Industrial Relations Commission of New South Wales in Court Session CITATION : James v Talisman Group Pty Ltd [2001] NSWIRComm 199 APPLICANT Elizabeth Myra James PARTIES : RESPONDENT Talisman Group Pty Ltd FILE NUMBER: IRC 4555 of 2000 CORAM: Marks J CATCHWORDS : Amendment of proceedings - Joinder of additional respondents - Amendment granted LEGISLATION CITED : Industrial Relations Act 1996 s106 s109 North v Consolidated Gaming Corp Ltd (2000) NSWIRComm 258 CASES CITED : Horton v Jones (No 2) (1939) 39 SR(NSW) 305 Reich v Client Server Professionals of Aust Pty Ltd (Administrator Appointed) (No 2) (2000) NSWIRComm 196 HEARING DATES: 08/30/2001 DATE OF JUDGMENT: 09/03/2001 APPLICANT Mr B K B Cross of counsel SOLICITORS Rockcliffs LEGAL REPRESENTATIVES: DEFENDANT SOLICITORS Allens Arthur Robinson JUDGMENT: INDUSTRIAL RELATIONS OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Monday 3 September 2001 Matter No IRC 4555 of 2000 ELIZABETH MYRA JAMES v TALISMAN GROUP PTY LTD Application under s106 of the Industrial Relations Act 1996 INTERLOCUTORY JUDGMENT 1 By summons dated 12 September 2000 the applicant Elizabeth Myra James has sought certain relief in this Court against the respondent Talisman Group Pty Ltd under s 106 of the Industrial Relations Act 1996 ("the Act"). The proceedings have been the subject of the mandatory conciliation process provided by the Act and are set down for hearing before me on 8 and 9 October next. 2 The summons alleges that a contract of employment between the applicant as employee and the respondent as employer was or became unfair in certain respects. These matters include but are not confined to matters surrounding the termination of employment of the applicant. 3 On 6 August 2001 the applicant filed a notice of motion seeking an order for the joining of three persons as additional respondents; they being Neil Hadfield, Ian Hadfield and Graeme Riley. The notice of motion sought that the summons originally filed be amended in a number of respects including the addition of the three proposed respondents. 4 When the notice of motion came on for hearing on 30 August 2001 the solicitor appearing on behalf of the respondent and the three proposed additional respondents, Mr Fitzharris indicated that there was no objection to the amendment of the summons save for the addition of the three proposed respondents. This judgment is confined to this discrete issue. 5 The applicant adduced evidence for the purpose of this interlocutory application concerning the involvement of each of the proposed additional respondents in the management of the corporate respondent and asserted that each of them was a director of that corporation. As it transpired, evidence adduced on behalf of the proposed additional respondents was to the effect that at all relevant times Ian Hadfield and Graeme Riley were not directors of the corporate respondent, although they subsequently became so. 6 The evidence adduced by the applicant demonstrated an involvement by each of the three proposed respondents in the management and affairs of the corporate respondent and in dealings with the applicant as its employee. For example the applicant alleged that certain representations were made to her by Neil Hadfield at the time that she negotiated her employment as to the terms and conditions of employment. There is evidence of communication between Neil Hadfield and the applicant concerning her performance as an employee. 7 In the case of Ian Hadfield there were representations concerning his involvement in the corporate respondent as Chief Executive Officer and allegations concerning his failure to undertake certain activities. He was also involved in discussions with the applicant concerning the financial position of the corporate respondent. 8 In the case of Mr Riley there is evidence of interaction with the applicant concerning in particular the financial management of the corporate respondent and concerning also the applicant's performance. 9 In support of the application Mr Cross of counsel who appeared for the applicant relied on the in-principle approach which I had set out in a judgment delivered in North v Consolidated Gaming Corporation Ltd (2000) NSWIRComm 258. In that judgment I referred firstly to s 170 of the Act giving this Court power to make amendments to proceedings, secondly to the judgment of Jordan CJ in the Full Court of the Supreme Court of New South Wales in Horton v Jones (No 2) (1939) 39 SR (NSW) 305 concerning the appropriate approach to amending pleadings and thirdly to the circumstances in which third parties may be held liable for payment of compensation in proceedings under s 106 of the Act. 10 Nothing which has been put to me by way of submissions in these proceedings causes me to change the views expressed by me in North as to the proper approach to be taken in applications of the kind being considered in these proceedings. 11 There will be, in my opinion, a prima facie right to amend proceedings if an applicant could have achieved the same result by discontinuing the current proceedings and filing fresh proceedings in the Court Registry embodying the proposed amendments. There will be obvious circumstances where the prima facie right may be curtailed. These include an application to amend made at an inappropriate time in the proceedings where the amendment may unduly create an evidentiary or cost burden on another party, or the circumstances referred to by Jordan CJ in Horton, namely where the proposed amendment "is so obviously futile that it would be struck out if it appeared in an original pleading, or unless it is one that it would be impossible to allow upon any terms without causing substantial injustice to another party in the proceedings." 12 As Jordan CJ pointed out in Horton, the application to amend does not of itself involve any consideration of the merits of any claim made by the applicant against any proposed additional respondent. The only exception would lie in the circumstances referred to by Jordan CJ which are analogous to an abuse of process. 13 Mr Fitzharris did not, as I understand his submissions, dissent from the appropriateness of the in-principle approach contained within North. He submitted however that in the factual circumstances as known the application to amend amounted to an abuse of process. This was because the application made by the applicant was motivated by her concerns about the financial situation of the corporate respondent and it was for this reason only that she sought to join in the proposed additional respondents. 14 In her affidavit material the applicant did express a concern about the corporate respondent's solvency because it was dependent upon the support of an overseas parent company. There were also other reasons expressed in her affidavit. However I do not regard this fact per se as enabling an argument to be raised that the application amounted to an abuse of process. A similar situation was considered by Hungerford J in this Court in Reich v Client Server Professionals of Aust Pty Ltd (Administrator Appointed) (No 2) (2000) NSWIRComm 196. Those proceedings sought to join two additional respondents being the directors and sole shareholders of a corporate entity. It was explained to his Honour that the problem concerning their joinder only arose once the corporate respondent had been placed under administration. In describing the role of those persons his Honour said that they were "the principals of the corporate entity; they were the persons who managed and controlled its affairs; they were the persons who were jointly concerned with offering the applicant employment and setting the terms and conditions of that employment; they were the persons who controlled the performance of the employment; and, significantly for present purposes, they were the persons involved in the discussions with the applicant which ultimately led to these proceedings …." (at para 7). 15 In this context I also refer to comments made by Hungerford J concerning the joinder of third parties to s 106 proceedings. His Honour said: It is not unusual in s 106 applications, where a contract is challenged, for persons not strictly parties to the contract to be made respondents so that they may be heard as to claims against them for the payment of money on the avoidance or variation of the subject contract once the grounds of unfairness had been made out. So much is clear from the very many occasions occurring in this Court on a regular basis, and as dealt with by the High Court in Brown v Rezitis (1970) 127 CLR 157; that is effectively the position here: see also Ace Business Brokers Pty Ltd v Phillips-Treby (2000) NSWIRComm 163." (at para 6) 16 In my opinion there is sufficient evidence to link the proposed additional respondents with the management and control of the affairs of the corporate respondent and with the circumstances of the applicant's employment by that respondent for me to reject any suggestion that their joinder as respondents to the proceedings at this stage would amount to or be analogous to an abuse of process. I stress that these comments are made in the context of the consideration of this aspect only. It may be open to the proposed additional respondents at any stage of the proceedings to make application that they be struck out upon any basis available to them. Such an application will have to be made at an appropriate stage of the proceedings. At this stage there is insufficient evidence to determine that the amendment sought is "so obviously futile that it would be struck out". There is no suggestion that the amendment would cause substantial injustice to either the proposed additional respondents or to the corporate respondent. 17 Accordingly, it is my opinion that the applicant should be permitted to amend the summons in the manner proposed save that, as Mr Cross conceded, it will be necessary to delete any allegation that Ian Hadfield and Graeme Riley were directors of the corporate respondent. 18 It will be necessary for the parties to consider the application of s 109 to the proceedings as amended and as to whether the matter will be able to proceed on the dates currently allocated for hearing namely 8 and 9 October next. I ask the representatives of the parties to consider these mattes urgently and I propose granting liberty to apply to accommodate any matters which require the further assistance of the Court. 19 No submissions were addressed on costs and I propose to reserve costs. ORDERS 20 I make the following orders: 1. The applicant is given leave to amend the summons in accordance with the draft amended summons for relief filed in the Court save for the variations referred to in these reasons for judgment. 2. The amended summons must be filed within seven days of this date. 3. Costs are reserved. 4. Liberty to apply. ------------------------------------------ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.