Industrial Court of New South Wales CITATION: Piriz v AAPT Limited (No 2) [2006] NSWIRComm 75 APPLICANT/RESPONDENT ON MOTION Eduardo Piriz PARTIES: RESPONDENT/APPLICANT ON MOTION AAPT Limited FILE NUMBER(S): IRC 2687 of 2002 CORAM: Staff J Practice and procedure - Unfair contract - Self executing orders - Whether service within time - Service by facsimile - Irregular service - Discretion - Court able to confirm irregular service - Court able to waive default - Power to extend time to avoid operation of such an order - Application of Industrial Relations Commission Rules - Service not in accordance with Rules - Rule 88; r 105; r 117 and r 134 considered - Indemnity costs - Rule 209 - Solicitor to show cause why order should not be made directing solicitor to pay costs CATCHWORDS: Unfair contract - Self executing orders - Whether service within time - Service by facsimile - Irregular service - Discretion - Court able to confirm irregular service - Court able to waive default - Power to extend time to avoid operation of such an order - Application of Industrial Relations Commission Rules - Service not in accordance with Rules - Rule 88; r 105; r 117 and r 134 considered - Indemnity costs - Rule 209 - Solicitor to show cause why order should not be made directing solicitor to pay costs Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Commission Rules 1996 Supreme Court Rules 1970 (NSW) Uniform Civil Procedure Rules 2005 FAI General Insurance Co Ltd & Ors v Southern Cross Exploration NL & Ors (1988) 165 CLR 268 CASES CITED: Piriz v AAPT Limited [2005] NSWIRComm 374 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 HEARING DATES: 01/03/2006 DATE OF JUDGMENT: 03/15/2006 APPLICANT/RESPONDENT ON MOTION Mr S Prince of counsel Solicitor: Mr J Biady LEGAL REPRESENTATIVES: J Biady & Associates RESPONDENT/APPLICANT ON MOTION Solicitor: Mr C Fisher Fisher Cartwright Berriman JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J 15 March 2006 Matter No IRC 2687 of 2002 EDUARDO PIRIZ v AAPT LIMITED (No 2) Application under s 106 of the Industrial Relations Act 1996 JUDGMENT [2006] NSWIRComm 75 1 On 21 October 2005 in Piriz v AAPT Limited [2005] NSWIRComm 374, I rejected a notice of motion by AAPT Limited ("the respondent") seeking dismissal, for want of prosecution, a summons filed pursuant to s 106 of the Industrial Relations Act 1996 ("the Act") in this matter. 2 In dismissing the notice of motion, I made various self-executing orders. Orders 4, 8 and 9, relevantly provided: 4 The applicant is to file and serve all affidavit material to be relied upon by 23 December 2005. … 8 Any application by the applicant to vary the timetable shall be made at least seven days prior to the compliance dates, that is, the dates referred to in Orders 1, 3, 4, 6 and 7 above, and shall be accompanied by an undertaking to pay the respondent's actual costs of the said application. The programme will not be varied unless made (with the necessary undertaking) prior to the compliance date and where a substantial fresh ground for variation is made out by the applicant. 9 In the event that the applicant fails to comply with any requirement in Orders 1, 3, 4, 6 and 7 above, without having any variation to those orders as provided for in accordance with Order 8, the Court makes the following self executing orders: (i) The application is dismissed. (ii) The applicant will pay the respondent's costs. (iii) If self executing orders are made, I give liberty to the respondent to make an application for indemnity costs. 3 On 16 January 2006, the respondent, filed a notice of motion seeking the following: 1. a declaration that the Respondent on the Notice of Motion ("Respondent") has failed to comply with Order 4 of the Orders of His Honour Justice Staff of the Industrial Court of New South Wales made on 21 October 2005, in matter IRC 2687 of 2002 ("Orders"); 2. a declaration that as a consequence of the Respondent's failure to comply with Order 4, Orders 9(i) and (ii) of the Orders have been made and are in effect; and 3. an order that the Respondent on the Notice of Motion ("Respondent") pay the costs incurred by the Applicant in matter IRC 2687 of 2002 after 21 October 2005 on an indemnity basis. 4 On 23 February 2006, Mr Eduardo Piriz, the applicant in the substantive proceedings, filed a notice of motion seeking the following: 1. A declaration that service of the affidavits of Messrs Urquhart, Greenaway, Knutson and Piriz ("the Affidavits") by facsimile on 23 December 2005 constituted valid service for the purposes of Order 4 of the Court's orders made by Justice Staff on 21 October 2005 ("the Orders"). 2. In the alternative, an order pursuant to Order (sic) 134 (1) and (2) of the Industrial Relations Commission Rules 1996 ("the Rules") extending the time for service of the Affidavits evidence up to and including 11 January 2006 nunc pro tunc. 3. Further and in the alternative, an order under Order (sic) 88 (1) of the Rules waiving the compliance with the procedural requirement to the extent necessary to allow effective service by facsimile of the Affidavits upon the Respondent's Solicitors and for the purposes of Order 4 made on 21 October 2005. 4. Further and in the alternative, an order pursuant to Order (sic) 85 (1) of the Rules nunc pro tunc that service for the purposes of Order 4 of the Orders may be effected by facsimile service of the Affidavits (excluding Annexures) with hand delivery including Annexures at the earliest reasonable opportunity thereafter. 5. Further and in the alternative, an order pursuant to Order (sic) 84 (1) that notwithstanding any procedural defect in the manner in which the Affidavits were served upon the Respondent, the Court will give the following directions which will enable expense or delay to be reduced and will help to achieve a prompt hearing of the matters at issue between the parties and will contribute to the expeditious conduct of the proceedings and the just determination of the matter or dispute and the equitable disposal of proceedings: a. The Respondent is taken to have been served with the Affidavits; b. The Orders are vacated (to the extent that they still continue following the orders made by this Court on 7 February and 11 February 2006) and the Court substitutes the following directions: a. The Respondent to file and serve any evidence in reply by 15 March 2006; b. The Applicant is to file and serve any affidavit material in reply by 29 March 2006; c. Thereafter the standard directions provided for in Practice Direction No. 14 will apply. Background 5 It was common ground that on 23 December 2005, sworn facsimile copies of affidavits by James Greenaway and William Urquhart were accepted by this court's registry and stamped "received" on the basis of an undertaking given by the solicitors for the applicant to file the original affidavits in the Registry as soon as practicable. Mr Urquhart resides in Queensland and Mr Greenaway resides in South Tweed Heads. Affidavits of Rodney Knutson and the applicant were filed on 23 December 2005. The applicant's solicitor then forwarded, by facsimile, the affidavits that had been received or filed in the Registry to the solicitors for the respondent on 23 December 2005. The affidavit of the applicant included 17 annexures and is approximately 180 pages. This affidavit, excluding the annexures, was forwarded to the solicitors for the respondents on 23 December 2005 at 5.01 pm. 6 The affidavits of Messrs Urquhart, Greenaway and Knutson were also forwarded under cover of letter dated 23 December 2005 to the solicitors for the respondent and received on 29 December 2005. The applicant's affidavit was not forwarded by mail on 23 December 2003. On 11 January 2006, copies of the affidavits received or filed in the court's registry on 23 December 2005, were served by hand on the solicitors for the respondent. The respondent contends that the affidavit of Mr Piriz that it received on this date did not contain all of the annexures. Consideration 7 Mr C Fisher solicitor, who appeared for the respondent, submitted that the applicants had failed to comply with order 4 of the orders made on 21 October 2005. I agree with this submission. The order required the applicant to file and serve "all affidavit material to be relied upon by 23 December 2005". 8 Part 15 Service and Notice of Hearing of the Industrial Relations Commission Rules 1996 ("the Rules") provides how service may be affected upon corporations. Rule 105(d) is in the following terms: 105 Service upon corporations other than industrial organisations Service of process upon a corporation other than an organisation incorporated under the Act must be effected: … (d) where the corporation has filed an address for service, by posting any document to that secretary or principal officer at that address or by leaving it at that address, or … 9 The respondent's address for service is Fisher Cartwright Berriman solicitors of North Sydney. The above rule makes no provision for service by facsimile. That mode of service is not authorised by the Act or by the Rules of this court. 10 Mr S Prince of counsel, who appeared for the applicant, referred the court to Pt 16 Affidavits, of the Rules, particularly r 117, Annexures and Exhibits, and r 118, Irregularity, to support a submission that that as it was not convenient to annex the annexures to Mr Piriz's affidavit, the documents may be made an exhibit to the affidavit. Rule 117 is in the following terms: 117 Annexures and exhibits (1) A document to be used in conjunction with an affidavit must, where convenient, be annexed to the affidavit. (2) Where annexure is inconvenient, the document may be made an exhibit to the affidavit. (3) An exhibit to an affidavit must be identified by a certificate entitled in the same manner as the affidavit and made by the person before whom the affidavit is sworn. 11 The difficulty I have with this submission is, even if it be accepted that it was inconvenient to annex approximately 150 pages of annexures to Mr Piriz's affidavit, no steps were taken by the applicant to utilise the provisions of r 117(2) and make the documents exhibits to the affidavit. I note in passing r 118, Irregularity, provides that an affidavit may, with leave of the Tribunal, be used notwithstanding any irregularity in its form. 12 Mr Prince submitted that what he described as the irregularity in respect of service could be cured by the application of r 85 or r 89(5) of the Rules. These rules are directed to circumstances where the provisions of the Act or the Rules do not make any, or adequate provision, for a procedure to be followed, or if there is no rule, order, direction or practice direction in force, the practice, procedure or usage of the Supreme Court is to be utilised. The difficulty I have with this submission is that Pt 15 of the Rules deals with Service and Notice of Hearing in a comprehensive manner. The applicant failed to observe the requirements of Pt 15, r 105. Simply put, it does not allow service by facsimile. 13 In considering the competing motions for declarations, two significant matters have been exercising my mind. The first is that it is essential to ensure the expeditious and cost-effective disposal of matters such as this. To assist in this goal, case management occurs. This must be balanced against the interests of justice as the High Court observed in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154: …the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. 14 However, where a court has power to vary orders made in respect of the filing and serving of affidavits in circumstances where a self-executing order has been made but not complied with, in my view, the power should only be exercised with caution and with due regard to the principle that orders are made to be observed. In this case, the purpose was to compel compliance after default. 15 The second matter is the balancing of the overall interests of justice. It appears to me that the failure to comply by the applicant with the orders of 21 October 2005 was due, in a significant way, to the dilatory conduct of the applicant's solicitor. The solicitor on the record in this matter is James Biady, the Principal of J Biady & Associates Pty Ltd. 16 Two affidavits of Joanne Khoo sworn on 11 January 2006 and 21 February 2006 respectively, were tendered by the applicant. Ms Khoo deposed that she is employed as a solicitor with J Biady & Associates Pty Ltd and is assisting Mr James Biady in the day to day conduct of the proceedings on behalf of the applicant. Ms Khoo was admitted as a solicitor in August 2005 and since that time has been working under the supervision of Mr Biady. 17 Ms Khoo stated she commenced day to day dealings with this matter on or about 9 December 2005, although she had undertaken various work on the file prior to this date. She deposed Mr Biady had left to travel overseas on 6 December 2005 and she was the only fulltime solicitor employed in the firm during this period and had limited secretarial support. Ms Khoo further stated that during the period 9 December 2005 to 15 December 2005, she was occupied predominantly by preparing for a contested hearing in the District court which was listed to commence on 15 December 2005. It appears from Ms Khoo's affidavit that Mr Biady did not return to the office prior to 23 December 2005. 18 I can only infer that Mr Biady thought that it was appropriate to leave an inexperienced solicitor responsible for complying with orders that included a self-executing order. A fair reading of my earlier judgment in Piriz v AAPT would lead to the conclusion that these proceedings remained on foot by the finest of margins. Furthermore, the way this case proceeded, as put by Mr Prince, makes it plain that a conscious decision was taken to proceed in the way they did and not plead mistake or other mitigation but rather choosing to contest the default on the basis that it was a most technical breach of the Rules. 19 Notwithstanding the applicant's approach, this matter is finely balanced. On the basis that service was substantially affected in accordance with the order, I am prepared to exercise my discretion in favour of the applicant. I should make it clear, were this not the case, I would decide the case differently. 20 In balancing the overall interests of justice, I am not prepared to have the applicant's case jettisoned as a result of the conduct of the applicant's solicitor. In my view, I should deal with this matter in accordance with r 88 of the Rules. This rule gives the court the power to waive strict compliance with any procedural requirement, or to exempt any party from compliance with any such requirement. I therefore propose to vary the formal requirements of r 105(d) to provide service of the affidavits as filed, or received by the Registrar on 23 December 2005 to be effected by facsimile transmission on that day. I waive the default in respect of r 105. 21 I should indicate that I am perfectly comfortable in taking this approach as the Uniform Civil Procedure Rules 2005 provides in Pt 10 Div 2, r 10.5 for various methods of service. Rule 10.5(2)(c) provides that if the notice advising the address for service is a solicitor's office which includes a facsimile mail address, service may be effected by faxing a copy of the document to that number. Although the Uniform Civil Procedure Rules apply to the Supreme, District and Local Courts and the Dust Diseases Tribunal, and not this Court, this court is currently reviewing its rules to consider any variation in light of the Uniform Civil Procedure Rules. 22 In adopting this approach, I should make it clear to the applicant that I am not in any way excusing the applicant's conduct. The applicant finds himself in this position due to the dilatory conduct of the solicitor on the record in this matter. 23 In determining the motions in this way, it is necessary to consider the question of whether I have the power to vary order 4 in light of the self executing orders found in order 9. 24 Mr Fisher submitted that one of the consequences of the default in respect of the orders was that the proceedings were dismissed in accordance with the self-executing order. 25 Mr Prince contended that the court had the power to vary the terms of the orders made on 21 October 2005, relying on r 134, Extension and Abridgement. Rule 134 provides as follows: 134 Extension and abridgment (1) A tribunal may, on terms, by order, extend or abridge any time fixed by the Rules or by any order. (2) A tribunal may extend the time under subrule (1) as well after as before the time expires whether or not an application for the extension is made before the time expires. 26 Part 2 r 3 of the Supreme Court Rules 1970 (NSW), which was in identical terms to r 134 of this Commission's Rules, was considered by the High Court in FAI General Insurance Co Ltd & Ors v Southern Cross Exploration NL & Ors (1988) 165 CLR 268. The facts of this case were that in the course of a long trial in the Supreme Court of New South Wales, the judge made an order that "[t]he proceedings be and stand dismissed … unless on or prior to 30 May 1986" the plaintiffs provide certain particulars and security for costs. On 30 May 1986 the plaintiffs applied for an extension of time for compliance with the order. The application was dismissed. On the same day they furnished the requisite security and provided a document which they later contended complied with the order. The plaintiff later applied for a declaration that the proceedings had not been dismissed and an extension of the time for the delivery of the particulars. The judge dismissed both applications holding that because the order was self-executing, the proceedings had been terminated and that the court had no power to extend time. Wilson J, with whom Brennan, Deane and Dawson JJ agreed, Gaudron J agreeing in a separate judgment, after referring to Pt 2, r 3 of the Supreme Court Rules stated at 283: The plain meaning of these words is very wide. The court may extend "any time" fixed by "any … order" and may do so as well after as before the time expires and even though the application to extend is not made until after the time has expired. As Baggallay LJ said in Carter v Stubbs of the analogous English rule, it gives "very full discretionary power; indeed, I can hardly imagine a more extended discretion". It is a remedial provision which confers on a court a broad power to relieve against injustice. The discretion so conferred is not readily to be limited by judicial fiat. The fact that it manifestly is a power to be exercised with caution and, in the case of conditional orders, with due regard to the public policy centred in the finality of litigation does not warrant an arbitrary limitation of the power itself, not expressed in the words of the rule, so as to deny its capacity to apply to circumstances such as those which are to be found in the present case. It would be wrong to so read the rule as to deny to a court power to prevent injustice in circumstances where the party subject to a conditional order ought to be excused from non-compliance. (Footnotes omitted). 27 In my opinion, the power clearly exists to vary the orders, and falls to the exercise of discretion. 28 The respondent also sought an order that the applicant pay the costs incurred in this matter after 21 October 2005 on an indemnity basis. This application was resisted by the applicant. The respondent's claim includes the payment of costs incurred in respect of the production of classes of documents for discovery purposes. In my view, the costs associated with the production of documents and discovery should be costs in the cause. 29 In respect of the costs incurred regarding the applicant's and the respondent's notices of motion, the applicant should pay the respondent's costs on an indemnity basis. However, in this regard, I propose to list the matter pursuant to r 209 of the Rules to hear submissions from Mr Biady, solicitor for the applicant, why I should not make an order directing that Mr Biady pay these costs and why the costs as between he and his client in respect of the motion should not be disallowed. ORDERS 1. I extend the provisions of r 105(d) of the Industrial Relations Commission Rules to provide that the applicant may serve any affidavits filed or received by the Registrar on 23 December 2005, by faxing a copy of the affidavits to the respondent's solicitors on the same date. 2 To the extent that there is any defect in faxing any affidavit to the solicitors for the respondent on 23 December 2005, I waive that defect, provided that a complete copy of any affidavit, with all relevant annexures as filed with the Registrar on 23 December 2005, is served formally on the respondent within seven days of the date of this judgment. 3. The respondent shall have its costs of the motions as agreed, or assessed, on an indemnity basis. The determination of order 4 will decide from whom. 4. This matter is listed pursuant to r 209 of the Industrial Relations Commission Rules at 10.00 am on 17 March 2006 to hear submissions from the applicant's solicitor why I should not make an order directing Mr Biady to pay the costs that have been ordered to be paid to the respondent in respect of the motions and to disallow any costs incurred as between the applicant and his solicitor in respect of these notices of motion. 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.