Federal Court of Australia

Australian Building and Construction Commissioner v O’Halloran [2021] FCAFC 185

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

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

REASONS FOR JUDGMENT

LOGAN J:

1    The Australian Building and Construction Commissioner (Commissioner) has instituted civil penalty proceedings in this Court’s Fair Work Division against the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia (as third respondent – (CEPU)), Mr Gary Leonard O’Halloran (the first respondent), and 26 other individuals (respectively, the second and fourth to twenty-eighth respondents).

2    It is apparent from the Commissioner’s statement of claim that the proceedings arise out of events in November and December 2017, at and in relation to a project at, 269 Grey Street, South Brisbane for the construction of a 22 storey apartment and hotel complex by J Hutchinson Pty Ltd (trading as Hutchinson Builders) (Hutchinson), at what was termed the “Southpoint A” site. Planet Plumbing (Qld) Pty Ltd (Planet) was engaged by Hutchinson as a plumbing contractor for that construction project.

3    Planet’s project manager at the Southpoint A site was a Mr Travis Walkley (Mr Walkley). There was, it seems, some history between the CEPU and Mr Walkley. The Commissioner alleges that, on the early morning of 1 December 2017, Mr Andrew Blakeley (the second respondent), a CEPU organiser, entered the Southpoint A Site, purportedly pursuant to an entry permit notice given under s 119 of the Work Health and Safety Act 2011 (Qld). It is alleged that, thereafter, Mr Blakeley convened an employee site meeting as a result of which employees decided not to undertake work at the Southpoint A site unless and until Planet removed Mr Walkley as its project manager. It is alleged that employees thereafter that day refused or failed to commence work at the scheduled 6:30 am commencement time. It is further alleged that, later that morning, in the course of a telephone conversation between Mr O’Halloran, the CEPU’s State Secretary of its Queensland Plumbing Division and a Mr Cameron Smart, Planet’s Queensland Manager, words to the following effect were exchanged:

…

Mr O’Halloran said to Mr Smart words to the effect that “the boys on site are wanting Travis [Mr Walkley] removed permanently off the Southpoint site or terminated from Planet Plumbing altogether”.

…

Mr Smart informed Mr O’Halloran that he would ask Mr Walkley to leave the Southpoint A Site for the day.

Mr O’Halloran responded with words to the effect that “if Travis is removed from the site, I will have the boys return to work at 10.30am as they are already going to be docked four hours of their pay”.

4    At the time of the events alleged in the statement of claim, Planet’s employees at the Southpoint A site were covered by an enterprise agreement: the “Planet Plumbing Qld Pty Ltd and CEPU Plumbing Division Enterprise Agreement 2015 – 2019”.

5    The Commissioner alleges that the respondents have, either as a principal or an accessorial party, engaged in unlawful industrial action in contravention of, inter alia, s 46 and s 52 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) and ss 417, 355, 348 and 500 of the Fair Work Act 2009 (Cth) (FW Act). At the heart of the Commissioner’s case is his allegation that on 1 December 2017 the CEPU, by its officials, engaged in coercion of Planet with respect to Mr Walkley, contrary to s 348 of the FW Act.

6    Flowing from the exceptions found in s 19(2) of the FW Act and s 7(2) of the BCIIP Act, in the respective definitions in those Acts of “industrial action”, the Commissioner’s statement of claim is, either expressly or by necessary implication, replete with many a “negative pregnant”. In other words, a denial of a pleaded allegation may carry with it an affirmative allegation. In this case, given the statutory exceptions, any such affirmative allegation would be that the circumstances fall within one or the other of the exceptions to what constitutes “industrial action” for the purposes of the FW Act or, as the case may be, the BCIIP Act.

7    In their defence, the individual respondents claimed and reserved their right to claim the privilege against self-exposure to civil penalties, and denied each allegation in the statement of claim.

8    Unfortunately, the Commissioner, as he ought to have done, did not raise at an interlocutory case management hearing a contention that a pleading of the defence in this way carried with it an inability on the part of the individual respondents, in the absence of a pleaded identification of the exception, to put forward at trial a case that the circumstances fell within one or the other of the statutory exceptions mentioned. Instead, as the learned primary judge related in her reasons for judgment, the point arose in this way at the commencement of the trial.

9    At the commencement of the trial it became apparent that the Commissioner anticipated objecting to any questions in cross-examination posed by either counsel for the individual respondents which introduced material going beyond a response to the case pleaded by the Commissioner. Mr C Murdoch QC and Mr A Smith for the Commissioner submitted to her Honour that any such questions were irrelevant to matters currently in issue in the proceeding, and should not be permitted by the Court. As her Honour further recorded, it was clear that the Commissioner anticipated opposing the raising of any positive defence which, in his submission, ought to have been pleaded by the individual respondents prior to the Commissioner’s opening his case. The consequential submissions on behalf of the individual respondents asserted that they were permitted to file an amended defence raising a positive defence, if so advised, following the close of the Commissioner’s case.

10    It was against this background that her Honour considered it necessary to make the following order, indicating that she would shortly thereafter publish her reasons:

If at the conclusion of the applicant’s case the individual respondents (or any of them) elect to waive the privilege against self-exposure to a penalty and advance a positive defence, those respondents are at liberty to file and serve any amended defences, affidavits and any outline of submissions immediately following the close of the applicant’s case or otherwise in accordance with orders of the Court.

11    The reasons for judgment published by her Honour – Australian Building and Construction Commissioner v O’Halloran [2020] FCA 1291 (ABCC v O’Halloran) – disclose that, in making this order, she followed a practice evident in a series of cases each also decided in the original jurisdiction, the origins of which are to be found in a judgment of Finkelstein J in Australian Securities and Investments Commission v Mining Projects Group Ltd (2007) 164 FCR 32 (ASIC v Mining Projects).

12    Before any detailing of the reasoning of Finkelstein J in ASIC v Mining Projects, it is first necessary to determine whether the Commissioner should be granted leave to appeal against what is, undoubtedly, an interlocutory order.

13    In Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170 (Adam P Brown), at 177, it was emphasised that courts with an appellate jurisdiction should be circumspect in permitting challenges to interlocutory value judgements in respect of matters of practice and procedure or exercises of discretion made in an exercise of original jurisdiction. That emphasis was hardly a revelation. In In re the Will of FB Gilbert (deceased) (1946) 46 SR (NSW) 318, at 323, cited with approval in Adam P Brown, at 177, Jordan CJ had stated:

[T]here is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.

Recently, in Gambaro v Mobycom Mobile Pty Ltd [2021] FCA 211, at [21], and with reference to these statements, I observed that:

This circumspection is no less applicable to the industrial jurisdiction than it is to other civil proceedings. In one sense, it is even more applicable in industrial cases, as there are invariably strong commercial, private and public interests at large in their prompt resolution.

14    The present case offers a paradigm example of the delay that can be introduced by a challenge to an interlocutory order. This delay is in addition to the inevitable lag between complaint, investigation and institution of most civil penalty proceedings and the uncertainties in relation to many trial listings introduced by episodic, public health restrictions associated with the present pandemic. Even for witnesses doing their honest best, memories can fade over time. Further, the essential purpose of a civil penalty regime, deterrence, is not well served by a lengthy delay between occurrence of events and determination of whether those events disclose a contravention of norms of conduct ordained by Parliament.

15    For all that, ASIC v Mining Projects is not, with respect, readily reconcilable with views earlier expressed by the majority of the New South Wales Court of Appeal in MacDonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612 (MacDonald), by the Full Court in Adams v Director of the Fair Work Building Industry Inspectorate (2017) 258 FCR 257 (Adams), at [104], (with reference to MacDonald), by the Full Court of the West Australian Supreme Court in Bridal Fashions Pty Limited v Comptroller-General of Customs (1996) 17 WAR 499 (Bridal Fashions) and by Gyles J in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2005) 226 ALR 247 (Silvestri), at [17], in relation to pleading practice and procedure applicable to civil penalty regimes. Neither, as I pointed out in the course of oral argument, is it reconcilable at all with an earlier judgment of the Court of Appeal for England and Wales, Inland Revenue Commissioners v Jackson [1960] 1 WLR 873 (Jackson) and the apparently settled practice in the United Kingdom in relation to suits for the recovery of pecuniary penalties by the Crown and emanations thereof, as revealed in Atkin’s Court Forms for which Jackson is cited as authority. Related to this, the practice ordained in ASIC v Mining Projects, as its application in the present case illustrates, is fraught with the prospect of a fragmented trial. The time has well and truly come for the correctness of that practice to be considered by a Full Court. A grant of leave to appeal is therefore warranted.

16    The learned primary judge offered (ABCC v O’Halloran, at [25] – [39]) a comprehensive summary both of the reasoning of Finkelstein J in ASIC v Mining Projects and of its subsequent reception in the original jurisdiction. This I now gratefully incorporate without further attribution. The individual respondents adopted that reasoning and that reception in their submissions.

17    In relation to the pleading dispute in ASIC v Mining Projects, ASIC delivered a detailed statement of claim and the defendants each filed defences. ASIC contended that the defences were deficient in several respects and sought orders for the provision of further and better particulars.

18    In their defences in ASIC v Mining Projects the directors opened with a statement that they claimed and reserved their right to claim penalty privilege in the proceeding. They admitted certain facts, denied some facts, admitted other facts but asserted other facts which could answer them; and set up a positive case in answer to the various claims set up. Justice Finkelstein observed that although the directors had provided considerable detail, including particulars of many of the allegations, no part of the defence amounted to an allegation of the truth of the facts therein. Rather, the statements in the defence were only to be treated as statements outlining the case which each director wished to raise for resolution by the Court.

19    The directors submitted that if their pleadings were deficient they could not be compelled to provide further information because of penalty privilege or the privilege against self-incrimination.

20    His Honour found that, in view of the claims made by ASIC, each privilege was engaged. After observing that penalty privilege was claimed in the context of a civil action, his Honour observed, at [11], that the circumstances in which penalty privilege may be claimed were not settled. At [12], his Honour continued:

That the rule has a wider application than merely preventing a plaintiff from obtaining discovery or interrogatories reflects the broad object of penalty privilege. In Daniels Corporation [2002] HCA 49; 213 CLR 543, 559 Gleeson CJ, Gaudron, Gummow and Hayne JJ said that penalty privilege “serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it.” That is, the plaintiff must prove his case without any assistance from the defendant: Abbco Iceworks [1994] FCA 1279; 52 FCR 96, 129; Rich [2004] HCA 42; 220 CLR 129, 142. So it has been held that although in a civil action a defendant is required to deliver a defence he cannot be compelled to make any admissions in relation to the matters alleged against him. That is, penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege: Hadgkiss v Construction, Forestry, Mining and Energy Union [2005] FCA 1453; (2005) 146 IR 106, 111 – 112; A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; (2005) 226 ALR 247, 251.

[Emphasis added by the primary judge]

21    In addition to commenting in respect of the operation of the penalty privilege, his Honour continued in respect of positive defences as follows:

13.    There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff’s case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say.

[Emphasis added by primary judge]

22    At [16], after examining Bridal Fashions, his Honour continued:

… both penalty privilege and self-incrimination privilege protect not only against the risk of exposure to penalty or incrimination by direct evidence but also by indirect or derivative evidence. Disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry. A defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence: Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 6 – 7. If a defendant is required to plead a positive case there is a risk of that happening: Chief Executive Officer of Customs v Camile Pty Ltd [2004] NSWSC 1256; (2004) 58 ATR 163, 169.

[Emphasis added by primary judge]

23    His Honour then said:

17.    In any event even if, contrary to my view, Bridal Fashions stands for the proposition that a positive defence can never incriminate a defendant or expose him to a penalty, it says nothing about when the defence must be delivered. On my alternative approach a defendant can rely on the privilege up to the point he decides to go into evidence. It is only at that moment, if the defendant elects to run a positive case, that he must give up the privilege and file a defence that outlines the case he intends to run.

[Emphasis added by primary judge]

24    The views expressed in ASIC v Mining Projects have been adopted and applied in numerous decisions in this Court’s original jurisdiction: Frugtniet v Migration Agents Registration Authority (2017) 73 AAR 1; Fair Work Ombudsman v Hu [2017] FCA 1081; Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 3) (2018) 357 ALR 695; Singh v Fair Work Ombudsman [2019] FCA 664; and Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 2) [2020] FCA 348. The learned primary judge extracted the pertinent passages in these cases in her reasons for judgment. None differ from the reasoning exposed in the passages from ASIC v Mining Projects set out above.

25    A necessary starting point for consideration of this line of authority is s 551 of the FW Act and its analogue in the BCIIP Act, s 86. Each of these provisions provide that this Court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention, or proposed contravention, of a “civil remedy provision” as defined. Each of the contraventions alleged by the Commissioner is of a “civil remedy provision”.

26    As, with the concurrence of Collier J, I highlighted in Heiko Constructions T/A Heiko Constructions Pty Ltd v Tyson [2020] FCAFC 208 (Heiko Constructions), at [62], provisions applying civil practice and procedure to suits by officers or emanations of the Crown in right of the Commonwealth have been found on the Federal statute book from the earliest days of Federation. In turn, as I also highlighted in that case, at [64], this was not an antipodean idiosyncrasy. Rather, it replicated a practice in the superior courts of England and Wales in relation to suits by officers of the Crown for the recovery of pecuniary penalties. The Rules of the Supreme Court 1883 (Eng), introduced as a sequel to the merger of courts which followed the Judicature Acts 1873 and 1875, provided, by O LXVIII, that the provisions of those rules applied to such proceedings, which were heard on the Crown or Revenue side of the Queen’s Bench Division of the High Court of Justice. This was the successor forum to the Court of Exchequer for the hearing and determination of suits “touching the profit of the Crown”: G S Robertson, The Law and Practice of Civil Proceedings by and Against the Crown and Departments of the Government (1908), pp 583-584 (Robertson).

27    Robertson, as I pointed out in Heiko Constructions, at [64], was regarded by Williams, Webb, Kitto and Taylor JJ in Naismith v McGovern (1953) 90 CLR 336 (Naismith v McGovern), at 340, as an authoritative source of guidance in relation to civil penalty proceeding practice when considering a point of practice with respect to discovery under a civil penalty regime for which provision was once made in the now former Pt VII of the Income Tax Assessment Act 1936 (Cth) (ITAA1936). Like the FW Act and the BCIIP Act, that regime provided that such proceedings were to be tried in accordance with the usual practice and procedure of the Court in civil cases (in the absence, as was the case with the High Court, of any particular rules for Crown suits in revenue matters): see the former s 237 of the ITAA1936.

28    It will be necessary to return shortly to Naismith v McGovern. Before so doing, consideration of English practice in relation to suits for penalties should be completed. Regard to Robertson discloses that the penal nature of such a proceeding did not mean that only a general joinder of issue was required of a defendant. Thus, Robertson includes, at 263, in a precedent answer to an Attorney-General’s information filed on the Revenue Side for the imposition of pecuniary penalties in respect of alleged customs offences, not just a plea of “not guilty” but also what was known as a plea of “non devenerunt”, by which a defendant made a positive allegation that the goods in question or any part thereof had not come into his possession.

29    The absence in English practice of any objection, based on the penal nature of a suit for the recovery of a pecuniary penalty, to the pleading in the first instance of a positive defence is made even starker in the more modern but no less authoritative English practice work, Atkin’s Court Forms. There (Atkin’s Court Forms, 2nd Edn., Vol. 34, Title, “Revenue”, p 223, Form 66, note 2), one finds this annotation in respect of a precedent defence to a suit on the Revenue Side of the Queen’s Bench Division of the High Court of Justice for the recovery of pecuniary penalties in respect of a failure to file taxation returns as and when required. The precedent defence includes a paragraph expressly denying a failure to lodge returns as alleged and is annotated by the editors of that work, “If not given, particulars may be ordered.” The authority cited for that proposition is Jackson.

30    Jackson was a civil penalty proceeding filed on the Revenue Side of the Queen’s Bench Division for a failure to lodge taxation returns. The statement of claim of the Inland Revenue Commissioners alleged that Mr Jackson had been required by notices in writing to furnish on or before a specified date, particulars as to the several sources of his income, and that he “without reasonable excuse” had failed to do so within the time specified. By his defence Mr Jackson admitted that he had not furnished all the particulars required within the time specified; but he specifically denied “that he failed to furnish any such particulars without reasonable excuse.” The commissioners applied for particulars of that denial, “specifying whether it is alleged that there was a reasonable excuse for not furnishing the particulars within the time and if so giving full particulars of such alleged excuse”. The master in the Queen’s Bench Division ordered the taxpayer to give these particulars. This ruling was upheld by a chamber judge from whose judgment Mr Jackson then appealed to the Court of Appeal. That appeal was, unanimously, dismissed. The affinity as between the issue in that case and the present is so strong that extensive reference to it is warranted.

31    The point pressed on appeal on behalf of Mr Jackson was exactly that pressed on behalf of the individual respondents in the present case and taken up by the learned primary judge in reliance upon the line of original jurisdiction authorities commencing with ASIC v Mining Projects. This is revealed by the summary of that argument in the authorised report of Jackson, at 875:

The onus of establishing that there has been a failure to deliver the particulars within the prescribed time “without reasonable excuse” falls on the commissioners, and if the particulars ordered by the master are given they will assist the commissioners to establish their case; and on the authorities that is just what they are not allowed to have. The commissioners say that the defence involving a double negative has implied in it a positive averment that the taxpayer had a reasonable excuse. But this is not an ordinary civil action. It is a claim for penalties; and the approach of the law to such an action is quite different from that to an ordinary civil action.

It is also obvious from an exchange which occurred in the course of oral argument in Jackson, at 876, that the court was well-seized of exactly the same consequence that may in the present case bedevil a failure to require the identification of a particular defence in the ordinary course of pleadings:

[Counsel for Mr Jackson] If his excuses are good no harm can befall him; but if they are inadequate the commissioners would be able to present their case better than they could without the particulars.

[PEARCE L.J. It would make no difference, for the judge would simply grant an adjournment at the taxpayer's expense on the ground that the commissioners required more evidence.]

32    The concern voiced on behalf of Mr Jackson, as in the present case by the individual respondents and in the authorities upon which they rely, was that to insist on particularity in a defence in a civil penal proceeding was to advantage the authority which had brought the proceeding in the proof of the contravention alleged. The point made in response in argument by Pearce LJ is the same as has been apprehended both in this case and in some Australian cases. If particularity of defence is given at a late stage of proceedings, procedural fairness may well dictate that a trial be adjourned part heard at the request of a plaintiff/applicant.

33    Another noteworthy feature of Jackson is that the point advanced on behalf of Mr Jackson was not regarded by the Court of Appeal as warranting calling upon counsel for the respondent commissioners to make oral submissions.

34    Submissions of counsel and views expressed judicially in the course of those submissions are, of course, not authoritative. But it is helpful in this instance to set them out to give context to the views which were expressed in the judgments delivered in Jackson.

35    In Jackson, at 878, Sellers LJ, having stated the facts referred to and disposed of the submissions for Mr Jackson in this way:

One can simply take this case as a claim for penalties. It is not a criminal proceeding. The form of the pleading is of the usual kind and normal so far as particulars are required of the averments in the pleading. I support the judge entirely in thinking that when the defendant pleads in the way I have read in paragraph 2 of the defence he is of necessity and by clear implication setting up an implied affirmative. It does not go to establish the plaintiffs' case but operates substantially for the benefit of the defendant who is thereby setting up an affirmative case. The plaintiffs' claim stands on its own feet and needs no support from the defendant. On these pleadings as they stand the defendant proposes to set up that there was reasonable excuse for not giving the information required. Unless the particulars of the defence which have been asked for are given before the trial there may well be surprise, delay and undue expense.

36    Having so done, Sellers LJ then quoted, at 879, with approval a passage from Duke’s Court Estates Ltd. v. Associated British Engineering Ltd [1948] Ch. 458, at 463, in which Harman J had, with reference to observations made by Goddard LJ in Pinson v. Lloyds and National Provincial Foreign Bank Ltd [1941] 2 K.B. 72 (Pinson), stated the usual civil pleading consequence of the denial in a defence of a negative pregnant in a statement of claim:

As the Lord Chief Justice [Goddard L.J.] said, ‘A bare traverse is a perfectly good plea provided that all that is thereby intended is to put the plaintiff to proof of his case, but it may be that, concealed in a traverse, is an affirmative case, and this may well be so when the traverse is of a negative averment. If it is clear to the court, either from the nature of the case or from the admission of counsel or otherwise, that it is intended to set up an affirmative case, so that the traverse is what has been described as a negative pregnant, it seems to me that particulars of the affirmative case ought to be delivered. Otherwise, the opposite party and the court will be in doubt as to what issues are to be determined at the trial.’

37    Also in Pinson, as Sellers LJ highlighted in Jackson, at 879, Stable J had stated, at 463-464:

“‘(ii)    it may be a negative pregnant which contains within the double negative an affirmative allegation.’” Then Stable J. said: “‘If it falls under the second head, the double negative extends beyond a mere traverse and amounts as in the present case to this: “If you establish a prima facie case that I sold or purchased shares for you and that in so doing I acted without authority, then I intend to call evidence to establish that on each or some of the occasions there was an express authority to act as I did or an implied authority to be derived from certain facts.” That, in my judgment, is to set up an affirmative case of which particulars ought to be given and that, none the less, though the affirmative case is concealed, albeit imperfectly, in a negative shell.’”

His Lordship then added, at 879, “It was pointed out that if the particulars are not given then it may preclude a defendant in those circumstances from advancing an affirmative case at the trial.” Once again, that is exactly the point that in the present case the Commissioner advanced before her Honour the learned primary judge as to a consequence of a failure on the part of the individual respondents to give particulars of a defence which traversed a negative pregnant in the statement of claim.

38    Also in Jackson, in expressing his concurrence with the judgment delivered by Sellers LJ, Pearce LJ stated, at 879 – 880:

It is clear from the pleadings that the traverse is a negative pregnant. The admissions of counsel have made it even clearer that the defendant intends to set up an affirmative case. The only object of the defendant in seeking to avoid giving these particulars is admittedly to prevent the plaintiffs knowing before the trial what the defendant's case is, and thus to give the defendant the advantage of surprise. That is an unmeritorious object and would probably lead to an inconvenient adjournment in the middle of the hearing.

39    The conclusion reached in Jackson is emphatic and, as the above analysis of the submissions and judgments discloses, in no way turned upon the limited admission made by Mr Jackson in his defence.

40    The particular importance of Jackson is that a requirement to deliver a particularised defence was at no stage in the judicial hierarchy in England which culminated in the judgment of the Court of Appeal regarded as incompatible with the privilege in respect of exposure to a penalty. The correctness of Jackson has never since been questioned in the United Kingdom.

41    The position which obtains in civil proceedings under this Court’s pleading rules, as found in the Federal Court Rules 2011 (Cth) (Federal Court Rules), is exactly the same as that described in Jackson with reference to Pinson. A denial in a defence of a negative pregnant in a statement of claim “is to set up an affirmative case of which particulars ought to be given”. In Jackson, the penal character of a suit for the recovery of a pecuniary penalty, nonetheless tried in accordance with the court’s civil practice, made no difference whatsoever to this position.

42    In Naismith v McGovern the point at issue was whether the Commissioner of Taxation, as prosecutor in the civil penalty proceeding could be required to give discovery, because the defendant could not be so required. That the latter was a given flowed from acceptance by the High Court of the applicability to a proceeding conducted in accordance with its civil practice rules of the long prevailing position in England with respect to civil penalty proceedings. That applicability and English position is revealed by the following passage in the joint judgment of Williams, Webb, Kitto and Taylor JJ, at 341 – 342:

We are here primarily concerned with the sections in Pt. VII. relating to the procedure laid down for the recovery of pecuniary penalties for offences and not with the nature of the offences themselves and nothing that was held in Mallan v. Lee throws any doubt upon the remarks of Williams J. and Fullagar J in the cases cited. The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature. It is clear that the actual procedure by which an order for the recovery of a penalty is obtained in this Court is, in the absence of a special order, the civil procedure of this Court. This is expressly provided for by s. 237 of the Assessment Act. Discovery and the administration of interrogatories are part of the ordinary civil procedure of the Court. The practice is now regulated by O. 32 of the Rules of Court. Originally orders for discovery were not obtainable at common law, except to a limited extent, and a party to a common law action who desired general discovery had to proceed by bill in equity. But the Court of Equity would not make an order for discovery or for the administration of interrogatories in favour of the prosecutor whether the prosecutor was the Crown or a common informer or any other person where the proceeding was of such a nature that it might result in a penalty or forfeiture: “nemo tenetur seipsum prodere”. When discovery and interrogatories were provided for under the rules made under the Judicature Act the same principle was applied. It was held that the orders were not intended to confer a right to discovery, Hunnings v. Williamson; or to administer interrogatories, Martin v. Treacher, where prior to the Judicature Act such orders were not obtainable. See also Mexborough (Earl) v. Whitwood Urban District Council; Colne Valley Water Co. v. Watford & St. Albans Gas Co. The subject is discussed in the judgment of Isaacs J., as he then was, in R. v. Associated Northern Collieries. The proceedings there in question were brought under s. 13 (1) of the Australian Industries Preservation Act 1906-1910 which provided that proceedings for the recovery of pecuniary penalties for offences, other than certain offences, should be instituted in the High Court by way of civil action and should be tried before a justice of that Court without a jury. His Honour held that in a civil action for penalties, in the absence of statutory provision to the contrary, the plaintiff is not entitled to an order for discovery of documents against the defendant and that this rule applies equally both to actions by the Crown and actions by a common informer.

In the present proceedings, therefore, assuming these principles are applicable, the plaintiff could not obtain an order for discovery or for interrogatories against the defendant.

[Footnote references omitted]

43    The conclusion that discovery did not go against a defendant in a suit for the recovery of a penalty reflected the by then long settled position in England: see Daniell’s Chancery Practice, 8th Edn, p 571.

44    Their Honours went on to hold in Naismith v McGovern that the principle encapsulated in the maxim “nemo tenetur seipsum prodere” – no one is bound to accuse himself, which underpinned the refusal to lend the processes of discovery and interrogatories against a defendant in a penal proceeding, did not have the reciprocal consequence that the Commissioner was relieved from giving discovery in accordance with the usual practice applicable to civil cases. Put another way, Naismith v McGovern stands for the proposition that those usual rules are rendered inapplicable only to the extent that they are inapplicable with the privilege against self-incrimination or exposure to a penalty.

45    The starting point for the reasoning in ASIC v Mining Projects is Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (2002) 213 CLR 543, in which, at 559, Gleeson CJ, Gaudron, Gummow and Hayne JJ held that this same privilege “serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it.” That holding had nothing to do with pleading practice but was directed to why it was that the recipient of a statutory notice to produce could not be compelled to produce documents sought by that notice in circumstances where that privilege was applicable and the statute concerned neither expressly nor by necessary implication abrogated the privilege. That it is a common law privilege and not merely a practice relating to discovery was confirmed in Pyneboard Proprietary Limited v Trade Practices Commission (1983) 152 CLR 328, at 336; see also Sorby v Commonwealth of Australia (1983) 152 CLR 281, at 309. The antithetical discovery practice grounded in a refusal to assist subjection to penalties is a manifestation of the privilege.

46    Bridal Fashions was a customs prosecution filed in the West Australian Supreme Court. Being so filed and there being no rules in that court specifically relating to Crown suits in revenue matters, the effect of s 247 of the Customs Act 1901 (Cth) (Customs Act) was that the usual rules of court in civil proceedings were applicable. In relation to pleadings, the position concerning the adequacy of a defence was complicated by s 255 of the Customs Act, which makes an averment of a fact in a statement of claim prima facie evidence of that fact. There is no equivalent provision in either the FW Act or the BCIIP Act. For present purposes, the utility of Bridal Fashions lies not in how the Full Court reasoned through the ramification for the pleading of an adequate defence in the face of averments but rather for some introductory observations made by the Full Court, at 515, in relation to the pleading of a defence in a civil penalty case, taking into account the privilege against exposure to a penalty:

The privilege against self-incrimination is not confined to oral evidence given at trial. It also applies in pre-trial interlocutory proceedings such as answers to interrogatories, discovery and inspection of documents and the production of documents in answer to a subpoena. The learned Master noted that no case had been cited to him in which the principle had been extended to pleadings. We were unable to find any such case. Accordingly, it is necessary to consider the question in the context of the pleading rules. These rules must necessarily be considered in the context of a Customs prosecution under the statutory regime contained in the Act.

The result of the conclusion that the privilege against self-exposure to a penalty is not available to a corporation means that the appellant will have to plead to the statement of claim in the conventional fashion. So far as concerns the second respondent [an individual], counsel made this submission:

“... in relation to the claim as a whole, any admission by the defendant in relation to matters such as this where the defendant is liable to exposure to a penalty, the defendants are entitled to say, ‘We are not obliged to assist the prosecutor in any way at all’ and that is by an admission on any matters.”

We think this over-simplifies the point. It is not a question of “helping the prosecutor”'. A defendant must raise a plea that will take the matter to trial and to the extent that they are consistent with the existence of the privilege the normal rules of pleading must be followed.

47    The passage just cited confirms that Jackson was not cited or otherwise discovered in Bridal Fashions, so the reasoning is from first principles. So reasoning, the Full Court eschewed the notion that a requirement for the pleading of a defence in itself assisted a prosecutor. Instead, the Full Court considered that the usual pleading rules were applicable to the extent which they were consistent with the privilege.

48    Australian Competition & Consumer Commission v FFE Building Services Ltd (2003) 130 FCR 37 (FFE Building Services), is a judgment of the Full Court which stands for the proposition that a necessary consequence of the privilege against exposure to a penalty is that an individual respondent party cannot be compelled by interlocutory order in advance of trial to file statements of evidence in a civil penalty proceeding. In so holding, the Full Court observed, at [35], “Pretrial disclosure of the evidence to be called by an individual respondent may assist the Commission to improve its case against that respondent.” No pleading point arose in FFE Building Services.

49    Hadgkiss v Construction, Forestry, Mining and Energy Union (2005) 146 IR 106 (Hadgkiss v Construction, Forestry, Mining and Energy Union), is cited in ASIC v Mining Projects as an authority which supports the conclusions reached. However, in my respectful view, that is to assign to that case more weight than it can bear. A pleading point did arise in Hadgkiss v Construction, Forestry, Mining and Energy Union, which was a civil penalty proceeding to which by statute the Court’s civil practice was applicable. In respect of individual respondents and having considered Bridal Fashions, Graham J stated, at [31] – [34]:

31.    In my opinion, the Third and Fourth Respondents can be required to file defences. Should they wish to waive the privilege to which they are entitled and make admissions, they may choose to do so either expressly or by refraining from pleading to specific allegations of fact in the Statement of Claim.

32.    Plainly, should they choose to make specific denials or statements of specific non-admission, such a course would be consistent with their rights to rely upon their privilege against exposure to penalties.

33.    It should be remembered that there is no requirement under the Rules for pleadings to be verified.

34.    In the light of O 11, r 13(1) of the Rules, I do not consider that the Third and Fourth Respondents could refrain from pleading to discrete allegations in the Statement of Claim in words to the effect “I decline to plead to the facts and matters alleged in paragraph X of the Statement of Claim on the ground that to do so may expose me to liability for a penalty” without risking deemed admissions in accordance with the Rule. However, it would seem to me perfectly proper for statements of specific non-admission to be made in such circumstances and it would be a matter for the Respondents to decide whether the basis of the statements of non-admission was included in their pleading or not.

The Federal Court Rules contain, in r 16.07(2), a deemed admission equivalent of the former O 11 r 13(1). I do not, with respect, see how a rule imposing a deemed admission could be compatible with the common law privilege, but I agree with Graham J that a respondent could not merely state, “I decline to plead to the facts and matters alleged in paragraph X of the Statement of Claim on the ground that to do so may expose me to liability for a penalty”. Rather, an individual respondent would have to comply with the general requirement in r 16.07(1) that, “A party pleading to an allegation of fact in another party’s pleading must specifically admit or deny every allegation of fact in the pleading.” Only the default found in r 16.07(2) would be rendered inapplicable by the privilege. A party choosing not to waive the privilege would not admit particular allegations but instead deny them. Jackson was not cited to Graham J in Hadgkiss v Construction, Forestry, Mining and Energy Union. Beyond this, it seems to me that Hadgkiss v Construction, Forestry, Mining and Energy Union stands for nothing more than the proposition, with which I respectfully agree, that the privilege does not prevent an individual respondent from waiving it and making such admissions as he or she may be advised in a defence.

50    A pleading point also arose in Silvestri, another civil penalty proceeding to which the usual civil practice rules were expressed to be applicable. In opining that an individual respondent was obliged to plead a positive defence, Gyles J stated, at [17]:

A personal respondent to a penalty proceeding is entitled to put the applicant to proof of its case. Such a respondent cannot be forced to make an admission and no solicitor acting for that person can be held responsible for not ensuring that a party plead in a way which goes further than this. In other words, such a respondent can decline to admit matters alleged against it. To the extent that the rules of pleading require to be modified to enable this to take place, that will be done. There is no occasion, however, for relieving respondents of a duty to plead. Even in a criminal trial, a defendant pleads guilty or not guilty. The issue would arise in a case where a personal respondent proposes to rely upon a positive defence. Penalty proceeding or not, means must be found to advise the applicant and the court of any positive defence so that the trial can be properly prepared and conducted.

[Emphasis added]

Jackson was not cited to his Honour. However, the reasoning of Gyles J is uncannily similar to what was evidently regarded in Jackson as elementary. Having set out his view in Silvestri, Gyles J added, at [17], “It is at that point that there may be a debate as to the appropriate course, which may involve a closer examination of the decisions in Bridal Fashions and Hadgkiss.” His Honour then noted that the point had not yet arisen yet in that case. Silvestri is not, with respect, a case which supports the conclusions reached in ASIC v Mining Projects. If anything, although it was unnecessary for his Honour to decide the point, the opinion expressed by Gyles J rather tends to the contrary. In Jackson, where the point unnecessary for Gyles J to resolve did arise, it was resolved by requiring a positive defence to be pleaded in advance of trial.

51    Bridal Fashions, FFE Building Services and Silvestri but not Jackson were amongst the cases which were considered by the New South Wales Court of Appeal in MacDonald, which was an interlocutory appeal on a pleading point concerning what was required in a defence in a civil penalty proceeding. The conclusions reached in that case concerning pleading requirements are not affected by the later High Court appeal, Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 which followed the subsequent trial. Like the present, MacDonald was also a case required by statute to be tried in accordance with the usual rules of practice applicable to civil proceedings. The applicable rules were the Uniform Civil Procedure Rules 2005 (NSW), which materially provided:

14.14    General rule as to matters to be pleaded specifically

…

(2)    In a defence or subsequent pleading, a party must plead specifically any matter:

(a)    that, if not pleaded specifically, may take the opposite party by surprise, or

(b)    that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

   (c)    that raises matters of fact not arising out of the preceding pleading.

(3)    Matters which must be pleaded pursuant to subrule (2) include (but are not limited to) fraud, performance, release, statute of limitation, extinction of right or title, voluntary assumption of risk, causation of accident by unknown and undiscoverable mechanical defect and facts showing illegality.

15.1    Pleadings must give all necessary particulars

(1)    Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet.

52    Having set out the passage from FFE Building Services quoted above and with reference to these rules of court, Mason P, with whom Giles JA agreed in this regard, stated, at [71] – [74]:

71.    In my opinion, these principles mean that the claimant should not be compelled to include in his Defence any information that may have the tendency to expose him directly or indirectly to the penalties being sought by ASIC.

72.    To draw the line conceptually at this point will not relieve the claimant from compliance with Uniform Civil Procedure Rules, r 14.14 and r 15.1, so far as disclosing in his pleading his intention to invoke the statutory defences or any other “positive” defence, regardless of where the onus lies in establishing that defence. Not every form of affirmative defence has the requisite tendency. I see nothing wrong with a pleading in the following form:

“If, which is denied, the matters alleged in para X constitute a contravention of sY of the Corporations Law, the defendant says that the matters alleged by ASIC also establish that the claimant relied upon information or professional or expert advice (etc) / acted honestly (etc). The defendant reserves the right to advance in his case additional material in support of his defence, the details whereof will be disclosed by amending this paragraph after the close of ASIC’s case.”

See also Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 86, Bridal Fashions (at 516).

73.    In the Matter of Water Wheel Mills Pty Ltd (Victorian Supreme Court, Mandie J, 22 June 2001, unreported) involved a civil penalty claim under the Corporations Law (Cth). Mandie J declined to order a defence to be filed going beyond one indicating the matters admitted, denied or not admitted. His Honour was not persuaded to follow Bridal Fashions. He considered that any meaningful pleading of affirmative allegations by way of defence might expose the defendants to a civil penalty or put the plaintiff upon notice of a train of enquiry which might expose the defendants to a civil penalty.

74.    I respectfully disagree. In my view, the Rules ought to be departed from no more than is necessary to give effect to the privilege. The pleading mechanism I have suggested would require the claimant to invoke from the outset any relevant defence or statutory ground of dispensation; and it would require him to identify any parts of ASIC’s own allegations intended to be relied upon in that regard. There would also be a framework that defines the legal issues throughout the trial against which rulings as to admissibility could be made (at least in some circumstances). If and to the extent that the claimant exercised his right to plead and particularise in the manner indicated and not to waive his privilege by venturing further, there will still be the likelihood of ASIC’s evidentiary case being split more than it otherwise might be, but at least this consequence would be reduced to a minimum.

[Emphasis added]

53    An analogous rule to those considered in MacDonald is to be found in r 16.08 of this Court’s rules. The purpose of r 16.08 is to advise an applicant and the Court a positive defence. It provides:

16.08    Matters that must be expressly pleaded

In a pleading subsequent to a statement of claim, a party must expressly plead a matter of fact or point of law that:

  (a)    raises an issue not arising out of the earlier pleading; or

(b)    if not expressly pleaded, might take another party by surprise if later pleaded; or

  (c)    the party alleges makes another party’s claim or defence not maintainable.

54    I respectfully agree with the statement by Mason P in MacDonald that the rules of court ought to be departed from no more than is necessary to give effect to the privilege. However, agreeing as I do with everything stated by the members of the Court of Appeal in Jackson, I respectfully disagree with his Honour as to where that line is to be drawn. As drawn by his Honour and in ASIC v Mining Projects and later authorities in the original jurisdiction, the prospect exists of an applicant being taken by surprise as to an issue in the proceedings and thereby having good cause to seek and obtain an adjournment. In my view, the individual respondents in the present case ought to have been required to give particulars of a denial of the negative pregnant in the statement of claim.

55    MacDonald was, in turn, considered by a Full Court of this Court in Adams, yet another civil penalty case, but that consideration did not entail any reference to ASIC v Mining Projects. Nonetheless, as I understood the Commissioner to submit, certain observations in Adams about the pleading of a defence are not readily reconcilable with ASIC v Mining Projects. Thus, at [104] – [105], having referred to the statements, quoted above, made by Mason P in MacDonald, the Full Court observed:

104.    To the extent that the decision relies upon New South Wales legislation and rules, there appears to be little difference between the position in that State and that which prevails in this Court. It is important to note that at [72], Mason P made it clear that when he spoke of a “defence”, he included statutory defences and any other “positive” defence, regardless of where the onus might be in establishing that defence. Much of his Honour’s reasoning seems to have been based on the simple proposition that pleading the facts necessary to establish a defence (or raise it) will not necessarily amount to exposure to the risk of incurring a penalty.

105.    We have little doubt that for the appellants to rely upon alleged authorization or agreement, is to advance a “positive” defence which, according to the decision in MacDonald, should have been pleaded. We would say the same about a claim of illness, that a particular appellant was unable to access the site or that such an employee was “off”, if that term meant anything more than that he was engaging in industrial action. However it is not necessary for us to decide this matter. Fair Work seems to have been content to conduct the case on the basis that the appellants were not obliged to plead these matters. Rather, it asserted that the appellants had not satisfied evidential burdens concerning them.

[Emphasis added]

56    As is apparent from the passage quoted, it was not necessary in Adams for the Full Court to reach any concluded view about pleading practice, because of the stance adopted in the original jurisdiction on that case by the applicant prosecutor. The Commissioner has adopted a different stance in the present case. Although Jackson was not cited in Adams, the emphasised statement in Adams, at [104], of the proposition flowing from MacDonald that the pleading of a positive defence “will not necessarily amount to exposure to the risk of incurring a penalty” is certainly consistent with Jackson, as is the Full Court’s characterisation of that proposition as “simple”. I respectfully agree with the observations made in Adams.

57    In addition to what is stated in Jackson, that requiring such a pleading is not inconsistent with the privilege is in accordance with the general object of pleadings, as expressed by Mason CJ and Brennan J in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 (Laws), at 86:

The suggestion that pleadings should be treated in the same way as any other form of admission fails, in our view, to take account of the function and object of pleadings, when they are not required to be verified, in outlining the party's case and defining the issues to be tried. Especially is this so in the case of pleading defences. A defendant is entitled to put a plaintiff to proof of his or her cause of action and to raise alternative matters of defence which may possibly answer the plaintiff's claim, without asserting in an absolute sense the truth or correctness of the particular matters pleaded.

58    Under this Court’s rules, pleadings serve a like purpose to that described in Laws and are not required to be verified. They define the issues for trial and prevent surprise as to those issues. Identifying, for example, what is a reasonable excuse or an exception to what constitutes “industrial action” does not assist an applicant prosecutor in the proof of the elements of an alleged contravention but it does ensures that the issues for trial are exposed in advance of the trial. A defence so particularised contains no statement which could be tendered against an individual respondent by way of admission. Rather, by its very nature, a positive defence is antithetical to an element of a contravention.

59    With great respect, ASIC v Mining Projects has given rise to a false line of authority in the original jurisdiction in relation to the pleading of a defence by an individual respondent in a civil penalty proceeding conducted in accordance with the civil practice of this Court. It is, with respect, an error to conflate pleadings with compulsory processes such as discovery or interrogatories. The extent of the inconsistency between the privilege and the pleading rules is reached by the recognition that the provision in the rules for deemed admission is not applicable to a civil penalty proceeding. By this means, there is no coercion of a respondent to make an admission subversive of an entitlement to claim privilege. Subject to this, a respondent must conform to the pleading rules, which include a requirement to particularise a defence which denies a negative pregnant in a statement of claim.

60    For these reasons, I would allow the appeal and set aside the order made in the original jurisdiction. To accommodate the contingency that the individual respondents may now wish to plead a positive defence in response to their denial of the negative pregnant in the statement of claim, I would grant leave to the individual respondents to file and serve such amended defence as they may be advised within 14 days. Thereafter, the proceedings should continue to trial in the original jurisdiction on the basis of the issues as revealed by the pleadings as they may come to be amended. If not amended, the individual respondents would, as the Commissioner submitted, be precluded from putting forward at trial a case that they fell within an exception.

Associate:    

Dated:    22 October 2021

REASONS FOR JUDGMENT

KERR AND WIGNEY JJ:

61    We have had the considerable benefit of having had the opportunity to read the reasons of Logan J in draft. We regret, notwithstanding the unfeigned respect we accord to his Honour’s reasoning, that we have come to a contrary conclusion. We would not grant leave to appeal, and, if it were appropriate to grant leave, we would dismiss the appeal.

62    We gratefully adopt Logan J’s outline of the background facts and circumstances and the issues that are raised by this application.

63    We should deal first with the question of leave.

64    We adopt and need not repeat what Logan J has set out at [1]-[11] as to the history of this matter. We endorse Logan J’s reasoning at [12]-[13] as bespeaks of the circumspection that appellate courts are to apply with regard to interlocutory challenges concerning matters of practice and procedure.

65    However, as is material to the different conclusion we have come to regarding whether leave ought to be granted, we take the observation of Logan J at [8] to be particularly salient:

Unfortunately, the Commissioner, as he ought to have done, did not raise at an interlocutory case management hearing a contention that a pleading of the defence in this way carried with it an inability on the part of the individual respondents, in the absence of a pleaded identification of the exception, to put forward at trial a case that the circumstances fell within one or the other of the statutory exceptions mentioned. Instead, as the learned primary judge related in her reasons for judgement, the point arose in this way at the commencement of the trial.

66    We further note Logan J's observation at [14] that the present case serves as a paradigm example of the delay that can be introduced by a challenge to an interlocutory order.

67    Taking those factors into account, even if it may be accepted, as Logan J has concluded, that the time has well and truly come for a Full Court to examine the correctness of the premise the Commissioner challenges, we are satisfied, having regard to the forensic decisions (examined or unexamined) the Commissioner made not to raise his concerns about the adequacy of the respondents’ pleadings prior to the trial, that it would be inappropriate to grant leave so as to use this case as a vehicle to achieve that arguably desirable end.

68    On the facts of this case, the course sought to be pursued by the Commissioner involved more than just the prospect of delay inherent in bringing an appeal in respect of a disputed a pre-trial interlocutory ruling. Rather it involved the Commissioner seeking to set aside a procedural order made by the primary judge in the course of the second day of the trial. The Commissioner’s application for leave is thus advanced where the Commissioner had not, as Logan J accepts he ought to have done at an interlocutory hearing prior to the trial being set down, raised the contention he now seeks to press.

69    The Commissioner does not suggest that he was unaware of the established practice of judges of the Federal Court of Australia in matters like this in applying the procedure which commended itself to the primary judge (see for example: Finkelstein J in Australian Securities and Investments Commission v Mining Projects Group Limited (2007) 164 FCR 32; [2007] FCA 1620; Katzmann J in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liq) (No 2) [2020] FCA 348; Lee J in Singh v Fair Work Ombudsman [2019] FCA 664; Moshinsky J in Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 3) (2018) 357 ALR 695; [2018] FCA 1107; Rangiah J in Fair Work Ombudsman v Hu [2017] FCA 1081; and Kenny J in Frugtniet v Migration Agents Registration Authority [2017] FCA 537).

70    This appeal, as Logan J correctly observes, involved a paradigm instance of delay attending such an application, but more critically it is also a paradigm instance of an appeal against an interlocutory decision which the primary judge had been required to make mid-trial. The issue properly ought to have been earlier agitated had the Commissioner considered, as he apparently does now, that the practice favoured by at least six judges of this Court was wrong and that the primary judge was required to approach and determine the issue in a fundamentally different way. We are satisfied that for that reason alone leave should not be granted.

71    Moreover we are sceptical that this case presents as an entirely suitable vehicle for this Court to determine the disputed point.

72    In that regard some close attention should be directed to the form of the dispute as is said to arise in respect of the pleadings. It would be prolix to refer to the respective parties’ pleadings in detail. However what appears below provides an illustrative example of the circumstance as gave rise, mid-trial, to the issue that then faced the primary judge. The Commissioner had, by way of one example, which is common to the pleadings inter alia, pleaded his case as follows:

20.    At the Southpoint A Meeting, the Southpoint A Employees voted not to commence work unless Mr Walkley was removed from the Southpoint A Site.

21.     …

22.     Following the Southpoint A Meeting, the Southpoint A Employees failed or refused to commence their scheduled work at the Southpoint A Site at 6.30am…..

…

35.     The conduct of the Southpoint A Employees pleaded in paragraphs 20 and 22 above:

a.    was a failure or refusal to perform any building work at all by employees who attended work (which work was building work) and was therefore "industrial action" within the meaning of s.7 of the BCIIP Act and s.19 of the FW Act; and

b.    was not "protected industrial action" within the meaning of s.8 of the BCIIP Act or s.408 of the FW Act;

c.    therefore amounted to unlawful industrial action in contravention of s.46 of the BCIIP Act; and

d.    amounted to a contravention of s.417 of the FW Act.

73    To those allegations the respondents had pleaded their defences in the following terms:

In response to the allegations in the Statement of Claim the First, Second and Fourth to Twenty-Eighth Respondents claim and reserve their right to claim the privilege against self-exposure to civil penalties and deny each allegation and the Respondents say as follows:

…

20.     The First, Second and Fourth to Twenty-Eighth Respondents deny the allegations in paragraph 20. The Third Respondent does not admit the allegations in paragraph 20 because after having made reasonable enquiries it is unable to ascertain the truth or otherwise of the allegations.

21.     ….

22.     The First, Second and Fourth to Twenty-Eighth Respondents deny the allegations in paragraph 22. The Third Respondent does not admit the allegations in paragraph 22 because after having made reasonable enquiries it is unable to ascertain the truth or otherwise of the allegations.

…

35.     The First, Second and Fourth to Twenty-Eighth Respondents deny the allegations in paragraph 35. The Third Respondent does not admit the allegations in paragraph 35 because after having made reasonable enquiries it is unable to ascertain the truth or otherwise of the allegations.

74    The point taken by the Commissioner concerning the respondents’ defence arose as a result of the way he pleaded his case in respect of the contention that the respondent employees had engaged in “industrial action” within the meaning of s 7 of the BCIIP Act and s 19 of the FW Act. The allegation in [35](a) of the Commissioner’s pleading included both a factual allegation based on a characterisation of the conduct pleaded in [20] and [22] and a legal conclusion, being that the conduct so characterised constituted “industrial action” within the meaning of s 7 of the BCIIP Act and s 19 of the FW Act. The denial or non-admission by the respondents of [35] of the Commissioner’s pleading, which carried with it a denial or non-admission of the rolled-up allegation in [35](a), may simply have been a denial of the factual allegation, particularly given that the underlying factual allegations in [20] and [22] had also been denied or not admitted. It may also have been a denial of the legal conclusion. The problem for the Commissioner, if there was one, was that he did not know which was being denied. That was, however, a problem of his own making. Had he separated out the factual allegation from the legal conclusion, the basis of the denial or non-admission by the respondents would have been clear.

75    Moreover, as Logan J has pointed out at [6], the Commissioner’s pleading was expressed in such a way as to inevitably give rise to many a “negative pregnant”. That was again a problem of the Commissioner’s own making. The issue arose in particular having regard to the way the Commissioner chose to plead in [35](a) that the respondent employees’ action constituted “industrial action” as defined. A denial or non-admission of the claim that the alleged conduct was “industrial action” within the meaning of s 7 of the BCIIP Act and s 19 of the FW Act may have been based not only on a denial of the underlying factual allegations made by the Commissioner, but also on the effect or operation of s 7(2) of the BCIIP Act and s 19 of the FW Act.

76    Section 7(2) of the BCIIP Act provides as follows:

(2)    However, industrial action does not include the following:

(a)    action by employees that is authorised or agreed to, in advance and in writing, by the employer of the employees;

(b)    action by an employer that is authorised or agreed to, in advance and in writing, by, or on behalf of, employees of the employer;

   (c)    action by an employee if:

(i)    the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and

(ii)    the employee did not unreasonably fail to comply with a direction of this or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform.

77    Subsection 19(2) of the FW Act is in relevantly identical terms.

78    The effect of s 7(2) of the BCIIP Act and s 19(2) of the FW Act is that, even if the conduct allegedly engaged in by the employee respondents could properly be characterised as a failure or refusal to perform any work at all by employees who attend work, as alleged by the Commissioner, and therefore fell within s 7(1)(c)(i) of the BCIIP and s 19(1)(c) of the FW Act, it would not constitute “industrial action” if any of the paragraphs of s 7(2) of the BCIIP Act and s 19(2) of the FW Act applied or were engaged in the circumstances.

79    The problem for the Commissioner, if there was one, arose because the Commissioner chose not to plead that the alleged conduct or action by the respondent employees was not conduct of the sort referred to in any of the paragraphs of s 7(2) of the BCIIP Act and s 19(2) of the FW Act. Had the Commissioner pleaded his case in that way, the respondents would have been required to either admit, not admit or deny those allegations. The respondents’ potential reliance on any of the paragraphs of s 7(2) of the BCIIP Act and s 19(2) of the FW Act would in those circumstances have been readily apparent.

80    The Commissioner initially argued that, if the respondents relied on s 7(2) of the BCIIP Act and s 19(2) of the FW Act as establishing that any conduct engaged in by them did not constitute “industrial action” as defined in those Acts, they bore the onus of establishing that their conduct fell within one or more of the paragraphs in those subsections. Ultimately, however, the Commissioner appeared to concede that, while the respondents may have an evidential burden or onus in respect of s 7(2) of the BCIIP Act and s 19(2) of the FW Act, he as the applicant ultimately bore the legal onus of proving that the conduct engaged by the respondent employees was “industrial action” as defined. It followed that, if the respondents were able to point to any evidence which suggested that their conduct fell within any of the paragraphs of s 7(2) of the BCIIP Act or s 19(2) of the FW Act, the Commissioner bore the onus of proving that the conduct did not fall within any of those paragraphs. That concession, if made, was correct and consistent with prior decisions of this Court: Auimatagi v Australian Building and Construction Commissioner (2018) 267 FCR 268; [2018] FCAFC 191 at [93]-[98]; Adams v Director of the Fair Work Building Industry Inspectorate (2017) 258 FCR 257; [2017] FCAFC 228 at [93], [106]-[110].

81    While the respondents may have had an evidential onus in respect of the matters in s 7(2) of the BCIIP Act and s 19(2) of the FW Act, it would nonetheless have been open to the Commissioner to plead that the action engaged in by the respondent employees did not fall within any of the paragraphs of those provisions. It is no complete answer to that point for the Commissioner to say that the matters in those provisions are matters that are not necessarily within his knowledge. It might be expected that the Commissioner, as the relevant regulator, would conduct investigations concerning the potential application or engagement of s 7(2) of the BCIIP Act and s 19(2) of the FW Act, including by obtaining information and, if necessary, evidence from the relevant employer concerning the factual matters in those subsections, before commencing proceedings alleging that the respondents engaged in industrial action.

82    It follows that the Commissioner’s concerns about possibly being taken by surprise if the respondents had sought to rely on s 7(2) of the BCIIP Act and s 19(2) of the FW Act may have been averted or alleviated if he had pleaded that the alleged action by the respondent employees did not fall within any of the paragraphs of those provisions.

83    Perhaps more significantly, as events transpired, the respondents’ lawyers in any event told the Commissioner, before the trial commenced, that they intended to rely on s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act; that is, that they would claim that their action was “authorised or agreed to, in advance and in writing” by their employer. The respondents’ lawyers told the Commissioner that the details of their case in that regard were privileged but that those details would be “disclosed by amending the defence after the close of the [Commissioner’s] case”. Thus, the Commissioner was well aware, before the commencement of the trial, that not only were the respondents putting him to proof as to whether the alleged conduct constituted “industrial action”, but that if it came to it, they were going to seek to discharge their evidential onus, and require the Commissioner to prove that their action did not fall within s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act.

84    It follows that the Commissioner was in no worse a position than he would have been had the form of pleading favoured by Mason P in MacDonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612; [2007] NSWCA 304 at [72] been required. The Commissioner had been expressly alerted to the fact that the respondents were intent on joining issue as to whether their action was industrial action, including by putting the Commissioner to proof that their action was not action of the sort referred to in s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act.

85    We do not understand that anything that was later said by the plurality of the Full Court in Adams, by way of obiter endorsement of the reasoning of Mason P in MacDonald, went any further than requiring a defendant to plead their intention to rely on a statutory or ‘positive’ defence. Their Honours spoke approvingly (at [105]) of matters which “according to the decision in MacDonald, should have been pleaded”. As was made abundantly clear in MacDonald, all that was required was that the defendant be put on notice that the point was to be in issue. The defendant was not required to include in the defence any particulars or information in respect of the defence which may have had a tendency to expose them directly or indirectly to the penalties being sought.

86    The Commissioner well knew, before the trial commenced, that the respondents intended to rely on s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act. The Commissioner also knew that the respondents contended that the particulars of their case in that regard were privileged and that they were accordingly entitled to withhold provision of those particulars until the close of the Commissioner’s case. Despite this, and despite presumably being aware not only of the well settled practice of the Court since Mining Projects as set out by Logan J at [16]–[24], but also of the decision in MacDonald, the Commissioner made no attempt to take any issue with the respondents’ defences until well after the trial had commenced.

87    We are entirely unpersuaded that it is appropriate to grant leave to the Commissioner to bring an appeal in respect of what was, in all the circumstances, an entirely conventional interlocutory decision of the primary judge in respect of a matter of practice and procedure that was raised only after the trial commenced.

88    We should, however, make it clear that if it were appropriate to grant leave to appeal, we would in any event be disposed to dismiss the appeal.

89    To succeed in any appeal, the Commissioner would have to demonstrate not only that the long line of cases in this Court, commencing with Mining Projects, were wrongly decided, but also that the judgments of the Courts of Appeal of both the New South Wales Supreme Court and the Queensland Supreme Court in MacDonald and Anderson v Australian Securities and Investment Commission (2013) 2 Qd R 401; [2012] QCA 301 are wrong and should not be followed in this Court. That is because the Commissioner’s case on appeal is that the primary judge should have ordered the respondents to file not just a defence of the sort countenanced in MacDonald and Anderson, but a defence which fully pleaded and particularised the respondents’ factual case that their action fell within s 7(2)(a) of the BCIIP Act and s 19(2) of the FW Act.

90    For the reasons effectively already given, we do not consider that this is an appropriate case to consider the correctness or otherwise of the judgements in MacDonald or Anderson. But if it were, we are not persuaded that the Commissioner has demonstrated that that those judgments were wrong in any event.

91    As a preliminary observation, and with great respect to the analysis of Logan J, we are unsatisfied that the judgment of the Court of Appeal for England and Wales, Inland Revenue Commissioners v Jackson [1960] 1 WLR 873, can be understood as authority for the propositions his Honour cites it for. To explain why we have so concluded, it is useful to set out Logan J’s statement of the history of that proceeding as appears at [30] of his Honour’s reasons:

Jackson was a civil penalty proceeding filed on the Revenue Side of the Queen’s Bench Division for a failure to lodge taxation returns. The statement of claim of the Inland Revenue Commissioners alleged that Mr Jackson had been required by notices in writing to furnish on or before a specified date, particulars as to the several sources of his income, and that he “without reasonable excuse” had failed to do so within the time specified. By his defence Mr Jackson admitted that he had not furnished all the particulars required within the time specified; but he specifically denied “that he failed to furnish any such particulars without reasonable excuse.” The commissioners applied for particulars of that denial, “specifying whether it is alleged that there was a reasonable excuse for not furnishing the particulars within the time and if so giving full particulars of such alleged excuse”. The master in the Queen’s Bench Division ordered the taxpayer to give these particulars. This ruling was upheld by a chamber judge from whose judgement Mr Jackson then appealed to the Court of Appeal. That appeal was, unanimously, dismissed. The affinity as between the issue in that case and the present is so strong that extensive reference to it is warranted.

92    A crucial difference is immediately apparent. In Jackson the respondent had already admitted that he had not furnished the commissioners with the returns required of him. He had then denied that he had failed to furnish them “without reasonable excuse”.

93    What arose as the issue in Jackson is properly distinguishable from the facts in this proceeding. In this proceeding the employee respondents have admitted none of the Commissioner’s allegations concerning their conduct or actions: cf Jackson at 874. To the contrary they have expressly denied those allegations. They remain in issue and are, inter alia, the subject of the trial.

94    So understood, the subject matter of what was decided in Jackson is not analogous to the facts in this case. Rather, that subject matter is analogous to what may or may not become the position once the Commissioner has closed his case after having adduced evidence. That is, evidence that would lead the respondents to conclude that, unless they went into evidence, the Court might be properly satisfied that the Commissioner would establish all of the elements of a breach of s 417 of the FW Act, including that the respondent employees’ conduct was industrial action within the meaning of s 7 of the BCIIP Act and s 19 of the FW Act.

95    If a respondent takes it upon him or herself to go into evidence to assert a positive case, it is uncontentious that as at that point in time the facts of any positive defence – which for reasons of privilege against self-exposure to a penalty had hitherto not been disclosed – are sought to be relied upon, those facts must be pleaded and particularised: see ABCC v O’Halloran at [48], [63]; MacDonald at [59], [71]-[72]. On that understanding of when the obligation arises, the reasoning and the outcome in Jackson is entirely orthodox. However it does not assist the Commissioner.

96    It is to be noted that in Adams the Full Court accepted (at [110]), consistently with High Court authority that, subject to any implied or explicit abrogation of the privilege by legislation or regulations made under it, the privilege against self-incrimination to a penalty, like that against self-incrimination, cannot be abrogated by a rule or order of the Court: Reid v Howard (1995) 184 CLR 1 at 8 (Deane J) and 14, 16-17 (Toohey, Gaudron, McHugh and Gummow JJ). It is in light of the Full Court’s deference to authority that their Honours’ obiter observations (at [102] and [104]) endorsing the manner of pleading proposed by Mason P in MacDonald (i.e. pleading as would provide a means of putting an applicant on notice, but without requiring it to plead the facts upon which a such a defence might be advanced until after the close of the applicant’s case) is to be understood. So understood, to require such a course is permissible because such a pleading did not, in their Honours’ view, involve any abrogation of the privilege.

97    It is unnecessary to explore whether the observations in MacDonald as to the preferable manner of pleadings should be accepted. Nothing material turns on that point. On the facts of this proceeding, it is clear beyond peradventure that the Commissioner had effectively been put on notice in accordance with MacDonald. The real issue is that, as already noted, in this appeal the Commissioner is not satisfied with that being the outcome. He seeks more. He seeks that the respondents plead not to the MacDonald test as expressed by Mason P, but comprehensively according to Pt 16 of the Federal Court Rules 2011 (Cth), thereby setting out the material facts upon which prospectively they might rely in any affirmative defence they might seek to advance after the close of the Commissioner’s case. We reject the proposition that the Commissioner is entitled to that assistance.

98    It is uncontentious that certain of the provisions of the Rules of this Court, such as those that provide for discovery in Pt 20, are inherently inconsistent with the privilege. For that reason, it is not open to a Court to order discovery from a party faced with a penalty. One then asks at the level of principle, is the position any different in respect of the Rules which govern pleadings insofar as they require a respondent to plead any facts which would or might directly or indirectly assist the Commissioner to make good his case against them? We do not take the Commissioner to assert there to be such. In any event, for our part, we discern nothing that might support such a conclusion. In our opinion the obligations in the Rules as require a respondent to plead such matters must yield to the privilege where it applies.

99    It is not to any point of principle, as Logan J appears to suggest at [58], that any pleadings in this Court, as are provided for by the Rules, are not required to be verified. Notwithstanding that absence of principle, any admission of fact in a pleading may be relied upon in terms as an admission against a party’s interests. Even assuming a cribbed and complex pleading might be capable of being advanced in terms such as would deny the fact of conduct but then assert (in support of the existence of an exception) facts as would intersect with those denials as might not amount to an admission – such a pleading itself would not conform with the Rules.

100    To require a pleading going beyond that approved of in MacDonald and Adams would be to require the respondent to state all the material facts as it may or may not later wish to rely upon in respect of matters which it is the duty of its opponent to prove. In the present case, such facts inevitably would relate to the conduct of the employees and the circumstances in which they took the action that they had denied they had undertaken. The respondents are entitled to maintain that denial.

101    It is impossible to think that to require a pleading that asserts material facts as the Commissioner contends he is entitled to have would not assist the Commissioner in investigating, preparing for and advancing its case at trial. For a court to require the respondent to assist the Commissioner in that manner thus runs directly counter to the core object of the privilege. As Gleeson CJ, Gaudron, Gummow and Hayne JJ observed in The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 at [31]:

…the privilege against exposure to penalties serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it.

102    Requiring a person to provide particulars of an event which he or she is entitled simply to deny until choosing to go into evidence would involve as fundamental an encroachment on the purpose of the privilege as would the ordering of discovery.

103    The Full Court in Australian Competition and Consumer Commission v FFE Building Services (2003) 130 FCR 37; [2003] FCAFC 132 held (at [12]), that “a respondent in a proceeding that is solely for the recovery of a pecuniary penalty should not be ordered to disclose information or produce documents that may assist in establishing his or her liability to the penalty” (emphasis added). That is effectively what the orders proposed by the Commissioner in this case would require. It may be the case, as Logan J has pointed out, that FFE did not involve a “pleading point”: see Logan J reasons at [48]. With respect, however, that is not to the point. The Full Court’s statement of principle nonetheless remains. To require the respondents to file a defence which pleads or particularises the facts upon which they might rely if, at the close of the Commissioner’s case, they choose waive the privilege and seek to discharge their evidentiary onus of establishing that their action fell within s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act, would be to order them to “disclose information” which my assist the Commissioner in establishing their liability to a penalty.

104    The privilege, as material to the facts of this case, exists to ensure that the entire burden of establishing that the employee respondents committed a contravention of s 417 of the FW Act fell on the Commissioner. That burden included, relevantly, his being required to prove that any action he could prove was engaged in by the respondents was “industrial action” within the meaning of s 7 of the BCIIP Act and s 19 of the FW Act. If the respondents sufficiently raise an issue as to whether their action fell within s 7(2)(a) or s 19(2)(a) of the BCIIP and FW Acts respectively, the Commissioner’s burden of proof will extend to disproving that to be the case. The Commissioner was on notice that the respondents may seek to raise, and put the Commissioner to proof, in respect of the matters in s 7(2)(a) of the BCIIP Act and s 19(2)(a) of the FW Act. The Commissioner is not, however, entitled to factual particulars concerning the respondents’ case in that regard, at least until the close of the Commissioner’s case, because to require the respondents to provide that information would be to require them to assist the Commissioner in establishing their liability to a penalty. The Commissioner’s contention to the contrary must be rejected.

105    We are not persuaded that the Commissioner has made out a case that the line of authority in this Court, commencing with Mining Projects, should be disturbed. Nor are we persuaded that this Court should not follow MacDonald and Anderson, to the extent that they establish, in respect of the pleading of positive defences in penalty matters, that no more is required than to plead, at the outset, an intention to rely on such a defence. It is unnecessary to consider, in the circumstances of this case, the respondents’ apparent contention that even that intention is not required to be pleaded.

106    It follows that, even if, contrary to the conclusion we have reached, it would be appropriate to grant leave to appeal, the Commissioner’s appeal would in our view in any event have failed.

107    We would refuse leave to appeal.

Associate:

Dated:    22 October 2021

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