FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 2) [2020] FCA 348

ORDERS

THE COURT ORDERS THAT:

1.    Leave be granted to the second respondent to file and serve an amended defence in the form provided to the applicant on 9 March 2020 by 5PM on 17 March 2020.

2.    Any requirement the applicant may have under the Federal Court Rules 2011 (Cth) to file a reply be dispensed with.

3.    Leave be granted to the second respondent to file and serve affidavits from the following persons and the following persons only, provided they are filed by 5PM on 20 March 2020 and, in the case of the last three, limited in accordance with orders 4 and 5 below:

(a)    himself;

(b)    Palma Yu;

(c)    Godfrey Kenneth Elvin;

(d)    Laura Elvin; and

(e)    Bruno Gareffa.

4.    The evidence of Godfrey Kenneth Elvin and Laura Elvin be limited to the following topics: the situation at 44B Edwards Street, Higgins between 24 June 2012 until 11 February 2016, namely, who lived there, whether or not the gate was ever locked, the transport of the first respondent’s employees to and from work, and any social activities in which the employees engaged outside working hours.

5.    The evidence of Bruno Gareffa be limited to any statements made to him by employees of the first respondent about any plans they may have had to quit their employment and their future work intentions.

6.    The applicant file and serve any affidavits in reply by 5PM on 30 March 2020 unless an interpreter is required, in which case the applicant may file and serve unsworn affidavits in reply by that date and sworn versions by 5PM on 2 April 2020.

7.    The applicant be excused from filing an amended outline of opening submissions.

8.    The second and third respondents file outlines of their submissions on liability, not exceeding 15 pages, by 5PM on 30 March 2020.

9.    Pursuant to para 570(2)(b) of the Fair Work Act 2009 (Cth), the second respondent pay the applicant’s costs of, and incidental to, his interlocutory application filed on 5 March 2020 and the case management hearing on 4 February 2020.

10.    There be liberty to apply on two (2) days’ notice.

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

REASONS FOR JUDGMENT

KATZMANN J:

Introduction

1    By an interlocutory application filed on 5 March 2020, the second respondent, Colin Kenneth Elvin, sought leave to file an amended defence by 11 March 2020 and evidence on liability by 20 March 2020. The application afforded the applicant, the Fair Work Ombudsman, seven days thereafter to file evidence in reply. The hearing of the Ombudsman’s application began in October 2019 and is due to resume on 1 April 2020. The application is opposed. The opposition is by no means without justification. Indeed, it is soundly based. Nevertheless, I have decided to allow Mr Elvin to file his amended defence and to provide for an abbreviated timetable to enable him to file his evidence. That will require some adjustments to the Ombudsman’s fall-back timetable. Whether Mr Elvin will ultimately be able to rely on all the evidence he wishes to adduce, however, is another matter.

The evidence in support of the interlocutory application

2    In the affidavit he filed in support of his interlocutory application, Mr Elvin stated that he planned to file an affidavit addressing the Ombudsman’s allegations and “brief affidavits” from his mother and father and a former, unnamed, employee. He said that his previous lawyers withdrew from his case the week before the hearing commenced and, since then, he has represented himself, which he found to be “extremely stressful and generally difficult to manage”. He said that during the course of the proceeding he had separated from his “relationship partner” and has the sole custody of their two young children. He asserted that, as a result of the stress caused by the litigation and the breakdown of his relationship, he suffered “severe anxiety and depression” and, on doctor’s advice, has begun taking anti-depressants to help him cope. He said he began taking the medication in 2019, since which time he has had difficulty concentrating and has suffered “memory loss lapses”. He said that his physical health had deteriorated, causing weight loss, and that at times he feels like he is “frozen and incapable of dealing with any serious matters such as filing documents in Court”. Although he admitted he was aware of the court orders requiring him to file an amended defence and evidence, due to his depressed state, lack of legal representation, and the fact that his attention was focused on his children, he said he “failed to take any action before the date came around”. He claimed that, if the orders were made in his favour, they would not cause any prejudice to any party and would not inconvenience the Court.

3    Annexed to the affidavit was a “Medical Statement” from a general practitioner, dated 21 January 2020, in the following terms:

This is to certify that I have today examined:

Mr Colin Elvin [of] …

In my opinion, he suffers from severe Anxiety and Depression due to stress from legal proceedings and poor financial state. This is compounded by the fact that he is stressed being a primary carer of 2 young children.

I have prescribed him Lexapro anti-depressant and referred him to see a psychologist Rexton D'Cruz at Gungahlin.

4    That was the sum total of the evidence in support of the interlocutory application. Notably, no draft defence or outlines of evidence were annexed to the affidavit.

5    The Ombudsman relied on three affidavits affirmed by Sharissa Thirukumar, a senior lawyer in her office, who has had carriage over the conduct of the proceeding.

6    Given the impending hearing, I listed the interlocutory application for hearing at short notice the day after it was filed. That was Friday, 6 March 2020. In order to assess the extent of any prejudice to the Ombudsman if I were to grant leave to Mr Elvin to file an amended defence and evidence, I made orders requiring him to disclose his proposed amended defence by 5 PM that day and to serve outlines of evidence from the witnesses he intended to call, if leave were granted, by 9 AM on Monday, 9 March 2020. I also required him to serve the Ombudsman at the same time with any additional documents he wished to tender. I gave the Ombudsman until 9 AM on 11 March 2020 to inform the Court whether she continued to oppose the relief Mr Elvin sought and, if so, to file and serve submissions. I gave Mr Elvin until 9 AM the following day to file and serve any submissions in reply. I ordered that the interlocutory application be determined on the papers.

Background

7    At all relevant times, the first respondent, Foot & Thai Massage Pty Ltd (FTM), was the owner and operator of a therapeutic massage shop trading as “foot&thai” in Belconnen, ACT. At all such times Mr Elvin was its sole director, secretary, and shareholder. The third respondent, Jun Millard Puerto, was an employee of FTM, allegedly responsible for supervising other FTM employees.

8    The applicant, the Fair Work Ombudsman, alleges that FTM contravened the Fair Work Act 2009 (Cth) (FW Act) in multiple respects over a period of approximately three and a half years, from 24 June 2012 until 11 February 2016. The alleged contraventions range from poor and misleading record-keeping to underpayment of wages and other award entitlements; requiring employees to work unreasonable hours; taking adverse action against them to prevent them from exercising their workplace rights; discriminating against them because of their race, national extraction or social origin; to threats of retribution against them and their families in the event that they complained about their working conditions. Mr Elvin and Mr Puerto are said to be knowingly concerned in these contraventions. Amongst other forms of relief, the Ombudsman applied for civil penalties against all three respondents.

The history of the proceeding

9    The proceeding was commenced on 22 June 2018. All three respondents filed defences, FTM and Mr Elvin on 20 July 2018, Mr Puerto on 20 August 2018. In their defences, Mr Elvin and Mr Puerto raised the privilege against exposure to penalties (penalty privilege).

10    Thereafter the litigation has had a rocky history.

11    First, the respondents made an unsuccessful application to the former docket judge for a separate trial of a question: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd [2018] FCA 1584.

12    Second, Mr Elvin, who had been legally represented at the time his defence was filed, and for some time that included both a law firm and a very experienced and competent junior counsel, became unrepresented when, on 7 February 2019, his lawyer filed a notice of ceasing to act. At the same time the lawyer who had been acting for Mr Puerto also filed a notice of ceasing to act. Six months later, Mr Elvin appointed a new lawyer to represent him and, on 13 August 2019, the new lawyer filed an address for service. A little over two weeks later, FTM’s lawyer filed a notice of ceasing to act.

13    Third, five weeks before the hearing was due to start, FTM appointed an external administrator and resolved to wind up the company. The Ombudsman applied for, and was granted, leave to proceed against it: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) [2019] FCA 1601.

14    Fourth, on 17 October 2019, four days before the trial was due to start, Mr Elvin’s new lawyer filed a notice of ceasing to act.

15    The trial began on 21 October 2019. All the Ombudsman’s affidavits were read and all of the employee witnesses were cross-examined.

16    The Federal Court Rules 2011 (Cth) (FCR) require that a party pleading to an allegation of fact in another party’s pleading must specifically admit or deny every allegation of fact in the pleading and provide that allegations that are not specifically denied are taken to be admitted (r 16.07). They also relevantly require that, in a defence, a party expressly plead a matter of fact or law that raises an issue not arising out of the earlier pleading or, if not expressly pleaded, might take another party by surprise if pleaded later (r 16.08). The effect of raising the penalty privilege in their defence was that Mr Elvin and Mr Puerto were relieved of the need to comply with the pleading rules if those rules would override the privilege: A & L Silvestri Pty Ltd (ACN 052 514 799) v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; 226 ALR 247 (Gyles J). Once the moving party’s case concludes and the other party chooses to run a positive case, however, an amended defence should be filed outlining that case: Australian Securities and Investments Commission v Mining Projects Group Limited (2007) 164 FCR 32 at [17] (Finkelstein J). Of course, it is open to a respondent at any time to waive the privilege.

17    On 25 October 2019, after the testimony of the last of the Ombudsman’s witnesses, the Court made orders, amongst other things, requiring that:

(1)    the respondents file and serve any amended defence by 20 December 2019;

(2)    the applicant file and serve a reply to any amended defence by 17 January 2020;

(3)    the respondents file and serve any evidence on liability, in affidavit form, by 14 February 2020;

(4)    the applicant file and serve any evidence in reply by 6 March 2020;

(5)    the respondents file and serve any submissions on liability by 27 March 2020; and

(6)    the matter be adjourned for further hearing commencing 1 April 2020, with an estimate of five days.

18    The parties were also granted liberty to apply on two days’ notice.

19    The orders were made in the presence of Mr Elvin and the lengthy periods for which they provided to enable him to file an amended defence and put on his evidence were designed to meet his convenience.

20    On 18 November 2019 the orders were varied and the time within which the respondents were to file any amended defences was extended to 23 December 2019.

21    On 20 December 2019 Ms Thirukumar emailed Mr Elvin, attaching a copy of the orders made on 25 October 2019, referring to the extension of time granted on 18 November 2019, and reminding Mr Elvin that he had until 23 December 2019 to file any amended defence.

22    Mr Elvin promptly replied:

I have unfortunately been unable to complete my submission by the due date. I apologise for the delay. There is no excuse however locating witnesses and details from that period has been difficult. I also could not afford legal representation to assist in this matter to avoid wasting the courts time with irrelevant issues. I have managed to find a retired solicitor but he was unable to review in time as he has other commitments. I would like ask for another 2 weeks if possible. Again I apologise to all parties involved and I hope her honour can understand my situation and allow some extra time.

23    He made no mention in this email of any anxiety or depression, difficulties with concentration or lapses of memory. He said nothing about having been prescribed anti-depressants. He made no application to the Court for leave to further extend the period for filing and serving the documents. And he did not file or serve the documents.

24    The matter returned to court on 4 February 2020, on the Ombudsman’s application. Neither Mr Elvin nor Mr Puerto appeared, although they had both been notified of the date. No explanation was given for their absence.

25    On that occasion the Ombudsman read an affidavit from Ms Thirukumar affirmed on 3 February 2020. That disclosed some of the information to which I have already referred and the following additional information.

26    Ms Thirukumar replied to Mr Elvin’s email of 20 December 2019, copying in Mr Puerto. She advised that she consented to an extension of two weeks (until 6 January 2020) for the respondents to file any amended defence, provided that the Ombudsman was given an extension of one week to file any reply. She attached a signed proposed minute of order to this effect. She received no reply to her email.

27    On 10 January 2020 Ms Thirukumar emailed Mr Elvin and Mr Puerto again, referring to her previous email, seeking “an update” by noon on 13 January 2020 as to whether they would be filing any amended defences. She said in her email that, unless she heard from them by that time, she would contact the Court to request that the matter be listed for a case management hearing at the Court’s earliest convenience. She received no reply to this email either.

28    On 14 January 2020 Ms Thirukumar emailed the Court, requesting that the matter be relisted to address the issue. She copied in Mr Elvin and Mr Puerto. This email also appears to have generated no response from either of them.

29    On 22 January 2020 Ms Thirukumar sent another email to Mr Elvin and Mr Puerto seeking an update on whether they intend to file an amended defence. Neither replied.

30    On 28 January 2020 Ms Thirukumar sent a further email to the two men, seeking the same information. Again, she received no reply.

31    Annexed to Ms Thirukumar’s affidavit was a proposed minute of order, seeking that the relevant orders made by the Court on 25 October 2019 be vacated, requiring the Ombudsman to file and serve an amended outline of submissions by 6 March 2020 and the respondents to file and serve any submissions on liability by 27 March 2020, and revising the estimate for the hearing from five days to three. When the matter came before the Court on 4 February 2020, however, the Ombudsman was disposed to give the respondents a further opportunity. On her application, I made orders to the following effect:

(1)    that the respondents file and serve any amended defence by 14 February 2020;

(2)    that, if no amended defence were filed within this time, none could be filed without the leave of the Court;

(3)    that the applicant file and serve any reply by 21 February 2020;

(4)    that the respondents file and serve any evidence on liability (in affidavit form) by 28 February 2020;

(5)    that, if no such evidence were filed within this time, none could be filed without the leave of the Court;

(6)    that the applicant file and serve any evidence in reply, together with an amended outline of submissions, by 20 March 2020; and

(7)    that the respondents file and serve an outline of their submissions, if any, on liability by 27 March 2020.

32    Ms Thirukumar’s second affidavit, affirmed on 5 March 2020, and read at the hearing on 6 March 2020, set out what transpired thereafter.

33    On 6 February 2020 Ms Thirukumar emailed Mr Elvin and Mr Puerto, informing them of the orders made two days earlier and attaching a copy of those orders.

34    On 10 February 2020 Ms Thirukumar wrote to Mr Elvin and to Mr Puerto, by mail and email, referring to the orders of 4 February 2020, explaining the significance of those orders, mentioning their history of non-compliance with court orders and their failure to attend the case management hearing, informing them of the Court’s powers in the circumstances to strike out their defences, disallow or reject any evidence they may wish to file, and enter judgment against them.

35    On 12 February 2020 Mr Puerto replied, thanking Ms Thirukumar for sending the letter by post, explaining that his email address had been inaccessible since December and giving her his new email address and mobile phone number. But there was no reply from Mr Elvin. On 14 February 2020 Ms Thirukumar forwarded all correspondence from 1 December 2019 to Mr Puerto. He replied the same day advising that he intended to maintain his current defence.

36    It was not until 28 February 2020 that the Ombudsman heard from Mr Elvin. On that day he emailed Ms Thirukumar, acknowledging the terms of the orders made on 4 February 2020, foreshadowing his interlocutory application and proposing that they agree on a timetable to permit him to file an amended defence and any evidence on liability. At that point he did not disclose his reasons for not complying with the previous orders.

37    Ms Thirukumar replied on 2 March 2020. She explained that, since he had not informed the Ombudsman of his reasons for not complying with the previous orders, the Ombudsman was not in a position to agree to his proposal. She also indicated that, if he were to make an application for leave at this point, the Ombudsman was likely to be significantly prejudiced. Besides detailing Mr Elvin’s history of non-compliance, she advised that his proposed timetable would give the Ombudsman insufficient time to prepare and file a reply, prepare and file any evidence in reply, prepare for cross-examination of any witnesses, and prepare submissions. She told him that any departure from the current timetable would affect the Ombudsman’s ability to present her case as a number of her witnesses were on bridging visas. She referred to the amounts of compensation she was seeking for the former employees of FTM and the extensive period of time during which the money has been outstanding. She also noted the potential prejudice to the creditors of FTM if the resolution of the proceeding were to be delayed. Finally, Ms Thirukumar said that the Ombudsman was unable to assess the precise extent of the prejudice she would suffer, so she asked him to advise her as soon as possible of the number and names of the witnesses from whom he intended to adduce evidence and an outline or description of their evidence.

38    Mr Elvin replied the following day. He said that he did not file an amended defence by 14 February 2020 and his evidence by 28 February 2020 for the reasons later set out in the affidavit in support of his interlocutory application. He invited the Ombudsman to reconsider her position. But he did not respond to Ms Thirukumar’s request that he provide her with the number and names of his witnesses or an outline or description of their evidence. He merely wrote:

For your information the issues l intend to address in my amended defence and affidavit evidence relate to three separate things. These are, the allegations against me of locking up and restricting the freedom of my employees, the record keeping for my business and, the alleged underpayments. I intend to file an affidavit covering these points and, affidavits from my mother and father and one previous employee. These affidavits will be relatively brief and only cover matters these people have direct knowledge about.

39    Ms Thirukumar’s third affidavit, affirmed on 10 March 2020, detailed the sequence of events after the hearing on 6 March 2020.

40    At 3:36PM that day Mr Elvin emailed to Ms Thirukumar an amended defence, but it was incomplete. At 5:56PM Ms Thirukumar wrote back to him pointing out that it failed to address a substantial number of paragraphs in the Ombudsman’s Further Amended Statement of Claim, which she identified. She indicated that she would not object to Mr Elvin providing a version of his amended defence that included his position on those additional paragraphs at the same time he provided his outlines of evidence, although she added that ultimately this was a matter for the Court. She noted that if he did not plead to the additional paragraphs, the allegations in those paragraphs would be deemed to be admitted, drawing his attention to r 16.07(2).

41    At 11:22AM, on Monday, 9 March 2020, Mr Elvin emailed another amended defence to Ms Thirukumar. He offered no explanation for the delay. Nor had he approached the Court for an extension of time.

42    In the meantime, on 8 March 2020, Mr Elvin emailed to Ms Thirukumar attaching draft affidavits from him and Ms Palma Yu. Neither of the documents was signed by the designated deponent and no signed statement was served from any proposed witness. As he pointed out in his covering letter, the affidavits were incomplete, but he claimed they would provide “a fair idea” of the evidence he intended to file. In the covering letter, he said that he also intended to file affidavits from his father and mother addressing aspects of the evidence given by the Ombudsman’s witnesses in their affidavits. He also foreshadowed an intention to file an affidavit from one Bruno Gareffa, who, he said, was a long-standing customer of FTM. He said that his evidence would “include him being told by employees of [FTM that] they were going to leave to start a new massage business nearby”. Mr Elvin added that he intended to draft a chronology to annex to his affidavit “to ensure that there is no confusion by the Court about relevant dates” and to prepare a “photo booklet” to assist the Court. He said that he would need to “briefly recall” all the Ombudsman’s witnesses so he could put his primary defence and allegations to them, namely that they had all lied. He invited the Ombudsman to consent to his application.

43    The draft amended defence makes a number of admissions but denies all allegations of wrongdoing.

44    In its present form, a good deal of Mr Elvin’s draft affidavit would be inadmissible. It is a mixture of evidence, accusations, and submissions.

45    In his draft affidavit Mr Elvin discloses that he is tertiary educated, that he studied economics at the Australian National University in order to become a businessman, an ambition he purportedly achieved. He provides a history of the establishment of FTM and presents an account of the recruitment process and the living and working conditions of the relevant employees which starkly contrasts with the evidence they gave. He alleges that their evidence was false and given for an ulterior purpose. He claims that he dismissed two of the employees who had entered into a personal relationship and that, from the time of their dismissal, they embarked on “a deliberate plan” to destroy FTM for personal gain. He also claims that they persuaded the other five employees to conspire with them to lie about their employment with FTM.

46    Mr Elvin referred in his draft affidavit to an investigation by the Australian Federal Police in 2016, which he claimed, in effect, exonerated him and FTM. He stated that copies of statements taken by the police are annexed, but no such documents were annexed to the draft affidavit.

47    Mr Elvin then answered the evidence given by one of the dismissed employees, Bartolome Durado, and started, but did not finish, answering the evidence given by another, Delo Be Isugan. There followed place-markers for responses to various parts of the affidavits of all the other witnesses including the Ombudsman’s employees, who were not previously required for cross-examination.

48    The draft affidavit of Palma Yu broadly corroborates Mr Elvin. It implicates a third party in the alleged conspiracy. But it, too, was incomplete.

49    In his submissions Mr Elvin said that he intends to apply for a subpoena to issue to the Australian Federal Police so that he can put in evidence an unredacted copy of a police report and “witness interview statements”.

The relevant principles

50    The Court’s power to make or refuse an order is conferred by FCR 1.41. Rule 1.41 imposes no fetters on the Court’s discretion. Like all powers conferred by the Rules, however, the power to make or refuse an order must be exercised in the way that best promotes the overarching purpose of the civil practice and procedure provisions, which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Federal Court of Australia Act 1976 (Cth) (FCA Act), s 37M. Subsection 37M(2) provides that the overarching purpose includes the following objectives:

  (a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c)    the efficient disposal of the Court’s overall caseload;

(d)    the disposal of all proceedings in a timely manner; and

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

51    The parties to a civil proceeding before the Court have an obligation to conduct the proceeding in a way that is consistent with the overarching purpose: FCA Act, s 37N(1).

52    If a party fails to comply with certain directions given by the Court or a judge, including directions requiring things to be done or setting time limits for the doing of things, the Court or a judge may make such order or direction as the Court or judge thinks appropriate: s 37P(5). Relevantly, that includes striking out a defence and disallowing any evidence: s 37P(6).

53    In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Gummow, Hayne, Crennan, Kiefel and Bell JJ said at [114]:

Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a “just resolution” of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.

54    These remarks apply equally to the rules of this Court mentioned above.

55    The key principles, drawn from Aon, are these:

(1)    There is no entitlement to amend (per Gummow, Hayne, Crennan, Kiefel and Bell J at [111]).

(2)    The extent of the delay, and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, must be weighed against the nature and importance of the amendment to the party seeking it (per Gummow, Hayne, Crennan, Kiefel and Bell J at [102]).

(3)    Where there is delay in applying for an amendment, an explanation is invariably called for (per Gummow, Hayne, Crennan, Kiefel and Bell J at [102]).

(4)    The Court should consider the potential for loss of public confidence in the legal system if applications are granted without adequate explanation or justification (per French CJ at [30]).

56    While Aon was concerned only with an amendment to pleadings, the same approach is to be taken to any interlocutory proceeding: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303 at [51] (French CJ, Kiefel, Bell, Gageler and Keane JJ).

57    Other considerations include the extent of any prejudice, actual and presumptive, occasioned to opposing parties; whether, and to what extent, acceding to the application would delay the hearing and the effect that would have on other litigants and the Court’s ability to efficiently manage its cases, and the presence or absence of good faith on the party making the application: see Black & Decker (Australasia) Pty Ltd v GMCA Pty Ltd [2007] FCA 1623 at [5] (Finkelstein J).

The applicant’s arguments

58    Mr Elvin submits that leave should be granted to ensure that the case is “fairly and fully heard”. He contends that, in view of the evidence he intends to file, there is a risk of miscarriage of justice if leave were not granted. He points out that he is the only respondent who is actively defending the Ombudsman’s claims and that he, personally, faces serious allegations which, if proven, may have serious consequences for him. He claims that the principles of fairness and natural justice mean giving every party a fair hearing and that, if leave were not granted, there would be no fair hearing. He submits that the relevant principles and the overarching purpose, the just determination of the proceeding, the nature and importance to him of being granted leave, the fact that he has not yet put on his evidence, the fact that granting leave would not interrupt the course of the proceeding, and the overall principles of fairness and natural justice warrant the grant of leave.

Consideration

59    Multiple factors, eloquently laid out in the Ombudsman’s submissions, militate against the grant of leave.

60    First, the application to amend the defence and file evidence was not made until less than a month before the hearing is due to resume when the dates were fixed five months ago. The orders made on 25 October 2019 would not have come as any surprise to Mr Elvin. On 1 April 2019 I made orders by consent which, amongst other things, provided for directions to be made that, at the close of the applicant’s case, he and Mr Puerto file any amended defences and any affidavits on the issue of liability.

61    Second, the Ombudsman has repeatedly kept Mr Elvin apprised of the times for compliance and accommodated him on several occasions.

62    Third, Mr Elvin has had a considerable period of time to prepare his defence and evidence. He was served with the originating application and the statement of claim in about June 2018 and has been in possession of most of the Ombudsman’s evidence since April 2019. I accept that he would have been under strain during that time and that he has suffered from anxiety and depression, which may well have been severe when he saw the doctor on 20 January 2020. But the medical evidence is weak. It does not support Mr Elvin’s claim that he has been taking anti-depressants since 2019 or that he has had difficulty concentrating and has lapses in memory. It says nothing about any deterioration in his physical condition. It does not explain why he did not respond repeatedly to the Ombudsman’s correspondence or fail to file his amended defence in December 2019 as originally required.

63    Fourth, despite the leniency extended to him on the last occasion this matter was before the Court, Mr Elvin has still not provided the Ombudsman with an outline of all the evidence he wants to adduce. In failing to do so, he has continued his pattern of non-compliance with, or disregard of, Court orders. On no view of the matter has Mr Elvin’s conduct been consistent with the overarching purpose of the civil practice and procedure provisions.

64    Fifth, in view of his repeated failure to comply with Court orders, I have little confidence that, if he were given the additional time he seeks, Mr Elvin would file all his affidavits within that time. For one thing, Mr Elvin’s stated intention to apply for a subpoena to issue to the Australian Federal Police, so that he could annex the documents to his affidavit, suggests that the prospect of him doing so is remote.

65    Sixth, although it is outside the scope of his interlocutory application, Mr Elvin has indicated he wants all the witnesses who were required for cross-examination in October recalled for further cross-examination. Yet, I made it abundantly clear to Mr Elvin on the first day of the hearing that if he wanted to call evidence to contradict a witness’s evidence, he had to put the contrary proposition to the witness and give her or him a fair opportunity to deal with it. I explained to him that he had to cross-examine to lay the basis for any defence that he may later wish to raise. I also told him he would not get another opportunity to cross-examine the witnesses.

66    Seventh, it is not known whether the witnesses will be available to attend court. Eight of them have current working commitments and, I was informed, have limited availability. Moreover, there are costs associated with bringing them back to court. Two of them reside in Queensland and all require or desire the assistance of an interpreter. The Ombudsman submitted that there are limited Filipino interpreters with the relevant qualifications in Australia and none in the ACT. But the costs are not only financial. These matters also affect the Ombudsman’s capacity to prepare any reply and evidence in reply. Furthermore, the witnesses were visibly and audibly distressed during cross-examination. Most of them broke down in tears. Assuming that they are available for the preparation of further evidence and willing to cooperate, it would place unwarranted strain on them to require them to return for further cross-examination, particularly at short notice.

67    Eighth, the Ombudsman would be prejudiced if leave were granted, although the extent of the prejudice is difficult to gauge in the absence of complete statements or affidavits from all the proposed witnesses. Doubtless she will be under some pressure in the lead-up to the hearing and I accept that there may be some practical difficulties in gathering evidence in reply in such a short time. In view of the allegation of a widespread conspiracy between all the employees and a third party, it is likely that the Ombudsman will have to conduct additional investigations and interview potential witnesses.

68    Finally, the Ombudsman submitted that the potential prejudice to the Ombudsman could not be remedied by adjourning the hearing with costs. She argued that would result in all probability in the matter not being relisted until the end of 2020, that the recollections of the witnesses are likely to “continue to erode with time”, and that the continued residence in Australia of three of the Ombudsman’s witnesses was uncertain as they are on bridging visas.

69    On the other hand, Mr Elvin will be at a grave disadvantage if leave were refused. He will be disabled from mounting any positive defence or responding to the Ombudsman’s evidence. Extremely serious allegations have been made against him. Those allegations include making threats to harm, indeed kill, families of employees in the Philippines. The allegations have been supported by sworn evidence. If he is not permitted to adduce evidence of his own, that evidence will go unanswered. Although his current misfortune is of his own making, that consideration weighs heavily in his favour.

70    Mr Elvin has provided an explanation for the delay, albeit that the explanation is incomplete and not entirely satisfactory. For substantial periods of time, including throughout the hearing itself, he has been unrepresented. I do not doubt that the litigation has taken its toll on him and he may well have struggled to face up to his obligations.

71    While the draft affidavits he served on the Ombudsman were incomplete, Mr Elvin was not ordered to serve draft affidavits, only outlines of evidence. The draft affidavits answer that description. The further affidavits deal with discrete questions and are likely to be of short compass.

72    The evidence Mr Elvin wishes to call would not have come as a surprise to the Ombudsman since the nature of his defence was apparent from some of the questions he asked in his cross-examination of the Ombudsman’s witnesses, although I accept that it was not until 28 February 2020, when the interlocutory application was foreshadowed, that the Ombudsman had good reason to think she would need to deal with, or investigate it. To the extent that in cross-examination Mr Elvin canvassed the matters the subject of the evidence he now wishes to present with the witnesses in October last year, I see no reason why evidence in reply needs to be obtained from them.

73    Furthermore, a good deal, if not all, of the prejudice to the Ombudsman can be alleviated.

74    First, regardless of the outcome of the proceeding, Mr Elvin should pay the costs of, and incidental to, his interlocutory application and any additional costs incurred by the Ombudsman as a result of his belated application. That includes the costs of, and incidental, to the case management hearing on 4 February 2020. That is because I am well satisfied that Mr Elvin’s failure to respond to the Ombudsman’s correspondence, to turn up at the hearing on 4 February 2020 and his repeated failure to comply with the Court orders for the filing of his amended defence and evidence were unreasonable acts or omissions: see FW Act, s 570(2)(b).

75    Second, I will dispense with the requirement for the Ombudsman to file a reply and extend the time for evidence in reply to be filed and served to 5PM on 30 March 2020. I will also dispense with the requirement for the Ombudsman to file an amended outline of her submissions.

76    Third, I do not propose to grant Mr Elvin’s request that all of the Ombudsman’s witnesses be recalled for further cross-examination. The request is unreasonable in the circumstances. He knew when the hearing began, during the cross-examination of the first witness, if not earlier, that he was required to put propositions to the witnesses if he intended to call evidence to contradict theirs. If he failed to put to particular witnesses something about which he wishes to give or call evidence, he will have to live with the consequences. There is no reason to believe that he did not know then any of the matters he now wishes to put to them.

77    Fourth, with one qualification only, all of Mr Elvin’s evidence will have to be served by 5PM on 20 March 2020. There will be no further extensions. The qualification relates to the evidence from the AFP. If he wishes to apply to the Court for leave to issue a subpoena to the AFP, he should do so within 24 hours. The subpoena should be returnable before a Registrar. If access is granted and Mr Elvin wishes to tender in evidence any of the documents that are produced, he can make an application at the hearing. It remains to be seen whether they are admissible.

78    Fifth, while I do not intend to vacate the hearing dates in April, if the Ombudsman requires extra time to investigate or deal with the evidence she shall have it. If necessary, extra hearing days can be found and final submissions can be reduced to writing. The extensive delay the Ombudsman feared is unlikely to arise.

79    With her submissions the Ombudsman included a draft minute of orders she asked the Court to make if leave were granted. Mr Elvin was content with all of them, except for the very short period (5PM on 13 March 2020) within which he would be required to file and serve his evidence. Since I did not receive the respondent’s submissions until 12 March 2020 and was in Court hearing a case on 12 and 13 March 2020 and therefore unable to consider the material until the weekend, I propose to give Mr Elvin the extra time he requested, that is until 5PM on 20 March 2020. Otherwise, with certain modifications to relieve the Ombudsman of some of her burdens and reduce the prejudice from which she would otherwise suffer, I intend to make orders to the effect of those she sought.

Conclusion

80    On balance, and notwithstanding the compelling case marshalled against him, having taken all relevant considerations into account I am persuaded to grant Mr Elvin leave to file an amended defence in the form served on the Ombudsman on 9 March 2020 and to file affidavits from his proposed witnesses, provided he does so by 5PM on 20 March 2020. But he will have to pay the Ombudsman’s costs and he will not be permitted to recall the Ombudsman’s witnesses.

Associate:

Dated:    17 March 2020