FEDERAL COURT OF AUSTRALIA

Kelly v Commonwealth of Australia as represented by Services Australia (formerly the Department of Human Services) (No 2) [2025] FCA 736

ORDERS

THE COURT ORDERS THAT:

1.    By 4 pm on Friday 18 July 2025 the parties are to:

(a)    provide to the chambers of Justice Kennett agreed or competing draft timetabling orders to prepare the case for a hearing on liability; and

(b)    advise chambers of their counsel’s mutually available dates during the period from 1 October 2025 to 31 May 2026.

2.    The draft orders submitted pursuant to order 1 are to include an order to the effect that, in the event of a failure by the applicant to file any part of his evidence or written submissions by the date specified in the orders, the proceeding will stand dismissed.

3.    The respondents’ interlocutory application filed on 24 February 2025 is otherwise dismissed.

4.    The applicant is to pay the respondents’ costs of the interlocutory application filed on 24 February 2025 (including the costs of the applicant’s application to re-open his case) as agreed or assessed.

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

REASONS FOR JUDGMENT

KENNETT J:

Introduction

1    The applicant (Mr Kelly) commenced this proceeding by an originating application which he filed on 9 September 2019. It concerns harassment which he claims to have suffered in his workplace between May and August 2016. The lapse of time since the key events, and the extraordinary delays that have occurred in preparing the matter for a hearing, have led the respondents to seek to have the proceeding dismissed (or, in the alternative, a guillotine order).

2    In large part, the delay that has occurred flowed from an interlocutory application, filed on 13 December 2019, to strike out parts of the amended statement of claim (the strike-out application). That interlocutory application was heard by a Judge of the Court on 27 May 2020 and judgment was reserved. Further submissions and evidence on a specific issue were invited and filed in June 2022, in the light of two decisions of the High Court handed down in February of that year. Judgment was delivered, dismissing the interlocutory application, on 8 February 2023 ([2023] FCA 69). I am not privy to the reasons why this application took so long to resolve, but it is obviously regrettable.

3    Because the resolution of the proceeding is likely to turn on the evidence of Mr Kelly and his former workmates about their recollection of events that occurred in 2016, one consequence of the delay in determining the strike-out application was that it became more important than usual for all parties to work in a concerted manner to avoid further delay. The evidence before me indicates that this has not occurred.

4    The respondents filed an interlocutory application on 24 February 2025 (amended without objection on 4 March 2025) seeking the following orders.

1.    An order pursuant to s. 37P(5) and/or (6)(a) of the Federal Court Act, 1976 (Cth) and Rule 5.23(1)(b) and 2(a) of the Federal Court Rules, 2011 (Cth) that:

(a)    the proceeding is dismissed; or

(b)    the Applicant shall not be permitted to rely on any affidavit filed after the time specified in Order 3 of Annexure A, nor adduce any evidence in his case, without the leave of the Court.

2.    In the alternative to Order 1(a), an order pursuant to r 5.04 of the Federal Court Rules 2011 (Cth) that the timetable for the preparation for the hearing in this matter be in the form, annexed hereto and marked Annexure A.

3.    An order pursuant to s. 37P(3)(a) of the Federal Court Act, 1976 (Cth) that:

By 3pm on 5 March 2025, the Applicant shall file and serve an affidavit containing the explanation for the failure to comply with the Directions made by the Court on 10 September 2024 and if that explanation is based or partly based upon the medical incapacity of the Applicant to give instructions, the Applicant is to attach to that Affidavit a report from the Applicant’s treating medical practitioner setting out:

(i)    a full description of the medical or psychiatric condition which rendered the Applicant incapable of giving instructions;

(ii)    the date on which that diagnosis was made;

(iii)    the date on which the Applicant’s said medical or psychiatric condition resolved such that he was able to provide instructions to his solicitors in relation to these proceedings.

4.    An order pursuant to s. 37P(6)(d) of the Federal Court Act, 1976 (Cth) and s. 570(2(b) of the Fair Work Act 2009 (Cth) that the Applicant pay the Respondents’ costs of and incidental to:

(a)    the directions hearing on 5 March 2025; and

(b)    this interlocutory application.

5.    Any other that the Court deems fit.

5    I heard argument on this interlocutory application on 20 March 2025. Disposition of the interlocutory application was delayed by an application, filed by Mr Kelly on 25 March 2025, seeking to re-open his case on the interlocutory application in order to file an expert report (the reopening application). Perhaps unwisely, I sought to deal with this issue on the papers rather than bring the parties in for a further hearing. The last submissions on the reopening application were filed on 14 May 2025. It is discussed below.

6    Rule 5.23(1) of the Federal Court Rules 2011 (Cth) (the Rules), upon which reliance is placed by the respondents, provides as follows.

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

(a)    a step in the proceeding be taken within a specified time; or

(b)    the proceeding be stayed or dismissed for the whole or any part of the relief claimed by the applicant:

(i)    immediately; or

(ii)    on conditions specified in the order.

7    Rule 5.22 defines when a party is “in default”, so as to include a party failing to comply with an order of the Court (para (b)). (The reference in the application to rule 2(a) appears to be a typographical error. There is no rule 2(a), and rule 5.23(2)(a) is irrelevant here.) Section 37P(6)(a) of the Federal Court of Australia Act 1976 (Cth) confirms the power of the Court to dismiss a proceeding where directions are not complied with.

8    As will appear below, Mr Kelly is clearly in default of orders made by the Court in relation to the filing of evidence. The question is whether that default justifies the dismissal of the proceeding under r 5.23(1)(b) or the taking of some other step. It almost goes without saying that the power to dismiss a proceeding without a determination of the applicant’s claims on their merits should be exercised with great caution and having regard to all relevant circumstances including the nature of and reasons for the relevant default.

Chronology

9    Mr Kelly was employed by the Commonwealth between 2006 and 2016. In 2016, he worked at the Hurstville Centre as a social worker until 16 August when he was directed to work at a location in Rockdale. He ceased attending work on 27 September 2016 and did not return.

10    Mr Kelly claims to have suffered discrimination in contravention of the Sex Discrimination Act 1984 (Cth) (the SD Act) and the Disability Discrimination Act 1992 (Cth) (the DD Act) arising from the conduct of the second respondent (Ms Stone) (who worked with him at Hurstville), the third respondent (Mr Kowal) (who supervised both Mr Kelly and Ms Stone) and a third person (a Mr Ristevski) who was a student trainee. Very briefly:

(a)    Mr Ristevski is alleged to have repeatedly “leered at” Mr Kelly and spoken to him expressing antisemitic opinions, sexist observations about Ms Stone, comments on Mr Kelly’s appearance and statements antipathetic to Mr Kelly’s sexual orientation. He is said to have sometimes stood silently behind Mr Kelly for long periods and come in to work to “surprise” him.

(b)    Ms Stone is alleged to have made various statements to Mr Kelly about his appearance, personality and sexual orientation and to have described Mr Ristevski’s behaviour as humorous. She is also alleged to have sent Mr Kelly sexually explicit images that contained references to homosexuality and body weight and were “derogatory in nature”. She is also alleged to have spread a rumour that Mr Kelly had behaved inappropriately towards her.

(c)    Mr Kowal is alleged to have:

(i)    failed to discipline or relocate Mr Ristevski and treated Mr Kelly’s complaints about him as trivial;

(ii)    amended a report about Mr Kelly’s performance in a negative way following a disclosure by Mr Kelly that he suffered from Attention Deficit Hyperactivity Disorder (ADHD);

(iii)    conducted a so-called “mediation” between Mr Kelly and Ms Stone in a highly unsatisfactory manner; and

(iv)    directed Mr Kelly to work in the Rockdale Centre, in isolation from other employees and at a workstation that lacked a functioning computer or headset, and without allocating any duties to him.

(d)    After a meeting (about which several complaints are made) with another officer concerning the images that had been sent by Ms Stone, Mr Kelly claims that he became medically unfit for work on 27 September 2016 as a result of the matters referred to above. He also makes several complaints concerning the handling by the first respondent (the Commonwealth) of the assessment of his fitness for duty and his worker’s compensation claim.

(e)    Mr Kelly’s employment was formally terminated on 4 October 2018.

(f)    Based on these events, Mr Kelly alleges that he suffered:

(i)    sexual harassment by Ms Stone;

(ii)    several forms of discrimination contrary to the SD Act and the DD Act, amounting to unlawful discrimination within the meaning of the Australian Human Rights Commission Act 1986 (Cth) (the AHRC Act);

(iii)    victimisation as a result of asserting his rights under the SD Act, the DD Act and the AHRC Act;

(iv)    failure to consult and to provide unpaid personal leave in breach of the Fair Work Act 2009 (Cth) (the FW Act).

11    Mr Kelly seeks a declaration pursuant to s 46PO of the AHRC Act that the Commonwealth unlawfully discriminated against him; damages (including aggravated damages); declarations of unlawful discrimination against Ms Stone and Mr Kowal; and pecuniary penalties against the Commonwealth under s 546(1) of the FW Act.

12    The following chronology is drawn from documents that are in evidence on the interlocutory application or on the Court’s file.

13    Before making an application to the Court under s 46PO of the AHRC Act, it was necessary for Mr Kelly to have made a complaint to the Australian Human Rights Commission (the AHRC) and for that complaint to have been terminated by the President under s 46PE of that Act. As required by the Rules, Mr Kelly’s complaint to the AHRC (the AHRC complaint) and the notice of termination were annexed to his originating application.

14    In making the AHRC complaint Mr Kelly was represented by his current solicitors. The complaint is dated 7 November 2018 and attached a letter of the same date from the solicitors. That letter requested that the complaint be terminated without inquiry because there was no utility in attempting conciliation. However, it also contained a detailed statement of the facts on which the complaint was based (running to 19 single spaced pages), a summary of the impact of the respondents’ conduct on Mr Kelly and submissions concerning the legal position. Approximately 100 pages of documents referred to in the statement of facts were attached. This material, submitted over the signatures of the firm’s “Chairman & Senior Team Leader” and another solicitor, must be taken to have been prepared on the basis of detailed instructions from Mr Kelly.

15    After the dismissal of the strike-out application in February 2023, orders were made on 6 March 2023 fixing dates for the filing of any further amended statement of claim (30 March 2023), a defence (11 May 2023) and any reply (1 June 2023). After the matter came into my docket, on 10 May 2023 these deadlines were extended by consent and Mr Kelly filed his further amended statement of claim on the same day (roughly six weeks late and with no extension having previously been sought). The deadlines for filing of a defence and any reply were extended, again by consent, on 24 July 2023 and 9 August 2023. The Commonwealth and Mr Kowal (who were jointly represented) filed their defence on 12 September 2023. On 11 October 2023 further extensions were granted for the filing of a defence by Ms Stone (11 December 2023) and the filing of a reply by Mr Kelly (12 January 2024). An amended defence by all of the respondents was filed on 12 December 2023. On 22 December 2023 the deadline for the defence was extended nunc pro tunc, and a new filing date of 24 January 2024 was fixed for a reply.

16    Provision was also made for a mediation to occur in January 2024. The mediation was unsuccessful.

17    On 1 July 2024 (more than six months after the respondents had filed their joint defence) a further consent order was made extending the time for filing of a reply to 12 July 2024. In correspondence leading up to that order, Mr Kelly’s solicitors said that Mr Kelly had told them he needed more time to provide instructions on a reply “due to his mental health condition”. It does not appear that any extension had been sought before then.

18    In an email on 12 July 2024, attaching draft consent orders, Mr Kelly’s solicitors again told the respondents’ solicitors that he required additional time to give the instructions necessary for a reply because of his “mental health conditions”. On 15 July the respondents’ solicitors asked whether Mr Kelly’s solicitors could “provide any further details of Mr Kelly’s purported condition impacting the progress of the pleadings”. The response to this request (on 17 July 2024) was:

As you are aware, our client has been diagnosed with several medical conditions including ADHD, adjustment disorder and depressive disorder.

We have been informed by our client’s treating psychiatrist, Dr Keith Chee, that the abovementioned medical conditions result in our client often requiring further time to provide instructions and prepare a response.

19    The respondents’ solicitors noted this response without conceding its accuracy and said that they would take a neutral position on the proposed consent orders. Further emails between the solicitors were directed to developing an agreed form of words for an email to be sent to my chambers by Mr Kelly’s solicitors. That email was sent to chambers on 22 July 2024 and I made the proposed order (vacating the deadline for a reply and a scheduled case management hearing) on the same day. The matter was listed for case management on 19 August 2024.

20    In the days leading up to this listing there was a further round of correspondence and discussions between the solicitors. The respondents’ solicitors inquired on 12 August 2024 when further information concerning Mr Kelly’s condition and the time frame for when a reply might be received. There was a telephone discussion on 15 August 2024 followed by an email from the respondents’ solicitors which said that they would again take a neutral position on any proposed extension of the deadline. An email from Mr Kelly’s solicitors on 16 August 2024 stated that they were unable to appear for Mr Kelly in circumstances where they could not get instructions from him. Despite this, they were apparently prepared to continue to act to the extent of proposing another email to be sent to my chambers.

21    The proposed email was sent to chambers 2 hours and 29 minutes later. The respondents’ solicitors then sent an email to chambers, noting that they had not consented to the sending of the email by Mr Kelly’s solicitors and stating that they took a neutral position on any further adjournment. Orders as proposed by Mr Kelly’s solicitors, vacating the listing on 19 August 2024 and listing the matter on 10 September 2024, were made in chambers.

22    On 9 September 2024 Mr Kelly’s solicitors informed the respondents’ solicitors by email as follows.

Due to the Applicant’s personal circumstances, and review of the Reply material, the Applicant does not intend on filing a Reply to the Amended Defence. The Applicant intends to address any necessary matter by way of affidavit evidence. To this end, we do not consider it necessary to file the previously suggested medical report.

23    The solicitors corresponded further in relation to procedural orders but did not agree on all issues. The case management hearing therefore proceeded on 10 September 2024. The pleadings had now closed, five years after the commencement of the proceeding and 19 months after the dismissal of the strike-out application. The matter was listed for a hearing on liability commencing on 30 June 2025 and a timetable was set for the filing of evidence and submissions. Mr Kelly’s lay affidavits and expert evidence were to be filed on 18 November 2024.

24    On the afternoon of 18 November 2024, Mr Kelly’s solicitors sent an email to the respondents’ solicitors which said (in part):

We confirm that we are currently in the process of finalising our client’s instructions in relation to:

1.    his affidavit (which will comprise of his lay evidence); and

2.    an expert medical report (which will comprise of his expert evidence), which our firm received late on Friday afternoon.

However, because of our client’s ill health and the length of time that has now elapsed since the alleged conduct, he requires further time to provide those instructions.

In addition, the principal solicitor with carriage of the matter, Mr Harmer, has been unwell over the course of the past week and remains unwell as at the time of writing. As such, Mr Harmer has not had the opportunity to review and consider the proposed lay and expert evidence.

Accordingly, given the above circumstances, we seek your clients’ consent to an extension of time for our client to file and serve his lay and expert evidence, and reply evidence, for a period of 10 days from the date specified in the orders. We confirm that our client consents to your clients’ being provided with a commensurate extension of time in relation to the filing and serving of their lay and expert evidence.

We do not consider our client’s request for an extension will cause any prejudice to your clients.

25    A response was sought by 10 am the next day (being the day after Mr Kelly’s evidence was due to be filed). The respondent’s solicitor replied on the evening of 18 November 2024 to the effect that he would seek instructions but was unlikely to be able to meet the “arbitrary deadline of 10:00am tomorrow”. On 20 November 2024 the respondents’ solicitors gave their consent to the proposed revision of the timetable. Mr Kelly’s solicitors responded with some truculent and unnecessary observations concerning whether their deadline for a response was “arbitrary”, but thanked the respondents’ solicitors for their “understanding” and said that draft consent orders would be provided later in the day. However, nothing further happened until 27 November 2024 when the respondents’ solicitors sent a follow-up email. The response, of 28 November 2024, was relevantly as follows.

Thank you for following up – we apologise for the delay in responding.

We confirm that we have nearly finalised our client’s instructions in relation to his lay and expert evidence (which comprises of his affidavit and two expert medical reports). However, due to the extensive volume of documents that will be exhibited to our client’s lay evidence (being over 50 documents), we will require further time to collate those documents today and tomorrow. Once the draft affidavit has been finalised tomorrow, our counsel and the principal solicitor with carriage of the matter, will need time to review and settle the affidavit before it can be filed and served. Please note that Mr Harmer has only returned to work this week after a period of illness and has a major hearing next week.

Nevertheless, we expect that we will be in a position to file and serve our client’s lay and expert evidence by Tuesday, 3 December 2024.

Accordingly, given the above circumstances, we seek your clients’ consent to an extension of time for our client to file and serve his lay and expert evidence, and reply evidence, for a period of a further 16 days from the date specified in orders (and 4 business days from the date originally consented to by your client). We confirm that our client consents to your clients’ being provided with a commensurate extension of time in relation to the filing and serving of their lay and expert evidence.

We do not consider our client’s request for a further extension of time will cause any prejudice to your clients, particularly given the upcoming Christmas break.

26    The respondents’ solicitors noted the reasons why the extension was sought and “as a further goodwill gesture”:

(a)    agreed to the request for a further extension; and

(b)    proposed that the extension for filing of Mr Kelly’s evidence be slightly longer — to 6 December 2024 — to allow a “buffer” and ensure there was sufficient time to complete the task.

27    On 29 November 2024 Mr Kelly’s solicitors responded. The email commenced with a surprisingly belligerent rejection of the suggestion that what the respondents’ solicitors were offering constituted a genuine gesture of good will. It continued by saying that, because Mr Kelly was “pragmatic and reasonable”, he would “not object” to extending the window for filing his own evidence until 6 December 2024. Citing “limited capacity”, it then asked the respondents’ solicitors to prepare draft consent orders. This was, with respect, a rather unsatisfactory message to send in circumstances where Mr Kelly’s evidence was significantly overdue and the respondents had agreed to a longer extension than had been requested.

28    The respondents’ solicitors replied in the early hours of 30 November 2024 (a Saturday). Unnecessarily but understandably, they engaged with the stranger aspects of the email of the previous day. They concluded as follows.

As you can appreciate and with respect, this is your client’s claim and request for an extension of to (sic) the existing procedural orders (of which your client is currently in default). You can prepare the proposed revised orders, associated correspondence to the Court and once received, we will seek instructions for them accordingly.

We will await these items.

29    Mr Kelly’s solicitors (whose client, it will be recalled, was in default) waited until Tuesday 3 December 2024 to respond. That time for reflection did not result in the correspondence returning to an even keel. The email began with a veiled complaint about the time when the respondents’ solicitors’ email was sent and moved on to take issue with its “tone”. (It is not worth setting out these exchanges in full; however, I note that in my view the tone adopted by the respondents’ solicitors, while terse, was not unprofessional. I am also not persuaded that their email was, as alleged in the response, “misleading and factually inaccurate”.) Mr Kelly’s solicitors concluded by saying that they had prepared draft consent orders and an email to the Court which counsel was reviewing.

30    On 6 December 2024 the respondents’ solicitors sent a brief email asking for an update on the proposed orders and correspondence to the Court. The reply, later the same day, said:

We apologise for the delay in providing a response. We have been liaising with counsel in relation to the orders and the time he has available to settle our client’s lay and expert evidence.

We confirm that we have completed a first draft of the affidavit, which counsel is in the process of reviewing. However, our counsel will require until Friday, 13 December 2024, to settle the affidavit due to pre-existing court commitments and the volume of the evidence.

Accordingly, we have prepared the attached revised set of orders for your clients’ consideration.

If these orders are agreed to by your clients, we will prepare a draft email to the Associate.

(Emphasis in original.)

31    The respondents’ solicitors sent emails on 9 and 12 December raising specific issues concerning the proposed consent orders. These did not elicit any reply. The respondents’ solicitors wrote again, early on 24 December 2024, in the following terms.

We note that the Applicant’s evidence-in-chief was due to filed and served on 18 November 2024. While we appreciate there appear to have been some delays and to which the Respondents had been willing to allow some flexibility, the duration of this process and the absence of further explanation as well as projected revised timeframes being requested (and missed) without any further details is of great concern.

We are mindful that the existing timetable (attached for ease of reference – but which will now need to be updated) provides for the listing of the Liability Hearing on 30 June 2025 (for a seven-day duration). With these continued delays, there is an evident potential impact on the programming of the matter. In addition (and as previously foreshadowed), we do not consider that the Respondents can continue to consent to any revised timetable (noting the potential impact on the hearing and associated prejudice) and instead will need to raise these circumstances with the Court to ensure appropriate oversight, management and progress.

If you have a revised timeframe and explanation for these circumstances, you are invited to convey these to us for consideration and instructions as a matter of urgency. However, we will otherwise prepare an appropriate update to the Court (that we will provide to you in advance of finalising / sending for any potential input) and intend to finalise and send on 2 January 2025 (presuming no materials or appropriate update has been received in the interim).

We reserve the rights of the Respondents in their entirety (including to rely upon these circumstances with respect to any appropriate orders to be sought).

(Emphasis in original.)

32    The next written communication from Mr Kelly’s solicitors was on 6 January 2025. It referred to a telephone conversation on 31 December 2024 (later corrected to 24 December 2024). It said:

As discussed, our client is currently unwell with a serious viral infection that recently required urgent medical treatment.

Please find attached medical certificate confirming our client was unwell from 9 December 2024 to 2 January 2025. We have requested an updated medical certificate which we will provide to you as soon as we can.

As a result of the symptoms associated with such condition, we have been unable to obtain instructions from our client in relation to the proposed orders and to finalise his lay and expert evidence, which we had expected to file and serve by Friday, 13 December 2024.

As you would appreciate, we are reluctant to propose any revised orders until our client is well enough to finalise his instructions and/or provide the updated medical certificate.

As a result of these extenuating circumstances, and subject to your client’s position, we propose to prepare a joint communication to the Associate regarding our delay in complying with the orders and the reason why we are unable to put forward a revised timetable at this time.

(Emphasis in original.)

33    The attached medical certificate was signed by a Dr Rosemary Chen but the facility at which she worked was redacted (for reasons that have not been explained). The certificate was dated 19 December 2024 and said that Mr Kelly was “unfit for work/school/usual activities” from 9 December until 2 January 2025. No information about the nature or seriousness of Mr Kelly’s condition was provided.

34    The respondents’ solicitors sent a long email in response on 7 January 2025. While they expressed sympathy in relation to any medical condition affecting Mr Kelly, their patience was running out. The important part of their email was as follows.

•    while we appreciate there have been various purported reasons for the delays experienced by the Applicant in the finalising of their materials in-chief and the Respondents had been willing to agree to some potential extensions (and previously proposed consent orders), it had been stressed this could not continue and – if there had not been progress - it would be necessary to bring this to the attention of the Honourable Justice Kennett in view of:

•    the prejudice to the Respondents and witnesses (in particular, previous arrangements for evidence preparation needing to be deferred and rescheduled with associated issues now likely to be experienced with availability)

•    the potential impact on current trial dates from 30 June 2025 with a seven-day estimate (noting that the currently set timetable pursuant to the orders dated 10 September 2024 does not have further flexibility to accommodate the Applicant’s continued default)

•    the absence of objective and reasonable supporting evidence of the explanations for the delay (noting, that the medical certificate provided in your email is the first item of supporting documentation provided with respect to the delays of the Applicant and it does not provide any specific details other than an indication the Applicant is ‘unfit for work/school/usual activities from 9 December 2024 to 2 January 2025), and

•    the risk of the Parties being perceived as discourteous to the Court in view of the time elapsed and non-compliance with the relevant orders.

In view of this, we agree that it is prudent to update and inform the Court of the relevant circumstances.

35    The email then set out the text of an email which the respondents’ solicitors proposed to send to my chambers. An email discussing the recent developments in the matter was sent to chambers on 10 January 2025, noting that Mr Kelly’s solicitors were copied into this correspondence and had been invited to provide feedback on the draft. The respondents’ solicitors sent a further email to chambers on 24 January 2025 expressing concern about continued non-compliance by Mr Kelly and the potential impact on the listed hearing.

36    Mr Kelly’s solicitors responded to these developments on 25 January 2025 (having, it would seem, been silent since 6 January 2025). They suggested that the respondents’ communication had omitted “important factual and contextual matters” and asked to be given until noon on 29 January 2025 to provide a full response. They noted that both the principal solicitor and the senior associate with day-to-day carriage of the matter had been on leave until 13 January 2025. A long email giving Mr Kelly’s version of events since 18 November 2024 was sent to chambers on 29 January 2025. That email attached what was described as an “updated medical certificate confirming his hospital admission due to the seriousness of the viral infection”. The email concluded:

We confirm that due to the extenuating circumstances outlined above, the Applicant intends on providing further updated medical evidence and a revised set of orders, once we have received a further update from our client in relation to his health. However, we respectfully request that the Court allow us for 7 days to provide this update, and that the matter be adjourned until such time.

37    The updated medical certificate was signed by Dr Jane Roberts, who was described as a Registrar, but the institution at which she worked was again redacted. It was dated 15 January 2025. It recorded that Mr Kelly had attended as an outpatient on 17 December 2024 and had been reviewed on 15 January 2025. It certified that he was “unfit for work/school/usual activities” from 17 December 2024 and would be “fit to return to work/school/usual activities” on a handwritten date which is unclear (but in my view is probably “20/01/2025”). This certificate did not, as suggested, confirm either a hospital admission or a serious viral infection.

38    My associates informed the parties that I was content to receive an update in seven days. No update was provided within that time.

39    After being prompted by my associates on 10 February 2025, Mr Kelly’s solicitors reported that Mr Kelly’s health had improved to the extent that he was able to provide instructions including in relation to his evidence; he was eager for the matter to proceed to a hearing without further delay; and proposed revised timetabling orders had been sent to the respondents’ solicitors. A further extension until 12 February 2025 was requested for the provision of a further response. Their further response was delayed until 14 February 2025, when they provided chambers with proposed revised orders to which the respondents neither consented nor objected. A listing for case management was requested. I listed the matter for case management on 25 February 2025.

40    On 24 February 2025 the respondents filed their interlocutory application. The listing for case management the next day was vacated and the application was made returnable on 5 March 2025. The respondents sought to argue the application on that day; however, I listed it for hearing on 19 March 2025 in order to allow Mr Kelly a short time in which to put on evidence, including evidence from his treating psychiatrist.

41    As noted earlier, Mr Kelly filed his re-opening application on 25 March 2025. I dismissed that application on the papers on 16 May 2025, reserved the costs thereof, and indicated that I would include my reasons for that decision in these reasons. The need to deal with the re-opening application (and potentially receive and consider further evidence) before deciding the respondents’ interlocutory application, and the fact that there was still no affidavit evidence from Mr Kelly, made it clearly impossible for the hearing on liability, due to commence on 30 June 2025, to go ahead. Counsel for both sides had earlier accepted that the loss of this listing was practically inevitable. On 26 May 2025 I made orders in chambers formally vacating the listing.

The issues that arise

42    The orders sought by the interlocutory application are set out at [4] above.

43    Mr Kelly’s evidence on liability was due to be filed by 18 November 2024. By the time I heard argument on the interlocutory application it was three months overdue and no clear indication had been provided as to when it might be ready. At the time of publication of these reasons, Mr Kelly’s evidence still has not been filed.

44    Further delay is clearly antipathetic to the interests of the administration of justice. Resolution of factual issues in the trial is clearly very likely to depend on competing recollections of conversations and interactions between Mr Kelly and others which occurred in 2016. Witnesses’ recollection of detail is already likely to be impaired and further delay can only worsen the situation.

45    It was submitted for the respondents that delay caused prejudice to them, in that potential witnesses are likely to have left the employment of the Commonwealth (in which case they may be hard to contact and cannot be directed to testify). Counsel for Mr Kelly suggested that delay was prejudicial to both sides. In my view, the consequences of delay are likely to fall more heavily on the respondents. For Mr Kelly, the events giving rise to his claims have been very significant and he can be expected to have clear (even if not necessarily accurate) recollections. He has also set down his version in writing in some detail in the process of making his complaint to the AHRC. None of these things are true for the witnesses whom the respondents might call (including the individual respondents). Even if it is correct (as Mr Kelly submitted) that both sides are prejudiced by further delay, that is small comfort. That proposition implies acceptance of a trial process in which both sides are proceeding on the basis of deficient memory and there can be no confidence in the outcome; hence my observation above that the interests of the administration of justice are prejudiced by further delay.

46    Three other matters should be noted at this stage.

47    First, there is a long history of delay in the proceeding since the judgment on the strike-out application, mostly on Mr Kelly’s side of the record.

(a)    The filing of the further amended statement of claim was approximately six weeks late (with an extension granted the day it was filed).

(b)    Almost six months passed (from January to July 2024) after the date fixed for the filing of a reply before an extension was sought. Further correspondence took place before, on 9 September 2024, the respondent’s solicitors were informed that Mr Kelly did not intend to file a reply. Timetabling orders were made the next day. The proceeding was thus in suspension for around eight months while the respondents and the Court awaited the filing of an overdue pleading that, eventually, was deemed unnecessary.

(c)    It was faintly suggested that the respondents could have minimised the consequences of this period of delay by making a start on the preparation of their evidence. While there is, no doubt, some work that could have been done (and may have been done), the substantial burden of conferring with potential witnesses, drafting and settling affidavits and identifying documents for tender necessarily fell on the respondents after the pleadings had closed and Mr Kelly’s evidence in chief was filed.

(d)    Mr Kelly’s legal team, on the other hand, had a significant head start in that they had prepared a detailed statement in support of the complaint to the AHRC and a detailed statement of claim in these proceedings, both (presumably) on the instructions of Mr Kelly. They did not have to wait until a decision was made about the filing of a reply before working up a draft affidavit for him to consider. The allocation of just over two months for the completion of Mr Kelly’s lay evidence in the orders of 10 September 2024 was, in the circumstances, quite generous.

48    Secondly, in relation to each of the periods of delay referred to above, deadlines have been missed for periods of weeks or months without any approach having been made to the Court either to explain the delay or to seek variations of the timetable. It should not, but apparently does, need to be said that this is a completely unsatisfactory approach to compliance with orders of a court by legal practitioners (cf eg Crawford v Australian Capital Territory [2015] ACTSC 282 at [24]-[28] (Mossop AsJ)). Relatedly, while lamenting unnecessary combativeness in solicitors’ correspondence is only marginally more productive than complaining about the weather, it is worth noting that the responses of Mr Kelly’s solicitors to the attempts by the solicitors for the respondents to obtain clarity have left something to be desired. In at least one instance (referred to below), their communication with the respondents’ solicitors was misleading.

49    Thirdly, Mr Kelly’s solicitors had obtained an expert report on Mr Kelly’s mental health position and prognosis from a psychiatrist, Dr Enrico Parmegiani, before 18 November 2024 but did not file or serve it until 5 March 2025 (after the respondents had filed their interlocutory application ). Mr Kelly’s solicitors’ email of 18 November 2024 refers to having received a report, which was intended to comprise the expert evidence, and needing Mr Kelly’s instructions to file it. Nothing in the evidence explains why Dr Parmegiani’s report was held back and filed more than three months later.

50    In these circumstances, in my view, dismissal of the proceeding is justified unless it is established that at least some part of the delay that has occurred since the dismissal of the strike-out application has resulted from circumstances beyond Mr Kelly’s control. Mr Kelly submits that this is the case.

Mr Kelly’s medical conditions

The viral infection

51    The first reference to a viral infection in the documents is in an email from Mr Kelly’s solicitors to the respondents’ solicitors on 6 January 2025. That email refers to an earlier telephone conversation during which the issue was apparently discussed. A medical certificate was attached covering the period from 9 December 2024 to 2 January 2025. A later medical certificate, dated 15 January 2025, covers the period up to (on my reading) 20 January 2025.

52    The medical certificates, as noted above, do not tell one anything about the nature or the seriousness of the condition suffered by Mr Kelly. They do not (contrary to the suggestion in one email) evidence an admission to hospital. They go no higher than to indicate that Mr Kelly was sufficiently unwell to be unfit to go to work or school for several weeks. The question whether he was so unwell as to be unable to review a draft affidavit and give instructions for its completion is left open.

53    Ms Nesbitt, a solicitor in the firm acting for Mr Kelly, affirmed an affidavit on 4 March 2025. She deposed that her colleague, Ms Ekaterina Oglos, had been unable to contact Mr Kelly between 29 November and 17 December 2024 and that, on the latter date, Mr Kelly disclosed that he had been diagnosed with a serious viral infection that required urgent medical attention. He provided his solicitors with the earlier of the medical certificates referred to above on 19 December 2024. Ms Nesbitt did not give any further evidence concerning the viral infection or any inquiries made in relation to it save that, after an email was sent to him on 4 February 2025 (with copies of the correspondence exchanged between the solicitors), Mr Kelly confirmed to Ms Oglos during a telephone call on 6 February 2025 that he had recovered from the viral infection and was in a position to finalise his affidavit so that it could be filed by 12 February 2025.

54    Ms Oglos affirmed an affidavit on 19 March 2025. She deposed to having had a telephone conversation with Mr Kelly on 10 January 2025 during which he said, among other things, that he had “never been so unwell”. She also telephoned Mr Kelly on 4 February 2025 for a further update and he said that he was still “extremely unwell” (Ms Oglos’ words) but “remained ‘confident to proceed’”. Ms Oglos also deposed that she called Mr Kelly in an effort to make progress with his evidence on 13 February 2025 (interestingly, after the date he had given on 6 February 2025 as a target for completing his affidavit) and on this occasion he “confirmed that he had made a partial recovery from his recent viral infection, but remained extremely scattered and continued to experience significant difficulty in recalling key events and dates”. Further attempts were made to contact Mr Kelly (apparently without success) between 13 and 24 February 2025. The next conversation referred to (involving Ms Nesbitt, Ms Oglos and Mr Kelly) was on 10 March 2025. No reference is made to a viral infection in the affidavit evidence concerning this conversation.

55    On the basis of the medical certificates, one can accept that Mr Kelly suffered an illness in December 2024 and January 2025 that led to him seeking medical treatment and led two practitioners to certify him as unfit for work. Although his illness was presumably not trivial, there is evidence of only two medical appointments in this time. Beyond this, the only evidence supporting a viral infection is the hearsay evidence of Mr Kelly’s self-description and an observation by his solicitor about her impression of a telephone call. In circumstances where the reasons for Mr Kelly’s evidence not having been filed had obviously become important, this is insufficient. It has not been suggested that there was any particular difficulty in obtaining a more detailed certificate from one of the practitioners who had treated him. The lack of convincing detail, in circumstances that demanded it, makes it impossible to accept that the filing of Mr Kelly’s evidence was delayed by a serious viral infection.

56    In any event, at its highest, the evidence concerning a viral infection indicates a problem arising in mid December 2024 and persisting until some time in February 2025. It arose only after Mr Kelly’s evidence was significantly overdue.

Mental health issues

The evidence available at the hearing

57    Dr Parmegiani’s report, referred to above, is dated 7 November 2024, and was apparently obtained in order to form part of the body of evidence in the substantive proceeding that was due for filing on 18 November 2024.

58    Dr Parmegiani conducted his assessment of Mr Kelly on 30 October 2024. He summarised Mr Kelly’s reporting of his “current symptoms” as follows.

Mr Kelly reported that if he spent time with his ex-partner Michael or with his dog, he felt much better. He managed to cheer up nowadays but acknowledged that it “had taken him years” for him to be able to do so. He stated that he continued to enjoy listening to music. He also stated that his mind was inquisitive and that he was thirsty for knowledge. Presently he kept checking the documents related to his case.

He stated that his thoughts were focused on his legal proceedings. He denied feelings of shame, guilt or hopelessness. He stated that he only occasionally felt that his life was not worth living and was adamant that he did not experience suicidal ideation.

Although he continued to ruminate on the past experiences at work, he did not report flashbacks, nightmares, hyperarousal or increased startle response.

59    Mr Kelly’s “current and proposed treatment” included daily medication (an antidepressant and an ADHD medication). He also reported to Dr Parmegiani as follows.

He consulted with his treating psychiatrist every two months for one hour. He stated that his psychiatrist nowadays mostly discussed his legal proceedings and gave him advice on how to deal with them.

He did not see his general practitioner often.

60    Dr Parmegiani’s diagnosis was as follows.

In my opinion, Mr Kelly most likely fulfilled diagnostic criteria for major depressive disorder, beginning at some point during 2016-17 and progressing until 2019, 2020 when he required admission to a private psychiatric hospital and treatment with antidepressant medication. He has responded reasonably well to the medication and his condition can now be regarded in partial remission.

61    In response to a question as to how long Mr Kelly’s condition was likely to last, Dr Parmegiani said:

Mr Kelly is receiving appropriate pharmacological treatment, and this should prove effective in the long term.

His ongoing involvement in legal proceedings constitutes an ongoing source of stress that will limit his ability to recover fully for the time being.

Under normal circumstances and given his clinical condition now, I would expect full symptomatic resolution within a period of a further 12 months but, in the presence of ongoing stressful events or factors such as constituted by the further legal proceedings foreseen for 2025, it is quite possible that the process will be extended considerably.

62    Dr Parmegiani expressed the view that the most helpful thing that could be done to eliminate or reduce the effect of the conditions suffered by Mr Kelly was the conclusion of these proceedings “in as speedy a manner as possible”. He concluded that, if the proceedings concluded in 2025, he expected Mr Kelly to be able to return to work as a social worker by the end of the same year.

63    As noted earlier, I adjourned the respondents’ interlocutory application for two weeks in order to allow a period (albeit a very brief one) for Mr Kelly to obtain some evidence from his treating psychiatrist concerning his condition. It appears that, rather than move immediately to obtain that evidence, Mr Kelly’s solicitors tried again to contact their client and finalise his evidence but received no response. It was not until 12 March 2025 that an approach was made to the clinic of his psychiatrist, Dr Chee. An email attaching a letter of instructions was sent on 12 March 2025 and followed up by a phone call to Dr Chee’s receptionist and a further email the next day. Unfortunately, rather than seeking a confined report on Mr Kelly’s mental health situation and the extent to which it had affected his ability to give instructions and settle his own affidavit since the latter part of 2024, Mr Kelly’s solicitors asked Dr Chee for what was in effect a fully-fledged expert report (including reasoning and complying with the Court’s practice note) covering a wide ranging series of questions.

64    Two points should be made here. One is that Mr Kelly’s solicitors do not seem to have previously sought any report from Dr Chee for the purpose of filing as part of Mr Kelly’s evidence in the proceeding (the letter of 12 March 2025 refers only to a report dated June 2018; and the email of 18 November 2024, quoted above, indicates that only one expert report (presumably that of Dr Parmegiani) was proposed to be relied on). The other is that the breadth of the request made to Dr Chee effectively ensured that his report would take some time to complete and there would be no substantial up-to-date expert evidence about Mr Kelly’s mental health when the interlocutory application came on for hearing.

65    Dr Chee provided a one page handwritten note to Mr Kelly’s solicitors dated 17 March 2025. He observed that the striking out of the proceeding would be “highly psychiatrically detrimental” to Mr Kelly. He did not engage with the issue upon which the Court really needed his assistance, namely Mr Kelly’s capacity to complete his evidence. On that issue, the Court has only the cautiously optimistic report of Dr Parmegiani based on an assessment in October 2024.

66    The correspondence between the parties’ solicitors includes some references to Mr Kelly’s mental health as a reason why he needed a lot of time to make decisions in the context of the proposed reply (which ultimately was not filed). In their email of 18 November 2024 Mr Kelly’s solicitors said that he needed more time, in part because of his “ill health”, but they were in the process of “finalising” his evidence. On 28 November 2024 Mr Kelly’s solicitors reported that they had “nearly finalised” his instructions in relation to his evidence (which, oddly, was now said to include two expert medical reports), and the delaying factor was now the extensive volume of documents to be exhibited. They said that Mr Kelly’s draft affidavit would be finalised the following day and then reviewed by counsel and the principal solicitor of the firm. They expected to be able to file all of the evidence by 3 December 2024. On 6 December 2024 they said that a draft of Mr Kelly’s affidavit was complete and the issue was counsel’s availability to review it. In their next written communication Mr Kelly’s solicitors referred to the serious viral infection that he was said to be suffering from and made no mention of mental health problems. On 7 February 2025 they reported that he was able to give instructions and eager for the matter to proceed.

67    Ms Oglos gave evidence in her affidavit that the email sent on 28 November 2024 was preceded by a call from Mr Kelly himself asking for more time. If true, this points to a lack of candour in the email which made the email quite misleading in so far as it purported to give an account of the reasons why more time was needed to settle the evidence.

68    In Ms Oglos’s account, Mr Kelly’s mental health does not arise again until 11 February 2025, when she received what she describes as a “concerning” call from him in which he said (among other things) that he had considered admitting himself to hospital for a lengthy period and that the need to finalise his evidence and recall traumatic events that occurred nearly ten years ago was exacting a “mental toll” on him. Ms Oglos had the impression during a telephone call on 13 February 2025 that Mr Kelly was “scattered” and had trouble recalling key events and dates. Her next conversation with him appears to have been on 10 March 2025, when, according to her recollection, he “suffered a reaction displaying the following symptoms including shortness of breath, tearfulness, incoherent speech, incessant talking, racing thoughts, irritability and stress and referred to suicidal ideations”.

69    Ms Oglos’s affidavit also exhibited what was described as the latest draft of Mr Kelly’s affidavit. On its face, it appears to be very close to a final document, with only a small number of specific things (mainly dates) marked as requiring attention. However, not much can be taken from this. Taking the emails of 28 November and 6 December 2024 at face value, it would appear that by early December 2024 the affidavit was sufficiently developed to be sent to counsel for his input (which suggests that it must have had substantial input from Mr Kelly by that stage). However, there is no direct evidence as to whether amendments have been made that require Mr Kelly to review the entire document again.

70    I accept that Mr Kelly has suffered from mental illnesses for a significant period of time and that these illnesses have impaired him in formulating his affidavit evidence and giving instructions to his solicitors. It is apparent that his solicitors have had considerable difficulty in keeping him focused on the necessary tasks. It also appears to be the case that, at least in the weeks leading up to the hearing of the interlocutory application, Mr Kelly was quite distressed when asked to focus on the events that gave rise to the proceeding. However, the extent to which he is actually incapacitated is unclear. Dr Paremegiani’s report indicates that, by late October 2024, Mr Kelly’s medication was allowing him to function reasonably well and he was expected to continue to improve.

The re-opening application

71    The re-opening application was filed on 25 March 2025. It seeks leave to re-open Mr Kelly’s case on the respondents’ interlocutory application in order to rely on a report of Dr Chee dated 23 March 2025.

72    Mr Kelly’s solicitors, it will be recalled, approached Dr Chee’s clinic on 12 March 2025 seeking to engage him to prepare a report. Dr Chee was thus able to produce a report within 11 days of the request, notwithstanding the broad nature of what was asked of him. This suggests that, had the report been sought on or soon after the interlocutory application was stood over (on 5 March 2025), the report could have been obtained and relied on at the hearing on 19 March 2025.

73    The hearing had been stood over for the purpose of allowing Mr Kelly time to obtain a report from Dr Chee. Dr Chee was evidently prepared to work very quickly to produce a report, but he was not asked to do so until around a week after the interlocutory application had been stood over. The obvious inference is that a report could have been obtained within the time that had been allowed for that purpose, if a request had been made more promptly. It is hard to see why, in these circumstances, Mr Kelly should be permitted to re-open his case — necessitating a further hearing and further costs — in order to rely on the report. Accordingly, on 16 May 2025 I made an order dismissing the re-opening application.

Conclusions

74    I am not satisfied that Mr Kelly’s illnesses provide a sufficient explanation for the present default.

(a)    The viral infection is not the subject of sufficiently cogent evidence for me to be persuaded of its nature or effects, and in any event arose only when the evidence was already overdue (and had resolved by mid February 2025).

(b)    Mr Kelly’s mental health issues have hampered his preparation of the case, but it is not clear to what extent. Importantly, also, it is not suggested that these issues are a recent development: according to the medical evidence Mr Kelly suffered from major depressive disorder requiring admission to a psychiatric hospital in 2020. Mr Kelly’s solicitors have represented him since at least 2018 and cannot realistically have been unaware that settling his affidavit and obtaining instructions generally would be a slow process. They consented to the order made on 10 September 2024, requiring Mr Kelly’s evidence to be filed by 18 November 2024, in circumstances where they at least should have known that early and possibly constant attention to the task would be needed. If they were truly taken by surprise by their client’s inability to focus on the preparation of the case, the proper response would have been to inform the respondents’ solicitors and seek a re-listing of the matter as soon as the problem became apparent.

75    If it is the case that Mr Kelly is so deeply impaired as to have been unable to finalise his affidavit in the months that have passed since the orders of 10 September 2024, a different problem arises: whether he will be able to comply with any new filing date (and indeed whether he will ever be able to give evidence). There must come a point where the respondents can no longer be expected to wait, and the devotion of public resources to litigation ceases to be a useful response to the events in Mr Kelly’s workplace in 2016.

76    In the light of these uncertainties and complexities, I have come to the view that the proceeding should not be dismissed at this stage, but should be put on a strict timetable with an order that it will stand dismissed in the event of non-compliance by Mr Kelly. This will at least ensure that he and his solicitors understand that, if a deadline for filing material cannot be met, they will need to approach the Court before the deadline passes and justify a further extension.

77    Because of the draconian effect of a self-executing order, it is necessary to allow Mr Kelly a reasonable time for filing his evidence. The respondents will then have to be allowed an appropriate time to file their evidence in response. I will order the parties to provide to chambers a list of mutually available dates between 1 October 2025 and 30 April 2026 and agreed or competing draft timetabling orders (including a self-executing order as mentioned in the previous paragraph). If necessary a date will be fixed for a case management hearing.

78    I am satisfied that this is a case in which “unreasonable” acts or omissions by a party have caused the other parties to incur costs, with the result that the Court’s discretion to award costs in relation to the interlocutory application is not excluded by s 570(1) of the FW Act (see s 570(2)(b)). Mr Kelly’s non-compliance with the order requiring his evidence to be filed is extreme. It was sought to be excused by assertions of ill health but these were not properly supported by evidence. His solicitors have delayed and obfuscated in their responses to inquiries from the respondents’ solicitors, leading to the respondents filing their interlocutory application. Mr Kelly will be ordered to pay the respondents’ costs of the interlocutory application (including the unsuccessful application to re-open the applicant’s case) as agreed or assessed.

79    I sought submissions from the parties as to whether costs might be ordered against Mr Kelly’s solicitors. It is agreed that, if the Court is satisfied that costs can be ordered consistently with s 570, an order requiring those costs to be paid by the solicitors can be made (see Ryan v Primesafe [2015] FCA 8 at [67] (Mortimer J)). However, although I have been critical in these reasons of some aspects of the handling of this case by Mr Kelly’s solicitors, the evidence concerning their instructions is not sufficiently clear to sustain a conclusion that their conduct warrants the unusual step of ordering costs against them.

80    There will therefore be an order that Mr Kelly pay the respondents’ costs occasioned by the interlocutory applications.

Associate:

Dated:    4 July 2025