FEDERAL COURT OF AUSTRALIA

A & L Silvestri Pty Ltd (ACN 052 514 799) v Construction, Forestry, Mining and Energy Union [2005] FCA 1658

PRACTICE AND PROCEDURE – joinder of parties and causes of action – whether joinder permissible under O 6 r 2 of Federal Court Rules – Workplace Relations Act claims included – considerations for the grant of leave under O 6 r 2(b)

PRACTICE AND PROCEDURE – application of privilege against incrimination to obligation to file a defence to statement of claim seeking the imposition of penalties against natural person respondent in proceedings under the Workplace Relations Act 1996 (Cth)

PRIVILEGE – application of privilege against incrimination to pleading to claim for penalty

Federal Court of Australia Act 1976 (Cth), s 22

Workplace Relations Act 1996 (Cth), ss 170NC, 298SC(c), 347

Federal Court Rules, O 622

Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681cited

Construction Forestry Mining & Energy Union of Australia v Inspector Alfred (2004) 135 FCR 459 cited

Finance Sector Union v Commonwealth Bank of Australia (2000) 106 IR 139 cited

Geelong Wool Combing Ltd v Textile, Clothing and Footwear Union of Australia (2003) 130 FCR 447, (2003) 125 IR 441 cited

Hadgkiss v Construction, Forestry, Mining and Energy Union [2005] FCA 1453discussed

Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000)100 FCR 530, (2000) 182 ALR 563, (2000) 102 IR 359 cited

Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70cited

National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114; (2002) 114 IR 20 cited

Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204cited

Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378, (2001) 184 ALR 65, (2001) 106 IR 404 cited

Seven Network (Operations) Ltd v Media Entertainment and Arts Alliance [2004] FCA 637,(2004) AIPC 91-998, (2004) 134 IR 19 cited

A & L SILVESTRI PTY LTD (ACN 052 514 799) AND NIGEL HADGKISS v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH), PETER PRIMMER, MICHAEL LANE AND DAVID KELLY

NSD 872 OF 2005

GYLES J

18 NOVEMBER 2005

SYDNEY

THE COURT ORDERS THAT:

1.      The motion stand over to enable short minutes of order to be prepared giving effect to these reasons and to hear submissions as to costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This proceeding arises out of events alleged to have occurred between 11 September 2003 and 23 October 2003 in connection with a building job at a site at Wollongong in New South Wales.  Several interlocutory issues have arisen. 

2                     Each applicant has discrete claims for relief.  A & L Silvestri Pty Ltd (Silvestri) seeks relief for inducing breach of, and interfering with, contract and for contravention of the Trade Practices Act 1974 (Cth) (the Trade Practices Act).  Nigel Hadgkiss, as a delegate of the Commonwealth Employment Advocate and an Inspector appointed under the Workplace Relations Act 1996 (Cth) (the Workplace Relations Act) seeks penalties for contravention of the Workplace Relations Act.  It is alleged that the third, fourth and fifth individual respondents were each, in substance, an agent for each of the first and second respondents.

3                     The gist of the claim by Silvestri is that it was a sub-contractor forced off the job in Wollongong by the actions of the respondents directed against the head contractor.  The claims for penalties by Hadgkiss fall into two categories.  The first concerns the actions of the respondents directly and indirectly against Silvestri, including conduct towards the head contractor, alleged to be in breach of s 170NC of the Workplace Relations Act.  The second concerned conduct of the fifth respondent (alleged to be on behalf of the first and second respondents) towards an employee of Silvestri alleged to be in breach of s 298SC(c) of the Workplace Relations Act.

Strike out

4                     It is submitted that the only factual matter alleged against the third and fifth respondents in relation to the breach of s 170NC is found in par 26 of the Statement of Claim and that that could not found a contention that either of them were engaged in conduct in breach of s 170NC of the Workplace Relations Act.  Reference is made to a number of authorities as to what amounts to coercion and what is required for proof of intent for the purposes of the application of that section including Finance Sector Union v Commonwealth Bank of Australia (2000) 106 IR 139; Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000)100 FCR 530; (2000) 182 ALR 563; (2000) 102 IR 359; Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378; (2001) 184 ALR 65; (2001) 106 IR 404; National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114; (2002) 114 IR 20, Geelong Wool Combing Ltd v Textile, Clothing and Footwear Union of Australia (2003) 130 FCR 447; (2003) 125 IR 441. 

5                     In my opinion, this submission is correct.  Paragraph 26 is not sufficient to make a prima facie case of intent to coerce against the third or fifth respondent in itself.  It is submitted on behalf of Hadgkiss that par 37(c) incorporates par 25 by reference.  Paragraph 25 does allege conduct in which the third and fifth respondents were involved but par 37(c) does not directly incorporate par 25.  Whilst the defects in the pleading may be easily cured, they exist at the moment and an order will be made. 

Joinder

6                     Counsel for the respondents points to the very small overlap in the pleaded facts between the Silvestri and the first Hadgkiss claim and to the lack of overlap between the second Hadgkiss claim and the other claims.  He also submits that there is no common question of law properly so called.  Thus, joinder is not permissible pursuant to O 6 r 2(a) of the Federal Court Rules and no leave has been granted pursuant to O 6 r 2(b).

7                     It is submitted for the applicants that O 6 r 2(a) is complied with as there are common questions of fact and law and the rights to relief arise out of the same series of transactions at and in connection with the building job.  In the alternative, it is submitted that leave should be given for joinder pursuant to O 6 r 2(b).  The respondents contend that there is no real overlap and no economy of litigation in granting leave.  It would also involve the second, third and fifth respondents in claims in which they have no interest.  Reference was made to Cheque One Pty Limited v Cheque Exchange (Australia) Pty Ltd (in liq) (2002) ATPR 41-881 and Bishop v Bridgelands Securities (1990) 25 FCR 311.  It is submitted that the nature of the claims for relief are different and should not be joined.

8                     There is some force in the argument that joinder is not permitted by O 6 r 2(a).  However, there is a case for the grant of leave pursuant to O 6 r2(b) and there is no barrier to leave now being granted.  In my opinion, there is a clear practical overlap between the evidence which would be led in relation to the Silvestri claims and the first Hadgkiss claim.  Each will require consideration of substantially the same course of conduct by the same people.  The resources of the Court and the parties are better utilised by hearing one case rather than two and there is no substantial injustice in doing so.  The actual appearances of witnesses and parties can be scheduled to avoid unnecessary waste of time.

9                     An argument against joinder is the different nature of the proceedings—one is civil and the other is penal.  However, this is common enough in proceedings under Pt IV of the Trade Practices Act. Further, under that Part, the Australian Competition and Consumer Commission (the ACCC) can bring proceedings of the type here brought independently by Silvestri for compensation to third parties. 

10                  The joinder of other causes of actions with Workplace Relations Act claims does complicate the long-standing costs regime presently reflected in s 347 of that Act (see Seven Network (Operations) Ltd v Media Entertainment and Arts Alliance [2004] FCA 637,(2004) AIPC 91-998, (2004) 134 IR 19 at [57]–[62] and Maritime Union of Australia v Geraldton Port Authority (2000) 94 IR 404 at [61]–[78]).  However, the conferral of jurisdiction upon this Court, with a wide civil jurisdiction, gives primacy to s 22 of the Federal Court of Australia Act 1976 (Cth) which requires the Court, as far as possible, to completely and finally determine all matters in controversy between the parties and avoid multiplicity of proceedings.

11                  The position in relation to the second Hadgkiss claim is not so clear.  It is pleaded as a discrete event leading to a separate breach.  On the other hand, it arises out of the same circumstances and could not sensibly be heard without the general chronology of events being taken into account.  Indeed, it is conceivable that evidence of the facts relevant to the first Hadgkiss claim and the Silvestri claim might be sought to be tendered in relation to the second Hadgkiss claim, even if heard separately, and vice versa.  This would point to hearing all matters together as being the most effective course, leaving the admissibility of evidence to be sorted out at the hearing.  Bearing in mind that each of the Hadgkiss claims is for a penalty, the rules must be strictly applied.

12                  Whilst I can understand the concern of the respondents, in my opinion, the right balance in this case is to hear all matters together.  To some extent, this will increase the task of management of the case to ensure the questions of admissibility of evidence are properly considered and that there are no other procedural disadvantages arising in the running of the case, particularly for those subject to potential penalties.  This is common enough in a Judge alone trial.

Security for costs

13                  In my opinion, the joinder of applicants with the one set of solicitors and counsel has the consequence that Hadgkiss will be responsible for any order for costs which is made arising out of the proceedings, even if made in the Silvestri proceeding.  The joinder is convenient for the applicants and liability for costs is one of the prices to be paid for that.

Filing of defences

14                  Counsel for the individual respondents submits that, as the proceeding involves potential imposition of penalties, they should not be forced to file defences, relying upon a long line of authority commencing with Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204, and including Australian Competition and Consumer Commission v FFE Building Services Ltd (2003) 130 FCR 37, Rich v Australian Securities and Investments Commission (2004) 209 ALR 271, Alfred v Walter Construction Group Ltd [2003] FCA 993 and (on appeal) Construction Forestry Mining & Energy Union of Australia v Inspector Alfred  (2004) 135 FCR 459 (CFMEU v Alfred).  It is submitted that the filing of defences in accordance with the Rules of Court would disclose information which may be used to the disadvantage of the respondents and may contain admissions which may be used against them in the proceedings. 

15                  Counsel for the applicants submits that an unverified defence does not, in any relevant sense, constitute an admission (Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 86).  It was submitted that the decision of the Full Court of the Supreme Court of Western Australia in Bridal Fashions Pty Ltd v Comptroller-General of Customs (1996) 140 ALR 681 (Bridal Fashions), particularly at 697 was correct in concluding that the privilege against self-exposure to a penalty or self-incrimination does not preclude a party from pleading in the ordinary way to allegations in the statement of claim.  It was pointed out that, in CFMEU v Alfred, Marshall J observed (at [52]):

‘It is open to the personal respondents to object to pleading to particular paragraphs of the amended statement of claim on the basis that in so doing, they may risk exposure to the imposition of a penalty in future proceedings.’

16                  After argument in the present case, Graham J decided Hadgkiss v Construction, Forestry, Mining and Energy Union [2005] FCA 1453.  His Honour declined to relieve the respondents from the obligation to plead but was of the opinion that they could plead in a manner which did not abrogate their privilege, having in mind the provisions of O 11 r 13.  His Honour said that he gained considerable assistance from Bridal Fashions.  It is submitted for the respondents that Graham J misunderstood the effect of Bridal Fashions.

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.  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 v Construction, Forestry, Mining and Energy Union.  That has not yet arisen here.  Directions can be sought if and when it does. 

18                  The motion will stand over to enable short minutes of order to be prepared giving effect to these reasons and to hear submissions as to costs.

Associate:

Dated:              18 November 2005