Federal Court of Australia

Kent Projects Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2025] FCA 1221

ORDERS

THE COURT ORDERS THAT:

1.    The applicants have leave to appeal from the primary judgment.

2.    Within 28 days of these orders, the applicants file and serve a notice of appeal substantially in the form of the draft notice annexed to the affidavit of Mr Daniel White sworn 30 April 2025.

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

REASONS FOR JUDGMENT

SNADEN J:

1    The first applicant (“Kent Projects”) is a party to an enterprise agreement that was (or is said to have been) made pursuant to pt 2-4 of the Fair Work Act 2009 (Cth) (the “FW Act”). That agreement was the subject of a decision made by the second respondent (the “Commission”) on or around 5 August 2022; specifically, a decision to approve it pursuant to s 186(1) of the FW Act (hereafter, the “Approval Decision”).

2    By its amended originating application in the substantive proceeding, the first respondent (the “CEPU”), moves the court for, amongst other things, prerogative relief directed to the Approval Decision. Key to that cause is its contention that the Approval Decision was a product of what it describes as a fraud upon the Commission, the result of which was a decision that the FW Act did not authorise. That fraud is said to have inhered in Kent Projects’ failure to disclose to the Commission certain information that was germane to the application that was the subject of the Approval Decision (and that the FW Act is said to have implicitly required that it disclose).

3    Those contentions were spelt out in the CEPU’s further amended statement of claim dated 25 June 2024. It was said there that Kent Projects had “concealed” that information from the Commission; and, further, that Kent Projects knew that it was obliged to inform the Commission of the information that was not disclosed.

4    Of some significance, for present purposes, is what that pleading did not allege. Perhaps somewhat confusingly, Kent Projects was not said subjectively to have known that it was obliged to disclose to the Commission the information that the CEPU complains went undisclosed; nor was it said that its decision not to disclose it was made dishonestly in breach of any such obligation.

5    By an interlocutory application made in the substantive proceeding on 15 March 2024 and amended on 9 July 2024, Kent Projects moved to have parts of the CEPU’s pleading—specifically, those parts that pertained to the alleged fraud upon the Commission (to which I shall refer hereafter as the “Fraud Pleas”)—struck out on the basis that they failed to disclose a reasonable cause of action. Central to that contention was the notion that the non-disclosure of information that the CEPU alleged was not competent to constitute a fraud upon the Commission (and, thereby, to reflect jurisdictional error that might attract prerogative relief).

6    During the hearing of that application on 26 August 2024, the case that the CEPU sought (and still seeks) to advance was clarified. Specifically, it was made clear (and remains clear for present purposes) that:

(1)    it was (and is) no part of the CEPU’s case that the non-disclosure that it seeks to impugn was tainted by dishonesty or an intention to deceive the Commission;

(2)    the CEPU’s position was (and remains) that “whether the breach of the obligation was a knowing breach of the obligation to disclose is irrelevant”; and

(3)    the reference to “concealment” in the pleading was a concealment-in-law, inhering merely in the non-disclosure of a known fact.

7    By a judgment dated 15 April 2025, the strike-out application, as subsequently amended, was dismissed (or, for reasons that needn’t here be explored, was effectively dismissed): Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kent Projects Pty Ltd [2025] FCA 362 (Rangiah J; hereafter, the “Primary Judgment”). So as to permit the addressing of some other concerns, the CEPU was granted leave to file a second further amended statement of claim, which it did a few weeks later. Thereupon it took the opportunity to remove the pleading that Kent Projects “knew” that it was obliged to inform the Commission of the matters said to be pertinent to the application that was the subject of the Approval Decision. The Fraud Pleas were otherwise retained, with minimal (and for present purposes immaterial) further amendment. The “effective” dismissal of the applicants’ strike-out application was perfected on 23 May 2025, when the court made a formal order to dismiss it.

8    By an application dated 30 April 2025, the applicants now move for leave to appeal from the Primary Judgment and it is to that application that these reasons pertain. For the reasons that follow, leave to appeal should and will be granted.

Applicable principles

9    It is uncontroversial that the Primary Judgment was interlocutory in nature and that an appeal from it lies only with leave: Federal Court of Australia Act 1976 (Cth), s 24(1A).

10    The considerations that guide the court’s discretion to grant leave to appeal are well-settled. In Waters v Mercedes Holdings Pty Ltd (2012) 203 FCR 218, 228-9 [32]-[34] (Jacobson, Flick and Foster JJ) (“Mercedes Holdings”), the full court described them as follows:

32    The principles to be applied when a party seeks leave to appeal are well settled. It is generally recognised that considerations relevant to the exercise of the discretion are:

•    whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and

•    whether substantial injustice would result if leave were refused supposing the decision to be wrong.

That test, so formulated, is cumulative and is not satisfied unless each limb is made out: Rawson Finances Pty Ltd v Deputy Commissioner of Taxation (2010) 81 ATR 36 at [5] per Ryan, Stone and Jagot JJ. But the two elements of the test are not unrelated: Cabcharge Australia Ltd v Australian Competition and Consumer Commission [2010] FCAFC 111 at [20] per Kenny, Tracey and Middleton JJ. The “sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments”: Sharp v Deputy Commissioner of Taxation (NSW) (1988) 19 ATR 908 at 910, per Burchett J.

33    Notwithstanding the oft-repeated reference to these two generally recognised considerations, it is also well recognised that the discretion to grant leave is not constrained by rigid rules: Seven Network Ltd v News Ltd (2005) 144 FCR 379 at [5], per Branson J (Allsop and Edmonds JJ agreeing). “No rigid or exhaustive criteria should be laid down; the circumstances of different cases are infinitely various”: Sentry Corporation v Peat Marwick Mitchell & Company (a firm) (1990) 24 FCR 463 at 488 per Lockhart J.

34    Leave to appeal may thus be granted where, for example, the questions posed for resolution on appeal “have general importance beyond the concerns of the parties”: Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at [10], per Heerey, Moore and Tracey JJ. Leave may also be granted where the interlocutory orders have a serious effect upon a party’s position and where there are seriously arguable questions to be resolved: Sentry Corporation at 488 per Lockhart J. In Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 3) (2005) 138 IR 394, French J (as his Honour then was) concluded:

[7]    I conclude that there is a seriously arguable case in support of the grounds of appeal. The formulation which would express that conclusion in terms of “doubt” attending the decision in my opinion sets the bar too high in a case such as the present.

[8]    The second factor which I have to take into account is a question essentially of case management. It is put by the applicant in terms of prejudice. That is to say if the proceeding were to go ahead to assessment of damages and penalties there would be considerable preparation, witness proofing and documentation involved in getting ready for the assessment hearing. In the event that an ultimate appeal against the first finding relating to the July action were upheld such work might have to be, at least in part, duplicated. The applicant submits that it is preferable to proceed to determine all issues which, as it were, go to liability, at the appellate level, before proceeding to damages assessment.

The amendment of the Federal Court Act in 2009 to include s 37M only reinforces the relevance of taking into account, in an appropriate case, considerations such as case management.

11    Similar observations were made more recently in Queensland Nickel Sales Pty Ltd v Park (Liquidators) of Queensland Nickel Pty Ltd (in liq) [2025] FCAFC 129, [56]-[57] (Markovic, Halley and Wheatley JJ).

12    The exercise of the court’s power to grant leave to appeal must conform to what best promotes the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Nationwide News Pty Ltd v Rush [2018] FCAFC 70, [2] (Lee J, with whom Allsop CJ and Rares J relevantly agreed) (“Nationwide News”). Generally speaking, the court should be concerned to keep a “tight rein” upon the interference with orders involving the exercise of discretion on points of practice and procedure: Nationwide News, [4] (Lee J, with whom Allsop CJ and Rares J relevantly agreed). Appellate intervention upon such points is ordinarily reserved for matters involving errors of principle that work substantial injustice: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 177 (Gibbs CJ, Aickin, Wilson and Brennan JJ); Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 78 [53] (Gummow and Hayne JJ).

13    In assessing whether the Primary Judgment is attended by doubt sufficient to warrant its reconsideration on appeal, the court’s task is to evaluate at “a reasonably impressionistic level” whether the bases upon which the applicants hope to impugn it are “sufficiently arguable” or attract “reasonable prospects of success”: Olson v Keefe [2019] FCA 339, [9] (Lee J).

14    The two standards of appellate review are explained in GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 280 CLR 442, 455-6 [16] (Kiefel CJ, Gageler and Jagot JJ, Gleeson and Steward JJ dissenting in the result but agreeing in respect of the characterisation of the standard of appellate review) (citations omitted):

The reasoning in House v The King applies to judicial decisions involving an exercise of discretion. It has been said that the concept of a “discretion” is “apt to create a legal category of indeterminate reference”, but the presently relevant essential characteristic of a discretionary judicial decision is that it is a decision where more than one answer is legally open. In Norbis v Norbis, for example, the power of a court to make an order altering the interests of parties to a marriage was characterised as a judicial discretion because the decision called for “value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right”. The line separating discretionary decisions (in which appellate review is confined to the House v The King standard) and other decisions (in which the “correctness standard” applies) was identified as that between questions lending “themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions” in which event “it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance”, and questions to which there is but one legally permissible answer, even if that answer involves a value judgment.

15    Rule 16.21(1)(e) of the Federal Court Rules 2011 (Cth) contemplates that the court may be asked to strike out all or part of a pleading on the ground (amongst others) that it fails to disclose a reasonable cause of action. In answering that question, the court addresses a question of law (and does not, by contrast, exercise a discretion of the kind referred to in House v the King (1936) 55 CLR 499, 504-5): McColley v Commonwealth [2014] ACTCA 21, [28] (Murrel CJ, Refshauge and Penfold JJ), applying Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 (Beaumont, French and Finkelstein JJ) (“Johnson Tiles”); Wreford v Castleyheard Pty Ltd (No 3) [2024] WASCA 2, [89] (Quinlan CJ, Mitchell and Vaughan JJA).

16    An appeal from a determination of a specific strike-out contention thus turns upon the application of the “correctness standard” of review. That was so in The Owners – Strata Plan No 84674 v Pafburn Pty Ltd (2023) 113 NSWLR 105, 111 [21]-[23] (Basten AJA, Ward P and Adamson JA agreeing), in circumstances where “the question [of] whether to strike out the defence depended on the proper construction of the relevant statutory provisions”; and in Lee v Lawfirst Pty Ltd (No 2) [2023] WASCA 166, [79], where the strike-out application depended on whether damages were available for alleged injury to credit and reputation.

17    Relief under r 16.21(1)(e) will be appropriate in circumstances where the existence of a cause of action turns upon acceptance of an untenable legal proposition: see, for example, Johnson Tiles and Esanda Finance Corp Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ). However, strike-out procedures should not be applied where the law is unsettled or still developing; nor otherwise in a way that might stultify its development: Johnson Tiles, [50] (French J, Beaumont and Finkelstein JJ agreeing); see also, in relation to summary processes, Spencer v The Commonwealth (2010) 241 CLR 118, 132 [25] (French CJ and Gummow J).

The correctness of the primary judgment

18    The present application is supported by an affidavit sworn by the applicants’ solicitor, Mr Daniel White, on 30 April 2025. As the court’s rules require, there is annexed to that affidavit a draft notice of appeal, which the applicants propose to file if the present application for leave succeeds. That notice identifies three grounds upon which the applicants hope to impugn the Primary Judgment on appeal.

19    It is unnecessary to rehearse those grounds here. It suffices, instead and by way of summary, to note that they distil to a central proposition: that, in the absence of dishonest concealment—being the deliberate withholding of information in conscious breach of duty (which the CEPU has made clear that it does not and did not allege)—none of the conduct in which, by the Fraud Pleas, Kent Projects is alleged to have engaged is capable of constituting a fraud on the Commission that might result in the granting of prerogative relief; and that, insofar as the primary judge concluded to the contrary, he did so in error.

20    Consistent with the need to focus at “a reasonably impressionistic level”, it is unnecessary to trace in detail the competing submissions that were advanced before the primary judge. They are summarised in detail in his Honour’s reasons. It suffices to observe that his Honour, after considering the authorities upon which the competing submissions relied, was moved to accept that there was a reasonable basis upon which to conclude that prerogative relief might issue in respect of the Approval Decision insofar as it was procured by the material but honest (which is to say, innocent) non-disclosure of information that the applicants were obliged to disclose (and to which the CEPU’s pleading referred).

21    At the hearing of the present application, the court was treated to high-quality and compelling submissions concerning the relevant state of the law, and the authorities that were said to incline both toward and against the conclusion that the Primary Judgment records. For reasons that will become apparent, I do not consider it necessary to summarise them either; although I should not wish, by saying so, to diminish the considerable skill and industry that attended their delivery.

22    Presently, the CEPU maintains that there is insufficient doubt about the correctness of the Primary Judgment to warrant its reconsideration on appeal. With respect, that cannot be accepted. The question before the primary judge was whether the material but honest non-disclosure of information that the applicants were obliged to disclose was capable of amounting to a fraud upon the Commission and, thereby, of stigmatising the Approval Decision as a product of jurisdictional error. The primary judge answered that question in the affirmative; but it is plain—both from the analysis recorded in the Primary Judgment and from the submissions advanced both orally and in writing in the present matter—that an argument may reasonably be made that it is properly to be answered in the negative.

23    The CEPU does not contend that the applicants’ substantive position is inarguable. Instead, it seeks to refine the question upon which it suggests that the grant of leave should turn. Recalling that the Primary Judgment concerned an application to strike out parts of a pleading, the CEPU posits that the test for the primary judge was not whether the relevant fraud would be established in the manner (and on the facts) that its pleading articulates; but, rather, whether it could so be established. It remains open to the applicants, it says, to submit in the substantive matter that no such fraud is established absent deliberate, knowing and dishonest non-disclosure, even if the other factual propositions that the pleading articulates are proved.

24    On that footing, the CEPU maintains that the question for the court presently is not whether the applicants have a reasonable prospect of establishing that the alleged fraud upon the Commission cannot be made out absent dishonesty; but, rather, whether they have a reasonable basis upon which to contend that it is not arguable that it could so be made out.

25    With respect, that cannot be accepted. For present purposes, it must be assumed that the factual matters that the CEPU alleges will ultimately be proved. But whether or not it is open to the court to find, on those facts, that the Approval Decision was a product of jurisdictional error inhering in (or partly in) a fraud of the kind that the Fraud Pleas allege is a question of law to which there is only one correct answer. That answer, whatever it might be, is apt to bear upon whether or not the case that the CEPU alleges in that respect should or should not be tried.

26    Accepting, as I do without real hesitation, that the applicants have a reasonable prospect of establishing that that question should be answered in the negative, it necessarily follows that the Primary Judgment is attended by doubt sufficient to warrant a grant of leave to appeal.

Substantial injustice

27    The more significant question, in my view, is whether the applicants can establish that they will endure substantial injustice if, assuming that it was wrongly decided, leave to appeal from the Primary Judgment is nonetheless refused.

28    Continuing on the proposition alluded to earlier, the CEPU submits that:

If leave to appeal is not granted, the applicants will be at liberty to advance each of the arguments concerning dishonesty at the final hearing of the matter. The matter will then be determined and they will have a right of appeal from that decision.

29    Central to that submission is the suggestion that the question as I have posed it above—that is, whether or not it is open to the court to find, upon proof of the facts as alleged, that the Approval Decision was a product of jurisdictional error inhering in (or partly in) a fraud upon the Commission constituted by the material but not dishonest non-disclosure of the information to which the Fraud Pleas refer—has not yet been answered. The CEPU maintains that all that the primary judge may be understood to have concluded thus far is that the answer to that question might be “yes”; not that it is “yes”.

30    Again with respect, that cannot be accepted. The primary judge must be understood to have concluded that jurisdictional error can inhere in the making of a decision of the Commission to approve an enterprise agreement in circumstances involving material but not dishonest non-disclosure of information that the FW Act implicitly obliged an applicant to disclose. As I have indicated, that is a binary question of law that permits only of one correct answer and his Honour has answered it. Assuming that the factual propositions upon which the cause rests are all proved, the suggestion that the applicants might nonetheless convince his Honour to reject the CEPU’s contention that they accumulate to a point reflective of jurisdictional error seems remote, to say the least.

31    Should that suffice to establish substantial injustice?

32    To repeat a proposition already recorded, the court should be slower than it might otherwise be to recognise substantial injustice in circumstances that involve matters of practice or procedure that have no bearing upon a party’s substantive rights. Allied to that observation, the CEPU was concerned to underline that the Fraud Pleas constitute only one of three claims that it presses by its substantive action. Thus, the applicants’ success on appeal (if achieved) will mean only that they will be relieved of that (fraud) aspect of the case that the CEPU mounts against them. There is no controversy that that is so.

33    With that accepted, counsel for the CEPU sought to downplay the benefits that success on appeal might deliver for the applicants; and, by extension, the detriment that a denial of leave to appeal might visit.

34    Respectfully, those contentions were fairly advanced and, at least to a point, may be accepted. Nonetheless, the present case would not be the first in which leave to appeal were granted in respect of a decision to dismiss (or relevantly dismiss) a strike-out application.

35    In Johnson Tiles (Beaumont, French and Finkelstein JJ), a judge at first instance granted leave to re-plead parts of a claim that alleged that a natural gas supplier had engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth); specifically, by failing to disclose to its customers certain risks that attended its supply of natural gas. At issue was whether the failure to advert to the risks as they had been pleaded was capable of qualifying (under the light of various contractual and other terms) as conduct that was relevantly apt to mislead or deceive. The primary judge concluded that it was; but, on appeal, French J (with whom Beaumont and Finkelstein JJ agreed) concluded otherwise. Leave to appeal from the initial ruling was granted and, on the resultant appeal, it was overturned.

36    In granting leave to appeal, French J (with the concurrence of the other members of the court) observed (at [45] 585):

…it is difficult to escape the initial impression that the viability of the cause of action in misleading or deceptive conduct, as re-pleaded, is doubtful and that the correctness of the decision to allow it to go forward is arguable. If it stands there are serious consequences in terms of time and costs for the respondents and other parties which cannot be compensated by an order for costs if they are successful at the end of the day. That may work a substantial injustice if it is concluded ultimately that the claims were not tenable.

37    Another example of this court granting leave to appeal in respect of a refusal by the court below to strike out a pleading may be found in Mercedes Holdings (Jacobson, Flick and Foster JJ). The strike-out application there concerned the interpretation of s 208 of the Corporations Act 2001 (Cth), and the rationale for granting leave to appeal was founded in the “general importance of settling the correct construction of s 208…and the specific importance [of that construction] to the present proceeding”: Mercedes Holdings, 229 [35] (Jacobson, Flick and Foster JJ).

38    By their written submissions, the applicants contend that, unless leave to appeal is granted, they will be denied what French J in Australian Competition and Consumer Commission v Emerald Ocean Distributors Pty Ltd [2001] FCA 982, [16] referred to as “procedural economies”. Central to that contention is the recognition that it is by reason of the Fraud Pleas that the bulk of the evidential conflict that divides the parties will fall to be resolved. Plainly, if the court were to accept on appeal that that case cannot succeed (and, therefore, that its articulation in the CEPU’s pleading should be struck out), a significant chunk of the matter will fall away. Again—and even accepting what is said above at [32] about the other aspects of the CEPU’s case that will progress regardless—there is no material doubt that that is so.

39    Whether it suffices to jeopardise significant “procedural economies”, as the applicants maintain, is difficult to know with precision; but it is not difficult to accept, at the level of principle, that it might. Inherent in the Fraud Pleas is the notion that Kent Projects was obliged but, without dishonesty, failed to disclose to the Commission that certain of the employees who had voted to make the agreement that was the subject of the Approval Decision:

(1)    “…were not genuinely employed for the purpose of performing work in the first respondent’s business and were instead employed for the purposes of voting to approve [that agreement]” and

(2)    “…did not perform any work for the first respondent other than voting on [that agreement]”.

40    The applicants deny (or, when or if appropriate, will deny) those allegations. Plainly, to succeed on those factual propositions, they (or, at the least, Kent Projects) will (or will likely) need to lead evidence and will be liable to subjection to the usual array of procedural devices. That, the applicants observe, will sound in effort, time and cost.

41    There is substance to that contention. If, as they maintain—and, for present purposes, should be assumed—the Fraud Pleas that the CEPU hopes to press against them are foredoomed to failure, then it is not difficult to see how substantial injustice might inhere in the requirement that the applicants be put to the time, effort and cost of defending them. All the more is that so in light of s 570(1) of the FW Act, which would likely operate to prevent them from recovering any costs were they successfully to do so.

42    The present matter strikes as a good example of one in which interlocutory orders promise to visit “…a serious effect upon a party’s position and…there are seriously arguable questions to be resolved”: Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd (2012) 209 FCR 408, 437 [39] (North and Flick JJ, with whom Marshall J relevantly agreed), citing Sentry Corporation v Peat Marwick Mitchell & Company (a firm) (1990) 24 FCR 463, 488 (Lockhart J).

Disposition

43    The applicants should have leave to appeal from the whole of the Primary Judgment. At the hearing of the application, it emerged that the applicants’ draft notice of appeal is in need of minor refinement to accommodate the CEPU’s filing of its second further amended statement of claim. That revised pleading was filed after the present application was commenced (pursuant to leave that was the subject of the Primary Judgment). As has been noted, the pleading in its current form contains Fraud Pleas similar to those that were the subject of the applicants’ strike-out application. That being the case, the refinement that was acknowledged is uncomplicated and I consider that it can be addressed by granting the applicants leave to file a notice of appeal substantially in the form that has hitherto been proposed.

Associate:

Dated:    6 October 2025