FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Inspector Lam [2018] FCA 1379

ORDERS

THE COURT DECLARES THAT:

1.    The notice to produce records or documents addressed to the “Proper Officer of the Maritime Union of Australia” issued by the respondent on 22 December 2017 is void and of no effect and the applicant is not required to comply with it.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMBERG J:

1    The respondent (“Mr Lam”) is an inspector appointed to the position of Fair Work inspector (“inspector”) pursuant to s 700 of the Fair Work Act 2009 (Cth) (“FW Act”). On 22 December 2017, Mr Lam issued a notice (“notice”) addressed to the Maritime Union of Australia (“MUA”). The notice sought the production of various documents.

2    At the time the notice was issued, the MUA was an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (“FW (RO) Act”). Following the issue of the notice, and pursuant to the FW (RO) Act, the MUA amalgamated with another union to form the Construction, Forestry, Maritime, Mining and Energy Union (“CFMMEU”). It was not in dispute that, by reason of s 78 of the FW (RO) Act, the notice served on the MUA is deemed to have been served on the CFMMEU and that accordingly, it is compliance by the CFMMEU which the notice calls for.

3    By this application, the CFMMEU asserts that the notice served upon the MUA is invalid. The CFMMEU seeks declarations to that effect.

4    There is no contest as to the Court’s jurisdiction. The CFMMEU invokes s 562 of the FW Act on the basis that the validity of the notice issued or purportedly issued under s 712 of the FW Act is a matter arising under the FW Act.

5    It is necessary to set out the terms of the notice. The notice states that Mr Lam requires the proper officer of the MUA to produce various documents “pursuant to s 712 of the [FW Act]”. There are six categories of documents listed. Each is expressed to relate to or be concerned with, “work stoppages at the Port of Melbourne precinct on Friday 8 December 2011”. The six categories are as follows:

1.    Copies of all correspondence and communications issued by the MUA to members and officials of the MUA that relate to work stoppages at the Port of Melbourne precinct on Friday 8 December 2017;

2.     All records or documents of any meetings, telephone discussions, social media posts, emails, correspondence or other communications concerning work stoppages at the Port of Melbourne precinct on Friday 8 December 2017 between the MUA and businesses operating at the Port of Melbourne precinct, including but not limited to:

a.    Victorian International Container Terminal Ltd trading as VICT (VICT);

b.    DP World Australia Ltd trading as DP World Australia;

c.    Patrick Stevedores Holdings Pty Ltd trading as Patrick;

d.    Svitzer Australia Pty Ltd trading as Svitzer Australia (Svitzer).

3.     All records or documents in the MUA’s possession which have the subject of, or make reference to, arrangements for work stoppages at the Port of Melbourne precinct on Friday 8 December 2017, including but not limited to;

a.    Time and duration of work stoppages; and

b.    Transportation between worksites and the Port of Melbourne precinct.

4.    All records or documents of any meetings, telephone discussions, social media posts, emails, correspondence or other communications between the MUA and the Victorian Trades Hall Council (VTHC) concerning work stoppages at the Port of Melbourne precinct on Friday 8 December 2017;

5.     All records or documents of any meetings, telephone discussions, social media posts, emails, correspondence or other communications between Mr Ian Bray, Assistant National Secretary of the MUA (Mr Bray), and officers and employees of Svitzer concerning work stoppages at the Port of Melbourne precinct on Friday 8 December 2017;

6.     All records or documents in the MUA’s possession that identify any members and officials of the MUA who participated in work stoppages and the picket at the Port of Melbourne precinct on Friday 8 December 2017 including, but not limited to, photographs, video footage, social media posts, emails and text messages.

6    Under the description of the documents sought, the notice says this:

The production of the above records and/or documents is required for the purpose of determining whether the [FW Act] is being or has been compiled with, specifically Part 3-3 (compliance with industrial action provisions).

7    The CFMMEU relied on an affidavit of its solicitor which exhibited a copy of the notice and otherwise included communications between that solicitor and Mr Lam’s employer, the Fair Work Ombudsman (“FWO”). Those communications are of no relevance to the matters I need to decide and I need not consider them further. Mr Lam relied on two affidavits of Ms Jacqueline Irwin, another inspector employed by the FWO. The matters dealt with in those affidavits were sought to be relied upon to establish that the CFMMEU must have been aware of certain matters either expressly or inferentially referred to in the notice. I have considered those matters. If at all relevant, I regard those matters to be of no import to my determination of the validity of the notice.

8    Section 706 of the FW Act sets out the purpose for which the powers conferred upon an inspector may be exercised. In particular, s 706(1)(a) provides that an inspector may exercise “compliance powers” for the purpose of “determining whether this Act or a fair work instrument is being, or has been, complied with”. Section 712(1) of the FW Act provides that an inspector may require a person, by notice, to produce a record or document to the inspector. Such a notice must be in writing and be served on the person in question (s 712(2)). The person served with a notice must not fail to comply with it unless the person has a “reasonable excuse” (s 712(3) and (4)). A person who fails to comply with a notice is, in the absence of reasonable excuse, liable to be punished by the imposition of a civil penalty (s 712(3)).

The Applicable Principles

9    The principles relevant to considering the validity of a notice issued pursuant to s 712 were recently addressed by Logan J in Construction, Forestry, Mining and Energy Union v Alfred (2016) 242 FCR 35. In that case, Logan J dealt with a challenge to the validity of a notice on grounds similar to those raised in this proceeding.

10    Logan J principally relied on the observations made by Bowen CJ and Neaves J in Bannerman v Mildura Fruit Juices Pty Ltd (1984) 2 FCR 581 at 584, which his Honour set out at [12] of his judgment as follows (emphasis added):

The requirement that a notice under sub-section 155(1) [of the Trade Practices Act 1974 (Cth)] identify the matter that constitutes, or may constitute, a contravention of the Act has a twofold purpose. First it is necessary that the notice disclose on its face that it is an exercise of the power which the subsection confers. That power depends upon the existence, objectively determined, of a "matter", in the sense in which that expression has been explained in earlier decisions of the court, that constitutes, or may constitute, a contravention of the Act and a belief in the person issuing the notice that the recipient is capable of furnishing information or producing documents relating to the matter so identified. Secondly, the identification of the matter that constitutes, or may constitute, a contravention of the Act provides for the recipient the point of reference by which to judge whether the notice validly requires the specified information to be furnished or the specified documents to be produced. It will only validly do so if the information and the documents specified in the notice can be seen, from the face of the notice itself, to be information or documents that relate to a matter of the kind described in the subsection and identified in the notice.

11    Logan J did not expressly consider whether the terms of s 115 of the Trade Practices Act 1974 (Cth) (as considered in Bannerman) were materially different to those of ss 706(1)(a) and 712 of the FW Act. Rather, at [15]-[16] his Honour noted that in relation to a predecessor provision to s 712 of the FW Act in the Workplace Relations Act 1996 (Cth) (“WR Act”), both Heerey J in Thorson v Pine [2004] FCA 805, at the interlocutory stage, and Marshall J in Thorson v Pine [2004] FCA 1316, at the final stage, regarded the observations made in Bannerman as relevant by analogy to the operation of a notice under s 86(1A)(c) of the WR Act. Logan J relied on those authorities.

12    In Thorson, Marshall J rejected a submission that the observations in Bannerman were not relevant to the requirements of s 86(1) of the WR Act which, for relevant purposes, may be regarded as the legislative predecessor to s 706(1)(a) of the FW Act. His Honour regarded the observations in Bannerman to be relevant because each of the provisions in question included a similar pre-condition on the exercise of the power of the person issuing the notice. At [34], Marshall J said this:

Counsel for the applicants drew the Court’s attention to cases dealing with notices given pursuant to s 155 of the Trade Practices Act 1974 (“the TPA”). Counsel for the inspector sought to downplay the significance of such cases by reference to the different phraseology used in the TPA when compared to the Act. Counsel drew attention to the opening words of s 155(1) which refer to where there is “reason to believe that a person is capable of producing documents...relating to a matter that constitutes...a contravention of this Act...”. They contended that it was a precondition to the exercise of s 155 that there was a reason to believe that a purpose was capable of producing the documents sought, whereas, it was submitted, there is no precondition to the exercise of power under s 86. However, as counsel for the applicants demonstrated, there is also a precondition to the exercise of the power contained in s 86. The precondition is that the purpose identified in the notice is one which is referable to s 86(1). I therefore reject the submission put on behalf of the inspector that cases such as Bannerman v Mildura Fruit Juices Pty Ltd (1984) 2 FCR 581 are not relevant to the issue before the Court.

13    In that case, the notice in question did not disclose the inspector’s purpose. Marshall J held at [32], that to be valid a notice must, on its face, be demonstrably relevant to a purpose referred to in s 86(1). At [36] Marshall J observed that the notice did not disclose a purpose referrable to s 86(1) as it failed to identify any sections of the WR Act, any terms of an award or awards (or employment contracts in Victoria) or any terms of certified agreements or agreements. His Honour concluded that the notice “gives the recipient no point of reference by which to judge whether the notice validly requires the specified documents to be produced”.

14    At [37]-[44] Marshall J rejected the proposition that by the use of the power to issue notices under the WR Act, an inspector was “entitled to engage in a roving enquiry”.

15    In Pine, Heerey J said this at [8]:

It is not to the point that the recipient may suspect that the inspector has in mind some particular award or agreement or requirement of the Act. Nor is it any answer that subsequent to the issue of the notice the inspector has provided information as to what she has in mind. This is a question of validity. The notice when issued is either valid or it is not. This is a matter of legal power.

16    The Explanatory Memorandum to the Fair Work Bill 2008 at [2655] referred to the judgment of Marshall J in Thorson, noting that that judgment considers “content requirements for notices to produce”. The Explanatory Memorandum then said this:

This case determined that in order to be valid, a notice to produce must, on its face, identify the specific purpose for which the notice is issued.

17    The CFMMEU also relied upon two other relevant authorities. In SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357, Fisher and French JJ (at p 370) made the following observations in reference to the judgment in Bannerman:

It is clear from what follows in that judgment that the description of the relevant "matter" must go beyond a mere assertion that it constitutes or may constitute a contravention of some identified section. The notice must disclose the necessary relationship between the information sought and the matter in respect of which it is sought. This requires a sufficient description of the "matter" to enable the relationship to be discerned. We shall refer to this for convenience as the "entitlement disclosure condition".

18    The recent judgment of the Court of Appeal of the Supreme Court of Victoria in Aurora Construction Materials Pty Ltd v Victorian WorkCover Authority [2018] VSCA 165 was also relied upon. That case concerned a notice issued by the Victorian WorkCover Authority pursuant to s 9(1) of the Occupational Health and Safety Act 2004 (Vic) (“OHSA”) which provided as follows:

9    Power to obtain information

(1)    For the purpose of ascertaining whether this Act or the regulations have been complied with or of investigating a suspected contravention, the Authority may (by written notice) require a person to —

(a)    give the Authority such information as the Authority requires; or

(b)    produce a document in the custody or control of the person.

19    The relevant part of the notice in question was in these terms:

1.    The Victorian WorkCover Authority (the Authority) is conducting an investigation arising from a workplace incident that occurred on Bulla Road, Bulla, Victoria on 5 December 2011. In that incident, [the driver] sustained serious injuries when the Kenworth (2008) T350 Concrete Agitator he was operating failed to brake (the incident).

Requirement to Give Information Pursuant to s 9(1)(a) of the Act:

2.    For the purpose of investigating suspected contraventions of the Occupational Health and Safety Act 2004 (and associated regulations), the Authority requires [the recipient] to give the Authority the information described in Schedule 1 to this Notice by 4:30pm on 06/10/2014 (the Compliance Date).

20    In the leading judgment of the Court of Appeal delivered by Kaye JA (with whom Tate JA agreed (at [48])), Kaye JA (at [78]) observed that prior authority including the observations of Bowen CJ and Neaves J in Bannerman, Marshall J in Thorson and Logan J in Alfred to which Kaye JA subsequently refers, were based on general principles and were applicable to the general class of provisions to which s 9 of the OHSA belonged.

21    At [79], Kaye JA said this (emphasis added);

The fundamental principle, discussed in the cases, is that a notice, requiring the compulsory provision of information or documents, must fulfil two important conditions. First, the notice must disclose, on its face, that it is an exercise of the power which is conferred on the Authority by the statutory provision in question. Secondly, the notice must specify, with reasonable clarity, the information that the recipient is required to provide, or the documents that the recipient is required to produce, so as to enable it to be judged whether the Authority in question is entitled to require the provision of the information or documents stipulated in the notice.

22    At [87] Kaye JA expanded upon the second requirement (emphasis added):

[T]he requirement, that the notice must demonstrate, on its face, that the Authority is entitled to the documents or information sought in the notice, has the effect that the notice must sufficiently specify the suspected contravention, or contraventions, that is or are the subject of the investigation, pursuant to which the information and documents are sought. In the absence of that specification, the recipient of the notice would not be able to assess, first, whether the Authority is entitled to demand the production of information and documents to it, and, secondly, whether the documents and information, specified in the particular notice, are within the ambit of that entitlement of the Authority.

23    At [92] Kaye JA emphasised that whether a notice is sufficiently informative to satisfy the requisite disclosure is to be assessed by reference to all of its terms. His Honour said this (citations omitted):

The principles, discussed above, do not require that a notice specify, in precise terms, the actual provision, or provisions, of the OHSA or regulations which, it is suspected, have been contravened. In the context of s 9 of the OHSA, what is necessary is that the notice sufficiently inform the recipient of the nature of the particular suspected contravention or contraventions, so that the recipient can sensibly assess whether the Authority has the power to require the provision to it of documents and information, and, further, whether the information and documents, sought in the notice, may relate to the suspected contravention that is the subject of the investigation by the Authority.

24    By way of a caution which, in my view, is equally applicable to a notice issued under s 712(1) of the FW Act, at [88] Kaye JA expressed the following caveat (citations omitted):

In addressing that question, it is important to bear in mind that the information and documents, specified in a notice under s 9, are sought for the purposes of an investigation which may not be complete. As the respondent has correctly pointed out, the information and documents, sought in such a notice, may be necessary to fill in gaps of information, or to elucidate matters which are unclear. The investigation in question may be at an incipient or early stage. For those reasons, in considering the validity of the notice in a particular case, it is important to bear in mind the caution, that has been reiterated in a number of the cases, that the issue, of the validity of such a notice, should not be addressed in an over-technical or hyper-critical manner. That caveat is of particular relevance to the service of notices under the OHSA, which has, as its express object, the securing of the health, safety and welfare of employees and other persons at work, and the elimination of risks to the health, safety or welfare of employees and other persons at work.

Consideration

25    As the FWO conceded, an inspector issuing a notice pursuant to s 712 of the FW Act, is not at large. That is so because s 706 of the FW Act requires that the “compliance powers” conferred upon an inspector must be exercised for one or more of the purposes identified by that provision.

26    Broadly stated, the general principle which emerges from the authorities is that a notice compelling the production of documents, issued in the exercise of a statutory power conditioned by a particular purpose, will need to demonstrate (on its face) that it is a proper exercise of the power made in furtherance of the particular purpose.

27    Consistently with that principle and the authorities which have specifically considered ss 706 and 712 (and their legislative predecessors), for a notice issued under s 712 of the FW Act to be valid it must, on a non-technical and fair reading of its terms:

(a)    disclose that it is an exercise of the power which is conferred on an inspector by s 712; and

(b)    (i)    specify with reasonable clarity the records or documents that the recipient is required to provide; and

(ii)    disclose the relationship between the records or documents being required and the matter (the particular inquiry as to non-compliance) which is the subject of the exercise of the power,

so as to enable its recipient to determine whether the inspector is exercising the power for a “compliance purpose” (s 706(1)).

28    In this case, the terms of the notice suggest that the particular compliance purpose, as specified by s 706(1)(a) of the FW Act, is that of “determining whether this Act… is being, or has been, complied with”.

29    Where, however, s 706(1)(a) speaks of compliance with “this Act”, it must be understood to mean compliance with a particular provision or provisions of the FW Act. That observation is important, because it assists in identifying the extent of the information that needs to be given by a notice issued under s 712. If the purpose of the exercise of the power is to issue a notice to determine whether a particular provision or provisions of the FW Act, is or are being, or has or have been, complied with, then, in order to enable the determination that the recipient of the notice must be enabled to make, it will ordinarily be necessary for the notice to identify the provision or provisions of the FW Act which are the subject of the inspector’s inquiry as to compliance.

30    I reject the CFMMEU’s submissions to the extent that they suggested that it will always be essential for validity, that a notice expressly specify the particular provision or provisions which found the inspector’s inquiry as to compliance. Consistently with the observations made by Kaye JA at [92] of Aurora, it would be sufficient if, by informing its recipient of the nature of the suspected contravention, the notice discloses the provision or provisions in question and thereby enabled its recipient to sensibly assess whether the issuer of the notice was validly compelling the production of the particular documents required by the notice. An overly-technical approach as to whether the notice is sufficiently informative is to be avoided.

31    Applying that approach to the notice here leads me to the conclusion that the notice is invalid. The notice does not enable its recipient to determine whether the inspector is entitled to require the records or documents specified by the notice. Principally, the problem arises because Mr Lam has specified his purpose in overly broad and thereby ambiguous terms. The notice states that purpose as being the determination of “whether the [FW Act] is being or has been complied with, specifically Part 3-3 (compliance with industrial action provisions)”.

32    That statement of purpose is to be sensibly read as intending to say that the purpose of the exercise the power to issue the notice is to determine whether particular provisions found in Pt 3-3 of the FW Act are being or have been complied with. There are, however, eleven provisions in Pt 3-3 which may be the subject of a contravention. In an agreed summary, the parties identified the civil penalty provisions in Pt 3-3 in the following table:

33    Whilst each of the provisions identified in the table has some connection with the taking of industrial action, their nature is disparate. Some of the provisions (ss 417(1), 421(1) and 434) deal directly with the taking of industrial action; others do not. Sections 458(2), 462(1) and (3), 463(1) and (2) and 467(1) are concerned with the integrity of protected action ballots. The concern of ss 470(1), 473(1) and (2), 474(1) and 475(1) and (2), is not the taking of industrial action itself but the unlawful payment of wages in respect of periods of employment when particular industrial action was taken.

34    The failure of Mr Lam to expressly identify the particular provisions that founded his compliance inquiry may have been overcome if the notice had made the nature of the suspected contraventions discernible. However, the notice’s reference to Pt 3-3 in the context of the disparity of the subjects addressed by the civil penalty provisions in that Part, makes it difficult to discern from the face of the notice, the nature of the suspected contravention or contraventions and thus the particular provision or provisions in Pt 3-3 that provide the foundation for the notice’s requirement that particular documents be produced.

35    The categories of documents sought by the notice are broadly described. For most of the categories, the documents sought need only relate to, concern or make reference to work stoppages at a specified location on a specified day. The nexus with industrial action is very broad. The requirement to produce the documents specified may be founded upon a suspicion of a contravention of those provisions in Pt 3-3 directly concerned with the taking of industrial action. It may also be founded upon, or perhaps only be founded upon, a suspicion that the provisions in Pt 3-3 dealing with unlawful payments have been contravened. Read as a whole and avoiding an overly technical approach, despite the broad nature of the descriptions in question, a suspicion founded upon a contravention of the protected action ballot provisions does not emerge.

36    Nevertheless, there is sufficient ambiguity as to the legislative foundation for the requirement to produce the various categories of documents sought by the notice to justify the conclusion that, on its face, the notice fails to enable its recipient to determine, with reasonable clarity, the documents required and the relationship between those documents and the inspector’s inquiry as to non-compliance.

37    A further basis relied upon by the CFMMEU to substantiate its contention that the notice is invalid, was that the documents required by the notice are not specified with sufficient clarity because two expressions used in relation to each category of documents sought, are vague, ambiguous and non-specific. The phrases impugned are “work stoppages” and “Port of Melbourne precinct” found in each of paragraphs 1 to 6 of the notice.

38    I accept, as the CFMMEU submitted, that the phrase “work stoppages” is capable of including any stoppage of work for any purpose including a stoppage of work authorised by an employer which is not capable of constituting “industrial action” within the meaning given to that phrase by s 19(1) of the FW Act. However, the phrase must be read in its context. The context provided by the notice, including by the notice’s reference to compliance with the FW Act and the fact that it is directed to a union, makes it sufficiently apparent (on a non-technical and fair reading) that the phrase is limited to work stoppages capable of being characterised as involving the taking of industrial action. I reject the CFMMEU’s contention that sufficient ambiguity arises from the use of the phrase “work stoppages”, to justify a conclusion that the notice is invalid.

39    Unlike a reference to a suburb like “Port Melbourne”, the expression “Port of Melbourne” was not suggested to be an expression in relation to which there is a common understanding as to its geographical boundaries or a ready capacity to ascertain those boundaries. That Melbourne has a commercial port is a matter of common understanding. As a matter of common understanding, that port would be regarded as constituted by various docks and related infrastructure in and around the mouth of the Yarra River. However, it was not suggested that the boundaries of the port are the subject of any particular designation whether official or not. When that expression is used for the purpose of enabling a judgment to be made as to whether or not a specific workplace or business is within its bounds, the description provided may only be regarded as loose.

40    The expression “the Port of Melbourne precinct” is looser still. The additional word “precinct” connotes the area adjacent to or associated with the core area of the “Port of Melbourne”.

41    Despite the loose nature of the expression, the notice has given the expression “the Port of Melbourne Precinct” a very specific application, in the sense that, compliance with the notice requires identification of whether specific workplaces or specific businesses fall within or outside of the description. That is so because paragraph 2 of the notice refers to “businesses operating at the Port of Melbourne precinct” and because elsewhere in the notice, “the Port of Melbourne precinct” is the locational description given for the central phrase “work stoppages”. By their nature, work stoppages occur at work places and, accordingly, the notice imposes a requirement for an assessment to be made as to whether particular workplaces are within or outside of the loose locational description given.

42    It is apparent then that the use of the expression “the Port of Melbourne precinct” creates significant ambiguity. In a context where the receiver of the notice is liable for civil penalties for non-compliance with the notice, the uncertainty of the locational qualifier given in the description of the documents being sought enables a conclusion that the notice fails to specify with reasonable clarity the records or documents that the recipient is required to provide. For that reason also, the notice is invalid.

43    For those reasons, a declaration should be made that the notice is void and of no effect and that the CFMMEU is not required to comply with it. No order for costs was sought and no such order should be made.

Associate:

Dated:    7 September 2018