Clements v Phillips (No. 3)[2023] QIRC 228

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Reasons for Decision

Introduction

1. [1]
   On 24 December 2021, the Queensland Human Rights Commission ('the QHRC') referred a complaint to the Queensland Industrial Relations Commission ('the Commission') filed by Ms Chandra Anne Clements ('the Complainant'), alleging discrimination under the Anti-Discrimination Act 1991 (Qld) ('the AD Act').

2. [2]
   On 07 October 2022, the Complainant filed a Notice of Discontinuance to discontinue Fusable Pty Ltd (ACN 629 348 214) ('Fusable') as the First Respondent in the proceeding.

3. [3]
   On 10 October 2022, an Order was issued confirming the parties to the proceeding pursuant to s 539(b)(i) of the Industrial Relations Act 2016 ('IR Act').

4. [4]
   On 24 October 2022, the Notice of Discontinuance of Fusable was approved by the Commission.

5. [5]
   On 02 December 2022, Mr Darren Phillips filed an application ('the Application') seeking an order to join Richard Marshall, Loulabelle Pty Ltd (ACN 168 277 209), Endellion Technology Pty Ltd (ACN 168 316 685) and Fusable Pty Ltd (ACN 629 348 214) ('non-parties') to be joined pursuant to s 41 of the Industrial Relations (Tribunals) Rules 2011 ('IR rules').

6. [6]
   On 05 January 2023, a mention was held to discuss the Application.

7. [7]
   On 17 April 2023, a Further Directions Order was issued to parties and non-parties to file written submissions for the Respondent's Application.

8. [8]
   On 24 May 2023, the Application was heard in the Commission.

Statutory framework

9. [9]
   Section 41 of the IR Rules provides the following:

41  Directions orders

1. (1)
   The court, commission or registrar may make an order (a directions order) about the conduct of a proceeding on the application of a party or on the initiative of the court, commission or registrar.
2. (2)
   A directions order may, for example, relate to the following—

1. (a)
   the parties who are to be served with applications, related material or other documents;
2. (b)
   requiring evidence of the service;
3. (c)
   another matter relating to service of an application;
4. (d)
   scheduling of conferences, mediation conferences, preliminary hearings and hearings before the court, commission or registrar;
5. (e)
   requiring further and better particulars of an application;
6. (f)
   requiring the applicant to file and serve all material to be relied on in support of the application by affidavit or another form;
7. (g)
   requiring a party to respond to a notice to admit facts or documents;
8. (h)
   requiring the respondent to file and serve material in reply;
9. (i)
   requiring the applicant to file and serve material in reply;
10. (j)
    requiring the parties—

1. (i)
   to confer to agree on matters that can be agreed on; and
2. (ii)
   to identify points in issue; and
3. (iii)
   to report back to the court, commission or registrar;

11. (k)
    requiring the parties to file—

4. (iv)
   a written outline of submissions; or
5. (v)
   submissions about the subject matter of the application;

12. (l)
    requiring—

1. (i)
   evidence to be given by affidavit; or
2. (ii)
   statements to be filed and served, in affidavit form, of the primary evidence of a witness;

13. (m)
    requiring—

1. (i)
   the identification of the provisions of relevant legislation or industrial instruments; and

2. (ii)
   a list of cases to be relied on to be provided;

14. (n)
    requiring submissions in writing to justify the necessity to carry out inspections or hearings at other locations;

12. (o)
    requiring disclosure of documents;

12. (p)
    requiring inspection of documents.

1. (3)
   An application for a directions order about a matter mentioned in subrule (2)(b) to (p) must be in the approved form unless the application was made in a document starting a proceeding.
2. (4)
   A draft of the directions order sought must be filed with the application.

10. [10]
    Section 177 of the AD Act provides the following:

177  Tribunal may join a person as a party

1. (1)
   The tribunal may join a person as a party to a proceeding whether or not the person was a complainant for, or respondent to, the complaint to which the proceeding relates.

2. (2)
   This section does not limit a provision of the relevant tribunal Act about joining a party to a proceeding.

Grounds for Application

11. [11]
    Mr Phillips seeks an order to have the non-parties joined in the proceedings on the following grounds:

The Complainant alleges multiple breaches of Anti-Discrimination Act 1991 (Qld) committed against her by Mr Phillips from July 2020 up to and including December 2020. She alleges that this occurred during her engagement with Mr Phillips and Fusable Pty Ltd which Mr Phillips was working for. During this period, Mr Marshall and Mr Phillips were working together as directors for E-tech.

It was not until 16 June 2021, that Marshall on behalf of Loulabelle Pty Ltd and E-tech (collectively known as the "Marshall Parties") and Darren Phillips on behalf of Darren Phillips Holdings Pty Ltd (collectively known as the "Phillips Parties") signed a Deed of Settlement resolving a dispute that had arisen. As E-tech held shares in Fusable Pty Ltd, the Deed additionally involved Fusable.

Pursuant to the deed, the Marshall parties and E-tech released and discharged the Phillips parties, and each of their officers, shareholders, contractors and employees and/or agents in respect of any and all claims, allegations, demands and causes of action in connection with all dealings between the parties directly or indirectly prior to this date makes them fully and completely accountable.

Submissions

12. [12]
    Mr Phillips submits, in summary, that:

1. (a)
   Endellion Technology Pty Ltd ('E-tech') was at all-times relevant to the conduct complained of in the substantive proceedings the owner of 100% of the share issued in Fusable Pty Ltd;

2. (b)
   together with Richard Marshall ('Mr Marshall'), Mr Philips was a director of E-tech and was the owner of Darren Phillips Holdings Pty Ltd ('DPH');

3. (c)
   DPH held 24.16% shares in E-tech and Mr Marshall’s companies owned 72.5% shares;

4. (d)
   the court has the discretion to order the non-parties to be joined in the proceeding if the parties presence is necessary before the court to adjudicate effectually and completely on all matters in dispute in the proceeding;

5. (e)
   the non-parties were an integral part of the overall operations of E-tech and Fusable and are therefore necessary for the efficiency of the proceedings;

6. (f)
   the absence of the non-parties will invariably prejudice Mr Phillips and lead to an unfair outcome;

7. (g)
   the Respondent referenced Gurtner v Circuit^[1] submitting that matters are not ''effectually and completely 'adjudicated upon' unless…all those who would be liable to satisfy the judgement are given an opportunity to be heard'';

8. (h)
   the non-parties were instrumental in formulating and devising mechanisms to interact with safety consultants including the Complainant;

9. (i)
   the Respondent referenced Peters v Coastace Pty Ltd^[2] ('Peters') as a matter in which interested parties were joined as parties to the proceedings;

10. (j)
    clause 2.5 of the Deed of settlement provides a release and discharge of Mr Phillips in respect of any and all claims; and

11. (k)
    Section 177 of the AD Act has a 'similar effect' to s 69 of the Uniform Civil Procedures Rules 1999 (Qld) ('UCPR')^[3];

Non-parties' submissions

13. [13]
    The non-parties oppose the Application submitting that:

1. (a)
   Mr Phillips had an opportunity to crossclaim against Fusable whilst Fusable was a named Respondent in the proceeding but did not;

2. (b)
   by letter on 23 January 2023, the Commission was previously informed by the non-parties that Fusable was deregistered on 04 January 2023;

3. (c)
   s 601AD(1) of the Corporations Act 2001 (Cth) states that a company ceases to exist on deregistration, and the deregistration of Fusable renders the Application to be futile and ought to be dismissed;

4. (d)
   the Application to join Mr Marshall, Loulabelle and E-Tech ought to be dismissed as they are not necessary to the determination of matters dispute;

5. (e)
   the Complainant continues to press the substantive proceedings against Mr Phillips only and is not pressed against the non-parties;

6. (f)
   the Application is premised on a misconceived understanding and reliance upon an executed Settlement Deed between Mr Phillips and the non-parties;

7. (g)
   clause 2.4 of the Deed provides Mr Phillips' release and discharge of Mr Marshall, Loulabelle, E-Tech (and Fusable) ''in respect of any and all claims, allegations, demands and cause of action in connection with all dealings between the parties … known unknown, evident or latent'';

8. (h)
   The non-parties rely upon the release and discharge in the Deed;

9. (i)
   Clause 2.4 of the Deed bars Mr Phillips' Application, and the non-parties reply upon that bar as a defence', citing the decision in McDonald v Tinbilly Travellers Pty Ltd^[4]:

10. (j)
    by reference to the above-mentioned cases, the Deed that is exhibited to the Affidavit of the Respondent compromises the Respondent's joinder application;

11. (k)
    the Respondent's reliance on Peters is irrelevant as the circumstances in that matter are in quite stark contrast to the present where the Respondent merely relies on E-Tech's share ownership of Fusable (now deregistered) to substantiate its joinder application;

12. (l)
    Mr Phillips' submission that the presence of non-parties is imperative as they were an integral part of the overall operation of E-Tech and Fusable can be held no higher than mere ipse dixit given that it is well established law that a company (Fusable) is a separate legal entity (to that of E-Tech);

13. (m)
    the simple answer to clause 2.5 of the Deed relied upon by the Respondent is that none of the Marshall parties or E-Tech are bringing any claims against the Respondent and the Complainant is not bringing a claim against the non-parties^[5];

14. (n)
    there is no indemnity in the Deed from the non-parties to Mr Phillips that indemnifies Mr Phillips from third party claims that are brought at any time^[6];

15. (o)
    There is a significant delay in Mr Phillip's Application and a significant period of time has expired before the Application was filed;

16. (p)
    the Application will significantly delay the substantive proceeding for the Complainant as the Complainant is seeking an order against the Respondent only^[7];

17. (q)
    the term 'Respondent' is defined in schedule 1 of the AD Act^[8] as ''a person alleged in the complaint to have contravened the Act''; the Complainant does not make allegations that any of the non-parties have contravened the Act.

18. (r)
    the Commission has no power to make declarations or make decisions in relation to whether the Respondent and the non-parties pursuant to a contract or a deed have certain rights or obligations^[9];

19. (s)
    consequently, it is a matter that needs to go to court of competent jurisdiction as it is not an issue within the jurisdiction of the AD Act and the Application will be fruitless exercise because of the orders which are not within the jurisdiction^[10];

20. (t)
    the non-parties are not in the position to waive the rights of the Complainant as the Complainant is a third party, further submitting that cl 2.5 of the Deed does not indemnify Mr Phillips against third party claims.

Complainant's Submissions

14. [14]
    The Complainant opposes the Application, referring to the length of time since the complaint was made to the QHRC on 04 April 2021.

15. [15]
    With reference to Mr Phillips' submission regarding Mr Marshall's approval of termination, the Complainant submits that the substantive matter is not an unfair dismissal claim and the non-parties were not present in any way.^[11]

16. [16]
    The Complainant made submissions about the significant disadvantage cause by the delay of the proceedings.^[12]

Consideration

17. [17]
    As outlined in Parker v Two Champions Pty Ltd,^[13] the Court of Appeal observed in Just GI P/L v Pig Improvement Co Aust P/L^[14] that the discretion to join a party to a proceeding requires a 'balancing exercise' of the advantages and disadvantages in considering whether to grant the application to join.

18. [18]
    In Sailor v Hubbucks & Black & White (Quick Service) Taxis Ltd ('Sailor')^[15] the Tribunal referred to the factors outlined in H v T^[16]  as relevant to the exercise of discretion in matters involving an application to join a party. These factors include the following:

    1. a.
       the strength or weakness of the case advanced against the present respondent and against the proposed respondent;

    2. b.
       the fact that the proposed respondent had not been a party to the assessment and conciliation process provided by the Act;

    …

    1. d.
       the lack of any real utility in joining the proposed respondent because relief against it would have no practical effect; and

    2. e.
       the length of time that the complaint had been on foot, the stage of the proceedings at which the application was made, whether there was any explanation for the delay in making the application and whether joinder would delay the hearing and determination.

    19. [19]
        I have not yet formed a view as to the strength or weakness of the case against Mr Phillips, however it is clear that there is unlikely to be any case against the non-parties given the nature of the complaint. The Complainant makes no allegations about the conduct of the non-parties and the only person who is alleged to have contravened the AD Act in the complaint is Mr Phillips.

    20. [20]
        The usual process for a complaint to be made is to the QHRC before a period is allowed for conciliation of the complaint prior to referral to the Tribunal for determination. As noted in Sailor, to join someone as a party that had not been involved in the assessment and conciliation procedures under the AD Act would be to disregard the normal process. I accept the comments in H v T^[17] where the Member considered that in general it is highly undesirable for the statutory process of acceptance of a complaint, conciliation of a complaint, and referral to be discarded noting that the majority of complaints are resolved without reference to the Tribunal. Joining the non-parties at this late stage in the process would deny them the opportunity to engage in the conciliation process as is the usual course of events. Alternatively, if the non-parties were to be joined, the process may have to be 're-set' to allow the non-parties to participate in conciliation causing significant time delay.

    21. [21]
        I also note the concerns raised in Q v X^[18] that there may well be jurisdictional concerns about the ability of a Tribunal to allow a joinder of a party against whom the original complaint was not made in circumstances where the usual process of referral has not been followed.

    22. [22]
        The utility of joining the proposed respondents is limited in circumstances where no contraventions are alleged and therefore no order is likely to be made. There would be no practical effect if the non-parties were to be joined to this complaint.

    23. [23]
        The factor upon which I have placed considerable weight in considering this application is the length of time that the matter has been on foot. The complaint was first made to the QHRC on 04 April 2021 and this application was filed on 02 December 2022. By the time this application was made the parties had filed statements of facts and contentions, exchanged witness lists and filed outlines of argument. The matter is now ready to be scheduled for hearing and determination. If parties are to be added to the complaint at this late stage, directions would need to be issued allowing all parties to file or amend documents, witness lists, and disclosure lists. This alone would likely result in a significant delay in the matter being heard and determined. Mr Phillips had the opportunity to make application to join the non-parties at any time following receipt of the complaint, and no reasonable explanation was provided as to why this did not occur at an earlier time. The delay in bringing this application raises the prospect of significant disadvantage to the Complainant in terms of both time delay and inconvenience.

    24. [24]
        The prejudice to the non-parties should also be noted in that not only will they be liable for their own legal costs and subjected to considerable inconvenience, they may also be liable for a potential costs order. Given that no claim has been made against the non-parties I do not consider that a costs order is a likely concern, however I am mindful of the general prejudice to the non-parties if they were to be joined in this application. If the case against the non-parties were strong no weight would be given to these factors, however there is effectively no case against the non-parties. I also note that the term 'Respondent' is defined in schedule 1 of the AD Act as:

    Respondent, in relation to a complaint, means a person alleged in the complaint to have contravened the Act.

    25. [25]
        As previously noted, there are no allegations made in the complaint that the non-parties have contravened the AD Act, thereby placing them outside the definition of 'Respondent'.

    26. [26]
        The essence of Mr Phillip's submissions in support of the application relate to a deed of settlement signed between himself and the non-parties. The deed includes a clause in which the deed signatories provide a mutual release and discharge against any and all claims against each other. If there is a finding of liability against Mr Phillips in this matter, he has the opportunity to enforce any rights he believes arise out of the deed in a court of competent jurisdiction.

    27. [27]
        Rule 69 of the UCPR, which Mr Phillips submits has a similar effect to s 177 of the AD Act, provides any of the following persons may be included as a party:

    1. (i)
       a person whose presence before the court is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in the proceeding;
    2. (ii)
       a person whose presence before the court would be desirable, just and convenient to enable the court to adjudicate effectually and completely on all matters in dispute connected with the proceeding.

    28. [28]
        I am not persuaded that the joinder of the non-parties will assist with the determination of all matters in dispute in the proceeding. Nor am I persuaded that the non-parties will enable an effective and complete adjudication on all matters in dispute connected with the hearing.

    Conclusion

    29. [29]
        After considering the matters outlined above and the nature of the complaint, I am of the view that the joinder application should be dismissed.

    Order

    30. [30]
        I make the following order:

    The application to join the non-parties is dismissed.

    Footnotes

    [1] [1968] 2 QB 587, 602-603.

    [2] (2006) 227 ALR 750.

    [3] T1.4, L 23.

    [4] [2006] QIRC 122.

    [5] T1.7, L 46-47; T1.8, L 1-4.

    [6] T1. 8, L 38-40.

    [7] T1.10, L 19 and L 24 -25.

    [8] T1.7, L17 – 20.

    [9] Ibid, L 31-33.

    [10] Ibid, L 34-37.

    [11] T1.13, L 1-3.

    [12] T.13, L 26-28.

    [13] [2018] QCAT 13.

    [14] [2001] QCA 48.

    [15] [2006] QADT 45.

    [16] [2006] QADT 20.

    [17] Ibid [31].

    [18] [2010] QCAT 297.