FEDERAL COURT OF AUSTRALIA

Asmar v Fair Work Commission [2014] FCA 1156

THE COURT ORDERS THAT:

1.    The Applicants have leave to file and serve an amended originating application in the form of the proposed amended originating application filed today.

2.    Subject to paragraph 3 hereof, until the hearing and determination of this proceeding or until further order, the Fair Work Commission be restrained from taking any action, step or proceeding pursuant to the Terms of Inquiry issued by the Commission under its seal dated 18 July 2014 set out and referred to in paragraphs 1-16 thereof.

3.    The injunction referred to in paragraph 2 shall be discharged if, prior to the hearing and determination of this proceeding, the Commission rules on and gives short written or oral reasons on the question of its jurisdiction to hear and determine the matters raised in paragraphs 1-16 of the said Terms of Inquiry.

4.    The further hearing of this originating application be adjourned to 9.30 am on 17 November 2014 for directions.

5.    The costs of the Applicants will be their costs in the cause.

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

REASONS FOR JUDGMENT

1    The first applicant (Ms Asmar) is an office holder and secretary of the Victoria No 1 Branch of the Health Services Union (the Branch). The second applicant (Ms Kitching) is a current employee and General Manager of the Branch. They are the subject of an inquiry currently being undertaken by the respondent (the Commission).

2    The applicants seek relief under s 39B of the Judiciary Act 1903 (Cth) (presumably ss 39B(1) and (1A)(c)) against the Commission to the effect of:

    An order in the nature of prohibition directed to the Commission prohibiting the Commission from taking any further step in the inquiry, or at least until such time as the Commission rules on and gives reasons as to the application that it does not have jurisdiction to hear the inquiry.

    Such interim relief as is necessary, including an interlocutory injunction which is sought before me this afternoon.

3    The applicants challenge the jurisdiction of the Commission to proceed with the inquiry insofar as it concerns the potential revocation of existing “right of entry” permits issued to Ms Asmar and others. The applicants assert that:

    The Commission lacks jurisdiction to proceed.

    Further or alternatively, the Commission has a duty to satisfy itself that it has jurisdiction pursuant to the provisions of the Fair Work Act 2009 (Cth) (the Act), and of the source and nature of that jurisdiction, as to the subject matter of the inquiry before proceeding with its inquiry.

    Further or alternatively, the Commission erred in law by seeking to proceed to hear evidence, including from persons the subject of potential adverse findings, before satisfying itself that it had such jurisdiction as to the subject matter of its inquiry.

    The Commission was required to observe but has not observed the requirements of procedural fairness.

4    The matter comes before me as a matter of some urgency in the following context:

    The applicants have challenged the Commission’s jurisdiction in written submissions filed with the Commission on 22 September, 16 October and 24 October 2014 and in oral submissions made to the Commission on 14 October and 27 October 2014.

    The inquiry has been scheduled to hear evidence, including potentially from the applicants, for five days beginning from 27 October through to 31 October 2014.

    On 27 October 2014, the Commission told the applicants that it was not currently in a position to decide at that time on the objection to jurisdiction and that it would decide that challenge at a later date. Nevertheless, the Commission decided not to adjourn the proceedings before it but to proceed to hear evidence, including evidence from those the subject of various notices of potential adverse findings.

5    The Commission has been given notice of the present application. It has filed a document described as a “submitting notice” stating that “[t]he Respondent submits to any order the Court may make in the proceeding”.

Background Facts

6    As I have said, Ms Asmar is an office holder and is the secretary of the Branch. Ms Kitching is a current employee of the Branch and acts in the role of General Manager.

7    Ms Asmar holds a right of entry permit issued under the Act. Ms Asmar applied for this permit pursuant to s 512 of the Act and such a permit was issued on 31 January 2013.

8    In August 2013, Ms Leonie Flynn, the assistant secretary of the Branch, made allegations to the Commission about the manner in which the Branch was being managed by Ms Asmar. Among those allegations were assertions that Ms Asmar and others had not undertaken their own right of entry tests for right of entry permits under the Act. It was asserted that another employee, Ms Kitching, had completed tests on their behalf. I do not need to go further into those allegations and I say nothing about their merits.

9    In September 2013, the Director, Regulatory Compliance Branch of the Commission, Mr Chris Enright, commenced his own inquiry into whether members of the Branch had, in fact, engaged in such activities.

10    Mr Enright has various powers under the Act which have been delegated to him under s 625.

11    Between September 2013 and March 2014, as part of his inquiry, Mr Enright conducted various interviews, obtained documents and the like.

12    On 26 March 2014, Mr Enright issued various notices of potentially adverse findings to various employees and office holders of the Branch, including Ms Kitching. Mr Enright foreshadowed in those notices that he proposed to make various final determinations. I do not need to go into the detail of the content of those notices.

13    On 30 April 2014, Holding Redlich, on behalf of the Union, wrote to Ross J, President of the Commission, requesting that a member of the Commission other than Mr Enright deal with the matter.

14    On 9 May 2014, Ross J made a direction to transfer the matter to Vice President Watson.

15    On 17 July 2014, the Commission issued Terms of Inquiry into the matters that had been referred to Vice President Watson. These Terms included the following matters:

As to Ms. Diana Asmar (RE 2013/426)

1.    Whether in order to obtain a ROE permit, Ms. Asmar made an inaccurate declaration for a ROE permit dated 29 January 2013 that she had received appropriate training about the rights and responsibilities of a permit holder, namely the ACTU Federal Right of Entry online training course completed on 25 January 2013.

2.    Whether the right of entry permit issued to Ms. Asmar should be revoked.

As to Mr. David Eden (RE 2013/747)

3.    Whether in order to obtain a ROE permit, Mr. Eden made an inaccurate declaration for a ROE permit dated 26 March 2013 that he had received appropriate training about the rights and responsibilities of a permit holder, namely the ACTU Federal Right of Entry online training course completed on 26 March 2013.

4.    Whether the right of entry permit issued to Mr. Eden should be revoked.

As to Mr. Darryn Rowe (RE 2013/730)

5.    Whether in order to obtain a ROE permit, Mr. Rowe made an inaccurate declaration for a ROE permit dated 21 March 2013 that he had received appropriate training about the rights and responsibilities of a permit holder, namely the ACTU Federal Right of Entry online training course completed on 20 March 2013.

6.    Whether the right of entry permit issued to Mr Rowe should be revoked.

As to Mr. Dean Sherriff (RE 2013/580)

7.    Whether in order to obtain a ROE permit, Mr. Sherriff made an inaccurate declaration for a ROE permit dated 20 February 2013 that he had received appropriate training about the rights and responsibilities of permit holder.

8.    Whether in order to obtain a ROE permit, Mr. Sherriff made an inaccurate declaration for a ROE permit dated 12 March 2013 that he had received appropriate training about the rights and responsibilities of a permit holder, namely the ACTU Federal Right of Entry online training course completed on 15 February 2013.

9.    Whether in order to obtain a ROE permit, Mr. Sherriff made an inaccurate declaration tor a ROE permit dated 20 February 2013 that he had "never been convicted of an offence against a law of Commonwealth, State, Territory or a foreign country, involving: … intentional use of violence against another person or intentional damage or destruction of property".

10.    Whether in order to obtain a ROE permit, Mr. Sherriff made an inaccurate declaration for a ROE permit dated 12 March 2013 that he had "never been convicted of an offence against a law of Commonwealth, State, Territory or a foreign country, involving: ... intentional use of violence against another person or intentional damage or destruction of property".

11.    Whether the right of entry permit issued to Mr. Sherriff should be revoked.

As to Mr. Nick Katsis (RE 2013/583)

12.    Whether in order to obtain a ROE permit, Mr. Katsis made an inaccurate declaration for a ROE permit dated 19 February 2013 that he had received appropriate training about the rights and responsibilities of permit holder.

13.    Whether in order to obtain a ROE permit, Mr. Katsis made an inaccurate declaration for a ROE permit dated 12 March 2013 that he had received appropriate training about the rights and responsibilities of permit holder, namely the ACTU Federal Right of Entry online training course completed on 15 February 2013.

14.    Whether the right of entry permit issued to Mr. Katsis should be revoked.

Mr. Steven Mitchell (RE 2013/585)

15.    Whether Ms. Kimberley Kitching accessed Mr. Mitchell's ACTU ROE course on 15 February 2013.

16.    Whether the right of entry permit issued to Mr. Mitchell should be revoked.

As to Ms. Jeanine Ghantous (RE 2013/1291)

17.    Whether having regard to the duration of the training and testing Ms. Ghantous received, the FWC is satisfied that Ms. Ghantous received appropriate training in accordance with the requirements of the FW Act.

18.    Whether the application for a right of entry permit should be refused for Ms. Ghantous.

As to Ms. Rose Charbel (RE 2013/1438)

19.    Whether having regard to the duration of the training and testing Ms. Charbel received, the FWC is satisfied that Ms. Charbel received appropriate training in accordance with the requirements of the FW Act.

20.    Whether the application for a right of entry permit should be refused for Ms. Charbel.

16    On 22 September 2014, Slater and Gordon, on behalf of Ms Kitching, made an application to the Commission pursuant to s 586(a) of the Act applying to amend the Terms of Inquiry. In substance, Ms Kitching sought to delete reference to paragraphs 1-16 of the Terms, which dealt with various matters pertaining to the potential revocation of rights of entry permits in respect of named individuals, including Ms Asmar. It was asserted that the Commission did not have jurisdiction to investigate and rule upon such matters.

17    The application to amend was heard by the Commission on 14 October 2014 but not finalised. Following that hearing, Slater and Gordon filed further submissions.

18    On 22 October 2014, Slater and Gordon also requested the instruments of delegation given to Mr Enright empowering him to exercise certain functions and powers under the Act.

19    On 24 October 2014, the delegation documents that had been requested were provided.

20    Further, on 24 October 2014, counsel for Ms Kitching filed additional submissions. On that same date, Holding Redlich adopted those submissions on behalf of various officers and employees of the Branch.

21    At the commencement of the hearing on 27 October 2014, counsel for Ms Kitching requested that Vice President Watson provide a decision in relation to the application to amend before proceeding further. Of course, a decision on the application to amend involved Vice President Watson adjudicating upon and ruling on essentially the jurisdictional challenge that had been made. Vice President Watson said:

I am mindful of the potential implications and the sensitivity of these matters. However, I am not sure when I will be able to give full consideration to the jurisdictional arguments that have been lodged and issue a decision in this matter. I consider that the more appropriate procedure is to commence to hear the evidence in this matter, and I will endeavour to give proper consideration to the arguments at the earliest opportunity.

22    In substance, Vice President Watson indicated that he was not in a position to make a decision on the application to amend, and in substance the jurisdictional challenge, and that he was unable to say when he would be in a position to do so. Nevertheless, Vice President Watson was not prepared to adjourn the matter and indicated that the adducing of evidence on the Terms of Inquiry should proceed.

23    After a brief interval, counsel told Vice President Watson that an application would be made to this Court challenging his decision to proceed. In those circumstances Vice President Watson further adjourned the matter for a short time.

Jurisdiction Argument

24    An issue has been raised as to the jurisdiction of the Commission to proceed with its inquiry under paragraphs 1-16 of the Terms of Inquiry at all or at least without first ruling on its jurisdiction to so proceed.

25    The challenge that has been made to the Commission’s jurisdiction involves the following elements.

26    First, it is said that Pt 3-4 of the Act provides an exhaustive codification of the circumstances under which revocation of a right of entry permit can be proceeded with. Accordingly, and notwithstanding the generality of s 603 of the Act and s 33(3) of the Acts Interpretation Act 1901 (Cth) (AIA), those general provisions, it is said, are to be read down by the more specific provisions of Pt 3-4. In my view, although I am not finally deciding the matter now, such a proposition is reasonably arguable, if not strongly arguable. The general power in s 603 arguably encroaches upon the subject matter apparently exhaustively governed by the special powers of Pt 3-4. The Act arguably only confers these special powers as the powers to take the relevant revocation action. The general power is arguably impliedly excluded by the special powers (Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 (Anthony Hordern) at 7 per Gavan Duffy CJ and Dixon J; Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at [59] per Gummow and Hayne JJ). Now the Anthony Hordern approach relates to the reconciliation of general statutory powers and special statutory powers in one and the same Act. Analogous approaches to construction may arguably also be adopted where the general power and the special power are in different legislative instruments (but note Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511 at 531 per Black CJ and Cooper and Merkel JJ). Ultimately, the question is one of legislative intention as to the exclusivity of the special power in one legislative instrument entailing the implied exclusion of a general power in that instrument or a different instrument. But perhaps none of these nuanced questions matter in dealing with s 33(3) of the AIA. It can more directly be arguably put to one side by the operation of s 2(2) of the AIA.

27    Second, in terms of the elements of Pt 3-4, it would seem to me that arguably only ss 505 and 507 are relevant as providing a potential source of jurisdiction in the present circumstances. Sections 505A and 510 are not presently relevant. Further, ss 512-513 are also unavailable. Section 512 deals with the issue of permits. The stipulated condition is that the Commission has to be satisfied that the relevant official is “a fit and proper person”. Section 513 then deals with how that criterion is to be ascertained. But both ss 512 and 513 are silent on the question of revocation. Arguably, they do not support or empower the carrying out of any inquiry concerning potential revocation, let alone empower revocation. Any inquiry concerning potential revocation can only be ancillary or incidental to the exercise of an express power to revoke or some other express power to conduct a broad ranging inquiry; this latter possibility can be put to one side.

28    Third, in terms of s 507, it would seem that this provision is not available as a source of jurisdiction in the present circumstances. Section 507 cannot be triggered of the Commission’s own initiative. It can only be triggered on the application of an inspector or a prescribed person. Apparently, according to the evidence before me, neither such a person has applied in the present case. I also interpolate at this point that s 507(2) notably makes express reference to the permit qualification matters which are addressed in s 513. Contrastingly, s 505 makes no such reference thereto.

29    Fourth, in terms of s 505 it is submitted by the applicants that this section also is not a source of jurisdiction. A number of propositions seem to be advanced:

    It is said that s 505 is not directed to s 513 type issues such as permit qualification matters. Section 505 is to be contrasted with s 507. The former makes no express reference to s 513. One explanation for this may support the applicants’ arguments. Another explanation may simply be that s 507 is concerned with a mandatory factor to consider, whereas s 505 was intended just to inject more flexibility rather than stipulating mandatory matters to take into account.

    Further, and equally if not more significantly, it is said that s 505 is not concerned with qualification type questions for these types of permits in any event, but rather how the rights may or are to be exercised by the holders of such permits. There is some considerable support for this in s 505(1). In s 505(1) there is a list of matters. Although it is stated that these listed matters are not exhaustive, nevertheless, it is arguable that they should be construed ejusdem generis and when one does, their genus does not deal with anterior qualification questions but rather the exercise of rights, functions or obligations after issue. Further, if they had intended to deal with qualification issues, one might have expected some reference arguably to s 513 in the way that it is picked up and addressed in s 507(2).

30    Fifth, it is also said in terms of s 505, and notwithstanding that the power thereunder can be exercised on the initiative solely of the Commission (see s 505(3)) that, nevertheless, there must be “a dispute” (see the prefatory words to s 505(1)). The applicants argue that there is no dispute. In my view, s 505(1) requires “a dispute”. Further, the dispute resolution mechanism is stipulated to be “arbitration”. Both the concept and the mechanism suggest an inter-partes contest as distinct from a dispute between a permit holder and the Commission. First, the subject categories in s 505(1) are so suggestive and would suggest a dispute between one or more of the persons described in s 505(3)(b). Second, the mechanism in s 505(2) suggests that the Commission’s role is to adjudicate on an inter-partes dispute rather than to be one of the disputants. Third, although s 505(3)(a) refers to the Commission acting of its own initiative, this concerns the Commission unilaterally stepping in and endeavouring to resolve a dispute between other parties rather than itself being a disputant. Fourth, to so construe s 505 is also consistent with how the concept of “dispute” is used in s 505A. Fifth, to so construe s 505 is also consistent with the complementary but different role played by s 507. Paragraphs 505(2)(a)-(c) can be triggered by an inter-partes dispute. Paragraphs 507(1)(a)-(c) are triggered differently. If paragraphs 505(2)(a)-(c) could be triggered on the initiative of the Commission as itself a disputant, the conditions for the trigger in s 507(1) would be rendered otiose.

31    In summary, in my view, the applicants have raised reasonably arguable issues challenging the Commission’s jurisdiction to proceed to hear and determine the matters set out in paragraphs 1-16 of the Terms of Inquiry.

Commission’s Present Position

32    The inquiry has been scheduled to hear evidence, including potentially from the applicants, for five days beginning from 27 October through to 31 October 2014. As I have said, on 27 October 2014, the Commission told the applicants that it was not currently in a position to decide at this time on its objection to jurisdiction and that it would decide that challenge at a later date. Nevertheless, the Commission decided not to adjourn the proceedings before it but to proceed to hear evidence, including evidence from those the subject of various notices of potentially adverse findings.

Adjudicating on jurisdiction

33    In my view, once the question of jurisdiction was properly raised by the applicants before the Commission, the Commission ought to have decided that question before embarking further with its inquiry.

34    First, there are numerous authorities to this effect including Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415 per Griffith CJ and at 428 per Barton J; R v Blakeley; Ex parte Association of Architects etc of Australia (1950) 82 CLR 54 at 90 per Fullagar J; R v Fulham, Hammersmith and Kensington Rent Tribunal; Ex parte Zerek [1951] 2 KB 1 at 10 per Devlin J; R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 at 215 per Gibbs J; Re Boulton; Ex parte CFMEU (1998) 85 IR 468 at [22] per Kirby J; Bray v F Hoffman-La Roche Ltd (2003) 200 ALR 607 at [239] per Finkelstein J and Old UGC Inc v IRC (NSW) (2006) 225 CLR 274 at [51] per Kirby J.

35    Second, it is fundamental that powers cannot be exercised (or rights affected) before the Commission determines that it is “right” to enter upon and proceed with the inquiry. If it has no such “right” it ought not to proceed further. The Commission is entitled to adjudicate upon its own jurisdiction, although of course its views cannot be determinative. But it should do so forthwith once its jurisdiction is challenged. It may be said to be its first duty. It cannot adopt the procedure of proceeding with the hearing and postponing the question of jurisdiction for later consideration. To do so is to assume the jurisdiction which is said to be postponed for later consideration; an internal inconsistency.

36    In the present case, a challenge to jurisdiction has been made. The Commission ought now rule upon it. The grounds of challenge are reasonably arguable. And at the least, it was arguably erroneous to proceed without first ruling thereon. In terms of the test for an interlocutory injunction, a prima facie case is well established. Moreover, the balance of convenience favours the grant of an injunction.

Conclusion

37    In my view, an interlocutory injunction should go against the Commission restraining it from proceeding further in relation to certain aspects of its inquiry until it has adjudicated upon and ruled on its jurisdiction.

38    Once it has ruled on its jurisdiction, the applicants may then seek to challenge that determination as they see fit, including making any necessary amendments to their originating application before me. But I do not consider that I should presently rule on the question of the Commission’s jurisdiction without first giving the Commission the further opportunity to rule on that question. But at the least, the Commission should not proceed further without properly determining its jurisdiction in the first instance.

Associate: Dated: 29 October 2014