FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited [2012] FCAFC 193

THE COURT ORDERS THAT:

1.    The application for leave to appeal is granted.

2.    The appeal is allowed.

3.    The order of the Federal Magistrates Court of 27 February 2012 is set aside.

4.    The matter is remitted to the Federal Magistrates Court to hear and determine in accordance with these reasons for judgment.

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

REASONS FOR JUDGMENT

marshall J

1    The matter before the Court raises the question of the effect of State limitation of actions legislation upon federal enactments. The application for leave to appeal and the ventilation of the grounds of appeal raise for specific consideration the question whether s 79(1) of the Judiciary Act 1903 (Cth) (“the Judiciary Act”) makes s 18 of the Limitation Act 1969 (NSW) (“the Limitation Act”) applicable to certain actions, based on provisions contained in the Workplace Relations Act 1996 (Cth) (“the WR Act”) as in force on 23 March 2006 (“the Pre-Reform WR Act”) and thereafter (“the Work Choices Act”).

2    A federal magistrate (Raphael FM) held that the Limitation Act applied to two relevant actions before the Court below. That conclusion is challenged on this application for leave to appeal. The application for leave was, with the consent of the parties, heard at the same time as the appeal.

3    The questions for determination are as follows:

1.    Can s 18(1) of the Limitation Act apply to a Commonwealth enactment?

2.    Are the provisions of the WR Act sought to be relied upon by the applicant “actions on a cause of action to recover a penalty”?

3.    Did the WR Act and other transitional legislation “otherwise provide” under s 79(1) of the Judiciary Act?

For reasons of convenience, the third question will be dealt with first.

4    The applicant, Fair Work Ombudsman (“FWO”), seeks leave to appeal from an interlocutory judgment of the Federal Magistrates Court, which summarily dismissed parts of a proceeding which FWO had instituted against the respondent, Toyota Material Handling (NSW) Pty Limited (“Toyota”). Counsel for Toyota conceded that if the appeal raised any meritorious point, leave should be granted and the appeal considered by this Full Court. As the appeal has raised one such point, it is appropriate to grant leave. The issue which should be determined in favour of the applicant is the third and last of those mentioned in the paragraph above. This issue was not raised before the Court below, although leave was granted, without opposition, for the applicant to raise the matter before this Court. It was appropriate for that to occur, otherwise, an incorrect legal result would have ensued.

THE PROCEEDING BELOW

5    FWO filed the proceeding in the Court below on 28 June 2011. Amongst the contraventions alleged in the application and statement of claim, FWO sought the following pecuniary relief:

    Orders pursuant to s 170VV of the Pre-Reform WR Act that Toyota pay penalties in respect of its alleged contravention of sub-section 170WG(1) and s 170VP of the Pre-Reform WR Act.

    Orders pursuant to s 407 of the Work Choices Act that Toyota pay penalties in respect of its alleged contravention of sub-sections 337(8), 337(9) and s 400(5) of the Work Choices Act.

6    The Federal Magistrate struck out the parts of the proceeding referred to in the preceding paragraph. His Honour considered that the claims were statute-barred, having been commenced after the expiry of the applicable limitation period for their commencement.

7    Section 170WG(1) of the Pre-Reform WR Act provided:

A person must not apply duress to an employer or employee in connection with an AWA or ancillary document.

Section 170VV of the Pre-Reform WR Act gave an eligible court, such as the Court below, power to impose a penalty on a person for contravention of a civil penalty provision including s 170WG(1).

8    Section 337 of the Work Choices Act dealt with the pre-lodgement procedure required where an employer intended to have a workplace agreement approved by the Australian Industrial Relations Commission. Certain procedural requirements were contained in s 337 (sub-sections (1), (2) and (3)). Section 337(8) and (9) provided that an employer contravened that section if the employer lodged a workplace agreement and failed to comply with the stipulated procedure. Section 337(10) provided that s 337(8) and (9) were “civil remedy provisions”.

9    Section 400(5) of the Work Choices Act provided:

A person must not apply duress to an employer or employee in connection with an ITEA.

An ITEA was an “individual transitional employment agreement”. Under s 407(2), s 400(5) is listed as a civil penalty provision. Section 407(1) of the Work Choices Act gave the Court below power to order a person who contravened a civil penalty provision to pay a pecuniary penalty.

10    An action based on a breach of s 170WG(1) of the Pre-Reform WR Act may be characterised as an action seeking the imposition of a civil penalty under s 170VV of the Pre-Reform WR Act. An action based on breaches of sub-sections 337(8), 337(9) and s 400(5) of the Work Choices Act may be characterised in the same way. In dealing with an analogous provision, in which the Court was empowered to impose a penalty for breach of an industrial award, a Full Court of the Federal Court described the proceeding as a civil proceeding for the recovery of a penalty; see Gapes v Commercial Bank of Australia Ltd [No 2] (1979) 27 ALR 87, especially at 111, per J.B. Sweeney J with whom Evatt and Deane JJ agreed.

11    The Federal Magistrate observed that each of s 170VV of the Pre-Reform WR Act and s 407 of the Work Choices Act did not provide a time limit for the institution of a proceeding. His Honour accepted the submission of Toyota that s 18 of the Limitation Act applied to causes of action based on the above provisions. The Limitation Act was said to apply as a consequence of the operation of s 79(1) of the Judiciary Act which provides:

The laws of each State or Territory, including the laws relating to procedure, evidence and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

12    Section 18 of the Limitation Act is headed “Penalty and forfeiture”. Section 18(1) provides:

An action on a cause of action to recover a penalty or forfeiture, or sum by way of a penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

The acts said to constitute contraventions of the Work Choices Act and the Pre-Reform WR Act occurred more than two years before the commencement of the proceeding in the Court below. In striking out the parts of the application referred to above, Raphael FM said at [20]:

I have come to the conclusion that by virtue of s. 79 of the Judiciary Act 1903 that s. 18 of the NSWLA [the Limitation Act] does apply to these proceedings and that the relevant limitation period for commencing these actions for a pecuniary penalty is two years.

Does commonwealth legislation “otherwise provide”?

i.     First positive answer

13    On the assumption that s 79(1) of the Judiciary Act is capable of making s 18 of the Limitation Act apply to actions based on s 170VV of the Pre-Reform WR Act and s 407 of the Work Choices Act, the question arises as to whether the laws of the Commonwealth have “otherwise provided”.

14    The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (“the Transitional Act”) is a law of the Commonwealth which has otherwise provided. The Transitional Act was in force at the time of the filing of the application and statement of claim in the Court below. The relevant schedules to it commenced operation on 1 July 2009. Under Schedule 1 of the Transitional Act, Part 8 of the Work Choices Act was repealed. Section 407 was found in Part 8.

15    Clause 11 of Schedule 2 to the Transitional Act provides that the Work Choices Act continues to apply to conduct before its repeal. Consequentially, as at 1 July 2009 and onwards, it was open to a person to commence an action based on s 407 of the Work Choices Act, notwithstanding its repeal. It is inconsistent with that provision in the Transitional Act to impose a two year time limit on actions based on the Work Choices Act, concerning conduct which occurred before the commencement of the Transitional Act. In that context, it should be noted that the contraventions of the Work Choices Act alleged in the Court below occurred in April/May 2009.

16    Clause 17(1)(g) of Schedule 7 to the Work Choices Act likewise had the effect of continuing to apply s 170VV of the Pre-Reform WR Act to conduct notwithstanding the enactment of the Work Choices Act. The relevant conduct in respect of the claimed breach of the Pre-Reform WR Act occurred on 23 March 2006. The Work Choices Act commenced at the end of March 2006. Given the legislative intention in Schedule 7 to the Work Choices Act to allow access to eligible courts in respect of alleged breaches of s 170VV as at the end of March 2006, a two year time limit for such actions as at 23 March 2006 could not have been intended by Parliament.

17    The operation of the relevant transitional provisions made the provisions of s 170VV of the Pre-Reform WR Act and s 407 of the Work Choices Act accessible to potential litigants, despite their repeal. This fact shows the existence of Commonwealth law, which provided, at the material time, otherwise than that there be a two year time limit for the institution of such proceedings.

ii.     Second positive answer

18    The Pre-Reform WR Act and the Work Choices Act contained limitation periods for some causes of action and none for others. This occurred in circumstances where side-by-side provisions contained divergent limitation periods. While no limitation period was contained in s 170VV of the Pre-Reform WR Act, Parliament chose to provide a six year limitation period in s 170VW which dealt with the recovery of loss or damage for the breach of an Australian Workplace Agreement. The same statutory time limit was provided in ss 178 and 179 concerning remedies for award breaches and the recovery of sums due under an award. Parliament made a deliberate choice not to insert a limitation period for actions under s 170VV.

19    Similarly, the Work Choices Act provided for a six year time limit in respect of some causes of action, such as in sub-sections 719(9) and 719(10) concerning the recovery of underpayments and a proceeding for a penalty for breach of an award. The same time limit applied to proceedings under s 721(2) for breach of an ITEA. In the case of s 407, Parliament made a deliberate choice not to impose such a time limit.

Conclusion on whether Commonwealth law “otherwise provides”

20    Parliament has chosen to impose time limits in respect of some causes of action and none in respect of others in the relevant legislation. Where time limits have been imposed, they have usually been for six years and not the State choice of two years. The exercise of such a choice reveals a Commonwealth legislative scheme “complete on its face”, leaving no room for the picking up by s 79 of the Judiciary Act of the State limitation law; see Bui v Director of Public Prosecutions (2012) 244 CLR 638 at [25] and the cases there referred to in the joint judgment of French CJ, Gummow, Hayne, Kiefel and Bell JJ.

21    For the foregoing reasons, the Limitation Act did not apply to the proceeding below insofar as it was based on s 170VV of the Pre-Reform WR Act and s 407 of the Work Choices Act. That is because laws of the Commonwealth, being the above Acts and the Transitional Act, have otherwise provided. It follows that leave to appeal should be granted, the appeal allowed and the order of the Court below made on 27 February 2011, summarily dismissing parts of the application be set aside. Although it is not strictly necessary to do so, the following reasons deal with two other matters raised by FWO on the current application. As will be seen below, neither of them has merit.

Action to recover a penalty

22    The actions based on s 407 of the Work Choices Act and 170VV of the Pre-Reform WR Act are actions on a cause of action to recover a penalty. They are what is commonly known as civil proceedings to recover a penalty of the type discussed by the Full Court in Gapes as referred to at [10] above, and as long ago as 1910 in R v Associated Northern Collieries (1910) 11 CLR 738 at 742 per Isaacs J. As is apparent from the judgment of J.B. Sweeney J in Gapes at 102, “a proceeding for the recovery of pecuniary penalties” is often used interchangeably with a “civil action for penalties”.

23    Counsel for FWO sought to confine the operation of s 18 of the Limitation Act to causes of action to recover penalties which had previously been imposed. Section 18 also refers to the recovery of a “sum by way of a penalty”. It evinces an intention to apply broadly to matters where penalties are either sought or sought to be enforced. There is no merit in the submission that, save for Commonwealth laws “otherwise providing”, s 18 would not apply to actions such as those based on s 170VV of the Pre-Reform WR Act and s 407 of the Work Choices Act.

24    Section 82 of the Judiciary Act provides:

Suits to recover pecuniary penalties and forfeitures under the laws of the Commonwealth may be brought either in the State or Territory where they accrue or in the State or Territory where the offender is found.

The terms of s 82 of the Judiciary Act support the contention that s 79(1) of the Judiciary Act encompassed civil proceedings for the imposition of a penalty. Section 82 refers to “suits to recover…penalties” being brought in State courts. The use of the word “recover” should not be interpreted as referable to actions where penalties have been imposed and are now sought to be recovered. So much would also be inconsistent with Gapes, as discussed at [22] of these reasons for judgment.

Can s 18(1) of the limitation act apply to a commonwealth enactment?

25    Counsel for FWO referred to s 14 of the Limitation Act which applied to impose a limitation period on certain causes of action such as those founded on tort or contract. Section 14(1)(d) applied to:

a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.

The words appearing after the comma in s 14(1)(d) of the Limitation Act separate out from s 14, those causes of action encompassed by s 18 of the Limitation Act. However, counsel for FWO highlight s 14(3) which had no counterpart in s 18. Section 14(3) of the Limitation Act provides:

For the purposes of paragraph (d) of subsection (1), enactment includes not only an enactment of New South Wales but also an enactment of the Imperial Parliament, an enactment of another State of the Commonwealth, an enactment of the Commonwealth, an enactment of a Territory of the Commonwealth and an enactment of any other country.

26    Section 14(3) of the Limitation Act puts beyond doubt that an “enactment” in s 14(1)(d) includes a Commonwealth enactment. However, this does not mean that “enactment” in s 18 is confined to a NSW enactment. It must be borne in mind that s 18 is made applicable to Commonwealth legislation as a result of the operation of s 79(1) of the Judiciary Act, provided all the requirements of that section have been satisfied. It makes the laws of the State binding on courts exercising federal jurisdiction in certain circumstances. The exercise of federal jurisdiction will be undertaken as a consequence of Commonwealth legislation. It is not controversial that s 79(1) of the Judiciary Act picks up s 18 and applies it as if it, in effect, was part of the relevant federal legislation. In these circumstances, it would be erroneous to hold that s 18 of the Limitation Act is confined to a State or Territory enactment. So much is clear from the judgment of the High Court in Solomons v District Court of New South Wales (2002) 211 CLR 119 at [21]. There, the Court stressed that State laws which are picked up by s 79(1) according to their terms do not apply by their own force but by virtue of s 79. By referring to Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559, the High Court in Solomons at [24], saw no difficulty in finding that State limitation laws were capable of being picked up by s 79 and applied to proceedings in the exercise of federal jurisdiction.

COSTS

27    As a consequence of the provisions of s 824 of the Work Choices Act and predecessor provisions as to costs, no costs can be awarded in this matter unless the Court determines that the application for leave to appeal was instituted vexatiously or without reasonable cause. As the application has succeeded and the appeal is allowed, no such order will be made.

orders

28    Having regard to the foregoing, the Court should order as follows:

1.    The application for leave to appeal is granted.

2.    The appeal is allowed.

3.    The order of the Federal Magistrates Court of 27 February 2012 is set aside.

4.    The matter is remitted to the Federal Magistrate Court to hear and determine in accordance with these reasons for judgment.

Associate:

Dated:    21 December 2012

REASONS FOR JUDGMENT

NORTH AND FLICK JJ:

29    In June 2011 the Fair Work Ombudsman filed a Statement of Claim in the Federal Magistrates Court of Australia. An Amended Statement of Claim was filed in December 2011. The relief sought included declarations that Toyota Material Handling (NSW) Pty Limited (“Toyota Material”) had contravened various provisions of the Workplace Relations Act 1996 (Cth) as it existed both before and after the enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). Orders were also sought for the imposition of penalties in respect to the contraventions and for the payment of those penalties into the Consolidated Revenue Fund of the Commonwealth.

30    The contraventions relied upon in the Amended Statement of Claim were based on conduct that was said to have occurred in March 2006 and between March and May 2009.

31    An Amended Defence filed on behalf of Toyota Material in January 2012 contended (inter alia) that the application for penalties was “out of time” and “cannot be maintained” by reason of the time limit imposed by the Limitation Act 1969 (NSW) (‘the State Limitation Act’).

32    The Federal Magistrate whose decision is now under challenge accepted that the State Limitation Act applied and struck out those parts of the Amended Statement of Claim seeking an order for the imposition of penalties and for their payment to the Consolidated Revenue Fund: Fair Work Ombudsman v Toyota Material Handling [2012] FMCA 122.

33    The Fair Work Ombudsman now seeks leave to appeal. The Application for leave to appeal was previously referred by a Judge of this Court to a Full Court pursuant to s 25(2)(e) of the Federal Court of Australia Act 1976 (Cth): Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited [2012] FCA 347.

34    On behalf of the Fair Work Ombudsman it is contended that:

    leave to appeal should be granted.

If leave to appeal is granted, it is further contended, in summary form, that:

    section 79 of the Judiciary Act 1903 (Cth) does not operate to “pick up” s 18 of the State Limitation Act because s 79 does not operate to “pick up” State laws in proceedings which can only be brought in a court “exercising federal jurisdiction”;

    the limitation period imposed by s 18 is confined to a cause of action to recover a penalty “by virtue of an enactment” and an “enactment” for the purposes of s 18 does not include Commonwealth legislation;

    for the purposes of s 79(1) the Pre-Reform WR Act and the Work Choices Act have, at the relevant times, “otherwise provided” such that the State limitation period is not “picked up”;

    section 18 of the State Limitation Act is, in any event, confined in its operation to a “cause of action to recover a penalty” and the parts of the Amended Statement of Claim which were struck out did not plead such a cause of action.

By one or other of these means, the Fair Work Ombudsman sought to reach the position whereby the State Limitation Act was not an obstacle to the recovery of penalties for the contraventions alleged. The Federal Magistrate, of course, concluded otherwise. This sequence, it should be noted, differed from the order in which Senior Counsel for the Fair Work Ombudsman presented her arguments. But no disservice to those submissions is occasioned by resolving them in this manner.

35    It is concluded that leave to appeal should be granted and that the appeal should be allowed. It is the second of the arguments advanced on behalf of the Fair Work Ombudsman which, in particular, leads to this conclusion. The same conclusion could also have been reached by reference to the third argument. The first and final arguments, with respect, should be rejected.

THE GRANT OF LEAVE TO APPEAL

36    Leave to appeal is required to appeal from an interlocutory decision of a Federal Magistrate: Federal Court of Australia Act s 24(1A).

37    The decision of the Federal Magistrate dismissing part of the Amended Statement of Claim is an interlocutory decision: Rana v University of South Australia [2004] FCA 559 at [8]-[15], 136 FCR 344 at 345-346 per Lander J. The decision did not finally resolve the rights of the parties: Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 at 767-768 per Gibbs CJ (Murphy and Wilson JJ agreeing). See also: Anying Group Pty Ltd v Wang [2012] FCA 702.

38    Considerations which guide the exercise of the discretion to grant leave to appeal are frequently expressed in terms of:

(a)    whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and

(b)    whether substantial injustice would result if leave were refused supposing the decision were wrong.

These two considerations, however, are not unrelated: Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20] per Kenny, Tracey and Middleton JJ. The “sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments”: Sharp v Deputy Commissioner of Taxation (NSW) (1988) 19 ATR 908 at 910 per Burchett J.

39    Notwithstanding the oft-repeated reference to these two generally recognised considerations, it is also well recognised that the discretion to grant leave is not constrained by rigid rules: Seven Network Ltd v News Ltd [2005] FCAFC 125 at [5], 144 FCR 379 at 380 per Branson J (Allsop and Edmonds JJ agreeing). “No rigid or exhaustive criteria should be laid down; the circumstances of different cases are infinitely various”: Sentry Corporation v Peat Marwick Mitchell & Co (A Firm) (1990) 24 FCR 463 at 488 per Lockhart J. Leave to appeal may thus be granted where, for example, the questions posed for resolution on appeal “… have general importance beyond the concerns of the parties”: Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123 at [10], 169 FCR 227 at 230 per Heerey, Moore and Tracey JJ. Leave may also be granted where the interlocutory orders have a serious effect upon a party’s position and where there are seriously arguable questions to be resolved: Sentry Corporation at 488 per Lockhart J. See also: Waters v Mercedes Holdings Pty Ltd [2012] FCAFC 80 at [32]-[34], 203 FCR 218 at 228-229 per Jacobson, Flick and Foster JJ.

40    The position ultimately adopted by Senior Counsel for the Respondent was that leave to appeal should be granted if any of the arguments sought to be raised by the Fair Work Ombudsman were considered to have any merit. No submission was advanced that leave to appeal should be refused and the parties left to resolve the outstanding claim for declaratory relief before an appeal takes place.

41    The merit in the arguments raised by the Fair Work Ombudsman, it is considered, warrants the grant of leave to appeal. The importance of the issues to be resolved, even though they may hopefully be of decreasing practical application as time progresses, warrants the grant of leave. The resolution of the issues to be resolved may well also have implications for other potential proceedings.

SECTION 79 – ITS BROAD PURPOSE & OPERATION

42    Section 79(1) of the Judiciary Act provides as follows:

The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

43    The “broad purpose” of s 79 was explained as follows by Mason J in John Robertson & Co Limited (in liquidation) v Ferguson Transformers Pty Limited (1973) 129 CLR 65 at 95:

The broad purpose of s. 79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms. Indeed, s. 79 contains no express provision which would enable a court exercising federal jurisdiction to alter the language of a State statute and apply it in that altered form. However, the presence of the words "including the laws relating to procedure evidence and the competency of witnesses" exhibits a clear intention that State laws relating to those topics should apply to federal jurisdiction. This purpose would fail partly in its objective if State laws on these topics are to be given a literal application under s. 79 by courts other than State courts. State laws dealing with matters of procedure, as the earlier consideration of s. 37 of the Limitation of Actions Act has shown, are often expressed so as to apply to State courts only, and in some instances they refer to particular State courts.

To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction. Whether that requirement supports the broader view that a similar approach is to be taken in applying s. 79 to substantive as well as procedural laws it is not now necessary to determine.

The objective of s 79 is to facilitate the particular exercise of federal jurisdiction by the application of a coherent body of law, elements of which may comprise the laws of the State or Territory in which the jurisdiction is being exercised, together with the laws of the Commonwealth, but subject always to the overriding effect of the Constitution itself: Northern Territory of Australia v GPAO [1999] HCA 8 at [80], 196 CLR 553 at 568 per Gleeson CJ and Gummow J.

44    It should also be noted that State or Territory laws upon which s 79 operate do not apply of their own force in the exercise of federal jurisdiction; the State laws apply “as federal law”: Solomons v District Court of New South Wales [2002] HCA 47 at [21], 211 CLR 119 at 134 per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ. They apply as “surrogate” federal law: O’Mara Constructions Pty Ltd v Avery [2006] FCAFC 55 at [3], 151 FCR 196 at 198 per Heerey, Dowsett and Conti JJ. See also: Wilson v Alexander [2003] FCAFC 272 at [19], 135 FCR 273 at 279 per Ryan, Heerey and Allsop JJ; R v Porter [2004] NSWCCA 353 at [10], 61 NSWLR 384 at 387-388 per Spigelman CJ (Barr and Hoeben JJ agreeing).

A COURT EXERCISING FEDERAL JURISDICTION

45    In the Pre-Reform WR Act, an “eligible court” (the nomenclature employed in the Act at the relevant time) that could exercise the jurisdiction sought to be invoked in this case was defined in s 170VA in the following terms:

In this Part, unless the contrary intention appears:

…

eligible court means any of the following:

(a)    the Federal Court of Australia;

(b)    a District, County or Local Court; or

(c)    a magistrate’s court.

46    Following the 2005 amendments, the meaning of “Court” (the equivalent nomenclature employed in the Act in its amended form) for present purposes was set forth in s 321 of the Work Choices Act:

In this Part:

…

    Court means the Federal Court of Australia or the Federal Magistrates Court.

…

47    The Federal Magistrates Court was thus a court “exercising federal jurisdiction” for the purposes of s 79(1) of the Judiciary Act. There is no reason to construe the reference in s 79 to a court “exercising federal jurisdiction” as excluding those circumstances where the court exercising such jurisdiction is a court established by the Commonwealth Parliament and the only court vested with jurisdiction to resolve the matter. For the purposes of s 79, the Federal Magistrates Court and this Court are equally courts “exercising federal jurisdiction” – as is a Supreme Court of a State or Territory which has been vested with jurisdiction to resolve a federal matter.

48    The first of the submissions advanced on behalf of the Fair Work Ombudsman is rejected.

SECTION 18 – RECOVERABLE “BY VIRTUE OF AN ENACTMENT”

49    The Federal Magistrate concluded that s 18 of the State Limitation Act was “picked up” by s 79 of the Judiciary Act and operated to defeat the Fair Work Ombudsman’s claim to the extent that it sought the imposition of penalties.

50    The Fair Work Ombudsman further submitted that s 79 of the Judiciary Act operated to “pick up” a State law with its meaning unchanged. Section 18, it was submitted, was confined to limiting the period within which a proceeding could be commenced for the recovery of a penalty that was “recoverable by virtue of an enactment”. But an “enactment”, it was submitted, was confined to a State “enactment”; it did not operate as a limitation with respect to any action to impose or recover a penalty pursuant to a Commonwealth enactment.

51    Section 79, it will be noted, “picks up” the laws of a State or Territory “… in all cases to which they [apply]”.

52    Section 18 of the State Limitation Act provides as follows:

18 Penalty and forfeiture

(1) An action on a cause of action to recover a penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.

(2) In this section "penalty" does not include a fine to which a person is liable on conviction for a criminal offence.

53    As a general proposition it may be accepted that s 79 does not purport to do more than “pick up” a State or Territory law with its meaning unchanged: Austral Pacific Group Limited (in liquidation) v Airservices Australia [2000] HCA 39, 203 CLR 136. Gleeson CJ, Gummow and Hayne JJ there set out the terms of s 79 and continued:

[13]    The closing words of s 79 indicate, as the authorities confirm, that the section does not enable a court exercising federal jurisdiction to give an altered meaning to a State statute which it is required to apply. The qualification expressed in those authorities, but inapplicable in this litigation, is that a State statute may be "picked up" in a federal court even though in its own terms the State statute is limited in its operation to the courts of the State in question. Here, of course, the federal jurisdiction was being exercised by a State court not a federal court.

Similarly, in Pedersen v Young (1964) 110 CLR 162 the defendant had pleaded – as a defence to a proceeding commenced in New South Wales – s 5 of the Law Reform (Limitation of Actions) Act of 1956 (Qld). In upholding the plaintiff’s demurrer, Kitto J concluded:

… It is, I think, in accordance with the received opinion as to the operation of ss. 79 and 80 to hold that, subject to the Constitution and to the laws of the Commonwealth, all Queensland laws must be treated as binding in this Court, as federal law if not by their own force, whenever the Court is exercising jurisdiction in Queensland: Cohen v. Cohen; see also Musgrave v. The Commonwealth; Bainbridge-Hawker v. The Minister of State for Trade and Customs. But in my opinion the defendant's reliance upon s. 5 of the Queensland Act would necessarily fail even if the action were to be tried and decided in Queensland, because the Judiciary Act does not purport to do more than pick up State laws with their meaning unchanged: Commissioner of Stamp Duties (N.S.W.) v. Owens [No. 2]. It cannot give s. 5 a new meaning, converting it into a provision limiting the time for the commencement of actions outside Queensland; and for that reason s. 5 does not, even by force of the Judiciary Act, afford a defence to an action commenced, as the present action was commenced, outside the time it allows but in New South Wales: (1964) 110 CLR at 165-166.

Menzies J reached the same conclusion but was more cautious in expressing his conclusion as follows:

… The position as I see it at the present stage of the action is that the Queensland statute pleaded cannot apply if the action is heard in the registry in which it now is. In these circumstances the defendant's plea is demurrable if for no other reason than that it omits—and I think necessarily omits—the allegation without which the statute pleaded cannot possibly be an answer to the plaintiff's claim, viz. that in the hearing and determination of this action the Court will be exercising its jurisdiction in Queensland: (1964) 110 CLR at 168.

Noted: Lane, High Court – Original Jurisdiction – Law to be Applied (1964) 38 ALJ 170. A “qualification” to the general proposition that s 79 “picks up” a State or Territory law with its meaning unchanged applies such that s 79 “picks up” a State or Territory law which apply “only to the courts of the State” or Territory: John Robertson at 88. Gibbs J there referred to the general proposition and continued:

… To that last proposition it is, however, necessary to add a qualification. Section 79 may render applicable in a court exercising federal jurisdiction a State statute which either by its express provisions or upon its proper construction is limited in its application to the courts of the State: … If the laws of a State could not apply if, upon their true construction as State Acts, they related only to the courts of the State, it would seem impossible ever to find a State law relating to procedure, evidence or the competency of witnesses that could be rendered binding on courts exercising federal jurisdiction, because most, if not all, of such laws, upon their proper construction, would be intended to apply in courts exercising jurisdiction under State law.

But that “qualification” may be left to one side.

54    The term “enactment” as employed in s 18 of the State Limitation Act may seem curious. It is not a term defined by that Act. But it is a term first used in the “Long Title” to the Act as follows:

An Act to amend and consolidate the law relating to the limitation of actions; to repeal section 5 of the Imperial Act known as the Common Informers Act 1588 and certain other Imperial enactments; to repeal the unrepealed portion of the Act passed in the fourth year of the reign of William the Fourth number seventeen and certain other enactments; to amend the Compensation to Relatives Act of 1897, as amended by subsequent Acts, and certain other enactments; to make further provision concerning estates tail; and for purposes connected therewith.

As used in that part of the Act, the term “enactment” would appear to be employed to refer to “enactments” without discrimination as to the legislative body that passes the “enactment” and without any evident attempt to confine the term to “enactments” passed by the New South Wales Parliament. The term “enactment” is used elsewhere in the State Limitation Act: see eg ss 5, 6, 7, 8, 18, 26 and 57. Particular reference should be made, however, to s 14 which provides as follows:

14 General

(1)        An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:

(a)    a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,

(b)    a cause of action founded on tort, including a cause of action for damages for breach of statutory duty,

(c)    a cause of action to enforce a recognizance,

(d)    a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.

(2)    This section does not apply to:

(a)    a cause of action to which section 19 applies, or

(b)    a cause of action for contribution to which section 26 applies.

(3)    For the purposes of paragraph (d) of subsection (1), enactment includes not only an enactment of New South Wales but also an enactment of the Imperial Parliament, an enactment of another State of the Commonwealth, an enactment of the Commonwealth, an enactment of a Territory of the Commonwealth and an enactment of another country.

55    Not without considerable reservation, it is concluded that the term “enactment” when used in s 18(1) is confined to an “enactment” passed by the New South Wales Parliament. That conclusion is reached for three reasons.

56    First, there is a “… general rule of construction requiring an interpretation which would restrain the general words so that they would not apply to Federal proceedings …”: Seaegg v The King (1932) 48 CLR 251 at 255. Rich, Dixon, Evatt and McTiernan JJ were there dealing with the term “indictment” as used in the Criminal Appeal Act 1912 (NSW) and concluded:

… “Indictment” is defined to include any information presented or filed as provided by law for the prosecution of offenders. We do not think that the State enactment by these general words intends to refer to prosecutions on indictment preferred by the law officers of the Commonwealth for offences against the laws of the Commonwealth. Such prosecutions are governed by the special provisions contained in secs. 69-77 of the Judiciary Act 1903-1927, which deal not only with the manner in which they shall be instituted and the jurisdiction in which they shall be tried, but with the nature and extent of the appeal from a conviction and the power of the Court hearing that appeal. Apart from the general rule of construction requiring an interpretation which would restrain the general words so that they would not apply to Federal proceedings so regulated and would confine the State enactment to State proceedings, the State statute contains specific references to the Attorney-General of the State and to the Minister of Justice which place its meaning beyond doubt (see secs. 13, 16, 24 and 17 (2)) and show that the right of appeal it confers is limited to convictions upon indictment preferred according to State law.

In that case there were there indications in both the Judiciary Act and the Criminal Appeal Act which assisted in the conclusion that the State Parliament’s use of the term “indictment” did not extend to Commonwealth offences. The decision, however, has been more recently invoked in support of a more generally expressed “general rule of construction”: Solomons v District Court of New South Wales [2002] HCA 47 at [9], 211 CLR 119 at 130 per Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ.

57    Second, where there is a legislative intention that the term “enactment” extends beyond “enactments” of bodies of the State with legislative power – and embrace (for example) a Commonwealth “enactment” – the legislature has so provided using express words, as in s 14(3). Section 18, in contrast to s 14(3), evidences a legislative intent to confine the term “enactment” to a State “enactment” by omitting such express words.

58    Third, the conferral by the Commonwealth Parliament of “standing” by s 405 of the Work Choices Act upon specified persons to seek civil remedies and the power conferred by s 407 of that Act upon this Court to order the payment of a “pecuniary penalty” sits uncomfortably with any conclusion that a State legislature may impose a limit upon the time within which this Court may exercise that power. Reference may thus be made to the following observations of Gibbs J in John Robertson at 89:

… [I]n my opinion the legislature of South Australia would not have power to legislate to provide a limitation period in respect of an action that was given by a Commonwealth statute and that could be brought only in the High Court. We are not concerned in the present case with the application in a State court of a State statute of limitations to an action brought under a Commonwealth statute… If a State statute of limitations, enacted in general terms, would on its proper construction apply to an action brought under a Commonwealth statute in a State court, it would be applied by force of s. 79 if the action were brought in a court exercising federal jurisdiction. However, it would seem to me to be quite outside the competence of the State Parliament to impose a limitation period on an action which neither arose under the law of the State (including in that expression the common law) nor was enforceable in any court of the State. If the right owed nothing to State law, and the remedy could only be pursued in a federal court, the State Parliament could not legislate either to extinguish the right or bar the remedy. If the words "actions ... given ... by any statute" in s. 37 included an action given by a Commonwealth statute which could be brought only in the High Court, the section would exceed the legislative power of the State. The section must be given a construction that would avoid that consequence. In short, s. 37, standing alone, does not refer to actions brought under s. 11 of the Australian Industries Preservation Act and when applied by virtue of s. 79 of the Judiciary Act it does not get an extended meaning so as to include such actions. On this difficult question I have therefore come to the conclusion that the plaintiff's demurrer should be allowed.

To adapt the language of French J (as his Honour then was) in Pavich v Bobra Nominees Pty Ltd (1988) 84 ALR 285 at 290, s 18 “… cannot be taken, either as a matter of construction or power, to have applied to proceedings in which the State courts had no jurisdiction”. This third reason applies with greater force to the relief sought pursuant to s 407 of the Work Choices Act as that Act confines the jurisdiction to determine whether to impose a penalty solely to this Court whereas the Pre-Reform WR Act vested jurisdiction to make such a determination in the Federal Court, a district court, county court, local court or a magistrate’s court: s 177A.

59    But whatever else the legislature may have intended by enacting the amendments in the Workplace Relations Amendment (Work Choices) Act, it is highly unlikely that the operation and reach of those Commonwealth provisions was intended by the Commonwealth Parliament to be constrained by the application of limitation provisions enacted by State legislatures.

60    It follows that s 18(1) is confined in its operation to imposing a limitation period within which “a cause of action to recover a penalty or forfeiture” pursuant to a New South Wales enactment may be commenced.

61    Section 18(1), when “picked up” by s 79 of the Judiciary Act does not have any wider operation. It does not impose a limitation period within which “a cause of action to recover a penalty or forfeiture” may be brought pursuant to a Commonwealth “enactment”.

62    Leave having been granted to institute the appeal, the appeal is thus to be allowed. The remaining arguments advanced on behalf of the Fair Work Ombudsman need not be resolved. But detailed submissions have been advanced and each of the remaining arguments should be briefly addressed.

SECTION 79 – “EXCEPT AS OTHERWISE PROVIDED”

63    Section 79 does not operate to “pick up” a State or Territory law where a Commonwealth law has “otherwise provided”.

64    In the event that the reference to an “enactment” in s 18 of the State Limitation Act was not to be confined to a New South Wales enactment, Senior Counsel for the Fair Work Ombudsman further submitted that the State limitation period was not to be “picked up” by s 79(1) because a Commonwealth law had “otherwise provided”.

65    In applying the phrase “otherwise provided” in s 79, in De Vos v Daly (1947) 73 CLR 509 Latham CJ and Starke J asked whether the particular law of the Commonwealth was to be regarded as “inconsistent” with the application of the State Act which was said to be “picked up” by s 79. In Northern Territory of Australia v GPAO [1999] HCA 8, 196 CLR 553 Gleeson CJ and Gummow J cited the following observations of Mason J:

[51]     In University of Wollongong v Metwally [(1984) 158 CLR 447 at 463)] Mason J said:

“Inconsistency or repugnancy is a long-standing concept in the field of statutory law. Where the provisions of two statutes are in conflict, so much so that they cannot be reconciled one with the other, there is a consequential need to resolve the problem created by the conflict. In the case of conflicting statutes enacted by one legislature the problem is resolved by regarding the later statute as impliedly repealing the earlier statute to the extent of the inconsistency. In the case of conflicting statutes, one enacted by the Imperial Parliament, the other by a colonial legislature, the problem was resolved in favour of the primacy of the Imperial statute, even if it be the first in time.”

Gleeson CJ and Gummow J concluded:

[80]    The objective of s 79 is to facilitate the particular exercise of federal jurisdiction by the application of a coherent body of law, elements in which may comprise the laws of the State or Territory in which the jurisdiction is being exercised, together with the laws of the Commonwealth, but subject always to the overriding effect of the Constitution itself. Seen in that light, the notion of “inconsistency” involved in the phrase “otherwise provided” in s 79 is akin to that first identified by Mason J in the passage from the judgment in University of Wollongong v Metwally set out earlier in these reasons. This is the need to resolve the problem that arises by conflict between conflicting statutes having the same source. The law of a State or Territory which is to operate as a surrogate law of the Commonwealth is to be measured beside other laws of the Commonwealth.

A Commonwealth law may also “otherwise provide” for the purposes of s 79 if the operation of the Commonwealth law is “irreconcilable” with that of the State law. Thus, for example, in Austral Pacific Group Limited (in liquidation) v Airservices Australia [2000] HCA 39, 203 CLR 136 Gleeson CJ, Gummow and Hayne JJ found that the test to be applied was “whether the operation of the [Commonwealth] Act would so reduce the ambit of the [State] Act that the provisions of the [Commonwealth] Act are irreconcilable with the other law. If so, the [Commonwealth] Act ‘otherwise provides’ within the meaning of s 79 of the Judiciary Act …”: at [17]. See also: Kelly v Saadat-Talab [2008] NSWCA 213 at [2]-[9], 72 NSWLR 305 at 307-309 per Allsop P.

66    Although Senior Counsel for the Fair Work Ombudsman accepted that there was no Commonwealth limitation period which confined the time within which a proceeding could be brought seeking the imposition of penalties for the alleged contraventions, it was submitted that limitation periods were specified in respect to other relevant statutory provisions in the Pre-Reform WR Act and the Work Choices Act. This, it was contended, indicated an intention that there be no limitation period for the provisions in question. Thus, and by way of example, reference could be made to ss 170CE(7) and (7A), 170CP(6), 170VW(2), 178(7) and (8) and 179(1) of the Pre-Reform WR Act. Reference could also be made to ss 643(14) and (15), 719(9) and (10) and 720 of the Work Choices Act.

67    The Fair Work Ombudsman’s submission was that the Commonwealth legislature had, where it deemed appropriate, addressed its attention to the times within which proceedings in relation to particular matters could be commenced – and, where it considered a time limit should be imposed, it expressly so provided. Where no limitation period had been expressly imposed, the presumed Commonwealth legislative intent was that no limitation as to time was considered appropriate. Irrespective of whether a time limit was expressly imposed, the fact that the legislature had turned its mind to the issues in some cases led to the inference that a choice to not prescribe a limitation period was evidence that it had “otherwise provided” so as to preclude s 79 “picking up” s 18 of the State Limitation Act.

68    Had it been necessary to resolve this argument, this alternative argument would also have been accepted.

THE RECOVERY OF A PENALTY?

69    The final argument advanced on behalf of the Fair Work Ombudsman assumed that s 18 of the State Limitation Act was capable of being “picked up” by reason of s 79 of the Judiciary Act. But this final argument contended that the Amended Statement of Claim was not pleading a cause of an action “to recover a penalty” within the meaning of and for the purposes of s 18 of the State Limitation Act.

70    It was not contended that the choice of New South Wales as a venue for the litigation, as the State in which the penalties under the Pre-Reform WR Act and the Work Choices Act accrued, was inappropriate in light of section 82 of the Judiciary Act.

71    On behalf of the Fair Work Ombudsman it was, however, contended that s 18 did not apply because the Amended Statement of Claim did not seek the “recovery of any penalty”; the Amended Statement of Claim, it was contended, merely seeks the “imposition” of a penalty. Both the Pre-Reform WR Act and the Work Choices Act, it was said, draw a distinction between “recovery” and “imposition”.

72    The orders sought in the Amended Statement of Claim in respect to penalties, it is concluded, are properly to be characterised as an action “to recover a penalty” within the meaning of and for the purposes of s 18(1). This final argument advanced on behalf of the Fair Work Ombudsman, with respect, is without merit.

73    The Pre-Reform WR Act s 170VV provided in part as follows:

170VV    Penalties for contravening this Part

(1)    An eligible court may make an order imposing a penalty on a person who contravenes a penalty provision.

(2)    The penalty cannot be more than 300 penalty units for a body corporate or 60 penalty units in other cases.

(3)    An application for an order under subsection (1) that relates to an AWA or ancillary document may be made by a party to the AWA or ancillary document.

(4)    In this section:

penalty provision means subsection 170VK(2) or (4), section 170VP, section 170VT, section 170VU, subsection 170WE(1), subsection 170WF(1), subsection 170WG(1) or (2) or subsection 170WH(1) or (2).

Section 407 of the Work Choices Act provided in part as follows:

407    Court may order pecuniary penalty

(1)    The Court may order the person who contravened the civil remedy provision to pay a pecuniary penalty of up to:

(a)    if the person is an individual—the maximum number of penalty units specified in subsection (2); or

(b)    if the person is a body corporate—5 times the maximum number of penalty units specified in subsection (2).

…

74    An action for an order that a person who has contravened a “penalty provision” or a “civil remedy provision” pursuant to either of these provisions, it is concluded, is an action to “recover a penalty” within the meaning of and for the purposes of s 18(1) of the State Limitation Act. The character of the action as an action to “recover a penalty” is not necessarily determined by reference to terms in the Pre-Reform WR Act and the Work Choices Act such as:

    “contravened” or “contravention”; or

    “penalty”.

Nor is the true character of the action denied by reference to terms such as:

    “impose” or “imposition”.

The true meaning of a provision contained within a New South Wales Act cannot be discerned by reference to the terminology employed in a Commonwealth statute.

75    A construction of s 18(1) of the State Limitation Act which encompasses an action to impose or order the payment of a money sum for a contravention of a statutory provision follows from:

    the natural and ordinary meaning of the phrase employed in s 18(1), “a cause of action to recover a penalty or forfeiture”; and

    earlier decisions which have interpreted and applied s 18.

In DTR Securities Pty Ltd v Deputy Commissioner of Taxation for the Commonwealth of Australia (1987) 8 NSWLR 204 at 210 Samuels JA, for example, observed that “… the words ‘penalties and forfeitures’ have traditionally been used to describe the imposts exacted for transgressing the provisions of statutes, and recoverable at the suit of the Crown or a private informer …”. It was there concluded that an action to recover “additional tax” imposed under the Income Tax Assessment Act 1936 (Cth) was an action to recover a “penalty” as contemplated by s 18(1). An action, such as that pleaded in the Amended Statement of Claim filed in the present proceeding, seeking orders for the payment of monies for alleged contraventions of the Pre-Reform WR Act and the Work Choices Act can similarly be characterised as an action “to recover a penalty …”. Neither the form of the order sought by the Fair Work Ombudsman nor the characterisation of a statutory provision (for example) as a “civil remedy provision” can deny the true reach of those words as employed in s 18 of the State Limitation Act, name “an action to recover a penalty”.

76    The final argument advanced on behalf of the Fair Work Ombudsman is thus rejected.

Conclusions

77    It is respectfully considered that leave to appeal should be granted and the appeal allowed.

78    Section 79 of the Judiciary Act operates to “pick up” s 18 of the State Limitation Act but, in doing so, does not extend the terms of the State Limitation Act to give them any wider operation than they would have in a State proceeding. Given the conclusion that s 18 is confined in its operation to the recovery of penalties under a New South Wales enactment, the Fair Work Ombudsman’s claim is not time-barred by reason of the State Limitation Act.

79    Concurrence is expressed with the orders proposed by the presiding Judge.

Associate:

Dated:    21 December 2012