Federal Court of Australia

Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants (No 4) [2024] FCA 179

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s application for leave to file a Statement of Claim in the form of the Statement of Claim annexed to his interlocutory application filed on 12 August 2022 be dismissed.

2.    The proceeding be listed for a case management hearing at 9:30am on 21 March 2024, or such other date as can be agreed between the parties and the Associate to Goodman J.

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

REASONS FOR JUDGMENT

GOODMAN J

a.    Introduction

1    On 9 June 2022, I made a series of orders in this proceeding, including that the Statement of Claim (SOC) filed on 29 September 2021 by the applicant, Mr Patial, be struck out.

2    My reasons for doing so are set out in Patial v Kailash Lawyers Pty Ltd trading as Kailash Lawyers and Consultants [2022] FCA 662 (Patial (No 1)). Some familiarity with that decision is assumed in these reasons for judgment. In Patial (No 1) I reasoned, in summary, that:

(1)    Parts B to M and O of the SOC were based upon an allegation that Mr Patial – who is a solicitor – was an employee of the first respondent (Kailash Lawyers), and as such should be struck out because the issue of whether Mr Patial was an employee of Kailash Lawyers had already been determined adversely to Mr Patial in the Fair Work Commission and it was an abuse of process for Mr Patial to seek to re-litigate that issue in this Court;

(2)    Part P of the SOC should be struck out as the allegations therein were not in a form which disclosed a viable cause of action;

(3)    the remainder of the SOC could not survive the striking out of Parts B to P of the SOC; and

(4)    leave to replead should be given with respect to Part N (as against the second and third respondents, Koala Investment Property Pty Ltd and Kuber Investment Group Pty Ltd respectively) and Part P of the SOC.

3    On 12 August 2022, Mr Patial filed an interlocutory application which annexed a proposed Statement of Claim (PSOC). The determination of that application was stayed pending the outcome of Mr Patial’s application for leave to appeal and subsequently his appeal against the 9 June 2022 orders. That appeal has now been heard and dismissed: Patial v Kailash Lawyers Pty Ltd t/as Kailash Lawyers and Consultants [2023] FCAFC 155 (Rares, Jackson and Halley JJ) (Patial FFC).

4    The issue for present determination is whether Mr Patial should have leave to file a Statement of Claim in the form of the PSOC.

B.    Overview of the PSOC

5    The PSOC presents several difficulties in comprehending the extent to which it mirrors, and the extent to which it departs from, the SOC. The first is that the PSOC is not marked up as against the SOC. The second, related to the first, is that parts of the SOC appear to have been substantially reproduced in different places within the PSOC. The third is that changes are sought to be made to the respondents and to the numbering ascribed to them in each pleading. The position is summarised in the following table:

6    In summary, Mr Patial seeks to add Mr Pall and Kailasam Holdings as proposed respondents and to re-number the present respondents, Kailash Lawyers, Koala Investment and Kuber Investment. To reduce confusion, where it is necessary to refer to individual present and proposed respondents, I will do so by reference to their names.

7    The PSOC comprises 268 paragraphs and has the following structure:

(1)    A.     The Parties;

(2)    B.     Background – Supervised legal training with Kailash Lawyers;

(3)    C.     Hourly Rate – Calculation;

(4)    D.     Outstanding Remuneration;

(5)    E.     Annual Leave Pay;

(6)    F.     Outstanding Payments for Additional Work including IT Services - Deepawali Event - Distributing Calendars - Assembling Office Furniture - Removing Office Furniture - Moving Office Files to Kennards Storage Box Wentworthville - Shifting Office Furniture - Continuing Professional Development Courses - Renewal Application Fees for The Office of The Migration Agent Registration Authority;

(7)    G.    Superannuation;

(8)    H.    Workplace Discrimination – Workplace Harassment;

(9)    I.    Forcing [Mr Patial] – Junior Solicitor under supervision to involve in Wrong Activities;

(10)    J.    Psychological Stress;

(11)    K.    Sham Agreement;

(12)    L.    Particulars of Outstanding Wages, Entitlements, Payments and Compensation; and

(13)    M.    Common Questions.

C.    Consideration

C.1    Generally

8    The principles in relation to the function of pleadings are well-established. In Banque Commerciale SA, en liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279, the High Court of Australia emphasised that pleadings are directed at ensuring that parties are provided a fair opportunity to meet the case advanced against them. Mason CJ and Gaudron J identified at 286 to 287:

The function of pleadings is to state with sufficient clarity the case that must be met… In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.

(citations omitted)

9    Similarly, the Full Court of this Court in Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356 (Keane CJ, Lander and Buchanan JJ), explained at 373 to 374 [50]:

Pleadings provide a structure for a proceeding for the purpose of the attainment of justice. The pleadings identify the material facts upon which the parties rely and the issues the parties seek to have determined. Because the pleadings require the parties to identify all material facts and issues, the pleadings provide the benchmark for discovery before trial and the admissibility of evidence at trial. Parties are required to plead the material facts upon which the party relies and the issues which that party seeks to have resolved for the further purpose of giving the opposing party fair notice of the case to be met at trial thereby minimising any risk of injustice by taking the opposing party by surprise. Pleadings incidentally are the record of the proceeding for the purpose of any subsequent arguments relating to res judicata or issue estoppel or any like issue.

10    There are several fundamental (and in some cases, recurring) flaws in the PSOC.

11    The first is the failure to adequately identify the causes of action relied upon in many parts of the PSOC. The PSOC is replete with alleged facts, but the causes of action said to arise from those alleged facts which give rise to the issues to be determined by the Court have not been pleaded either at all, or with sufficient clarity. Thus, the PSOC does not identify the issues that Mr Patial seeks to have resolved in a way which enables a fair identification of the case that the present and proposed respondents would be required to meet.

12    The second relates to the pleading of relationships of employment. In this regard, PSOC [5], in Part A is in the following form:

5.    From April 2019 to August 2020, [Mr Pall] employed [Mr Patial] to do the IT and other work for him, [the present and proposed respondents].

13    This paragraph expresses a conclusion – “employed” – without any material facts alleged to give rise to such a conclusion. Moreover, it is ambiguous in that it is not clear whether it is alleged that the employer is Mr Pall, or the employer is one or more of the other present and proposed respondents. Further, to the extent it is intended to plead that Mr Patial was employed by Kailash Lawyers, the pursuit of that allegation would be an abuse of process for the reasons set out in Patial (No 1) and Patial FFC.

14    The third is the failure to plead how Mr Pall is liable for conduct allegedly engaged in by the present and proposed respondents.

15    In this regard, during oral submissions Mr Patial submitted that Mr Pall, as a director of the present and proposed respondents, is liable for any amounts for which those respondents are liable. In support of that submission, Mr Patial relied upon parts of the “Small business guide” in Part 1.5 of Division 4 of Chapter 1 of the Corporations Act 2001 (Cth), which relevantly provides:

Small business guide

...

Part 1.5—Small business guide

This guide summarises the main rules in the Corporations Act (the Corporations Act 2001) that apply to proprietary companies limited by shares—the most common type of company used by small business. The guide gives a general overview of the Corporations Act as it applies to those companies and directs readers to the operative provisions in the Corporations Act.

The notes in square brackets at the end of paragraphs in the guide indicate the main provisions of the Corporations Act, the regulations made under the Corporations Act, and ASIC Practice Notes that are relevant to the information in the paragraphs.

...

1.3 Director’s liability for company’s debts

A director of a company may be liable for debts incurred by the company at a time when the company itself is unable to pay those debts as they fall due.

A director of a company may be liable to compensate the company for any losses the company suffers from a breach of certain of the director’s duties to the company (see 5.3).

In addition to having liability for the company’s debts or to pay compensation to the company, a director may also be subject to a civil penalty.

If a company holds property on trust, a director of the company may be liable in some circumstances for liabilities incurred by the company as trustee.

[sections 197, 344, 588G, 588J, 588M, 1317H]

1.4 Director’s liability as guarantor/security over personal assets

As a matter of commercial practice, a bank, trade creditor or anyone else providing finance or credit to a company may ask a director of the company:

•    for a personal guarantee of the company’s liabilities; and

•    for some form of security over their house or personal assets to secure the performance by the company of its obligations.

The director of a company may, for example, be asked by a bank to give a mortgage over their house to secure the company’s repayment of a loan. If the company does not repay the loan as agreed with the bank, the director may lose the house.

...

(bold emphasis and italics in original)

16    Such reliance is misplaced. The “Small business guide” does not provide a cause of action; rather, it is a summary of some sections in that Act that apply to proprietary companies limited by shares. It may be possible to plead a cause of action by reference to some of the sections of the Corporations Act referred to in the “Small business guide” but, as Mr Patial acknowledged, the PSOC does not do so.

17    The fourth is the use of the expression “sham agreement” in various parts of the PSOC (and in particular Parts C, D and K). That “sham agreement” is identified in PSOC [32] and [34] as the “Agreement for General Use” entered into by Mr Patial and Kailash Lawyers. The salient parts of the Agreement for General Use were described in Patial (No 1) at [4] and Patial FFC at [2]. Also relevant are the findings of the Commission summarised at Patial (No 1) [35] and [36] (references to the Agreement are to the Agreement for General Use and references to the applicant are to Mr Patial):

35.    Commissioner McKenna found that the applicant was not an employee of the first respondent and thus that the Commission lacked jurisdiction to determine the application ([2], [23], [75], [81]).

36.    In reaching that conclusion the Commissioner found that:

(1)    the applicant made an unsolicited approach to the first respondent/Mr Pall and sought to obtain supervision as a restricted legal practitioner ([23]);

(2)    the Agreement was freely negotiated between the applicant and the first respondent and its terms were similar to terms of an earlier agreement between the applicant and Gondwana Lawyers ([3], [4], [23]);

(3)    the applicant and the first respondent entered into an arrangement “squarely not intended by either of them to involve an employment relationship” ([34]);

(4)    the Agreement in the form proposed by the applicant to the first respondent included: “it is expressly understood and stated that the parties do not form an employer/employee relationship” ([35], [75]);

(5)    in around April 2020 the applicant declined to accept an offer made to him by Mr Pall to become an employee of the first respondent. The applicant determined instead to continue to work on the basis of the terms of the Agreement ([23]);

(6)    the applicant sent regular invoices to the first respondent for a percentage of professional fees and the applicant was remunerated on the basis of these invoices ([23]); and

(7)    during 2020, at a time the applicant claims to have been employed by the first respondent, he received JobKeeper payments via a company of his own ([23]).

18    In summary, the Commission found that Mr Patial was not an employee of Kailash Lawyers because, inter alia, he and Kailash Lawyers were parties to the Agreement for General Use which explicitly stated that there was no employment relationship.

19    The use of the word “sham” in various parts of the PSOC (and in particular Parts C, D and K) suggests that it is Mr Patial’s case that the Agreement for General Use was one which the parties to it – Mr Patial and Kailash Lawyers – did not intend to govern the relationship between them: see Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 at 486 [46] (Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ). However, that word aside, Parts C, D and K appear to be premised upon the Agreement for General Use binding both Mr Patial and Kailash Lawyers. I raised this with Mr Patial during the hearing, who confirmed that he maintained the position that the Agreement for General Use was a sham:

MR PATIAL: In reply to Mr Misra’s submissions, Mr Misra is stressing the point, what kind of relationship is that? Is it a contractual relationship, or is it a employment relationship? I, again, came to ask you one and what I submit is, since 2019 to 2024 I have mentioned I have an employ. I have ..... to all these legal bodies, all the law societies as per the directions and everything. I was working as an employee of the Kailash Lawyers and Consultants. My version is only one. I am not denying from my version. I’m still not denying. ... I worked as an employee for the first respondent, which is Kailash Lawyers and Consultants.

...

HIS HONOUR: Can I raise one thing. From what you’ve just said, you seem to be saying that you place no reliance upon the agreement for general use; is that correct?

MR PATIAL: Sorry.

HIS HONOUR: You say you’re not a contractor.

MR PATIAL: I’m not a contractor.

HIS HONOUR: Okay. What do you say I should do with what you call the sham agreement?

MR PATIAL: The sham agreement was signed between the parties by all – on the directions of Mr Amit Pall.

HIS HONOUR: Yes.

MR PATIAL: What I am saying, if I’m saying I will apply, then my ..... because the Fair Work Commissioner had make a decision I’m not an employee regardless of all the evidence, and my learned friend has not provided any evidence to the Federal Court of Australia. What are the qualifications of the Commissioner? The Commissioner - - -

HIS HONOUR: No, no, no. Just come back to my question. I’m looking at the statement of claim.

MR PATIAL: Yes.

HIS HONOUR: At paragraph 44 of the statement of claim you say that you’re entitled to be paid.

MR PATIAL: Yes. Yes.

HIS HONOUR: As per the sham agreement.

MR PATIAL: Yes.

HIS HONOUR: So do you rely upon that agreement, or do you say it’s a sham?

MR PATIAL: It’s a sham.

HIS HONOUR: So you don’t rely upon it?

MR PATIAL: I’m not relying. ...

20    I turn now to consider particular parts of the PSOC.

C.2    Part A – The Parties (PSOC [1] to [23]) and Part L – Particulars of Outstanding Wages, Entitlements, Payments and Compensation (PSOC [262])

21    Parts A and L of the PSOC, which identify the parties and the amounts claimed by Mr Patial respectively, are not controversial from a pleading perspective with the exception of PSOC [5] which is discussed at [12] and [13] above. The remaining paragraphs stand or fall with the balance of the PSOC.

C.3    Part B – Background – supervised legal training with Kailash Lawyers (PSOC [24] to [43])

22    Part B of the PSOC is an expansion of Part B of the SOC, which was struck out without leave to replead. Part B of the PSOC commences with PSOC [24] in the following terms:

On 15 April 2019, [Mr Pall], on behalf of [Kailash Lawyers], verbally employed [Mr Patial] as a solicitor for [Kailash Lawyers].

23    Part B contains other contentions to the effect that Mr Patial was employed by Kailash Lawyers, including PSOC [40]:

From 17 April 2019, [Mr Patial] was an employee on record and working as a solicitor for [Kailash Lawyers] at the Law Society of New South Wales, Legal Aid NSW and MARA register.

24    These allegations and Part B in its entirety are based squarely on the proposition that Mr Patial was an employee of Kailash Lawyers, and as such the pursuit of Part B would be an abuse of process. Leave with respect to Part B of the PSOC should be refused.

C.4    Part C – Hourly Rate – Calculation (PSOC [44] to [46]) and Part D – Outstanding Remuneration (PSOC [47] to [64])

25    It is convenient to consider Parts C and D of the PSOC together. Those parts are in the following terms:

C.    Hourly rate - Calculation

44.    As per the sham agreement, [Kailash Lawyers] would pay 40% to [Mr Patial] for the billing of the first $100,000.00 and 50% if the billing crosses $100,000.00.

45.    As per the costs agreement provided to the clients, [Mr Pall] and [Kailash Lawyers] had charged $330.00 per hour for the work of [Mr Patial].

Particulars

Costs Agreement provided to clients.

46.    Therefore, as per the sham agreement, [Mr Patial’s] hourly rate is between $132.00 per hour @ 40% and $165.00 per hour @ 50%. Accordingly, the average hourly rate of [Mr Patial] is $148.50.

D.     Outstanding Remuneration

47.    [Mr Patial] claims the outstanding remuneration of $16,597.28 because [Mr Pall] and [Kailash Lawyers] have not yet paid the following invoices.

    D.1.    Adjustment Invoice April 2020 – Pending

48.    In or around May 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the Adjustment Invoice April 2020 invoice for the amount of $8,489.23 to [Mr Pall].

49.    On 31 August 2020, the same invoice was again provided to [Mr Pall] via email.

50.    [Mr Pall] and [Kailash Lawyers] have not yet paid the Adjustment Invoice for April 2020.

51.    [Mr Patial] has suffered a financial loss because [Mr Pall] and [Kailash Lawyers] breached the sham agreement.

52.    [Mr Patial] claims $8,489.23 from [Mr Pall] and [Kailash Lawyers].

    D.2.    August 2020 Invoice – Pending

53.    On 31 August 2020, as per [Mr Pall’s] instruction [Mr Patial] provided the August 2020 invoice for the amount of $6,766.00 to [Mr Pall] via email.

54.    [Mr Pall] and [Kailash Lawyers] have not paid the August invoice yet.

55.    [Mr Patial] has suffered a financial loss because [Mr Pall] and [Kailash Lawyers] breached the sham agreement.

56.    [Mr Patial] claims $6,766.00 from [Mr Pall] and [Kailash Lawyers].

    D.3.    Outstanding 2020 Invoice 1 – Pending

57.    On 29 June 2020, as per [Mr Pall’s] instruction, [Mr Patial] provided the Outstanding 2020 Invoice for the amount of $939.20 to [Mr Pall] via email.

58.    [Mr Pall] and [Kailash Lawyers] have not paid the Outstanding 2020 invoice yet.

59.    [Mr Patial] has suffered a financial loss because [Mr Pall] and [Kailash Lawyers] breached the sham agreement.

60.    [Mr Patial] claims $939.20 from [Mr Pall] and [Kailash Lawyers].

    D.4.    Outstanding 2020 Invoice 2 - Pending

61.    As per [Mr Pall’s] instruction, [Mr Patial] provided the Outstanding 2020 Invoice 2 for the amount of $402.85 to [Mr Pall] via email.

62.    [Mr Pall] and [Kailash Lawyers] have not yet paid the Outstanding 2020 invoice 2.

63.    [Mr Patial] has suffered a financial loss because [Mr Pall] and [Kailash Lawyers] breached the sham agreement.

64.    [Mr Patial] claims $402.85 from [Mr Pall] and [Kailash Lawyers].

(bold emphasis in original; underline emphasis added)

26    As noted at [17] above, the “sham agreement” is the Agreement for General Use between Mr Patial and Kailash Lawyers. Mr Pall is not pleaded to be party to the agreement. Thus, the pleading in PSOC [63] that Mr Pall breached the Agreement for General Use cannot stand. Similarly, PSOC [64] to the extent it refers to Mr Pall.

27    More fundamentally, there is a lack of clarity as to whether Mr Patial is in fact pursuing a claim for breach of the Agreement for General Use. As noted at [19] above, on the one hand Mr Patial through the use of the word “sham” contends that it is an agreement which Mr Patial and Kailash Lawyers did not intend to bind them (a position confirmed by Mr Patial in oral submissions); and on the other hand Mr Patial pleads that Kailash Lawyers breached that agreement.

28    Leave with respect to Parts C and D of the PSOC should be refused while this lack of clarity remains.

C.5    Part E – Annual Leave Pay (PSOC [65] to [73])

29    Part E of the PSOC is in the following form:

E.    Annual Leave Pay

65.    From 17 April 2019 to 26 August 2020, [Mr Patial] was entitled to have four (4) weeks of annual leave per annum as per [Kailash Lawyers and Koala Investment] office policy.

Particulars

[Kailash Lawyers and Koala Investment] office policy dated 28 February 2020 was received via email.

66.    [Mr Patial] relies on [Kailash Lawyers and Koala Investment] office policies.

67.    [Mr Patial] is entitled to 5.47 weeks of holiday payments from [Mr Pall] and [Kailash Lawyers and Koala Investment].

68.    [Mr Patial] worked on an average of 60-70 hours per week for [the present and proposed respondents]. So, the average working hours are 65 per week.

69.    [Mr Patial] claims 65 * 5.47 = 355.55 hours of annual leave from [the present and proposed respondents].

70.    [Mr Patial] claims 355.55 * $148.50 = $52,799.18 for the annual leave payment from [the present and proposed respondents].

71.    [Mr Patial] further claims the 17.5% loading of the annual leave. Accordingly, the loading amount is $9,239.85.

72.    [Mr Patial] has suffered a financial loss of $52,799.18 + $9,239.85 = $62,0390.05 because [Mr Pall, Kailash Lawyers and Koala Investment], breached their company policy.

73.    [Mr Patial] claims $62,0390.05 from [Mr Pall, Kailash Lawyers and Koala Investment].

(emphasis in original)

30    Part E of the PSOC is an expansion of the claim for annual leave found in Part I of the SOC. It has several flaws:

(1)    first, no cause of action is identified. There is reference to an entitlement under the office policies of Kailash Lawyers and Koala Investment, however this is insufficient in the absence of (at least) a sustainable cause of action against those companies;

(2)    secondly, to the extent that it is claimed that annual leave is payable because of an employment relationship between Mr Patial and Kailash Lawyers the pursuit of such an allegation would be an abuse of process; and

(3)    thirdly, no cause of action has been pleaded pursuant to which Mr Pall is alleged to be liable for a “breach” of the “office policy” or “company policy”.

31    Leave with respect to Part E of the PSOC should be refused.

C.6    Part F – Outstanding Payments for Additional Work including IT Services - Deepawali Event - Distributing Calendars - Assembling Office Furniture - Removing Office Furniture - Moving Office Files to Kennards Storage Box Wentworthville - Shifting Office Furniture - Continuing Professional Development Courses - Renewal Application Fees for The Office of The Migration Agent Registration Authority (PSOC [74] to [158])

C.6.1    Parts F.1 to F.10

32    Parts F.1 to F.10 of the PSOC are a miscellany of claims for what is described as “additional work”, allegedly undertaken by Mr Patial for all of the present and proposed respondents.

33    However, no cause of action – whether in contract or otherwise – has been pleaded. To the extent that it might be suggested that this work was done pursuant to an employment relationship between Mr Patial and Kailash Lawyers this would be an abuse of process. To the extent that it might be suggested that Mr Patial was in a contractual relationship with any of the present and proposed respondents, the material facts upon which that conclusion is based has not been pleaded.

34    Leave with respect to Parts F.1 to F.10 of the PSOC should be refused.

C.6.2    F.11 –Unauthorised possession of practising certificates (PSOC [148] to [152]) and F.12 –Unauthorised possession of cases and research folder (PSOC [153] to [158])

35    Parts F.11 and F.12 of the PSOC involve allegations the present and proposed respondents unlawfully had possession of various personal belongings of Mr Patial.

36    The allegations in F.11 and F.12 of the PSOC are in a similar form to the allegations in Part P.1 of the SOC. Again, there is no pleading of a cause or causes of action. Leave with respect to Part F.11 and F.12 of the PSOC should be refused.

C.7    Part G – Superannuation ((PSOC [159] to [164])

37    Part G of the PSOC is in the following form:

G.    Superannuation

159.    [Mr Patial] was entitled to superannuation from 17 April 2019 to 26 August 2020 as per Superannuation Guarantee (Administration) Act 1992.

160.    As per the Australian Taxation Office, Australian Government guidelines QC 67770, As an …. trainee, you will always be an employee for tax and super purposes.

161.    [Mr Patial] is entitled to $150,211.00 * 10% = $15,021.10 from [all of the present and proposed respondents].

162.    [Mr Patial] further entitled to $271,755.00 * 10% = $27,175.50 from [all of the present and proposed respondents].

163.    [Mr Patial] has suffered a financial loss of $15,021.10 + $27,175.50 = $42,196.60 because [all of the present and proposed respondents] breached the Superannuation Guarantee (Administration) Act 1992.

164.    [Mr Patial] claims $42,196.60 from [all of the present and proposed respondents].

(bold emphasis in original; underline emphasis added)

38    Part G of the PSOC is an expansion of Part M of the SOC. It appears to be a claim based upon a breach of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SG(A) Act) by all of the present and proposed respondents.

39    The section of the SG(A) Act allegedly contravened has not been pleaded, nor have material facts been pleaded by reference to such a section.

40    In oral submissions, Mr Patial referred to s 12(3) of the SG(A) Act, which provides:

12    Interpretation: employee, employer

...

(3)     If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.

(emphasis in original)

41    However, this is merely a definitional section and does not assist in identifying the section alleged to have been contravened.

42    Mr Patial also relied upon Moffett v Dental Corporation Pty Ltd [2019] FCA 344; (2019) 286 IR 21 (Flick J) and On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) [2011] FCA 366; (2011) 214 FCR 82 (Bromberg J). However, those authorities do not overcome the absence of a pleading of a cause of action in Part G of the PSOC. Leave with respect to Part G should be refused.

C.8    Part H – Workplace Discrimination – Workplace Harassment (PSOC [165] to [183])

43    Part H of the PSOC contains various allegations to the effect that Mr Patial was harassed at a workplace, was discriminated against on racial grounds, and was denigrated and humiliated. However, Part H does not plead a cause of action, and for that reason leave with respect to Part H should be refused.

C.9    Part I – Forcing [Mr Patial] – Junior Solicitor under supervision to involve in Wrong Activities (PSOC [184] to [226])

44    Part I of the PSOC contains a miscellany of very serious allegations against Mr Pall. Again, no cause of action has been pleaded. Leave with respect to Part I should be refused.

C.10    Part J – Psychological Stress (PSOC [227] to [249])

45    Part J of the PSOC contains similar allegations to Part P of the SOC, save that Part P.1 of the SOC appears, in an expanded form, at Parts F.11 and F.12 of the PSOC. Parts J.1 to J.3 of the PSOC correspond to Parts P.2 to P.4 of the SOC.

46    In Patial (No 1) at [51], I noted that Part P of the SOC was not pleaded in a form which disclosed a cause of action and contained bare allegations of fact with no identification of a particular legal standard alleged to have been enlivened or contravened. The pleading deficiencies there identified have not been remedied. It follows that leave should not be given with respect to Part J.

C.11    Part K – Sham Agreement (PSOC [250] to [261])

47    Part K of the PSOC is in the following form:

K.    Sham Agreement

250.    In 2008, [Mr Pall] was admitted as a solicitor.

251.    In January 2019, [Mr Patial] received his first practising certificate.

252.    On or about 24 April 2019, [Mr Pall] manipulated [Mr Patial] to sign the sham agreement and used the words to the effect that this is the norm of the legal profession, and I have used these kinds of agreements for a long time since he was in business. It’s normal in the legal profession.

253.    On 9 March 2021, [Mr Pall] affirmed at the Fair Work Commission that he had these kinds of agreements with other lawyers in relation to supervised legal training.

Particulars

Transcript dated 9 March 2021

254.    On 9 March 2021, [Mr Pall] affirmed at the Fair Work Commission that the Law Society of New South Wales accepts these arrangements concerning restricted practitioners.

Particulars

Transcript dated 9 March 2021

255.    These arrangements are contrary to the Legal Profession Uniform Law, Fair Work Act 2009 (Cth), and Superannuation Guarantee (Administration) Act 1992.

256.    [Mr Patial] has lost his employee entitlements, including sick leave payments, superannuation payments on time, overtime payments, annual leave, unfair dismissal rights, and Notice Requirements as per Fair Work Act 2009 (Cth).

257.    [Mr Patial] has lost the following amounts of entitlements because of a sham agreement:

(a)    Sick leave of 103 hours and 48 minutes that equals to 103.79 * $148.50 = $15,412.82.

(b)    Annual leave of 355 hours and 33 minutes that equals to 355.55 * $148.50 = $52,799.18.

(c)    Annual leave loadings of 17.5% of $52,799.18 that equals to $9,239.86.

(d)    Overtime of 1207 hours that equals to 1,207 * $148.50 = $179,239.50.

(e)    Two weeks’ notice requirements as per Section 117 of the Fair Work Act 2009 (Cth) that equals 130 * $148.50 = $19,305.00.

(f)    Superannuation payments equals to $42,196.60.

(g)    Lost interest @10% on Superannuation payments equals to $14,692.00

258.    [Mr Patial] has suffered a financial loss of $332,884.96 because of [all of the present and proposed respondents’] conduct.

259.    [Mr Patial] also suffered immense stress, psychological stress, humiliation, workplace discrimination and racial discrimination because of [all of the present and proposed respondents’] conduct.

260.    [Mr Patial] claims compensation of $160,000.00 or any other amount the court sees fit for the suffering caused by [all of the present and proposed respondents’] conduct.

261.    [Mr Patial] claims $332,884.96 + $160,000.00 = $492,884.96 for financial loss and sufferings from [all of the present and proposed respondents] because [all of the present and proposed respondents] have a duty of care towards [Mr Patial] as he was a restricted practitioner.

[All of the present and proposed respondents] intentionally breached sections 357, 358 and 359 of the Fair Work Act 2009 (Cth), Superannuation Guarantee (Administration) Act 1992 and Legal Profession Uniform Law.

(bold emphasis in original; underline emphasis added)

48    Part K appears to contain allegations that: (1) Mr Pall engaged in conduct by which he “manipulated” Mr Patial to sign the Agreement for General Use; (2) as a result of his entry into the Agreement for General Use (and implicitly because as a result Mr Patial cannot be regarded as an employee of Kailash Lawyers) Mr Patial has lost entitlements to which he would have had access if he had been an employee.

49    However, the cause of action alleged to have arisen by reason of Mr Pall’s alleged conduct in “manipulating” Mr Patial to enter into the Agreement for General Use has not been pleaded.

50    Moreover, as noted at [19] above, this claim appears to be premised upon the Agreement for General Use being a contract binding upon both Mr Patial and Kailash Lawyers; yet that agreement is referred to at PSOC [252] and [257] as a “sham agreement” and Mr Patial’s position as expressed at the hearing is that the Agreement for General Use is a sham. For the reasons set out at [26] to [28] above, such a pleading is embarrassing.

51    Further: (1) there is no pleading as to how the alleged conduct of Mr Pall is conduct of the present respondents or Kailasam Holdings; (2) whilst Mr Patial pleads that ss 357, 358 and 359 of the Fair Work Act 2009 (Cth) have been contravened, the PSOC does not plead the material facts which are alleged to give rise to such contraventions; and (3) whilst Mr Patial pleads that the SG(A) Act and the Legal Profession Uniform Law have been breached, he has not identified the provisions alleged to have been contravened.

52    Nestled within PSOC [261] is a reference to a duty of care owed to Mr Patial by the present and proposed respondents. To the extent that Part K of the PSOC is intended to include a claim in negligence, it is self-evidently insufficiently pleaded.

53    For all of the above reasons, leave with respect to Part K should be refused.

C.12    Part M – Common Questions (PSOC [263 to [268])

54    Part M sets out a list of “common questions”. Such questions are unnecessary in a case such as the present, which is not a class action. Leave with respect to Part M should be refused.

D.    Conclusion

55    For the reasons set out above, leave to file the PSOC should be refused. I will make an order to that effect.

Associate:

Dated:    6 March 2024