FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 998

File number(s):

NSD 574 of 2019

Judge(s):

RARES J

Date of judgment:

14 June 2019

Catchwords:

PRACTICE AND PROCEDUREwhere individual respondents claimed privilege against self-exposure to penalty – where union pleaded it did not know and could not admit allegations in statement of claim because individual respondents who were its officers or members claimed such privilege – where union likely to have other information available to it to answer allegations – whether defence embarrassing and liable to be struck out

PRACTICE AND PROCEDUREapplication to allow a cross-claim to be filed – where primary claim brought by Australian Building and Construction Commissioner alleging contraventions of Building Construction Industry (Improving Productivity) Act 2016 (Cth) by union and its officers or members engaging in industrial activity – where union seeks cross-claim be filed against employer subject of industrial activity, its director and another officer – whether relief in cross-claim related or sufficiently related to subject of the principal proceedings – where witnesses in both claims likely to claim privilege against self-exposure to penalty – whether case management issues would arise if cross-claim heard together with primary claim

Legislation:

Building Construction Industry (Improving Productivity) Act 2016 (Cth)

Fair Work Act 2009 (Cth) ss 50, 185

Federal Court of Australia Act 1976 (Cth) ss 22, 37M

Federal Court Rules 1979 O 5 r 1

Federal Court Rules 2011 rr 15.01, 15.04, 16.07, 16.32

Cases cited:

Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 652

Lend Lease Project Management & Construction (Australia) Pty Limited v Construction, Forestry, Mining and Energy Union (No 3) [2011] FCA 912

Martech International Pty Limited v Energy World Corporation Limited [2004] FCA 1470

The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 531

Date of hearing:

14 June 2019

Registry:

New South Wales

Division:

Fair Work Division

National Practice Area:

Employment & Industrial Relations

Category:

Catchwords

Number of paragraphs:

23

Counsel for the Applicant:

Mr M White SC

Solicitor for the Applicant:

Herbert Smith Freehills

Counsel for the Respondents:

Mr P Boncardo

Solicitor for the Respondents:

Taylor & Scott Lawyers

Solicitor for the prospective Cross-Respondents:

Pryor Tzannes & Wallis

ORDERS

NSD 574 of 2019

BETWEEN:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

AND:

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

First Respondent

ROBERT KERA

Second Respondent

MICHAEL GREENFIELD (and others named in the Schedule)

Third Respondent

JUDGE:

RARES J

DATE OF ORDER:

14 JUNE 2019

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the first respondent on 7 June 2019 be dismissed.

2.    The defence filed by the first respondent be struck out.

3.    Leave be granted to the first respondent to file an amended defence that complies with the Rules on or before 21 June 2019.

4.    The first respondent pay the applicants’ and the proposed cross-respondent’s costs of the interlocutory application.

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

REASONS FOR JUDGMENT

(Revised from the transcript)

RARES J:

1    These proceedings commenced when the Australian Building and Construction Commissioner claimed that the Construction, Forestry, Maritime, Mining And Energy Union and 12 individuals who were officers or members of the Union had contravened provisions of the Building Construction Industry (Improving Productivity) Act 2016 (Cth) (the Productivity Act) in October 2018 and on 25, 30, 31 January and 1 February 2019. The alleged contraventions concerned industrial activity in that period in respect of Griffiths Cranes Pty Limited, trading as Botany Cranes. The Commissioner seeks declaratory relief and pecuniary penalties against each respondent.

2    When the matter came before me for the first case management hearing on 17 May 2019, the Union indicated that it proposed to file a cross-claim, once the Commissioner amended the originating application and statement of claim to correct some minor errors later that same day. I ordered that if the Union, or any other respondent, wanted to file a cross-claim, it or he or she should seek leave to do so by interlocutory application to be filed and served by 7 June 2019 and that I would hear that application today.

3    In conformity with the directions, the Union filed an interlocutory application seeking leave to file a cross-claim and statement of cross-claim that alleged two substantive contraventions by Botany Cranes on 24 January 2019, namely the alleged unlawful dismissal of the seventh respondent, Howard Byrnes, who was a Union official, and an alleged lockout of some or all of its staff. In the circumstances, the provisions of rr 16.32 and 15.04(a) of the Federal Court Rules 2011 relating to the 28-day time period within which the Union can file and serve a cross-claim (namely the same time period in which it could file its defence) did not operate to its prejudice.

4    The cross-claim alleged that, first, on 24 January 2019, Botany Cranes unlawfully dismissed Mr Byrnes, in contravention of provisions of an enterprise bargaining agreement, thereby contravening s 50 of the Fair Work Act 2009 (Cth); and, secondly, that Botany Cranes locked out all or some of its work force on 24 January 2019, which the Union alleged to be unlawful industrial action in contravention of the Productivity Act. The Union also alleged that two of Botany Cranes’ staff, being its managing director, Damien Griffiths, and one of its senior officers, Rhonda Hodges, were accessorily liable in respect of the company’s conduct.

5    The defences of the Union and the 12 individual respondents all rely on the individuals’ privilege against self-exposure to penalties to avoid, as was the individuals’ right, giving any substantive answers to almost all of the allegations against them. However, the Union’s defence is replete with assertions that it did not know and could not admit allegations in the amended statement of claim because the individual respondents had claimed the privilege against self-exposure to a penalty.

6    For example, pars 1416 of the amended statement of claim pleaded that, in June 2018, the Union provided a proposed draft new enterprise bargaining agreement (EBA) to Botany Cranes (par 14) that Mr Griffiths considered would, if accepted, threaten Botany Cranes’ viability (par 15) following which, in August 2018, Botany Cranes provided the Union with a proposed draft EBA (par 16).

7    The Union pleaded that it did not know and could not admit par 15 of the statement of claim, and that plea is unexceptional. However, it pleaded as to each of pars 14 and 16 that it “does not know and therefore cannot admit [par 14 and par 16] as the Second to Thirteenth Respondents have claimed the privilege against self-exposure to a penalty”. The Union, being a body corporate, has no such privilege: The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 559 [31] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375 at 380 [2] per French CJ, Kiefel, Bell, Gageler and Keane JJ. As Mansfield J held in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 652 at [6], the Union is not entitled to avoid pleading as to the facts by relying on the privilege against self-exposure to a penalty of its officials or members, who are individuals.

8    The Union is highly unlikely to have no records or other information available to it whatsoever that would enable it to plead to many of the substantive allegations which it has avoided in the current version of its defence. Given that the Union admitted, in par 26 of its defence, the allegation that on 6 September 2018 it had filed an application, under s 185 of the Fair Work Act, in the Fair Work Commission for approval of its draft EBA, it is inconceivable that the Union did not have information or records available to enable it to plead specifically, as r 16.07(1) requires, a non-evasive admission or denial of the facts alleged in pars 14 and 16 of the statement of claim: cf: Boral 258 CLR at 388 [38].

9    In my opinion, the Union’s assertion of an inability to plead to the statement of claim in the way it has is embarrassing. Because, substantively, almost all of the defence of the Union has similarly evasive pleas, it should be struck out.

The Union’s application to file a cross-claim

10    The question for decision is whether I should allow the cross-claim to be filed in this proceeding. I required the Union to justify it doing so, rather than allowing it to take such course as it might have otherwise wished to do under r 15.01(b) which provides that:

A respondent may make a cross-claim in a proceeding:

(b) against any other respondent or personfor any relief, including for contribution or indemnity, that is related to the subject of the proceeding. (emphasis added)

11    The Union argued that the relief that it sought in the cross-claim is related to the subject of the proceeding. It says that this was because, although it admitted and is common ground that Botany Cranes dismissed Mr Byrnes on 24 January 2019, the circumstances in which that dismissal occurred potentially traverse in some respects the subject of the principal proceedings. The Union submitted that the relief sought in the cross-claim is related to the subject of the proceeding because the Commissioner’s case suggested that Mr Byrnes’ dismissal provoked or motivated the Union, its officials and members, who are the individual respondents, to engage in the conduct complained of by picketing on 25, 30, 31 January and 1 February 2019.

12    The Union contended that Mr Griffiths, who, on the current pleadings, was instrumental in the dismissal, will be giving evidence for the Commissioner, as will Ms Hodges. The Union argued that there will be some factual overlap between its cross-claim and the Commissioner’s case concerning what occurred on 24 January 2019 in relation to the dismissal and alleged lockout. The Union asserted that it is likely that it will be necessary to make findings about what occurred on 24 January 2019 as part of the factual substratum of the Commissioner’s case, notwithstanding that the Union admitted that Mr Byrnes had been dismissed summarily, even though there was no allegation in the statement of claim or defence about the lawfulness or otherwise of that dismissal. It contended that the main protagonists in the proceedings, Mr Griffiths and Mr Byrnes, will be the subject of evidence, in any event, in the Commissioner’s case.

13    The Union said that to the extent that case management issues might arise were I to grant leave to file its proposed cross-claim, those issues could be dealt with in the same way as Collier J foreshadowed in Lend Lease Project Management & Construction (Australia) Pty Ltd v Construction, Forestry, Mining and Energy Union (No 3) [2011] FCA 912 at [38]-[39]. There, after her Honour allowed the joinder of what appeared to be a separate but related claim, she separated the hearing of the cross-claim from that of the principal claims by the applicant in that case.

14    I granted Mr Macaulay leave to appear today on behalf of Botany Cranes and Mr Griffiths. He has not been able to obtain instructions from Ms Hodges because she is, at this time, indisposed. Botany Cranes, Mr Griffiths and the Commissioner all oppose the grant of leave.

Consideration

15    All the parties accepted that the considerations discussed by French J in Martech International Pty Ltd v Energy World Corporation Limited [2004] FCA 1470 at [28]-[30] are informative as to the assessment of whether a relationship can be found to exist between the subject of the proceeding and any relief sought in a cross-claim, albeit that his Honour was considering the analogous provision (O 5 r 1(2)) and s 22 of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act). French J said (at [29]-[30]):

The objective of the requirement that a cross-claim involving a non-party cross-respondent be related to, or connected with, the subject matter of the proceedings is to allow, so far as possible, all aspects of a matter or controversy before the Court to be resolved.  The rule does not authorise the joinder in one proceeding of another where the only common factor between them is that the respondent in the first proceeding is the cross-claimant in the second.  The words of the rule do not authorise such a cross-claim nor does its policy.  The management of cases before the Court would become difficult, if not impossible, if parties could tack on claims against other parties raising different factual and legal issues.  The question of what amounts to a sufficient relationship to or connection with the principal proceedings for the purposes of O 5 r 1(2) involves an evaluative judgment of a practical nature having regard to the proper management of the case and the policy of the rule and of s 22 of the Federal Court Act.  Where a cross-claim raises a dispute factually discrete and distinct in time from the matter which is the subject of the principal proceedings, and there is a third party involved, the mere existence of the nominal connection between the common parties and even perhaps some degree of factual similarity in the disputes between them, may not be sufficient to characterise the relief claimed in the cross-claim as ‘related to or connected with’ the subject matter of the principal proceeding.

It must be acknowledged of course that the Rules appear to allow for a cross-claim on a discrete and unconnected issue to be raised by a respondent against an applicant where no third party is involved.  But even in that case, the Court has a discretion to direct that the cross-claim be tried separately.  The exercise of that discretion is a matter of case management informed by essentially practical judgments. (emphasis added)

16    Subsequently, the Parliament enacted s 37M of the Federal Court Act to create the overarching objective of the civil practice and procedure provisions.

17    The Commissioner’s proceeding seeks relief in his capacity as a regulator appointed under statute to enforce the law. The Union has no right to claim privilege against self-exposure to a penalty, unlike each of the individuals whom the Commissioner has sued. That means that it is likely that in the management of this proceeding and the hearing of the substantive case, it will only be when and if each of the individual respondents decides to give evidence that he or she will waive that privilege. That decision may not occur, in the ordinary course, until after the Commissioner has closed his case.

18    On the other hand, the issues which the cross-claim seeks to raise will involve three new parties to be joined in the proceeding, namely Botany Cranes, Mr Griffiths and Ms Hodges, but will not involve the Commissioner. The Union is a private person, not acting in the public interest, but exercising its private rights to enforce the law. It seeks to file the cross-claim to raise new issues involving new parties that are sufficiently distinct from those the subject of the proceeding that I do not consider sufficiently relate to that proceeding.

19    The subject of the proceeding is whether one or more of the 13 respondents contravened the Productivity Act and, if they did, what, if any, declarations should be made as to the contravention and what penalty should be imposed. In addition, the Commissioner seeks to recover a limited amount of compensation for Botany Cranes because it allegedly sustained loss as a result only of the industrial activity complained of that occurred on 25 January 2019.

20    Although Mr Griffiths and, probably, Ms Hodges will be material witnesses in relation to the proof of the Commissioner’s claim, I am not satisfied that there is a sufficient connection between their evidence in support of the issues which the Union seeks to raise in the proposed cross-claim and the principal proceeding. There is no sufficient relationship between the subject of the proceeding and the relief that the Union seeks against Botany Cranes, Mr Griffiths and Ms Hodges, being the making of declarations and the imposition of pecuniary penalties for alleged contraventions of the Fair Work Act and the Productivity Act based on Mr Byrnes’ dismissal and the alleged lockout.

21    The Union argued that Mr Griffiths and or Ms Hodges may be asked to give evidence in the Commissioner’s case about what occurred on 24 January 2019. So far as their evidence might be material to the case the Union seeks to bring in the cross-claim, they would be entitled to exercise their right to claim privilege against self-exposure to a penalty, being the same right as is asserted by the individual respondents. If the cross-claim were on foot, such a claim of privilege could make very difficult the management of both the Commissioner’s claim and the cross-claim at the same time.

22    I am of opinion that there is no sufficient nexus between the relief sought in the cross-claim and the subject of the Commissioner’s proceeding, involving, on the one hand, the allegation that Botany Cranes was the victim of the respondents’ conduct of which the Commissioner complains and, on the other, the alleged activities of Mr Griffiths and Ms Hodges as two of the principal witnesses whose evidence the Commissioner would seek to use to establish his claim. The Union’s case is based on allegations that, on 24 January 2019, one or more of Botany Cranes, Mr Griffiths or Ms Hodges contravened either the Fair Work Act or the Productivity Act. The relief that the Union seeks in the cross-claim is not related or sufficiently related to the subject of the principal proceedings.

Conclusion

23    For these reasons, in my opinion, the interlocutory application should be dismissed. The Union should pay the Commissioner’s costs and Botany Cranes’ and Mr Griffiths’ costs.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:

Dated:    14 June 2019

SCHEDULE OF PARTIES

NSD 574 of 2019

Respondents

Fourth Respondent:

DARREN GREENFIELD

Fifth Respondent:

RITA MALLIA

Sixth Respondent:

REBEL HANLON

Seventh Respondent:

HOWARD BYRNES

Eighth Respondent:

SAM RUSSELL-ANDERSON

Ninth Respondent:

JAKE BULLEY

Tenth Respondent:

MARTIN ASTRUP

Eleventh Respondent:

ALFIO GUARRERA

Twelfth Respondent:

PATRICK MILLER

Thirteenth Respondent:

WILLIAM MCIVOR