Industrial Court of New South Wales CITATION: Marshall v Proteus Solutions Limited (in liquidation) and Anor (No 2) [2007] NSWIRComm 66 APPLICANT: Bruce Alan Marshall PARTIES: FIRST RESPONDENT: Proteus Solutions Limited (in liquidation) SECOND RESPONDENT: Patricia Anne Mackay Sneddon FILE NUMBER(S): IRC 1831 of 2002 CORAM: Schmidt J CATCHWORDS: Practice and Procedure - unfair contract - application by applicant to re-open case - application refused - costs LEGISLATION CITED: Industrial Relations Act 1996 Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 CASES CITED: Smith v New South Wales Bar Association (1992) 176 CLR 256 Urban Transport Authority of New South Wales v Nweiser (1991) 28 NSWLR 471 DATE OF JUDGMENT: 30 March 2007 APPLICANT: Mr JP Phillips SC SOLICITORS: Baker & McKenzie LEGAL REPRESENTATIVES: SECOND RESPONDENT: Ms MAC Painter of counsel and Ms B Britt of counsel SOLICITORS: ERA Legal JUDGMENT: - 8 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Schmidt J 30 March 2007 Matter No IRC 1831 of 2002 BRUCE ALAN MARSHALL V PROTEUS SOLUTIONS LIMITED (IN LIQUIDATION) AND ANOTHER Application under s.106 of the Industrial Relations Act 1996 JUDGMENT (No 2) [2007] NSWIRComm 66 1 Final submissions were made in these proceedings on 13 December 2006 and the decision reserved. Later on 13 December, after the adjournment of the proceedings, Mr Phillips SC wrote to my Associate on behalf of the applicant, drawing attention to questions which had arisen during submissions about the question of mitigation in this case and the operation of s 106(6) of the Industrial Relations Act 1996 ('the Act'). Copies of extracts from various texts were attached. 2 A copy of the correspondence had been sent to Ms Painter of counsel, after Mr Phillips SC had first advised her of the course which he proposed to take. No objection to that course was taken by the second respondent and there was a response filed on 17 December 2006. 3 On 30 January 2007, Mr Phillips SC wrote again to my Associate in relation to the question of mitigation. On this occasion, a further written submission on the question was provided, together with 'relevant financial records of the Applicant's earnings since the termination of his contract with the First Respondent, in or about March 2002', which it was said 'the applicant now seeks to tender'. This material was taken from a bundle of documents filed in the proceedings in accordance with directions earlier given for preparation of the matter for hearing. The documents had not, however, been tendered by either party at the hearing. The submissions sought to both further address the relevant law and to advance submissions about this new material. 4 On 16 February 2007, Ms Painter wrote to my Associate, objecting to the course which had been taken for the applicant without notice to the respondent, nor leave of the Court. It was submitted that for the additional material to be received, the applicant would need to seek leave to re-open his case. Such leave would be opposed, because the further submissions were made well after the conclusion of the proceedings; the material sought to be tendered did not form part of the applicant's case in chief and the applicant was not cross examined on it; Ms Sneddon, the second respondent, was defending the proceedings in circumstances there the first respondent, a company in liquidation, was not a participant in the proceedings, had reached an agreement with the applicant not to defend the proceedings and where the applicant had agreed to refrain from enforcing any damages or costs orders against the first respondent. The applicant, with the benefit of hindsight and with the advantage of having seen the second respondent's entire case, sought to re-open. If such leave were granted, an unfairness would result which could not be cured by a costs order. 5 It was also put that the applicant had been represented at trial by a leading law firm and by senior counsel. The conduct of his case must have been a considered and deliberate affair and such late attempts to 'strap up' his case ought not now to be permitted. 6 The matter was relisted on 21 February 2007, when an application for leave was made by Mr Phillips SC, on the basis of short oral submissions. Ms Painter confirmed that the leave sought was opposed and a timetable was fixed for the filing of written submissions on that question. 7 The last of these submissions was filed on 19 March 2007. 8 The respondents' case was that there is a public interest in maintaining the finality of litigation. (See Smith v New South Wales Bar Association (1992) 176 CLR 256 at p 265.) The exercise of the discretion to permit a re-opening was dealt with in Urban Transport Authority of New South Wales v Nweiser (1991) 28 NSWLR 471 at p 476: The primary purpose for the rules pursuant to which cases are contested in this State is the furtherance of the interests of justice. For this reason the exercise of the discretion to allow an application to re-open depends essentially upon the trial judge's view as to whether the interests of justice are served better by granting than refusing the application. Of course, there needs to be finality in litigation and a limit upon the number of issues which it is open to the parties to contest at a hearing. 9 Courts 'will usually be disinclined to grant an application to re-open' where the case has closed (per Clarke J at p 476). This approach was not inconsistent with the High Court's discussion in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, a case concerned with preparation of a case for hearing. 10 Here, the proceedings were lengthy and hotly contested, with the applicant making lengthy written and oral submissions, involving a wide review of the transcript and evidence. The second respondent had met the case advanced on a basis which had been carefully considered, 'based on an interlocking matrix of tactical and strategic approaches'. This had been heightened by the absence of the first respondent as the result of the agreement between the applicant and the first respondent. 11 The applicant's affidavit evidence did not address his conduct after the cessation of his employment and no oral evidence was given about the matter, that it now appeared that there was an apparent lacuna in the applicants presentation of his case, was not a sufficient ground to justify the exercise of the discretion, so as to permit a re-opening. 12 To permit that course would be to the detriment of the second respondent in additional ways, because the evidence sought to be adduced would have to be assessed and consideration given to questions of further cross examination and the calling of further evidence by the second respondent, including medical evidence; an investigation of the applicant's expenses; the nature and extent of advice which the applicant had given evidence about in cross examination, that he was not bound by a restraint; as well as the content and records of the applicant's company. There would also be a necessity to pursue documents from third parties. 13 The applicant's case was that it was in the interests of justice to permit the re-opening, the issue sought to be addressed 'having arisen at the very later stage in the hearing of the case'. The second respondent had access to the financial material now sought to be relied upon. It was the second respondent who chose not to cross-examine on that material. It was conceded that further cross examination and the pursuit of other material might be required as the result of the leave being granted, although it was submitted that such material could have been sought earlier and that some of the second respondent's submissions appeared to be 'somewhat tenuous'. Consideration 14 In JL Holdings the High Court observed at p 154: Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim. 15 Later, as to costs, it was observed at pp 154 - 155: The majority in the Full Court considered that costs are not these days considered the "healing medicine" they once were. They referred to the speech of Lord Griffiths in Ketteman v Hansel Properties Ltd (1996) 189 CLR 146 at 155 and the decision of this Court in The Commonwealth v Verwayen [1987] AC 189. In Ketteman Lord Griffiths said [ Ketteman [1987] AC 189 at 22]: "justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes ... " In this case, which is of a commercial nature, the litigants are on the one side a developer and on the other side government, and there is nothing which would indicate any personal strain which would justify the conclusion that costs are not an adequate remedy for prejudice caused by the amendment sought to the pleadings. 16 The High Court was there concerned with the question of amendment of pleadings in commercial litigation during preparation of the matter for hearing. These circumstances are quite different. They are concerned with an application to re-open a case, made in circumstances where, in determining the matter, the Court is obliged to consider the claims advanced and the granting of any relief under s 106 of the Act, consistently with the requirements of s 106 (5) and (6) which provide: (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. 17 The applicant was bound by restraints, under his contracts with the first respondent. While he gave no evidence in chief about his earnings after termination of his employment, the question was raised with him in cross examination, as was his adherence to the restraints. Despite this cross examination, the documents now sought to be tendered were not relied upon in the applicant's case. 18 Unsurprisingly, given the statutory scheme, the question of how the obligations imposed by s 106(6) should be approached, if the conclusion was reached that the contract was unfair, so that the making of money orders arose for consideration, was raised in submissions. Submissions as to that matter were advanced for both parties and further written submissions were made for the applicant on 13 December, without objection, after the decision had been reserved. 19 It follows that there was obvious difficulty with the way in which further submissions were made and evidence was sought to be tendered for the applicant on 30 January. On this occasion, prior consent was not sought from the second respondent, nor was leave to re-open sought by motion, as the Court's Rules contemplate. 20 The applicant was met with an objection to the oral application for re-opening belatedly made when the matter was relisted on 21 February, with a complaint of unfairness and additional cost, given the need to meet evidence which had always been in the applicant's hands and which the applicant had never sought to address in his case. That the documents now sought to be tendered had earlier been in the second respondent's hands, was no real answer to these complaints. It was material that the second respondent had no obligation to meet, unless it was tendered in the applicant's case. The applicant did not seek to lead the evidence and hence there was no need for it to be met, in the way in which the respondents now outline will be necessary, if the re-opening is permitted. 21 Litigation in proceedings such as this is conducted on a basis that there be no ambush or surprise. While the applicant had produced documents to the second respondent which might be relevant to the question of mitigation, the respondents had not needed to meet that material because it was not material on which the applicant relied. The second respondent concluded her case accordingly. 22 I am satisfied that justice cannot be served by allowing the applicant to re-open his case, a considerable time after judgment was reserved, because of a belated appreciation that there was additional evidence which could have been led, in order to meet the defence which the second respondent mounted. 23 The parties had every opportunity to put their case. The applicant filed his first affidavit evidence in September 2002. The hearing commenced in August 2006 and concluded in December after 8 days of hearing. I am well satisfied that to now permit a re-opening because it is belatedly perceived that a different course to that which was taken in the proceedings, might have been advantageous, is not a proper basis for the exercise of the Commission's discretion. This must be so when consideration is given to the resulting burden which would be imposed on the second respondent. I am not satisfied that a costs order is an adequate basis upon which to deal with the consequences of such a re-opening, particularly having in mind the basis upon which the applicant is conducting this litigation - an agreement with the first respondent which has as its two arms that the first respondent won't appear in the proceedings to resist the claims made and that the applicant will not pursue the first respondent, for any orders made against it. 24 The result of that approach is that the second respondent is alone meeting the applicant's claims, even though it is a contract with the first respondent which is being attacked in these proceedings. 25 As the High Court discussed in Smith v New South Wales Bar Association at pp 266 - 7: If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application [ Barker v Furlong , [1891] 2 Ch 172, at p 184; Hughes v Hill, [1937] SASR 285, at p 287]. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete [As, eg, in Watson v Metropolitan (Perth) Passenger Transport Trust , [1965] WAR 88; Murray v Figge (1974), 4 ALR 612], or one in which reasons for judgment have been delivered [As, eg, in In re Scott and Alvarez's Contract , [1895] 1 Ch 596]. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side [As suggested by Sheppard J in Joyce v GIO (NSW) reported in Ritchie , op cit, vol 2, pp 8551-8552. But cf Watson v Metropolitan (Perth) Passenger Transport Trust; Murray v Figg e; Hughes v Hill .] Orders 26 In this case, I am not satisfied that justice lies in granting the application. Accordingly, the application must be refused. Costs should follow the event on the usual basis. The parties have liberty to approach in that respect if the appropriate order is not agreed. ------------------------ 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.