Federal Court of Australia

Braun v St Vincent’s Private Hospital Northside Ltd [2023] FCA 166

ORDERS

THE COURT ORDERS THAT:

1.    The applicant have leave to amend the Originating Application and Further Amended Statement of Claim to allege contraventions of ss 285 and 287 of the Industrial Relations Act 2016 (Qld) (the IR Act), ss 15 and 129 of the Anti-Discrimination Act 1991 (Qld) (the AD Act) and s 40 of the Public Interest Disclosure Act 2010 (Qld), and to make claims for relief under s 314 of the IR Act and s 209 of the AD Act.

2.    The costs of the applicant’s application for leave to amend are reserved.

3.    The amended application and pleading must be filed and served within 14 days.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    The applicant has commenced proceedings claiming relief for alleged contraventions of the general protections provisions of the Fair Work Act 2009 (Cth) (the FW Act) and the whistleblower provisions of the Corporations Act 2001 (Cth), and for conspiracy and breach of contract.

2    In the interlocutory application presently before the Court, the applicant seeks leave to amend his Originating Application and Further Amended Statement of Claim. The amendments would add claims for relief under State legislation, namely the Anti-Discrimination Act 1991 (Qld) (the AD Act), the Public Interest Disclosure Act 2010 (Qld) (the PID Act) and the Industrial Relations Act 2016 (Qld) (the IR Act).

3    The respondents oppose the interlocutory application, contending principally that the proposed amendments would be futile because the Federal Court of Australia lacks jurisdiction to determine the proposed State-based claims.

4    I will describe the proceedings and the nature of the proposed amendments before considering the parties’ submissions.

Background

5    The respondents to the principal proceeding are:

    First Respondent: St Vincent’s Private Hospital Northside Ltd (St Vincent’s)

    Second Respondent: Robert Finch

    Third Respondent: George Hopkins

    Fourth Respondent: Nicholas O’Rourke

    Fifth Respondent: Metro North Hospital and Health Service (Metro North)

    Sixth Respondent: Michael Hatzifotis

6    The applicant’s current pleading is a Further Amended Statement of Claim consisting of some 80 pages. I will outline its allegations only to the extent necessary for the purposes of determining the interlocutory application.

7    Drs Finch, Hopkins, O’Rourke and Hatzifotis (collectively, the Individual Respondents) and Dr Braun are upper gastrointestinal surgeons. Between 2016 and 2019 they all worked at Holy Spirit Northside Hospital, owned by the first respondent.

8    The claims arise from conflicts between Dr Braun and the Individual Respondents. Drs Finch and O’Rourke made complaints about Dr Braun to St Vincent’s and Metro North, including allegations of incompetence and sexual misconduct. Dr Braun made complaints about Drs Finch, Hopkins and O’Rourke, including allegations of incompetence and bullying.

9    In 2019, Metro North suspended Dr Braun from working at the hospitals it operates. The suspension was declared to be of no force and effect by the Supreme Court of Queensland. However, Dr Braun has been directed by Metro North not to return to the workplace, remaining on his base rate of pay while excluded.

10    The further Amended Statement of Claim, alleges that:

    The respondents contravened s 340 of the FW Act by taking adverse action against Dr Braun;

    The respondents contravened s 343 of the FW Act by taking action against Dr Braun with intent to coerce him into not exercising workplace rights;

    St Vincent’s breached Dr Braun’s contract of employment by, inter alia, failing to protect him or properly investigate his complaints;

    Metro North breached Dr Braun’s contract of employment by, inter alia, failing to protect him, and acting capriciously and for an improper purpose;

    Metro North breached s 1317AD of the Corporations Act by suspending Dr Braun; and

    The Individual Respondents committed the tort of conspiracy against Dr Braun.

11    The applicant’s Originating Application claims declarations, pecuniary penalties, damages or compensation and other relief.

12    The applicant’s proposed Amended Originating Application would add claims for declarations, pecuniary penalties, compensation or damages and other relief for contraventions of Queensland statutes, namely the AD Act, the PID Act and the IR Act.

13    The applicant’s proposed Further Amended Statement of Claim has somehow grown to about 118 pages in length. It is unnecessary to provide any detailed explanation of the allegations. In summary, the proposed amendments would add the following allegations:

    The respondents contravened s 285 of the IR Act by taking adverse action against Dr Braun.

    The respondents contravened s 287 of the IR Act by threatening to take action against Dr Braun to coerce him not to exercise workplace rights.

    Dr Finch and Metro North contravened s 15 of the AD Act by unlawfully discriminating against Dr Braun on the basis of his race.

    Dr Finch and Metro North contravened s 129 of the AD Act by victimising Dr Braun.

    Dr Finch contravened s 40 of the PID Act by causing Dr Braun detriment because he made disclosures, which were protected.

14    The alleged contraventions of Queensland laws rely upon substantially the same conduct as the existing allegations of breaches of Commonwealth laws.

The submissions

15    The principal issue concerns whether the Federal Court has jurisdiction and power to determine Dr Braun’s claims based on contraventions of Queensland laws, namely the IR Act, the AD Act and the PID Act.

16    Dr Braun submits that as the claimed contraventions of Commonwealth laws and Queensland laws arise from the same substratum of facts, they are part of a single “matter”, and that the Federal Court has jurisdiction under s 39B(1A)(c) of the Judiciary Act 1903 (Cth).

17    The respondents concede that there is a common substratum of facts which underlies all of the applicant’s claims, State and Federal, but submits that the State laws are, under s 79 of the Judiciary Act, not “applicable”. They submit those statutes vest jurisdiction and power to decide claims for contravention of those statutes in, and only in, the Queensland Industrial Relations Commission (QIRC). The respondents argue that, accordingly, the Federal Court does not have jurisdiction to deal with the applicant’s claims under the Queensland laws, and that leave to amend should be refused because the amendments would be futile.

18    The Individual Respondents also submit that the claims of contravention of s 285 of the IR Act cannot succeed against them because, under s 282, adverse action can only be taken against an employee by their employer, and the Individual Respondents are not the employer of the applicant. They submit that in respect of an alleged contravention of s 285, a corporation can only be liable, relevantly, through vicarious liability, which can only be established in a civil penalty proceeding by demonstrating actual authority. They submit that the applicant has not alleged material facts capable of establishing that the alleged conduct of the Individual Respondents was within the scope of their actual authority.

19    The Individual Respondents also argue that leave to amend should be refused because no explanation has been provided by Dr Braun for his delay in making his application for leave to amend.

20    I have provided only a brief synopsis of the parties’ submissions at this stage and will discuss the submissions in greater detail in the course of these reasons.

Consideration

21    Dr Braun seeks leave under rr 8.21 and 16.53 of the Federal Court Rules 2011 (Cth) to amend his Originating Application and his Further Amended Statement of Claim. The respondents’ principal contention is that the proposed amendments would be futile because they would not raise any reasonable cause of action, or would be liable to be struck out.

22    The applicant’s extant application and pleading seek relief in respect of alleged contraventions of ss 340 and 343 of the FW Act and s 1317AD of the Corporations Act, breach of contract and conspiracy. It is not in dispute that the Federal Court has jurisdiction under s 39B(1A)(c) of the Judiciary Act to hear and determine those claims.

23    The applicant’s proposed amendments would add claims that the same respondents contravened Queensland laws, namely ss 285 and 287 of the IR Act, ss 15 and 129 of the AD Act and s 40 of the PID Act, and seek orders under s 314 of the IR Act and s 209 of the AD Act. I will refer to the IR Act, the AD Act and the PID Act collectively as “the State Acts”.

24    The respondents’ submissions contend variously that the proposed amendments are futile because the Federal Court “does not have jurisdiction” in respect of the claims under the State laws and because the State laws “are not applicable to the Federal Court”. Their submissions rely upon the proposition that s 450 of the IR Act vests jurisdiction in respect of the alleged contraventions of the State laws exclusively in the QIRC.

25    In ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559, the plurality (Gleeson CJ and Gaudron and Gummow JJ) at [3] described federal jurisdiction as, “the authority to adjudicate derived from the Commonwealth constitution and laws”. The Commonwealth law relied on in this case is s 39B(1A) of the Judiciary Act. That section provides, relevantly:

The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:

…

(c)    arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.

26    It is well established that a “matter” in which that jurisdiction is conferred under s 39B(1A) of the Judiciary Act may include claims arising under common law and statute law of a State.

27    Section 79(1) of the Judiciary Act provides:

The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

(Emphasis added.)

28    In Rizeq v Western Australia (2017) 262 CLR 1, the plurality explained the purpose of s 79(1) at [63]:

The incapacity of a State Parliament to enact a law which governs the exercise of federal jurisdiction by a court, whether it be a federal court or a State court, explains the necessity for s 79 of the Judiciary Act and is the key to understanding the nature and extent of its operation. Section 79 is a law, enacted under s 51(xxxix) of the Constitution, which serves to ensure that the exercise of federal jurisdiction is effective. The section fills a gap in the law governing the actual exercise of federal jurisdiction which exists by reason of the absence of State legislative power. The section fills that gap by picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. The section has no broader operation.

29    In this case, it is not in dispute that any federal jurisdiction exercised by the Federal Court will be exercised “in” Queensland, and that the laws which fall to be considered for the purposes of s 79(1) of the Judiciary Act are the laws of Queensland. The respondents have not suggested that the Constitution or the laws of the Commonwealth have “otherwise provided”.

30    The respondents rely upon the express limitation of s 79(1) to “all cases to which [the State laws] are applicable”. They submit that as the QIRC has exclusive jurisdiction under s 450 of the IR Act over the alleged contraventions of the State Acts, those Acts are not “applicable” and the Federal Court lacks jurisdiction. That submission makes it necessary to consider the relevant provisions of the State Acts.

31    Dr Braun proposes to claim relief for alleged contraventions of ss 285 and 287 of the IR Act, (within the general protections provisions of Chapter 8, Part 1). Section 285(1) prohibits the taking of adverse action against another person because the person, relevantly, has exercised or proposes to exercise a workplace right. Section 287(1) prohibits, relevantly, the taking of any action against another person with intent to coerce that person to exercise or not exercise a workplace right.

32    Section 309 of the IR Act provides, relevantly, that a person affected by a contravention of Chapter 8, Part 1, “may apply to the commission for the commission to deal with the dispute”. The expression “commission” is defined in s 429, relevantly, as the QIRC. Section 429 also establishes the QIRC as a court of record in Queensland.

33    Section 313 of the IR Act provides, relevantly, that the QIRC may hear and decide the application by making an order under s 314 or by dismissing the application. The orders that may be made under s 314 include orders for reinstatement, payment of compensation and injunctions. Dr Braun’s proposed amendments would ask the Federal Court to determine that the respondents contravened ss 285 and 287 of the IR Act and to make consequential orders.

34    Section 450 of the IR Act, which is critical to the respondents’ case, provides:

The original and appellate jurisdiction conferred on the commission by this Act or another Act is exclusive of the jurisdiction of the Supreme Court or another court or tribunal, unless otherwise prescribed under this Act or the other Act.

35    Dr Braun’s proposed amendments would also seek relief for alleged contraventions of ss 15 and 129 of the AD Act. Section 15 prohibits discrimination by, inter alia, treating a worker unfavourably in any way in connection with work. Section 129 prohibits victimisation.

36    The AD Act allows a complaint to be made to the Human Rights Commissioner, who may investigate the complaint and try to resolve it: ss 134-138, 154A and 158. If the matter is unable to be resolved, the complainant may require the matter to be referred, if it is a work-related matter, to the QIRC: ss 164A-167. The expression “tribunal” is defined in the Dictionary to the AD Act to mean, in relation to a work-related matter, the “industrial relations commission”. Although that expression is not defined, it is apparent from s 276(3) of the AD Act that it refers to the QIRC.

37    Section 174B of the AD Act confers upon the QIRC functions including hearing and deciding complaints referred to the QIRC. Section 174C provides that if the AD Act confers jurisdiction on the QIRC in relation to a complaint or other matter, the QIRC may exercise the powers conferred on it under the AD Act or the IR Act. Section 209(1) of the AD Act allows the QIRC to make orders including declarations, orders for payment of compensation and injunctions. The applicant proposes to seek orders under s 209(1) of the AD Act and s 314 of the IR Act for contraventions of ss 15 and 129 of the AD Act.

38    Section 40(1) of the PID Act provides, relevantly, that a person must not cause, or attempt or conspire to cause, detriment to another person because the other person has made a public interest disclosure. Section 48(1) of the PID Act provides that an application for an injunction about a reprisal may be made to the QIRC if certain conditions are satisfied. The applicant proposes to seek orders under s 314 of the IR Act for the contravention of s 40 of the PID Act.

39    It may be seen that the QIRC is conferred with jurisdiction over claims of contravention of ss 285 and 287 of the IR Act, ss 15 and 139 AD Act and s 40 of the PID Act. Section 450 of the IR Act applies in respect of each those claims and, in its terms, provides that the jurisdiction conferred on the QIRC is, “exclusive of the jurisdiction of the Supreme Court or another court or tribunal”. The respondents rely upon observations made by Kirby J in Edensor concerning circumstances where the power conferred on a State Court or Tribunal may result in laws being, within s 79 of the Judiciary Act, not “applicable’ to federal proceedings. The respondents submit that as s 450 excludes “another court” from exercising jurisdiction in respect of alleged contraventions of the State Acts, those Acts are not “applicable” to proceedings before the Federal Court and the Federal Court lacks jurisdiction.

40    Edensor was concerned with whether the Federal Court had jurisdiction to hear and determine a proceeding brought by ASIC alleging contravention of s 615 of the Corporations Law (Victoria) and the power to make an order that a company pay a sum of money disgorging the benefit it had received as a result of its contravention. The respondents ultimately conceded that the Federal Court had jurisdiction in respect of the controversy arising under s 615, but contended that the Federal Court did not have power to make the disgorging order under s 737 or s 739. Those sections conferred power upon the “Court” to make certain orders, that expression being defined in s 58AA(1) as follows:

‘Court’ means any of the following courts when exercising the jurisdiction of this jurisdiction:

(a)    the Federal Court;

(b)    the Supreme Court of this or any other jurisdiction.

41    Edensor was decided after Re Wakim; Ex parte McNally (1999) 198 CLR 511, which held that the purported conferral of State jurisdiction on the Federal Court is invalid and ineffective. Therefore, it was necessary to treat the reference in s 58AA of the Corporations Law (Victoria) to “the Federal Court” as invalid and ineffective. However, the appellant argued that ss 58AA, 737 and 739 of that Act were “picked up” under s 79 of the Judiciary Act and were required to be applied by the Federal Court exercising federal jurisdiction.

42    Six members of the High Court held that the Federal Court had jurisdiction under s 39B(1A)(a) of the Judiciary Act (that is, where the Commonwealth seeks an injunction or declaration) in respect of the controversy under s 614 of the Corporations Law (Victoria) and that s 79 operated to “pick up” ss 737 and 739 and give the Federal Court power to make the disgorging order. Justice Kirby agreed that the Federal Court had jurisdiction but dissented on the issue of power.

43    The respondents in the present case rely upon the following passages from the judgment of Kirby J at [201]:

A more difficult problem is presented when, by the express provisions of the State or Territory law, or upon the proper construction of that law, it is limited in its application to the courts, or a particular court, of the State or Territory concerned. Because s 79 adopts the law of the State or Territory, made substantively for that jurisdiction and extends its operation into federal jurisdiction, some degree of adaptation is obviously contemplated. But a point will be reached, because of the language of the legislation in question, the nature of the powers conferred on the particular court, or the specialised character of that court, where it will be concluded that the State or Territory law in question is not “applicable”.

…Thus s 79 does not authorise a federal court to do what a State law, in terms, prevents State courts from doing or what a State law, in terms, requires only to be done by a particular, identified State court. In all such cases, the State or Territory law concerned is treated as not “applicable”.

44    Justice Kirby at [202]-[205] considered that, given the “high particularity” with which “Court” was defined, interpreting s 58AA(1) such that it applied to the Federal Court would involve redrawing the provision in a manner beyond the relatively modest adaptation contemplated by s 79. His Honour held that the Federal Court would not, within s 58AA(1), be “exercising the jurisdiction of this jurisdiction”, that is of Victoria, but exercising federal jurisdiction, so that there was no applicable State law to be picked up at all. His Honour considered that the Victorian Parliament had not contemplated (and indeed explicitly denied) access to the Federal Court exercising federal jurisdiction. His Honour held that while the Federal Court had jurisdiction over the parties and the matter, it lacked power to make the disgorging order.

45    It is important to observe that the passages of Kirby J’s judgment relied on by the respondents were not concerned with jurisdiction, but only with the power of the Federal Court to make the disgorging orders under ss 737 and 739 of the Corporations Law (Victoria).

46    The other six members of the High Court held that the Federal Court had both jurisdiction over the matter and power to make the disgorging order.

47    On the issue of jurisdiction, the plurality observed at [52]:

There is no harm in the continued use of the term “accrued jurisdiction” in such situations provided several matters are borne in mind. First, while there are various claims, in these cases there is but one “matter” in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it.

48    The plurality continued at [59]:

It should be emphasised that the law of a State cannot withdraw…the federal jurisdiction which a court (State or federal) otherwise may exercise under a conferral or investment of jurisdiction by a law made under s 76 or s 77 of the Constitution; nor may a State law otherwise limit the exercise of federal jurisdiction.

49    The plurality noted at [63] the respondents’ submission that whatever “jurisdiction” the Federal Court had, it did not have the necessary “power” to act under ss 737 and 739 of the Corporations Law (Victoria) so that disgorging order had been made beyond power. Their Honours at [64] quoted from the judgment of Toohey J in Harris v Caladine (1991) 172 CLR 84 at 136:

The distinction between jurisdiction and power is often blurred, particularly in the context of ‘inherent jurisdiction’. But the distinction may at times be important. Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in the exercise of that jurisdiction a court has powers expressly or impliedly conferred by the legislation governing the court and ‘such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred’.

(Footnote omitted.)

50    The plurality then held at [65]:

Nevertheless, it is to be remembered…that, in the words of Brennan and Toohey JJ, “[c]haracteristically an exercise of jurisdiction is attended by an exercise of power”. The claims for relief illuminate the scope of a controversy which constitutes a matter and once the Federal Court has jurisdiction to determine a controversy it has power in the exercise of that jurisdiction to give the remedies sought.

(Footnotes omitted.)

51    The plurality continued at [68]:

It is well established from the decisions under s 79 of the Judiciary Act…that a State statute may be applicable as a source of rights and remedies in federal jurisdiction even though, on its own terms, that law identifies only the courts of the enacting State as the courts to provide those remedies. Indeed, as Gibbs J indicated in John Robertson & Co Ltd v Ferguson Transformers Pty Ltd, were that not so the operation of federal jurisdiction might readily be stultified. There might be withdrawn from courts exercising federal jurisdiction (including this Court) the effective authority to quell controversies in respect of which, by reason, for example, of the identity of parties, s 75 of the Constitution had conferred original jurisdiction upon this Court and s 77 empowered the Parliament to grant authority to the other federal courts and to State courts exercising federal jurisdiction. An attempt by State law to achieve that result would, as to this Court, be repugnant to s 75 of the Constitution. Where jurisdiction was conferred by a law made by the Parliament in exercise of its powers under s 77 of the Constitution, the State law also would be invalid for inconsistency under s 109 of the Constitution.

(Footnotes omitted.)

52    The plurality went on to reject the significance of s 58AA(1) in defining “Court” in a way that excluded the Federal Court when exercising federal jurisdiction. The plurality stated at [86]:

One difficulty with the arguments based upon s 58AA is that federal jurisdiction exists by reason of the operation of the Constitution and the laws made under it, not by reason of State law.

53    The plurality cited the dictum of Walsh J in Felton v Mulligan (1971) 124 CLR 367 at 399:

The foundation for the authority of this Court to deal with the ‘cause’ is that it involves the interpretation of the Constitution. Once it is clothed with that authority, this Court may do whatever is necessary for the complete adjudication of the cause and therefore it may exercise any relevant power which the Supreme Court would have had, whatever may be the source of that power.

54    The plurality upheld the exercise of jurisdiction by the Federal Court in Edensor and the orders made in pursuit of that jurisdiction.

55    Justice McHugh held at [130]:

By ss 64 and 79 it is the Parliament itself, and not the legislature of the State, which has provided the extent to which, consonant with Ch III and subject to the Constitution, State laws will be applicable as federal laws. When State laws apply as federal laws in proceedings in which the Commonwealth is a party and in their application affect the Commonwealth, they do so, as I have indicated, by force of a federal law, the Judiciary Act, enacted by the Parliament to facilitate the exercise of the judicial power of the Commonwealth.

56    His Honour at [135] cited with approval the following passage from the judgment of Gibbs J in John Robertson & Co Ltd (in liquidation) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at 88:

It is also settled that s 79 does not give a new and more extensive meaning to State laws which it renders binding on a court exercising federal jurisdiction; it applies those laws with their meaning unchanged ... To that last proposition it is, however, necessary to add a qualification. Section 79 may render applicable in a court exercising federal jurisdiction a State statute which either by its express provisions or upon its proper construction is limited in its application to the courts of the State...If the laws of a State could not apply if, upon their true construction as State Acts, they related only to the courts of the State, it would seem impossible ever to find a State law relating to procedure, evidence or the competency of witnesses that could be rendered binding on courts exercising federal jurisdiction, because most, if not all, of such laws, upon their proper construction, would be intended to apply in courts exercising jurisdiction under State law.

57    Justice McHugh at [134] also cited the following passage from the judgment of Mason J in John Robertson at 95:

To ensure that State laws dealing with the particular topics mentioned in [s 79] are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application.

58    Justice McHugh went on to hold at [137]:

The fact that a State statute either expressly or as a matter of construction provides only for State courts to enforce its provisions does not mean that it cannot be “picked up” and applied by s 79 of the Judiciary Act in the exercise of federal jurisdiction. The hypothesis to which Mason J referred in John Robertson, which must apply to substantive as well as procedural laws, will ensure its applicability in federal jurisdiction unless the statute is not applicable for some reason other than that State courts were intended by the State as the instruments for enforcing it. Its application might require, for example, the exercise of non-judicial power that is inconsistent with the exercise of the judicial power of the Commonwealth. Or as Gaudron J pointed out in Kruger v The Commonwealth, the language of a State statute may make it impossible for s 79 to “pick up” the statute, or the statute may impose functions which are beyond the reach of s 79…

(Footnotes omitted.)

59    His Honour concluded at [145]:

To hold that s 79 is excluded by the device of stating that ss 737 and 739 only apply in the exercise of the jurisdiction of Victoria, when there was no impediment to the Federal Court or the Supreme Court of Victoria applying them in proceedings in federal jurisdiction, would mean that the legislature of the State of Victoria could define the jurisdiction of the Federal Court or the jurisdiction of a State court exercising federal jurisdiction. That would contradict the negative implication in Ch III of the Constitution that only the Parliament may define the jurisdiction of the Federal Court or the federal jurisdiction of a State court. In those cases, such as the present one, where there exists a law of the Commonwealth conferring federal jurisdiction on the Federal Court in respect of the justiciable controversy before that Court, such a construction of s 58AA would also give rise to inconsistency for the purposes of s 109 of the Constitution.

(Footnotes omitted.)

60    Justices Hayne and Callinan added at [219]:

The questions which would arise if a State attempted to preclude courts exercising federal jurisdiction from making particular kinds of order do not arise. They do not arise because the Corporations Law did not seek to limit the powers of courts exercising federal jurisdiction. The only questions are, therefore, whether and how ss 737 and 739 can be invoked by a court exercising federal jurisdiction. It is sufficient for present purposes to say that, for the reasons given by Gleeson CJ, Gaudron and Gummow JJ, s 79 of the Judiciary Act operated to pick up ss 737 and 739. Even if those sections had been cast in terms which spoke only of the courts of the State granting remedies under them, it would not mean that they were not, in the words of s 79, “applicable” to the litigation between these parties in the Federal Court.

(Footnote omitted.)

61    The respondents’ submissions treat the question of whether the State laws are “applicable” under s 79(1) of the Judiciary Act as integral to the question of whether the Federal Court has “jurisdiction” over the proposed claims. However, they are separate issues. That is because it is s 39B which confers jurisdiction on the Federal Court, while s 79 only becomes relevant in a matter where a court is “exercising federal jurisdiction”: see Solomons v District Court (NSW) (2002) 211 CLR 119 at [23]. Any determination that particular State laws are inapplicable cannot operate to remove the jurisdiction of the Federal Court over a matter.

62    Section 39B(1A)(c) of the Judiciary Act confers jurisdiction on the Federal Court in any civil “matter” arising under any laws made by the Commonwealth Parliament. In Edensor, the plurality observed at [7] that a “matter” in which jurisdiction is conferred may include claims arising under common law or under the statute law of a State.

63    In Rana v Google Inc (2017) 254 FCR 1, the Full Court gave the following summary of the relevant principles at [17]:

The “matter” is the justiciable controversy between the parties arising out of the substratum of facts and claims representing, or amounting to, the dispute or controversy between or amongst the parties. Where federal and non-federal claims comprise the same justiciable controversy, a court exercising federal jurisdiction will have jurisdiction to resolve the entire matter in the exercise of its federal jurisdiction. The non-federal part of the matter is sometimes referred to as “accrued jurisdiction” (as distinct from the associated jurisdiction provided for under s 32 of the Federal Court of Australia Act). It is better understood and expressed, however, as being part of the one matter…

64    The respondents concede that the applicant’s proposed claims under State legislation arise from the same substratum of facts as the applicant’s existing claims. That concession is correctly made, since the parties are the same, the conduct complained of is the same, and the contraventions alleged are of statutory provisions cast in the same or similar terms.

65    The jurisdiction conferred under s 39B(1A)(c) of the Judiciary Act is federal jurisdiction. The authority of the Federal Court is to adjudicate the entirety of the matter. In Edensor, the plurality observed at [52] that, “there is but one ‘matter’ in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it”. Their Honours held at [59] that, “the law of a State cannot withdraw…the federal jurisdiction which a court (State or federal) otherwise may exercise under a conferral or investment of jurisdiction by a law made under s 76 or s 77 of the Constitution; nor may a State law otherwise limit the exercise of federal jurisdiction”. The plurality held at [68] that a State statute may be applicable as a source of rights and remedies in federal jurisdiction even though, on its own terms, that law identifies only the courts of the enacting State as the courts to provide those remedies.

66    Once it is accepted that the applicant’s existing claims in the Federal Court and his proposed claims under the State Acts arise from the same substratum of facts, it must follow that the proposed claims form part of the same matter. The Federal Court has jurisdiction over the whole of the matter. It has not been suggested that the claims based on the State Acts are “colourable”: cf. Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219. While s 450 of the IR Act states that it confers exclusive jurisdiction on the QIRC, it cannot operate to remove the federal jurisdiction conferred on the Federal Court.

67    It must be concluded that the Federal Court has jurisdiction under s 39B(1A)(c) of the Judiciary Act to hear and determine the whole of the matter, including Dr Braun’s allegations that the respondents contravened ss 285 and 287 the IR Act, ss 15 and 139 of the AD Act and s 40 of the PID Act and his claims for relief under s 309 of the IR Act and s 209 of the AD Act.

68    The next question is whether, under s 79(1) of the Judiciary Act, the State Acts are not “binding” on the Federal Court because they are not “applicable”. It is necessary to consider this issue because, even though the Federal Court has jurisdiction over the claims made under the State Acts, it is possible that the Court may ultimately determine that those Acts are not in fact applicable in the circumstances of the case.

69    In the passages of the judgment of Kirby J in Edensor at [201]-[205], his Honour acknowledged that “some degree of adaptation” of the language of a State statute is contemplated by s 79 of the Judiciary Act. However, his Honour considered that a point may be reached, because of the language of the legislation in question, the nature of the powers conferred on the particular court, or the specialised character of that court, where it may be concluded that the State or Territory law in question is “not applicable”. His Honour considered that interpreting the “highly particular” State provision in question such that it applied to the Federal Court would involve “redrawing” the provision in a manner beyond the “relatively modest adaptation” contemplated by s 79.

70    However, the language of s 450 of the IR Act is general and not drawn with anything like the particularity of the provision considered in Edensor. In that case, s 58AA(1) of the Corporations Law (Victoria) had been drafted to specifically (but invalidly) confer jurisdiction on the Federal Court when exercising State jurisdiction, and not otherwise. In any event, the majority in Edensor rejected the submission that the language or particularity of that provision meant that it was “not applicable” within s 79 of the Judiciary Act.

71    In Edensor it was acknowledged that there are some categories of provisions which may impose functions beyond the reach of s 79 of the Judiciary Act. The plurality at [72] gave an example of conferral of functions insusceptible of exercise as part of the judicial power of the Commonwealth, including functions that do not involve the exercise of judicial power. Justice McHugh at [137] also gave an example of where the application of a State law, “might require…the exercise of non-judicial power that is inconsistent with the exercise of the judicial power of the Commonwealth”.

72    The respondents argue that the QIRC has been conferred with functions which involve the exercise of administrative power as well as judicial power. They point out that under the IR Act, the QIRC can exercise arbitral functions and other powers on its own motion (ss 262 (1)(b) and 452), that the right to legal representation is confined (s 530), that the QIRC is not bound by the rules of evidence (s 531(2)), and the QIRC may also refrain from hearing a matter because it is not in the public interest (s 542(b)), although the significance of some of these provisions was not developed. They submit that the exercise of judicial power requires the jurisdiction of the court to be invoked by a party, relying on TCL Air Conditioner v Federal Court (2013) 251 CLR 533 at [28]. They also submit that there is inconsistency between the power of the QIRC to refrain from hearing a matter and the absence of such a power in the Federal Court. They argue that because the State Acts confer jurisdiction and power on the QIRC to deal with the subject matters of the dispute including by the exercise of non-judicial power, those Acts cannot be applicable in the Federal Court, which can only exercise judicial power.

73    It is the case that courts established by or under Ch III of the Constitution cannot discharge functions which are not in themselves part of, or auxiliary or incidental to, judicial power: R v Kirby; Ex parte Boilermakers’ Society of Australia (Boilermakers’ Case) (1956) 94 CLR 254 at 271-272; Attorney-General (Cth) v The Queen (Boilermakers’ Case) (1957) 95 CLR 529 at 543-544. However, the respondents’ submissions assume that if any provision of a State Act confers a non-judicial power on a State court, the whole of the Act must be inapplicable for a court exercising federal jurisdiction. In Rizeq, the plurality held at [61] in respect of s 79:

Just as State Parliaments have no power to add to or detract from federal jurisdiction, State Parliaments have no power to command a court as to the manner of exercise of federal jurisdiction conferred on or invested in that court.

Accordingly, a State Act cannot require the exercise of non-judicial power by the Federal Court. In Commonwealth v Mewett (1997) 191 CLR 471, Gummow and Kirby JJ at 556 acknowledged that a State Act can be severed such that only part of it is picked up under s 79 (although not where picking up some but not all of the otherwise applicable terms would give an altered meaning to the unsevered parts).

74    In the present case, the relevant provisions of the State laws picked up are ss 285, 287 and 314 of the IR Act, ss 15, 129 and 209 of the AD Act and s 40 of the PID Act. It has not been suggested that the exercise of jurisdiction to determine the dispute under those provisions involves any non-judicial function, nor that these provisions would have an altered operation if severed from provisions conferring non-judicial functions. The provisions of the IR Act that involve non-judicial functions should be regarded as not “applicable”, or as “otherwise provided” by the Constitution, for the purposes of s 79.

75    In my opinion, ss 285, 287 and 314 of the IR Act, ss 15, 129 and 209 of the AD Act and s 40 of the PID Act are applicable to the exercise of federal jurisdiction in this matter by the Federal Court.

76    Accordingly, I reject the respondents’ submission that leave to amend the Originating Application and Further Amended Statement of Claim should be refused on the basis that they would be futile or have no reasonable prospects of success.

77    The Individual Respondents also oppose leave to amend the Further Amended Statement of Claim on the basis that there are insufficient material facts pleaded to establish a cause of action under s 285 of the IR Act against them. Under s 282 of the IR Act, adverse action can only be taken against an employee by the employer. The Individual Respondents are not Dr Braun’s employer. Dr Braun seeks to attribute the conduct of the Individual Respondents to the Metro North. The Individual Respondents argue that as the IR Act does not contain any provision which attributes the conduct of employees, agents or officers of a body corporate to the body corporate, the Dr Braun must rely upon the common law principles of vicarious liability. They submit that in a penalty proceeding, the applicant is required to show actual authority, but that the applicant has not alleged any material facts to establish actual authority. They submit that as Dr Braun cannot succeed in his argument that the conduct of the Individual Respondents is the conduct of Metro North, and that as Metro North was the only entity that could take adverse action, this aspect of the claim must fail. The Individual Respondents contend that leave should not be granted to include the parts of the proposed Amended Originating application and the proposed Further Amended Statement of Claim which assert contravention of s 282 of the IR Act.

78    There was no substantial oral argument by the parties upon the adequacy of the proposed pleading concerning s 282 of the IR Act. I was not taken to the manner of pleading of the allegation to demonstrate the alleged deficiency in the pleading. It is, in any event, unnecessary to determine the issue for present purposes. For reasons I will come to, I will allow Dr Braun leave to amend without confining him to the particular form of the proposed amended pleading he has relied upon. He will have the opportunity, if he considers it necessary, to plead in a way that deals with the concerns raised by the Individual Respondents. The respondents are not precluded from making any application to strike out the amended pleading.

79    The Individual Respondents also argue that leave to amend should be refused because no explanation has been provided by the applicant as to why he waited some ten months to make this application. They submit that in circumstances where they have been put to the considerable cost of agitating the deficiencies in the Statement of Claim, bringing a strike out application, taking instructions in respect of the Amended Statement of Claim and preparing a Defence, Dr Braun should show good cause as to why it is that he waited until after that process to seek to amend this proceeding to include the State-based allegations. That is said to be especially so in circumstances where the proceeding is subject to the general costs prohibition in s 570 of the FW Act.

80    I accept that no satisfactory explanation has been provided for Dr Braun’s considerable delay in making the present application. However, delay producing consequential prejudice is only one of the relevant factors. The claims based on federal and State legislation arise, as has been conceded, from the same substratum of facts. The State claims are unlikely to add much to the costs that would be incurred in the existing proceedings in any event. On the other hand, if leave to amend were refused and the proceedings in the QIRC and the Federal Court continued concurrently, the overall costs for the parties would be much greater and the resources of two courts would be occupied. In these circumstances, I propose to allow leave to amend.

81    Finally, I consider that the proposed Further Amended Statement of Claim is unnecessarily prolix and complex. It is some 118 pages in length. Rule 16.02(1)(b) of the Federal Court Rules requires that a pleading must, “be as brief as the nature of the case permits”. The proposed pleading is capable of being drawn much more succinctly and with greater clarity. I will not grant leave to amend in the particular form proposed by Dr Braun.

82    I will make a general order giving Dr Braun leave to amend his Originating Application and Further Amended Statement of Claim to allege contraventions of ss 285 and 287 of the IR Act, ss 15 and 129 of the AD Act and s 40 of the PID Act, and to make claims for relief under s 314 of the IR Act and s 209 of the AD Act, without stipulation as to the precise form of the amendments. My expectation is that the amendments will take into account my comments in the preceding paragraph.

83    I will reserve the costs of the application for leave to amend.

Associate:    

Dated:    7 March 2023

SCHEDULE OF PARTIES