unless one party or another party does something the action will be dismissed, it is imperative that the thing to be done in order to avoid dismissal of the action should be specified in the clearest and most precise language, so that it may be possible for the party on whom the necessity of doing the act lies ... to be in no doubt whatsoever as to the steps which he is to take if he is to avoid his action being dismissed.

12    In the present case, the appellant was ordered to file, by 28 February 2005 an amended application giving complete particulars of each ground of review being relied upon. An amended application was filed within time on 8 February 2005. The Minister’s solicitors were, however, of the view that the amended application did not satisfy the terms of the order. This is plain from their letter of 2 March 2005. In his reasons, the Federal Magistrate noted that the amended application "purported" to comply with the earlier orders and, in a passage that reflects the submissions made to him, his Honour observed (at [14]):

This document was not submitted in the proper Court form and did not give proper particulars of the grounds of review. The amended application merely cavilled with the evidentiary finding of the Tribunal and as such was seeking an impermissible merits review. The applicant’s individual grounds were not identified nor any particularisation supplied.

To reach that conclusion, however, it was necessary to make an evaluation of the amended application and form an opinion as to whether it complied with the first order made by the Federal Magistrate. That order could not be said to be unambiguous, nor expressed with such clarity and precision that the appellant, particularly as he was a self-represented appellant, would have no doubt whatsoever about what was required to be in his amended application to avoid his case being summarily dismissed.

13    In these circumstances, it was wrong to dismiss the appellant’s application without giving him proper notice and an opportunity to be heard in opposition to that course. Moreover, a formal application should have been made to the Court. The letter sent by the respondent’s solicitors to the Federal Magistrate’s Chambers was an impermissible informality in these circumstances. Allsop J makes some observations, with which I agree, about the circumstance that the orders were made other than in open court.

(Emphasis added.)

47    Having regard to the submissions of the respondents in this respect, and the issues identified in NBGI, I make the following observations.

48    First, while a self-executing order referable to a specific action, such as for example payment of costs by a certain date, is unambiguous – see, for example Welsh v Digilin and Strategic Financial and Project Services – there is ample authority for self-executing orders relating to non-compliance with other forms of case management orders. So, for example:

    In Fisher v Westpac Banking Corporation Ltd (Unreported, Federal Court, French J, 9 February 1994) French J considered a motion for an order that a matter stand dismissed pursuant to the following orders:

1.     On or before 17 January 1994, the applicants to give further and better answers to those contained in para4, para5, para6 and para7 of the applicants' answers to the third respondent's request dated 14 September 1993 for further and better particulars of the amended substituted statement of claim.

2.     On or before 17 January 1994, the applicants to give further and better answers to the third respondent's request for particulars of the applicants' reply.

3.     In the event of default by the applicants to comply with O1 and O2, the applicants' action against the third respondent be dismissed.

                        His Honour noted that:

In purported compliance with para1 of the order, the applicants filed further particulars of their statement of claim on 17 January 1994. Particulars of the reply and defence to cross-claim required by para2 of the order were not filed until 21 January. When the directions hearing came on again on 24 January, counsel for the third respondent contended that there had been non-compliance with the order of 8 December 1993 in relation to the provision of particulars and that the third respondent was entitled to a judgment of dismissal on the claim. That question was adjourned to 28 January 1994. On 27 January 1994, the applicants filed a motion, returnable on the following day, seeking an extension of time for compliance with the order of 8 December 1993. The third respondent, on the other hand, filed a motion on 28 January for orders that the applicants' claim as against it be dismissed and, alternatively, the statement of claim be struck out and that it have judgment on its cross-claim.

                         French J later observed:

In the event, I am satisfied that the particulars filed on 17 January 1994 do not comply with the requirements of the requests in respect of which the order of 8 December 1983 was made. No particulars of the reply were filed within the required time and those filed out of time do not appear to be responsive to the request.

Given the history of this matter, I do not consider that any further extension of the time for filing proper particulars should be granted. Although I do not think it appropriate to make it a determination on the strike out element of the motion, the applicants' pleaded case is marginal. There has already been strong and adequate warning in this case about the need to comply with the Court's directions. In my opinion, the applicants' claim as against the third respondent should stand dismissed.

(Emphasis added.)

    In Goodwill Group Pty Ltd v Pongrass Associates Pty Ltd [2002] FCA 1203 a self-executing order was made by a Judge of this Court requiring that the applicant file its evidence in support of the claim by a nominated date, in default of which the application would be dismissed. Evidence was filed but the respondents in that case submitted that it did not disclose the pleaded case, that the self-executing order has taken effect and that the application stood dismissed. French J found that the applicant had done enough, in filing evidence which put in case in part, to avoid dismissal of the application pursuant to the self-executing order.

    In Leonard Cohen & Co v Richardson [2005] WADC 172, against a background of repeated non-compliance with discovery orders, the District Court of Western Australia considered a self-executing order made by a Deputy Registrar in the following terms:

Unless the defendants do within 10 days of service of this order file and serve a further affidavit properly particularising the documents comprised in item 139 of the list of documents filed on 8 April 2005 and in particular, itemising those documents relating to the finalisation in settlement of proceedings in Supreme Court Action 1090 of 1991, their defence be struck out and judgment be entered on the plaintiff for the amount of its claim, interest and costs.

   The order was made pursuant to O 26 r 15 of the Rules of the Supreme Court (WA) which relevantly provided:

(1)     If any party who is required by any of the rules of this order or by any order made thereunder, to give discovery of documents or to produce any documents for the purpose of inspection or any other purpose fails to comply with any provisions of that rule or with that order, as the case may be, then without prejudice, in the case of a failure to comply with any such provision, to rules 7 and 9(1) the Court may make such order as it thinks just including in particular, an order that the action be dismissed or as the case may be, an order that the defence be struck out and judgment entered accordingly.

   Sleight DCJ observed:

63.    Notwithstanding that in my opinion Deputy Registrar Hewitt would have been entitled to give judgment under O 26 r 15 he generously gave the defendants a further opportunity to give discovery. He also, by the wording of his order, clearly intended to make it explicit as to what documents were required to be discovered.

64.    Since the decision of Deputy Registrar Hewitt I have received further affidavits from the defendants which in my opinion, again manifest a disregard for the obligations of giving proper discovery. The affidavits of the defendants dated 10 August 2005 and 11 August 2005 respectively stating the documents are not in their physical control do not address the issue of their obligation to make enquiries of persons with whom documents may be held on their behalf, and to give discovery of these documents.

65.    In my opinion, the continuing disregard by the defendants of their obligation to give proper discovery justifies a judgment being entered against them under O 26 r 15. In my opinion, the history of this matter demonstrates that the defendants have deliberately attempted to frustrate the plaintiff's attempts to obtain proper discovery, and in doing so they have sought to avoid putting the plaintiffs in the position which they will be able to prepare adequately for trial.

66.    In the circumstances I believe I should make an order under O 26 r 15 for judgment.

(Emphasis added.)

   An appeal against the decision of Sleight DCJ was upheld in Richardson v Leonard Cohen & Co (A Firm) [2006] WASCA 64.

    In O'Donoghue v State of Western Australia [2013] FCA 903 McKerracher J made an order as follows:

The time within which the Applicant is to file and serve on the Respondents an affidavit and a Statement of Issues, Facts and Contentions in relation to the application be extended to 21 August 2013, failing which the application will be dismissed.

   The respondents wrote to the Court advising that they had not been served with an affidavit and a statement of issues, facts and contentions, and sought a formal order that the application be dismissed. McKerracher J ordered that the application be dismissed.

    In KerryJ Pty Ltd v Xiamen Fengwei Energy Technology Co Ltd [2013] FCA 361 Kenny J made self-executing orders in the following terms:

4.    The First Respondent appoint a lawyer and:

  4.1    file a notice of acting in accordance with Rule 4.04 of the Rules; and

4.2    file a notice of address for service in accordance with Rule 11.01, 11.02 and 11.07 of the Rules,

by 10 May 2013.

5.    In the event that the First Respondent does not comply with Order 4;

5.1    judgment be entered for the Applicant against the First Respondent pursuant to Rule 5.23(2) of the Rules, in terms that the Court shall direct.

49    I am satisfied that it is possible, in appropriate circumstances, to make self-executing orders referable to discovery obligations and filing of pleadings compliant with the Federal Court Rules.

50    Second, I do not accept that there would be ambiguity in a self-executing order referable to compliance with previous case management orders of the Court in this case. Again, I note that the respondents are respectively a lawyer and a law firm, represented by another law firm. The respondents have at no time indicated any lack of comprehension of the meaning of the Court’s orders, or of their obligations in complying with those orders. Indeed given that Orders 1 and 2 refer to case management orders of the Court concerning the filing of a defence and discovery it would be surprising if the respondents (being lawyers themselves) and their lawyers had difficulty either comprehending or complying.

51    Third, it cannot be said that the respondents have lacked opportunity to be heard in respect of the question of whether self-executing orders should be made against them. The issue was originally before the Court on 16 July 2019, and in respect of the current interlocutory application on 7 August 2019 and 15 August 2019. Detailed submissions have been filed by both parties.

52    Nonetheless, I consider that, in the event that the respondents continue their non-compliance with Court orders in terms contemplated by the self-executing orders I propose to make, it would be appropriate for the applicant to seek a formal order that the FAD be struck out and that judgment be entered in his favour. In the interests of justice, the Court should be formally satisfied that orders referable to discovery and compliance with the Federal Court Rules in respect of the respondents’ defence have themselves been complied with. To the extent that the respondents would seek to be heard in respect of whether they had complied with the orders of the Court (or not), and whether the self-executing orders had come into effect, they would have an opportunity to be heard by the docket Judge at that point.

53    In this respect I consider that, in the circumstances where there may be controversy as to whether the respondents have complied with the self-executing orders I will make, a further order of the Court is necessary. In the interests of certainty, I will also order that any application by the applicant for a formal order in these terms be made by 4.00pm on 30 August 2019.

Conclusion

54    While it is a very serious matter to strike out the respondents’ FAD and give judgment for the applicant summarily as sought by the applicant, I consider that such orders are appropriate in the circumstances of this case and the repeated and ongoing want of compliance by the respondents. Further, I am satisfied that the Court has the power to, and should, make self-executing orders striking out the respondents’ FAD and entering judgment in favour of the applicant, unless the respondents comply with Orders 1 and 2 made by the Court on 16 July 2019. In light of the fact that the respondent has had many months to comply with earlier case management orders in this proceeding, I do not consider 5 business days to be unjust. Accordingly, I consider that it is appropriate to extend time for compliance by the respondents with Orders 1 and 2 of 16 July 2019 until 26 August 2019.

55    I consider that a further order of the Court is required to formally give effect to the self-executing orders I will now make, in light of possible controversy as to whether the respondents have complied with those orders. Accordingly, I do not consider it appropriate that the self-executing orders in this case be given effect to “without further order” as the applicant has sought.

56    It is further unnecessary for me to make orders regarding a date for a case management hearing to provide directions for a hearing on remedies and penalties as the applicant has sought as, if such a date is necessary, the docket Judge will make such orders.

57    The applicant seeks his costs of and incidental to this interlocutory application and the case management hearing on an indemnity costs basis. Mr Carbone’s claim is under the Fair Work Act. Section 570 of the Fair Work Act provides:

570 Costs only if proceedings instituted vexatiously etc.

(1)    A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

Note:    The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

(2)    The party may be ordered to pay the costs only if:

(a)    the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b)    the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

(c)    the court is satisfied of both of the following:

(i)    the party unreasonably refused to participate in a matter before the FWC;

(ii)    the matter arose from the same facts as the proceedings.

58    The Court has a discretion under s 570(2) to order costs in what is, as a general rule, a non-costs jurisdiction. As Mortimer J said in Richens v Commonwealth of Australia (as represented by the Commissioner of Australian Federal Police) [2018] FCA 1276 at [23]:

…the discretion in s 570(2) should be exercised cautiously and the case for its exercise should be clear, in part to avoid discouraging parties from completely and robustly pursuing claims of contravention under the Fair Work Act, or in equally robustly pursuing their defence of such claims. However, I also observed that s 570 was an access to justice provision in the sense that the ordinary position would be that parties may pursue these claims without the apprehension of adverse costs orders if they are unsuccessful.

59    In respect of an award of costs on an indemnity basis the Full Court of this Court recently observed in Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32 at [48]:

It has long been established that the Court may, in the exercise of the discretion under s 43 of the FCA Act, award costs on a solicitor/client or indemnity basis where the particular circumstances of the case warrant the Court departing from the ordinary practice of awarding costs on a party and party basis. As Sheppard J explained in Colgate Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225 (Colgate Palmolive) at 233, there should be some special or unusual feature in the case to justify the Court departing from the ordinary practice.

60    I am satisfied that the historical (and ongoing) want of compliance by the respondents in this proceeding constitutes unreasonable acts or omissions, which have in turn caused the applicant to incur unnecessary costs within the meaning of s 570(2) of the Fair Work Act. I am also satisfied that the repeated non-compliance by the respondents with case management orders of the Court over many months, their concession of non-compliance, the absence of proper explanation by the respondents, the prejudice the applicant has suffered as a result, and the fact that the applicant has been required to incur the costs of this interlocutory application in an endeavour to make the respondents comply, constitute a special or unusual feature warranting an order for indemnity costs.

Associate:

Dated:    19 August 2019