FEDERAL COURT OF AUSTRALIA

Mutch v ISG Management Pty Ltd [2020] FCA 362

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s interlocutory application dated 10 May 2019 for declassing and class-closure/opt-in orders is dismissed.

2.    The applicant’s interlocutory application dated 19 July 2019 for a common fund order is dismissed.

3.    The applicant’s interlocutory application dated 24 May 2019 for summary judgment on the respondent’s cross-claim is adjourned to a date to be fixed.

4.    The costs of each of the applications dealt with in orders 1-3 are reserved.

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

ORDERS

THE COURT ORDERS THAT:

1.    The defendant reinstate the registration of Mutch Better Communications Pty Ltd (ACN 168 580 292).

2.    There be no order as to costs.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    There are 4 interlocutory applications which fall to be determined. Applications for de-classing orders, class closure/opt-in orders and for the reinstatement of a corporation associated with the applicant (“Mr Mutch”) have been made by the respondent (“ISGM”). Mr Mutch has applied for a common fund order and for the summary dismissal of a cross-claim brought by ISGM.

2    Mr Mutch commenced a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) (“FCA”) against ISGM. The key question in that proceeding is whether Mr Mutch and at least 3,348 group members, on whose behalf Mr Mutch brings the proceeding, were employees of ISGM or were employees or contractors of various corporations which provided services to ISGM. In that proceeding Mr Mutch seeks, inter alia, declarations that he was an employee of ISGM and that contrary to various obligations imposed by the Fair Work Act 2009 (Cth) (“FW Act”) and an industrial award made under that Act, ISGM failed to pay or provide him with various employee entitlements. ISGM has filed a cross-claim in the representative proceeding against Mr Mutch and a former corporation associated with Mr Mutch, Mutch Better Communications Pty Ltd (“MBC”). The cross-claim is premised on the Court finding (contrary to ISGM’s Defence) that Mr Mutch was an employee of ISGM. The cross-claim seeks restitution of monies paid to MBC in relation to work performed by Mr Mutch and damages for misleading and deceptive conduct based on representations said to have been made to ISGM by Mr Mutch and MBC that Mr Mutch was providing services to ISGM as an independent contractor and not as an employee of ISGM. In order to pursue the cross-claim against MBC, ISGM also commenced a separate proceeding against the Australian Securities and Investment Commission (“ASIC”) seeking the reinstatement of MBC.

ISGM’s application for de-classing orders

Relevant legislation and principles

3    The statutory scheme provided by Part IVA of the FCA for representative proceedings (“class actions”) includes three threshold requirements specified by s 33C(1). Whether one of those requirements is satisfied is in contest. That requirement is that the claims of the group members “give rise to a substantial common issue of law or fact”: s 33C(1)(c). Section 33C(1) provides:

33C    Commencement of proceeding

(1)    Subject to this Part, where:

(a)    7 or more persons have claims against the same person; and

(b)    the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and

(c)    the claims of all those persons give rise to a substantial common issue of law or fact;

a proceeding may be commenced by one or more of those persons as representing some or all of them.

4    Also in contest is whether the Court should be satisfied that the interests of justice require that the proceeding not continue as a class action. Relevantly, s 33N(1) provides:

Order that proceeding not continue as representative proceeding where costs excessive etc.

(1)    The Court may, on application by the respondent or of its own motion, order that a proceeding no longer continue under this Part where it is satisfied that it is in the interests of justice to do so because:

(a)    the costs that would be incurred if the proceeding were to continue as a representative proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or

(b)    all the relief sought can be obtained by means of a proceeding other than a representative proceeding under this Part; or

(c)    the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or

(d)    it is otherwise inappropriate that the claims be pursued by means of a representative proceeding.

5    The threshold requirements set out in s 33C(1) require a different inquiry than that required by s 33N(1) and those inquiries ought not be merged: Bright v Femcare Ltd [2002] FCAFC 243 at [134] (Kiefel J, with Lindgren J in agreement at [33]). A class action that has satisfied the threshold requirements of s 33C(1) may nevertheless be dismissed by an order made under s 33N(1): Bright v Femcare at [128] (Kiefel J).

6    The threshold inquiry “is concerned with the commencement, not subsequent conduct” of proceedings under Part IVA of the FCA: Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at [26] (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ). The focus of the inquiry is upon the applicant’s claims and a determination as to whether the requirements of s 33C(1) have been met is to be made by reference to the pleading or other document in which the claims of the applicant and the group members are made: Bright v Femcare at [126] (Kiefel J). A “claim” for the purposes of Part IVA proceedings does not mean merely the cause of action pleaded; rather it is a term to be given a broad meaning, it need not be based on the same conduct and may arise out of disparate transactions: see Dillon v RBS Group (Australia) Pty Ltd (2017) 252 FCR 150 at [43] (Lee J).

7    The requirement made by s 33C(1)(c), that the claims of the group members give rise to a “substantial common issue of law or fact”, is directed to issues which are “real or of substance”; it is not necessary for the issue to be “large” or “of special significance”, or to be an issue which would have a “major impact on the…litigation”: Wong at [28]; Bywater v Appco Group Australia Pty Ltd [2018] FCA 707 at [9] (Wigney J). As Wigney J observed in Bywater at [10] by reference to the observation of Kiefel J in Bright v Femcare at [126] to which I have already referred:

[t]he question whether the claims of the group members raise a substantial common issue of law or fact depends on the way that the claims of the group members have been framed, and the way that the alleged questions of law common to those claims have been specified, in the originating application and pleading.

That conclusion was reinforced by Wigney J in Bywater at [11] with the following observations:

The question raised by s 33C of the Federal Court Act must be approached on the basis that ‘it is the pleading which has precedence over any other evidentiary assertions’: Allphones Retail Pty Ltd v Weimann [2009] FCAFC 135 at [67]; see also Pampered Paws Connection Pty Ltd (on its own behalf and in a representative capacity) v Pets Paradise Franchising (Qld) Pty Ltd [2008] FCA 1606 at [31]. A ‘conclusion that the claims do not give rise to a common question cannot be reached by reference to the evidence to be given on that point and a finding that it is likely to be different in each case’: Bright v Femcare at [133] (per Kiefel J). If a respondent to a Part IVA proceeding claims that the proceeding does not raise a common question of law or fact, it must establish that the alleged common question or questions specified in the application or pleading is not arguable: Allphones v Weimann at [64]. It is, therefore, immaterial that it might be considered that the alleged common claim is weak.

8    Section 33H facilitates this threshold inquiry. That provision requires that the group members for whom the proceeding relates be described, that the nature of the claims brought on their behalf and the relief claimed be specified and that the question of law or fact common to the claims of the group members be identified. As Lee J said in Gill v Ethicon Sàrl (No 3) [2019] FCA 587 at [7]:

The importance of s 33H in the statutory scheme is that it provides the basis upon which the court can determine, immediately upon commencement of the representative proceeding, whether or not it has been properly constituted as a class action. Put another way, s 33H allows the court to identify whether s 33C (and hence Pt IVA) has been properly engaged.

9    Section 33N(1) empowers the Court to discontinue a representative proceeding “if, and only if, the Court is satisfied that it is in the interests of justice to do so on one or more of the grounds stated in paras (a) to (d) of s 33N(1)”: Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd (2007) 164 FCR 275 at [121] (Jacobson J). The onus of so satisfying the Court rests with the applicant for discontinuance.

10    The nature of the inquiry required by s 33N(1) raises “practical questions” (Bright v Femcare at [74], Lindgren J) and envisages that the Court “will engage in a comparison between how the factors specified in grounds (a) to (d) apply to the existing representative proceeding and how they would apply to a hypothetical non-representative proceeding”: Multiplex at [128] (Jacobson J). As Wigney J observed in Bywater at [16]:

The need for the Court to engage in that sort of comparison exercise might mean that an applicant for a s 33N order will be required to adduce detailed evidence of the likely course or form of the comparator proceeding: Multiplex at [129]; cf. Bright v Femcare at [76] (per Lindgren J). It may, however, not always be necessary for the Court to give detailed consideration to the likely course of the comparator proceedings, particularly in a case where ‘the inefficiency or inappropriateness of the claims as a representative proceeding will be so great that the only possible order is to ‘de-class’ the proceeding’: Multiplex at [131].

11    The considerations applicable to the “inefficiency” and “inappropriateness” grounds in (c) and (d) of s 33N(1) “will vary greatly depending upon the facts and form of each representative proceeding” but the focus will likely be on “the commonality and non-commonality of issues raised in the representative proceeding, as well as the purpose of the proceeding”: Multiplex at [130] (Jacobson J). The extent of the commonality raised by the claims of the group members has an obvious bearing upon the utility, in terms of costs, efficiency and the appropriateness of the representative proceeding as a vehicle for resolving the claims of the group members as compared to the alternative of the resolution of those claims through multiple non-representative proceedings. Further, a consideration of “efficiency” would almost certainly involve “an assessment of the findings which might be made in the applicant’s case and of the extent to which they would be likely to resolve the other claims”, however, this does not require an audit of the findings which might be useful and those which might not be in the other claims: see Bright v Femcare at [128] (Kiefel J). Where claims diverge, the efficiency of the proceeding may be compromised, particularly where the Court has to consider different causes of action. If the cases are so divergent as to be incompatible, there will be a conflict between the representative party’s personal interest and the interests of the group members which would make it inappropriate for the claims to be pursued through a class action: see Tropical Shine Holdings Pty Ltd (t/a K C Country) v Lake Gesture Pty Ltd (1993) 45 FCR 457 at 464 (Wilcox J).

12    I respectfully agree with the observation made by Finkelstein J in Bright v Femcare at [152] (cited with approval in Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323 at [215], Murphy J; Dorajay Pty Ltd v Aristocrat Leisure Ltd (2005) 147 FCR 394 at [133], Stone J; AS (by her litigation guardian Marie Theresa Arthur) v Minister for Immigration and Border Protection [2017] VSC 137 at [49], Forrest J) that whether or not it is in the interests of justice to make an order for the discontinuance of a representative proceeding must be weighed against the public interest in the administration of justice that favours such proceedings and in turn that requires a consideration of the principal objects of the class action procedure which his Honour described as:

(1)    To promote the efficient use of court time and the parties’ resources by eliminating the need to separately try the same issue; (2) To provide a remedy in favour of persons who may not have the funds to bring a separate action, or who may not bring an action because the cost of litigation is disproportionate to the value of the claim; and (3) To protect defendants from multiple suits and the risk of inconsistent findings.

13    A survey of the authorities also shows that, ordinarily, it will be difficult for the Court to reach the requisite satisfaction required by s 33N(1) where the proceeding is at an early stage and not sufficiently evolved to permit a proper assessment of whether it would be efficient or appropriate for the class action to continue. An application for discontinuance was prematurely brought in Bright v Femcare (see at [18], Lindgren J and [149], Kiefel J), Bywater (see at [124], Wigney J) Jenkings v Northern Territory of Australia [2017] FCA 1263 (see at [95], White J) and Guglielmin v Trescowthick (No 2) [2005] FCA 138 (see at [75]-[76], Mansfield J).

14    In Bright v Femcare, and despite the fact that a substantial amount of material had been put before the Court in support of the motion for discontinuance, Kiefel J said this at [149]:

In my view the motion brought by the first respondent was premature, in the sense that it required a view of the evidence which is likely only to be gained after a hearing, or at least a hearing on those issues. If the trial Judge considers that the findings to be made have application to the other claims, appropriate determinations and orders can be made. The question whether to make an order of discontinuance under s 33N(1)(c) could be revisited at that point. If the findings are not useful in that way, and the applicant fails to establish the relevant risk and cause, such an order could be made at an earlier point and before other orders in the proceedings.

The pleadings and the matters at issue

15    To identify in broad terms the claims for relief made and the major issues likely to arise for determination at trial, it is necessary to give an outline of the issues raised by the Further Amended Statement of Claim (“FASC”) and also by ISGM’s Defence (“Defence”). I have also had regard to the material filed in support of the declassing application and the submissions of the parties which elaborate upon the nature of the case each party is likely to rely upon. The claims for relief made by the FASC are detailed below. There is only one claim for relief relating to contraventions of s 357(1) of the FW Act which is claimed in relation to all group members. The other claims for relief are currently framed by reference to Mr Mutch alone. I suspect that that is so because, at this time, Mr Mutch has only been able to particularise his own claims. It may, however, be expected that the nature of the claims for relief intended to be made for group members will largely mirror the nature of the claims specified in the Amended Originating Application (“AOA”) for Mr Mutch. The need to specify those claims, if only in general terms, was raised by the Court at the hearing. Counsel for Mr Mutch indicated an intent to address that matter.

16    Mr Mutch posed the following common questions in the AOA:

1.    Whether the Respondent controlled and directed, or had the capacity to control and direct, the manner in which the Group Members performed work.

 2.    Whether the Respondent superintended the Group Members’ finances.

3.    Whether the economic activity carried out by the Group Members was portrayed as that of the Respondent.

4.    Whether the Group Members were integrated into the business of the Respondent.

 5.    Whether any goodwill inured in activities carried out by the Group Members.

 6.    Whether the Respondent negotiated rates of pay with the Group Members.

7.    Whether the Group Members were economically dependent upon, and provided services exclusively, or to an extent that was almost exclusive, to the Respondent.

8.    Whether, the relationship as between the Group Members and the Respondent was one of employment.

9.    Whether ISG Management was a ‘national system employer’ within the meaning of s 14 of the Fair Work Act.

10.    Whether the Group Members were ‘national system employees’ within the meaning of s 13 of the Fair Work Act.

11.    Whether the Group Members were ‘casual employees’ within the meaning of s 86 of the Fair Work Act.

 12.    Whether the Respondent contravened s 44 of the Fair Work Act.

 13.    Whether the Respondent contravened s 45 of the Fair Work Act.

 14.    Whether the Respondent contravened s 357 of the Fair Work Act.

15.    Whether the Respondent is liable to pay a pecuniary penalty under s 546 of the Fair Work Act.

16.    Whether any of the 2013 Tickets of Work Agreement, the 2015 Tickets of Work Agreement, and the 2016 Agreement was ‘unfair’ or ‘harsh’ within the meaning of s 12 of the Independent Contractors Act.

17.    Whether an order should be made under s 16 of the Independent Contractors Act and, if so, what form of order is appropriate.

17    For the reasons I will now detail, it is tolerably clear from the pleadings that what is primarily in contest in the proceeding are questions that concern the correct legal characterisation of the relationship, if any, between each of the group members and ISGM. At the core of Mr Mutch’s case is that each group member (including himself) was a telecommunications technician employed by ISGM and that, accordingly, various employee entitlements are owed by ISGM. At the core of ISGM’s Defence is that it had no legal relationship with any group member as its employee. It contends that it made agreements with various corporate entities from whom it received services under an independent contractor relationship. Its position in denying the case put by Mr Mutch is that the group members were either employees or independent contractors of those corporate entities.

18    Mr Mutch pleads that from 2011 Telstra and ISGM were parties to an agreement under which ISGM agreed to manage a workforce to provide Telstra with installation and maintenance services. The “workforce” contemplated by that pleading is essentially the group members which are defined as the “workers” by the FASC. Putting aside conditions in that definition not relevant for current purposes and reading that definition in the context otherwise given by the FASC, the group members are the natural persons who, in the period 2011 to the date of the filing of the FASC, are asserted to have received “Tickets of Work” from ISGM and provided their services to ISGM as telecommunications technicians.

19    Perhaps a more neutral descriptor for a group member than the term “worker” used by the FASC, is the term “technician”. I will adopt that descriptor in referring to group members. As I understand it (an understanding drawn largely from the Defence), the term “Ticket of Work” refers to an electronic document provided to a technician via a mobile computer known as a “Toughbook”. The document specifies the work that Telstra desires be undertaken in relation to telecommunications facilities or equipment provided by Telstra to a particular customer or customers.

20    Central to Mr Mutch’s pleading is that he and each other technician made an agreement or agreements with ISGM (referred to as “Tickets of Work Agreement”) pursuant to which those technicians received Tickets of Work and provided services to ISGM as employees of ISGM.

21    That each Tickets of Work Agreement was entered into as between ISGM and each technician is pleaded to be a legal conclusion that follows from an examination of the whole of the relationship between ISGM and each technician including because:

    each technician “individually” received “Tickets of Work” from ISGM;

    each technician “individually” provided telecommunications services to ISGM;

    “Toughbooks” were issued to technicians and Tickets of Work were issued to technicians through the use of the Toughbook; and

    by reason of each of the matters detailed at [30]-[32] below.

22    As to the nature of the agreements asserted to have been made between ISGM and each technician, and again relying on the matters detailed at [30]-[32] below, Mr Mutch pleads that “on the totality of the relationship” as between each technician and ISGM, the relationship created was one of employment.

23    On the basis that he was an employee of ISGM, Mr Mutch claims that ISGM failed to meet both the statutory and industrial award obligations imposed upon it by law. There is no claim made either in the AOA or the FASC that ISGM failed to pay either statutory or industrial award entitlements to any group member other than Mr Mutch. As earlier indicated, such claims for compensation are not yet specified for any group member beyond Mr Mutch because Mr Mutch is not in a position to know or specify the particulars thereof. Nevertheless, it is apparent from the indications given by Senior Counsel for Mr Mutch that the claims for relief by way of unpaid statutory and award entitlements intended to be made for group members will, in terms of the nature of those claims, largely mirror those made by Mr Mutch in the pleading as currently formulated.

24    In respect of statutory entitlements, Mr Mutch claims that in contravention of s 44 of the FW Act, he was not provided annual leave, paid in lieu of annual leave or provided personal carer’s leave as required by ss 87, 90(2) and 96 of the FW Act. In support of those claims, Mr Mutch asserts that he and each technician were “national system employees” within the meaning of s 13 of the FW Act and that they were not “casual employees” within the meaning of s 86 of that Act. In respect of alleged award obligations, Mr Mutch claims that he and each technician were, from 1 January 2010, covered by the Telecommunications Services Award 2010 (“Award”). He claims that contrary to the obligations imposed upon ISGM by the Award, he was underpaid minimum wage entitlements; not paid a vehicle allowance; not paid a telephone allowance; not paid a meal allowance; not paid expenses and travelling time; not paid a tool allowance; and that ISGM did not make superannuation contributions; failed to pay penalty rates in respect of weekend work and overtime; and failed to pay amounts in respect of annual leave in accordance with the requirements of the Award.

25    The Award contraventions alleged are also claimed as contraventions of s 45 of the FW Act. As well as compensation, civil penalties are sought in respect of all alleged contraventions of the FW Act.

26    An alternative claim of award breach is made on the basis that, if Mr Mutch was not a full-time employee, he was a casual employee and entitled to a casual loading.

27    Section 357(1) of the FW Act relevantly provides that a person that employs an individual must not represent to the individual that the contract of employment under which the individual is employed by that person is a contract for services under which the individual performs work as an independent contractor.

28    Mr Mutch also claims that, in contravention of s 357 of the FW Act, ISGM represented to each technician (ie. each group member) that the contract of employment under which the technician was employed by ISGM was a contract for services under which the technician would perform work as an independent contractor. To make good those claims, apart from the making of the representations, it will be necessary for Mr Mutch to establish that each technician was an employee employed by ISGM. By reference to the various matters I here outline, Mr Mutch pleads that each technician was an employee of ISGM. Both a declaration and civil penalties are sought in relation to those alleged contraventions.

29    An alternative claim is also made under the Independent Contractors Act 2006 (Cth). Mr Mutch pleads that if the technicians were independent contractors of ISGM, each of the Tickets of Work Agreements was “unfair” and/or “harsh” within the meaning of s 12 of the Independent Contractors Act. Mr Mutch claims that in order to put him in the position he would have been in had he been an employee, the Tickets of Work Agreements that he made with ISGM are amenable to being varied by inserting a term that ISGM pay appropriate compensation. That claim, as currently pleaded, is made only in relation to Mr Mutch.

30    To support the allegation of an agreement (or agreements) made between ISGM and each technician as well as the allegation that on the totality of the relationship as between each technician and ISGM an employment relationship existed, the FASC relies upon a wide range of asserted facts and circumstances. Those facts and circumstances are categorised at paras 220-227 of the FASC by reference to indicia not uncommonly considered by the authorities as relevant to whether a legal relationship is to be characterised as that of employment. Those categories and the matters relied on in support of each are as follows:

(1)    That ISGM controlled and directed, or had the capacity to control or direct, the manner in which the technicians performed work, including in respect of the following matters:

(a)    the manner in which work was to be performed, and what standards and requirements were to be complied with in performing the work;

(b)    the issuance of Tickets of Work;

(c)    the circumstances in which technicians could accept or reject a Ticket of Work;

(d)    the hours in which technicians were to be available to perform work;

(e)    the provision of training, and requirements that technicians be trained;

(f)    attendance at meetings;

(g)    the circumstances in which technicians could sub-contract or delegate work;

(h)    the issuance by ISGM of directions to the technicians;

(i)    the provision of information by the technicians to ISGM, and ISGM’s rights to be provided with information and audit the technicians;

(j)    ISGM having the right in certain circumstances and in certain respects, to amend contractual documents and/or alter the legal rights as between ISGM and the technicians;

(k)    ISGM having the right to terminate the contracts with technicians without cause;

(l)    in the event that Telstra exercised its right to defer or suspend the provision of services under the “Head Agreement”, ISGM’s entitlement to defer or suspend any services or work;

(m)    the circumstances in which technicians could perform services for other persons;

(n)    ISGM’s power to impose, and its imposition of, adverse consequences on technicians in respect of perceived or actual poor performance, or when the technicians failed to meet statistical measures desired by ISGM;

(o)    ISGM’s specification of the tools that the technicians were required to use;

(p)    that technicians were required not to make public or media comment about the services performed for ISGM, without first obtaining permission;

(q)    the superintendence by ISGM of the technicians’ finances; and

(r)    the appearance of the technicians.

(2)    That ISGM superintended the technicians’ finances by reason of the following matters:

(a)    the amount payable for work done was set in accordance with rates determined by ISGM;

(b)    ISGM prepared “Recipient Created Tax Invoices” (“RCTIs”) and provided the RCTIs to the technicians;

(c)    ISGM prescribed the process for when technicians sought to dispute the amounts in RCTIs; and

(d)    ISGM could, and did, in certain circumstances, adjust the rates in respect of the amounts to be paid for work.

(3)    That the economic activity that was carried on by the technicians was portrayed as that of ISGM by reason of the following matters:

(a)    the technicians were required to wear a uniform containing ISGM branding;

(b)    the technicians were required to use ISGM branding on their vehicles; and

(c)    the technicians were required to have identification with ISGM and Telstra branding.

(4)    That by reason of the following matters each technician was integrated in the business of ISGM and did not conduct a business of his or her own:

(a)    ISGM controlled the allocation of work;

(b)    Technicians had little latitude in respect of acceptance of work;

(c)    ISGM’s business was the marshalling and direction of the labour of the technicians; and

(d)    the technicians did not supplement or perform part of the work undertaken by ISGM, rather the technicians effectively performed all of ISGM’s operations.

(5)    That no goodwill inured to the technicians by reason of services performed for ISGM.

(6)    That the technicians carried out little, or no, advertising to the public promoting a business being carried on by the technicians.

(7)    That ISGM did not negotiate with the technicians in respect of the amounts paid (or payable) to them.

(8)    That the technicians were economically dependent upon, and provided services exclusively, or to an extent that was almost exclusive, to ISGM.

31    Each of the matters relied upon in each of the sub-paras to categories (1), (2), (3) and each of sub-paras (a) and (b) of category (4) are supported in the FASC by particulars. Whilst as a rule of pleading material facts should not be hidden in particulars, the particulars given set out the material facts relied upon in support of each allegation. In each case what is relied upon is:

(i)    one or more clauses of a Tickets of Work Agreement asserted to have been made between ISGM and the technicians. There are 3 versions referred to: the “2013 Tickets of Work Agreement”; the “2015 Tickets of Work Agreement”; and the “2016 Agreement”; and/or

(ii)    one or more clauses of a “Field Operations Manual” alleged to have been issued to technicians by ISGM and which it is alleged technicians were required to comply with. There are 3 versions referred to: the “2013 Field Operations Manual”; the “2015 Field Operations Manual”; and the “2016 Field Operations Manual”; and/or

(iii)    one or more of the sub-paras to para 219 of the FASC.

32    Paragraph 219 of the FASC is headed “Work practice” and is in the following terms:

At all material times, the relationship between ISG Management (on the one hand) and the Applicant (and the group members) (on the other hand) was conducted on the following basis:

 a.    [Technicians] were required to login on a Toughbook by 7am to 8am.

 b.    On logging in, Tickets of Work were allocated to [technicians].

c.    [Technicians] were not able to pick and choose the Tickets of Work allocated to them.

d.    The number of Tickets of Work allocated to [technicians] varied from day to day.

e.    [Technicians] had no ability to predict or to control the minimum number of Tickets of Work allocated to them.

f.    [Technicians] had no ability to predict or control the location of Tickets of Work.

g.    If [technicians] wanted to decline a Ticket of Work, the [technician] would have to go to the [technician’s] team leader and ask for a sequence code (being a code inputted by a [technician’s] team leader that, once provided, could be submitted to ISG Management in order to decline a Ticket of Work). Team leaders would usually refuse to issue a code.

h.    Each Ticket of Work had a timer attached to it, which had a time set by ISG Management allocating the time within which the Ticket of Work was required to be completed.

i.    [Technicians] were required to complete a Ticket of Work within the time indicated by the timer.

j.     ISG Management measured and recorded [technicians’] compliance with timers.

k.    If [technicians] did not complete Tickets of Work within the time allocated by the timers, they would be reprimanded by ISG Management; and/or [technicians] were (from time to time) directed to suspend work on the first job, which resulted in two Tickets of Work being active.

l.    [Technicians] had little or no control over how long a job would take, and no allowance was made for difficulties encountered by the [technician] in performing the work due to matters beyond the [technician’s] control.

m.    In practice, there was no ability of the [technicians] to delegate Tickets of Work to other [technicians].

n.    ISG Management provided, on a weekly basis, statistics to [technicians] in respect of their performance for matters including:

  i.    The time taken to complete Tickets of Work.

ii.    Whether the time taken to complete a Ticket of Work was in accordance with the time allocated to the Ticket of Work.

  iii.    The number of Tickets of Work the subject of a sequence code.

  iv.    Customer satisfaction.

  v.    Returns to jobs to fix defects.

vi.    Re-rolls (being when a [technician] had to send someone else out to complete a job that the [technician] had been assigned when the first [technician] was unable to complete the job).

o.    [Technicians] were able to avoid the recording by ISG Management of a ‘re-roll’ by completing the job in question without pay.

p.    ISG Management penalised [technicians] in respect of perceived or actual poor performance (or when the [technician] did not meet the statistical measures desired by ISG Management) by assigning fewer (or no) Tickets of Work.

q.    In practice, [technicians] were required to work for a minimum of 6 days a week, and sometimes worked 7 days a week, including public holidays.

r.    In practice, if [technicians] wanted to take time off, they were required to give 3 months’ notice of unavailability to work on particular days.

s.    In practice, [technicians] were not able to provide services for entities other than ISG Management because they were expected to be available 6 days a week and, if the [technicians] indicated a lesser availability, the [technicians] (in practice) were allocated fewer (or no) Tickets of Work.

t.    [Technicians] were required to wear uniforms with Telstra and ISG Management logos.

u.    [Technicians] were directed by ISG Management to comply with policies, manuals and methods of work issued by ISG Management.

v.    In the event that ISG Management concluded that a [technician] had not complied with policies, manuals and methods of work, ISG Management penalised the [technician], including by issuing a breach notice or suspending the [technician] from receiving new Tickets of Work.

w.    ISG Management, from time to time, suspended [technicians] from receiving new Tickets of Work for substantive periods.

x.    ISG Management required [technicians] to attend meetings or do training including the following:

i.    mandatory toolbox meetings (being meetings of teams of [technicians], who worked in a particular radius under a particular team leader, usually held monthly).

  ii.    mandatory OH&S training.

  iii.    courses offered by Telstra and ISG Management.

 y.    [Technicians] did not negotiate the terms or amounts of payment.

z.     ISG Management required [technicians] to wear identification with ISG Management and Telstra branding.

aa.    [Technicians] had no ability to engage additional workers to carry out a Ticket of Work.

bb.    [Technicians] were required to obtain tools specified by ISG Management.

Particulars

  ISG Management listed mandatory tools in a document entitled ‘ISGM Contractor – Mandatory Tool List’.

  cc.    [Technicians] were not paid a minimum wage.

  dd.    [Technicians] were not paid any amounts in respect of Annual Leave.

  ee.    [Technicians] were not paid any amounts in respect of Overtime.

ff.    [Technicians] were not paid any amounts in respect of Long Service Leave.

gg.    [Technicians] were not paid any amounts in respect of Employee Allowances.

hh.     [Technicians] were not paid any amounts in respect of Superannuation.

Particulars of practices to which the Applicant was subject

(i)    The Applicant was subject to the practices referred to in (a) to (m), (o), (q), (r), (t) to (v), and (x) to (hh) above.

(ii)    In respect of paragraph (n) above, the Applicant was subject to the practices referred to in (n), (i), (iv), (v) and (vi).

(iii)    The Applicant is aware of the practice of (w) above occurring to other workers.

33    Although not elegantly pleaded, many if not most of the matters referred to in the sub-paras to para 219 of the FASC assert the existence of a particular work practice, policy or system of ISGM upon which the relationship between ISGM and each technician is said to have been conducted. A few of the matters referred to cannot be so characterised. They appear to address a circumstance or consequence alleged to have been experienced by technicians. For example at sub-para (m) – “in practice, there was no ability for [technicians] to delegate Tickets of Work to other [technicians]”.

34    It seems apparent then, that for his own claim to have been an employee of ISGM employed under a contract or contracts made with ISGM and for the claims made that each other technician was such an employee, Mr Mutch largely relies upon requirements, arrangements or circumstances which are asserted to have been generally applicable to all technicians either by reason of a Tickets of Work Agreement, a Field Operations Manual or by reason of a practice, policy or system of ISGM. In support of the characterisation of the relationship contended for and by reference to the particulars given at paras 220-227, the FASC relies upon over 120 such requirements, arrangements or circumstances.

35    The Defence largely denies the allegations made by the FASC. In particular, ISGM denies that Mr Mutch or any of the technicians made any agreement with it and that the technicians were its employees. ISGM asserts that it entered into agreements (referred to in the Defence as “Standard Agreements” but said to have been historically titled “Tickets of Work Standing Offer Agreement” and subsequently “I&M Subcontractor Agreement”) with various proprietary companies (referred to as “Subcontracting Companies”) pursuant to which services (described as installation and maintenance services or “I&M Services”) “were provided by Subcontracting Companies as independent contractors in the course of carrying on their own businesses”. Principally, I&M services are stated to involve:

A.    the installation of telephone, asymmetric digital subscriber line (ADSL) and broadband cable services to Telstra customers;

B.    identification and rectification of faults on the [Customer Access Network] and on customer premises;

 C.    disconnection services; and

D.    work required to connect copper twisted wires that connect Telstra customers’ telephone service to equipment in the Telstra exchange in order to create a dial tone or ADSL.

36    The Defence denies the allegation that pursuant to an agreement between Telstra and ISGM, ISGM agreed to manage a workforce to provide Telstra with I&M Services. By its Defence, ISGM refers to and relies upon particular provisions of its agreement with Telstra. Contrary to the characterisation made in the FASC to the effect that under the Telstra/ISGM agreement ISGM was the provider of a workforce, ISGM asserts that it was the provider to Telstra of I&M Services.

37    The Defence alleges that there were terms of the Telstra/ISGM Agreement to the following effect:

(a)    ISGM could enter into subcontracts in relation to provision of the I&M Services;

(b)    any subcontractor engaged by ISGM to perform I&M Services was required to be incorporated as a proprietary company;

(c)    any subcontractor engaged by ISGM to perform I&M Services was required to have and maintain an Australian Business Number (ABN);

(d)    any subcontractor engaged by ISGM to perform I&M Services was required to be permitted to further subcontract such work to its own contractors or employees;

(e)    any subcontractor engaged by ISGM to perform I&M Services was required to participate in reporting and safety meetings with Telstra, as required by Telstra;

(f)    each subcontractor was required to be engaged by ISGM through a written subcontract signed by authorised representatives of the subcontractor, which was consistent with all requirements necessary to provide for a principal/contractor relationship; and

(g)    the rates payable to ISGM’s subcontractors for the performance of I&M Services were to be fixed by Telstra in consultation with ISGM.

38    The Defence further relies upon terms of the Telstra/ISGM Agreement requiring that all persons performing I&M Services on Telstra’s network have suitable training, skills and accreditation and, in that respect, asserts that the requirement reflects the requirements arising under the Telecommunications Act 1997 (Cth) and the Telecommunications Cabling Provider Rules 2014 (Cth). Further, it is asserted that all persons performing I&M Services must undergo specific training as directed by Telstra relating to the use of Telstra’s assets and products, health and safety issues specific to Telstra’s network and the use of Telstra’s electronic and work management system and further that those persons must comply with Telstra’s operational procedures when carrying out work on Telstra’s “Customer Access Network” and on the premises of Telstra’s customers.

39    Additionally, the Defence asserts that the manner in which I&M Services are performed was informed by the Telecommunications (Customer Service Guarantee) Standard 2011 (Cth), said to be a legislative instrument made pursuant to the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth) which contains certain minimum performance requirements.

40    Under the heading “Provision of I&M Services”, the Defence sets out the process or work management system which it is asserted was utilised in the provision of I&M Services. The Defence states that in accordance with the terms of the Telstra/ISGM Agreement, from about 2011, ISGM entered into agreements with proprietary companies – the Subcontracting Companies – pursuant to which those companies were engaged by ISGM to perform the I&M Services. Again, to adopt more neutral language I will refer to the “Subcontracting Companies” as the “Corporate Entities”.

41    Passing over matters to which I will return, the Defence states that each of the Corporate Entities was incorporated pursuant to the Corporations Act 2001 (Cth); had and maintained an ABN; was registered for the purposes of GST; had and maintained at its own cost public liability insurance, workers’ compensation insurance and vehicle insurance; was required to ensure that its officers, employees and/or contractors had the necessary skills, training and accreditations to perform the I&M Services on its behalf; was responsible for the employment costs of employees engaged by it and for the remuneration of any contractors engaged by it and had at least one director.

42    It is asserted that on entering into a Standard Agreement, a Corporate Entity was required by ISGM to satisfy ISGM that its technicians (referred to as the Corporate Entity’s “Representatives”) had engaged in the requisite training and held the requisite accreditations to perform I&M Services. Further, that ISGM ensured that each Corporate Entity and/or its technicians had access to ISGM’s electronic “Contractor Management System”; and that ISGM requested that the Corporate Entity record its technicians’ nominated availability to perform I&M Services up to three months in advance in the Contractor Management System. It is further asserted that ISGM discussed and agreed with each technician a “start location”, being the areas or districts in which work was to be offered to the technician.

43    ISGM pleads that it advised Telstra of the engagement of a Corporate Entity and provided Telstra with details about the identity, skills accreditations and availability of the Corporate Entity’s technicians.

44    In further describing the processes or work management system utilised, ISGM asserts that the information described above was provided by it to Telstra and was then recorded in an electronic work allocation system operated by Telstra and known as “Connect”. That information included the nominated availability of the technicians. It is asserted that Telstra provided each of the technicians with a Toughbook and required each technician to complete Telstra’s mandatory training.

45    The Defence then asserts that “thereafter”, the Corporate Entity and/or their technicians, used ISGM’s Contractor Management System to identify:

    the days that technicians were available to perform I&M Services each week;

    the time periods during which each technician was available to perform I&M Services each day; and

    the number of Tickets of Work they wished each technician to complete on each day that they were available to perform I&M Services.

46    Further, when Telstra received requests for I&M Services from its customers, Telstra scheduled appointment windows for time periods of 2 or 4 hours (referred to as “customer appointment windows”); recorded details of the customer appointment windows and the nature of the I&M Services required in Connect and that, on the day scheduled for the specific customer appointments, Telstra allocated the customer appointments to individual technicians in the form of Tickets of Work which were received via the technicians’ Toughbooks.

47    The Defence then states that on any given day, the Corporate Entities’ technicians logged onto their Toughbooks shortly before the time they had indicated their availability would commence, received Tickets of Work allocated by Telstra via their Toughbook and were able to accept or reject Tickets of Work that had been allocated to them.

48    Upon completion of a Ticket of Work, it is asserted that technicians entered details of the work they had completed in their Toughbook and that those details were automatically communicated to Telstra via Connect. Telstra provided details of the work completed pursuant to each Ticket of Work to ISGM and, based on those details, RCTIs were automatically generated by ISGM’s Contractor Management System on a weekly basis.

49    It is asserted that RCTIs in respect of I&M Services were issued in the names of Corporate Entities, identified the Corporate Entities’ ABNs, were tax invoices for the purposes of GST, and included a charge by the Corporate Entities in respect of GST.

50    The Defence then states that the amounts payable by ISGM to the Corporate Entities in respect of each RCTI were provided by ISGM within 7 days of the date of the RCTI and that the amounts payable were reimbursed to ISGM by Telstra.

51    Lastly, in dealing with the arrangements through which I&M Services were provided, the Defence asserts that Corporate Entities determined the amounts paid to their technician or technicians pursuant to the employment, contracting or other arrangements they had with their technicians and were responsible for those costs, together with any superannuation payments and other statutory and/or award entitlements.

52    The Defence also pleads to some variation in circumstances as between Corporate Entities.

53    The Defence asserts that Corporate Entities engaged persons to perform I&M Services on their behalf and that those arrangements varied, including as follows:

i.    sole director [Corporate Entities] where the sole director individually performed the I&M Services for and on behalf of the [Corporate Entity];

ii.    [Corporate Entities] with more than one director and/or officers where the directors and/or officers performed the I&M Services for and on behalf of the [Corporate Entity];

iii.    [Corporate Entities] with one or more directors that engaged between one and 129 employees to perform the I&M Services for and on behalf of the [Corporate Entity]; and

iv.    [Corporate Entities] with one or more directors that engaged varying numbers of contractors to perform the I&M Services for and on behalf of the [Corporate Entity].

54    The material filed by ISGM in support of its declassing application suggests that (taking a point in time assessment as at 3 May 2019) some 94% of the Corporate Entities were, like MBC, within the first category described above where the sole director was a technician who, like Mr Mutch, individually performed the I&M Services provided to ISGM. The material also asserts that about 113 Corporate Entities currently engage more than one technician, which equates to about 22.7% of the technician workforce. ISGM contended that it is likely that these Corporate Entities would have a variety of contractual arrangements in place with technicians asserted to be engaged by those Corporate Entities.

55    There are other asserted variations in arrangements as between Corporate Entities referred to in the Defence. It is asserted that the Corporate Entities engaged by ISGM from time to time were not necessarily engaged pursuant to the same version of the Standard Agreement at the same time or times. The Defence identifies 12 versions of such agreements between ISGM and Corporate Entities that were used between 2011 and 2019.

56    Material filed by ISGM (some 12 affidavits) was received for the limited purpose of allowing the Court to gain an understanding of the kind of evidence that may be available to demonstrate the potential for variability as between group members relating to particular indicia that may be relevant to the issue of whether the technicians were employees of ISGM. That material elaborated upon the nature of the variations referred to in the Defence.

57    Other asserted differences raised in the material relied upon by ISGM were that:

    Some Corporate Entities provided ISGM and its related companies services other than I&M Services including services outside of “the Tickets of Work System”. The ISGM material asserted that of the 3,348 Corporate Entities that contracted with ISGM during the period of Mr Mutch’s claim, some 284 have provided services other than I&M services to the Tandem Group of companies to which ISGM belongs;

    Some Corporate Entities provide services to other individuals or entities outside of the Tandem Group. The ISGM material noted that while ISGM does not have detailed knowledge of which Corporate Entities were providing such services, approximately 96 Corporate Entities provide services to other individuals or entities;

    The days of work differed as between different Corporate Entities and the hours of work and starting times differed as between different technicians; and

    The revenue earned by Corporate Entities varied greatly.

58    ISGM relies on variations in the manner in which the Corporate Entities came to provide services to it. It is asserted that only some Corporate Entities, like Mr Mutch’s company MBC, were set up by individuals who, like Mr Mutch, took part in specific training programs which, as ISGM asserted, were aimed at increasing I&M suppliers where the opportunity of providing services to ISGM was specifically envisaged by the program. ISGM further asserts that some 1,074 Corporate Entities (engaging 1,116 technicians) had been suppliers to ISGM’s predecessors in relation to the I&M services provided to Telstra. Yet another 722 Corporate Entities (engaging 787 technicians) are asserted to have been new to Telstra related work and were established companies providing work to entities other than Telstra.

59    In terms of variation to the agreements ISGM asserts it made with Corporate Entities, ISGM relies on 4,726 separate agreements being executed with the 3,348 Corporate Entities which it asserts contracted with ISGM in the years 2011-2019. In a chart provided by ISGM, a summary of changes made to 10 clauses is given. Of the clauses addressed, 6 are relied upon by the FASC.

60    ISGM also relied upon negotiated variations to Tickets of Work Agreements asserted to have been made by it with Corporate Entities. ISGM contended that 8 Corporate Entities directly discussed or negotiated the terms of the 2015 Tickets of Work Standing Offer Agreement with ISGM which resulted in ISGM agreeing to amend the terms of the standard agreement in relation to 4 Corporate Entities. However, it is not clear that those amendments to the standard agreements materially affected the provisions relied upon by Mr Mutch in the FASC. Further, it is asserted that 196 Corporate Entities appointed the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia to represent them in negotiations with ISGM. No detail was provided as to what variations were made, if any, as a result of those negotiations.

61    Fundamental to the denials made by ISGM’s Defence of Mr Mutch’s claims for unpaid statutory and award entitlements is ISGM’s denial that Mr Mutch was ever employed by it. Further, ISGM pleads that if the technicians (including Mr Mutch) were employees they were casual employees of ISGM within the meaning of s 86 of the FW Act. ISGM denies that the technicians (including Mr Mutch), if employees, were covered by the Award. ISGM denies the claims made that, in relation to each technician, it contravened s 357(1) of the FW Act. In that respect it again denies that the technicians were employees of ISGM.

62    It is apparent from the Defence and the material upon which ISGM relies, that ISGM intends at trial to make out a positive case in denying the characterisations contended for by Mr Mutch. The Defence extensively relies upon a wide range of material facts in relation to what, by its own material, ISGM refers to as “the Tickets of Work System”.

63    It seems clear that the parties through their pleadings are calling upon the Court to engage in an exercise of characterisation through which the Court will determine who were the parties to what the Defence calls the Standard Agreements and what the FASC calls the Tickets of Work Agreements as well as the nature of those agreements. On the one hand, Mr Mutch is contending that the parties to the relevant agreements were ISGM and the technicians and that the relationship between those parties was a relationship of employment. On the other hand, ISGM contends that the parties to the relevant agreements were ISGM and the Corporate Entities and that the technicians did not provide services to ISGM but provided their services to the Corporate Entity that employed or engaged them.

64    What is of significance for purposes to which I will later refer, is that in large part each of the FASC and the Defence deals globally – that is by reference to all technicians and all Corporate Entities – in setting out the material facts asserted in support of the competing characterisations contended for. Further, many if not most of those material facts arise from agreements (including requirements made by relevant manuals) with the same or similar content and out of ISGM policies and practices and a system of work management applicable to all technicians and all Corporate Entities. Reliance is also placed, particularly by ISGM, on its agreement with Telstra and various legislative requirements, the consequences of which for the characterisation exercises here required, appear to be largely standard across all technicians. Of course, each of the parties seeks to emphasise different aspects of those arrangements in contending for its own characterisation of the nature of the relationships created pursuant to them.

65    It is also tolerably clear that in trying to establish the existence of an employment contract between ISGM and each of the technicians, Mr Mutch will conduct his case on the basis that an assessment of the substance or reality of what has or has not been agreed ought not be confined to the terms of contractual arrangements entered into, but will only be revealed by an examination of a wide range of other considerations and, substantially, considerations that arise from ISGM systems, practices and other arrangements generally applicable to all technicians. It is sufficient for current purposes to observe, by reference to the authorities that follow, that the approach to the issue of whether the technicians were each employees of ISGM that Mr Mutch intends to take, is sufficiently supported by authority to make that exercise, broadly speaking, forensically justifiable.

66    Determining whether a first person is providing work to another as an employee of that second person, is an exercise which requires consideration of whether a contract exists between the first and second person and, if so, whether that contract bears the legal character of a contract of employment. When determining whether a contractual relationship exists and the legal nature of that relationship, courts have been alert to ensure that form and presentation, whilst relevant, do not distract from the substance of what has been agreed and the true nature of the relationship in question: Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) 228 FCR 346 at [142] (North and Bromberg JJ) and the authorities there cited.

67    It will not necessarily be the case that the interposition of a corporation between a worker providing personal services and an entity receiving those services will deny the existence of a contract of employment between the worker and the recipient of the work: Ace Insurance Ltd v Trifunovski (2013) 209 FCR 146 at [150]-[153] (Buchanan J with Lander and Robertson JJ in agreement); Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2010) 184 FCR 448 at [43] (Keane CJ, Sundberg and Kenny JJ). A relevant consideration is the function served by the corporation in the relationship created by the contract which, as the authorities just referred to show, requires an examination of a range of relevant circumstances beyond the terms of the contract in question.

68    The parties’ characterisation of their relationship may not be given effect according to its terms where that characterisation contradicts the nature of the relationship the parties have actually created: Curtis v Perth and Freemantle Bottle Exchange Co Ltd (1914) 18 CLR 17 at 25 (Isaacs J); Garnac Grain Co Inc v H M F Faure and Fairclough Ltd [1968] AC 1130 at 1137 (Lord Pearson); Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389 (the Court), citing Lord Denning MR in Massey v Crown Life Insurance Co [1978] 2 All ER 576 at 579; Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [58] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ); Quest at [148] (North and Bromberg JJ). The character of the relationship created by the contract will be revealed by all the terms of the contract examined in the light of circumstances surrounding the making of it: Narich Pty Ltd v Commissioner of Pay-roll Tax [1983] 2 NSWLR 597 at 601 and 606 (Lord Keith of Kinkel, Lord Elwyn-Jones, Lord Roskill, Lord Brandon of Oakbrook and Lord Templeman); ACT Visiting Medical Officers Association v Australian Industrial Relations Commission [2006] FCAFC 109 at [24] (Wilcox, Conti and Stone JJ); and Quest at [148] (North and Bromberg JJ).

69    Determining whether a person is providing services as an employee requires a multi-factorial assessment of the “totality of the relationship”: Hollis at [24]; Quest at [176] (North and Bromberg JJ). The majority in Hollis (at [40]) approved the observation made by Windeyer J in Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217 that the distinction between an employee and an independent contractor is “rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own”: see further Hollis at [47] and [57] and see Quest at [177].

70    In the multi-factorial assessment conducted in Hollis, the indicia that the majority considered included: the level of skill exercised by the worker; whether the worker was able to create an independent career and generate goodwill; whether the notion that the worker was running a business was intuitively unsound; whether the worker could refuse work offered; whether the worker could delegate work; whether the worker could engage in work for others, ie. was given scope for the pursuit of any real business enterprise on the worker’s own account; whether the worker was presented to the public as an emanation of the recipient of the work; whether the recipient superintended the worker’s finances; whether there was scope for the worker to bargain for the rate of remuneration; whether the recipient undertook provision of insurances; the method of payment; the capacity for the worker to take leave; the provision of and maintenance of tools and equipment; and whether the workers effectively performed all of the business’ operations in the outside world (at [48]-[57]).

71    At [24] the majority emphasised the relevance of the recipient’s work systems and work practices stating that the relationship between the worker and the recipient was not to be found merely from the contractual terms agreed and observed that:

The system which was operated thereunder and the work practices imposed by [the recipient] go to establishing ‘the totality of the relationship’ between the parties; it is this which is to be considered.

72    Most of the indicia referred to in Hollis and set out above are relied upon by Mr Mutch. The list there given is not exhaustive. Nor are any of the indicia necessarily determinative in any particular case. The weight which may be accorded to any particular indicator may vary from case to case: Lopez v Deputy Commissioner of Taxation (2005) 143 FCR 574 at [82] (Ryan, Lander and Crennan JJ). As Wigney J observed in Bywater at [61], the characterisation task is “essentially evaluative”, citing Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 where Mummery J emphasised that the task was a “matter of evaluation of the overall effect of the detail”.

Deliberation - s 33C(1)

73    To establish non-compliance with s 33C(1), ISGM relied only upon para (c) thereof and only upon the requirement made in s 33C(1)(c) that the claims of all group members must “give rise to a…common issue of law and fact”. ISGM contended that none of the common questions listed in the AOA could constitute a common issue. It was contended that from the manner in which Mr Mutch has pleaded his case, none of the asserted common questions are common questions “in the requisite sense”. That was so because “the alleged common questions can only be determined by reference to underlying premises which must be assessed on an individual-by-individual basis”.

74    ISGM contended that each of the asserted common questions were dependent upon 2 questions – (1) whether each of the technicians and ISGM had entered into a contract and (2) whether that contract was a contract of employment. More specifically, although it is not entirely clear, ISGM contended that common questions 1-7 and 16-17 are dependent on the first question and common questions 1-15 are dependent on both of the questions. Relying upon the FASC’s assertion of a contract made between ISGM and each technician as being “a legal conclusion that follows after an examination of the whole of the relationship between the parties” and also the reference in that pleading to the “totality of the relationship” made in asserting that the relationship between each technician and ISGM was an employment relationship, ISGM contended that the 2 questions necessarily involved a fact specific exercise which would require a consideration of the individual circumstances of each technician. It was also asserted that a consideration of individual circumstances was mandated by the “very nature” of the assessment raised by the 2 questions.

75    ISGM contended that the 2 questions of whether there was a contract and, if so, whether it was an employment contract, were individual to each technician and not common to all. On the basis that each of the common questions in the AOA was dependent on those 2 questions, ISGM contended that each of the common questions was individual and not common.

76    There are a number of difficulties with that submission and it should be rejected.

77    First, to some extent the submission impermissibly (for s 33C(1) purposes) travels beyond Mr Mutch’s pleaded case. As outlined already ISGM asserted that by its “very nature” the exercise involved in answering the 2 questions it identified necessarily requires an assessment of the individual circumstances particular to each technician. That assertion is not necessarily true. Nor is it consistent with Mr Mutch’s pleaded case which does not rely on individual circumstances naturally or otherwise arising.

78    The assertion is not necessarily true because as Hollis itself demonstrates, the exercise of evaluating whether or not a person is an employee by an assessment of the “totality of the relationship” does not necessarily require that circumstances peculiar to the specific worker whose relationship is being assessed be known and given significance. In that case, the particular bicycle courier whose status was being assessed was unknown. An assessment of the totality of that worker’s relationship with the putative employer was conducted without reference to any individual circumstance applicable to the unknown bicycle courier. The assessment and the ultimate conclusion that the unknown bicycle courier was an employee, was based upon the system of work and work practices generally applicable to all bicycle couriers in the putative employer’s workforce. As the High Court said, at ([24]) “[t]he system which was operated thereunder and the work practices imposed by [the putative employer] go to establishing ‘the totality of the relationship’ between the parties; it is this which is to be considered”.

79    Second, although the FASC specifies in wide terms the applicable test for the characterisation exercises it invites, there is no reliance there placed on any circumstances individual to any particular technician. What is relied upon to make out Mr Mutch’s claim that each technician is to be characterised as an employee of ISGM are a multitude of particular contractual arrangements and requirements, work practices and systems generally applicable and thus common to the relationships of each of the technicians and ISGM.

80    ISGM contended that the particulars given to para 219 of the FASC (see above at [32]) demonstrated reliance upon individual circumstances applicable to Mr Mutch. The pleading is somewhat ambiguous, however, I do not understand it to be suggesting that any of the work practices there asserted were applicable only to Mr Mutch and therefore an individual circumstance particular and unique to Mr Mutch. Read in context, the particulars to para 219 are suggesting no more than that Mr Mutch had no personal experience of a very small number of the work practices listed, which in turn suggests that some of the work practices alleged were generally applicable rather than necessarily uniformly applicable. Even if the paragraph was read as ISGM would have it, the FASC’s departure from its general rule is insubstantial. That departure would not materially alter the proposition apparent from the FASC, that Mr Mutch’s case that each technician is to be characterised as an employee, is based upon a common nucleus of facts uniformly applicable to all technicians which are sufficient of themselves to make good the characterisations contended for (Bywater at [87]-[103], Wigney J). For the purpose of s 33C(1) it is the pleaded case sought to be made out by Mr Mutch that the Court must focus upon.

81    Third, and most significantly, ISGM’s submission is based upon a flawed analysis. ISGM is wrong to have contended that all of the common questions listed in the AOA are dependent upon the 2 questions of whether there was a contract and whether it was a contract of employment. Whilst that may well be true of common questions 9-17, it is not true for common questions 1-7.

82    Question 8 in the list of common questions in the AOA, is a compound of the 2 questions relied upon by ISGM. That question is – “[w]hether, the relationship as between the [technicians] and [ISGM] was one of employment”. The answer to question 8 is dependent (at least in part) upon the answers to questions 1-7. Each of those questions calls for an assessment of an indicator or factor commonly assessed under the multi-factorial totality test. They are each factors alleged in the FASC to be of relevance to and informative of the answer to question 8. In that sense question 8 is dependent upon questions 1-7. The reverse relation contended for by ISGM is erroneous.

83    Sheared of the erroneous contention that questions 1-7 are dependent upon and therefore infected by the individual and non-common nature of question 8 (assuming for present purposes that that is the case), nothing is left in the s 33C(1)(c) challenge made by ISGM to common questions 1-7.

84    It is not in contest that, for s 33C(1)(c) purposes, one substantial common issue would suffice: Guglielmin at [56] (Mansfield J) referring to Wong at [30] (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ). Nor is it in contest that, if a common issue, each of common questions 1-7 are “substantial” as s 33C(1)(c) requires. Further, as the High Court observed in Wong (at [30]), it is not necessary to show that the single common issue “would be likely to resolve wholly, or to any significant degree, the claims of all group members”.

85    It is only necessary then for me to identify one question from those listed in the AOA which I am satisfied is a common issue within the meaning of s 33C(1). Common question 3 raises the issue of “[w]hether the economic activity carried out by [the technicians] was portrayed as that of [ISGM]”.

86    By reference to the FASC, Mr Mutch’s case (as already outlined at [30]-[32] above) is that the economic activity that was carried out by the technicians was portrayed as that of ISGM by reason of (1) the technicians being required to wear a uniform containing ISGM branding, (2) the technicians being required to use ISGM branding on their vehicles and (3) the technicians being required to have identification with ISGM and Telstra branding. In support of each of those requirements, Mr Mutch relies upon numerous provisions of Tickets of Work Agreements and Field Operations Manuals. Further and in relation to the first requirement, reliance is also placed on the asserted work practice that the technicians were required to wear uniforms with Telstra and ISGM logos. In relation to the third requirement, the asserted work practice that ISGM required workers to wear identification with ISGM and Telstra branding is also relied upon. Those requirements and work practices relied upon are, on Mr Mutch’s case, common and applicable to all technicians. There is no basis for any suggestion that, on the claim made by Mr Mutch, common question 3 calls for any individual-by-individual assessment. Common question 3 raises a substantial common issue.

87    The same analysis may be made in relation to the first common question listed in the AOA of whether ISGM “controlled and directed, or had the capacity to control and direct, the manner in which [the technicians] performed work”. In making the claim that ISGM had and had used that capacity, Mr Mutch’s pleading relies on the matters set out at sub-para (1) of [30] above supported by a common nucleus of facts said to be applicable to all technicians. On the basis of the pleading, the question does not call for any individual-by-individual assessment.

88    For those reasons, I reject ISGM’s contention that the requirements of s 33C(1) are not satisfied and that therefore the proceeding was not properly commenced. I refuse ISGM’s application for a declaration to that effect.

Deliberation - s 33N

89    ISGM’s contentions in support of its application under s 33N – that it is in the interests of justice that the claim not continue under Part IVA of the FW Act – are threefold. First, that there is limited utility in the proceeding continuing as a representative proceeding as most, if not all of the key issues are not capable of being determined on a common basis. Second, that there is a real possibility for prejudice to group members from being involuntarily exposed to cross-claims as a result of being involved in the proceeding and third that there is a conflict of group members interests which warrants the proceeding being de-classed.

90    It may be accepted consistently with ISGM’s submissions and as discussed above in relation to ISGM’s s 33C application, that a wide range of indicators or factors may be relevant in the application of the multi-factorial assessments required in determining whether one person was in a contractual relationship of employment with another. It may further be accepted that the factors relevant to the assessment of a particular relationship may vary as between one relationship and the next and that the relevant factors are personal to the relationship in question. Further, the weight that may be given to the same factor in an overall assessment may vary as between different assessments and, that each multi-factorial assessment will ultimately involve an evaluation of not just each detail but “the overall effect of the detail” or, as Mummery J also put it in Hall at 944, a “qualitative appreciation of the whole”.

91    All of that suggests that, particularly in relation to a putative employer with a large and diverse workforce, and even where standardised systems and arrangements are extensively applied, an assessment of whether the putative employer was in a contractual relationship of employment with each of the putative employees in its putative workforce, may not be capable of being wholly undertaken on a collective basis ie. across all of the separate relationships being assessed.

92    However, that the requisite assessments cannot be wholly undertaken on a collective basis does not rule out the utility of parts of those assessments being undertaken on that basis. Whilst a particular circumstance may be regarded as personal to a particular relationship between the putative employer and a putative employee, it may also be personal to each and every relationship between the putative employer and its employees including because the circumstance concerned arises from a requirement, system or practice universally applicable. In other words, the circumstance, indicator or factor in question may be common across all of the relationships being assessed. Other relevant circumstances, indicators or factors may not be common to all but only to a sub-group within the putative workforce. It may be that within a particular factor some elements thereof are common across the putative workforce and some are not.

93    It stands to reason that circumstances common to many persons are capable of being assessed collectively. Such commonality gives rise to the utility of a collective assessment. The greater the commonality of relevant circumstances, the greater the potential for a single collective assessment to be of utility as compared to multiple assessments conducted on an individual-by-individual basis.

94    To take a simple example from a factor already addressed above – where it is asserted (as is here the case) that ISGM required technicians to wear and utilise ISGM branding on the uniforms they wore and the vehicles they used, there is obvious utility in that issue being addressed once in the one class action proceeding rather than multiple times in separate proceedings brought by numerous technicians. Given that there are at least 3,348 group members in this proceeding (ISGM contracted with 3,348 Corporate Entities during the period of Mr Mutch’s claim of which it is assumed that at least one technician was associated with the contracted work of each Corporate Entity), even if only a small proportion of those persons initiated their own proceeding there would likely be utility in that question being investigated and determined once on a collective basis.

95    Of course if that question was the only question capable of collective determination, I may have reached a different view. But, as best as I can tell at present, that is highly unlikely. It is highly unlikely because the pleadings and other material before me suggest a high degree of commonality in the circumstances attending the technicians that are likely to be relevant to the multi-factorial assessments required to assess the claims made for all technicians.

96    As earlier outlined, both parties extensively plead reliance upon standardised systems and arrangements applicable to all or most technicians. That those standardised systems and arrangements overwhelmingly dominate the pleadings suggest that the likely disputed interpretations, characterisations, consequences and effects of multiple elements of those systems and arrangements are likely to be significant if not dominant in the resolution of the claims made for all technicians. On the material before me it would appear that a very large number of requirements, arrangements and practices relevant to the assessments which must be made are likely to be universally applicable to either all or most technicians. The potential for collective assessments made through common questions directed at either the circumstances of all technicians or large sub-groups thereof, appears to me to be substantial.

97    That potential is not properly exposed by the common questions listed in the AOA. It is necessary to bear in mind that the common questions specified in the AOA are not determinative of or necessarily reflective of the common issues or issues of commonality that may be determined by an initial trial of the class action. As Lee J said in Gill at [8]:

A common misconception is that the s 33H common question or questions specified in the originating application or supporting documentation (for the ‘gateway’ purpose explained in the preceding paragraph) define the common question or questions for the balance of the proceeding. A moment’s reflection will lead to the conclusion that this cannot be the case. For one thing, issues which are common may narrow considerably upon a joinder of issue by way of pleadings. Similarly, issues which are common to the claims may arise by way of a positive averment made in a subsequent pleading, whether it be a defence, a reply, a rejoinder or so on. Further common issues of fact may arise upon the filing of lay or expert affidavit evidence.

98    Particularly in the light of ISGM’s Defence and the material before me which illustrates the intended reliance to be made by ISGM on the asserted variance in the circumstances attending some groups of technicians, many if not most of the common questions listed in the AOA are likely to be inappropriately pitched at a high level of generality. Pitched at lower levels of granularity and taking into account the potential for sub-groups, I would expect that tens of useful common questions will be formulated prior to the initial trial.

99    It is possible that the view I hold, that a very large number of common questions of utility will be formulated, may well prove to be wrong. But if that turns out to be the case, the application here raised prematurely, may be revisited: see Bywater at [117] (Wigney J). As discussed above at [13], it is often unhelpful for the Court’s assessment of s 33N(1) considerations to be conducted at an early stage of the proceeding.

100    The problem with ISGM’s submission is that it is premised upon the idea that the initial trial in the proceedings will be a trial of the common questions listed in the AOA including question 8. Question 8 poses the question at the core of the claims made by Mr Mutch of whether the technicians were each employees of ISGM. On the premise that question 8 will be a common question and that other common questions are dependent upon and affected by question 8 considerations, ISGM contended that the proceeding was inutile. That was so because on the postulated premise, the initial trial of the proceeding would entail an examination of the entirety of the relevant circumstances of each and every technician. An exercise which was said to be no less costly than if each technician conducted her or his own separate proceeding and an exercise said also to likely involve greater delay in the determination of the claims of the technicians. For those reasons, ISGM contended that this proceeding as a class action would not provide an efficient and effective means of dealing with the claims of group members (s 33N(1)(c)) and is otherwise inappropriate (s 33N(1)(d)).

101    To reverse a well-known idiom, the submission fails to see the trees for the wood. It concentrates on the whole and fails to see its numerous component parts. ISGM ignores the potentially significant utility of many, if not most, of those component parts being determined once and once only in a single proceeding.

102    The 2 other matters raised by ISGM in support of this application were also raised in support of ISGM’s “opt-in” proposal with which I later deal. For the reasons given below, even if those matters had any substance, there are measures available to avoid the asserted prejudice and/or conflict.

103    For all of those reasons, I am not satisfied that because of the considerations set out in s 33N(1) it is in the interests of justice to order that the proceeding no longer continue as a representative proceeding under Part IVA of the FCA. Accordingly, I will dismiss ISGM’s application for such an order.

ISGM’s application for class closure/opt-in orders

Relevant legislation and principles

104    The Court’s power to order class closure is derived from s 33ZF(1) of the FCA. The power is conditioned by the Court’s satisfaction that any such orders are “appropriate or necessary to ensure that justice is done in the proceeding”. It is not in contest that there must be a “compelling reason” to make a class closure order departing, as it does, from the passive role group members are entitled to assume under Part IVA: P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 2) [2010] FCA 176 at [17] (Finkelstein J); Winterford v Pfizer Australia Pty Ltd [2012] FCA 1199 at [5] (Bromberg J).

Deliberation

105    ISGM contended the Court should order class closure as a means of avoiding potential prejudice to group members and to avoid the potential for conflicts of interest between group members caused by the potential for prejudice to some but not all. The potential for prejudice relied upon was twofold. First, that technicians may be prejudicially exposed to cross-claims issued by ISGM against technicians and their associated Corporate Entities, of the kind ISGM has in fact issued against Mr Mutch and MBC. Second, that if technicians are held to have been employees of ISGM, arrangements put in place by Corporate Entities and technicians based upon the technicians not being employees of ISGM will be undermined with potential prejudicial flow-on implications for the technicians.

106    ISGM contended that the risk of that potential prejudice should not attach to group members who take a passive role in the proceeding but should only attach to group members who have made a “conscious choice” to remain part of the representative proceeding. By “conscious choice” ISGM means a positive election to stay as a group member rather than a passive election not to opt-out.

107    ISGM also argued that if group members were given the opportunity to make a positive election, the extent of potential prejudice upon it would be alleviated in two respects. First, if it decides to issue cross-claims and, in circumstances where it would not issue cross-claims against group members who do not opt-in, the potential burden on ISGM of issuing cross-claims may be substantially diminished. Second and relatedly, in so far as those group members that do not opt-in are persons with whom ISGM continues to have ongoing commercial relations, those relations will not be prejudiced by the issuance of any cross-claim against them.

108    Part of the difficulty with these contentions, assuming for the moment that the potential for prejudice of the kind contended for is real and of significance, is that the contentions are erroneously premised on a positive election being the only effective and available means by which group members may be afforded an opportunity to take into account the consequences for them of electing to remain group members.

109    ISGM proposed that class closure be effectuated through an opt-in process. Under that process, it is proposed that a notice will be published directed to group members requiring group members to register their interest in remaining group members by a specified date and that amendments then be made to the group definition limiting group membership to those persons who have opted-in, that is, who have chosen to remain group members.

110    Whilst that process would require group members to make a decision as to whether they wished to remain group members, it would not facilitate an informed election by group members as to whether to remain a group member in the face of the risk of the potential prejudice suggested by ISGM, unless that potential for prejudice was made known to the group members. That is the first difficulty with ISGM’s proposal. The second difficulty is that providing group members with an election informed by a consideration of the potential prejudicial consequences of electing to remain group members can also be provided by an opt-out process without requiring class closure. Third, as I shall explain, neither an opt-in process or an opt-out process is necessarily fail safe in identifying the will of all group members but, with that understanding, Parliament has chosen an opt-out model as the preferred process. That choice must be respected and should not be undermined by the Court’s exercise of the power conferred by s 33ZF(1).

111    During the hearing, I sought the views of the parties as to why an opt-out notice could not be utilised for informing group members about those matters that may be potentially prejudicial to them should they decide to remain as group members. Subject to the opt-out notice not being alarmist, Mr Mutch indicated no objection to that course. ISGM said that its preferred approach was an opt-in notice as the adoption of that process “would make it very clear” because some group members “may well not make any decision at all regarding [an] opt-out notice”.

112    Whilst that suggestion was not further explored or explained, I understand ISGM to be contending that in contrast to an opt-out process an opt-in process is preferable because, as it requires a positive decision to be made by group members to remain in the proceeding, group members who in fact make no election but who would have decided not to remain, will not be included as group members and will thereby avoid the risk of prejudice that ISGM says they may suffer.

113    That submission essentially invites the Court to revisit an issue which was the subject of considerable debate prior to the enactment of Part IVA of the FCA (see Grave A, Adams K, Betts J, Class Actions in Australia (2nd Ed, Thomson Reuters, 2012) at [8.100]-[8.130]) and which was resolved by the adoption by Parliament of an opt-out process. As Jagot, Yates and Murphy JJ said in Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (2017) 252 FCR 1 at [72]:

The Commonwealth Parliament, in implementing a core recommendation of the Australian Law Reform Commission in its report Grouped Proceedings in the Federal Court, Report No 46 (Canberra, 1988) at [127], expressed a legislative intention to adopt an opt out rather than an opt in procedure: Second Reading Speech, Federal Court of Australia Amendment Bill 1991 (Cth), House of Representatives Parliamentary Debates, Hansard, 14 November 1991 p 3,175.

114    Whilst compelling reasons may provide a basis for the exercise of the Court’s discretion to require an opt-in process, that discretion must not be used to revisit and thereby undermine the conclusion that Parliament must be taken to have arrived at, that an opt-out process is the preferable process. Further, it must also be recognised that implicit in Parliament’s adoption of an opt-out model, and bearing in mind that Parliament must have taken into account both equity and efficiency considerations, is Parliament’s acceptance that an opt-out process will provide a sufficiently certain and accurate indication of the will of those group members who want to maintain their status as group members, such group members having been informed by an opt-out notice and having made an election including by reference to the consequences for the group member of electing to remain a group member. I note in that respect, that in King v GIO Australia Holdings Ltd [2000] FCA 1869 at [4], Moore J regarded the central purpose of an opt-out notice was to inform group members of the right to opt-out, when that right must be exercised and “the consequences of exercising or not exercising the right”.

115    There are serious consequences that flow from the making of either a positive or a passive election, including the potentially prejudicial consequence that the group member will be bound by the result and denied the opportunity to pursue an individual claim. So much must have been appreciated when an opt-out model was preferred. It must also have been appreciated that the potential for prejudice would vary from one group member to the next and that in some cases, the risk of prejudice would be higher for some group members than for others. I do not accept ISGM’s suggestion that Parliament’s preference for an opt-out model is premised on that process being appropriate for the usual case where the making of an election by a group-member is of little consequence to group members because they “stand to gain much and, and stand to lose little”.

116    That a less than fail safe opportunity is provided under an opt-out model for all group members to consider the consequences of not opting out must also have been appreciated. That is so because, particularly in relation to a class the membership of which is not readily discernible, there is no guarantee that all the members of the class will become aware of the class action despite the publication of opt-out notices. As was noted by Gaudron, Gummow and Hayne JJ in Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 at [39], there is in that context a real possibility that some group members “may have their rights affected without their knowing or consenting to that being done”.

117    Similarly, an opt-in process does not provide a fail-safe mechanism for identifying all group members who want to remain group members. Requiring a positive election has a tendency to exclude from the claim group some persons who by reason of a lack of understanding, timidity, unfamiliarity with the law or apathy do not take the affirmative step of electing to participate: see the discussion of the Supreme Court of the United States of America as to the respective merits of the opt-in and opt-out processes in Phillips Petroleum Co v Shutts 472 U.S 797 (1985) at 812-813 (Rehnquist J on behalf of the Court); and by Young J in Carnie v Esanda Finance Corporation Ltd (1996) 38 NSWLR 465 at 473.

118    It may be accepted that for the reason suggested by ISGM, an opt-out process is less than perfect in identifying all group members who want to remain part of the represented class. But, an opt-in process is also less than perfect in that respect. There are both efficiency and equity considerations relevant to the question as to which of the two models is the more perfect and reasonable minds may differ as to the appropriate choice. The point is, however, that Parliament has already made that choice and for the Court to make a different choice by resorting to the powers conferred by s 33ZF(1), would undermine the statutory scheme enacted by Part IVA. The Court ought not do so.

119    In that respect, the Court is in a different position to that faced by Young J in Carnie who, in the context of dealing with a representative action permitted under the rules of the Supreme Court of New South Wales, was unrestrained by the scheme in question and free to make an unrestricted choice between an opt-out and an opt-in process. That his Honour made a different choice to the choice made by the statutory scheme in Part IVA is of little assistance to ISGM’s submissions, despite the heavy reliance placed upon that choice by those submissions.

120    I should add that even if I had been of the view that I was unrestricted by the statutory scheme to choose an opt-in process in preference to an opt-out process, in the circumstances and at present, I would not have been persuaded to do that. There are three reasons.

121    First, the statutory scheme intends to provide group members with the advantage of passive involvement not only in relation to the making of an election of the kind already addressed, but generally. As a Full Court said in Melbourne City Investments at [73] (citing Forrest J in Thomas v Powercor Australia Ltd (No 1) [2010] VSC 489 at [30]), the legislature clearly intended to provide group members with the ability to “‘sit back’ and watch the proceeding unfold”. Class closure at this very early stage of the proceeding would substantially impede that capacity. Even if an opt-in process (in comparison to an opt-out process) would provide a more perfect identification of those group members who wish to remain within the group, the extent of the improvement (particularly given my second reason which follows) is unlikely to be significant and does not outweigh the prima facie entitlement of group members to passive participation

122    Second, in this case, group members are identifiable. ISGM has the names of each technician (but not necessarily the current addresses of all). It would seem therefore that notification by an opt-out notice, including information about the potential consequences of the making of an election not to opt-out, may be given personally rather than by publication. The likely availability of personal notification supports my view that an opt-out process is capable of providing a very high level of assurance that all group members will be provided with an opportunity to make an informed election as to whether or not to opt-out.

123    Third, to this point I have assumed (in favour of ISGM) the existence of potential prejudice of the kind ISGM have suggested exists. That I should give weight to that assumption has not really been justified. In particular, most of the potential prejudice suggested by ISGM, both the potential prejudice to group members and the potential prejudice for itself, relates to the issuance of cross-claims to all group members and Corporate Entities with whom those group members are associated. At this time, ISGM has not made a decision to issue cross-claims beyond that issued to Mr Mutch and MBC. Senior Counsel for ISGM informed the Court that ISGM intends to “give serious consideration” to whether it will do so. Accordingly, the apprehended prejudice may or may not come to pass and, in the absence of a firm decision by ISGM to issue cross-claims, the potential for prejudice is greatly overstated. As is the potential for arrangements made by group members to be prejudiced by a finding that that all group members are employees of ISGM. ISGM’s assertion of that potential prejudice is premised on such a finding being made at the initial trial. For reasons already addressed, the initial trial may partially but not wholly resolve the issue as to whether group members (beyond Mr Mutch) were employed by ISGM. In that circumstance, the apprehended prejudice is premature.

124    As to ISGM’s apprehension that its relations with group members with whom it continues to deal with will be prejudiced, it seems to me that if the potential for prejudice is real there must be many alternative ways in which it might be addressed.

125    For all those reasons, a compelling basis for class closure has not been demonstrated. ISGM’s application for orders to facilitate class closure must be dismissed.

Mr Mutch’s application for a Common fund order

126    Mr Mutch made an amended interlocutory application seeking that a common fund order (“CFO”) be made in relation to the class action, referrable to funding terms attached to that application. ISGM neither consented nor opposed the application for a CFO.

127    At the hearing I raised with Senior Counsel for Mr Mutch the fact that the making of a CFO did not appear to be a matter of any urgency, and suggested that in that circumstance and given that the Court’s power to make such orders was under challenge in the High Court it would be appropriate that the application not be determined until after the High Court’s decision in BMW Australia Ltd v Brewster [2019] HCA 45 was handed down. I indicated my intention to deal with the application for a CFO on that basis.

128    The High Court’s decision in Brewster has since been handed down. In Brewster, the High Court found that properly construed, s 33ZF of the FCA did not empower the Court to make a CFO. Section 33ZF provides that in a class action, the Court may make any order that it thinks appropriate or necessary to ensure that justice is done in the proceeding. As Kiefel CJ, Bell and Keane JJ stated (at [3]):

[w]hile the power conferred by these sections [s 33ZF FCA and s 183 Civil Procedure Act 2005 (NSW)] is wide, it does not extend to the making of a CFO. These sections empower the making of orders as to how an action should proceed in order to do justice. They are not concerned with the radically different question as to whether an action can proceed at all. It is not appropriate or necessary to ensure that justice is done in a representative proceeding for a court to promote the prosecution of the proceeding in order to enable it to be heard and determined by that court. The making of an order at the outset of a representative proceeding, in order to assure a potential funder of the litigation of a sufficient level of return upon its investment to secure its support for the proceeding, is beyond the purpose of the legislation.

129    In accordance with the holding in Brewster that this Court lacks the power to make a CFO, Mr Mutch’s application for a CFO is dismissed.

Mr Mutch’s summary judgment application

130    Mr Mutch made an interlocutory application seeking the summary dismissal of ISGM’s cross-claim in accordance with s 31A(2) of the FCA. Section 31A(2) provides that the Court may give summary judgment if it is satisfied that a party has no reasonable prospect of successfully prosecuting the proceeding.

131    The cross-claim brought by ISGM is brought against each of Mr Mutch and MBC. The cross-claim is premised upon the proposition that, contrary to ISGM’s Defence, Mr Mutch was an employee of ISGM or that Mr Mutch had a personal contractual relationship with ISGM pursuant to which he was an independent contractor. On that premise, ISGM makes 2 types of claims by its cross-claim – claims in restitution and claims for misleading and deceptive conduct.

132    Broadly stated, ISGM’s claims for restitution are based on the payments it said it made to MBC in consideration for MBC providing I&M Services, being payments made under a mistake of fact or law. The mistaken belief being that ISGM had a contract with MBC pursuant to which I&M Services were provided to ISGM by MBC as an independent contractor and not provided by Mr Mutch personally as an employee or independent contractor. ISGM further claims that the payments made by it to MBC were made for consideration that has wholly failed, in circumstances where MBC did not provide the I&M Services.

133    Again broadly stated, by its claims of misleading and deceptive conduct in contravention of s 18 of the Australian Consumer Law being Sch 2 of the Competition and Consumer Act 2010 (Cth), ISGM claims that MBC or alternatively Mr Mutch made representations to it that MBC was providing I&M Services to ISGM as an independent contractor and that those services were not being provided by Mr Mutch as an employee or personally as an independent contractor.

134    Mr Mutch made the following submissions in relation to ISGM’s restitution claims. First, that the payments MBC received involved no unjust enrichment as the payments made by ISGM to MBC, even if made in a mistaken belief by ISGM, did no more than – on ISGM’s pleaded case – discharge ISGM’s contractual liabilities. Second, that ISGM has already been reimbursed by Telstra for all payments made to technicians so if the restitution claims are successful ISGM would itself be unjustly enriched. Third, relying on Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate (2015) 240 FCR 578, that ISGM could not seek restitution payments made by it to Mr Mutch as consideration for provision of services as a “set-off” of payments owing by ISGM to Mr Mutch under the Award or the FW Act, unless the payments actually made by ISGM to Mr Mutch related to the various unpaid benefits.

135    In relation to ISGM’s misleading or deceptive conduct claim, Mr Mutch submitted that the impugned representation is a representation as to Mr Mutch’s opinion and not a representation of fact such that if it were wrong it would unlikely constitute misleading or deceptive conduct, especially if it was honestly held as it was for Mr Mutch, who held the opinion on the basis of the Tickets of Work Agreements.

Deliberation

136    The timing and the apparent purpose of the summary judgment application being raised now is, in my view, significant for the case management considerations I should take into account.

137    The summary judgment application has been made very early in the life of the proceeding. As acknowledged by Senior Counsel for Mr Mutch, the timing of the application is responsive to ISGM’s reliance on the issuance of cross-claims in support of its submission that an opt-in order under s 33ZF should be made. In that context, Mr Mutch has been motivated to press for his summary judgment application to be determined now, so that he could demonstrate that ISGM’s cross-claim lacks merit and thus all the possible cross-claims threatened by ISGM would lack merit and that thus the prejudice apprehended for group members by ISGM is illusory. However, as I have rejected ISGM’s application for an opt-in order, the potential utility which drove Mr Mutch to press for an early consideration of the merit of ISGM’s cross-claim has evaporated.

138    From a case management perspective there is no other justification for the summary judgment application being dealt with at this juncture. Indeed, in terms of the efficient use of the resources of both the parties and the Court, bearing in mind the overarching principle in s 37M of the FCA, there are good reasons for the determination of the cross-claim (whether summary or final) to await the determination of Mr Mutch’s primary claim. If ISGM succeeds in relation to those primary claims, the premise upon which the cross-claim is based will evaporate and the cross-claim need not be determined because there would be no utility in it being pressed.

139    In those circumstances, I consider that the most appropriate course is for the summary judgment application to be adjourned to a date to be fixed. If at some later time an application is made asserting that there is utility in the summary judgment application being determined, I will give the matter further consideration.

ISGM’s application for the reinstatement of mbc

140    MBC was registered as a proprietary corporation on 17 March 2014 and was deregistered by ASIC on 13 August 2017. In order to facilitate the cross-claim it seeks to pursue against MBC ISGM commenced a separate but related proceeding seeking that the registration of MBC be reinstated. ASIC is a respondent in that proceeding.

141    On particular conditions, which it is not necessary to here outline, and upon being informed that in the event of reinstatement Mr Mutch would give an undertaking to the Court that he would be the sole director of MBC and would cause MBC to operate solely for the purpose of defending the cross-claim and not otherwise trade, ASIC did not appear and does not oppose the application. Further, Mr Mutch agrees that MBC should be reinstated if his summary judgment application seeking the dismissal of the cross-claim does not succeed or is adjourned.

Relevant legislation and principles

142    Section 601AH(2) of the Corporations Act provides that the Court may make an order that ASIC reinstate the registration of a company if an application for reinstatement is made to the Court by a person aggrieved by the deregistration and the Court is satisfied that it is just that the company’s registration be reinstated. The Court also has a residual discretion to refuse to make an order that the company be restored to the register: see Re James Hardie Australia Finance Pty Ltd (deregistered) (2008) 170 FCR 545 at [13] (Lindgren J).

143    The threshold to determine whether or not a party is a “person aggrieved” is low and needs only be dealt with in a summary way. As long as the claim is “not plainly hopeless and bound to fail, it should, subject to other relevant matters, proceed”: see Re Brockweir Pty Ltd [2012] VSC 225 at [22] (Sifris J). The key question is whether there is a “person aggrieved” rather than “an officious bystander or mere busybody”: see Partners v Sampson [2002] NSWSC 383 at [8] (Barrett J). The expression “person aggrieved” is of wide import and is to be construed liberally and extends to a person who, because of the deregistration has some right of some or potential value that has been lost, including a right to bring a claim against a company: see Boys, in the matter of 38 Akuna Pty Ltd (deregistered) v Australian Securities and Investments Commission [2019] FCA 320 at [26] (Lee J); In the matter of Likehart Pty Ltd (deregistered) [2017] NSWSC 884 at [18] (Black J).

144    It is well settled that the Court has a broad discretion in satisfying itself that it is “just” to order reinstatement. Relevant considerations include the circumstances of the company’s deregistration, the purpose of reinstatement, whether any person is likely to be prejudiced by reinstatement and the public interest generally: see In the matter of ERB International Pty Ltd (deregistered) [2014] NSWSC 200 at [5] (Brereton J); Boys at [27]-[28].

145    Further, it is generally not appropriate to go into factual matters which may be the subject of dispute in a reinstatement application, other than in the “clearest of clear cases”, for example, where reinstatement would be futile or an abuse of process: AMP General Insurance Ltd v Victorian Workcover Authority (2006) 1 VR 175 at [35] (Maxwell P and Neave JA); Deputy Commissioner of Taxation v Australian Securities and Investments Commission; in the matter of Civic Finance Pty Ltd (deregistered) [2010] FCA 1411 at [14] (Jagot J); Hayes (Liquidator) v 5G Developments Pty Ltd, in the matter of 5G Developments Pty Ltd [2019] FCA 1541 at [16] (Stewart J).

Deliberation

146    I find that ISGM meets the broad description of a “person aggrieved”. ISGM is not a mere “bystander”, it would not be able to prosecute its cross-claim against MBC without the reinstatement of MBC. I hold that it is just to reinstate MBC. In coming to that conclusion I have considered the fact that MBC was not deregistered following a winding up process (see Boys at [31]), that the purpose for the reinstatement is to pursue the cross-claim against MBC and the absence of any likely prejudice to either MBC or Mr Mutch. Further, the risk to the public interest of insolvent trading is addressed by the undertaking given by Mr Mutch that he would be MBC’s sole director and operate MBC solely for the purpose of defending the cross-claim and further by the fact that MBC has litigation funding to cover the costs of defending the cross-claim. There is no reason why the residual discretion should be exercised. I will make orders reinstating MBC.

conclusion

147    For the reasons expressed, I will make orders

(1)    dismissing ISGM’s interlocutory application for declassing orders and class-closure/opt-in orders;

(2)    dismissing Mr Mutch’s application for a common fund order;

(3)    adjourning Mr Mutch’s application for summary judgment on the cross-claim; and

(4)    requiring ASIC to reinstate MBC.

148    Other than for the reinstatement application in which I presume no costs are sought, I will make an order reserving costs in each application. The parties should consult on the question of costs and attempt to reach agreement on appropriate consent orders. If there is no, or no complete agreement, and in so far as any order for costs is pressed, the party seeking costs should file and serve a short written submission within 14 days of the publication of these reasons. Any responding submission should be filed and served within 7 days thereafter. I will deal with any order for costs on the papers.

Associate:

Dated:    18 March 2020