FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v McDermott [2017] FCA 504

ORDERS

THE COURT ORDERS THAT:

1.    The name of the applicant in the proceedings be amended to read “Australian Building and Construction Commissioner”.

2.    Leave to make the amendment marked in paragraph 16.1 of the proposed second amended statement of claim forming annexure ADS-5 to the affidavit Andrew Short sworn 23 February 2017 is refused.

3.    On the condition specified in paragraph 4:

(a)    the applicant has leave to file and serve a second further amended originating application in the form of Exhibit A1 tendered on 31 March 2017;

(b)    the applicant has leave to file and serve a second further amended statement of claim containing:

(i)    the amendments marked in paragraphs 1 and 29 of the proposed second amended statement of claim marked as annexure ADS-4 to the affidavit of Andrew Short sworn on 7 December 2016; and

(ii)    the amendments marked in paragraphs 2.1, 3.1, 4.1, 12, 17, 21, 29, 30, 32, 34, 36 and 38 of the proposed amended second statement of claim forming annexure ADS-5 to the affidavit of Andrew Short sworn 23 February 2017 and marked as annexure ADS-5.

4.    The respondents have leave to re-open their case, if so advised, to adduce evidence relevant to or consequent upon the amendments forming the subject of the grant of leave in paragraph 3.

5.    The applicant is to file and serve a second further amended originating application and second further amended statement of claim in accordance with these orders on or before 17 May 2017.

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

REASONS FOR JUDGMENT

CHARLESWORTH J:

1    In these proceedings, the applicant (Commissioner) alleges contraventions of certain civil remedy provisions of the Fair Work Act 2009 (Cth) (FW Act) by three officials of the fourth respondent union (CFMEU). Subject to what is said below, CFMEU is alleged to have contravened the same civil remedy provisions by virtue of the attribution to it of the conduct and states of mind of the three union officials.

2    The trial has commenced but is not yet complete. Evidence on the separate issue of liability was given over five days concluding on 14 October 2016. The parties closed their cases on the evidence and the matter was adjourned to 21 December 2016 for closing submissions on liability.

3    On 7 December 2016, the Commissioner filed an interlocutory application for leave to file a second further amended statement of claim and a second further amended originating application. The application was listed for hearing on 21 December 2016. On 19 December 2016, the respondents provided their written closing submissions to the Commissioner. The closing submissions raised a number of issues which prompted the Commissioner to make an oral application for leave to make additional amendments to his pleading. With one exception, all of the proposed amendments are opposed. Closing submissions are adjourned pending judgment on the Commissioner’s amended application for leave to amend.

4    For the reasons that follow, leave to make all but one of the amendments should be granted.

THE PROPOSED AMENDMENTS

5    The allegations against the respondents broadly concern the conduct of the three union officials at a construction site situated on South Terrace in Adelaide. It is alleged that the head contractor on the site was Sun Construction Australia Pty Ltd.

6    The first respondent (Mr McDermott), the second respondent (Mr Gava) and the third respondent (Mr O’Connor) are each alleged to have contravened s 348 of the FW Act. It provides:

A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.

7    Mr Gava and Mr O’Connor are also alleged to have contravened s 500 of the FW Act. It provides:

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.

8    It is not disputed that Mr McDermott, Mr Gava and Mr O’Connor are permit holders within the meaning of that provision.

9    It is currently alleged that CFMEU is liable for contraventions of s 348 and s 500 of the FW Act by reason of the operation of s 793 of the FW Act, at least in respect of the official’s conduct. Section 793 is a statutory aid to proof. Subject to its terms, a body corporate may be taken to have engaged in the conduct and to have the state of mind of its officers, employees or agents. It is currently alleged that the union officials are each “an employee, officer and agent and therefore an official of ... CFMEU” for the purposes of that provision.

10    The proposed amendments are those set out in a draft second further amended statement of claim (proposed 2nd SOC) forming annexure ADS-5 to an affidavit of Mr Andrew Short sworn on 23 February 2017. They may be dealt with in five groups:

(1)    the amendments marked in paragraphs 2.1, 3.1, 4.1 and 29 of the proposed 2nd SOC (the s 363 amendments);

(2)    the amendments marked in paragraphs 12, 30, 32 and 34 of the proposed 2nd SOC (the “organise” amendments);

(3)    the amendment marked in paragraph 16.1 of the proposed 2nd SOC (the Gava amendment);

(4)    the amendments marked in paragraphs 17, 21, 36 and 38 of the proposed 2nd SOC (the WHS Act amendments); and

(5)    the amendment contained (but not underscored) in paragraph 29 of the proposed 2nd SOC (the state of mind amendment).

11    The state of mind amendment is underscored in an earlier proposed amended pleading forming annexure ASD-4 to the affidavit of Andrew Short sworn on 7 December 2016.

12    The s 363 amendments concern allegations that CFMEU has contravened s 348 of the FW Act, which is contained in Pt 3-1 of Ch 3. Section 363 relevantly provides:

Actions of industrial associations

(1)    For the purposes of this Part [being Part 3-1 of Ch 3], each of the following is taken to be action of an industrial association:

…

(b)    action taken by an officer or agent of the industrial association acting in that capacity;

(3)    If, for the purposes of this Part, it is necessary to establish the state of mind of an industrial association in relation to particular action, it is enough to show:

(a)    that the action was taken by a person, or a group, referred to in paragraphs (1)(a) to (e); and

(b)    that the person, or a person in the group, had that state of mind.

(4)    Subsections (1) to (3) have effect despite subsections 793(1) and (2) (which deal with liabilities of bodies corporate).

13    An issue arises as to whether s 363 of the FW Act operates to the exclusion of s 793 of the FW Act, at least in relation to the provisions of Pt 3-1: see s 363(4). Accordingly, the Commissioner seeks to plead references to s 363 of the FW Act as an additional or alternative statutory basis by which the conduct and state of mind of Mr McDermott, Mr Gava and Mr O’Connor may be attributed to CFMEU in relation to the alleged s 348 contraventions.

14    The “organise” amendments concern the phrase “organise or take” in s 348 of the FW Act. It is currently pleaded that Mr McDermott, Mr Gava and Mr O’Connor “threatened to take” industrial action within the meaning of that provision. By the proposed amendments the Commissioner seeks to allege that each of them threatened to “organise or take” the action. The content of the words alleged to have been said are not the subject of any proposed amendment.

15    The Gava amendment concerns words alleged in the current pleading to have been said by Mr O’Connor. It is alleged that Mr O’Connor said “if you don’t abide by what we’re telling you we’ll shut you down we know the rules better than safework do”. The Commissioner seeks to amend the pleading so as to allege that “O’Connor and/or Gava” said the words.

16    The WHS Act amendments concern the legal source of the union officials’ right of entry to the construction site. It is convenient to set out those proposed amendments in the form that they appear in the proposed 2nd SOC:

17.    Gava and O’Connor entered the Site exercising or seeking to exercise rights conferred by section 117 of the WHS Act in accordance with under Part 3-4 of the Act. to investigate a suspected contravention of the WHS Act.

…

21.    Having entered the Site for the purpose of exercising or seeking to exercise rights conferred by section 117 of the WHS Act in accordance with under Part 3-4 of the Act to investigate a suspected contravention of the WHS Act, Gava and O’Connor held discussions with Project Workers.

…

36.    By reason of the matters pleaded in paragraphs 3.4, 14, 15, 17 to 22, and 24 to 28 above, Gava, as a permit holder exercising, or seeking to exercise, rights conferred by section 117 of the WHS Act in accordance with under Part 3-4 of the Act to investigate a suspected contravention of the Act or, further and/or in the alternative, exercising or seeking to exercise rights in accordance with section 484 of the Act, acted in an improper manner, in contravention of section 500 of the Act.

…

38.    By reason of the matters pleaded in paragraphs 4.4, 14, 15, 17 to 21 and 23 to 28 above, O’Connor, as a permit holder exercising, or seeking to exercise, rights conferred by section 117 of the WHS Act in accordance with under Part 3-4 of the Act to investigate a suspected contravention of the Act or, further and/or in the alternative, exercising or seeking to exercise rights in accordance with section 484 of the Act, acted in an improper manner, in contravention of section 500 of the Act.

17    The references to the WHS Act are references to the Work, Health and Safety Act 2012 (SA).

18    The state of mind amendment concerns the facts to be relied upon in support of the CFMEU’s alleged contraventions. In its current form, the statement of claim alleges that the CFMEU is taken to have engaged in the conduct of its union officials. By the amendment, it is sought to allege that CFMEU is taken to have had the state of mind of the officials in relation to the conduct attributable to it.

Other amendments

19    The proposed pleading marked annexure ADS-4 to the affidavit of Andrew Short sworn on 7 December 2016 also underscores proposed amendments to [1], concerning the change of name of the applicant in the proceedings. That amendment is not opposed. Leave will be granted to make the amendment and the title of the name of the applicant in the action will be varied.

20    The Commissioner also applies for leave to file a second further amended originating application (proposed 2nd OA) in the form of Exhibit A1 tendered in the course of argument on 31 March 2017. That application is also opposed. It is dealt with at the conclusion of these reasons.

PRINCIPLES

21    The Court has the discretion to allow an amendment to a pleading: r 16.53 of the Federal Court Rules 2011. The power to allow an amendment is to be interpreted and exercised in a manner that best promotes the overarching purpose of the Court’s civil practice and procedure provisions: s 37M of the Federal Court of Australia Act 1976 (Cth) (FCA Act).

22    In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the High Court (Gummow, Hayne, Crennan, Kiefel and Bell JJ) held at [111] that an application to amend a pleading:

… should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings [Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146] which suggest only a limited application for case management to do not rest on upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

(footnote omitted)

23    In Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261, the Full Court (Keane CJ, Gilmour and Logan JJ) said (at [51]):

Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.

24    The same philosophy underlying the decision in Aon Risk Services can now be discerned in s 37M of the FCA Act: Cement Australia at [43]. To similar effect, the Full Court on appeal in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; (2016) 332 ALR 199 at [125] approved this summary of relevant factors given by Gleeson J at first instance (Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098 at [127], citations removed):

(1)    The nature and importance of the amendment to the party applying for it;

(2)    The extent of the delay and the costs associated with the amendment;

(3)    The prejudice that might be assumed to follow from the amendment, and that which is shown;

(4)    The explanation for any delay in applying for that leave;

(5)    The parties’ choices to date in the litigation and the consequences of those choices;

(6)    The detriment to other litigants in the Court; and

(7)    Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.

25    Given the wide variety of circumstances in which the discretion not to amend may fall to be exercised, I have discerned little assistance from a comparison of the results reached in the decided cases in differing circumstances. The authorities do not, and could not, set down a uniform approach to the exercise of the power or otherwise require that a particular conclusion be reached on this application. The discretion is to be exercised judicially, having regard to all of the relevant circumstances.

ISSUES

26    The parties’ submissions addressed three overarching issues:

(1)    what is the Commissioner’s explanation for the delay in making the application to amend?

(2)    would allowing the amendments cause the respondents to suffer irretrievable forensic disadvantage or substantive injustice, having regard to the nature of the proceedings and the conduct of the trial to date?

(3)    would the grant of leave best promote the overarching purpose of the Court’s civil practice and procedure provisions, especially bearing in mind the nature and importance of the amendments, the explanation for the late application and any substantive injustice or other prejudice the respondents might be assumed or shown to suffer?

EXPLANATION FOR THE LATE APPLICATION

27    Explanations for the late application to amend are advanced in affidavits sworn by the Commissioner’s solicitor, Mr Short of Minter Ellison, on 7 December 2016 and 23 February 2017. No application was made to cross-examine Mr Short on either of his affidavits. Although brief, I accept the explanations given in the affidavits to be true.

28    The respondents submitted that the application for leave to make the amendments should not be allowed in the absence of an explanation given by the Commissioner or a member of his staff. I reject that submission. The nature of the amendments do not call for additional evidence to be given either by the Commissioner or a member of his staff personally. In that regard, I reject the respondents’ submissions that the amendments advance an entirely new case and that the Commissioner must be taken to have made a deliberate forensic decision that now necessitates personal explanation.

29    The explanation for the late application to make the Gava amendment may be considered separately. I am satisfied that amendment is made for the purpose of aligning the Commissioner’s pleaded facts with the evidence as it emerged at trial: Water Board v Moustakas (1988) 180 CLR 491 at 497. The relevant evidence is that given by Mr Michael Jones, the Site Manager of the construction site. In closing submissions, the Commissioner will submit that Mr Jones gave evidence broadly to the effect that it was either Mr Gava or Mr O’Connor who said words to the effect pleaded in [16.1] of the statement of claim in its current form, but could not say with any certainty which of the two officials had said the words. It will be submitted that if the Court cannot find on the balance of probabilities that Mr O’Connor said the words, it may nonetheless find that the words were said by either Mr O’Connor or Mr Gava. I accept that such a finding may found a conclusion that CFMEU contravened s 348 of the FW Act, even if no finding could be made as to the identity of the speaker.

30    I am satisfied that the late application for this amendment is not due to a deliberate or tactical decision on the Commissioner’s part. Nor do I consider there to have been an inordinate delay on the Commissioner’s part in proposing the amendment in any event. The amendment is one that did not arise for consideration until after the evidence emerged at trial. Although the amendment could have been made immediately after the close of evidence in October, the delay between the close of evidence and the filing of the Commissioner’s first amended application in early December is not significant in all of the circumstances. I have nonetheless determined that the amendment should not be allowed, for reasons given at [100] below.

31    The reasons advanced for the late application in relation to the remaining amendments is that there are omissions in the pleading caused by the drafter’s inadvertence, which were not realised until a much later time. I use the word “omissions” in a broad sense to refer either to words absent from the current pleading that the Commissioner now seeks, upon closer reflection, to have inserted, or to ambiguities he now seeks to clarify.

32    I am satisfied that the omission in the pleading now sought to be addressed by the state of mind amendment was not realised by the Commissioner’s advisers until 28 November 2016. On that day the Court heard submissions in the matter SAD58/2015 in which allegations of contraventions of s 500 of the FW Act by the CFMEU are pleaded in relevantly the same manner as they are in this action. Counsel for CFMEU in SAD58/2015 submitted that the Commissioner’s pleading in that case did not contain an allegation that the state of mind of CFMEU officials was to be attributed to CFMEU. That submission caused the Commissioner’s advisors to reflect upon the pleading in this action and to file the interlocutory application of 7 December 2016. The Commissioner maintains that the pleading in its current form sufficiently alleges that the states of mind of the union officials are to be attributed to CFMEU in any event, but says that the amendments are necessary to “clarify” its position.

33    I accept that the omissions sought to be addressed by the s 363 amendments, the WHS Act amendments and the “organise” amendments were realised for the first time when the Commissioner’s advisors received the respondents’ written closing submissions on 19 December 2016. I reject the respondents’ submission that their bare denial of the pleaded allegations served to positively put the Commissioner on notice of their arguments that the claims against them are not maintainable on the pleaded facts and law.

34    Counsel for the Commissioner submitted that the delay in bringing the explanation was explained in part by the failure of CFMEU (at least) to comply with an obligation under r 16.08 of the Rules to plead matters that would render the Commissioner’s claim not maintainable. For the purposes of assessing the adequacy of the Commissioner’s explanation, however, I would place very little weight on that submission, assuming it to be correct. The Commissioner is a sophisticated and well-resourced litigant. With the assistance of his legal advisors, he may reasonably be expected to plead all of the facts and statutory provisions relied upon and to reflect again upon the sufficiency of the pleaded case prior to the commencement of the trial. The Commissioner, by his advisors, may also reasonably be expected to have anticipated arguments of the kind now made by the respondents in their written closing submissions and to positively plead alternative routes to liability if the anticipated arguments were thought to have any possibility of succeeding. The arguments fairly arise on the face of the pleading and the statute: they are not sourced from facts known only by the respondents and their timely identification did not depend upon the respondents’ input. The point raised by the respondents in relation to the exclusive application of s 363 of the FW Act rests on familiar principles of statutory construction and is neither enigmatic nor novel.

35    I nonetheless consider the operation of r 16.08 of the Rules to be a relevant consideration in the ultimate exercise of my discretion in a limited respect to which I will refer to later in these reasons.

36    The respondents’ submit that the Commissioner did not seek any particulars of the bare denials they had pleaded to the allegations made against them. The failure to do so, it is submitted, should be regarded as a “forensic decision” in that the Commissioner ought be regarded as having deliberately assumed a risk that the proceedings might be defended in the way that has now become apparent for the first time in the respondents’ written closing submissions.

37    I doubt that the making of a request for particulars would have prevented the lateness of the application to amend. All of the individual respondents maintain that they were under no obligation to furnish particulars of their defences if to do so would undermine their respective claims of privilege against exposure to penalty (penalty privilege). CFMEU claimed that it, too, was under no obligation to draw deficiencies in the Commissioner’s pleading to the Commissioner’s attention if to do so would assist the Commissioner in any way to secure orders for penalties against its union officials and so undermine or “abrogate” their penalty privilege. In light of the submissions made by the respondents on this application, I am not satisfied that the respondents would have pleaded or otherwise divulged the points they now make at any time prior to the closure of the Commissioner’s evidentiary case, even if they had been requested to do so. That is consistent with the respondents’ conduct of threatening to make an application for orders striking out the statement of claim, whilst giving no explanation as to why they considered the pleading so defective as to be liable to be struck out. Although I do not criticise the respondents for making and maintaining claims of privilege where it was proper to do so, or for otherwise taking any guarded position not inconsistent with their obligations under the Rules and the FCA Act, I reject the notion that a request for particulars by the Commissioner would have resulted in the shortcomings in his pleaded case being brought to his attention by the respondents at an earlier time. The Commissioner’s failure to request particulars of the respondents’ denials does not weigh heavily in the exercise of my discretion.

38    The circumstance that the amendments are explained by inadvertence in respect of omissions in the pleading that ought reasonably to have been identified at an earlier time weighs against the grant of leave. There is, however, no evidence to support a conclusion that the Commissioner or his advisers have made a deliberate or tactical choice to delay the application to amend at this very stage of the proceedings: compare Aon Risk Services [4], [24]. I am satisfied that the application has been made reasonably promptly upon the Commissioner coming to appreciate the omissions that are now sought to be rectified.

WOULD THE AMENDMENTS WORK SUBSTANTIve injustice?

39    As the respondents’ Counsel properly submits, a person asserting prejudice in the form of substantive injustice or unfairness arising from the late amendment of a pleading must show that he or she would be in a worse position from the point of view of the presentation of his or her case than he or she would have been in had the subject matter of the proposed amendment been pleaded at the appropriate time: Ketteman v Hansel Properties Ltd [1987] AC 189 at 203 (Lord Keith).

40    In Ketteman, Lord Keith went on to say “It is not a relevant type of prejudice that allowance of the amendment will or may deprive him of a success which he would achieve if the amendment were not to be allowed” (at 203). I would not go so far as to say that disadvantage of that kind is irrelevant to an application to amend a pleading made under the Rules of this Court. To do so would be inconsistent with what was said in Aon Risk Services and the requirement that the discretion be exercised in accordance with s 37M of the FCA Act. I will deal with the concept of prejudice and inconvenience in the wider sense later in these reasons. I am presently concerned with the respondents’ submission that the proposed amendments would work a substantive injustice to them.

41    In determining whether substantive unfairness has or might occur, the focus is on the presentation of the parties’ cases, conceived in a broad sense to include all steps preparatory to trial as well as the conduct of the trial itself. It is relevant to consider whether the person alleging prejudice might have presented his or her case differently had the pleadings been in their intended form at the appropriate time, namely (in most cases) at the outset of the action.

Facts

42    No application to re-open the Commissioner’s case will be made in the event that the proposed amendments are allowed, and any application by the respondents to re-open will not be opposed by the Commissioner. Any grant of leave to make the amendments should, in the circumstances, be made on the condition that the respondents have leave, if so advised, to re-open their case. As will be seen, the question of whether or not the respondents would exercise any such leave remains uncertain.

43    Each of Mr McDermott, Mr Gava and Mr O’Connor expressly asserted their claims of privilege at the pre-trial stages. The claim was made expressly in their filed defences, in outlines of anticipated evidence and in their written opening submissions. Each of the respondents pleaded denials to the allegations which the Commissioner now seeks to amend, except the status of Mr McDermott, Mr Gava and Mr O’Connor are each an “officer” or “agent” of CFMEU within the meaning of s 793(1)(a) of the FW Act. The words “officer” and “agent” also appear in s 363(1)(b), upon which the Commissioner seeks to rely.

44    Neither Mr McDermott nor Mr Gava gave oral or affidavit evidence at the trial, although they did “go into” evidence in the limited sense that documentary evidence was tendered and witnesses were called in support of the respondents’ cases in the course of a joint trial. Mr O’Connor gave oral evidence and was cross-examined.

45    The respondents rely on the affidavit of their solicitor, Mr Ats, sworn on 8 March 2017 annexing a letter from Mr Ats to Ms O’Keefe of Minter Ellison of the same date. The letter states that on the advice of Senior Counsel, Mr Abbott QC, Mr O’Connor gave evidence but Mr Gava and Mr McDermott did not. The letter further states that Mr Abbott QC had informed Mr Ats that the following factors were relevant to the advice he had given to Mr McDermott, Mr Gava and Mr O’Connor:

A.    the nature of the proceedings, being civil penalty proceedings, in which both the privilege against self-exposure to a penalty and the privilege against self incrimination applies:

B.    the way in which the hearing was conducted by Senior Counsel for the [Commissioner] and by Mr Abbott;

C.    the applicant’s pleaded case;

D.    the examination and cross examination of the witnesses for both the applicant and respondents and the evidence thereby obtained; and

E.    the potential consequences of findings adverse to the respondents having regard to circumstances particular to each respondent.

46    Counsel’s advice was also stated to have been based on his analysis of these matters and the submissions he proposed to make in his closing address. I proceed on the basis that the arguments then planned for the closing address are the same as those now made in the respondents’ written closing submissions dated 19 December 2016. Among other things, the submissions expose, and mount arguments based upon, the omissions in the pleadings that now form the subject of this amendment application.

47    The letter goes on to assert that in his discussions with Mr Ats, Mr Abbott QC referred to a number of particular matters that informed his advice to the respondents as to whether or not to give evidence. It is appropriate that I set the matters out in the same form as they appear in the letter:

1.    At the conclusion of the [Commissioner’s] case Mr Abbott made a forensic decision to advise O’Connor to give evidence based on his assessment of the pleadings and the evidence given in the case at that point in time. That decision was in part based on the applicant’s opening address, the examination in chief of the applicant’s witnesses, and the cross examination of the applicant’s witnesses.

2.    Similarly, Senior Counsel for the respondents made a forensic decision after O’Connor and Vial gave evidence to advise Gava and McDermott not to give evidence based on his assessment of the pleadings and the evidence given in the case at that point in time. That decision was in part based on the applicant’s opening address, the examination in chief of the applicant’s witnesses, and the cross examination of the applicant’s witnesses and the examination in chief and cross examination of O’Connor and Vial. That forensic decision operated in circumstances where Gava and McDermott had accepted Senior Counsel’s previous advice that they should not give evidence, subject only to Senior Counsel reassessing the position after O’Connor and Vial’s evidence was completed.

3.    It was not pleaded that Gava said if you don’t abide by what we are telling you we’ll shut you down we know the rules better than SafeWork do, rather, it was only pleaded that O’Connor said words to that effect.

4.    The pleaded allegation in [32] was only that Gava contravened s348 because he threatened to take action. There was no pleading at [32] that Gava contravened s348 because he threatened to organise ... action in circumstances where Mr Abbott was of the view that section 348 must mean different things by threatened to take as opposed to threatened to organise.

5.    Similarly, the pleaded allegation in [34] was only that O’Connor contravened s348 because he threatened to take action. Mr Abbott was aware that there was no pleading at [34] that O’Connor contravened s348 because he threatened to organise ... action.

6.    The pleaded allegation was that Gava and O’Connor were seeking to exercise rights under part 3 - 4 of the Act and not that Gava and/or O’Connor were exercising or seeking to exercise rights conferred by section 117 of the WHS act in accordance with part 3 - 4 of the Act in circumstances where Mr Abbott was of the view that rights conferred by section 117 of the WHS Act are not rights under Part 3-4 of the FW Act.

7.    The pleaded allegation at [32] that Gava threatened to take action ... in contravention of section 348 could not be made out because that allegation was made by reason of the matters pleaded in paragraph 16. Paragraph 16 contained no allegation that Gava threatened to take any action himself, in circumstances where Mr Abbott was of the view that section 348 must mean different things by threatened to take as opposed to threatened to organise.

8.    The pleaded allegations that the CFMEU was liable for the alleged contraventions of McDermott, Gava and O’Connor did not include a plea that the state of mind of McDermott or Gava or O’Connor should be attributed to the CFMEU. In these circumstances Mr Abbott was of the view that the CFMEU could not be liable for any s348 contravention if the Court found that McDermott, Gava or O’Connor contravened s348.

48    Mr Ats deposed that the contents of the letter are true to the best of his knowledge, understanding and belief and no application was made to cross-examine Mr Ats in respect of its contents. Each proposed amendment will be considered against the facts stated in Mr Ats’ letter.

49    Paragraphs 1 to 8 of the letter extracted above contain assertions as to Counsel’s subjective understanding of the meaning of the statement of claim. Whilst I accept that Counsel subjectively understood the pleading to have the meaning referred to in the letter, the effect of the proposed amendments is to be determined by an objective reading of the words pleaded and proposed to be pleaded, and not by the parties’ subjective appreciation of their import: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1287 at [76].

Submissions

50    The respondents submit that the Commissioner’s application is “unprecedented” in that it arises after the close of evidence by all parties in proceedings in which civil penalties are sought. It is true that neither party has brought to the Court’s attention any authority in which an application to amend a statement of claim has been made at such a late stage in a civil remedy proceeding. There are, however, well-settled principles governing the circumstances in which a court in criminal proceedings may amend a complaint or information even after the conclusion of evidence in a criminal trial; including at the stage of an appeal: see, for example Perry v Police [2006] SASC 136 at [29] (Doyle CJ) and the authorities cited there. The circumstance that there appears to be no previous authority decided in a similar factual or legal context to the case at hand weighs neither for nor against the grant of the leave.

51    Crucially, it is submitted that the respondents have made forensic decisions in reliance upon the state of the pleadings as they currently stand and in reliance upon the Commissioner having closed his case on the evidence. They submit that the proposed amendments, if allowed, would involve an “infringement”, “abrogation” or other impermissible trammelling of the penalty privilege which the three individual respondents are undoubtedly entitled to claim in the action. Allowing the amendments would, it was submitted, be “contrary to the interests of justice, irretrievably prejudicial [and] destructive of public confidence in the legal system”.

The penalty privilege

52    The Full Court considered the scope of and rationale for the penalty privilege in Australian Competition and Consumer Commission v FFE Building Services Ltd (2003) 130 FCR 37 (Emmett, Hely and Jacobson JJ). In that case, the Australian Competition and Consumer Commission (ACCC) claimed relief against two natural persons who, it was alleged, were knowingly concerned in contraventions by corporations of the then-named Trade Practices Act 1974 (Cth). The corporations were also joined. An issue arose as to whether it was within the power of the trial judge to compel the natural person respondents to file and serve statements of their evidence at any time prior to the closure of the ACCC’s case. In the course of reciting the general principles, the Full Court said (at [13]):

The privilege of refusing to answer questions or provide information on the ground that the answers or the information might tend to expose the party to the imposition of a pecuniary penalty:

• is not confined to discovery and interrogatories;

• is available at common law;

• is distinct from the privilege against exposure to conviction for a crime

(Pyneboard (at 337)).

The rationale for the privilege is that an applicant must prove its own case and should not get any assistance from the respondent in proving its case: Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 129; Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 77 ALJR 40 at 47 [31].

53    The Full Court went on to hold (at [27], [29] and [34]):

27.    It is common ground that, by furnishing statements, Fodera and Bell might provide information that would enable the Commission to improve its case. However, the Commission points to the undertaking that it has proffered and says that the consequence of the undertaking is that it would not be able to make any use of statements filed that would be inconsistent with the rationale for the privilege. However, the existence of the undertaking cannot be determinative of the question. Either the privilege is infringed by the proposed direction or it is not. If the privilege is infringed, then the undertaking does not justify infringement. The respondent cannot be required to surrender a privilege in return for protection different from that which the law provides. …

…

29.    While there would be no direct compulsion on Fodera and Bell to file statements pursuant to the directions sought by the Commission, the practical consequence of the direction may be that they will be compelled to file statements in order to preserve the option to which they are entitled, to decide after the Commission’s case is closed, to go into evidence. If they are compelled either to file statements before the commencement of the trial or to be precluded from going into evidence, there is a practical compulsion imposed on them, in order to preserve the option that the law gives to them, to file statements. That is inconsistent with the privilege.

…

34.    It is true that, at some stage of the proceedings, a respondent must elect whether or not to go into evidence. But an election which is preserved until after the Commission closes its case is quite different from one which is brought forward to a time before the case is closed. Once it is acknowledged that circumstances may arise before the case is closed under which supplementary evidence may be adduced, even though it was obtained from the respondent’s ‘leads’, it is plain that the privilege is so weakened that it is either impermissibly abrogated or substantially undermined.

54    The observations of the Full Court in FFE are directed to the provision of information that might directly or indirectly (including by leads for further investigation) assist a prosecuting authority to prove its case, for example by producing documents as part of discovery, answering interrogatories, providing witness statements and pleading positive defences. Whether or not the allowance of an amendment to a statement of claim would infringe or weaken the privilege must be determined by reference to its scope and rationale: the individual respondents are not to be compelled to supply evidence in the proceedings out of their own mouths or to provide information that would otherwise assist the Commissioner (whether directly or indirectly) to prove his case in an evidentiary sense: Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375, [55].

55    Without being exhaustive, a regulator in civil remedy proceedings may be assisted in the proof of his or her case (and the penalty privilege thereby infringed) if an amendment to a pleading were allowed after the close of evidence in circumstances where:

(1)    proof of the amended allegation relies upon evidence given by a respondent who elected to tender or adduce evidence in his or her case; and

(1)    the respondent would not otherwise have elected to tender or adduce the evidence had the amendment been made at an earlier time.

56    There may be cases in which prejudice of that kind may be safely assumed in the absence of evidence by reason of the very nature of the amendment, or the progress of the trial, or the evidence given, or a combination of all of those things. I do not consider this to be such a case. It was for that reason that I indicated to Counsel for the respondents that evidence concerning the asserted prejudice should be given by affidavit. It was not suggested that the requirement to file affidavits in and of itself involved an infringement of any privilege the respondents were entitled to claim.

57    None of what I have said thus far should be taken as a suggestion that irretrievable and serious prejudice of the kind to which I have referred must be shown in answer to an application of this kind. I am at present dealing only with the respondents’ positive claim that they would in fact suffer prejudice of that serious kind if the application were to be allowed. As I have already observed, other aspects of prejudice or disadvantage must also be considered.

Consideration

58    It is convenient to first consider the broad position of the two individual respondents who elected not to give evidence in their case, Mr McDermott and Mr Gava. I do not consider their elections to be irrevocable. It will of course be necessary to consider the inconvenience and expense that might be occasioned by a re-opening of the trial but, for present purposes, I proceed on the basis that if the amendments were allowed, the respondents will be granted leave to re-open their case on the evidence and any one of them may give evidence (or additional evidence), call additional witnesses and tender additional documents.

59    Mr Ats’ letter to Ms O’Keefe demonstrates (and I accept) that the respondents made forensic decisions concerning the conduct of their case in reliance on the Commissioner having closed his case and by reference to the pleadings as they stood at that time. However, the letter does not demonstrate whether any one of the respondents’ decisions concerning the presentation of their case would have been any different had the amendments to the Commissioner’s pleading been made at an earlier time. The uncertainty in relation to that question was not resolved in the course of the respondents’ submissions. By way of example, when asked what inference the Court might draw as to how the respondents might have run their case had the Gava amendment been made prior to the Commissioner closing his case on the evidence, Counsel said:

… I would like your Honour to draw the inference that it would have been a matter as counsel for me to weigh up and give advice to my clients as to the pros and cons of the situation. I can’t say and I won’t say that this meant, if they had made the amendment they now seek to make, that Mr Gava must have given evidence. I can’t say that and I don’t say that.

… But what I do say is that we have lost the opportunity to consider whether or not Mr Gava could or should have given evidence based on the way in which the trial proceeded.

60    Similarly, in relation to the “organise” amendment, when asked whether Mr McDermott would seek to give evidence should that amendment be made, Counsel for the respondents said:

Well, I haven’t discussed it with him. I have not discussed this with Mr McDermott, because, it seems to me, we don’t even get to first base as to what Mr McDermott might or might not do if the amendment is made. What we have here is a clear case where there was one allegation, and one allegation only, which Mr McDermott denied, and having denied it, your Honour can’t, with respect, speculate that if you changed the goal posts, they may or may not be able to kick a goal because of anything Mr McDermott has or hasn’t done or might not do.

And even if your Honour came to the view, well, Mr McDermott wouldn’t have said anything different had he given evidence – which, I submit, with respect, your Honour couldn’t or shouldn’t come to that position – the fact is Mr McDermott hasn’t given evidence. The fact is it’s too late to call Mr McDermott. The fact is that it has been and gone. The case is closed. …

61    I accept that it would be impermissible for the Court to speculate on the content of any evidence Mr McDermott might give should he apply to re-open his case and testify in it. The particular prejudice identified by Counsel, however, does not involve an impermissible trammelling over Mr McDermott’s penalty privilege. Rather, the prejudice is one that would involve Mr McDermott suffering the inconvenience and expense of:

(1)    obtaining advice and giving instructions in relation to the amended pleading;

(2)    reconsidering, in light of that advice, whether to change his earlier decision not to give evidence; and

(3)    applying to re-open his case and incurring the expense of a resumed trial.

62    The possibility of prejudice of that kind occurring is, of course, to be taken into account in determining the application for leave to amend. However, neither Mr McDermott nor Mr Gava would suffer substantive injustice or forensic unfairness of the kind referred to in Ketteman, in relation to any one of the proposed amendments, nor would their entitlement to claim penalty privilege be infringed or otherwise undermined.

The WHS amendment

63    It was submitted that allowing the WHS amendment would constitute an unfair shifting of the “goal posts” because evidence was adduced through Mr O’Connor that may now assist the Commissioner to prove the proposed amended case. Relatedly, it was submitted more generally that Mr O’Connor may not have given evidence at all if any one of the amendments were made at an earlier time.

64    In determining whether this proposed amendment truly raises a new issue the Court is to consider not only the form of the current pleading, but also the way in which the case proceeded during the course of evidence: Pascoe v Boensch [2009] FCA 1240 at [79]; Intelmail Explorenet Pty Limited v Vardanian (No 2) [2009] FCA 1018; (2009) 82 IPR 281 at [47]. In the present case, the course of evidence is to be considered in the context of the whole of Pt 3-4 of the FW Act.

65    A person may exercise or seek to exercise rights “in accordance with” Pt 3-4 of the FW Act even if the FW Act is not the legal source of the right in question. It is true that some provisions of Pt 3-4 of the FW Act operate to confer rights. Section 481 and s 482 (contained in Div 2 of Pt 3-4) are examples. Relevantly s 481 confers on a permit holder a right to enter premises for the purpose of investigating a suspected contravention of the FW Act or the terms of a fair work instrument. Section 482 confers rights, while on premises, to do various things in the course of such an investigation. Section 483 of the FW Act also confers substantive rights on a permit holder. Under that provision, a permit holder may, for example, require the production of, inspect and copy documents. Similar substantive rights are conferred by provisions contained in Subdiv AA of Div 2 in relation to certain award workers. Section 484 (contained in Subdiv B of Div 2) confers a substantive right upon a permit holder to enter premises for the purposes of holding discussions with specified persons.

66    Division 3 of Pt 3-4 is titled “State or Territory OHS rights”. It commences with this proscription in s 494(1):

An official of an organisation must not exercise a State or Territory OHS right unless the official is a permit holder.

67    The phrase “State or Territory OHS right” is defined in s 494(2). Sections 495 to 499 impose conditions upon the exercise of such rights. Thus, although the FW Act does not, in and of itself, confer the right of entry to which Div 3 of Pt 3-4 relates, the statute does condition the exercise of such rights.

68    Section 117 of the WHS Act confers a right of entry on a union official to investigate a suspected contravention of that Act. Argument on this application proceeded on the assumption that the right of entry conferred under s 117 of the WHS Act was capable of meeting the description of a State or Territory OHS right. It is not disputed that s 118 of the WHS Act confers additional rights upon a person who has entered premises in the exercise of the right of entry conferred by s 117.

69    The opening words of s 500 of the FW Act require proof that the permit holder against whom a contravention is alleged was either seeking to exercise or was exercising rights “in accordance with” Pt 3-4. The meaning of the phrase “in accordance with” is itself the subject of some dispute in these proceedings.

70    The originating application has, from the outset of the proceedings, sought declarations of contraventions against Mr Gava and Mr O’Connor in terms that accord with the statute, as follows:

7.     A declaration that the Second Respondent has contravened section 500 of the Act by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the Act on 9 December 2015.

…

9.     A declaration that the Third Respondent has contravened section 500 of the Act by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the Act on 9 December 2015.

71    The relevant paragraphs of the statement of claim in its current form are identified at [16] of these reasons, ignoring the proposed amendments marked by the striking out and underscoring of words. In their current form the relevant paragraphs do not properly reflect the words contained in s 500 of the FW Act, extracted at [7] above. They allege that Mr Gava and Mr O’Connor entered the premises seeking to exercise rights “under” Pt 3-4 of the FW Act ([17]) “to investigate a suspected contravention of the WHS Act” (SOC, [17], [21], [36] and [38]). Although the paragraphs do not reflect the statutory wording, the pleading in its present form clearly contains an allegation to the effect that Mr Gava and Mr O’Connor sought to exercise a right of entry “to investigate a contravention of the WHS Act”. The error in the plea is that the right of entry for that purpose is wrongly described as a right “under” Pt 3-4 of the FW Act, when it is not: see Ramsey v Sunbuild (2014) 221 FCR 213. Nor is there currently a plea that Mr Gava and Mr O’Connor sought to exercise such rights “in accordance with Part 3-4”. The general effect of the amendments is to substitute the word “under” with the phrase “in accordance with”.

72    A second aspect of the amendments is the insertion of the words “exercise or”. The pleading in its current form alleges that Mr Gava and Mr O’Connor were seeking to exercise the rights in question, but not in fact exercising them. That is inconsistent with the originating application extracted at [70] above.

73    I make the following observations and findings about the presentation of the parties’ cases at trial in connection with each aspect of these amendments.

74    The Commissioner’s case at trial was conducted on the basis that s 500 of the FW Act applied because Mr Gava and Mr O’Connor were (at least) seeking to exercise rights conferred under s 117 of the WHS Act. Counsel for the Commissioner made express and unequivocal references in his oral opening address to s 500 of the FW Act being applicable in respect of the two respondents seeking to exercise rights of entry under that State law. Counsel said:

Your Honour, in terms of contravention of section 500, it seems to us that this is probably – this is likely to be a simpler case than some of the section 500 cases, because this is a case where notices were produced, written notice was produced, under section 117 of the WHS Act; copies of those notices will be tendered. The effect of the Fair Work legislation is that, therefore, if there was an entry into the site under section 117, that it’s an entry for the purposes of the Commonwealth Act, under section 500 of the Act, so there doesn’t appear to be a dispute by – an issue that the entry on the site was an entry to which section 500 must have applied.

75    I have not overlooked that Counsel for the Commissioner, in response to a question from me in the course of the trial, stated that the rights of entry in issue included those conferred under s 481 of the FW Act. However, I do not understand Counsel by that comment in all of the circumstances to have confined the Commissioner’s case.

76    The respondents did not object to the Commissioner tendering evidence relevant to prove an allegation that two respondents were the holders of permits issued under the WHS Act and had attended the site bearing notices issued under the WHS Act. The evidence had been referred to in the Commissioner’s outline of proposed evidence provided to the respondents in advance of the trial.

77    On the third day of the trial, submissions were made concerning the significance of the Commissioner’s plea that Mr Gava and Mr O’Connor were “seeking” to exercise the rights and the absence of a plea that they had exercised the rights in fact. By the cross-examination of the Commissioner’s witnesses it became apparent that the respondents’ case was to the effect that they were in fact exercising rights of entry that they did in fact have under s 117 of the WHS Act.

78    I asked the respondents’ Counsel to explain the relevance of evidence tending to show that the respondents were not merely seeking to exercise rights under the WHS Act but that they were in fact exercising such rights, other than the potential bearing of the evidence on the Court’s assessment of the seriousness of the alleged contraventions. I explained that I took the view that the Commissioner had alleged that the respondents were “seeking” to exercise rights under the WHS Act, and the relevance of whether or not the respondents were in fact exercising those rights was accordingly unclear. Counsel said:

I say it’s relevant to the way we’ve approached this case and the evidence that we wish to lead and the submissions we propose to make about section 500 and indeed the other sections.

79    The exchange continued:

MR ABBOTT:        .. I point out that they haven’t alleged currently that we were exercising.

THE COURT:        They need not though to establish a contravention, Mr Abbott.

MR ABBOTT:        They need not, but we want to prove that we were exercising rights.

THE COURT:        For what purpose?

MR ABBOTT:        As a defence to their claim, your Honour.

THE COURT:        But it’s not a defence to establish that, Mr Abbott.

MR ABBOTT:        Well, it may be, your Honour, depending on what then after follows.

80    The above exchange occurred after Counsel for the Commissioner had stated again, and in unequivocal terms, that it was the Commissioner’s case that the respondents were exercising or seeking to exercise rights conferred under the WHS Act.

81    Shortly afterward, Counsel for the respondents gave this explanation as to the relevance, on the respondents’ case, of the circumstance that the respondents had in fact entered the site in the lawful exercise of rights conferred under s 117 of the FW Act:

MR ABBOTT:        Your Honour will see section 117 talks about actual entry in subparagraph (1) of section 117. It talks about the fact that a permit-holder may enter. Subsection (2) talks about the suspicion to be held by an entry-holder – by a permit-holder. But so far as the actual entry is concerned, there are certain rights that flow from the entry, if it be in accordance with section 117, and those rights are set out in section 118.

And those rights are plenary in the sense that they are extremely wide rights, once there has been a lawful entry. And in my respectful submission, what my learned friend appears to have been conceding but without making it quite plain – if they accept that there – we had a – we made a lawful entry pursuant to section 117, then it follows that the issue is whether or not – was what did – was what we did pursuant to section 118, therefore amounting to a lawful conduct and not improper conduct.

THE COURT:        Yes, I see.

MR ABBOTT:        It’s that sequence on which I rest my cross-examination of Mr Jones in relation to what was happening on the site and of course, as your Honour has already said on many occasions throughout this trial, the issue of penalty.

82    Counsel remarked that if the Commissioner amended the pleading to allege that the two respondents were “exercising” the rights rather than merely “seeking” to exercise the rights, then the trial might be made shorter.

83    An additional answer to this aspect of the Commissioner’s claim is only now made apparent for the first time in the respondents’ written closing submissions. The respondents submit that they were in fact exercising the WHS Act right of entry, and it follows therefore that they were not exercising or seeking to exercise rights conferred by or under the FW Act. As the Commissioner’s case was confined to an allegation that the rights in issue were those conferred “under” the FW Act, they submit, the Commissioner has failed to prove his pleaded case.

84    I do not accept that the pleading could be reasonably read as having confined the Commissioner’s case in the way contended for. Read objectively, the pleading asserts that the two respondents were seeking to exercise rights to enter premises to investigate a contravention of the WHS Act which right was conferred under the FW Act. A legally qualified person would understand the pleading, so read, as containing an allegation of fact (the purpose of entry) and erroneous proposition of law (the legal source of the right of entry).

85    An assumption that the Commissioner’s case was confined in the manner now contended for cannot be reasonably made in light of other pleaded allegations to the effect that Mr Gava and Mr O’Connor were each holders of work health and safety (WHS) permits for the purposes of the WHS Act ([3.3] and [4.3] respectively) and that, when requested, they produced entry notices pursuant to s 117 of the WHS Act to Mr Jones prior to entering the site [18], and that they entered the site to investigate contraventions of the WHS Act ([17], [21], [36], [38]). Those pleaded facts could serve no purpose other than to support an allegation that the two respondents had sought to exercise rights under the WHS Act. As I have mentioned, the Commissioner’s opening address made it plain that the Commissioner was proceeding on the footing that s 500 of the FW Act was applicable because the two respondents had sought to exercise rights under the State law.

86    In light of the express references to s 117 of the WHS Act in the statement of claim, the proper inference to draw was that the drafter had failed to ensure that the pleaded allegations accorded with the words of the statutory provision said to have been contravened.

87    I infer from [6] of Mr Ats’ letter (extracted at [47] above) that Mr Abbott QC gave advice to the respondents knowing that there was, on the face of the pleading, the erroneous proposition of law to which I have referred. However, given the nature of the error, the facts pleaded in the remainder of the statement of claim, the Commissioner’s opening address and the evidence adduced by the Commissioner, any advice given to the respondents as to the presentation of their case ought to have referred not only to the pleadings in their current form but to the actual conduct of the Commissioner’s case and with an eye to the Rules of the Court in relation to the amendment of pleadings.

88    In any event, the respondents themselves did not conduct their case as though the pleadings were or should be confined to an allegation that the only rights of entry in issue were those directly conferred by the FW Act. The defence concerning the “plenary” rights under s 118 of the WHS Act proceeds from the footing that the Commissioner’s case did indeed concern the exercise of rights conferred under s 117 of that Act. It was from that premise that the respondents contend that the lawfulness of their actions in accordance with s 118 of the WHS Act must demand the conclusion that their conduct was not “improper” within the meaning of s 500 of the FW Act. They concluded their evidentiary case accordingly.

89    Mr Ats’ letter does not allege that Mr O’Connor would not have given evidence at all had these amendments been made at an earlier time, nor does it assert that the evidence adduced through him would have differed, nor that documents tendered in the respondents’ case would not otherwise have been tendered. I am not prepared to make assumptions about those matters in light of the exculpatory defence founded on s 117 and s 118 of the FW Act and the conduct of the trial viewed as a whole.

90    Nor do I consider the insertion of the word “exercise” would now occasion a substantial injustice to the respondents. The amendment accords with the form of declaratory relief sought in the originating application and is one that Mr Abbott QC suggested the Commissioner might make so as to render it unnecessary for the respondents to prove the proposition. In that regard, I will take into account the time that may have been wasted at trial in relation to that issue, assuming for present purposes that proof of the respondents’ actual exercise of rights is capable of being exculpatory of them.

The s 363 amendment and the state of mind amendment

91    Section 363 of the FW Act is an evidentiary aid to proof. It is a legal mechanism by which the Court may find CFMEU to have engaged in conduct and to have had, when engaging in that conduct, a particular state of mind. Section 793 of the FW Act is expressed in relevantly the same terms. The argument between the Commissioner and CFMEU as to whether s 363 of the FW Act applies to the exclusion of s 793 in connection with an alleged contravention of s 348 is one that does not affect the legal interests of the individual respondents. It affects only the interests of CFMEU in the proceedings. CFMEU’s contention is that the Commissioner’s currently pleaded case against it in relation to s 348 of the FW Act is not legally maintainable. The same may be said of the state of mind amendment. Generally speaking, such points should be pleaded by a respondent in accordance with r 16.08 of the Rules.

92    It is to be accepted that CFMEU cannot be obliged to take steps which would weaken or nullify the privilege of the individual respondents: John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] FCA 1032 at [52]. However, it has not been shown that compliance with that obligation in respect of the s 363 issue or the state of mind issue would have impinged upon the penalty privilege enjoyed by any one of the individual respondents in the present case.

93    As I have said, CFMEU made a threat to bring an application to strike out the statement of claim, but no such application was brought. I infer from that circumstance that CFMEU made a choice to delay notifying the Commissioner of its position in connection with omissions that it now asserts renders the Commissioner’s pleaded claim against it fatally flawed, at least until the date that its written closing submissions were filed. That circumstance, together with r 16.08 of the Rules, justifies the Court giving less weight to the lateness of the application to make amendments affecting CFMEU than it would otherwise give, notwithstanding that the omissions in the pleading are also of a kind that the Commissioner was capable of identifying without CFMEU’s input.

94    I do not consider CFMEU would suffer any forensic disadvantage by the making of the amendment from the point of view of the presentation of its evidentiary case. Again, it is not established that CFMEU would have presented its case on the evidence any differently had the amendments been made at an earlier time.

95    My reasons in relation to the operation and relevance of r 16.08 are confined to the Commissioner’s application to make the s 363 amendments and the state of mind amendment. Ultimately, I have not considered it necessary to consider the application of the rule in relation to the other respondents and the other amendments.

The Gava amendment

96    I have accepted Mr Short’s explanation that this amendment is made for the purpose of ensuring that the pleaded facts accord with the Commissioner’s assessment of the evidence as it emerged at trial.

97    It is said that no finding of contravention of s 348 of the FW Act is sought against Mr Gava in relation to the words pleaded in [16.1] of the proposed 2nd SOC. Rather, the Commissioner will submit that the evidence supports a finding either that:

(1)    Mr O’Connor said the words; or

(2)    Mr O’Connor or Mr Gava said the words (even though no finding can be made as to which of them did so).

98    The words “and/or Gava” are subjectively intended to capture only those two possible outcomes. In either event, it is submitted, the words may be attributed to CFMEU under s 793 or, if other amendments be allowed, s 363 of the FW Act.

99    The second of the possible findings (as the Commissioner advances them) is one that might affect Mr Gava’s reputational interests. The finding is also one that might be conceivably considered relevant by the Fair Work Commission in the exercise of its powers concerning Mr Gava’s entitlement to hold a permit under the FW Act: see s 510 and s 513(1)(g) of the FW Act. However, a limited amendment inviting the alternative finding would not prejudice Mr Gava in a forensic sense or infringe or undermine the penalty privilege in relation to him. In all of the circumstances I would allow a plea that invited an alternative finding to the effect stated at [97(2)] above.

100    I am not, however, satisfied that the objective meaning of the proposed amendment is as confined as Counsel for the Commissioner submits. In addition to the two alternative findings to which Counsel referred, the outcomes invited by the device “and/or” also include a finding that both of the union officials said the words, or alternatively a finding that Mr Gava (and not Mr O’Connor) said the words. In addition, [32] of the pleading in its current form alleges a contravention of s 348 of the FW Act by Mr Gava by cross-reference to the whole of [16] with the consequence that the amended case would include an allegation (albeit an alternative one) that Mr Gava contravened the FW Act by saying the words pleaded at [16.1]. I do not consider it appropriate that I assess the evidence and make findings (if any) of contravention by reference to pleadings that are wider in their meaning than the Commissioner subjectively intends them to be.

101    The amendment in its proposed form should not be allowed.

The “organise” amendment

102    In light of all that I have said about the course of the trial so far, I do not consider this amendment to work any substantive injustice. The content of the words alleged to have been said and the conduct alleged to have been engaged in have not changed. The amendment does nothing more than to allege that the facts as pleaded fall within the statutory meaning of the phrase “threaten to organise” industrial action. It has not been shown that the respondents presented their case in a way that would now work a forensic disadvantage or that would constitute an impingement on the penalty privilege or that would otherwise work a substantive injustice.

The state of mind amendment

103    CFMEU has not demonstrated how this amendment would work a substantive injustice in the relevant sense. Once again, it is to be accepted that the amendment, if made, might deprive CFMEU of success in the proceedings that it might otherwise enjoy. However, CFMEU would have been deprived of that success had the amendment been made at the appropriate time. It has not been shown that CFMEU would be worse off by the amendment in terms of the presentation of its evidentiary case. Nor has it been shown that the amendment would otherwise cause inconvenience or expense, except to the extent that the respondents have prepared written closing submissions in which the omission in the pleadings is relied upon in support of a submission that the Commissioner’s case against CFMEU cannot be maintained in fact or law.

THE OVERARCHING PURPOSE

104    I have already determined the Gava amendment should not be allowed. What follows is my consideration of the remainder of the application.

105    Although I have not identified any substantive injustice that might be suffered by the respondents if the amendments are allowed, the respondents should nonetheless be assumed to suffer inconvenience and expense in that event. At the very least, the respondents would need to obtain advice and give instructions as to whether or not they would seek to re-open their case at trial. Whether or not they re-open their case at trial, it will be necessary for all parties to revise their written closing submissions and the resumption of the trial will be delayed for that reason alone. I take into account the comprehensiveness of the respondents’ written submissions and the costs that will be incurred in revising them. Beyond that, however, it is difficult to make any meaningful assessment of the costs, delay and inconvenience that allowing the amendments may cause. It may be that no respondent would elect to re-open and in that event the trial on questions of liability may resume for closing submissions at the earliest opportunity. I am not prepared to exercise my discretion on an assumption that the respondents would necessarily re-open their case. I cannot therefore make any meaningful assessment as to the delay and expense that would be occasioned in that event.

106    I take into account the delay and disruption to the proceedings as a relevant consideration that transcends the interest of the parties to the action. As French CJ said in Aon Risk Services at [24]:

… The discretion is exercised in the context of the common law adversarial system as qualified by changing practice. But that is not a system which today permits disregard of a undue delay. Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon the proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is a waste of public resources and inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials, either because of the non-compliance with court timetables or, as in this case, because of the late and deliberate tactical change by one party in the direction of its conduct of the litigation.

107    Although the inconvenience and expense associated with the amendments may be ameliorated by an order for costs, such a remedy may be inadequate if what is sought to be done by the Commissioner is to effectively commence the litigation afresh: Aon Risk Services at [99]. That is not what the Commissioner seeks to do.

108    The achievement of justice in this case includes the public interest in ensuring that the proceedings effectively quell the controversy between the parties: Cement Australia at [25]. The true controversy in the present case is not merely whether the respondents engaged in the conduct pleaded against them, but whether any such conduct would constitute a contravention of the FW Act. In that regard, I place significant weight on the nature of the amendments and the minimal variation sought to be made to the pleaded words and conduct upon which the Commissioner relies. The circumstance that the Commissioner does not seek to re-open his case on the evidence underscores that the amendments are minimal in a factual sense, but nonetheless important insofar as they concern the application of the terms of the statute to words and conduct that have been alleged from the outset.

109    It is to the benefit of the community that the whole of the dispute be quelled in that sense, notwithstanding that the late amendments are directed at correcting omissions that could have and should have been identified by the Commissioner at an earlier time. I take into account the circumstance that the respondents might, by reason of the amendments, be deprived of success in the proceedings they might otherwise have had if the omissions in the pleading are not rectified. However, I give that consideration little weight in connection with CFMEU. I consider CFMEU to have made a choice to wait until closing submission before raising arguments that might render the Commissioner’s pleaded case not maintainable on any view of the pleaded facts or law in respect of the state of mind issue and the s 363 issue. If it had expectations that it would succeed in the action by reference to the omissions in the pleading, the sudden deflation of those expectations at such a late stage in the litigation is due in part to its own decisions.

110    With the exception of the Gava amendment, leave to make the amendments contained in the proposed 2nd SOC will be granted on the condition that the respondents have leave to re-open their case on the evidence, referable to the amendments, if they are so advised.

THE ORIGINATING APPLICATION

111    Leave will be granted to make the amendments set out in the proposed 2nd OA forming Exhibit A1. The amendments to that document reflect the amendments contained in the proposed 2nd SOC. I accept that the terms of the declaratory relief do not contain the detailed facts that might ultimately be contained in declarations of contravention, if any, that might be made in the proceedings. However, it is not unusual that the precise terms of declaratory relief in proceedings of this nature be subject to further submissions in the event that findings of contravention are made on the decided facts.

Associate:

Dated:    12 May 2017

SCHEDULE OF PARTIES