Federal Court of Australia

Revill v John Holland Group Pty Ltd (No 2) [2021] FCA 1056

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth), judgment is entered in favour of the respondent in relation to the whole of the proceeding.

2.    On or before 16 September 2021 the respondent must file and serve any written submission, of not more than three pages in length, in relation to the costs of its interlocutory application dated 9 June 2021 and the costs of the proceeding, indicating whether it seeks an oral hearing.

3.    On or before 30 September 2021 the applicant must file and serve any written submission, of not more than three pages in length, in reply, indicating whether he seeks an oral hearing.

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

REASONS FOR JUDGMENT

JACKSON J:

1    The respondent, John Holland Group Pty Ltd (JH Group), applies under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) for summary judgment against the applicant, Mr Revill. Alternatively, JH Group says that parts of Mr Revill's substituted statement of claim (SSOC) should be struck out.

2    Some background appears in Revill v John Holland Group Pty Ltd [2020] FCA 1633. That decision concerned, in part, an application by Mr Revill to join two other members of the John Holland corporate group as respondents, namely John Holland Pty Ltd (JHPL) and JHG Mutual Pty Ltd (JHG Mutual). That application was dismissed because if JHPL and JHG Mutual had been joined they would have had a limitation defence which, in my view, meant that Mr Revill would not have had reasonable prospects of success against them.

3    Subsequently, Mr Revill filed and served the SSOC against JH Group. JH Group says that Mr Revill has no reasonable prospect of successfully prosecuting the proceeding, alternatively that the SSOC does not disclose a cause of action which is maintainable against it. In order to assess those contentions, it is necessary to describe the claims advanced in the SSOC and relevant defences raised by JH Group.

Mr Revill's claims

4    In the SSOC, Mr Revill pleads that he was at all material times employed by JH Group, alternatively JHPL, at the Wheatstone construction project at Ashburton North, Western Australia. He pleads that JH Group owns all of the shares in JHPL.

5    Mr Revill was employed from February 2013 until he was made redundant in November 2013. He claims that his employment was governed by the John Holland Wheatstone Project Agreement 2012 (EA), which is (although not expressly pleaded to be) an enterprise agreement approved by the Fair Work Commission under the Fair Work Act 2009 (Cth) (FWA).

6    Mr Revill alleges that cl 14 of the EA requires the provision to employees of income protection insurance in accordance with the employer's existing practices and policies. Those policies include a document titled 'Employee Financial Support Plan' (EFSP). It is pleaded that by way of page 1 of the EFSP, JH Group 'if not the employer of the Applicant, is deemed to be an insurer as that term is used in the Insurance Contracts Act 1984 (Cwth) ("the ICA") and JHPL an insured, also as that term is used in the ICA'.

7    Mr Revill alleges that on 19 June 2013 he suffered a non-work related injury to his lower back and right shoulder. This, he claims, was a 'Protected Event' under the EFSP. On 4 July 2013 he applied to JH Group (he says) for income protection insurance, in accordance with the EA and the EFSP. JH Group declined the claim by way of a letter dated 21 August 2013 saying, in essence, that it was based on a pre-existing condition which was excluded under the EFSP. Mr Revill unsuccessfully sought review of that decision by JH Group, and then by an independent body nominated in the EFSP, and then by the Financial Ombudsman. As at 5 September 2014, Mr Revill had exhausted all avenues of review.

8    The SSOC alleges that the decision to decline the claim on the basis that it is a pre-existing condition is wrong. This is said to lead to the following causes of action against JH Group:

(1)    breach of cl 14 of the EA, which entails contravention of s 50 of the FWA, which provides that a person must not contravene a term of an enterprise agreement; or

(2)    breach of a contract of general insurance leading to breach of s 48 of the Insurance Contracts Act 1984 (Cth) (ICA), which gives a third party beneficiary under a contract of general insurance a right to recover from the insurer, in accordance with the contract, the amount of any loss suffered by the third party beneficiary, even though the third party beneficiary is not a party to the contract. This appears to be on the basis of the plea that if JH Group is not the employer it is nevertheless insuring the employer, presumably JHPL, against claims made on JHPL by its employees. Hence, on this construction, Mr Revill would be a third party beneficiary of the insurance provided by JH Group to JHPL.

9    Mr Revill claims that he has suffered loss and damage as a result of those alleged breaches, and seeks damages for weekly amounts over approximately 47 weeks. The total claimed is $110,128.57 plus interest, as well as penalties for the alleged breach of s 50 of the FWA.

JH Group's defence

10    JH Group has filed a defence to the SSOC. It pleads that at all material times Mr Revill was employed by JHPL, not JH Group. It alleges that his contract of employment was constituted by an offer of employment letter dated 3 April 2013 and three other documents signed by Mr Revill, none of which is the EA. It admits, however, that the EA covered and applied to Mr Revill's employment with JHPL.

11    The defence joins issue with the legal and factual merits of Mr Revill's claim that he has wrongfully been denied the benefit of income protection insurance, in ways that do not need to be described here. Relevantly, it also alleges that Mr Revill's insurance claim was submitted to JHPL, not JH Group. It denies that it was JH Group who declined the application for indemnity.

12    JH Group objects to the paragraphs of the SSOC which allege that JH Group has breached s 50 of the FWA, on the grounds that they do not plead material facts, are conclusory, do not disclose a cause of action and are embarrassing. Under cover of that objection, JH Group says that the EA did not cover or apply to JH Group, and JH Group could not contravene cl 14 of the EA or s 50 of the FWA.

13    JH Group also objects on the same grounds to the paragraph of the SSOC which pleads that Mr Revill has a right to recover from JH Group under s 48 of the ICA. Under cover of that objection, it denies the existence of any contract of general insurance, denies that it was the insurer under that contract if it did exist, and otherwise denies that Mr Revill has a right to claim as a third party beneficiary under s 48.

The parties' positions in relation to summary judgment

14    As to the claim of breach of the EA leading to contravention of s 50 of the FWA, JH Group relies on s 51 of the FWA, which provides that 'an enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person'. For an enterprise agreement to apply to a person it must, among other things, cover the person: s 52(1)(b). An enterprise agreement covers an employer if the agreement is expressed to cover the employer: s 53(1). The EA is not expressed to cover JH Group; it is expressed to cover JHPL. So in this case, only JHPL, and not JH Group, could contravene s 50. JH Group says this means that the cause of action against it under that section has no prospects of success.

15    As far as the claim under s 48 of the ICA goes, JH Group submits that such a claim is only maintainable against the entity described in the section as 'the insurer'. Put in the manner most favourable to Mr Revill, the only entities which could conceivably be 'the insurer' under cl 14 of the EA are JHPL or JHG Mutual. JH Group relies on policy documentation which, it says, shows that in fact JHG Mutual insures various John Holland entities. So, once again, according to JH Group, any cause of action under s 48 against it has no prospects of success.

16    In his response to these contentions, Mr Revill submits that JH Group is estopped from making its submissions on the summary judgment application because they contradict submissions it made in the joinder application. He further submits that JH Group has controlled its subsidiaries JHPL and JHG Mutual, and has used them to avoid providing income protection insurance to Mr Revill, alternatively those two companies were relevantly acting as JH Group's agents. These things, he says, mean that the corporate veil should be pierced and the separate legal identity of JH Group disregarded.

Principles of summary judgment

17    The principles applicable to an application under s 31A(2) of the Federal Court Act are not in dispute. It is convenient to repeat the summary given in Quach v Commissioner of Taxation [2019] FCA 1729; (2019) 168 ALD 130 at [10] and [12]:

The relevant power to order summary judgment is found in s 31A(2) of the Federal Court of Australia Act 1976 (Cth). In order to enliven the power to award summary judgment under that provision, the court must be satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. It is also necessary to have regard to s 31A(3):

For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)    hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

…

The applicable principles are well established and may be summarised as follows:

(1)    It is the applicant for summary judgment who bears the onus of persuading the court that the proceedings should be determined summarily: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 at [45].

(2)    It may be doubted that it is useful to adopt any gloss, paraphrase or lexicon as to the criterion of no reasonable prospect of success: Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [58]; see also at [22].

(3)    As the combined effect of s 31A(2) and 31A(3) makes clear, the inquiry is whether the prosecution of the relevant part of the proceeding has no reasonable prospect of success, not whether that defence is hopeless or bound to fail: Spencer at [52].

(4)    The test is a departure from earlier provisions authorising summary judgment to be ordered: Spencer at [53]. Section 31A has lowered the bar and softened the test: Cassimatis at [46].

(5)    Nevertheless, the power to dismiss an action summarily must be exercised with caution and is not to be exercised lightly: Spencer at [24] and [60].

(6)    Section 31A(1) provides that when the court is satisfied that the respondent to an application for summary judgment has no reasonable prospect of successfully prosecuting or defending the proceeding or that part of the proceeding, then the court 'may' give judgment. The assessment required by s 31A of whether a proceeding has no reasonable prospects of success necessitates the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 at [28].

(7)    A practical judgment as to the case at hand is required, by reference to the stage it has reached: Spencer at [25]; Cassimatis at [46].

18    In this case, as will be seen, Mr Revill seeks to establish a sufficient foundation in the evidence for the court to conclude that there are issues about 'piercing the corporate veil' that should go to trial. In that regard, it is helpful to bear in mind the summary of the purposes of s 31A of the Federal Court Act which Gordon J gave in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60; (2008) 167 FCR 372 at [124]-[125]:

… [T]he express words of s 31A impose a different and less stringent test to that described in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130. As was explained in the Second Reading Speech of the Migration Litigation Reform Bill 2005 (Cth) which introduced s 31A of the Federal Court Act, the legislative purpose of s 31A was to strengthen ' … the power of the court to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases': Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 at [45]; Paramasivam v University of New South Wales [2007] FCAFC 176 at [41]; and PZ Cussons (International) Ltd v Rosa Dora Imports Pty Ltd (2007) 74 IPR 372 at [13].

That such a provision should exist is not surprising. In modern litigation, cost and delay are two prominent features of the legal landscape: Gleeson CJ (1998) Commentary on Paper by Lord Browne-Wilkinson (Supreme Court of New South Wales Judges' Conference) http://www.hcourt.gov.au/speeches/cj/cj_cj2.htm (viewed 26 November 2007) (stating that 'civil litigation is far too expensive' and 'there should be an increased emphasis on summary disposal of proceedings which are amenable to such treatment'). Section 31A is a provision which permits, and assists, the Court to manage proceedings and therefore assists in controlling the cost of, and delays in, resolving proceedings by summarily dismissing claims which have no reasonable prospect of success. At the same time, it is a provision that ensures that no injustice is done to a party. The mechanism adopted to achieve these objectives is that before judgment is entered, the claim or part of the claim must have 'no reasonable prospect of success'.

19    In light of those purposes, I respectfully agree with the description of how the court should assess factual disputes in summary judgment applications which Foster J gave in Wang v Anying Group Pty Ltd [2009] FCA 1500 at [43]:

(a)    The moving party does not have to demonstrate that the defence is hopeless or unarguable;

(b)    The Court must consider the pleadings and the evidence with a 'critical eye' in order to see whether the respondent party has evidence of sufficient quality and weight to be able to succeed at trial (Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at [23] (p 382) (per Finkelstein J));

(c)    The respondent party is not obliged to present its whole case in order to defeat the summary judgment applicant but must at least present a sufficient outline of the evidence in order to enable the Court to come to a preliminary view about the merits for the purpose of considering the statutory test in s 31A(1)(b) (Jefferson Ford Pty Ltd 167 FCR 372 at [22] (p 382) (per Finkelstein J)); and

(d)    The test may require greater scrutiny of the pleadings and evidence in some cases than in others. In my judgment, the words of s 31A(1) compel a flexible approach. The real question in every case is not so much whether there is any issue that could arguably go to trial but rather whether there is any issue that should be permitted to go to trial. This seems to be the approach of Finkelstein J in Jefferson Ford Pty Ltd 167 FCR 372 and of Gordon J in the same case (as to which see [123]-[134] (pp 406-409)), although Rares J in that case at [73]-[74] (p 394) and in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 esp at [45] (p 731) favoured a test which is much closer to the older test articulated in authorities decided under Rules of Court expressed in terms different from the language of s 31A(1)).

While Foster J was speaking in terms of s 31A(1), which concerns an applicant seeking summary judgment against a respondent, the same approach should be taken here in respect of s 31A(2).

Consideration

20    On the face of things, the company that Mr Revill has sued is neither the employer who undertook potentially relevant obligations under the EA, nor the entity which may have undertaken obligations of insurance in relation to Mr Revill. The offer of employment which Mr Revill signed was expressed to have been made by JHPL. The only employer on whom the EA is expressed to be binding is JHPL. As for insurance, the documents that have been produced to the court indicate that it was JHG Mutual which was potentially obliged to other companies in the John Holland corporate group to pay claims made by them in respect of injuries, illness or death suffered by their employees. In so far as it is potentially relevant to Mr Revill's claim, JHG Mutual's position as the possible insurer emerges from an instrument called the 'Rules of JHG Mutual' read together with 'Schedules and Protection Wordings' for the 2012-2013 financial year, which appear to have been issued for the benefit of companies in the John Holland corporate group, including JHPL and JH Group. Mr Revill points to no agreement or other instrument in which JH Group has undertaken any obligation to him, or under which JH Group has undertaken an insurance obligation to anyone.

21    As a result, it does seem that Mr Revill has not sued the companies potentially liable under his two causes of action, namely his employer under the EA, JHPL, nor the possible insurer, JHG Mutual. He does not seriously dispute the matters set out in the previous paragraph which, without more, would lead to that conclusion. As has been said, his resistance to summary judgment is based on an estoppel argument and on an argument that, despite the prima facie position, JH Group is in fact liable because of its alleged control over JHPL and JHG Mutual, as well as the purpose for which the John Holland corporate group is structured in the way that it is.

Estoppel

22    The estoppel contention is difficult to understand. Mr Revill's written submissions in opposition to the summary judgment application refer to passages from the submissions which JH Group filed in opposition to the joinder application. In those passages, JH Group said that Mr Revill had no arguable case against either JHPL or JHG Mutual. Mr Revill compares that with a passage from JH Group's submissions on the current application which says that 'on the construction most favourable to the applicant there are possibly two contracts of insurance which the applicant could seek to maintain a claim under'. According to Mr Revill's counsel, the latter submission is inconsistent with JH Group's position in the previous application. That is apparently because the earlier submissions said that there was no case against JHPL or JHG Mutual, while now JH Group is saying that there are two possible contracts of insurance under which Mr Revill could seek to maintain a claim. Counsel relied on Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [21]-[22] and Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212 at [27] to submit that an estoppel therefore arises.

23    That is not a cogent submission. First, it is unclear why Mr Revill wants to stop JH Group from conceding the possibility that he does have a claim against anyone. In truth, his counsel was less than specific as to precisely what JH Group was estopped from doing. Second, the passages from the High Court authorities on which counsel relied are about estoppels that can arise in a proceeding when a dispute has previously been determined in a different proceeding: see in particular the reference in Tomlinson at [21] to 'a final judgment having been rendered in other adversarial proceedings'; see also Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 at [21]. That has not happened here. The dismissal of the joinder application did not finally determine Mr Revill's rights against JHPL or JHG Mutual. Although they were not joined as respondents to this proceeding, there is nothing to stop Mr Revill from issuing separate proceedings against them (whether those proceedings would have any merit or not is a separate issue). So the dismissal of the joinder application was truly interlocutory, meaning that no issue estoppel could arise: Schlieske v Minister for Immigration and Ethic Affairs (1987) 79 ALR 554 at 574. Third, Mr Revill has not articulated any way in which the determination of the joinder application in JH Group's favour is inconsistent with the position JH Group now takes in the present application. He did not make it clear whether he was relying on issue estoppel or some sort of Anshun estoppel. Assuming it is the former, there is no inconsistency between, on the one hand, the dismissal of the joinder application because of the availability of limitation defences, and on the other hand, JH Group now saying that Mr Revill could 'seek to maintain a claim' against JHPL or JHG Mutual. If those companies were to meet the claim with the same limitation defences, it would still be a claim that Mr Revill would 'seek to maintain'. The contention about estoppel is without merit.

Piercing the corporate veil

24    The reasons why Mr Revill says JH Group is liable to him appear in his written submissions in this summary judgment application, which say that in the SSOC Mr Revill advances the following 'causes of action':

(1)    At all material times JH Group 'has dominant control over JHPL and JHG Mutual that both acted as one with Respondent [sic] … Therefore, the acts of the [sic] JHPL and JHG Mutual are acts of the Respondent who is responsible for the acts of JHPL and JHG Mutual'. This appears to be supported by submissions as to the constitution of the boards of directors of JH Group, JHPL and JHG Mutual, and by assertions such as that JH Group 'is the head and brain of the trading venture'.

(2)    There is a reference to John Holland Group Pty Ltd v Commissioner of Taxation [2015] FCAFC 82; (2015) 232 FCR 59 (JHG v CoT) at [14]-[24] in which, Mr Revill says, the court 'examined the Respondent and JHPL (collectively "John Holland") for the period 31 March 2012 to the [sic] 31 March 2013'. In oral submissions Mr Revill's counsel said that this case was an example of 'how John Holland Group avoids its employment responsibilities by using its subsidiary companies to divide its workforce into staff and workforce'. Mr Revill also submitted that the case shows that all employees, whether employed by JHPL or JH Group, were required to act in accordance with directions from JH Group and to 'observe certain codes of conduct directed by' JH Group. Once again, it is asserted that JH Group 'is in dominant control [of] JHPL'.

(3)    The written submissions also asserted that JH Group 'is in dominant control of JHG Mutual'. This is said to mean that JH Group and JHG Mutual 'act as one and are the insurer as that term is used in the ICA'.

25    These matters are all put in the written submissions without reference to any evidentiary support, although, as will be seen, counsel did refer to some evidence at the hearing. Mr Revill goes on to submit that JH Group has 'used its dominate [sic] control over its subsidiaries JHPL and JHG Mutual to evade legal obligations to the Applicant'. Referring to Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254, the submissions say that there are two instances where the separate legal personality of a company is to be disregarded in the context of a corporate group: (1) when there is a partnership or agency between the companies in the group; or (2) where the creation or use of the company was designed to enable a legal or fiduciary obligation to be evaded or a fraud to be perpetrated. Mr Revill relies on both of these categories. His counsel appeared to submit that JHPL and JHG Mutual were agents of, alternatively partners of, JH Group. He also submitted that JH Group has 'used JHPL and JHG Mutual to avoid providing income protection insurance in this case to the Applicant' or 'for the sole or dominant purpose of evading an existing obligation to provide income protection insurance'.

A new case

26    Before assessing the merits of these submissions, it is necessary to say that the suggestion that the SSOC advances the above three 'causes of action' is wrong. The SSOC does plead that JH Group owned 100% of the shares in JHPL, and that JH Group, if not the employer, is deemed to be the insurer. But apart from that it contains none of the allegations of fact made in the submissions I have just summarised, and articulates no way in which JH Group should somehow be liable for acts or omissions of JHPL or JHG Mutual. It does not avert to the possible significance of the fact that JHPL is the employer under the EA, and does not refer to JHG Mutual at all. It does not allege that JHPL or JHG Mutual are agents or partners of JH Group, or that JH Group is in 'dominant control' of JHPL and JHG Mutual, or that JH Group has used those other companies to evade an obligation to provide income protection insurance. All of those allegations would need to be pleaded distinctly and particularised properly. Accordingly, JH Group submits that the court should not entertain what it says is in essence a completely new and different case on a different set of alleged facts.

27    There is force in that. Mr Revill commenced this proceeding in August 2019. The joinder application was made on 17 July 2020. By that time, at least, Mr Revill's solicitors must have been alive to the questions about which entity employed Mr Revill and which entity allegedly provided income protection insurance. In truth, they should have been alive to it well before then; the EA on which Mr Revill has relied from the outset clearly identifies JHPL, and only JHPL, as the employer that is bound by it. Clause 14(4) of the EA says that JHPL 'will provide the income protection benefits outlined in this clause through JHG Mutual Ltd'. Yet neither the SSOC nor any earlier pleadings have made any real attempt to address the question of how it is JH Group and not the other companies that are said to be liable. Instead the drafter of the SSOC has simply proceeded on the basis that the correct respondent is JH Group. Only the summary judgment application has provoked any articulation of a case that the corporate veil separating JH Group from JHPL and JHG Mutual should be pierced.

28    Substantial amendments to the SSOC would be needed if that claim were to proceed. It would be a significant reconfiguration of the matter, some two years after it commenced. That would not be consistent with the overarching purpose of the civil practice and procedure provisions of the court as stated in s 37M(1)(b) of the Federal Court Act to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible.

29    Allowance must be made for the fact that the internal arrangements between members of the John Holland corporate group may not have been fully visible to Mr Revill. It could be that preliminary discovery, or discovery in the present proceeding, would be necessary in order for him to advance the claim outlined in his written submissions. But Mr Revill made no attempt to take advantage of any such procedure before the summary judgment application was filed, and still has not pleaded the case set out in his submissions.

30    That is so, even though Mr Revill put into evidence a bundle of correspondence and other documents which includes the following letters from JH Group to Mr Revill's solicitors:

(1)    a letter dated 15 February 2016, drawing the solicitors' attention to the clause of the EA which provides for income protection benefits to be provided through JHG Mutual;

(2)    a letter dated 22 March 2018 saying that the EFSP 'provides the details of the income protection benefits provided through the [sic] JHG Mutual Ltd'; and

(3)    a letter dated 4 April 2018 saying that the relevant insurance wording 'is between John Holland Mutual and the employing entity, which is John Holland Pty Ltd'.

So Mr Revill's solicitors had all this pointed out to them before they commenced this proceeding on 15 August 2019. And yet they chose not to include JHPL or JHG Mutual as defendants at that time. They did not seek to confront the problem until the joinder application and even when that application was determined against Mr Revill, they made no real attempt to address the implications for their case until the summary judgment application forced them to confront the issue. In my view that is relevant to the exercise of any discretion that arises if the threshold question of whether there is a reasonable prospect of successfully prosecuting the proceeding is answered against Mr Revill. I will return to it after answering that question.

Should summary judgment be granted?

31    I will approach that question in accordance with the principles I have summarised above, so that it is necessarily a preliminary assessment of the evidence. Along with the threshold question under s 31A(2)(b) of the Federal Court Act is an evaluation of whether, in all the circumstances and having regard to the purpose of s 31A, the case is one which should be permitted to go to trial. Any conclusion that it should not go to trial must be reached with due caution and regard to the fundamental principle that ordinarily a person who, in a regular way, invokes the jurisdiction of the court to determine a dispute is entitled to have it determined after a trial on the merits.

32    Ultimately, the onus of persuading the court that this matter should not be permitted to go to trial falls on JH Group. But the reality of this case is that, as I have described, JH Group has given reasons why, on the face of the evidence before the court, Mr Revill has simply sued the wrong company. Those reasons have substance. Therefore it is Mr Revill who has the practical onus here of persuading me that JH Group's liability should nevertheless only be determined after a trial.

33    The basis on which Mr Revill seeks to do so presents him with an ambitious task. In Pioneer Concrete, on which Mr Revill relies, Young J referred (at 264D) to 'massive problems in performing the exercise commonly called lifting the corporate veil'. His Honour addressed four possible bases on which that could be done in the context of a corporate group. One was that the company was in fact and law acting as agent for the other company in the corporate group. His Honour swiftly discounted that possibility on the evidence before him: at 264-265. Then his Honour considered certain authorities, in particular DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852, after which he held (at 267A):

In my view the plaintiff's submissions take the DHN case too far and it is only if the court can see that there is in fact or in law a partnership between companies in a group or alternatively where there is a mere sham or facade that one lifts the veil. The principle does not apply in the instant case where it would appear that there was a good commercial purpose for having separate companies in the group performing different functions even though the ultimate controllers would very naturally lapse into speaking of the whole group as 'us'.

Thus the second and third possibilities his Honour considered were partnership, and a sham or façade. The fourth possibility was that it would be inequitable not to lift the corporate veil, because the company was formed or used to facilitate the evasion of legal obligations: see at 267C to 267G. Young J held that this depends on a finding that one of the reasons for the creation of the intervening company was to evade a legal or fiduciary obligation: see at 267E. There was no question of that in the case before his Honour: at 267G.

34    Returning to this case, JH Group submits that the reasons for piercing the corporate veil which Mr Revill gave in his written submissions 'amount to no more than a collection of unanchored legal propositions devoid of any evidentiary support, or an application to such evidentiary support'. As I have said, the written submissions were not supported by references to evidence. But Mr Revill's counsel did rely on some specific evidence, so it is necessary to assess that in light of the summary of the relevant aspects of Pioneer Concrete which I have just given.

35    By the affidavit of its in house counsel, Ms Ward, JH Group accepts that JHPL is its wholly owned subsidiary and that all three companies have the same ultimate holding company, China Communications Construction Company Ltd. Mr Revill also relied on historical company searches showing that when he made the insurance claim in 2013, the ultimate holding company for all three companies was ACS Actividades De Construccion y Servicios SA.

36    Counsel for Mr Revill submitted that this shows that JH Group was the 'main shareholder and owner' of both JHPL and JHG Mutual. But while JH Group does own all the shares in JHPL, the evidence does not establish that JH Group is the main shareholder and owner of JHG Mutual. For one thing, JHG Mutual is a company limited by guarantee, so there are no shares. It appears from the rules and protection schedules I have mentioned that JH Group, JHPL and other John Holland companies are the members of JHG Mutual. The fact that JH Group and JHG Mutual have the same ultimate holding company does not mean that JH Group owns or controls JHG Mutual. Ms Ward's affidavit does not say anything different; while (in para 6) she mentions other John Holland companies and says 'They too are wholly owned subsidiaries of JH Group', she is referring back to her description (in para 3) of JHPL, not JHG Mutual, as a wholly owned subsidiary of JH Group.

37    Mr Revill also relied on common directors between the three companies. But while there are some common directors, the company searches in evidence reveal that there are many other directors of each company that are not common.

38    So far, all this establishes is that the companies are part of the same corporate group, have some common directors, and that JHPL is a subsidiary of JH Group. That is an unremarkable structure for a large commercial enterprise and could be said of many other corporate groups in Australia. In Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549, after a survey of the authorities about piercing the corporate veil in corporate groups, Rogers AJA concluded (at 577D to E):

In the result, as the law presently stands, in my view the proposition advanced by the plaintiff that the corporate veil may be pierced where one company exercises complete dominion and control over another is entirely too simplistic. The law pays scant regard to the commercial reality that every holding company has the potential and, more often than not, in fact, does, exercise complete control over a subsidiary. If the test were as absolute as the submission would suggest, then the corporate veil should have been pierced in the case of both Industrial Equity [Ltd v Blackburn (1977) 137 CLR 567] and Walker v Wimborne [(1976) 137 CLR 1].

The fact that a parent company exercises control over its subsidiary does not itself justify treating acts of the subsidiary as those of the parent: Heytesbury Holdings Pty Ltd v City of Subiaco (1998) 19 WAR 440 at 451F (Steytler J). Hence some further facts would need to be established here for the court to conclude that JHPL or JHG Mutual were agents or partners of JH Group, or that the John Holland corporate group was a sham or otherwise structured to avoid some obligation.

39    Counsel for Mr Revill sought to enlist the case of JHG v CoT in support of the last contention, that the John Holland corporate group was, in fact, structured to avoid legal obligations. He submitted that it was an example of how 'John Holland Group avoids its employment responsibilities by using its subsidiary companies to divide its workforce'. This submission does not address the rule that evidence of a finding of fact in an Australian proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding: Evidence Act 1995 (Cth) s 91(1). But even disregarding that rule (which counsel for JH Group was essentially prepared to do), JHG v CoT does not suggest that the structure of the John Holland corporate group was a sham or designed to avoid an obligation.

40    The relevant findings of fact, which are in the judgment of Edmonds J, concern an aspect of the John Holland corporate group's business known as JH Rail, which is not the part of the business where Mr Revill was employed: at [14]. Employees were designated as either 'workforce' (who were paid by an hourly rate) or 'staff' (salaried workers): at [16]. JHPL employed all workforce employees and JH Group employed all staff employees: at [18].

41    Counsel for Mr Revill relies on JHG v CoT as support for the proposition that the group is structured in that way for the purpose of evading or minimising liabilities which JH Group would otherwise have to employees such as Mr Revill, including an obligation to provide income protection insurance. One problem with this is that the very idea is incoherent. If there was an obligation to provide income protection insurance, it was an obligation which only arose voluntarily. Neither JH Group nor any other company would have the obligation unless it agreed to provide the insurance, whether through the mechanism of the EA or through private legally binding agreement in the usual way. There is no suggestion in the materials that JH Group has ever agreed with Mr Revill to provide the insurance. Perhaps JHPL so agreed, by way of the EA. Perhaps JHG Mutual agreed to act as the relevant insurer. But that is simply the way in which the affairs of the group are structured as a result of choices by the relevant companies to undertake certain obligations. It appears that JH Group has not made that choice, at least in so far as Mr Revill is concerned. It does not make sense to say that JH Group is evading obligations where there is no suggestion that it ever had them or ever should have had them.

42    Similarly, the fact that JH Rail was structured in the way outlined in JHG v CoT simply reflects the choices that have been made. One category of employees was employed by one company; a different category of employees was employed by a different company. That does not suggest any evasion of obligations. After all, JH Group did undertake direct obligations to the 'staff' employees, by employing them. JHPL employed the 'workforce' employees but there is nothing to suggest that somehow JH Group would have, or should have, employed them too. And nothing in the case suggests that one company was the agent of another, or that they were in partnership in relation to JH Rail, let alone in relation to the Wheatstone project at which Mr Revill was employed.

43    Apart from the group structure, in JHG v CoT Edmonds J also says at [21] that '[t]he terms of employment of both workforce and staff employees required them to act in accordance with directions from John Holland and to observe certain codes of conduct'. Also, 'John Holland' could direct employees to fly to particular sites at particular times: at [22]. Mr Revill relies on these statements as indicating that 'workforce' employees (presumably those equivalent to him as an employee of JHPL) must follow directions from JH Group, which is evidence of its 'dominant control' over JHPL. But earlier, at [14], Edmonds J defined 'John Holland' to mean JH Group and JHPL collectively. So his Honour's general statements at [21]-[22], when the question of the distinction between JHPL and JH Group was not an issue before him (the case was about the deductibility of the cost of flights), provide no support for a submission that JH Group controlled JHPL's employees.

44    Of more direct relevance to the present case was a document called 'John Holland Workforce Employment Agreement Permanent' which Mr Revill signed on 4 April 2013 and which formed part of his terms of employment. Clause 7.1 of that document provided that the employee ('you') was:

bound by, and must comply with and remain familiar with, the Company's policies and procedures, as amended. The policies and procedures are available for you to view on the Company's intranet.

Counsel for Mr Revill readily accepted that 'the Company' was defined to mean JHPL. But he went on to submit that 'John Holland Pty Ltd doesn't have a website. John Holland Group Pty Ltd have a website with their policies and procedures that must be followed by the subsidiaries'. There was no evidence of this. Counsel could only refer to a document which had the internet address www.johnholland.com.au written on it. There was no evidence that this was owned or operated by JH Group, or as to the contents of the website. Nor was there any evidence equating it to the 'intranet' referred to in cl 7.1.

45    Counsel for Mr Revill also referred to Bray v F Hoffman-La Roche Ltd [2002] FCA 243; (2002) 118 FCR 1. That was a cartel case where the issue said to be relevant for present purposes was whether overseas parent companies carried on business in Australia through their subsidiaries. Counsel appeared to be relying on [64]-[69] in which Merkel J summarised authorities such as Smith, Stone & Knight Ltd v Lord Mayor, Aldermen and Citizens of the City of Birmingham [1939] 4 All ER 116 and Spreag v Paeson Pty Ltd (1990) 94 ALR 679 as explicable as cases where 'the subsidiary was not maintained as a distinct and separate entity because the parent had disregarded the corporate boundaries'. But Merkel J went on to find that this was not the case in the matter before him. In the course of doing so his Honour observed (at [79]) that an arrangement where parent companies, in a practical and commercial sense, had a general capacity to direct and control the commercial operations of subsidiaries 'reflects a quite unexceptional commercial and legal relationship which commonly exists between overseas parent and regional companies and their Australian subsidiaries in a vertically integrated worldwide group of companies'. None of the evidence Mr Revill's counsel has pointed to is capable of making the structure and operations of the John Holland corporate group any more exceptional than that. None of it suggests that there was any disregard of corporate boundaries.

46    To the contrary, the evidence suggests that the corporate boundaries were observed. For example, while Mr Revill submitted that the form he used to make his original injury claim was directed to JH Group, care was taken in the form to state the precise position. Immediately under its title on its first page there appears (albeit in small print):

Note, throughout the claim form 'John Holland' refers to John Holland Group Pty Ltd; John Holland Rail Pty Ltd; John Holland Pty Ltd or John Holland Queensland Pty Ltd (whichever is the applicable employer for the person completing this claim form).

47    The only real exception to this careful delineation of the roles of the different entities that appears in the evidence is the correspondence in which Mr Revill's insurance claim was rejected. The EFSP says that financial support in cases including non-work related injury will be assessed on a case by case discretionary basis by 'John Holland' (defined as JH Group, JHPL, John Holland Rail Pty Ltd and John Holland Queensland Pty Ltd) based 'on the advice of JHG Mutual and it's [sic] manager, Regis Mutual Management Pty Ltd'. The correspondence with Mr Revill and his solicitors which followed the submission of his claim was sent on JH Group letterhead. But that letterhead also said 'Correspondence to: Regis Mutual Management Pty Ltd' and was signed by a person as 'Claims Supervisor, Regis Mutual Management Pty Ltd for and on behalf of John Holland Group Pty Ltd'. The letters said that correspondence should be addressed to Regis Mutual Management Pty Ltd at their address (Mr Revill's solicitors did not address subsequent letters that way) and one of the letters from Regis/JH Group (dated 21 November 2013) referred to Regis as 'Managers of the John Holland Employee Financial Support Plan'.

48    So it was quite clear that the correspondence was coming from the claim manager who had been appointed by JHG Mutual to advise on claims in respect of all the members of the group. Perhaps that claims manager was mistaken when it said it was writing on behalf of JH Group. But even if its letters are evidence that JH Group had some involvement in making a decision about coverage under the group-wide protection plan, that hardly rises to the level of 'dominant control' or thoroughgoing disregard of corporate boundaries which would justify the extraordinary step of dispensing with the separate legal personalities of the different companies. In my view the following comments of Steytler J in Heytesbury Holdings at 451A-451B could be made in a similar way here:

The fact that correspondence was, from time to time, sent to the City [of Subiaco] on [Heytesbury] Holdings' letterhead, or signed by persons described as employees or officers of Holdings, is simply irrelevant. The same is true of the fact that the two companies had overlapping directorships and shared a registered office and that Holdings consolidated the accounts of its subsidiaries into its own accounts. Those facts, taken individually or together, cannot alter the fact that it was [Heytesbury] Properties, and not Holdings, which was the lessee of the Humes site, which owed the money to the City and which lodged the development proposal.

49    Counsel also relied on an email dated 14 October 2014 from the Chief Operating Officer of Regis Mutual Management Pty Ltd to the Financial Ombudsman Service which said that 'JHG Mutual Ltd is a controlled entity of the employer which administers the income protection provided by the employer'. But that was immediately after referring to what appear to be the relevant clauses of the EA. So the reference to the 'employer' is a reference to JHPL. This provides no support for the proposition that there was a disregard of corporate boundaries or that JH Group had such dominant control over JHPL or JHG Mutual that JH Group is somehow legally liable for such obligations to Mr Revill as the other companies may have had.

50    In my view none of the evidence to which Mr Revill's counsel has referred provides any reasonable basis to think that at trial he may be able to establish that the JH Group should be equated with its related companies JHPL and JHG Mutual for the purposes of his claim. There is simply no cogent basis in the evidence to assert that the John Holland corporate structure is a sham or that it was designed in order for JH Group to evade liabilities. Nor is there any basis to think that JHPL or JHG Mutual acted as partners to or agents of JH Group when they undertook such obligations as they are alleged to owe to Mr Revill.

51    There are further difficulties with the case which have not yet been mentioned, which arise from the fact that both pleaded causes of action are statutory in nature. Under the provisions of the FWA that are described above, Mr Revill would need to persuade the court that, here, the reference in s 53(1) to an enterprise agreement being 'expressed to cover (however described) … the employer' encompasses an entity that is not named in the EA at all (that is, JH Group). He would need to persuade the court that the reference in s 48 of the ICA to 'the insurer' in connection with 'a contract of general insurance' is a reference to an entity which, on Mr Revill's newly proposed case, is insuring itself. That is because under that case, both the insurer of the employer (with Mr Revill as third party beneficiary) and the employer who is the insured should be taken to be JH Group. These are further examples of the incoherence of the case now sought to be put.

Conclusion

52    As a result of the matters discussed above I consider it highly likely that the position that appears on the face of the documents - that Mr Revill has sued the wrong company - is the true position. None of the matters which Mr Revill's counsel has outlined to refute that have any substance.

53    In truth the present situation is not the result of any 'evasion' on the part of JH Group. To the extent that Mr Revill does not now have the benefit of any income protection insurance he might otherwise have had as an employee, that is because when he commenced the proceeding he did not sue either the employer that had obligations under the EA (JHPL) or the entity that appears to have been the relevant insurer (JHG Mutual).

54    In my view, Mr Revill has no reasonable prospect of prosecuting the proceeding. That must be taken with the failure on the part of his solicitors even to raise the relevant claims until now, despite the fact that the roles of JHPL and JHG Mutual appear on the face of the EA and were pointed out to Mr Revill's solicitors before the proceeding commenced. Even on the cautious approach mandated by the authorities, this is a case that should not go to trial. The interlocutory application will be allowed and judgment will be entered for the respondent.

55    Given that I have come to this conclusion, it is not necessary to express a view on the merits of JH Group's application for parts of the SSOC to be struck out.

56    Because Mr Revill's claim was made, in part, under the FWA, s 570 of that Act may or may not mean that there should be no order as to costs. Orders will be made programming written submissions from the parties on that subject, with each party to indicate whether they seek an oral hearing.

Associate:

Dated:    2 September 2021