Federal Court of Australia

Registered Organisations Commissioner v Australian Workers’ Union [2020] FCAFC 202

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer with a view to agreeing on a form of orders appropriate to give effect to the Court’s reasons.

2.    Any minute of orders so agreed be provided to the Court within seven days.

3.    In the event that the parties are not able within seven days to provide to the Court a minute of order reflecting these reasons:

(a)    The appellant file and serve within a further seven days draft minutes of order containing the orders he seeks and written submissions of no more than three pages in support of such orders;

(b)    The first respondent file and serve within a further seven days written submissions of no more than three pages in response to the appellant’s draft minutes of order and written submissions; and

(c)    Subject to any further order, the Court will determine the orders to be made on the basis of the written submissions.

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

REASONS FOR JUDGMENT

ALLSOP CJ:

1    I have read the reasons of Besanko J to be published. I agree with them and with the orders proposed by his Honour.

Associate:

Dated:    20 November 2020

REASONS FOR JUDGMENT

BESANKO J:

Introduction

2    This is an appeal from orders made by a judge of this Court on 19 November 2019. The Australian Workers’ Union (AWU) is a registered organisation under the Fair Work (Registered Organisations) Act 2009 (Cth) (the RO Act) and it brought an application for judicial review of a decision made by the Registered Organisations Commissioner (the Commissioner) by his delegate under s 331(2) of the RO Act to conduct an investigation as to whether civil penalty provisions had been contravened. Stating the matter broadly at this stage, the investigation was said to relate to an alleged donation by the National Office of the AWU to GetUp Limited (GetUp), an alleged donation by the Victorian Branch of the AWU to GetUp, 15 alleged donations by the National Office of the AWU to entities associated with the Australian Labour Party, and the alleged passing of a resolution in either 2006 or 2007 by the National Executive of the AWU to delegate its power to approve loans, grants and donations exceeding $1,000. The alleged donations were said to have been made in the financial years ending 30 June 2006 and 30 June 2008 respectively. The civil penalty provisions of the RO Act which were said to be relevant were s 237(1) which deals with the obligation on organisations to lodge with the Commissioner particulars of loans, grants or donations exceeding $1,000 made by them, and ss 285(1), 286(1) and 287(1) which set out various duties of officers of organisations.

3    The AWU’s case before the primary judge was that the decision of the Commissioner by his delegate to conduct an investigation under s 331(2) (the Investigation) was invalid because it involved jurisdictional error. The AWU advanced five grounds of judicial review in support of its case before the primary judge. For introductory purposes, these grounds may be summarised as follows. First, the AWU alleged that the Commissioner did not have the power to investigate “historical conduct”, that is to say, conduct which had occurred prior to 1 May 2017. The significance of this date will be identified later in these reasons. Secondly, the AWU alleged that the Commissioner was not validly satisfied that there were reasonable grounds for conducting the Investigation. The third, fourth and fifth grounds are conveniently dealt with together and are to the effect that the decision to conduct the investigation was invalid by reason of the fact that the Commissioner had an improper political purpose or took into account an irrelevant consideration or was the subject of an impermissible direction from the responsible Minister under the RO Act.

4    The second ground of judicial review contained two limbs and the primary judge upheld the first limb in that he held that the Commissioner was not validly satisfied under s 331(2) that there were reasonable grounds for conducting an investigation of possible contraventions of ss 285(1), 286(1) and 287(1) of the RO Act. He rejected the ground insofar as it related to possible contraventions of s 237(1). The primary judge rejected the other four grounds of judicial review advanced by the AWU (Australian Workers’ Union v Registered Organisations Commissioner (No 9) [2019] FCA 1671; (2019) 168 ALD 48 (the substantive reasons)). The primary judge’s rejection of the second ground of judicial review insofar as it related to possible contraventions of s 237(1) of the RO Act raised an issue as to whether the Commissioner, through his delegate, had made a decision which was partly valid and partly invalid. The primary judge dealt with this issue in a further set of reasons (Australian Workers’ Union v Registered Organisations Commissioner (No 10) [2019] FCA 2004). In those reasons, he recorded the fact that he was informed by the parties that they had conferred and that, based upon the conclusions expressed in the substantive reasons, the parties proposed that a declaration be made that the decision of the Commissioner by his delegate be declared to be invalid. The orders which the primary judge made and which, with the exception of the order in paragraph 5, are the subject of the Commissioner’s appeal are as follows:

THE COURT DECLARES THAT:

1.    The decision of the first respondent by his delegate Mr Chris Enright made on 20 October 2017 to commence investigation INV2017/30 into the applicant (“Decision”), is invalid.

THE COURT ORDERS THAT:

2.    The Decision of the first respondent, by his delegate Mr Chris Enright, is quashed.

3.    The second respondent (by himself or by his servants or agents) return to the applicant the documents seized pursuant to the warrants issued by Magistrate Reynolds on 24 October 2017 pursuant to s 335L of the Fair Work (Registered Organisations) Act 2009 (Cth).

4.    The execution of order 3 is stayed pending the hearing and determination of any appeal of these orders.

 5.    There be no order as to costs.

5    By his appeal, the Commissioner contends that the primary judge erred in upholding the AWU’s second ground of judicial review. There are nine grounds of appeal and in these grounds, the Commissioner challenges the primary judge’s final conclusions as well as important intermediate findings made by his Honour.

6    The AWU has filed a Notice of contention in which it seeks to have the primary judge’s orders upheld on grounds other than those relied on by him. There are four grounds in the Notice of contention. In grounds 1 and 3, the AWU seeks to have this Court uphold the second ground of judicial review on grounds other than those relied on by the primary judge. In ground 2, the AWU seeks to have this Court uphold the first ground of judicial review by reference to one of the arguments put to the primary judge and rejected by him. In ground 4, the AWU seeks to have this Court uphold a slightly reformulated version of the fifth ground of judicial review. There is no challenge in this Court to the primary judge’s rejection of the third and fourth grounds of judicial review.

7    There is an aspect of the case as it was conducted in the Court below which was not directly in issue on the appeal or by reason of the Notice of contention, but which should be noted. It concerns the Commissioner’s decision subsequent to his decision to conduct an investigation, to apply for the issue of certain search warrants and the execution of those warrants.

8    The primary judge described the events which were relevant to this aspect of the case in the following terms (at [8]):

8    On 24 October 2017, upon the application of the Commissioner under s 335K of the RO Act, a magistrate issued a warrant authorising officers of the second respondent (“AFP”) to search the premises of the National Office of the AWU in Sydney, and a warrant authorising officers of the AFP to search the premises of the Victorian Branch of the AWU in Melbourne (collectively “search warrants”). Later that day, officers of the AFP accompanied by representatives of the Commissioner executed the search warrants at each of the National and Victorian Branch offices of the AWU. In the execution of the search warrants, the AFP took possession of various documents.

9    The Commissioner of the Australian Federal Police was a respondent to the proceedings in the Court below. However, he did not participate in the trial. He sought leave to be excused from the trial and that leave was granted. He filed a submitting appearance in the appeal.

10    The AWU’s grounds of judicial review relevant to the search warrants were as follows:

Ground 6 - That the warrants are invalid because there was no valid investigation and thus no power to obtain a warrant under s 335K of the RO Act;

Ground 7 - That the warrants are invalid because there was no power for the Commissioner to apply for them in connection with the conduct under investigation (which allegedly occurred before 1 May 2017)

11    The primary judge dealt with these grounds in the following way. With respect to ground 6, his Honour said that the AWU’s essential point was that the existence of a valid investigation was an essential pre-requisite for the validity of the search warrants. The contention of the AWU was that as there was no valid investigation on foot, the Commissioner was not authorised under s 335K of the RO Act to apply to a magistrate for the search warrants to be issued and, in those circumstances, the warrants were invalid. His Honour went on to point out that in his view there were a number of difficulties with the relief sought by the AWU in relation to the search warrants having regard to the way in which the proceedings were constituted (at [387]–[390]). With respect to ground 7, the primary judge noted that the AWU pressed this ground in the alternative and on the basis that the decision to conduct the investigation was valid. His Honour noted that the ground was based on the proposition that in the conduct of an investigation as to whether civil penalty provisions had been contravened by historical conduct, the Commissioner was only permitted to exercise powers that were, or would have been, available to the General Manager in the course of such an investigation and such powers did not extend to a power to apply for search warrants to be issued. The primary judge noted that he had already rejected that premise in dealing with the first ground of judicial review, and, in the circumstances, he did not need to deal further with ground 7.

12    In my opinion, this appeal should be allowed. The declaration made by the primary judge and the order quashing the decision under s 331(2) of the RO Act should be set aside. If there are any issues concerning the search warrants and their execution which need to be addressed as a result of these reasons, then such matters can be raised at the time final orders are made.

Background

13    There is no dispute about the relevant background and the following summary is taken from the primary judge’s reasons.

14    The RO Act provides for the registration as organisations of associations of employers and associations of employees. Section 5 of the RO Act describes Parliament’s intention in enacting the Act and the section includes a statement to the effect that the standards set out in the Act “encourage the efficient management of organisations and high standards of accountability of organisations to their members” (s 5(3)(c)). The RO Act deals with a range of matters relevant to registered organisations, including the registration of associations and the cancellation of registration, the amalgamation of organisations and the withdrawal from amalgamation, the rules of organisations, the membership of organisations, the records which must be kept by organisations and the obligations in relation to their financial affairs, the conduct of officers and employees of organisations and branches of organisations, and civil penalties when certain provisions of the RO Act are contravened.

15    Part 3A of Chapter 11 of the RO Act deals with the Commissioner and the Registered Organisations Commission (the Commission), including their establishment, powers and functions. Section 329AA in Part 3A provides for the establishment of the Commissioner and s 329DA provides for the establishment of the Commission. Section 329DC provides that the Commission’s function is to assist the Commissioner in the performance of the Commissioner’s functions.

16    Part 4 deals with the Commissioner’s powers to conduct inquiries and investigations, as the case may be, and includes s 331. The key subsection in this case is s 331(2) and it is in the following terms:

(2)    If the Commissioner is satisfied that there are reasonable grounds for doing so, the Commissioner may conduct an investigation as to whether a civil penalty provision (see section 305) has been contravened.

17    Except where otherwise indicated, a reference in these reasons to the RO Act is a reference to the Act as it was when the decision in issue in this appeal was made in October 2017.

18    At all times relevant to the matters raised in this proceeding, the Minister with oversight responsibility for the Commission was Senator the Honourable Michaelia Cash, the Minister for Employment (the Minister).

19    On 20 October 2017, Mr Chris Enright, who is the Executive Director of the Commission and a delegate of the Commissioner, decided to conduct an investigation which he described in a document he prepared, or caused to be prepared, titled “Case Decision Record” (the Decision Record) as “an investigation under section 331(2) of the Fair Work (Registered Organisations) Act 2009 (the RO Act) in relation to the National Office and Victorian Branch of the Australian Workers’ Union (AWU) as to whether various civil penalty provisions within the meaning of section 305 have been contravened”. The Decision Record describes the Investigation as one that “relates to the following matters”. The first matter is a donation of $50,000 from the National Office of the AWU to GetUp during the financial year ending 30 June 2006 and whether that donation was properly approved under Rule 57 of the AWU’s Rules (the Rules) at the relevant time. The second matter is a donation of $50,000 from the Victorian Branch of the AWU to GetUp during the financial year ending 30 June 2006 and whether that donation was properly approved under Rule 57 of the AWU’s Rules at the relevant time. The third matter is 15 other donations made by the National Office of the AWU to persons or entities associated with the Australian Labour Party during the financial year ending 30 June 2008 and whether those donations (and each of them) were properly approved under Rule 57 of the AWU’s Rules at the relevant time. In the case of each of these matters, the possible contraventions of civil penalty provisions included whether in relation to the donation (and its reporting), ss 237(1), 285(1), 286(1) and 287(1) in Sch 1B of the Workplace Relations Act 1996 (Cth) (WR Act) between 12 May 2003 and 27 March 2006, and in Sch 1 of the same Act between 27 March 2006 and 30 June 2009 had been contravened. The fourth matter is a resolution allegedly passed by the National Executive in either 2006 or 2007 to delegate its power to approve loans, grants or donations of an amount exceeding $1,000. In the case of this matter, the possible contraventions of civil penalty provisions were identified as ss 285(1), 286(1) and 287(1).

20    At the time of the possible contraventions, ss 237(1), 285(1), 286(1) and 287(1) were in the following terms:

237    Organisations to notify particulars of loans, grants and donations

(1)    An organisation must, within 90 days after the end of each financial year (or such longer period as the Registrar allows), lodge in the Industrial Registry a statement showing the relevant particulars in relation to each loan, grant or donation of an amount exceeding $1,000 made by the organisation during the financial year.

Note:    This subsection is a civil penalty provision (see section 305).

…

285    Care and diligence—civil obligation only

(1)    An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:

(a)    were an officer of an organisation or a branch in the organisation’s circumstances; and

(b)    occupied the office held by, and had the same responsibilities within the organisation or a branch as, the officer.

               Note:    This subsection is a civil penalty provision (see section 305).

...

286    Good faith—civil obligations

(1)    An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties:

(a)    in good faith in what he or she believes to be the best interests of the organisation; and

     (b)    for a proper purpose.

                 Note:    This subsection is a civil penalty provision (see section 305).

...

287    Use of position—civil obligations

(1)    An officer or employee of an organisation or a branch must not improperly use his or her position to:

(a)    gain an advantage for himself or herself or someone else; or

(b)    cause detriment to the organisation or to another person.

Note:    This subsection is a civil penalty provision (see section 305).

21    A copy of the Decision Record is an appendix to these reasons.

22    Section 140 of the RO Act provides that an organisation must have rules that make provision as required by the Act. Section 149 addresses the rules which an organisation must have with respect to conditions for making of loans, grants and donations by the organisation. Section 149(1) is in the following terms:

Rules to provide conditions for loans, grants and donations by organisations

(1)    The rules of an organisation must provide that a loan, grant or donation of an amount exceeding $1,000 must not be made by the organisation unless the committee of management:

(a)    has satisfied itself:

(i)    that the making of the loan, grant or donation would be in accordance with the other rules of the organisation; and

(ii)    in the case of a loan – that, in the circumstances, the security proposed to be given for the repayment of the loan is adequate and the proposed arrangements for the repayment of the loan are satisfactory; and

(b)    has approved the making of the loan, grant or donation.

23    At the time the donations were made, s 149(1) of Sch 1 of the WR Act was to the same effect.

24    The AWU’s Rules at the time the donations were made included Rule 57 which was in the following terms:

(1)    A loan, grant or donation, must not be made by the Union or any Branch as the case may be, unless the National Executive of the Union has:

(a)    Satisfied itself:

(i)    that the making of the loan, grant or donation, would be in accordance with the Rules of the Union; and

(ii)    in relation to a loan, that, in the circumstances, the security proposed to be given for the repayment of the loan is adequate and the proposed arrangements for the repayment of the loan are satisfactory; and

(b)    Approved the making of the loan, grant or donation.

(2)    Nothing in sub-clause (1) is to affect a Branch’s power to make donations, less than $1,000. However, National Executive may from time to time set a maximum donation figure lower than $1,000.

25    Mr Enright’s consideration of the matter under s 331(2) of the RO Act extended over a period of just over two months. The starting point was two articles published in the Weekend Australian on 12 August 2017, one titled “Shorten’s AWU donated $100,000 to [GetUp]” and the other titled “Union and ALP links test [GetUp] ‘independence’”. On 14 August 2017, Mr Enright asked his staff to commence inquiries and to locate documents that might assist in addressing the allegations in the articles. Later on the same day, Senator the Honourable Eric Abetz wrote to the Commissioner referring to reports in the Australian on 12 August 2017 in relation to a sum of funds provided by the AWU to GetUp and saying, “If these reports are correct, it would appear that this donation may have been in violation of the Union’s own rules and does not appear to have been included in its financial disclosures …”.

26    Further articles appeared in the Australian newspaper as follows:

(1)    Article titled “Thomson case provides ammo for Shorten attack” published on 15 August 2017;

(2)    Article titled “Probe for Shorten over AWU’s [GetUp] donation” published on 16 August 2017;

(3)    Article titled “Shorten donated AWU funds to his political campaign” published on 17 August 2017; and

(4)    Article titled “‘Unaccountably shifty’: Bill flayed” published on 18 August 2017.

27    The Minister sent two referral letters to the Commissioner dated 15 August 2017 and 17 August 2017 respectively. These referral letters and Mr Enright’s responses to them are considered in detail in connection with ground 4 in the Notice of contention.

28    Mr Enright communicated with the AWU (Mr Walton) and then with its solicitors, Maurice Blackburn. Some information was provided by the AWU in respect of the reporting of the donation of $50,000 by the National Office of the AWU to GetUp and the donation of $50,000 by the Victorian Branch of the AWU to GetUp. A stalemate soon developed with Mr Enright seeking all documents showing the AWU’s approval of various donations and the AWU, through its solicitors, seeking all documents disclosing communications between Mr Enright and his office on the one hand, and the Minister and her office on the other.

29    The AWU called a number of witnesses at the trial. In each case, the witness attended in response to a subpoena issued by the AWU. Mr Enright was called by the AWU and, in the course of his evidence, and with the leave of the Court granted under s 38 of the Evidence Act 1995 (Cth), counsel for the AWU was able to question Mr Enright as though the AWU was cross-examining Mr Enright about aspects of his evidence. The Commissioner did not call any witnesses. The primary judge recorded the fact that, in addition to the oral evidence, a large number of documents were tendered at the trial.

The Commissioner’s Appeal and Grounds 1 and 3 IN the AWU’s Notice of Contention

30    The second ground of the AWU’s application for judicial review was in the following terms:

That the Commissioner’s decision to conduct the Investigation under s 331(2) of the RO Act was affected by jurisdictional error, because:

(i)    it was not open to the Commissioner to be satisfied that there were “reasonable grounds” to conduct an investigation for breach of the AWU’s rules, due to the operation of s 320 of the RO Act;

(ii)    further or alternatively, in not adverting to s 320 of the RO Act, the Commissioner misunderstood the law he was to apply.

As I have said, the primary judge upheld the first limb of this ground. He rejected the second limb.

31    Section 320, which is referred to in both limbs of the second ground, is in the following terms:

Validation of certain acts after 4 years

(1)    Subject to this section and section 321, after the end of 4 years from:

(a)    the doing of an act:

(i)    by, or by persons purporting to act as, a collective body of an organisation or branch of an organisation and purporting to exercise power conferred by or under the rules of the organisation or branch; or

(ii)    by a person holding or purporting to hold an office or position in an organisation or branch and purporting to exercise power conferred by or under the rules of the organisation or branch; or

(b)    the election or purported election, or the appointment or purported appointment of a person, to an office or position in an organisation or branch; or

(c)    the making or purported making, or the alteration or purported alteration, of a rule of an organisation or branch;

the act, election or purported election, appointment or purported appointment, or the making or purported making or alteration or purported alteration of the rule, is taken to have been done in compliance with the rules of the organisation or branch.

(2)    The operation of this section does not affect the validity or operation of an order, judgment, decree, declaration, direction, verdict, sentence, decision or similar judicial act of the Federal Court or any other court made before the end of the 4 years referred to in subsection (1).

At the time the donations were made, s 89 of Sch 1 of the WR Act was in similar terms.

The Primary Judge’s Reasons

32    The primary judge summarised the AWU’s argument in support of the first limb of the second ground of judicial review in the following way. Mr Enright’s decision was affected by jurisdictional error because it was not open to him to be satisfied that there were reasonable grounds to conduct the investigation. The only ground relied upon by Mr Enright to reach a state of satisfaction that there were reasonable grounds to conduct an investigation as to whether ss 285(1), 286(1) and 287(1) had been contravened was that the making of the donations involved suspected non-compliance with the Rules and, in particular, Rule 57. The AWU submitted that this approach was misconceived because the operation and effect of s 320 of the RO Act was such that the making of the donations was “taken to have been done in compliance with the Rules” at the end of the four year period after each of the donations were made (at [85]). The AWU submitted that in those circumstances, there is no possibility of non-compliance with the Rules in relation to the making of the donations and it was not open to Mr Enright to reach the state of satisfaction required by s 331(2). It followed that his decision was affected by jurisdictional error and invalid.

33    The primary judge noted that the AWU’s submission did not extend to the conduct of an investigation into whether s 237(1) had been contravened because that aspect of the Investigation had nothing to do with a suspected contravention of the Rules. The relevant failure was a failure to comply with an obligation imposed by the RO Act itself.

34    The primary judge then discussed the general principles concerning the Court’s power, on an application for judicial review, to review the exercise of a power of the nature set out in s 331(2). There was no dispute before this Court about his Honour’s statement of the general principles and, to the extent necessary, the principles are referred to later in these reasons.

35    His Honour said that if reasons are given by a decision-maker which explain the basis for the decision-maker reaching a requisite state of satisfaction or opinion, it is to those reasons that a supervising court should look to understand how the state of satisfaction or opinion was reached. His Honour said (at [94]):

That is the approach taken by a supervising court in the related field of legal unreasonableness. I can see no reason why the same approach is not apposite.

36    I should say something at this point about the evidence of Mr Enright’s reasons for the decision he made. The primary judge focussed on the Decision Record as did the parties both before the primary judge and on appeal. However, as counsel for the AWU put it in the course of oral submissions, there was no statutory obligation on Mr Enright to give reasons and the identification of his actual reasons is a question of fact. As it happened, Mr Enright gave oral evidence extending over nearly two days primarily directed (so far as I can see) to the improper political purpose ground and related grounds (i.e., the third, fourth and fifth grounds of the application for judicial review). Nevertheless, he gave some evidence relevant to the second ground and both the primary judge and the parties referred to and relied on aspects of this evidence.

37    The primary judge’s approach was to set out his conclusions and then explain his reasons for those conclusions. He said that he had reached the view that the only circumstance or ground relied upon by Mr Enright to form the opinion that there were reasonable grounds to conduct an investigation as to whether ss 237(1), 285(1), 286(1) and 287(1) of the RO Act had been contravened was that there was a basis for suspecting that each of those provisions had been contravened, and further, that Mr Enright’s only basis for the suspicion that ss 285(1), 286(1) and 287(1) had been contravened was that the donations were not made in accordance with the Rules. His Honour said that he reached that conclusion “looking to the reasons given by Mr Enright for the Decision” (at [96]).

38    His Honour said that it was open to Mr Enright to be satisfied that there were reasonable grounds to conduct an investigation as to whether s 237(1) “has been contravened” and the conduct of the Investigation for that purpose was not invalid because the requisite state of satisfaction did not exist (at [97]).

39    The primary judge said that he reached the opposite conclusion in relation to the conduct of an investigation for the purpose of investigating whether ss 285(1), 286(1) and 287(1) had been contravened. His Honour concluded that the delegate’s suspicion that various acts had occurred in contravention of those sections was predicated upon the view that those acts, if done, were done in breach of the Rules and that, in each case, the breach of the Rules was the basis for the suspected contravention. His Honour said (at [98]):

… It was for that reason that Mr Enright formed the opinion that there were reasonable grounds to conduct an investigation as to whether those provisions had been contravened.

40    His Honour said that the basis relied upon by Mr Enright to ground his suspicion could not sustain the opinion that there were reasonable grounds to conduct an investigation as to whether those provisions had been contravened. He said that there was no basis for Mr Enright’s opinion that the suspected contraventions would be grounded in acts done in contravention of the Rules because, by the operation of s 320 of the RO Act, the suspected acts in question, if done, must be “taken to have been done in compliance with the [Rules]”. His Honour said that, in those circumstances, the matters relied upon by Mr Enright to form his opinion, were insufficient to induce a reasonable person to form the opinion that there were reasonable grounds to conduct an investigation as to whether ss 285(1), 286(1) and 287(1) had been contravened (at [100]). His Honour then turned to provide his reasons for reaching those conclusions.

41    There are eight key conclusions in his Honour’s reasoning and, in my opinion, it will assist in understanding the primary judge’s reasons, and the submissions on the appeal and with respect to the Notice of contention, if I organise my description of his Honour’s reasons by reference to those eight key conclusions.

42    The first key conclusion is a finding by the primary judge that Mr Enright’s state of mind in deciding to conduct the Investigation was a suspicion that ss 237(1), 285(1), 286(1) and 287(1) had been contravened.

43    The primary judge said that Mr Enright “unquestionably” held a state of mind about whether ss 237(1), 285(1), 286(1) and 287(1) had been contravened and relied upon that state of mind in forming the opinion that he did under s 331(2) (at [114], [121], [123], [128], [133], [137] and [147]). He considered that having regard to the Decision Record that state of mind was the only ground relied upon by Mr Enright in being satisfied that there were reasonable grounds to commence an investigation into whether each of ss 237(1), 285(1), 286(1) and 287(1) had been contravened (at [114]).

44    The second key conclusion is a holding by the primary judge that the state of mind necessary for the Commissioner “to proceed reasonably” under s 331(2) is “at least a reasonable suspicion of a contravention” (at [113]). Although his Honour said that he did not need to determine the state of mind required by s 331(2), in view of his first conclusion, it is clear from his reasons read as a whole that he did reach the second key conclusion (at [113] and [122]).

45    His Honour began his analysis by considering the terms of s 331 and the coercive powers which are available for the purposes of an investigation. He then contrasted those matters with the powers available to the Commissioner in conducting inquiries under s 330 (at [102]–[109]). His Honour considered that the matters he identified were to be kept in mind when assessing whether a particular investigation has been commenced within the boundaries of the power conferred by s 331(2). I will address those matters later in these reasons.

46    The primary judge then summarised the competing submissions of the parties as to the necessary state of mind of the decision-maker before the power in s 331(2) to conduct an investigation is exercised. The AWU’s submission was that there will be reasonable grounds to conduct an investigation under s 331(2) if there are sufficient facts to satisfy a person that: (1) there are reasonable grounds to believe that a civil penalty provision may have been contravened; and (2) there are reasonable grounds to believe that the investigation will assist the Commissioner to establish that a civil penalty provision has been contravened.

47    By contrast, the Commissioner’s submission was that the decision-maker was not required to have a state of mind about whether a civil penalty provision “had been contravened”. He submitted that the only question to be answered in the formulation of the requisite opinion was “whether it was reasonable to investigate whether a civil penalty provision had been contravened” or “was it reasonable to think it appropriate to investigate” whether a civil penalty provision had been contravened.

48    His Honour considered that the Commissioner’s formulations merely restated the criterion in non-statutory language and did not identify the content of the criterion, that is, the considerations that needed to be taken into account. He described the Commissioner’s submissions as to content as involving identification of only those matters which were said not to be necessary. His Honour said that the considerations which were said not to be necessary or relevant, were “unhelpfully” supported by the Commissioner’s submissions by reference to authorities dealing with s 155 of the Trade Practices Act 1974 (Cth), such as Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 31 ALR 519; (1980) 47 FLR 163 (Melbourne Home of Ford) at 173; Emirates v Australian Competition and Consumer Commission [2009] FCA 312; (2009) 255 ALR 35 at [103]; Singapore Airlines Ltd v Australian Competition and Consumer Commission [2009] FCAFC 136; (2009) 260 ALR 244 at [37]. His Honour said that these cases dealt with a different legislative provision with “insufficient equivalence” to s 331(2) (at [112]).

49    The primary judge said that the requirement of “at least a reasonable suspicion of a contravention” was implicit in the text, context and purpose of the limitation on the exercise of the power in s 331(2) i.e., reasonable grounds to conduct an investigation (at [113]).

50    The third key conclusion is that the primary judge construed Mr Enright’s “reasonable grounds” for the purposes of s 331(2) as being based solely on the alleged contraventions of the Rules of the AWU (at [96], [98], [137], [138], [146], [147] and [323]). He found that there were no other matters beyond the contraventions of the Rules which formed the basis of Mr Enright’s suspicion of contraventions of ss 285(1), 286(1) and 287(1).

51    As part of determining whether Mr Enright had “proceeded reasonably” for the purposes of s 331(2), his Honour identified and then considered the “reasonable grounds” relied on by Mr Enright.

52    His Honour found that Mr Enright’s reasonable grounds were contained in the Decision Record. He relied on the following evidence to make that finding. First, he noted that although there was no statutory obligation upon the Commissioner or his delegate to provide reasons for a decision, including a decision to conduct an investigation under s 331, Mr Enright’s practice within the established processes of the Commission was to create a decision record in relation to any “significant” decision. Mr Enright regarded the decision in this case as a significant decision and the purpose of a case decision record is to set out the decision and the reasons for the decision. Secondly, the primary judge noted that a number of drafts of the Decision Record were in evidence and that Mr Enright explained in his evidence the reasons for those drafts. He set out a passage from Mr Enright’s evidence to the effect that the process of drafting is to ensure that “all of the relevant reasonable grounds” are identified. Thirdly, the primary judge noted that the Commissioner often obtained legal advice, including advice about “our reasonable grounds” (at [118]). In this case, Mr Enright obtained legal advice from Mr Chris O’Grady QC. Mr O’Grady provided advice by memorandum dated 4 October 2017. Mr Enright explained in his evidence that he sought advice because he wanted senior counsel’s advice “about whether or not there were reasonable grounds to commence an investigation in this case, and whether the Commissioner’s discretion ought to be exercised to conduct the investigation” as well as to ensure that the legal bases for conducting such an investigation were properly considered. The primary judge said that it was significant that in compiling a list of matters “suggesting that there may have been a contravention of the predecessor provisions warranting investigation”, Mr O’Grady referred to matters, in relation to which, either the Honourable Bill Shorten MP (Mr Shorten) or the Branch Secretary of the Victorian Branch of the AWU at the relevant time, Mr Cesar Melhem, were specifically mentioned.

53    In his memorandum of advice, Mr O’Grady expressed the opinion that on the basis of the material in the brief sent to him, it would appear that there are reasonable grounds for being satisfied that there is a matter warranting investigation in that there are good grounds for suspecting the following matters. I will not set out all the matters to which Mr O’Grady referred. The following are the relevant matters for present purposes. In April 2005, GetUp was incorporated as a non-profit organisation. On 1 August 2005, Mr Shorten was made an inaugural director of GetUp. He resigned from that position from some time in or around 2006, but prior to him being elected to the Commonwealth Parliament. In the year ending 30 June 2006, the AWU National Office approved a donation or donations to GetUp totalling $50,000 and at that time Mr Shorten was the National Secretary of the AWU. In November 2006, the National Secretary passed a resolution authorising Mr Shorten, who at that time was the National Secretary of the AWU, to make donations at his discretion to candidates in the 2007 Federal Election. Subsequent to that authorisation, Mr Shorten donated $25,000 to his own political campaign and a further $50,000 to two other campaigns. In the year ending 30 June 2006, the AWU Victorian Branch approved a donation or donations to GetUp totalling $50,000. At the time, Mr Melham was the Branch Secretary of the Victorian Branch of the AWU (at [118]).

54    As the primary judge said, there was no reference in the Decision Record to possible circumstances attending Mr Shorten or the delegation to Mr Shorten of the capacity to make donations at his discretion to candidates in the 2007 Federal Election or that Mr Shorten donated $25,000 to his own political campaign (at [143]).

55    The primary judge, having decided that it was intended that the Decision Record set out all of the grounds regarded by Mr Enright as constituting the “reasonable grounds” to conduct the Investigation and upon which his satisfaction was based, then turned to consider what the Decision Record disclosed about the reasonable grounds. He said that having regard to the content of the Decision Record, it was apparent that there are no considerations relied upon for the state of satisfaction reached by Mr Enright, other than considerations that he perceived supported a suspicion that either ss 237(1), 285(1), 286(1) and 287(1) had been contravened.

56    The primary judge said that no matters going to other considerations are raised by the Decision Record. This demonstrated, in the primary judge’s opinion, that Mr Enright construed s 331(2) as the primary judge had, recognising that his assessment of whether there were reasonable grounds had to focus upon whether there was a basis for suspecting particular contraventions of civil penalty provisions. The primary judge referred to and relied on paragraphs e i. and e ii. in the Decision Record and said that the first sentence of each sub-paragraph addresses the basis for Mr Enright’s suspicion that ss 285(1), 286(1) and 287(1) were contravened, whilst the second sentence of each sub-paragraph addresses the basis for his suspicion in relation to contraventions of s 237(1).

57    As I have already said, and as the primary judge noted, there was little doubt that it was open for Mr Enright to come to the view, by reference to the consideration he relied upon, that there was a reasonable basis for suspecting contraventions of s 237(1) and that, therefore, there were reasonable grounds for conducting an investigation as to whether s 237(1) was contravened by the AWU in the financial years ending 30 June 2006 and 30 June 2008.

58    The primary judge then turned to consider ss 285(1), 286(1) and 287(1) and said (at [128]):

However, whether objectively considered a reasonable basis existed for Mr Enright’s suspicion that ss 285(1), 286(1) and 287(1) were contravened, is far more problematic.

59    The primary judge then referred to the terms of each of the sections and reached the view that it was at least arguable that in exercising the powers and discharging the duties of his or her office, an officer of a registered organisation may contravene ss 285(1) and 286(1) because, in so doing, the officer acted in contravention of the rules of the organisation. However, with respect to s 287(1), the primary judge said that it was not immediately apparent how a contravention of the rules of an organisation would of itself contravene s 287(1), unless the contravention of the rules of an organisation was itself the means by which an advantage was gained or a detriment caused. The primary judge recorded the fact that the AWU had not argued that an act done in contravention of the rules was not capable of “founding a ground of contravention” of s 287(1) and the primary judge said that, “for present purposes”, he would proceed on the basis that such a contravention was at least arguable (at [132]).

60    The primary judge then identified the acts which appeared to have formed the basis of Mr Enright’s suspicion that acts had occurred which may have contravened each of ss 285(1), 286(1) and 287(1). He noted that no particular officers or employees were named in the Decision Record as being the actors in relation to any of the matters relied upon by Mr Enright. The primary judge said that with respect to the acts identified, the only concern recorded in the Decision Record about them is that they might not have been done in accordance with the Rules.

61    The result of the primary judge’s analysis was that he reached the conclusion that the basis for Mr Enright’s suspicion that ss 285(1), 286(1) and 287(1) had been contravened was that the Rules had been contravened. He analysed the matter by reference to the Decision Record, although he said that his conclusion was supported by two other matters “beyond” the Decision Record (at [137]).

62    The first matter was that there was “extensive evidence of communications” either made directly by Mr Enright, or made with his approval, which reported the bases for the Investigation as the making of donations not approved in accordance with the Rules (at [137]). In that regard, his Honour referred to three findings which he made in his analysis of the third ground of judicial review (at [234], [246] and [257]). The three findings related to draft media statements, one before and two after Mr Enright made his decision, stating that the Investigation related to a breach of the Rules.

63    The second matter was that his Honour considered that Mr Enright had been selective in relation to the matters he chose to rely upon to form the opinion that he was satisfied that there were reasonable grounds to conduct an investigation as to whether ss 285(1), 286(1) and 287(1) had been contravened. He said that two matters referred to in Mr O’Grady’s advice were not relied upon by Mr Enright. Those matter were as follows: (1) Mr Shorten may have been a director of GetUp at the time the donations were made by the AWU. This was also a circumstance “giving good grounds for suspecting” the possible contravention of the RO Act; and (2) there were grounds for suspecting that the National Executive delegated to Mr Shorten the capacity to make donations at his discretion to candidates in the 2007 Federal Election and that Mr Shorten donated $25,000 to his own political campaign. However, neither of those matters were referred to in the Decision Record. The primary judge expressed the following conclusion (at [144]):

It is apparent then that, beyond possible contraventions of the AWU’s Rules, Mr O’Grady advised Mr Enright that there were grounds for suspicion which, broadly stated, may be characterised as giving rise to possible conflicts of interest for Mr Shorten, which could be relied upon to form the view that there were potential contraventions of ss 285(1), 286(1) and 287(1). However, those matters were not relied upon by Mr Enright.

64    The primary judge referred to the fact that in cross-examination Mr Enright was taken to earlier drafts of the Decision Record, including drafts which were based on there being reasonable grounds to conduct an investigation specific to the conduct of Mr Shorten in relation to the making of the donations as well as the conduct of two other officials of the AWU. Mr Enright was asked why later drafts were differently cast without reference to or naming any particular individuals. Mr Enright’s evidence was that this had occurred because, consistently with his own view, the Investigation was an investigation “into a range of office holders at the AWU and no particular office holder – there were no office holders in particular”. Mr Enright said in response to a question asking him to further explain his answer that “we weren’t focusing on any office holder in particular”. The primary judge did not make a specific finding at this point as to whether or not he accepted this aspect of Mr Enright’s evidence.

65    The primary judge concluded that Mr Enright had not relied on the fact that the donations had been made by the AWU to GetUp at the time when the National Secretary (Mr Shorten) was a board member of GetUp and the fact that donations were made to Mr Shorten as an election candidate and that there may be an argument about a conflict of interest or the best interests of the AWU. The primary judge considered that in this respect the Commissioner was restricted to the matters set out in the Decision Record.

66    The fourth key conclusion is the finding by the primary judge that the hypothesis which was the subject of Mr Enright’s suspicion was based upon acts of the kind referred to in either ss 320(1)(a)(i) or 320(1)(a)(ii) of the RO Act (at [154]). His Honour carried out an analysis by reference to “the facts as likely envisaged by Mr Enright in the hypothesis upon which he based his suspicion that acts had occurred in contravention of the Rules” (at [151]).

67    The primary judge said that on Mr Enright’s hypothesis, the donations made by the AWU were effected by an officer or employee of the National Office or the Victorian Branch of the AWU and the Rules conferred a power on the AWU to expend its funds by making donations. Furthermore, the hypothesis is based on that power being exercised by an officer without authority under the Rules and thus as a purported exercise of the expenditure power conferred by the Rules. The primary judge concluded that the donations were acts which would fall within the terms of s 320(1)(a)(ii) because in each case they were acts by a person holding an office or position in the AWU or its Victorian Branch purporting to exercise the power conferred by or under the Rules to expend the AWU’s funds. With respect to any resolution of the National Executive to delegate its powers of approval of loans, grants and donations and, on the assumption that Mr Enright regarded such a resolution as possibly grounding the contravention of ss 285(1), 286(1) and 287(1), his hypothesis must have been that in contravention of the Rules, the National Executive exercised a power to delegate its functions. On that hypothesis, the act would fall within s 320(1)(a)(i) as an act of a collective body purporting to exercise power conferred by or under the Rules.

68    The fifth key conclusion is a holding by the primary judge that the effect of s 320 of the RO Act is to notionally alter the facts so that the act in question is deemed to have been in compliance with the Rules at the time the act was done (at [159]).

69    In the context of that conclusion, the primary judge rejected three arguments advanced by the Commissioner.

70    First, the Commissioner submitted that s 320 did not operate from the time of non-compliance, but from a point in time four years after the non-compliance. The primary judge rejected this argument by reference to what he considered the proper construction of the section and by reference to relevant authorities, in particular, Egan v Harradine (1975) 6 ALR 507; (1975) 25 FLR 336 (Egan v Harradine) at 380 per Sweeney and Evatt JJ. The primary judge went on to say that even if this conclusion was wrong and it was possible to say that there had been historical contraventions of ss 285(1), 286(1) and 287(1), but contraventions which could not be proved because more than four years had passed, that would not be relevant because Mr Enright’s satisfaction must be understood to have been based upon his suspicion that there were contraventions of ss 285(1), 286(1) and 287(1) which were capable of being proved. Even if Mr Enright proceeded on the basis of historical contraventions only, he could hardly be said in those circumstances to have proceeded reasonably.

71    Secondly, the Commissioner submitted that it was at least arguable that s 320 cannot have the effect of defeating civil penalty proceedings. The primary judge rejected this argument. He considered that there was neither textual nor contextual support for construing the deeming effect of s 320 as being selective in its operation so that it would have no operation on an act when that act is relied upon to found a contravention of a civil penalty provision. In addition, the terms of s 320(2) supported the operation of s 320(1) in relation to Court orders or other judicial acts made after the end of the four year period referred to in s 320(1).

72    Thirdly, the Commissioner relied on s 321 of the RO Act which provides that where, having regard to the interests of the organisation, or members or creditors of the organisation, or persons having dealings with the organisation, the Federal Court is satisfied that the application of s 320 in relation to an act would do “substantial injustice”, s 320 does not apply and is taken never to have applied to that act. The primary judge rejected this argument on the basis that it was, as his Honour put it, “highly speculative” and because it impermissibly departed from Mr Enright’s reasons to take up a possibility which played no part in the formation of Mr Enright’s satisfaction that reasonable grounds existed. It is not necessary for me to describe this argument any further. The Commissioner did not repeat it on the appeal.

73    The sixth key conclusion is the finding by the primary judge that the facts assumed by Mr Enright which were central to the suspicion he formed, namely, the various acts done in contravention of the Rules “could not have existed” as acts done in contravention of the Rules at the time Mr Enright formed his opinion that there were reasonable grounds for the Investigation. The primary judge said that a reasonable person with a correct understanding of the operation of s 320 upon assumed facts central to Mr Enright’s suspicions of acts in breach of the Rules, could not have been satisfied, as Mr Enright was satisfied, that by reason of that suspicion, reasonable grounds existed for the conduct of an investigation into whether ss 285(1), 286(1) and 287(1) had been contravened.

74    The seventh key conclusion is a finding by the primary judge about materiality assuming he was wrong about the scope of Mr Enright’s reasonable grounds (i.e., the third key conclusion set out above). The primary judge said that even if he had been satisfied that there were matters beyond the contraventions of the Rules which grounded Mr Enright’s suspicions of ss 285(1), 286(1) and 287(1), he would arrive at the same ultimate conclusion because there was nothing in the Decision Record to suggest that the suspicion Mr Enright arrived at, and the satisfaction he formed based upon it, would have been arrived at by him in the absence of his reliance upon the view that “there are reasonable grounds for suspecting” contraventions of the Rules (at [166]).

75    The eighth and final key conclusion is the holding by his Honour that Mr Enright’s misconstruction of s 320 did not of itself constitute jurisdictional error.

76    Although it was unnecessary for the primary judge to do so, he went on to consider the second limb of the second ground of the AWU’s application for judicial review, that is to say, the allegation that the Commissioner’s decision was affected by jurisdictional error because in not adverting to s 320 of the RO Act, the Commissioner misunderstood the law he was to apply.

77    Section 320 is not referred to in the Decision Record. Mr Enright gave evidence that he regarded the provision as “inapplicable in this case”. The primary judge noted that Mr Enright did not explain why he regarded the provision as inapplicable, but at the same time, he was not pressed on that matter or challenged as to the veracity of his evidence. In the circumstances, the primary judge said there was no basis for the AWU’s contention that Mr Enright ought not to be accepted as to the evidence he gave which supports the conclusion that he considered s 320 (at [168]).

78    The alternative submission made by the AWU was that if Mr Enright thought that s 320 was inapplicable, he must have misunderstood the operation of the section. The primary judge said that, for reasons he had already given, Mr Enright was wrong to have regarded s 320 as inapplicable for the purpose of arriving at the suspicion and the consequent opinion arrived at by him, but that that did not in itself constitute jurisdictional error. The primary judge said that as the passage from the judgment of Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430 and 432 demonstrates, “misconstruing the terms of the legislation” means to misconstrue the law under which the decision-maker is required to reach the requisite opinion. In this case, that law was s 331(2) and not s 320 of the RO Act. The primary judge then said that it followed that the misconstruction by Mr Enright of s 320 would not, of itself, have given rise to jurisdictional error. However, the misconstruction of s 320 contributed to Mr Enright “not proceeding reasonably” under s 331(2) because a reasonable person proceeding on a correct construction of s 320 could not have formed the opinion that was formed by Mr Enright. The primary judge said (at [171]):

… Accordingly, the AWU has succeeded in its reliance on s 320 for the first limb of ground 2 but not for the second limb.

79    Before leaving this section of the reasons, it is necessary to say something more about Mr Enright’s approach to s 320 of the RO Act. That matter lay at the heart of the primary judge’s holding of jurisdictional error because his Honour held that a reasonable person with a correct understanding of s 320 could not have been satisfied that reasonable grounds existed for the conduct of an investigation into whether ss 285(1), 286(1) and 287(1) had been contravened.

80    Mr Enright had considered s 320, but had decided that it did not have any work to do and was not applicable in this case.

81    The primary judge discussed Mr Enright’s view as to the inapplicability of s 320 of the RO Act in the context of his consideration of whether Mr Enright’s decision to conduct the Investigation was motivated by an improper political purpose, that is, the third ground of the AWU’s application for judicial review (at [315]–[325]). In that context, his Honour declined to find that Mr Enright’s view as expressed by him in his evidence that s 320 of the RO Act was inapplicable was not a genuine and longstanding view held by him.

82    Mr Enright was not asked what he meant by “inapplicable” and, as I have said, s 320 is not even mentioned in the Decision Record. He was not asked whether inapplicability meant never relevant, or only irrelevant at the stage of deciding whether or not to conduct an investigation. He was not asked precisely how he construed s 320 of the RO Act. When counsel for the AWU was asked in the course of submissions to this Court what was Mr Enright’s “misconstruction” of s 320 (as the primary judge put it; see, for example, at [171]), he responded by saying that the way the AWU put its case below and the way in which the primary judge has approached the matter, was that an error is to be inferred from the result and, in that respect, counsel referred to the well-known statement of principle by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360 as follows:

If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law.

83    I agree with counsel for the AWU that without expressly saying so, that is how the primary judge reached his conclusion that Mr Enright had misconstrued s 320 of the RO Act.

The Structure of the Commissioner’s Arguments on the Appeal

84    As I have said, there are nine grounds of appeal. The Commissioner submitted that he did not need to succeed on all of them in order to establish his case on appeal that the orders of the primary judge should be set aside and the application for judicial review dismissed. Furthermore, he put some of the grounds of appeal on the assumption that he had failed on earlier grounds.

85    As argued by the Commissioner, and adopting the order in which he put his arguments, the grounds of appeal may be arranged as follows:

(1)    Grounds 7, 6 and 8. The Commissioner submitted that if these grounds succeed, then it is not necessary to consider the other grounds of appeal. In other words, if these grounds are upheld, then the appeal must be allowed and the orders of the primary judge set aside;

(2)    Grounds 1 and 2. The Commissioner submitted, as I understood him, that if the Court goes on to consider these grounds, it does so on the basis that the earlier grounds (i.e., grounds 7, 6 and 8) have failed and that the primary judge was correct to find that Mr Enright had suspected that ss 285(1), 286(1) and 287(1) had been contravened. I say “as I understood him” because, with respect, it was not always easy to be clear as to the assumptions upon which various arguments were being put;

(3)    Ground 9 to the extent to which it does not overlap with ground 8 (which I have chosen to include in the first category) is put on the assumption that Mr Enright did, in fact, misconstrue s 320 of the RO Act and it is argued by the Commissioner that nevertheless the error did not go to jurisdiction; and

(4)    Grounds 3, 4 and 5. These grounds were addressed last by the Commissioner and on the basis that “they only arise in the event the Commissioner has failed on every other ground of appeal” (Commissioner’s Outline of Submissions dated 7 April 2020, para 49).

Grounds 7, 6 and 8 of the Appeal

86    These grounds appear under the heading Reasonable grounds to conduct an investigation and are as follows:

6.    The primary judge erred by finding (at [113]) that for the appellant to be satisfied under section 331(2) of the FWRO Act that there were reasonable grounds to commence an investigation as to whether a civil penalty provision has been contravened, the appellant:

(a)    must have a state of mind as to whether the provision being investigated has been contravened; or alternatively

(b)    if a state of mind is necessary, that the state of mind must be (at least) a reasonable suspicion that the provision being investigated has been contravened.

7.    Further or alternatively to ground 6, the primary judge erred by finding (at [114]) that the appellant’s delegate held a state of mind that sections 237(1), 285(1), 286(1) and 287(1) of the FWRO Act had been contravened.

8.    Further to ground 6, the primary judge erred by finding (at [165] and [171]) that in order for the appellant (via his delegate) to be satisfied that there were reasonable grounds to commence an investigation as to whether a civil penalty provision has been contravened, the appellant (via his delegate) had to hold a correct understanding of the legal effect of section 320 of the FWRO Act on the relevant acts.

87    The starting point for the Commissioner’s arguments on the appeal is ground 7. The question which is raised by ground 7 of the appeal relates to his Honour’s first key conclusion and is what was in fact Mr Enright’s state of mind about possible contraventions at the time he made his decision. As I have said, the primary judge found that Mr Enright “unquestionably” held a state of mind about whether ss 237(1), 285(1), 286(1) and 287(1) had been contravened and relied upon that state of mind in forming the opinion he did under s 331(2). The Commissioner submitted that Mr Enright’s state of mind was not a suspicion of contraventions, but rather that there were reasonable grounds to conduct an investigation as to whether a civil penalty provision had been contravened. If the Commissioner succeeds on this argument, he must also succeed on the next argument which is raised by ground 6 of the appeal and relates to his Honour’s second key conclusion. In other words, he must establish that it is not the case, as the primary judge held, that as a matter of law in order to engage the power in s 331(2), Mr Enright needed, at least, to have a reasonable suspicion of a contravention. If the Commissioner succeeds on these two grounds, then he submitted that Mr Enright did not have to have a correct understanding of the legal effect of s 320 (ground 8 of the appeal) in order to decide to conduct an investigation under s 331(2) and the holding of jurisdictional error by the primary judge was erroneous. In other words, a correct understanding of s 320 was not “critical” (to use the primary judge’s word at [319]) because Mr Enright did not, and was not, as a matter of law, required to suspect that ss 285(1), 286(1) and 287(1) had been contravened. In those circumstances, the whole foundation for his Honour’s finding of jurisdictional error was removed.

88    The Commissioner’s submission that the primary judge erred in finding that Mr Enright’s state of mind was one of a suspicion that there had been contraventions of civil penalty provisions was based on the following: (1) the contention that he had such a suspicion was never put to him in the course of his evidence; (2) there is no statement in his decision as recorded in the Decision Record that he had such a suspicion that ss 285(1), 286(1) and 287(1) had been contravened; and (3) leaving aside a suspected contravention of s 237(1), the suspicions expressed by Mr Enright in the Decision Record were as to breaches of the Rules, not civil penalty provisions.

89    In my opinion, the Commissioner’s overall submission should be accepted for the reasons which follow.

90    It is clear from the primary judge’s reasons that his finding about Mr Enright’s state of mind was based on inferences he drew and was not affected by impressions formed by him about the credibility and reliability of Mr Enright or other witnesses. In those circumstances, this Court is in as good a position as the primary judge to determine the inferences which should be drawn. This Court will give respect and weight to the conclusion of the primary judge, but “once having reached its own conclusion, will not shrink from giving effect to it” (Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551 per Gibbs ACJ, Jacobs and Murphy JJ; see also Lee v Lee [2019] HCA 28; (2019) 266 CLR 129 at [55]–[56] per Bell, Gageler, Nettle and Edelman JJ).

91    The Decision Record consists of two sections, being a section entitled “Decision” and a section entitled “Reasons”.

92    The “Decision” section is drafted so as to incorporate the phraseology in s 331(2). The section also contains a reference to “possible contraventions” and whether particular sections “were contravened”.

93    In the “Reasons” section, Mr Enright refers to “alleged possible contraventions” and then expresses a state of satisfaction in terms of s 331(2), that is to say, there are reasonable grounds to conduct an investigation as to whether civil penalty provisions have been contravened. Mr Enright does refer to the civil penalty provisions and Rule 57 in this section, but only in a way which describes their content and effect (at paragraphs a. and b.).

94    Mr Enright expresses a view in relation to s 237(1) and the obligation to lodge with the Commissioner details of loans, grants and donations within a certain period of time and that view is that the material suggested that statements were lodged late in contravention of s 237(1) (paragraph c.). The Commissioner accepts that the reasons in the Decision Record are such that it should be concluded that Mr Enright suspected that s 237(1) had been contravened. As I have said, the AWU did not dispute that Mr Enright had proceeded reasonably in relation to the contravention or suspected contravention of s 237(1).

95    Paragraph d. is part of the narrative and is in the following terms:

It has been reported in various media articles that the GetUp donations and the political donations relating to the 2007 Federal Election were not approved by the National Executive in accordance with Rule 57. I have invited the AWU to provide documents voluntarily as to whether each donation was approved by the National Executive in accordance with Rule 57, but the AWU has failed or refused to do so.

96    Paragraph e. in the Decision Record is a critical paragraph and it will assist to set it out, other than those parts of it that relate to the reporting requirements in s 237(1):

e.    I conclude that there are matters warranting investigation in relation to the following:

i.    there are reasonable grounds for suspecting the National Executive may have neither satisfied itself that the GetUp donations were made in accordance with the AWU’s Rules nor approved the GetUp donations …

ii.    there are reasonable grounds for suspecting that the National Executive may have resolved to delegate its power to approve the political donations relating to the 2007 Federal Election. This further give [sic] rise to reasonable grounds for suspecting that the National Executive may not have approved the aforementioned political donations or satisfied itself that the donations were made in accordance with the AWU’s Rules …

97    The effect of these statements is that Mr Enright reasonably suspected facts which, on their face, supported a conclusion that there had been contraventions of the Rules. There is no expression in these statements of a belief, opinion or suspicion about contraventions of ss 285(1), 286(1) and 287(1) of the RO Act. Breaches of the Rules and contraventions of civil penalty provisions in the RO Act are clearly two different things. With respect, it is not clear why the primary judge found that Mr Enright suspected that contraventions of ss 285(1), 286(1) and 287(1) had occurred. There is very little in his reasons directed to this precise issue. Perhaps his Honour was influenced by his conclusion on the question of law to the effect that the power in s 331(2) is only engaged if the decision-maker reasonably suspects a contravention of a civil penalty provision and by the fact that any investigation is about whether a civil penalty provision has been contravened.

98    At all events, there is no reason to go beyond the Decision Record in order to determine Mr Enright’s suspicions and the Decision Record indicates that he suspected nothing more than facts which would or could give rise to the conclusion that there had been breaches of the AWU’s Rules. In my opinion, the primary judge’s finding about Mr Enright’s state of mind was erroneous. I do not consider that Mr Enright suspected that there had been contraventions of ss 285(1), 286(1) and 287(1).

99    In light of this conclusion, the Commissioner must, in order to avoid establishing a different jurisdictional error (i.e., a failure to form the state of mind required for the exercise of the power in s 331(2)) negate the proposition that an exercise of the power in s 331(2) is conditioned on a state of mind of a suspicion that there has been a contravention of a civil penalty provision.

100    The starting point for the purposes of determining this issue is the text of the subsection. Subsection 331(2) provides that the decision-maker must be satisfied that there are reasonable grounds to conduct an investigation as to whether there has been a contravention of a civil penalty provision. The subsection does not require the Commissioner to have reasonable grounds for believing or suspecting that there has been a contravention of a civil penalty provision. As the Commissioner pointed out, a consideration of other sections in the RO Act shows that where Parliament intended that a person must have reasonable grounds for believing or suspecting a circumstance to have occurred, such as a breach or contravention, before taking action, or exercising a power, then Parliament has used those words, or words to very similar effect (see, for example, ss 257(11), 273(2)(b), and 278(2) of the RO Act). Furthermore, the phrase “as to whether” in s 331(2) seems to be used as a form of shorthand for “as to whether or not” a civil penalty provision has been contravened. In my opinion, that consideration points away from a conclusion that the decision-maker under s 331(2) must, before exercising the power, have formed a belief or a suspicion on reasonable grounds that a contravention has occurred. Finally, in terms of text, the fact that the power in s 331(2) is a power to investigate, not a power to report or refer, or to prosecute or charge, also, in my opinion, points away from a conclusion that there must be a belief or suspicion on reasonable grounds that a contravention of a civil penalty provision has occurred before the power is exercised.

101    I turn now to the context in which the subsection appears and to the purpose of the subsection.

102    Section 331 of the RO Act deals with the Commissioner’s power to conduct investigations. It is convenient at this point to set the section out in full:

331 Commissioner may conduct investigations

(1)    If the Commissioner is satisfied that there are reasonable grounds for doing so, the Commissioner may conduct an investigation as to whether:

   (a)    a provision of Part 3 of Chapter 8 has been contravened; or

(b)    the reporting guidelines made under that Part have been contravened; or

(c)    a regulation made for the purposes of that Part has been contravened; or

(d)    a rule of a reporting unit relating to its finances or financial administration has been contravened.

(2)    If the Commissioner is satisfied that there are reasonable grounds for doing so, the Commissioner may conduct an investigation as to whether a civil penalty provision (see section 305) has been contravened.

(3)    The Commissioner may also conduct an investigation in the circumstances set out in the regulations.

(4)    Where, having regard to matters that have been brought to notice in the course of, or because of, an investigation under subsection (1) or (2), the Commissioner forms the opinion that there are grounds for investigating the finances or financial administration of the reporting unit, the Commissioner may make the further investigation.

(5)    An investigation may, but does not have to, follow inquiries under section 330.

The Court was told that no regulations have been made under s 331(3).

103    The wording of subsections (1) and (2), save for that part which identifies the subject matter of an investigation, is in material respects the same and each subsection is to be given a similar interpretation. Subsection (5) makes it clear that whilst an investigation may follow an inquiry, it does not have to follow an inquiry.

104    The Commissioner is given extensive powers which may be exercised in the conduct of an investigation. Those powers include the power to compel persons to provide information or documents, to answer questions or to provide other reasonable assistance to the Commissioner (s 335). A failure to comply with these obligations is an offence (s 337). The Commissioner may apply for the issue of a search warrant in the course of an investigation (s 335K and the sections which follow). Each of these powers is subject to its own conditions for the exercise of the power.

105    The Commissioner also has the power to make inquiries under s 330 of the RO Act and that includes the power to make inquiries as to whether a civil penalty provision has been contravened (s 330(2)). The person making inquiries cannot compel a person to assist with the inquiries under s 330. The subject matter of inquiries under s 330(1) is the same subject matter of investigations under s 331(1) save that the inquiries are as to whether various matters are being complied with and investigations are as to whether those matters have been contravened. The subject matter of inquiries under s 330(2) is the same as the subject matter of investigations provided for in s 331(2), save that there is no requirement that the Commissioner be satisfied that there are reasonable grounds for making the inquiries.

106    The Commissioner has the power to bring proceedings for the imposition of a pecuniary penalty for the contravention of a civil penalty provision (s 310).

107    The functions of the Commissioner are set out in s 329AB and that section provides as follows:

329AB Functions of the Commissioner

The Commissioner has the following functions:

(a)    to promote:

(i)    efficient management of organisations and high standards of accountability of organisations and their office holders to their members; and

(ii)    compliance with financial reporting and accountability requirements of this Act;

including by providing education, assistance and advice to organisations and their members;

(b)    to monitor acts and practices to ensure they comply with the provisions of this Act providing for the democratic functioning and control of organisations;

(c)    such other functions as are conferred on the Commissioner by this Act or by another Act;

(d)    to do anything incidental to or conducive to the performance of any of the above functions.

108    The Explanatory Memorandum for the amendments to the RO Act which, among other things, established the Commissioner and the Commission, namely, the Fair Work (Registered Organisations) Amendment Act 2016 No 79, 2016 (Cth) (the 2016 Amendment Act), makes it clear that the aim of the changes was to ensure the better governance of registered organisations by improving the regulatory framework. An aspect of that aim was the establishment of an “independent watchdog”, being the Commission, “to monitor and regulate registered organisations with enhanced investigation and information gathering powers”. The enhanced investigation and information gathering powers were modelled on the powers set out in the Australian Securities and Investments Commission Act 2001 (Cth).

109    The primary judge surveyed these contextual matters and considered that the comparison between s 331 and s 330 revealed a relation between the coercive powers conferred on the Commissioner and the limitation imposed on the investigative function for which those powers have been conferred. Another way of putting this point was to say that access to the coercive powers is not to be available unless the Commissioner is satisfied that there are reasonable grounds to conduct an investigation. His Honour then made two points which he considered needed to be borne in mind in the assessment of whether a particular investigation has been commenced within the boundaries of the power conferred by s 331(2). They are as follows: (1) the requirement of reasonable grounds should be understood “as harbouring a concern for the rights ordinarily enjoyed by others and the capacity for those rights to be adversely affected by the conduct of an investigation” (at [108]); and (2) coercive powers are not usually conferred “on” fishing expeditions, the language in s 331(2) is “specific” and the Commissioner is not “at large” (at [109]).

110    I see no difficulty in concluding that the requirement in s 331(2) that the Commissioner be satisfied that there are reasonable grounds is a check on the power to conduct an investigation and was inserted to confine the power of investigation with its attendant coercive powers. As I have already said, it may be observed that a number of the coercive powers are not completely unchecked and have their own internal requirements of reasonable grounds (e.g., s 335) or reasonable grounds to suspect (e.g., s 335K). In any event, the matters identified by the primary judge, although relevant, do not lead inevitably to the conclusion that the test is one of, at least, a reasonable suspicion that a civil penalty provision has been contravened as his Honour held.

111    The difficulty with the primary judge’s construction of s 331(2) is that it involves putting a gloss on the words used. The subsection is not expressed in terms of, at least, a reasonable suspicion of a contravention. It is expressed in terms of whether the Commissioner is satisfied that there are reasonable grounds to conduct an investigation as to whether a civil penalty provision has been contravened. No doubt in some, perhaps a number of, cases, the Commissioner will have formed a view about whether a civil penalty provision has been, or may have been, contravened, but, as the Commissioner pointed out, there will be others where (by way of example) the position is unclear, there is a strong public interest in ascertaining the truth and “clearing the air” and an investigation is an effective means of doing so.

112    The AWU submitted that s 331(2) of the RO Act should be construed in a similar way to the now repealed ss 218 and 219 of the Industrial Relations Act 1988 (Cth) (see now ss 200 and 201 of the RO Act). The AWU relied on the approach to ss 218 and 219 of the Industrial Relations Act taken by French J sitting as a judge of this Court in Re Post; Re Election for Offices in Transport Workers Union of Australia, Western Australian Branch (1992) 40 IR 162 (Re Post).

113    Re Post concerned an application by a member of an organisation for an inquiry by the Court as to whether there has been an irregularity in an election for an office in the organisation or a branch of an organisation. Sections 218 and 219 of the Industrial Relations Act dealt with the making of an application for an inquiry and the conditions which must be satisfied before the Court fixes a time and place for the conduct of an inquiry. Those sections were in the following terms:

218.    Where a person who is, or within the preceding period of 12 months has been, a member of an organisation claims that there has been an irregularity in relation to an election for an office in the organisation or a branch of the organisation, the person may make an application for an inquiry by the Court into the matter.

 219.    Where:

(a)    an application for an inquiry has been lodged with the Court under section 218;

and

(b)    the Court is satisfied that there is reasonable ground for the application;

the Court shall fix a time and place for conducting the inquiry, and may give such directions as it considers necessary to ensure that all persons who are or may be justly entitled to appear at the inquiry are notified of the time and place fixed and, where the Court fixes a time and place, the inquiry shall be taken to have been instituted.

114    Justice French addressed the requirement in s 219(b). His Honour said (at 166–167):

The question for the court mandated by s 219(b) of the Industrial Relations Act 1988 is whether it is satisfied that there is reasonable ground for the application. It will not be so satisfied if the grounds relied upon could not, even if made out, constitute “an irregularity in relation to an election for an office in the organisation”. The question whether there is such an irregularity lies at the heart of this jurisdiction. Nor will it be so satisfied if the allegations of fact relied upon in the application do not at least offer good grounds for suspicion that there has been such an irregularity. The court will not entertain an application of a speculative nature based upon the applicant's opinion that there has been irregularity unless that opinion rests upon some substantial factual foundation. Necessary conditions to establish the requisite state of satisfaction can be multiplied. It is harder to state what is sufficient to satisfy the court beyond the words of the section itself which require an evaluative judgment at this preliminary stage.

(Emphasis added.)

115    The approach to interpretation taken by French J in Re Post has been followed in the case of the interpretation of ss 200 and 201 of the RO Act and, in particular, s 201(b) which provides that the Court must be satisfied that there are reasonable grounds for the application for an inquiry (Walker, in the matter of an election for an office in Victorian Branch of the Australian Rail, Tram and Bus Industry Union [2014] FCA 1109 at [20] per Bromberg J; Clancy, in the matter of an application for an inquiry in relation to election for offices in the Australian Nursing and Midwifery Federation [2017] FCA 460 at [26] per Siopis J).

116    The AWU submits that in the same way that the Court was required to be satisfied under s 219(b) of the Industrial Relations Act and now s 201(b) of the RO Act that there are, at least, good grounds for suspecting that there has been an irregularity, so too the Commissioner cannot act under s 331(2) of the RO Act unless he has a suspicion that there have been contraventions of civil penalty provisions. On the face of it, this argument has some attractions. However, I consider that when the different contexts of the two statutory schemes are appreciated, the approach taken in Re Post, and the cases which have followed it, is of little, if any, assistance to the proper interpretation of s 331(2) of the RO Act.

117    The Commissioner occupies an office established by statute. The Commissioner is independent of registered organisations and their members. Whilst the Commissioner might act under s 331(2) of the RO Act by reason of matters being raised with him, or referred to him, he does not act by reason of applications made to him. The Commissioner investigates a matter and he does not do so in public. Furthermore, he is not restricted to information provided to him by others. If he is not satisfied with the information, he can take steps himself to obtain further information. The scope and extent of an investigation is in his hands. The outcome of the investigation may be that no action is taken.

118    By contrast, the Court under ss 200 and 201 of the RO Act acts on the basis of an application by an interested party and sits in public exercising the judicial power of the Commonwealth, not performing investigative functions. It usually acts on the basis of information provided to it, although there is one qualification to that proposition. The Court can authorise the Commissioner to take action under s 202 of the RO Act. Having said that, even with that qualification the fact is that the functions performed by the Commissioner on the one hand, and those performed by the Court on the other, are very different.

119    The AWU’s construction is not enhanced by submitting (as it did) that the requirement that the Commissioner or his delegate have a reasonable suspicion of a contravention is not a high bar and by pointing to the fact that, as described by the High Court in George v Rockett [1990] HCA 26; (1990) 170 CLR 104 (George v Rockett), suspicion is something less than belief. The Court said (at 115):

The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown.

That is to be accepted, but it does not advance the construction issue.

120    The context in which s 331(2) appears is as follows. The Commissioner has important compliance and enforcement powers and functions under the RO Act, including the power to bring proceedings for pecuniary penalties for contraventions of civil penalty provisions. The civil penalty provisions in the RO Act relate to important matters such as reporting requirements, financial requirements and officers’ duties. The test posed by the subsection is whether in that context it was open to the Commissioner to be satisfied that there are grounds to conduct an investigation as to whether a civil penalty provision has been contravened. It was open to the Commissioner to be so satisfied if the grounds are sufficient to induce that state of satisfaction in a reasonable person (Prior v Mole [2017] HCA 10; (2017) 261 CLR 265 at [98] per Gordon J).

121    In my respectful opinion, the primary judge’s statement of the relevant test (that is, at least a reasonable suspicion of a contravention) is incorrect.

122    Before leaving this issue, it is necessary to say something about the Commissioner’s reliance on cases dealing with s 155(1) of the now repealed Trade Practices Act. Counsel for the Commissioner referred to these provisions as “cognate” or as involving “cognate constructions”. Section 155 empowered the Chairman of the Trade Practices Commission to obtain information from a person whom he or she had reason to believe was capable of providing information relating to a matter that constitutes, or may constitute, a contravention of the Trade Practices Act. The authorities dealing with the requirements of that section established that the Chairman acting under that section did not need to know or suspect a contravention before exercising the power. The power was a power to investigate. In Melbourne Home of Ford, the Full Court of this Court (Brennan, Keely and Fisher JJ) said (at 173):

In the case of a matter that may constitute a contravention, the Chairman may not know the constitutive facts of a contravention (if there has been one) and he may ultimately ascertain that there has been no contravention in the conduct or transaction which he is investigating. Because his attention has been drawn to a particular act or transaction which warrants investigation, and because he has reason to believe that the person to whom the notice is given is capable of furnishing information relating to the matter under investigation, he is engaged in a function of investigation, not in a task of proving an allegation. The power conferred by s 155(1) is in aid of that function and is a power which authorizes inquiries both wide in scope and indefinite in subject matter. It is an investigative power which is under ·consideration here and it is not possible to define a priori the limits of an investigation which might properly be made. The power should not be narrowly confined.

123    In WA Pines Pty Ltd v Bannerman (1980) 30 ALR 559; (1980) 41 FLR 175, Lockhart J said (at 188–189):

The Commission is given the powers conferred by s 155(1) because Parliament has entrusted to it the task of investigating contraventions or possible contraventions of the Act. Armed with the powers of s 155(1) the Commission will be able to determine whether prosecutions would be likely to succeed or fail. The Commission is part of the Commonwealth’s law enforcement machinery. It is not for it to determine contravention or no; that is for the courts. The belief of the Commission whether there has been or may be a contravention is not necessary for the valid exercise of the powers of the Commission; but it must have a well-founded belief that the recipient of the notice is capable of providing information, producing documents or giving evidence that may assist in determining whether a contravention has occurred or may occur.

The Commission may seek to exercise its powers under s 155 to obtain information or documents that may be exculpatory rather than inculpatory. Surely this must be a proper exercise of the power conferred by s 155; in which case plainly it is unnecessary for the Commission to have the belief that there has been or may be a contravention of the Act.

…

Parliament has armed the Commission with powers of investigation to determine whether contraventions have occurred or may occur. A fortiori these powers must be exercised before courts hold that there has been or has not been a contravention. No-one knows whether a contravention has occurred until a court says so. It is erroneous to suggest that the validity of the power of investigation is determined by the subsequent findings of courts of law. Indeed, informations may never be laid because the very exercise by the Commission of its powers may reveal that there is not or will not be a contravention.

(see also Seven Network Ltd v Australian Competition and Consumer Commission [2004] FCAFC 267; (2004) 140 FCR 170 at [49(iii)] per Sackville and Emmett JJ).

124    There are sufficient differences between the statutory schemes and text used in the respective provisions to make me hesitate before placing any reliance on these authorities. That is particularly so in light of the fact that it emerges clearly from cases such as George v Rockett and McKinnon v Secretary, Department of Treasury [2006] HCA 45; (2006) 228 CLR 423 that when considering the scope of provisions that are framed in terms of reasonable grounds or a suspicion, belief or other state of mind, it is important to pay very close attention to the precise words of the relevant statutory provision under consideration. In the event, I would uphold the Commissioner’s construction without reliance on these cases.

125    Mr Enright’s state of mind when he decided to conduct the Investigation was that he was satisfied that there were reasonable grounds to conduct an investigation as to whether (relevantly) ss 285(1), 286(1) and 287(1) had been contravened. He did not suspect that there had been contraventions of ss 285(1), 286(1) and 287(1) and nor was he required as a matter of law to have that state of mind before exercising the power in s 331(2). It follows that the jurisdictional error identified by the primary judge did not arise. It was not the case that Mr Enright suspected contraventions of ss 285(1), 286(1) and 287(1) and that suspicion was not well-founded in this case because it was based on an incorrect understanding of s 320 of the RO Act as the primary judge found (at [165] and [319]). Mr Enright’s state of mind was such that he was not required to have an understanding of the operation s 320. That is the critical point and is sufficient to lead to the conclusion that the primary judge erred in upholding the second ground of judicial review.

126    As I have said, there are two grounds in the Notice of contention relevant to the second ground of judicial review. However, neither can operate to avoid this result.

127    Ground 1 in the Notice of contention is set out below (at [137]). It raises a materiality point if grounds 1 and 2 of the appeal are successful. As I have said, Mr Enright did not suspect that there had been contraventions of ss 285(1), 286(1) and 287(1) and he was not required to have an understanding of s 320. In those circumstances, there is no error and materiality is not relevant.

128    Ground 3 in the Notice of contention is set out below (at [164]). It raises an argument which is only relevant on the assumption that Mr Enright misunderstood the operation of s 320 and was wrong to have regarded s 320 as inapplicable for the purpose of arriving at the suspicion and the consequent opinion arrived at by him. As those assumptions are negated by my upholding of grounds 7, 6 and 8 of the appeal, ground 3 in the Notice of contention does not need to be considered at this point.

129    The effect of these conclusions with respect to grounds 7, 6 and 8 is that the appeal must be allowed and the orders of the primary judge set aside, subject to the fate of ground 2 and ground 4 in the Notice of contention. Those grounds in the Notice of contention are dealt with below.

130    The arguments in the remaining grounds in the appeal are put on the assumption that earlier grounds of appeal have failed.

131    It is not strictly necessary to consider these grounds and it is really a question of judgment as to whether it is appropriate to do so on the hypothetical basis that earlier grounds have failed (Boensch (as trustee of the Boensch Trust) v Pascoe [2019] HCA 49; (2019) 375 ALR 15 at [8] per Kiefel CJ, Gageler and Keane JJ; at [101] per Bell, Nettle, Gordon and Edelman JJ).

132    Ground 1 of the appeal raises an important issue about what formed the basis of Mr Enright’s suspicion of contraventions of ss 285(1), 286(1) and 287(1) (as found by the primary judge, but reversed for the reasons I have given). The issue occupied substantial time before the primary judge and on appeal. In my opinion, it is convenient to address it in case I am later held to be wrong with respect to grounds 7, 6 and 8. Ground 2 is related to ground 1 and is conveniently considered at the same time.

133    Ground 9 is advanced on the assumption that all the other grounds of appeal have failed or, put another way, it is the only ground of appeal. It raises a concise point and it is convenient to address it and the related issue raised in ground 3 in the Notice of contention.

134    Grounds 3–5 raise complex issues of law which, for reasons I will give, I do not think should be addressed.

Grounds 1 and 2 of the Appeal

135    Grounds 1 and 2 of the appeal appear under the heading Scope of the investigation and are in the following terms:

1.    The primary judge erred by finding (at [96] and [98]) that the appellant’s decision (via his delegate) to commence the investigation under section 331 (2) of the Fair Work (Registered Organisations) Act 2009 (Cth) (FWRO Act) into potential contraventions of sections 285-287 of the FWRO Act, was made solely on the basis that the relevant acts were done in contravention of, or non-compliance with, the rules of the first respondent.

2.    Further or alternatively to ground 1, the primary judge erred by finding (at [166]) that even if there were matters beyond breaches of the rules of the first respondent which grounded the appellant’s suspicion (via his delegate) of contraventions of sections 285-287 of the FWRO Act, that the appellant (via his delegate) would not have made the decision to investigate under section 331 (2) of the FWRO Act in the absence of suspected breaches of the rules of the first respondent, including where the finding:

(a)    was not based on any evidence or was not otherwise open on the evidence;

(b)    was not put to the appellant's delegate during the course of the trial; and

   (c)    was not the subject of any argument, address or submission.

136    These two grounds are linked. Counsel for the Commissioner made it clear that ground 1 was advanced on the basis that the Commissioner had failed on ground 7, that is to say, that the Court upheld the primary judge’s finding that Mr Enright’s state of mind when he decided to conduct the Investigation was that he suspected that ss 285(1), 286(1) and 287(1) had been contravened. I think that that is also made clear by the terms of ground 2.

137    Ground 1 in the Notice of contention is related to the materiality issue raised in ground 2 of the appeal. It is in the following terms:

1.    If the Appellant succeeds in the allegation that the trial judge was wrong to conclude that the decision of the Appellant’s delegate “was made solely on the basis that the relevant acts were done in contravention of, or non-compliance with, the rules of the first respondent” (ground one) and/or that he “would not have made the decision to investigate under section 331(2) of the FWRO Act in the absence of suspected breaches of the rules of the first respondent” (ground two), then the First Respondent contends that:

a.    the Appellant’s delegate’s suspicion of breaches of the rules of the First Respondent was material to his decision to investigate the First Respondent; and

b.    that degree of contribution to the decision is sufficient to uphold the trial judge’s orders if the trial judge did not otherwise err as to s 320 of the RO Act.

138    I start with ground 1 of the appeal.

139    The Commissioner’s first submission was that there were matters beyond the breaches of the Rules which grounded Mr Enright’s suspicion of contraventions of ss 285(1), 286(1) and 287(1). The Commissioner further submitted that if his first submission is accepted, then that leads to the upholding of the appeal because the primary judge’s holding of jurisdictional error was fairly and squarely based on the proposition that the only basis for Mr Enright’s suspicion was that acts had been done in breach of the Rules. That enabled the primary judge, according to the Commissioner’s submission, to reason that any non-compliance with the AWU’s Rules had been “cured” by s 320 of the RO Act.

140    The Commissioner’s first submission is in dispute. As to the Commissioner’s further submission, it is correct to say that the primary judge’s holding of jurisdictional error was fairly and squarely based on the proposition that the only basis for Mr Enright’s suspicion was that acts had been done in breach of the Rules.

141    The primary judge’s conclusion that Mr Enright’s suspicion that there had been contraventions of ss 285(1), 286(1) and 287(1) was based solely on breaches of the Rules was based on inferences his Honour drew primarily from the Decision Record. This Court is in the same position in relation to this ground of appeal as it is in relation to ground 7 (see [90] above). As I said above, the primary judge did rely on “extensive evidence of communications” to bolster the conclusion he had reached by reference to the Decision Record, but the three communications he specifically referred to are not in dispute and again, the question is essentially one of the inferences which are to be drawn from them (see [62] above). The other matter “beyond” the Decision Record, to use the primary judge’s word (at [137]), which his Honour said “underscored” Mr Enright’s focus on suspected breaches of the Rules was that Mr Enright was selective in terms of the matters he included in the Decision Record (at [138]). Mr Enright said that he excluded earlier matters from the Decision Record because, far from seeking to narrow the scope of the Investigation, he sought to keep it as broad as possible. I will return to this point.

142    The Commissioner submitted that the primary judge’s conclusions followed from “an artificial and contorted forensic dissection of the Case Decision Record and the series of events which led up to it by the primary judge”.

143    It seems to me that the burden of the Commissioner’s challenge in ground 1 is, assuming Mr Enright had a suspicion that ss 285(1), 286(1) and 287(1) had been contravened – this being the assumption made for the purposes of ground 1 – that suspicion was not solely based on the alleged breaches of the Rules, or even if the suspicion was so based, the higher level question, if I may put it that way, and the precise question posed by the terms of the subsection (i.e., are there reasonable grounds to conduct an investigation as to whether ss 285(1), 286(1) and 287(1) had been contravened) was not solely based on the suspicion that ss 285(1), 286(1) and 287(1) had been contravened.

144    It is not easy to grasp the precise issue raised by ground 1 of the appeal, particularly in light of the assumption upon which it is put, namely, that Mr Enright suspected that there had been contraventions of ss 285(1), 286(1) and 287(1) of the RO Act. The difficulty of “untangling” the issues so that the matter can be considered on that assumption suggests that the exercise may be artificial and provides further support for the conclusions I have already reached in relation to ground 7.

145    The question raised by ground 1 of the appeal is whether there were matters other than the suspected breaches of the Rules which were relevant to Mr Enright’s suspicion of contraventions of ss 285(1), 286(1) and 287(1) (i.e., the assumption) or to the higher level question of whether there were reasonable grounds to conduct an investigation as to whether civil penalty provisions had been contravened. It is not entirely clear whether the “other matters” were the matters referred to in Mr O’Grady’s advice, but not in the Decision Record, or whether they were not specific identifiable matters, but rather were matters which would or might be discovered or ascertained or confirmed in the course of the proposed investigation.

146    It seems to me that the better view is that the matters which the Commissioner referred to as being beyond the breaches of the Rules, were not other facts or allegations in the Decision Record which were overlooked by the primary judge, but rather were matters which highlight the nature of the exercise under s 331(2) as perceived by Mr Enright. There are facts known or believed or suspected and there are matters which are unknown and yet to be discovered. The purpose of an investigation is to confirm allegations or ascertain matters or, most likely, both. In a particular case, an investigation may, in large part, involve confirming allegations; in another it will be that and ascertaining matters. As a general proposition, and subject to the particular circumstances of the case, it would be artificial to restrict the basis of the investigation and its scope to identified facts or allegations.

147    In my opinion, it would be contrary to the evidence in this case to conclude that Mr Enright reached the state of satisfaction identified in s 331(2) solely by reference and limited to a suspicion that there had been breaches of the Rules. I have reached that conclusion by reason of the following matters considered cumulatively.

148    First, in the Decision Record, Mr Enright is careful to use broad phrases in describing the Investigation: (1) it “relates to” the matters he identifies; (2) in describing the link between the matters he identifies and the reasonable grounds, they are said to “flow from” those matters; and (3) in describing the matters warranting investigation, they are “in relation to” the matters he identifies.

149    Secondly, it is difficult, if not impossible, to see how a mere breach of a rule which imposes an obligation on a Union or a branch of a Union could give rise to a contravention by an officer of an obligation he or she owes to the organisation. Even the obligation of care and diligence in s 285(1) is very likely to involve something more than a mere breach of the Rules, such as a fact indicating relevant responsibility on an individual for the payments made or oversight responsibility for such payments. The problem becomes more acute for the AWU’s argument as one moves to s 286(1) (i.e., good faith, best interests of the organisation and proper purpose) and then s 287(1) (i.e., gaining an advantage or causing a detriment to the organisation). It is, for example, very difficult to see how a contravention of s 287(1) could be based on a breach of the Rules alone or even substantially based on a breach of the Rules. The difficulty is not overcome by the fact that the AWU did not contend that a breach of the Rules was not capable of founding a ground of contravention of s 287(1), as the primary judge put the matter. With respect, that is not really the issue. The issue is what do these circumstances suggest about whether there were matters grounding Mr Enright’s suspicion beyond breaches of the Rules? In my opinion, they clearly suggest that there were such other matters. Furthermore, as the Commissioner put it, in the ordinary case an investigation about compliance with ss 285(1), 286(1) and 287(1) “would be heavily focussed on ‘why’ the donations were made” and that is the “stuff” of the officers’ duties in those provisions.

150    Finally (and perhaps relatedly), there is to my mind no obvious, plausible or rational explanation as to why Mr Enright’s state of mind would be limited to breaches of the Rules and not include such other matters as may be, or may become, relevant to contraventions of ss 285(1), 286(1) and 287(1).

151    I do not think that the two matters beyond the Decision Record relied on by the primary judge take the matter very far. The three examples of media statements to which he referred really involve Mr Enright giving what specific information he then had. It is perfectly possible for Mr Enright to suspect that there was other information of which he was unaware and which he would attempt to ascertain as part of the Investigation. That indeed is a purpose of an investigation.

152    The other matter, being the fact that Mr Enright excluded matters from the Decision Record that had been referred to in Mr O’Grady’s advice, was the subject of evidence from Mr Enright. His Honour summarised that evidence (see [64] above). Although his Honour found that Mr Enright did not rely on two matters and they were not part of his reasons for suspecting contraventions of ss 285(1), 286(1) and 287(1) (at [147]), that conclusion appears to have been based on the primary judge’s construction of the Decision Record rather than conclusions based on his assessment of Mr Enright’s demeanour. Insofar as the primary judge concluded that those two matters were not part of the matters upon which Mr Enright formed his suspicion of contraventions, even if that is correct, it is not correct to say that they are evidence that Mr Enright’s state of mind with respect to the Investigation was limited to breaches of the Rules.

153    In conclusion, in making his decision to conduct an investigation, Mr Enright’s state of mind was not limited to a suspicion that ss 285(1), 286(1) and 287(1) had been contravened only because the donations had been made in breach of the Rules.

154    I turn now to ground 2 of the appeal and ground 1 in the Notice of contention.

155    The Commissioner submits that the primary judge erred in finding that even if he was wrong and there were matters beyond the contraventions of the Rules which grounded Mr Enright’s suspicion of contraventions of s 285(1), 286(1) and 287(1), nevertheless he would have arrived at the same conclusion because there was nothing to suggest that the suspicion Mr Enright arrived at, and the satisfaction he formed based upon it, would have been arrived at by Mr Enright in the absence of his reliance upon his view that there were reasonable grounds for suspecting breaches of the Rules. The Commissioner submitted that the primary judge erred because that finding was not based on any evidence, or otherwise open on the evidence. Furthermore, it was not put to Mr Enright during the course of the trial and was not the subject of any argument, address or submission.

156    This ground is linked to ground 1 in the Notice of contention which is to the effect that if the “but for” analysis applied by the primary judge is rejected, that is, the Commissioner is able to show that the but for test was not satisfied, the suspected breaches of the Rules were material to Mr Enright’s decision and that is a sufficient causative link for the purposes of jurisdictional error. The difference between the “but for” test and the materiality test was not the subject of submissions from the parties.

157    The Commissioner submits that the onus was on the AWU to establish materiality as a matter of fact and that it had failed to discharge the onus (Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421 (SZMTA) at [4], [44] and [46] per Bell, Gageler and Keane JJ). As I understood the Commissioner’s submission, it was that there was no evidence of materiality before the Court. The AWU submits that the primary judge drew an inference of materiality that was appropriate in the circumstances. The AWU submits that, in any event, materiality was clearly established on the facts of the case.

158    The onus to establish materiality was on the AWU as the applicant for judicial review and materiality is to be established as a matter of fact. The AWU would need to show that Mr Enright’s error as to the proper construction of s 320 operated to deprive the AWU of the possibility of a successful outcome. A successful outcome for the AWU in this case is a decision not to conduct an investigation under s 331(2) of the RO Act (Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 264 CLR 123 (Hossain) at [30] per Kiefel CJ, Gageler and Keane JJ; SZMTA at [3], [4], [41], [44], [45] per Bell, Gageler and Keane JJ). It seems to me looking at the Decision Record, and on the assumptions being made, it is quite clear the error as to s 320 was material. The alleged breaches of the Rules was the main, indeed the only, matter expressly referred to in the Decision Record. Had the error not occurred, the decision could realistically have been different. If, in terms of the recognised grounds of judicial review, the nearest analogy to the assumed error is a failure to take into account a mandatory consideration, then I do not think that it could be said that the correct approach could not have affected the result.

159    The Commissioner placed emphasis on the fact that nothing was put to Mr Enright about materiality. The circumstances of this case were somewhat unusual in that the Decision Record was before the Court and, subject to some evidence from Mr Enright concerning his views with respect to s 320, the Decision Record contained Mr Enright’s reasons for his decision under s 331(2) of the RO Act. At the same time he was called to give evidence by the challenging party, but neither that party nor the Commissioner raised the issue of materiality with Mr Enright. It seems to me that if an inference of materiality fairly arises from the Decision Record, the fact that the AWU did not ask Mr Enright about materiality cannot operate to prevent the inference from being drawn. Nor do I consider that the other matter the Commissioner raised, that is, that the issue of materiality had not been the subject of submissions or argument, prevents the inference being drawn. It seems to me that since the decisions in Hossain and SZMTA, materiality is an issue to be routinely considered, even if in some cases, quickly dismissed.

Ground 9 of the Appeal and Ground 3 in the AWU’s Notice of Contention

160    Ground 9 of the appeal appears under the heading Jurisdictional error and is in the following terms:

9.    Further or in the alternative to grounds 1-8, the primary judge erred by finding (at [171]–[172]) that the appellant’s misconstruction (via his delegate) of section 320 of the FWRO Act meant that:

(a)    the appellant (via his delegate) did not proceed reasonably in forming the opinion required under section 331 (2) of the FWRO Act;

(b)    the appellant’s decision (via his delegate) to commence the investigation was affected by an error which was jurisdictional in nature; and/or

(c)    to the extent that the decision to commence the investigation involved an investigation as to whether sections 285(1), 286(1) and 287(1) of the FWRO Act had been contravened, that the decision was invalid.

161    This ground of appeal is put as “[f]urther or in the alternative” to grounds 1–8. Insofar as the ground is put as being further to previous grounds, it follows from what I have said in relation to grounds 7, 6 and 8, that ground 9 like those grounds must be upheld and no more need be said about this aspect of ground 9 because it does not really add anything to the previous grounds.

162    Insofar as ground 9 is put in the alternative to the other grounds and in particular grounds 7, 6 and 8, the ground is put on the assumption that the primary judge was correct to hold that Mr Enright suspected and, was in fact required by law, to suspect contraventions of ss 285(1), 286(1) and 287(1) before deciding to conduct an investigation under s 331(2) of the RO Act and that s 320 was necessarily relevant to those matters and that Mr Enright misconstrued s 320 of the RO Act. Another way of putting the assumption is that all the other grounds of appeal have failed or ground 9 is the only ground of appeal.

163    The primary judge said that Mr Enright’s misconstruction of s 320, although not a jurisdictional error of itself, contributed to his “not proceeding reasonably” under s 331(2) because a reasonable person proceeding on a correct construction of s 320 could not have formed the opinion that was formed by Mr Enright. It is that holding of the primary judge which is the subject of ground 9 of the appeal.

164    Ground 3 in the Notice of contention is in the following terms:

3.    The trial judge should have found that the Appellant’s delegate’s misconstruction of s 320 amounted to jurisdictional error (cf J[169]–[171]) because:

a.    the Parliament cannot have intended a decision to investigate under s 331 to be valid notwithstanding an error of law by the decision maker as to the construction or operation of another provision of the RO Act relevant to the decision-maker’s decision;

b.    further or alternatively, the Appellant’s delegate having identified breach of the rules as relevant to his decision, the error caused the delegate’s decision to misfire by his own criteria for decision (see Jabbour v Secretary, Department of Home Affairs (2019) 369 ALR 620; [2019] FCA 452 at [89] (Robertson J));

c.    further or alternatively, the error as to s 320 caused the Appellant’s delegate to misunderstand the nature of his jurisdiction, fail to apply himself to the question which s 331 prescribes or misunderstand the nature of the decision which he was to form.

165    By this ground, the AWU seeks to challenge the related conclusion of the primary judge that Mr Enright’s misconstruction of s 320 did not of itself amount to jurisdictional error.

166    The essential point made by the Commissioner in support of ground 9 of the appeal is that the construction and application of s 320 is part of the investigation itself, just as the proper interpretation of “care and diligence” in s 285(1) may give rise to questions of construction in the course of the investigation. Such matters are not matters that must be determined as part of a decision made under s 331(2). Any errors of construction of those matters are errors within jurisdiction or, at least, not jurisdictional errors at the decision-making stage under s 331(2). Whether an error of construction with respect to a matter determined in the course of an investigation can be challenged in some way, it ought not to be capable of being challenged in a way which invalidates the investigation itself.

167    In support of his arguments, the Commissioner relied on the following passages in the reasons of Kiefel CJ, Gageler and Keane JJ in Hossain at [25], [27] and [28]:

25    To return to the explanation of Professor Jaffe, jurisdictional error is an expression not simply of the existence of an error but of the gravity of that error. In the language of Selway J, the unavoidable distinction between jurisdictional errors and non-jurisdictional errors is ultimately “a distinction between errors that are authorised and errors that are not; between acts that are unauthorised by law and acts that are authorised”.

27    Just as identification of the preconditions to and conditions of an exercise of decision-making power conferred by statute turns on the construction of the statute, so too does discernment of the extent of non-compliance which will result in an otherwise compliant decision lacking the characteristics necessary to be given force and effect by the statute turn on the construction of the statute. The question of whether a particular failure to comply with an express or implied statutory condition in purporting to make a particular decision is of a magnitude which has resulted in taking the decision outside the jurisdiction conferred by the statute cannot be answered except by reference to the construction of the statute.

28    The common law principles which inform the construction of statutes conferring decision-making authority reflect longstanding qualitative judgments about the appropriate limits of an exercise of administrative power to which a legislature can be taken to adhere in defining the bounds of such authority as it chooses to confer on a repository in the absence of affirmative indication of a legislative intention to the contrary. Those common law principles are not derived by logic alone and cannot be treated as abstractions disconnected from the subject matter to which they are to be applied. They are not so delicate or refined in their operation that sight is lost of the fact that “[d]ecison-making is a function of the real world”.

(Citations omitted.)

168    There is a good deal of force in the proposition that s 320 may raise difficult questions and these questions may only be capable of being resolved, even provisionally, after the facts, or at least some facts, have been ascertained. The facts are most likely to be ascertained by the investigation, not before the investigation. That would suggest that s 320 is to be construed (if necessary) and applied during the investigation.

169    However, I am presently considering this ground on the assumption that all other grounds of appeal have failed. On that assumption, I agree with the primary judge’s conclusion that there was jurisdictional error, although I would identify the error as one of Mr Enright misunderstanding the nature of his jurisdiction, or failing to apply himself to the question which s 331(2) prescribes, or misunderstanding the nature of the decision which he was required to reach. In that regard, I refer to Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 (Craig) at 179; Minister for Immigration and Multicultural Affairs v Yusef [2001] HCA 30; (2001) 206 CLR 323 (Yusef) at [82] per McHugh, Gummow and Hayne JJ; Graham v Minister for Immigration and Border Protection [2017] HCA 33; (2017) 263 CLR 1 (Graham) at [57] per Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ; Hossain at [34] per Kiefel CJ, Gageler and Keane JJ. For example, in Graham, Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ said (at [68]):

… The inference to be drawn is that the Minister made the decisions on the understanding that s 503A was valid in its entirety and operated to prevent the Minister from in any circumstances being required to divulge or communicate the information including to a court engaged in the judicial review of the decisions. That understanding was in error. The error was not as to the question to be asked by the Minister in making the decision but as to an important attribute of the decision to be made: whether or not the decision would be shielded from review by a court in so far as it was based on the relevant information. As in Re Patterson; Ex parte Taylor, where the error of the Minister was a failure to appreciate that there would be no opportunity to seek revocation of the decision, “[t]he result of this misconception as to what the exercise of the statutory power entailed was that there was, in the meaning of the authorities, a purported but not a real exercise of the power conferred by s 501(3)”.

(Citations omitted; see also Australian Mines and Metals Association Inc v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCAFC 223; (2018) 268 FCR 128.)

170    It seems to me that this way of expressing the jurisdictional error reflects ground 3c in the Notice of contention.

171    I turn now to consider briefly grounds 3a and b in the Notice of contention.

172    Ground 3a involves the proposition that Mr Enright’s misconstruction of s 320 was an error of law and, in the absence of a contrary intention in the statute or other instrument which established it, an administrative authority lacks authority either to determine authoritatively questions of law, or to make an order or decision otherwise than in accordance with law (Craig at 179; Yusef at [182]).

173    The proposition raised in ground 3b is that the Commissioner constructively failed to exercise the power in s 331(2) because he erred having regard to his own approach to the question. He could have proceeded in a different way, but he did not.

174    It is unnecessary to deal with grounds 3a and b in the Notice of contention in light of my earlier conclusions. Whilst it may well be the case that the Commissioner, like an administrative tribunal, lacks authority either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law (Craig at 179 per Brennan, Deane Toohey, Gaudron and McHugh JJ) and that the common law presumption of statutory interpretation means “that a statutory conferral of decision-making authority on a person or body other than a court is conditioned by an implied statutory requirement that the person or body can validly exercise that authority only on a correct understanding of the law applicable to the decision to be made” (emphasis added) (Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1 at [75] per Gageler J), those matters will only be of significance if the proper construction of s 320 of the RO Act is a matter to be taken into account in reaching a decision under s 331(2) of the RO Act. For the reasons I have given in relation to grounds 7, 6 and 8 of the appeal, that is not the case. Furthermore, I am unable to see how the AWU’s case is assisted by reference to Jabbour v Secretary, Department of Home Affairs [2019] FCA 452; (2019) 269 FCR 438 at [89] and the submission that Mr Enright, having identified a breach of the Rules as relevant to his decision, the error caused his decision to misfire by his own criteria for decision. The fact is that Mr Enright did not and was not required to conclude that suspected breaches of the Rules did not give rise to a suspicion of contraventions of ss 285(1), 286(1) and 287(1) of the RO Act.

Grounds 3–5 of the Appeal

175    Grounds 3–5 of the Notice of appeal appear under the heading Operation of section 320 and are as follows:

3.    The primary judge erred by finding (at [155]–[161]) that the effect of section 320 of the FWRO Act was to notionally alter facts in a manner which had the effect that a contravention of any of sections 285-287 of the FWRO Act by an officer of an organisation or a branch which relied on acts done in contravention of, or non­compliance with, the rules of the organisation or branch, could no longer subsist after the expiry of four years from the doing of the acts.

4.    Further or alternatively to ground 3, the primary judge erred by finding that the appellant’s delegate was acting upon, or by otherwise attributing to the appellant’s delegate (at [134]–[135] and [152]–[154]), certain hypotheses or states of mind which may have attracted the operation of section 320 of the FWRO Act, when those hypotheses and/or states of mind:

(a)    were not based on any evidence or were not otherwise open on the evidence;

   (b)    were not the subject of any argument, address or submission;

(c)    were wrong and/or involved an erroneous interpretation of section 320 of the FWRO Act and a conflation of the different acts engaged in by different persons validated by that provision; and/or

(d)    were merely one of a number of equally likely hypotheses or states of mind.

5.    Further to grounds 3 and 4, the primary judge erred by not finding that section 320 of the FWRO Act:

(a)    had no effect and/or operation on any potential contraventions of sections 285–287 of the FWRO Act by officers or former officers of the first respondent being investigated (or capable of being investigated) by the appellant (via his delegate) under section 331(2) of the FWRO Act; and

(b)    was not relevant to assessing whether the appellant (via his delegate) could have been satisfied that there were reasonable grounds to commence an investigation under section 331(2) of the FWRO Act.

176    As I said earlier, these grounds were addressed by the Commissioner last as, on his case, they only arise in the event that he has failed on every other ground of appeal. He has succeeded on grounds 7, 6 and 8 and that is sufficient to dispose of the appeal. For the reasons which follow, there is no advantage in the Court considering these grounds in the event I am wrong as to the earlier grounds.

177    The terms of some of the grounds suggest that the Commissioner argues that the primary judge’s construction of s 320 was wrong and that it simply did not apply to potential contraventions of ss 285(1), 286(1) and 287(1) of the RO Act by officers, or former officers, of the AWU. However, by the time the matter came to be argued before the Court, there had been a shift in the primary focus of the Commissioner’s submissions.

178    The Commissioner’s complaints concerning the primary judge’s approach to s 320 of the RO Act as set out in his written Outline of Submissions fall into three categories.

179    The first category consists of four general points which the Commissioner submits supports the construction that however it might otherwise operate, s 320 cannot operate to prevent a successful action for a contravention of ss 285(1), 286(1) and 287(1) by an officer based on a breach of the Rules which took place more than four years previously.

180    First, the Commissioner submits that the effect of holding that contraventions of civil penalty provisions based on breaches of the Rules cannot succeed after four years because of s 320 is to impose a “de facto time limit” on proceedings for contraventions of civil penalty provisions in circumstances where there is no express limitation period with respect to those types of proceedings. This is in circumstances where in other sections, the RO Act contains express limitation periods.

181    Secondly, the Commissioner refers to the Second Reading Speech for the Conciliation and Arbitration (Organisations) Bill 1974 (Cth) which amended the Conciliation and Arbitration Act 1904 (Cth) to insert s 171F, in which the following appears:

The second category of the Bill’s provisions are those directed to remedying existing and future invalidities in organisations registered under the Act. I have outlined how irregularities and invalidities have occurred in organisations due to the present system of dual incorporation. The Committee's Report states that this applies to all unions, both of employers and of employees. There was no confident assertion that any single one at all was operating validly. The provisions of Part IX A proposed by clause 16 provide for: The validation of all acts done in good faith by a collective body or by a person holding an office in an organisation or branch, notwithstanding any invalidity that may afterwards be discovered in any election or appointment or any making or alteration of a rule of an organisation or branch; …

The point made by the Commissioner by reference to this passage was that it says nothing about possible contraventions of civil penalty provisions by officers.

182    Thirdly, the Commissioner relies on the well-accepted rule that a deeming provision (such as s 320) is to be given a narrow construction: Muller v Dalgety & Co Ltd [1909] HCA 67; (1909) 9 CLR 693 at 696; Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96 per Fisher J; Howard v Federal Commissioner of Taxation [2012] FCAFC 149; (2012) 206 FCR 329 at [48].

183    Finally, the Commissioner points to s 289 of the RO Act which is in the following terms:

289 Effect of ratification by members

(1)    If the members of an organisation ratify or approve a contravention of section 285, 286, 287 or 288, the ratification or approval:

(a)    does not prevent the commencement of proceedings for a contravention of the section; and

(b)    does not have the effect that proceedings brought for a contravention of the section must be determined in favour of the defendant.

(2)    If members of an organisation ratify or approve a contravention of section 285, 286, 287 or 288, the Federal Court may take the ratification or approval into account in deciding what order or orders to make under section 306, 307 or 308 in proceedings brought for a contravention of the section. In doing this, it must have regard to:

(a)    how well informed about the conduct the members were when deciding whether to ratify or approve the contravention; and

(b)    whether the members who ratified or approved the contravention were acting for proper purposes.

The Commissioner submits that it would be an odd result if a ratification by members of a contravention of ss 285, 286, 287 or 288 had a lesser effect than the mere effluxion of four years which would be the case if the primary judge’s construction of s 320 is correct.

184    The second category consists of a number of submissions to the effect that it is not at all clear that the facts outlined in the Decision Record (to the extent that they are outlined) would fall within the terms of s 320 of the RO Act. The Commissioner provides three examples. First, the power to make donations is a general power of the organisation and Rule 57 is not the source of the power, but rather, it provides for a limit on the power. In those circumstances, the making of a donation may not amount to “purporting to exercise power conferred by or under the Rules of [an] organisation or branch within section 320(1)(a)(i) or (ii)”. Secondly, if there was an unlawful delegation by the National Executive to make donations, then, it is arguable, that the act of making donations has involved “purporting to exercise power under the delegation rather than a power conferred by or under the Rules of the organisation or a branch within section 320(1)(a)(i) or (ii)”. Thirdly, the Commissioner submitted that s 320(1)(a) does not apply to an officer purporting to exercise the powers conferred upon the collective body and does not apply if the non-compliance is an omission, rather than a positive act. An example of the latter is if the National Executive omits to approve a donation. The Commissioner submits that the failure to recognise and take into account these matters indicates the flaws in the primary judge's approach.

185    The third category consists of a repetition of two submissions put to the primary judge, but rejected by him. The first was a submission by the Commissioner that s 331(2) speaks in the past tense, that is, that the subject matter of any investigation is whether a civil penalty provision has been contravened. The Commissioner submitted that it was doubtful that s 320 of the RO Act had anything to say about that matter. He submitted that when the conduct occurred, it either did or did not contravene one or more provisions of the RO Act. The contravention was perfected and had crystallised at that time. The way in which the primary judge dealt with this argument is set out above (at [70]). The second was a submission by the Commissioner that the scope and effect of s 320 is not to expunge crystallised contraventions from the historical record at all, such that even if the section did or could apply, it could not have the effect of defeating civil penalty proceedings in the exercise of judicial power to determine past rights and duties. The provision being a deeming provision, it should extend no further than the precise words allow.

186    Before turning to the Commissioner’s submissions at the hearing, the AWU’s submissions should be noted. For the most part, the AWU sought to support the primary judge’s reasons. The AWU did emphasise two points. First, it submitted that the removal of the words “for all purposes” from legislative predecessors to s 320 did not narrow the scope of the provision. Secondly, it submitted that this Court should proceed on the basis that s 320 had a very wide operation such that acts which were invalid at the time they occurred are given validity by virtue of the passage of time and it is only acts which are performed “without any semblance of authority” that are not validated (Bailey v Krantz (1985) 13 IR 339 at 392 per Gray J).

187    The Commissioner in oral submissions did not emphasise his argument about a particular construction of s 320, but rather submitted that it was impossible, at the stage of Mr Enright’s decision, to determine the relevance of s 320. In other words, until matters are ascertained in the course of the Investigation, it is impossible to know if s 320 will be relevant and, if so, in what way. Counsel for the Commissioner submitted that there were too many “unknowns” to postulate an operation for s 320 at the beginning of the Investigation. He said that s 320 could be relevant once the facts are known and the Commissioner was saying nothing about “the relevance of s 320 at the end of the investigation”.

188    The operation of s 320 in the context of possible contraventions of civil penalty provisions raises, or, at least, may well raise, complex questions of law. It is artificial to consider the operation of s 320 in the context of possible contraventions of ss 285(1), 286(1) and 287(1) of the RO Act based only on breaches of the Rules. It is unnecessary to do so and, indeed, I consider that it would be unwise to address these grounds in the circumstances.

Ground 2 in the AWU’s Notice of Contention

189    Ground 2 in the Notice of contention is in the following terms:

2.    The trial judge should have found that the Appellant did not have power to investigate the suspected contraventions because:

a.    the Appellant has power under s 331(2) to investigate whether a “civil penalty provision (see section 305) has been contravened”

b.    section 305(2) provides that “[a] civil penalty provision is a subsection, or a section that is not divided into subsections, that has set out at its foot a pecuniary penalty, or penalties, indicated by the words ‘Civil penalty’”;

c.    the suspected contraventions which the appellant purported to be investigating were of provisions that were not “civil penalty provisions” within the meaning of s 305(2); and

d.    the trial judge erred (see J[69]-[71]) in relying upon s 7(2)(b) of the Acts Interpretation Act 1901 (Cth), which does not have the effect of permitting or empowering the Appellant to investigate the possible contraventions under s 331(2) notwithstanding sub-paragraphs (a) through (c) above.

190    The acts or omissions which are identified in the Decision Record are acts or omissions which allegedly occurred in the financial years ending 30 June 2006 and 30 June 2008 respectively. The possible contraventions were of ss 237(1), 285(1), 286(1) and 287(1) of the Relevant Legislation and that term is defined in the Decision Record as Sch 1B of the WR Act effective between 12 May 2003 and 27 March 2006, and Sch 1 of the WR Act effective between 27 March 2006 and 30 June 2009 (whichever was in operation at the relevant time).

191    These four provisions as they appeared in the Relevant Legislation are set out earlier in these reasons (at [20]). By reference to the note at the end of each subsection and s 305 as it appeared in the Relevant Legislation, they were designated as civil penalty provisions. Subject to the recognition of the establishment of the Commissioner in s 237(1), the four provisions were, in substance, in the same terms in the RO Act in October 2017 when Mr Enright made his decision. They were designated as civil penalty provisions in the RO Act at that time. However, the AWU contends that, as a result of changes to the RO Act effected by the 2016 Amendment and, in particular, a change to the definition of civil penalty provisions in s 305(2), at the time of Mr Enright’s decision in October 2017, the only possible contraventions of civil penalty provisions which could be the subject of an investigation under s 331(2) were contraventions which occurred after the 2016 Amendment came into effect in May 2017. Contraventions prior to that date did not fall within the terms of s 331(2) and could not be the subject of an investigation under that subsection. The AWU contends that as the possible contraventions which Mr Enright relied on occurred before that date, they were not within the power in s 331(2) and Mr Enright has exceeded his jurisdiction. The 2016 Amendment contained significant amendments to the RO Act. The 2016 Amendment consisted of two schedules; Sch 1 came into effect on 1 May 2017 and Sch 2 came into effect on 2 May 2017.

192    Before proceeding to consider the arguments, it is necessary to trace in broad outline the legislative history. The following summary is largely taken from the primary judge’s reasons.

193    Since 2009, the principal Commonwealth Act dealing with workplace relations has been the Fair Work Act 2009 (Cth) (the FW Act). That Act received Royal Assent on 7 April 2009 and commenced substantially on 1 July 2009. Prior to the FW Act, the principal Commonwealth Act dealing with workplace relations was the WR Act. The statutory provisions dealing with the registration and accountability of organisations were in a schedule to the WR Act. From 12 May 2003 until 27 March 2006, the relevant schedule was Sch 1B and on and from 27 March 2006, the relevant schedule was Sch 1. When the FW Act commenced on 1 July 2009, Sch 1 was not repealed, but was instead renamed and became the RO Act (Item 3, Pt 1, Sch 22 of the Fair Work Act (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the FW (TPCA) Act)).

194    Neither the Commissioner nor the Commission were referred to in Sch 1 of the WR Act. There was provision for the appointment of an “Industrial Registrar” to exercise various powers and functions, including those conferred by Sch 1 of the WR Act in s 331 of that Act. Furthermore, s 141 of the WR Act made the same provision for “Deputy Industrial Registrars”.

195    Section 331(2) in Sch 1 of the WR Act was in the same terms as the current s 331(2), save and except that it identified the Registrar (defined as the Industrial Registrar or a Deputy Industrial Registrar) rather than the Commissioner as the person to conduct investigations. However, s 305 in Sch 1 of the WR Act was in different terms from s 305 of the RO Act as it was at the time of Mr Enright’s decision in October 2017. Section 305 in Sch 1 of the WR Act contained a list of those provisions which were civil penalty provisions. The section was in the following terms, relevantly:

(1)    Subject to this Part, an application may be made to the Federal Court for orders under sections 306, 307 and 308 in respect of conduct in contravention of a civil penalty provision.

(2)    These provisions are the civil penalty provisions:

…

   (u)    subsection 237(1) (particulars of loans, grants and donations);

…

(zj)    subsections 285(1), 286(1) and (2), 287(1) and (2), and 288(1) and (2) (officers’ duties);

…

Section 305 in the RO Act until the 2016 Amendment, was in substantially the same terms.

196    Following the 2016 Amendment, s 305 was in the following terms:

305 Civil penalty provisions

(1)    Subject to this Part, an application may be made to the Federal Court for orders under sections 306, 307 and 308 in respect of conduct in contravention of a civil penalty provision.

(2)    A civil penalty provision is a subsection, or a section that is not divided into subsections, that has set out at its foot a pecuniary penalty, or penalties, indicated by the words “Civil penalty”.

(3)    For the purposes of this Part, any contravention of a civil penalty provision by a branch or reporting unit is taken to be a contravention by the organisation of which the branch or reporting unit is part.

(4)    The Federal Court must apply the rules of evidence and procedure for civil matters when hearing and determining an application for an order under this Part.

197    As I have said, prior to the 2016 Amendment, the four civil penalty provisions which are relevant in this case were in substantially the same terms as they were after the 2016 Amendment. However, they were designated as civil penalty provisions as part of the list of civil penalty provisions set out in s 305(2) of the RO Act. After the 2016 Amendment, the four provisions identified themselves by reference to the definition in s 305(2) as civil penalty provisions because at the foot of each provision there was a pecuniary penalty and the words “Civil penalty”. As an example, I set out s 285(1) as it resulted from the 2016 Amendment:

285    Care and diligence—civil obligation only

(1)    An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:

(a)    were an officer of an organisation or a branch in the organisation’s circumstances; and

(b)    occupied the office held by, and had the same responsibilities within the organisation or a branch as, the officer.

Civil penalty:    100 penalty units, or 1,200 penalty units for a serious contravention.

198    At the time Sch 1 of the WR Act was renamed the RO Act and commenced in operation, that is, on 1 July 2009, many of the regulatory functions which had been held by the Industrial Registrar or Deputy Industrial Registrar, including the function of conducting investigations under s 331, became the functions of an office created by s 656 of the FW Act and titled “General Manager of Fair Work Australia”. From 1 January 2013, this office became known as the General Manager of the Fair Work Commission. The amendments were made by the FW (TPCA) Act, but that Act made no amendments to s 237(1) other than substituting “the General Manager” for “the Registrar” and “with FWA” for “in the Industrial Registry”. No amendments were made to ss 285(1), 286(1) or 287(1). The office of the General Manager remains an office established under the FW Act. However, the functions and powers of that office were altered by the 2016 Amendment.

199    In summary, the legislative position in April 2017 was as follows. At that time, ss 237(1), 285(1), 286(1) and 287(1) were civil penalty provisions in the RO Act by reason of the fact that they were specifically identified in s 305(2). They did not contain a reference at the foot of the provision to “Civil penalty” and the identification of a number of penalty units. Section 331 conferred the power to conduct an investigation as to whether a civil penalty provision has been contravened on the General Manager and it was open to the General Manager to exercise the power with respect to past contraventions, including possible contraventions in the financial years ending 2006 and 2008 respectively.

200    As I have said, Sch 1 in the 2016 Amendment commenced on 1 May 2017. It established the Commissioner and the Commission and specified the functions and powers of each entity in a new Pt 3A of Ch 11 of the RO Act. Division 6 of Pt 3A deals with the reporting requirements between the responsible Minister and the Commissioner and contains a section (i.e., s 329FA) which will be addressed in the context of ground 4 in the Notice of contention. The Commissioner takes the place of the General Manager in a number of provisions in the RO Act, including ss 330 and 331 and, in particular, in s 331(2). Section 331(2) is not otherwise changed and the subject matter of an investigation under the subsection is whether a civil penalty provision has been contravened. The subsection refers to s 305 which, at that point, remained unchanged, that is to say, it specifically identified a number of provisions as civil penalty provisions (see [195] above).

201    Part 2 of Sch 1 contained transitional provisions which included the following:

130 Commissioner to complete certain processes

(1)    This item applies if:

(a)    a process begun under the Act is incomplete at the commencement time; and

(b)    because of the amendments made by this Schedule, a function or power that the General Manager or the FWC was required, or able, to perform or exercise in relation to the process has become a function or power of the Commissioner.

(2)    For the purposes of completing the process:

(a)     the Commissioner must or may, as the case requires, perform the function or exercise the power; and

(b)    things done by or in relation to the General Manager or the FWC before the commencement time have effect as if they were done by or in relation to the Commissioner.

202    The primary judge noted that it was not in contention before him that an investigation of the kind contemplated by s 331(2) of the RO Act was a “process” within the meaning of Item 130.

203    If one freezes the picture at this point, that is to say, on 1 May 2017 after Sch 1 of the 2016 Amendment has commenced, but before Sch 2 has commenced, then the only relevant change from the position as it was prior to 1 May 2017 is that the Commissioner and not the General Manager is the repository of the power in s 331(2) to conduct an investigation. There are two possible conclusions as to the position at this point. The General Manager retained the power to conduct investigations with respect to possible contraventions prior to 1 May 2017 and the Commissioner had the power with respect to possible contraventions from 1 May 2017 onwards, or the Commissioner had both powers, having taken over the General Manager’s powers and functions in that respect. Absent clear words in the legislation in favour of the former, the case in favour of the latter conclusion is supported by common sense and the difficulty of discerning any reason for retaining two separate regimes. Furthermore, although not directly relevant on the facts in this case, the idea behind a provision like Item 130 supports the latter conclusion. It follows, in my opinion, that as at 1 May 2017, the Commissioner had the power in s 331(2) of the RO Act to conduct an investigation into possible contraventions before 1 May 2017, including possible contraventions in the financial years ending 2006 and 2008 respectively.

204    Schedule 2 in the 2016 Amendment commenced on 2 May 2017. It should be noted at this point that the 2016 Amendment made provision for Schs 1 and 2 to commence on a day or days to be fixed by Proclamation (which is what occurred) and went on to provide that if any of the provisions did not commence with the period of 12 months beginning on the day the 2016 Amendment received the Royal Assent (i.e., 24 November 2016), they commenced on the day after the end of that period.

205    Schedule 2 conferred powers on the Commissioner in relation to the conduct of an investigation that were not previously available to the General Manager. Those powers were summarised by the primary judge in a manner which is sufficient for present purposes, as follows (at [28]):

(i)    the power to require a person to take an oath or make an affirmation (s 335D(1));

(ii)    the power to require a person to answer a question on pain of a criminal penalty (s 335D(3) and s 337(1)(d)(i)); and

(iii)    the power to apply for a warrant which, on issue, would authorise a member of the AFP to obtain documents by executing the warrant upon specified premises with authority to use such force as is necessary and reasonable to enter on or into those premises, search the premises, break open and search anything and take possession of documents (ss 335K and 335L).

206    Of significance for the purposes of the present argument is that by Item 200 in Sch 2 of the 2016 Amendment, s 305(2) was repealed and replaced by a subsection containing the current definition of a civil penalty provision (see [196] above). Furthermore, by items 79, 80, 148, 149, 150, 151, 154 and 155 in Sch 2, the note at the end of each of subsections 237(1), 285(1), 286(1) and 287(1) was removed and replaced by a reference to “Civil penalty” and the identification of a number of penalty units.

207    As at 2 May 2017, both Sch 1 and Sch 2 of the 2016 Amendment had commenced in operation. By Sch 2, a different means of describing a civil penalty provision from that previously used had been adopted, although the substantive operation and effect of the civil remedy provisions and, in particular, ss 237(1), 285(1), 286(1) and 287(1) remained as they had been for many years.

208    The AWU’s first submission was that the different way of describing civil penalty provisions from 2 May 2017 had the effect that no regulator, whether it be the General Manager or the Commissioner, had the power to conduct an investigation under s 331(2) in relation to possible contraventions occurring before 2 May 2017. The AWU put an alternative submission which removed one of the undoubtedly unattractive features of its first submission. It was that the 2016 Amendment should be considered as a whole and not an approach emphasising that as Sch 1 commenced on 1 May 2017 and Sch 2 commenced on 2 May 2017 should not be adopted. Considered as a whole, the effect of the 2016 Amendment was to create the Commissioner and the Commission, to provide the Commissioner with wider powers in relation to investigations under s 331(2) than previously existed, and to provide the Commissioner with the power to investigate possible contraventions after 2 May 2017, leaving the General Manager with more restricted powers in connection with conducting investigations into possible contraventions prior to May 2017.

209    There is nothing in the express provisions of the 2016 Amendment indicating an intention to, in effect, immunise possible contraventions prior to the commencement of the amendment from the power of investigation in s 331(1) or any matter that gives a clue as to any reasons why that might have been considered appropriate. The Explanatory Memorandum for the 2016 Amendment gives no indication that such a result was intended. There is a reference in Item 200 in the Memorandum to the insertion of new subsection 305(2) being “a consequential change due to the new approach to civil penalty provisions taken throughout the RO Act”. The Court was told during submissions that there is nothing in the Explanatory Memorandum which expressly articulates the nature of the “new approach”. I infer that the new approach is simply a different means of identifying a civil penalty provision for ease of reference or clarity for the draftsman, or the reader, or both. The new approach did not involve any change to the substantive nature of the civil penalty provisions or the immunisation of possible contraventions occurring before the amendment. The AWU did not suggest that its argument was blessed with any merit, but submitted that the words were too clear to admit of any other conclusion and the remedy lay with the Parliament, not this Court.

210    Unsurprisingly, the Commissioner referred to Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 where the High Court addressed the circumstances in which a court may depart from a literal meaning of the words of a statutory provision. The literal meaning may be departed from where it “would lead to an incongruous result” (at 305 per Gibbs CJ) or would defeat the object of the Act (at 311 per Stephen J) or would be “capricious or irrational” (at 322 per Mason and Wilson JJ). There was also reference in the course of submissions to the circumstances in which the Court might read words into a statutory provision in order to avoid a result which was plainly unintended (Taylor v Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531 at [37]–[39]), but those submissions were not developed. This matter can be resolved without considering whether this latter approach is open in the circumstances of this case, although in my view, on the face of it, the adoption of such an approach has a good deal of merit.

211    The primary judge rejected the AWU’s argument on two grounds.

212    First, he pointed out that the four provisions were civil penalty provisions both before and after the 2016 Amendment and “there is nothing to support the idea that a change of any substance was intended by the amendment made to s 305(2) of the RO Act by the [2016 Amendment]” (at [65]). At a general level that is true, but, with respect, it does not answer the AWU’s argument that s 305(2) after the 2016 Amendment was only referring to civil penalty provisions as they were on and from 1 May 2017.

213    Secondly, the primary judge held that a complete answer to the AWU’s argument was provided by s 7(2)(b) of the Acts Interpretation Act 1901 (Cth). That paragraph and other relevant paragraphs of s 7(2) are as follows:

(2)    If an Act, or an instrument under an Act, repeals or amends an Act (the affected Act) or a part of an Act, then the repeal or amendment does not:

(a)    …

(b)    affect the previous operation of the affected Act or part (including any amendment made by the affected Act or part), or anything duly done or suffered under the affected Act or part; or

(c)    affect any right, privilege, obligation or liability acquired, accrued or incurred under the affected Act or part; or

(d)    affect any penalty, forfeiture or punishment incurred in respect of any offence committed against the affected Act or part; or

(e)    affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment.

Any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the affected Act or part had not been repealed or amended.

Note:    The Act that makes the repeal or amendment, or provides for the instrument to make the repeal or amendment, may be different from, or the same as, the affected Act or the Act containing the part repealed or amended.

214    With respect to the primary judge, I do not think s 7(2)(b) provides the answer to the AWU’s submission. The preservation of the previous operation of the affected Act or part and of acts duly done or suffered under the affected Act or part does lead to the conclusion that the Commissioner is able to exercise the power in s 331(2) of the RO Act in October 2017 in relation to possible contraventions of civil penalty provisions before May 2017. However, other paragraphs in s 7(2) of the Acts Interpretation Act are relevant.

215    In my opinion, the AWU’s argument should be rejected by reference to the following analysis.

216    The starting point is the position on 1 May 2017 after Sch 1 of the 2016 Amendment had commenced. At that point, the Commissioner had the power to investigate possible contraventions on and after that date. The Commissioner also had the power to investigate contraventions before that date and I have already given my reasons for that conclusion. I should mention that I reject the following argument advanced by the AWU against that conclusion. The AWU submitted that Schs 1 and 2 were part of one Amendment Act and the default position in terms of the commencement date of the two schedules was that they would commence on the same date. The AWU submitted that, in those circumstances, the fact that Sch 1 commenced on one day and Sch 2 on the following day is irrelevant in terms of the resolution of the issue. I reject that argument. The fact is that the 2016 Amendment envisaged that Schs 1 and 2 might commence on different dates and, as it happened, that is what occurred.

217    The second step in the analysis is that the liability for a pecuniary penalty for a contravention of a civil penalty provision prior to the commencement of the 2016 Amendment was not affected by the amendment. That is the effect of s 7(2)(c) of the Acts Interpretation Act.

218    The third step is that the power to investigate in respect of possible contraventions prior to the commencement of the 2016 Amendment is not affected by the amendment and any investigation may be instituted as if the RO Act had not been amended by the 2016 Amendment. That is the effect of s 7(2)(e) of the Acts Interpretation Act.

219    As far as the second and third steps are concerned, there is nothing in the RO Act as amended by the 2016 Amendment to show a contrary intention (s 2(2) Acts Interpretation Act). In fact, it is almost impossible to attribute to the Parliament the results which would follow from acceptance of the AWU’s argument.

220    The final step relates to the powers which attend an investigation into possible contraventions of civil penalty provisions which occurred prior to 2 May 2017. The relevant enhanced powers are not expressed as being subject to a limitation that they only apply to investigations into possible contraventions that occurred after 2 May 2017 and, in my opinion, there is no reason why they would not attach to any investigation commenced after their statutory conferral on the Commissioner (Rodway v The Queen [1990] HCA 19; (1990) 169 CLR 515 at 521; Yrttiaho v Public Curator (Queensland) (Copley) [1971] HCA 29; (1971) 125 CLR 228 at 245 per Gibbs J).

221    I reject ground 2 in the Notice of contention.

Ground 4 in the AWU’s Notice of Contention

222    Ground 4 in the Notice of contention is in the following terms:

4.    The trial judge should have found that the Decision was affected by jurisdictional error by reason of the Minister having sent two referrals to the Appellant, because:

a.    on its proper construction, the RO Act does not permit an exercise of power under s 331 to be affected to any extent by a referral from the responsible Minister; and

b.    the trial judge misconstrued the RO Act by proceeding on the basis that the Minister’s referrals had to be a “material and operative reason” for the Decision.

(Emphasis added.)

223    This ground involves a challenge to the primary judge’s rejection of ground 5 of the AWU’s application for judicial review to the effect that the Commissioner’s decision to conduct the Investigation under s 331(2) of the RO Act was affected by jurisdictional error because the Commissioner impermissibly acted upon the advice and direction of the Minister.

224    This ground is often referred to as the dictation ground and key cases in this country dealing with that ground are R v Anderson; Ex parte Ipec-Air Pty Ltd [1965] HCA 27; (1965) 113 CLR 177; Telstra Corporation Ltd v Kendall (1995) 55 FCR 221; Bread Manufacturers (NSW) v Evans [1981] HCA 69; (1981) 180 CLR 404 (Bread Manufacturers); CPCF v Minister for Immigration and Border Protection [2015] HCA 1; (2015) 255 CLR 514 (CPCF). The Administrative Decisions (Judicial Review) Act 1977 (Cth) contains a ground of review of exercising a personal discretionary power at the direction or behest of another person (s 5(1)(e) and (2)(e)). It is not necessary to pursue the question of the appropriate general descriptions of the ground. The cases make it clear that the extent to which the holder of a statutory power can take into account or act upon the advice of another without committing a jurisdictional error very much depends upon the particular statutory context.

225    In order to identify the context in which this ground is advanced, it is necessary to refer briefly to grounds 3 and 4 of the AWU’s application for judicial review. As I have said, the primary judge rejected these grounds and the AWU does not seek to challenge their rejection. They are relevant because of the fact that his Honour’s findings about Mr Enright’s motives were made in this context.

226    In ground 3, the AWU alleged that the Commissioner’s decision to conduct the Investigation under s 331(2) of the RO Act was affected by jurisdictional error because the decision was made for an improper political purpose of aiding, assisting or promoting the political purpose of the Minister and/or members of her office who wanted the AWU to be investigated by the Commissioner in order to discredit, embarrass or politically harm Mr Shorten. In ground 4, the AWU alleged that the Commissioner’s decision to conduct the Investigation under s 331(2) of the RO Act was affected by jurisdictional error because the Decision was made taking into account a mandatory irrelevant (political) consideration, namely, the Minister’s political purpose.

227    As I have said previously, all of the witnesses who gave evidence at the trial were called by the AWU and all of them attended Court in response to a subpoena. The witnesses included Mr Enright and the Minister. Other witnesses at the trial were a media adviser at the Commission and a media director at the Fair Work Ombudsman and two members of the Minister’s staff. A substantial part of the evidence at trial seems to have been directed to the issues raised in grounds 3 and 4 of the AWU’s application for judicial review, although a small part of the evidence was and is also relevant to ground 5 and, therefore, to ground 4 in the Notice of contention.

228    His Honour dealt with the evidence by setting out in chronological order the events it established starting on 12 August 2017 and ending on 26 October 2017. The starting point was an article published in the Weekend Australian on 12 August 2017 and the end point, in terms of his Honour’s recitation of events, was a letter from the Minister to the Commissioner on 26 October 2017.

229    During this period, the Minister wrote two letters to the Commissioner. The primary judge described these letters as referral letters and I will do the same, although it needs to be borne in mind that they were not written pursuant to any formal referral procedure.

230    The first referral letter is dated 15 August 2017 and it is in the following terms:

Referral of matters relating to the Australian Workers Union

I refer to recent media reports (enclosed) regarding a donation of $100,000 reportedly made by the Australian Workers Union to the political organisation “Get Up” in 2005. These reports have questioned whether or not this donation was validly authorised in accordance with the AWU’s rules.

I am advised that Rule 57 of the AWU’s rules, as they applied in 2005 to donations by the AWU, required that the donation had to be approved by the National Executive of the union and must otherwise be in accordance with the rules:

RULE 57 – LOANS, GRANTS AND DONATIONS

(1)    A loan, grant or donation, must not be made by the Union or any Branch as the case may be, unless the National Executive of the Union has:

     (a)    Satisfied itself:

i.    that the making of the loan, grant or donation, would be in accordance with the Rules of the Union; and

ii.    in relation to a loan, that, in the circumstances, the security proposed to be given for the repayment of the loan is adequate and the proposed arrangements for the repayment of the loan are satisfactory and;

(b)    Approved the making of the loan, grant or donation.

(2)    Nothing in sub-clause (1) is to affect a Branch’s power to make donations, less than $1,000. However, National Executive may from time to time set a maximum donation figure lower than $1,000.

I note that it has been reported that the AWU has not been able to indicate whether this rule was observed in this case. Accordingly, I request that you give consideration to investigating this matter in any way that you may consider appropriate.

231    The second referral letter is dated 17 August 2017 and it is in the following terms:

Referral of matters relating to the Australian Works Union

I refer to my recent correspondence regarding matters relating to the Australian Workers Union. Since that correspondence, I have been made aware of further reports regarding political donations by the AWU that, it is alleged, may not have been made in accordance with the union’s rules (enclosed).

In particular, these reports have queried whether any power to authorise donations under Rule 57 was properly made, whether such a power could be delegated, and whether the powers under any such delegation were validly exercised. The reports also query whether there was a conflict of interest in this situation.

Accordingly, I respectfully request that you give consideration to reviewing this matter as part of any investigation that you may undertake in relation to other AWU matters.

232    In addressing ground 3 of the AWU’s application for judicial review, his Honour set out the three steps in the AWU’s argument as follows:

(1)    the Minister had a political purpose;

(2)    Mr Enright knew that the Minister had a political purpose; and

(3)    Mr Enright was motivated to commence the investigation in order to aid or assist in the Minister’s political purpose.

233    His Honour found it unnecessary to make findings with respect to the first two steps in the AWU’s argument because he found that Mr Enright had an understanding, based on an assumption made by him, that the Minister’s purpose in sending the referral letters to the Commissioner included that she wanted the AWU to be investigated by the Commissioner in order to discredit, embarrass or politically harm Mr Shorten (at [277]–[278]).

234    His Honour then turned to consider whether he should accept Mr Enright’s denial that he had the improper purpose alleged. He did so by reference to five arguments put by the AWU in support of its contention that Mr Enright had the improper purpose it alleged. These five arguments were as follows:

(1)    Mr Enright took steps to accommodate and look after the Minister’s interests in a proactive fashion.

(2)    Mr Enright was not transparent about his communications with the Minister’s office or about the particular focus of the investigation upon matters concerning Mr Shorten, which, it was contended by the AWU, bespeaks of consciousness of guilt.

(3)    Mr Enright took steps immediately upon receiving the referrals from the Minister and shortly after visiting the Minister’s office in Canberra in September 2017.

(4)    Mr Enright overlooked, or showed no interest at all in, s 320 of the RO Act which, it was contended, revealed a mindset that was fixed on carrying out the referrals made by the Minister.

(5)    In the context of the RO Act, it was improper for Mr Enright to have had regard to the referrals from the Minister.

235    The primary judge addressed each of these arguments. He concluded his analysis with his comments on the reliability of Mr Enright as a witness. His Honour said that he had assessed each of the reasons put forward by the AWU in terms of whether they supported a finding that, in commencing the Investigation, Mr Enright’s purpose included aiding or assisting the Minister to discredit or politically harm Mr Shorten. He said that individually none of those reasons were of any significant assistance to the finding contended for by the AWU and that, assessed cumulatively, the position was unchanged. He also said that “some weight was to be given to Mr Enright’s denial” (at [344]). In the result, his Honour was not satisfied that the AWU had established that in commencing the Investigation, Mr Enright acted for an improper political purpose.

236    The primary judge then turned to consider ground 4, namely, whether in commencing the Investigation, Mr Enright took into account an irrelevant consideration, being the Minister’s political purpose. The primary judge said that at the factual level, as he put it, this claim rose no higher than the AWU’s third ground regarding improper purpose. All of the considerations put by the AWU in support of its contention that Mr Enright took into account an irrelevant consideration, were also relied upon in support of the AWU’s contention that Mr Enright acted in furtherance of the alleged improper purpose. His Honour said that he had already dealt with those matters and that neither individually nor cumulatively did they demonstrate that Mr Enright took into account the consideration of aiding or assisting the Minister to discredit, embarrass or politically harm Mr Shorten. The primary judge considered that the relevant test was whether Mr Enright had regard to the alleged irrelevant consideration as a “materially motivating factor” in deciding to commence the Investigation and his Honour said that that had not been established. Accordingly, he rejected ground 4 of the application for judicial review.

237    With that contextual background in mind, I turn to consider ground 4 in the Notice of contention.

238    The focus of this ground is the referral letters. The AWU challenges the primary judge’s formulation of the relevant principle. The primary judge said that the issue was to be resolved by determining Mr Enright’s state of mind and the extent to which he was motivated by the referral letters in reaching the decision to conduct an investigation (at [362], [371], [374] and [376]). His Honour formulated what he considered to be the relevant test in terms of whether a communication from the Minister was a material and operative reason for the decision to conduct an investigation pursuant to s 331(2) of the RO Act. The primary judge based his decision rejecting this ground on two important findings of fact. First, his Honour found that the referral letters were not treated by Mr Enright as a direction to undertake the Investigation. Secondly, his Honour found that the AWU had not demonstrated that the referral letters were a material and operative reason for Mr Enright’s decision to conduct the Investigation (at [376]). The AWU does not challenge those two findings of fact. As I have said, it challenges the primary judge’s formulation of the relevant test.

239    In its Notice of contention, the AWU formulates the test of the necessary and sufficient link between the referral letters and Mr Enright’s decision for the purposes of establishing jurisdictional error in this field of discourse as being whether the referral letters “affected the decision to any extent”. In its written outline of submissions, the AWU used a variety of phrases to describe the test it submitted was the correct test, including “any degree of influence is sufficient”, “any interaction between the responsible Minister and [Mr Enright]” concerning a decision under s 331(2) in a specific case or prospective case and no capacity in the responsible Minister “to put suggestions” to Mr Enright or “speak to” Mr Enright on specific matters, or to make “informal overtures” to Mr Enright about specific matters. It was also put that it is sufficient that the Minister’s referral letters had “some (any) influence on [Mr Enright]”. I identify the AWU’s various ways of formulating the relevant test to make the point that the AWU’s test is very broad and, I think, somewhat elusive in nature.

240    In order to explain the test formulated by the AWU in a meaningful way, an identification of the facts the AWU relies on to make out its case will assist. The facts are not in dispute.

241    First, in his evidence, Mr Enright said that in relation to the first referral letter he “carefully read the letter and the media articles attached to it” and “gave careful consideration to the letter” at the time he received it. He accepted that “[s]ubsequently, well, yes, I did. I looked into the matters that were raised in the media articles”.

242    Second, the media statement for Workplace Express on 16 August 2017 contained the following: “[t]he Registered Organisations Commission has received and is reviewing a referral from the Minister’s office”.

243    Third, on 17 August 2017, the Commissioner wrote to the Minister’s office informing the Minister that he had received the first referral letter and he went on to state:

A file relating to your query has been created and allocated the reference Q2017/27. The allegations outlined in your correspondence will now be examined and your office contacted once this process in complete.

244    Fourth, Mr Enright gave evidence that by the end of August 2017, he was much more familiar with the content of the first referral letter and had been dealing with the matters contained in it, “reasonably extensively”.

245    Fifth, on 11 September 2017, Mr Enright wrote an email to Ms Sarah Wilkin asking her to commence preparing the relevant documents to commence an investigation. Ms Wilkin was a senior adviser, Compliance, at the Commission. He referred to “the GetUp and other matter referred to the ROC” and to “whether or not the loans were approved by the former Secretary of the AWU in contravention of its rules as referred to in the second referral”. He gave evidence that the reference to the “other matter referred to the ROC” was a reference to the referral letters from the Minister.

246    Sixth, the reference to “information received from several sources, being predominantly media reports” in the Decision Record includes a reference to the referral letters (as well as the letter from Senator Abetz) and after referring to the results of the informal inquiries he has undertaken, Mr Enright makes reference in the Decision Record to “[h]aving considered the abovementioned material, I am satisfied that there are reasonable grounds to conduct an investigation …”. The material included the referral letters. I make the point that this matter must be read in the context that his Honour found, and this finding is not challenged by the AWU, that the referral letters were not a material and operative reason for Mr Enright’s decision to conduct the Investigation.

247    Finally, Mr Enright produced a chronology in order to try and crystallise what had occurred and in that chronology there was reference to the referral letters.

248    The AWU contends that the extent of interaction between the responsible Minister and Mr Enright and his office as identified by reference to these seven matters exceeded what was permitted by the RO Act and meant that Mr Enright’s decision was affected by jurisdictional error.

249    The AWU made it clear in its oral submissions that it did not suggest that other persons could not provide information to the Commissioner and, indeed, ask the Commissioner to commence an investigation under s 331(2) of the RO Act. Further, as developed, the AWU’s submission is that it is only the responsible Minister who is not able to engage in the degree of interaction with the Commissioner which it identified. This was said to follow largely, although not entirely, from the terms of s 329FA of the RO Act which is as follows:

329FA Directions from the Minister

(1)    The Minister may, by legislative instrument, give written directions to the Commissioner about the performance of the Commissioner’s functions.

Note:    Section 42 (disallowance) and Part 6 (sunsetting) of the Legislative Instruments Act 2003 do not apply to the direction (see sections 44 and 54 of that Act).

 (2)    The direction must be of a general nature only.

 (3)    The Commissioner must comply with the direction.

250    Both parties and the primary judge treated the following statement of Mason and Wilson JJ in Bread Manufacturers at 429 as providing the guiding principles in determining the extent to which a repository of a statutory power, such as the Commissioner, can be permissibly influenced or directed by the views of a government or a Minister in the exercise of that power:

So much depends on a variety of considerations, for there are few cases in which the statute explicitly provides that the [repository of the power] is bound to give effect to, or to give weight to, a ministerial direction. One must take into account the particular statutory function, the nature of the question to be decided, the character of the tribunal and the general drift of the statutory provisions in so far as they bear on the relationship between the tribunal and the responsible Minister, as well as the nature of the views expressed on behalf of the Government.

(see also CPCF at [37] per French CJ; at [292] per Kiefel J (as her Honour then was)).

251    The three matters advanced in support of the AWU’s contention that any degree of interaction between the responsible Minister and the Commissioner, as informed by the factual matters to which the AWU referred, is impermissible are as follows.

252    First, the AWU submits that the Commissioner’s statutory function of investigating and exercising compulsory powers are not, by their nature, powers that ought to be exercised upon a view of the Minister, and the Minister does not enjoy any particular special expertise that could aid the Commissioner. That proposition may be accepted, but it does not provide a reason for accepting the test formulated by the AWU over that formulated and applied by the primary judge.

253    Second, the AWU submits that the character of the Commissioner and the “general drift” of the RO Act is to preserve the Commissioner’s independence from the government. Again, that proposition may be accepted, but it does not provide a reason for accepting the test formulated by the AWU over that formulated and applied by the primary judge.

254    This brings me to the burden of the AWU’s argument which is that the statutory scheme in Division 6 Part 3A and, in particular, s 329FA precludes the responsible Minister from making suggestions or speaking to the Commissioner about specific matters. A statutory provision limiting permissible directions to those of a general nature only may be taken as prohibiting a specific direction, but the primary judge found, and the AWU has not challenged this finding, that the responsible Minister did not give a direction to Mr Enright to undertake the Investigation.

255    The AWU’s third submission anticipated this conclusion and made the submission that the prohibition on a specific direction should, by reference to the implied intention of Parliament, be extended to “informal overtures” to the Commissioner about specific matters because of what was said by the AWU to be ambiguous line between directions and “guidelines” and a tendency for the regulator to defer too greatly to the views of the Minister with responsibility for the regulator.

256    I would not describe the Minister’s communications with Mr Enright as the provision of “guidelines”. It is not easy to describe in a single phrase or sentence the interaction evidenced by the seven matters which the AWU identified. The Minister certainly asked the Commissioner to consider investigating the matter “in any way the Commissioner may consider appropriate”. The Minister’s referral letters were referred to in the reasons section of the Decision Record. Whilst the Minister cannot give specific directions to the Commissioner, I am not able to see how it can be inferred from s 329FA that Parliament intended that the responsible Minister under the RO Act, and only the responsible Minister, is precluded from communicating with Mr Enright and Mr Enright proceeding the way in which he did as revealed by the seven matters identified by the AWU.

257    I reject ground 4 in the Notice of contention.

Conclusions

258    The appeal should be allowed. The declaration made by the primary judge and the order quashing the decision made by the Commissioner, by his delegate, Mr Chris Enright, should be set aside.

259    The parties will be given the opportunity to agree the final orders which should be made in light of these reasons. Failing that, the parties will be heard as to the final orders which are to be made.

Associate:    

Dated:    20 November 2020

REASONS FOR JUDGMENT

WHITE J:

260    I agree with the orders proposed by Besanko J and with his reasons.

Associate:

Dated:    20 November 2020