FEDERAL COURT OF AUSTRALIA

Director, Fair Work Building Industry Inspectorate v Ingham [2016] FCA 328

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ interlocutory application be listed for further hearing on 4 May 2016 at 10.15 am.

2.    The parties are to further consider which matters the subject of this proceeding were also the subject of proceeding QUD 729/2013 and are to attempt to reach an agreed position by 4 pm on 18 April 2016.

3.    The respondents are to file and serve further written submissions (not exceeding 10 pages) by 4 pm on 26 April 2016.

4.    The applicants are to file and serve further written submissions (not exceeding 10 pages) by 4 pm on 2 May 2016.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    The applicant, the Director, Fair Work Building Industry Inspectorate (“the Director”), has filed an originating application seeking declarations and pecuniary penalties against twenty-two respondents. The Director’s statement of claim alleges that in 2013 the respondents contravened ss 343, 417 and 421 of the Fair Work Act 2009 (Cth) by engaging in industrial action at two construction sites in Brisbane.

2    The twenty-second respondent is the Construction, Forestry, Mining and Energy Union (“the CFMEU”). The other respondents are employees, officers or delegates of the CFMEU or employees of building subcontractors.

3    The respondents (other than the twenty-first respondent who has not yet been served) have filed an interlocutory application seeking summary judgment or, alternatively, a permanent stay of the proceeding. The respondents contend that the Director has no reasonable prospect of successfully prosecuting the current proceeding as the Director is prohibited by s 73(2) of the Fair Work (Building Industry) Act 2012 (Cth) (“the FWBI Act”) from bringing the proceeding. They contend, in the alternative, that the proceeding is an abuse of process. The basis of the respondents’ application is a substantial overlap between the current proceeding and a previous proceeding which was settled and discontinued.

4    In response, the Director submits that s 73(2) of the FWBI Act, on a plain reading of the provision, does not prohibit him from commencing the current proceeding, and that there is no abuse of process.

5    The respondents’ application raises four issues:

(a)    whether s 73(2) of the FWBI Act prohibits the Director from bringing a new proceeding which relates to matters that were the subject of a previous proceeding that was settled and discontinued;

(b)    whether there is an existing matter in respect of which the Director may commence proceedings;

(c)    whether the current proceeding is an abuse of process;

(d)    to what extent the current proceeding relates to matters that were the subject of the previous proceeding.

6    I will discuss the factual background and the relevant legislative provisions before considering each of these issues in turn.

Background

7    On 4 November 2013, John Holland Pty Ltd and John Holland Queensland Pty Ltd (“the John Holland companies”) commenced proceeding QUD 729/2013 in the Federal Court of Australia against the CFMEU and four of the respondents to the present proceeding, Jade Ingham, Kane Pearson, Tony Kong and Kevin Griffin. I will describe that proceeding as “the previous proceeding”. The Director elected to intervene in the previous proceeding, and thereby became a party to it.

8    The John Holland companies were the principal contractors for construction projects known as the “Enoggera Barracks Project” and the “QUT Kelvin Grove Project” (“the construction projects”) in Brisbane. Between 8 March 2013 and 20 December 2013, some of the employees of subcontractors stopped performing work at the construction projects. Broadly speaking, the John Holland companies alleged that the respondents to the previous proceeding contravened ss 343, 417 and 421 of the Fair Work Act in the course of a campaign to force John Holland Queensland Pty Ltd to enter into an enterprise agreement.

9    In January 2014, the parties to the previous proceeding (other than the Director) entered into a deed of settlement by which they agreed to settle that proceeding. The John Holland companies agreed to release the CFMEU, its employees, officers and delegates, and the individual respondents from any claims arising out of or connected with the subject matter of the proceedings. The John Holland companies also agreed to release the workers who had participated in the stoppages from any claims. It was also a term of the settlement that the previous proceeding would be discontinued.

10    Although the Director was not a party to the settlement, the Director (so I was informed by the Director’s counsel) filed a notice discontinuing the previous proceeding following the settlement.

11    The Director commenced the current proceeding on 19 June 2015. The CFMEU, Ingham, Pearson, Kong and Griffin are respondents to both the current proceeding and the previous proceeding. The remaining seventeen respondents to the current proceeding were not parties to the previous proceeding.

12    The first twelve respondents to the current proceeding are employees and officers of the CFMEU. The next nine respondents are officers or delegates of the CFMEU, or workers who were employed by subcontractors at the construction projects, or have some combination of those roles.

13    In the current proceeding, the Director alleges that each of the respondents contravened ss 343, 417 and 421 of the Fair Work Act. The substance of the present proceeding is also that the respondents contravened the Fair Work Act in the course of the campaign to force John Holland Queensland Pty Ltd to enter into an enterprise agreement.

14    There is significant overlap between the subject matter of the previous proceeding and the current proceeding. There are also differences, including that there are seventeen additional respondents and the current proceeding alleges some specific incidents which were not alleged in the previous proceeding. While the parties accept that there is a large area of overlap, they are not agreed as to the extent of the overlap. I will return to this issue later in these reasons.

The legislative provisions

15    The FWBI Act is central to the disposition of the respondents’ interlocutory application. Section 9 of the FWBI Act establishes the office of Director of the Fair Work Building Industry Inspectorate. Under s 10(d), the Director’s functions include commencing proceedings in a court to enforce the Fair Work Act. Section 539(2) of the Fair Work Act, taken with ss 59A and 59C of the FWBI Act, allows the Director to apply to a court for orders in relation to contravention of provisions of the Fair Work Act, including ss 343, 417 and 421.

16    Section 71(1) of the FWBI Act provides that the Director may intervene in the public interest in a civil proceeding before a court in a matter that arises under the Fair Work Act. Under s 71(2), if the Director intervenes in a proceeding, the Director is taken to be a party to the proceeding and has all the rights, duties and liabilities of such a party.

17    Section 73 of the FWBI Act is critical to the present application. It provides:

73    Director etc. must not participate in court proceedings in relation to settled matters

(1)    This section applies if:

(a)     either:

(i)    the Director (or an inspector) and another party or parties are joint applicants in a building proceeding before a court; or

(ii)     the Director (or an inspector) has intervened in a building proceeding before a court under subsection 71(1); and

(b)     before the court has given judgment in the proceeding:

(i)     the matter that is the subject of the proceeding is settled between the parties to the proceeding (or if more than one matter is the subject of the proceeding – one or more of those matters is settled between the parties to the proceeding); and

(ii)     a notice is filed in the court discontinuing the proceeding to the extent that it relates to the settled matter or matters.

(2)     The Director (or inspector) must not continue to participate in the building proceeding to the extent that it relates to the settled matter or matters.

(3)     A reference in subparagraph (1)(b)(i) to parties to the proceeding does not include a reference to the Director (or inspector).

(4)     In this section:

building proceeding means a civil proceeding in relation to a matter that arises under a designated building law and involves a building industry participant.

18    Section 73A of the FWBI Act does not apply directly to the present case, but may inform the construction of s 73. It provides:

73A     Director etc. must not institute court proceedings in relation to settled matters

(1)    This section applies if:

(a)     a building proceeding was instituted in a court; and

(b)     neither the Director nor an inspector:

(i)     was a party to the proceeding; or

(ii)     had intervened in the proceeding; and

(c)     the matter that was the subject of the proceeding was settled between the parties to the proceeding (or if more than one matter was the subject of the proceeding—one or more of those matters was settled between the parties to the proceeding); and

(d)     a notice was filed in the court discontinuing the proceeding to the extent that it related to the settled matter or matters.

(2)     The Director (or an inspector) must not institute a building proceeding in a court if the conduct giving rise to the proceeding was the subject of the settled matter or matters referred to in paragraph (1)(c).

(3)     In this section:

building proceeding has the same meaning as in subsection 73(4).

19    Both ss 73 and 73A apply where there is or has been litigation between “building industry participants”. That expression is defined in s 4 of the FWBI Act to refer to certain employees, employers, contractors and industrial associations involved in building work. The Director is not a building industry participant.

Consideration

The first issue: Construction of s 73(2) of the FWBI Act

20    The respondents submit that where a building proceeding is settled and discontinued, s 73(2), on its proper construction, prohibits the Director from commencing a new building proceeding to the extent that it relates to the settled matter or matters. The submission continues that the current proceeding is prohibited as it relates to matters settled in the previous proceeding.

21    The Director submits that s 73(2) only prohibits the Director from continuing to participate in the building proceeding – it does not prevent the Director from commencing a new proceeding even if it relates to settled matters.

22    It is common ground that the requirements of s 73(1) are satisfied. The previous proceeding was a building proceeding before the Federal Court. The Director intervened in the previous proceeding under s 71(1). Before the Federal Court gave judgment in the previous proceeding, the matters that were the subject of that proceeding were settled between the building industry participants (that is, between the parties to the proceeding other than the Director). A notice of discontinuance of the proceeding was filed in the Federal Court.

23    For the purposes of s 73(2), it is also common ground that the present proceeding relates to the matters settled in the previous proceeding to some extent.

24    Section 73 refers to both the Director and a Fair Work Inspector. As neither party has suggested that anything turns on the references to an inspector, it is convenient to refer only to the Director in the discussion that follows.

25    It is useful to repeat s 73(2) at this stage:

The Director…must not continue to participate in the building proceeding to the extent that it relates to the settled matter or matters.

26    The Director submits that the natural and ordinary, or literal, meaning of s 73(2) is that it only prohibits the Director from continuing to participate in the building proceeding to the extent that it relates to the settled matter or matters; but does not prevent the Director from commencing a new proceeding that relates to the settled matters. I do not understand the respondents to dispute that this is the literal meaning. This aspect of the Director’s submissions is plainly right and I accept it.

27    The respondents submit that the phrase “the building proceeding” in s 73(2) should be construed as referring to “a building proceeding”. If that submission is accepted, s 73(2) would prohibit the Director from commencing a new proceeding to the extent that it relates to the settled matter or matters. However, the natural and ordinary meaning of “the building proceeding” in s 73(2) is the particular proceeding described in s 73(1) to which the Director is a joint applicant or intervener and which was discontinued in whole or part. That meaning is reinforced by the preceding words “must not continue to participate in”. It is also reinforced by the use in s 73(2) of the definite article in contrast to the prohibition against the Director instituting “a building proceeding” under s 73A. On its face, s 73(2) indicates that the Director must not continue to participate in the particular proceeding to which s 73(1) applies. However, that is not the end of the matter.

28    The literal construction of s 73(2), while important, is not necessarily determinative. The Director relies upon extracts from the authorities which emphasise the importance of the words used in construing a statutory provision. On the other hand, the respondents rely on judicial statements that emphasise the importance of context and purpose. However, there is no true dichotomy. Language, context and purpose must all be considered: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]-[71], Weiss v R (2005) 224 CLR 300 at [31]-[33], Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47], Commissioner of Taxation v Unit Trend Services Pty Ltd (2013) 250 CLR 523 at [47].

29    The respondents’ submit that construing the section in the way contended for by the Director is inconsistent with the purpose of the provision and extrinsic material, and produces anomalous or absurd results unlikely to have been intended by the legislature. There is force in their submissions.

30    Section 3 of the FWBI Act provides that the object of the Act is to provide a balanced framework for cooperative, productive and harmonious workplace relations in the building industry by, inter alia, providing effective means of enforcing the rights and obligations of all building industry participants. There are two such means relevant for present purposes.

31    The first means is giving the Director the power, under s 10(d) of the FWBI Act, to commence proceedings in a court to enforce the Fair Work Act and other legislation. The Director is appointed as a Fair Work Building Industry Inspector under s 59A and under s 59C has the same powers and functions as Fair Work Inspector. Section 539(2) of the Fair Work Act allows the Director, as a Fair Work Inspector, to apply to a court for civil penalties and other orders in relation to contraventions of certain provisions of that Act.

32    The second means is giving the Director the power, under s 71(1) of the FWBI Act, to intervene in the public interest in a civil proceeding before a court in a matter that arises under the FWBI Act, the Fair Work Act and other specified legislation involving a building industry participant or building work.

33    Sections 73 and 73A of the FWBI Act operate as limitations upon the Director’s powers to effectively enforce the rights and obligations of building industry participants. The issue is the extent to which those provisions limit the Director’s powers.

34    Section 73 applies where the Director is a joint applicant or has intervened in a building proceeding. Section 73A operates where the Director was not a party or an intervenor in a building proceeding.

35    Under s 73A(2), the Director must not institute a building proceeding in a court if the conduct giving rise to the proceeding was the subject of the settled matter or matters. In contrast, under s 73(2), the Director must not continue to participate in the building proceeding to the extent that it relates to the settled matter or matters.

36    The respondents argue that ss 73 and 73A operate together to allow the building industry participants to reach agreement on the resolution of a proceeding without the consent of the Director, and to prevent the Director from both continuing the proceeding and commencing a new proceeding. They argue that the provisions are intended to cover the field.

37    If the Director’s construction of s 73(2) is correct, the Director must not continue to participate in a proceeding that has been settled between the building industry participants, but can commence a new proceeding making exactly the same allegations. Under that construction, what useful purpose would the provision serve? The Director has been unable to suggest any such purpose.

38    The Director would have to discontinue the existing proceeding, or withdraw as an intervener, only to be free to start a fresh proceeding. Under the Director’s construction, s 73(2) would be productive only of wasted costs and wasted public resources, including the resources of the courts. In my opinion, the provision serves no useful purpose if the Director is free to commence a new proceeding relating to the same matter or matters.

39    Further, the purpose of s 73(2) must be to operate as a limitation upon the power of the Director to enforce the rights and obligations of building industry participants. Section 15AA of the Acts Interpretation Act 1901 (Cth) provides that “the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation”. The question here is not the extent to which s 73(2) seeks to achieve the purpose I have identified: cf Carr v State of Western Australia (2007) 232 CLR 138 at [6] (Gleeson CJ). It is a question of whether that purpose is achieved at all by the construction for which the Director contends.

40    Any limitation on the Director continuing to participate in an existing proceeding would be illusory if the Director is free to commence a new proceeding in respect of the settled matter or matters. It would be a limitation without substance. On the other hand, on the respondent’s construction, the provision would operate as an effective limit on the Director’s powers. The respondents’ construction would best achieve the purpose of s 73(2).

41    The respondents submit that under the Director’s construction, the effect of s 73A(2) could be avoided by the Director employing the device of intervening in a proceeding if he or she became aware that it might be settled, and this was unlikely to be intended by the legislature. In response, the Director submits that the legislature intended that the Director should be able to intervene in any proceeding in the public interest. This is only half-an-answer, because the legislature has evidently decided that the public interest is best served by not allowing the Director to continue to participate in some proceedings and not to commence some proceedings. However, it is possible that the legislative intention is that the Director should be able to intervene in order to preserve the power to commence a new proceeding. I do not think the respondents’ point is a strong one.

42    The respondents note that s 73(4) defines “building proceeding” as a “civil proceeding in relation to a matter that arises under a designated building law”. They submit that the “matter” comes to an end when the proceeding is settled. They argue that the proceeding was settled between all parties, including the Director, when it was settled by the building industry participants. That is because s 73(2) makes the Director a party to the settlement by prohibiting the Director from continuing to participate in the proceeding, so the argument continues.

43    As I understand the respondents’ argument, it goes to the legislative purpose of s 73(2) – that if the matter is at an end, it is an indication the legislature intended that the Director should not commence a new proceeding in respect of the same matter. I reject this part of the respondents’ argument, but it is convenient to leave my reasons for doing so until later in these reasons.

44    Sections 73 and 73A were added to the FWBI Act by the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2012 (Cth). The respondents rely on extracts from two speeches made to the House of Representatives by the Minister for Employment and Workplace Relations. On 16 February 2012, the Minister said:

The amendments provide that a director or an inspector of the Fair Work Building Industry Inspectorate is prohibited from commencing or continuing civil proceedings in a court where proceedings arise under a designated building law or they involve a building industry participant and the matter of the subject of the proceedings is subsequently settled and discontinued by the parties other than the inspectorate.

45    Later on the same day, the Minister said:

We want to ensure that all building industry participants are not the subject of multiple proceedings in relation to matters that have already been the subject of discontinued litigation, as well as ensuring the resources of the Fair Work Building Industry Inspectorate are appropriately targeted to matters which remain unresolved.

46    Section 15AB(1) of the Acts Interpretation Act provides that in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material for specified purposes. Those purposes include determining the meaning of the provision when the ordinary meaning conveyed by the text of the provision, taking into account its context in the Act and the purpose or object underlying the Act, leads to a result that is manifestly absurd or unreasonable. Section 15AB(3) requires that regard shall be had to, relevantly, the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision.

47    The ordinary meaning of s 73(2) leads to a result that is manifestly absurd or unreasonable. This is so because the provision would serve no useful purpose while causing wastage of public resources. Therefore, I may consider the extracts from the Minister’s speeches. Those extracts suggest that the legislature’s intention was that both ss 73 and 73A of the FWBI Act would operate to prohibit the Director from commencing a new proceeding.

48    Some further support for the respondents’ construction may be found in the heading to s 73, which reads “Director etc. must not participate in court proceedings in relation to settled matters”. The heading suggests that s 73(2) prohibits the Director not merely from continuing to participate in the settled proceedings, but bars participation more generally in court proceedings in relation to the settled matters.

49    From the matters discussed so far, two conclusions may be drawn. Firstly, the legislature is likely to have intended that s 73(2) operate not only to prohibit the Director from continuing to participate in a building proceeding to which that provision applies, but also to prohibit the Director from commencing a new proceeding in relation to the settled matter or matters. Secondly, such an intention is not reflected in the ordinary or natural language of s 73(2). The question is whether it is open to construe s 73(2) to give effect to the legislature’s likely intention.

50    In Project Blue Sky Inc v Australian Broadcasting Authority, McHugh, Gummow, Kirby and Hayne JJ said at [78]:

[T]he duty of the court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.

51    There are limits upon the extent to which a court may depart from the literal meaning of the words. One limit is that the provision must be construed, not rewritten, in light of its purposes: Mills v Meeking (1990) 169 CLR 214 at 31 (Dawson J). Another limit is that the proposed construction must be reasonably open: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ).

52    The respondents submit that the words “the building proceeding” in s 73(2) should be construed prohibiting the Director from continuing to participate, not only in the building proceeding described in s 73(1), but in any building proceeding to the extent that it relates to the settled matter or matters. Such a construction would accord with what I consider is likely to have been the legislative intention. However, it would be quite contrary to the natural and ordinary meaning of the words and would give the text an overly strained construction. That construction is not reasonably open. It would amount to a rewriting of the provision, not merely construction of it. That would be a step too far.

53    I reject the respondents’ submission that s 73(2) prohibits the Director from commencing a new proceeding to the extent that it relates to the settled matter or matters.

The second issue: Whether there is an existing matter

54    I have already noted the respondents’ submission that that s 73(2) of the FWBI Act makes the Director a party to the settlement by prohibiting the Director from continuing to participate in the proceeding. The respondents contend that matters the subject of the previous proceeding came to an end when the proceeding was settled by the building industry participants and, by operation of s 73(2), the Director.

55    The respondents’ submission, as it was put, goes to the legislature’s purpose in enacting s 73(2). However, the submission may have a broader significance. The respondents expressly disclaimed any argument that the Court lacks jurisdiction to deal with the matter, but that, it seems to me, that would be the result if I accept their argument that there is no “matter”. Further, the argument is relevant to the respondents’ abuse of process argument, as I will discuss later.

56    The Director’s submission in response is that he was not a party to the settlement of the previous proceeding, and there remains a matter that is the subject of the current proceeding.

57    Under ss 71, 76 and 77 of the Constitution, the Commonwealth Parliament created the Federal Court of Australia and conferred jurisdiction in respect of “any matter” arising under any laws made by the Parliament. The Federal Court cannot exercise judicial power unless there is a “matter”. For there to be a matter, there must be a justiciable controversy: Abebe v Commonwealth of Australia (1999) 197 CLR 510 at 523-524 (Gleeson CJ and McHugh J), 585 (Kirby J).

58    In Australian Industry Group v AFMEPKIU (2002) 125 FCR 529, Goldberg and Finkelstein JJ said at [88]:

[I]n our view a justiciable controversy which is brought before a court will come to an end either when the court (including an appeal court) has resolved the controversy by ruling on the issue in dispute or, if the controversy concerns a matter of private law, when the parties have resolved their differences by agreement. Before those events occur the court retains jurisdiction to enter upon the controversy.

59    The justiciable controversy between the building industry participants that was the subject of the previous proceeding was brought to an end by the settlement of that proceeding. The Director did not agree to settle the proceeding. The respondents contend that s 73(2) operates to make the Director a party to the settlement, regardless of the Director’s failure or refusal to agree.

60    Section 73(1) applies only where the building industry participants have agreed to settle one or more of the matters subject of a proceeding. The provision also requires that a notice of discontinuance of the proceeding or part of a proceeding be filed in the court. Section 73(1) proceeds on the natural assumption that a term of the settlement between the building industry participants was that the proceeding would be discontinued in whole or part.

61    By providing that the Director must not continue to participate in the proceeding, s 73(2) has the same effect as if the Director were bound to the term of the settlement by which the building industry participants agreed to discontinue the proceeding or part of the proceeding. That is because where the Director is a joint applicant, the Director would file a notice of discontinuance. Where the Director is an intervener, the Director could either file a notice of discontinuance or withdraw as an intervener. Section 73(2) deprives the Director of any element of choice as to whether to end his participation in the proceeding, just as the building industry parties are deprived of that choice once the settlement has been agreed.

62    Section 73(2) of the FWBI Act does not in its terms make the Director a party to the settlement between the building industry participants. Section 73(2) may be seen as having the same effect as if the Director were a party to one term of the settlement, namely the term requiring discontinuance. However, s 73 does not have that effect in relation to the other terms of the settlement. Therefore, s 73(2) cannot be construed as making the Director a party to the settlement as a whole.

63    The present relevance of this discussion is that if s 73(2) does not make the Director a party to the settlement as a whole, it follows that there has been no resolution of the justiciable controversy between the Director and the respondents to the settled proceeding. Therefore, there remains a “matter” in relation to which the Director may institute proceedings. The Court has jurisdiction to decide the matter.

The third issue: Whether the proceeding is an abuse of process

64    I have rejected the respondents’ submission that s 73(2) of the FWBI Act prohibits the Director from commencing the current proceeding. The respondents submit, in the alternative, that the current proceeding is an abuse of process. The respondents argue that the Director seeks to subject those persons who were the subject of the previous proceeding to the unjustifiable cost and vexation of another proceeding in relation to the same matters.

65    In Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 Gleeson CJ, Gummow, Hayne and Crennan JJ at [15] cited the following passage from the judgment of McHugh J in Rogers v The Queen (1994) 181 CLR 251 at 286 with approval:

Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute.

66    It is the second of these categories that the respondents rely upon in this case.

67    The respondents rely on the following passage from in Walton v Gardiner (1993) 177 CLR 378 at 393 (Mason CJ, Deane and Dawson JJ):

[P]roceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances did not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings.

68    Their Honours indicated at 392 that the power to stay a proceeding permanently should be exercised in only an exceptional or extreme case.

69    The respondents also refer to the following passage in Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 89 ALJR 750 (French CJ, Bell, Gageler and Keane JJ):

25    Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.

26     Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

(Citations omitted.)

70    The Director submits that the current proceeding cannot be an abuse of process because he was not a party to the settlement of the previous proceeding. The Director also submits that in circumstances where the present proceeding is lawfully brought and the allegations against the respondents have not been previously heard and determined, there can be no “vexation”.

71    It is true that the Director is not prohibited by s 73(2) of the FWBI Act from bringing the current proceeding, and is entitled to bring the proceeding in the exercise of his power as an inspector under s 539(2) of the Fair Work Act. It is also true that the Director was not a party to the settlement and discontinued the proceeding only because he was prohibited from continuing to participate in the proceedings. Further, it is true that the allegations made against the respondents in the current proceeding were not heard and determined by a court in the previous proceeding. Those facts mean that no estoppel can arise. These facts are relevant to, but do not answer, the question of whether the current proceeding is unjustifiably vexatious and oppressive.

72    Although s 73(2) does not make the Director a party to the settlement of the previous proceeding, by providing that the Director must not continue to participate in the settled proceeding, s 73(2) has the same practical effect as if the Director were bound to the term by which the building industry participants agreed to discontinue the proceeding. The previous proceeding was brought to an end by the filing of a notice of discontinuance by all parties, including the Director. The Director now seeks to relitigate matters already disposed of by the settlement between the building industry participants in the previous proceeding. In doing so, the Director seeks to proceed in a way that is inconsistent with the agreement to discontinue the proceeding, to which the Director is, in effect, bound by s 73(2); and inconsistent with the discontinuance itself.

73    If the applicants to the previous proceeding commenced a new proceeding relitigating the same matters, the new proceeding would be an abuse of process: see Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 32-33 (Lord Bingham). That is so because the building industry participants agreed to settle the previous proceeding, and discontinued that proceeding under the terms of the settlement. The new proceeding would be unjustifiably vexatious and oppressive.

74    The settlement between the building industry participants and discontinuance of the previous proceeding meant that s 73(2) operated to require the Director to discontinue the previous proceeding, or to withdraw as intervenor. The connection between the settlement and the statutory prohibition upon the Director, make the Director’s commencement of the current proceeding analogous to the commencement of a new proceeding by the applicants to the discontinued proceeding. In my opinion, the commencement of the new proceeding by the Director is unjustifiably vexatious and oppressive to those respondents who were parties to the previous proceeding.

75    Rule 26.14 of the Federal Court Rules 2011 (Cth) expressly provides that discontinuance under Div 26.2 cannot be pleaded as a defence to a proceeding in relation to the same, or substantially the same, cause of action. However, that rule cannot stand in the way of an argument that the commencement of another proceeding after a notice of discontinuance has been filed is an abuse of process.

76    In O’Shane v Harbour Radio Pty Ltd (2013) 85 NSWLR 698, Beazley P (with whom McColl JA and Tobias AJA concurred) said at [113]:

The authorities also recognise that the same issue may be litigated in different proceedings, even though there has been a determination on that issue in earlier proceedings. This will occur, for example, where both civil and criminal proceedings are brought in respect of the same conduct. It will also occur where some regulatory action has been taken against an individual and civil proceedings are also brought. In those proceedings, the prosecuting party will rarely be a party in both sets of litigation. Different standards of proof apply and there may be different onuses. The evidence may not be the same. It could not be said in those circumstances that there would be an affront to the due administration of justice if an issue determined in a civil proceeding also arises for determination in criminal proceedings involving a person who was a party to the civil proceedings.

77    It may be possible to describe the current proceeding brought by the Director as “regulatory action”. However, the circumstances identified in O’Shane as leading to a conclusion that regulatory action will not amount to an abuse of process are absent in the present case. The Director argues that a significant difference between the current proceeding and the previous proceeding is that he seeks pecuniary penalties payable to the Commonwealth, whereas the John Holland companies may have sought that any pecuniary penalties be paid to them. The question to whom any pecuniary penalties should be paid is a matter for the decision of the trial judge, so it was not necessarily the case that they would be paid to the John Holland companies. It is, in any event, a minor difference. I cannot see that this factor makes the current proceeding analogous to the type of regulatory action described in O’Shane.

78    The current proceeding is an abuse of process to the extent that it relates to the matters that were the subject of the previous proceeding.

The fourth issue: To what extent does the present proceeding relate to matters that were the subject of the settled proceedings?

79    The respondents argue that the current proceeding is unjustifiably oppressive both to those of them who were parties to the previous proceeding and those who were not. They point out that under the terms of the settlement, the John Holland companies released not only the CFMEU and the other four respondents to the previous proceeding, but also the CFMEU’s employees, officers and delegates and the workers who participated in the stoppages. Each of the respondents to the current proceeding falls into one or more of these categories. The respondents argue that the current proceeding should be stayed in full.

80    Section 73(2) operates in relation to the proceeding “to the extent that it relates to the settled matter or matters”. A “settled matter” is a matter that “is the subject of the proceeding”. In this context, the word “matter” refers to “the subject matter for determination”: see Abebe v The Commonwealth of Australia at [36], [117], [215], Hadgkiss v CFMEU (No 4) [2007] FCA 425 at [96]-[99] (Graham J).

81    In my opinion, the matters the subject of the proceeding are to be determined primarily by reference to the legislative provisions, the application and the pleadings, or where there are no pleadings, the affidavits. The terms of settlement between the parties are not determinative as it is entirely possible for the parties to settle matters that both are and are not the subject of the proceeding.

82    In addition, as I have noted, s 73(2) operates as if the Director is bound to the term of the settlement between the building industry participants that requires the proceeding to be discontinued, but does not have that effect in relation to any other terms of the settlement. This indicates that the agreement cannot widen the scope of which matters are settled matters for the purposes of s 73(2).

83    The current proceeding is unjustifiably vexatious only to the extent that it seeks to relitigate the matters that were the subject of the previous proceeding. The respondents to the previous proceeding were the CFMEU, Ingham, Pearson, Kong and Griffin. The matters that were the subject of the previous proceeding were the allegations made against those respondents. Those matters did not concern the other seventeen respondents to this proceeding. The current proceeding is not an abuse of process to the extent that it relates to those seventeen respondents.

84    The conclusions that I have reached so far lead to one remaining issue. This involves comparison of the pleadings in the previous proceeding and those in the current proceeding in order to determine the extent to which the current proceeding relates to the matters settled in respect of the five respondents to the previous proceeding – the CFMEU, Ingham, Pearson, Kong and Griffiths. That is because the Director asserts that the allegations in the current proceeding go beyond those in the previous proceeding, and to that extent the current proceeding relates to matters that were not the subject of the previous proceeding.

85    The parties did not address this issue in oral submissions. I directed that the parties provide written submissions dealing with which matters are and are not common to the previous proceeding and the current proceeding. The written submissions reveal that there remains substantial disagreement as to this issue. There is dispute as to whether some 66 paragraphs of the statement of claim in the current proceeding relate to the settled matters. I will require oral submissions in order to resolve the disagreement.

86    I note that the respondents have not submitted that the current proceeding is an abuse of process to the extent that it pursues matters against the five respondents to the previous proceeding that could have been, but were not, pursued in the previous proceeding.

87    I propose to list the interlocutory application for further hearing on the remaining issue. I will make directions requiring the parties to attempt to narrow the extent of the dispute.

Associate:

Dated:    7 April 2016

SCHEDULE OF PARTIES