Bomilsco Pty Ltd (in liquidation) v Ng & Anor; Harts Australasia Limited (in liquidation) v Ismail & Anor; Bomilsco Pty Ltd (in liquidation) v Pimm & Anor [2003] QIRC 216 (2003) 174 QGIG 1238

1238 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 5 December, 2003 QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 280 – application to reopen Bomilsco Pty Ltd (in liquidation) AND Cheuk Wah Raymond Ng AND Harts Australasia Limited AND Harts Pty Ltd (No. B1503 of 2003) Harts Australasia Limited (in liquidation) AND Shaheda Ismail AND Harts Pty Ltd (No. B1504 of 2003) Bomilsco Pty Ltd (in liquidation) AND Gregory Ian Pimm AND Harts Pty Ltd (No. B1505 of 2003) COMMISSIONER BROWN 25 November 2003 DECISION These three applications ask the Commission to – 1. reopen case nos. B2201 and B2259 of 2001 and B219 of 2002; 2. set aside the orders. Both Harts Australasia Limited and Bomilsco Pty Ltd were part of the failed Harts Group of companies and these applications seek to reopen the matters mentioned above on the basis that the applicants were not the employers of the individuals named (first respondents) and hence should not have been the subject of the orders issued. Background Both Bomilsco Pty Ltd (in liquidation) and Harts Australasia Limited (in liquidation) were represented by Mr G. Martin (instructed by Blake Dawson Waldron Lawyers). Mr Ng represented himself. Mr Murdoch (instructed by Minter Ellison Lawyers) represented the second respondent Harts Pty Ltd (in liquidation) (Receivers and Managers Appointed). Neither Ms Ismail or Mr Pimm were present at the hearing and no explanation for their absence was forthcoming, however, the Commission is satisfied that proper steps to ensure their notification were taken by the applicant. In reaching that conclusion I have relied upon the affidavits of service by Mr Adam Gary Rice (Exhibits 1 & 2). On 7 January 2002, the Commission issued orders for the payment of severance allowance by Harts Australasia Limited to both Cheuk Wah Raymond Ng and Shaheda Ismail. The Commission on 15 February 2002 issued a further order in favour of Gregory Ian Pimm that Bomilsco Pty Ltd (in liquidation) pay him severance allowance also. After a further hearing in October 2002, the order in favour of Ng was rescinded and a new order naming Bomilsco Pty Ltd (in liquidation) was issued. On 22 November 2002, Blake Dawson Waldron announced that they had instructions to apply to reopen proceedings in which Bomilsco Pty Ltd (in liquidation) had been named as the Employer. On 12 September 2003, applications to reopen proceedings were lodged by the liquidators of Bomilsco Pty Ltd and Harts Australasia Limited. Mr Martin cited the principles previously applied by de Jersey P (as he then was) in Queensland Nurses’ Union of Employees v Aged Care Queensland Inc (1996) 156 QGIG 530 wherein he referred to the decision of the Full Bench of the Commission in the Teachers’ Award Case (1994) 86 QGIG 611 as follows: “This commission holds the strong view that a matter which has been fully argued by all of the parties, and in respect of which a decision has been given on the merits should only be reopened if it can be shown that some vital and relevant material which was not available at the hearing, is now available or that the commission has made an obvious error or created clear anomalies or has been in some manner mislead in arriving in its original decision.”. Mr Martin submitted that he (de Jersey P) also referred to the statement of Moynihan P (as he then was) in Re: FEDFA (1987) 126 QGIG 340 at 341: “The purpose of a jurisdiction to reopen proceedings such as is conferred by s. 32 of the Act is not to provide a party, wise in hindsight and enlightened by failure, an opportunity to see if it can retrieve its position. The strong public interest in the finality of proceedings which have been heard and determined on the merits is reflected in a requirement that, in order to found an exercise of a jurisdiction to reopen, it is shown that :– ‘some vital and relevant material which was not available at the hearing, is now available’; to adopt the formulation of the Full Bench of the Industrial Commission in Re Teachers Award.”. Mr Martin then cited the comments of de Jersey P namely: “Allowing on the one hand for a strong public interest in the finality of proceedings, there is a balancing and also strong public interest in accuracy. While I would unhesitatingly exclude a reopening to allow a party, ‘wise in hindsight’ to re-argue the correctness of a disappointing result, I am not persuaded that a Commissioner might not, in reliance of s. 46, to reopen to permit further examination of the basis of an order previously made, where he or she perceives the real prospect of serious factual error or misapprehension on the part of the Commission.”. Mr Martin submitted that the matters sought to be reopened were not fully argued in the original hearing nor were the cases related to the proper identity of the Employer, heard on their merits. Mr Martin referred to the 7 January 2002 comments of the Commission relating to some doubt as to the employing entities and contemplated an application for reopening. Mr Martin submitted that there was no requirement for the liquidator to go to the expense of responding to the original applications and that there was now “substantial” material available for examination by the Commission which was not before the Commission originally. -- 1 of 5 -- 5 December, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 1239 Mr Martin claimed that no prejudice would be suffered by anybody because of the delay in lodging the applications for reopening. Mr Martin referred the Commission to the case of Stevens and Brodribb and the tests therein indicating that this was an indicator of the employing entity and that financial records indicating the payment of an employee were not the only test. Mr Martin claimed that a Mr Stewart was in a position to know what was occurring at the time of the hearings. Mr Martin referred the Commission to submissions made by Mr Stewart during the January 2002 proceeding wherein Mr Stewart stated that he was Group Financial Accountant of the Harts Group and offered the view that Ng, Ismail and Pimm were employees of Harts Pty Ltd. Mr Martin referred to the comments of Pimm on 15 February 2002 where he advised the Commission that Bomilsco Pty Ltd paid his wages and entitlements whilst he believed he performed his work for Harts Pty Ltd. Mr Martin presented a range of documents relating to the employment of the first respondents with his submissions. Those documents, he said, were “everything we had”. (t’cript, page 17, line 56) Mr Martin contended that should the Commission view some of the documents as unreliable then the Commission should view all as unreliable leaving the statement of Stewart in the category of material having greater objectivity. With respect to the reliability of documents, Mr Martin stated: “. . . it’s difficult to know whether any of them can be relied upon. But the least that can be said is that there are documents which tend to demonstrate that Harts was an employer as much as there are documents which tend to demonstrate that Bomilsco was an employer.”. Mr Martin indicated that the Commission was not in possession of all of the material necessary to determine the setting aside of the orders in the event that the matters were to be reopened. (t’cript, page 22 lines 5 to 23) Mr Martin submitted that for the Commission to reopen the matters, the Commission would not need to find that there were serious factual errors but would need to be satisfied that there existed “the real prospect of serious factual error”. (exhibit 3 and t’cript page 21, lines 35 to 60) Mr Murdoch submitted that the powers of the Commission under s. 280 of the Industrial relations Act 1999 (the Act) was entirely discretionary and that this matter did not involve circumstances where relevant material was not available during the hearing and subsequently became available but rather a case where the liquidator made a deliberate decision to neither consent nor oppose the orders sought being made at the time. He submitted that the liquidator was represented before the Commission by an experienced law firm on each relevant occasion and by their actions indicated that they were not prepared to spend time and money to ensure that the Commission made a decision based on the best evidence available. Mr Murdoch described as an extraordinary proposition, circumstances whereby the liquidator, having chosen to conduct themselves in a particular fashion, should be given an opportunity to revisit the matter at considerable cost, inconvenience and delay to other parties. He further claimed that the liquidator in neither consenting to not opposing the orders indicated to the Commission that the liquidator had no concerns about the orders being made. Mr Murdoch submitted that there existed long standing authorities with respect to a litigant alleged to have been “disabled by want of means from appearing and maintaining his case” and the greater public interest of the finality of decisions of tribunals and courts citing Venkata Narasimha Appa Row v Court of Wards (1886) 11 App. Cas., at pp. 663-664, approved by the High Court of Australia in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (1982) 150 CLR 29. Mr Murdoch submitted that Ng and Ismail had written employment contracts with Bomilsco Pty Ltd and that evidence existed that Pimm had an identical arrangement but that records could no longer be found. Mr Murdoch claimed that almost all documents presented by the liquidator were related to the Australian Taxation Office (ATO) or the Taxation Agents Board (TAB). Mr Murdoch pointed out that the material presented by the liquidator is evidence that Steve Hart misled the ATO with respect to the employing entity of Ismail. Table 7 of the Ismail documents contains a statement by Steve Hart to the Taxation Agents Board dated 28 September 1992 to the effect that Ismail was employed by Harts from “1-7-90 to the present” despite the existence of an employment contract established on 12July 1991 between Bomilsco Pty Ltd and Ismail, executed under the common seal of Bomilsco Pty Ltd and signed by Steven Hart. This, he contended, was to satisfy the requirements that tax agents to be employed by the entity providing the tax services. This contention, he says, is supported by the statutory declaration of Steven Hart attesting to the termination of Ismail from Bomilsco Pty Ltd and subsequent employment by Harts Pty Ltd. This followed a request by the TAB that Harts Pty Ltd provide evidence of such employment by Harts Pty Ltd. Mr Murdoch contended that there was nothing to suggest that anything in the employment relationship had changed, such as payment of wages and responsibility of accrued benefits, following Steve Hart’s statutory declaration of March 1993. Mr Murdoch referred to other documents which gave conflicting information as to the employing entity. Mr Murdoch referred the Commission to the delay in filing the applications and the prejudice to the second respondent that the delay has caused. Further, that there was strong public interest in favour of finality of decisions of the Commission and against a party that has had the opportunity to put a case at a hearing and fails to do so being permitted, after a lengthy delay, to obtain a reopening. Mr Murdoch further contended that no useful purpose would be served by reopening the matters. Mr Martin and Mr Murdoch both provided written submissions with respect to the Corporations Act 2001. Mr Ng chose not to make any submissions. Exhibit 4 was an affidavit sworn by Nicholas Hanwood an employee of Deliotte Touche Tohmatsu attesting to the financial position of Bomilsco Pty Ltd, Harts Australasia Limited and Harts Pty Ltd at specific times. -- 2 of 5 -- 1240 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 5 December, 2003 Mr Ray Richards, an accountant with 29 years experience, gave evidence (Exhibit 6) that he was responsible for the day to day conduct of the administration on behalf of the joint receivers and managers of Harts Pty Ltd (in liquidation) at material times. Richards’ evidence was that any future application for orders against Harts Pty Ltd (in liquidation) would be opposed on the basis that, in his view, Harts Pty Ltd has no responsibility for wages or benefits of employment. In supporting this claim he stated that record keeping at Harts Pty Ltd had been inconsistent, irregular and at times contradictory as well as ad hoc, incomplete and inaccurate. He stated that he was not able to describe any accounting system within the Group as having integrity or reliability. He claimed that no Harts Pty Ltd document that he had seen evidenced any payment directly to any employee within the Harts Group and further that Bank records indicated that payments of wages with respect to the first respondents were effected by Bomilsco Pty Ltd. (exhibits 6.7 & 8) Richards stated that, in his view, Bomilsco Pty Ltd was a service company within the Hart Group which provided employee services. He gave further evidence relating to funds and disbursements within Harts Pty Ltd and the effect of the delay in finalising these proceedings. Decision The relevant provisions of s. 280 are – “280 Procedure for reopening (1) Proceedings may be reopened, on application by a person under subsection (2), by– (a) for proceedings taken before the full bench – the full bench; or (b) otherwise – the commission. (2) An application for reopening may be made by– (c) . . . . . .; or (d) a party to the proceedings; or (e) . . . . . . . . (3) If the commission reopens proceedings, it may– (f) revoke or amend a decision or recommendation made by it; or (g) make the decision or recommendation it considers appropriate. (4) . . . . . . . . (5) . . . . . . . . (6) If the commission grants an application for reopening, it may give the retrospective operation to its decision made in the reopened proceeding it considers appropriate.”. In BCC v ARTBU (2002) 171 QGIG 104, Commissioner Bloomfield (as he then was) drew together a number of decisions relating to reopening and concluded as follows: “However, the power to reopen is clearly discretionary, the relevant authorities make it clear that the discretion must not be exercised lightly or without good reason. Factors which have grounded the exercise of discretion to reopen proceedings in the past have included: (a) the availability of vital and relevant material which was not available at the original hearing; (b) an apprehension that the Commission has made an obvious error or created anomalies; (c) information that the Commission has been in some manner misled in arriving at its original decision; (d) the creation of undesirable outcomes as a result of a decision; or (e) public interest consideration.”. I have had regard to these points. I have had further regard to the comments of de Jersey P in QNU v Aged Care Queensland Inc (1996) 152 QGIG 1857 cited the following comments of Walsh J in Witten v Lombard Aust Ltd (1968) 88 WN (Pt 1) NSW 405 @ 411 with approval – “There is a tendency to propound rules which are to govern the exercise of (a) discretion in the sense that it will be fettered by them. It is entirely proper that, in the exercise of a judicial discretion, guidance should be sought and obtained from decided cases of a similar kind, but I think that care must be taken to ensure that a discretionary power it not trammelled by set rules, by means of which one conclusion is to be automatically reached, regardless of other factors on the case which may point to the opposite conclusion.”. He also said – “Section 46 of the Act accords an unfettered discretion to reopen. Had the legislature intended to limit the exercise of that discretion in any particular way, it could have done so, but has not. In the Teachers’ Award case, a Full Bench of the Commission expressed this view– ‘This Commission holds the strong view that a matter which has been argued by all the parties, and in respect of which a decision has been given on the merits, should only be reopened if it can be shown that some vital and relevant material which was not available at the hearing, is now available or that the Commission has made an obvious error or created clear anomalies or has been in some manner been misled in arriving at its original decision’.”. Mr Martin also cited the following comments of the Commission recorded at page 7, lines 28-33 of the transcript of the original hearing – “Ms Garner’s made some comment with respect to that. It would seem to me that the order could be issued against the employing entity listed in your applications and if there was some problem with that down the track, well, it would be up to the parties to ask for the matter to be reopened, so that that technical issue could be addressed if indeed it arises.”. -- 3 of 5 -- 5 December, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 1241 The Commission did in fact reopen 2 of the originally determined matters. In both instances the request to reopen was made within a comparatively short timeframe. The Campbell reopening being pursued almost immediately before the Commission on 20 February 2002 and the Ng matter being raised on 15 July 2002 and reopened on 11 October 2002. The Commission does not view those matters as a precedent. The decisions in those matters were made having regard to the circumstances and information available at the time as will the decisions in these matters. The time taken by the applicant to lodge these applications has been considerable. In November 2002, the applicant first indicated to the Commission an intention to re-visit the matter in question (and others). It took from then until 12 September 2003, a further 10 months and indeed some 19 months from the initial decisions, to lodge the applications. Whilst the submissions of Mr Martin that considerable activity was taking place to further the matters, have been considered, I am influenced by the correspondence dated 1 September 2003 from Blake Dawson Waldron Lawyers to Minter Ellison Lawyers which states inter alia: “The liquidators intend to proceed with the applications to reopen Queensland Industrial Relations Commission (Commission) cases Nos B2259 of 2001; B2201 of 2001 and B219 of 2002. The delay in filing the applications has been due to the internal administrative procedures and ministerial approval procedures within DEWR – finalising the funding arrangements of the reopening applications. DEWR has confirmed that those arrangements are now finalised. The reopening applications will be filed and served by tomorrow.”. The delay was caused, in the view of the Commission, initially by the absence of a party prepared to fund such action and subsequently of the need for the entity that eventually emerged as the financial backers of the applications to put in place the appropriate authorities for funding. The Commission considers that the time allowed to lapse is far too long and that there appeared to be a distinct lack of urgency surrounding the efforts of the applicant. I can see little public interest in circumstances where a matter that has been finalised pursuant to a hearing where all parties had every opportunity to put their arguments being reopened simply because a party has gained access to funds which enable them to put a more detailed argument perhaps with more senior representation. The orders originally issued resulted in a benefit being paid to the first respondents by the Government Employee and Entitlements and Redundancy Scheme (GEERS) in that it was accepted by GEERS that the employers named in the orders were unable to pay the entitlement. It is common ground between the parties that should the orders be rescinded, it may be that action could be taken by GEERS to recover the benefits paid. That is not a consideration. During the initial hearings the legal representatives of the liquidators were aware that orders were being considered, did not oppose the issuing of the orders and assisted the Commission in the identification of the employing entity. In each case the legal representatives of the liquidators were given the opportunity to research the situation after the hearing and advise the Commission of the position before the issuing of the orders. I accept the submissions of Mr Murdoch that the liquidators adopted the position of neither supporting nor opposing the original applications and in doing so chose not to present evidence or any submissions of note. I do not accept the submissions of Mr Martin that because matters had not been fully argued they were thus not decided on their merits. The opportunity to mount an argument or make submissions including with respect to the correct employing entity was always available to the liquidators who deliberately chose to neither support nor oppose the applications. In fact, the opportunity to research details of employing entities was offered to the legal representatives of the liquidators and indeed taken by them as mentioned. Mr Martin cited the comments of de Jersey P where he stated that the real prospect of a serious factual error in the original decision could be cause for reopening considered against the “strong public interest” in finality of proceedings. At the time of the issuing of the orders and with the benefit of the assistance of the legal representatives of the liquidators as to the employers named, the Commission was confident that the orders issued were appropriate in all respects. For that view to change, the Commission would need to be confronted with “vital and relevant” (see de Jersey P in QNU v Aged Care Queensland) material and evidence that would cause the Commission to perceive the existence of the “real prospect of serious factual error”. I agree with both the submissions of Mr Martin and Mr Murdoch that the documents generated by various entities within the Harts Group and provided to the Commission for consideration are unreliable. This position is supported by the evidence of Richards. I am satisfied that the material presented is neither vital nor relevant given the common ground as to its reliability. Mr Martin’s suggestion, that in the absence of reliable material the Commission should be influenced by the statement made by Mr Stewart at the original hearing, would be compelling were it not for the fact that Stewart prefaced his comments regarding who may have been employed by Harts by stating “I think (my emphasis) there were probably (my emphasis) two of us”. Stewart did not give evidence in these proceedings. The evidence of Richards was directly contradictory to Stewarts comments (ex 6, para 9). Neither the material nor the evidence nor the reference to Stewart causes me to believe that the real prospect of a serious error has occurred. Mr Martin further argued that the tests in Stevens v Brodribb should be applied in determining the employment relationship in addition to examining the financial documents. Mr Martin submitted the matters need not reach finality today (t’cript page 15, line 39) and that the Commission did not have all information. (t’cript page 22, line18) The Commission is not persuaded that the matters should drag on. -- 4 of 5 -- 1242 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 5 December, 2003 The applications clearly seek the reopening of the matters and the setting aside of the orders (additionally in the pleadings, the applicant requests the Commission to proceed to determine the employing entity as well as reopening and setting aside). Directions were issued to facilitate the hearing of the applications. Those were complied with by the presentation of material, submissions and evidence by the parties. Given the accepted level of unreliability of the material presented and the submissions from Mr Martin at paragraph 13 as follows – “There is substantial material available for consideration by the Commission relevant to the employment status of each of the four individuals referred to above which was not before the Commission in its earlier consideration. Without going into the fine detail of the status of each former employee, it can be seen from the attached documents that there is substantial evidence to show that the individuals involved were employed by Harts Pty Ltd.”, and further, where Mr Martin also states at page 17, lines 55-56 of the transcript “in this bundle of documents – and we gave you everything”, I am of the view that the matter should be disposed of in this decision as I accept the submissions of Mr Martin that with respect to material, that I have everything. Further, if there were individuals who could have assisted by giving evidence then frankly they should have been called. Part 2 of the applications, the setting aside of the orders, need only be addressed should part 1 be answered in the affirmative. The material submitted, whilst contradictory and unreliable in determining an employing entity, was considered in relation to the submissions of Mr Martin with respect to the tests in Stevens v Brodribb bearing in mind that there was no argument here that any of the first respondents was an independent contractor. Copies of Ng and Ismail’s employment contracts (1991) with Bomilsco Pty Ltd were signed by Steven Hart. I accept the uncontested submissions of Mr Murdoch that Pimm had a contract in similar terms. At tab 17 of exhibit 3 containing documents relating to Ismail, there is a copy of a further contract between Bomilsco Pty Ltd and Ismail from 1996. In each of these documents there is a clear distinction between Bomilsco Pty Ltd – described as “the Company” and the Harts Group to which employee services may be provided by “the Company”. That 1996 contract states: “The Company employs all staff working for the Harts Group which comprises a number of corporate members namely Harts Pty Ltd, Bomilsco Pty Ltd, Harts Securities Pty Ltd, Harts Finance Pty Ltd, Harts Superannuation Pty Ltd, Harts Insurance Brokers Pty Ltd and Harts Fidelity Limited, all of which are fully owned subsidiaries of Harts Australia Limited. All of these companies are collectively hereafter called “the Harts Group.”. The contract further states: “The company (my emphasis) agrees to employ the Employee and the Employees agree to accept employment from the Company commencing on the date set out in Item 1 of the Schedule in the position set out in Item 2 of the Schedule.”. The Company (Bomilsco Pty Ltd) is responsible for – 1. working hours and variations thereto; 2. annual leave; 3. sick leave; 4. remuneration; 5. termination; and 6. duties. The 1991 contracts vary somewhat, however, the distinction between the company (Bomilsco Pty Ltd as the employer) and the Harts (or Hartcorp) Group is consistent and the control test over the various aspects of the employment listed above remained with the company (Bomilsco Pty Ltd). Another test of control is the day to day instruction of the employee. Given that Steven Hart is the principal of each of the entities within the Harts Group and appeared, from the material, to take a fairly direct role in the running of the Harts Group, it would be reasonable to assume that he, from time to time, directed the work of the first respondents. It would be anybody’s guess as to which of the entities within the Group he might have been acting for at a given time when directions were issued. Steven Hart did not give evidence in these proceedings but I would find it difficult to accept that he would have declared on behalf of which of the entities he was acting on each occasion he issued work related instructions. I accept Mr Martin’s submissions that the material presented was unreliable and capable of supporting conflicting views as to the employing entity depending on which of the documents was being examined at the time. However, it appears that the Harts Group took a certain stance with respect to their advice to the ATO and the Tax Agents Board which was not reflected in reality. Even though the material suggests that Ismail was employed by Bomilsco Pty Ltd at some stage and not by Harts Australasia Limited, I prefer to rely on the information provided by the legal representatives for the liquidators which guided the Commission in the decision leading to the initial order than rely on any of the documentation presented in the reopening application. Having considered all the evidence, material and submissions of the parties, I am not prepared to reopen the proceedings. The applications for reopening are refused. D. K. BROWN, Commissioner. Hearing Details: 2003 15 October 14 November – Written Submissions received) Released: 25 November 2003 Appearances: Mr G. Martin (instructed by Blake Dawson Waldron Lawyers) for Bomilsco Pty Ltd (in liquidation) and Harts Australasia Limited. Mr R. Ng on his own behalf. Mr J.E. Murdoch SC (instructed by Minter Ellison Lawyers) for Harts Pty Ltd (in liquidation). -- 5 of 5 --