Australian Building and Construction Commissioner v Ingham [2017] FCAFC 3 | Case summary

Australian Building and Construction Commissioner v Ingham [2017] FCAFC 3 | Case summary | Zoe

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THE COURT: 1 This is an appeal, and a cross-appeal, each by leave, from orders made by a single Judge of the court on 2 June 2016 in a proceeding brought by the Director of the Fair Work Building Industry Inspectorate ("the Director") against the respondents, the Construction, Forestry, Mining and Energy Union ("the CFMEU") and 21 named individuals, alleging contraventions of ss 343, 417 and 421 of the Fair Work Act 2009 (Cth) ("the FW Act") at various times in 2013 at the sites of construction projects known as the "Enoggera Barracks Project" and the "QUT Kelvin Grove Project" at which John Holland Pty Ltd and John Holland Queensland Pty Ltd (together, "John Holland") were the principal contractors. For reasons which the primary Judge had given on 7 April 2016, his Honour struck out many of the allegations in the Statement of Claim on the ground that they amounted to an abuse of process. 2 The circumstances giving rise to the Director's allegations were that, over a period which commenced in 2013 and appears to have run into early January 2014, some of the employees of subcontractors to John Holland at these construction sites stopped performing work in support of what appears to have been a campaign to force John Holland Queensland Pty Ltd to enter into an enterprise agreement. On 4 November 2013, John Holland commenced proceeding QUD 729/2013 ("the Holland proceeding") against the CFMEU and four of the respondents to the present proceeding, alleging contraventions of ss 343, 417 and 421, and other civil wrongs. On 14 November 2013, the Director intervened in the Holland proceeding. 3 In January 2014, the parties to the Holland proceeding executed a deed of settlement which covered not only that proceeding but other proceedings and matters involved in the dispute between John Holland and the CFMEU. Relevantly to the present appeal, that deed included a release by John Holland in favour of the respondents in the Holland proceeding and workers who were engaged on the projects and who participated in the stoppages of work between 28 October 2013 and 6 January 2014. It was also a term of the deed that the Holland proceeding be discontinued "by consent on the basis that the parties are to bear their own costs". 4 On 27 March 2014, the solicitors for the parties in the Holland proceeding forwarded to the Director, for execution by him, a Notice of Discontinuance of that proceeding. In that notice, it was stated that the discontinuance was by consent, with each party bearing their own costs. On 9 April 2014, the Director refused to execute the notice, asserting that he intended to continue his investigation of matters which gave rise to the Holland proceeding and that the discontinuance of that proceeding did not preclude him from commencing his own proceeding in relation to those matters. 5 On 26 May 2014, John Holland filed a Notice of Discontinuance in the Holland proceeding. This notice involved neither the consent of the other parties to that proceeding nor the leave of the court. It was filed conformably with r 26.12(2)(a)(ii) of the Federal Court Rules 2011 (Cth) ("the Rules") on the basis that the pleadings in the Holland proceeding had not closed. It is common ground that this notice was effective to bring the Holland proceeding to an end. 6 The proceeding which came before the primary Judge in the present case was commenced by the Director on 19 June 2015. Broadly, like the Holland proceeding, it related to allegedly unlawful conduct at the Enoggera Barracks and Kelvin Grove sites in 2013. On 3 August 2015, the respondents filed an Interlocutory Application in which they sought the permanent stay of the proceeding, pursuant to r 26.01 of the Rules. It was that application which was dealt with in the primary Judge's reasons of 7 April 2016 and his Honour's orders of 2 June 2016. 7 In his reasons of 7 April 2016, the primary Judge identified the following four questions which arose on the respondents' Interlocutory Application: (i) whether s 73(2) of the Fair Work (Building Industry) Act 2012 (Cth) ("the FWBI Act") prohibited the Director from bringing a new proceeding which related to matters that were the subject of a previous proceeding that had been settled and discontinued; (ii) whether there was an existing matter in respect of which the Director might have commenced his proceeding; (iii) whether the proceeding was an abuse of process; and (iv) to what extent the proceeding related to matters that had been the subject of the Holland proceeding. Favourably to the Director, his Honour answered the first two questions in the negative and the affirmative respectively. His Honour answered the third question in the affirmative, but only to the extent that the proceeding related to matters which had been the subject of the Holland proceeding. That required the fourth question to be answered, and this involved a detailed ruling on the extent of the overlap between the proceeding before his Honour and the Holland proceeding. Assisted by the parties' submissions (the result of their consultations), his Honour made such a ruling, and it is not now challenged (save, of course, that the Full Court's determination of the appeal and the cross-appeal may require it to be revisited). 8 In the appeal, the appellant, the Australian Building and Construction Commissioner, who replaced the Director on the record pursuant to item 19 of Sch 2 to the Building and Construction Industry (Consequential and Transitional Provisions) Act 2016 (Cth) some 17 days after we had reserved, challenges the primary Judge's ruling on the abuse of process point. He contends that the proceeding was and is not an abuse of process to any extent. 9 In the cross-appeal, the respondents challenge the way the primary Judge answered the first two questions set out above. They contend that the Director was prohibited by s 73(2) of the FWBI Act from bringing the proceeding, alternatively that the settlement of the Holland proceeding as between the primary parties thereto wholly disposed of any "matter" that might otherwise have provided the basis for the Director to make his allegations of contravention of the FW Act. In their Notice of Cross-Appeal, the respondents also challenged his Honour's ruling that the proceeding was an abuse of process only to the extent that it related to matters which had been the subject of the Holland proceeding, but that ground of cross-appeal was not pressed. 10 In the circumstances, the issues which are now before the Full Court involve the correctness of the answers given by the primary Judge to the first three questions set out above - the first and second arising on the cross-appeal and the third arising on the appeal. It is convenient to deal with those issues in that order. 11 Sections 71, 73 and 73A of the FWBI Act provided as follows: 71 Director may intervene in court proceedings (1) The Director may intervene in the public interest in a civil proceeding before a court in a matter that: (a) arises under this Act; or (b) arises under the Independent Contractors Act 2006, the FW Act or the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and involves: (i) a building industry participant; or (ii) building work. (2) If the Director intervenes in a proceeding under subsection (1), the Director is taken to be a party to the proceeding and has all the rights, duties and liabilities of such a party. … 73 Director etc. must not participate in court proceedings in relation to settled matters (1) This section applies if: (a) either: (i) the Director (or an inspector) and another party or parties are joint applicants in a building proceeding before a court; or (ii) the Director (or an inspector) has intervened in a building proceeding before a court under subsection 71(1); and (b) before the court has given judgement in the proceeding: (i) the matter that is the subject of the proceeding is settled between the parties to the proceeding (or if more than one matter is the subject of the proceeding - one or more of those matters is settled between the parties to the proceeding); and (ii) a notice is filed in the court discontinuing the proceeding to the extent that it relates to the settled matter or matters. (2) The Director (or inspector) must not continue to participate in the building proceeding to the extent that it relates to the settled matter or matters. (3) A reference in subparagraph (1)(b)(i) to parties to the proceeding does not include a reference to the Director (or inspector). (4) In this section: building proceeding means a civil proceeding in relation to a matter that arises under a designated building law and involves a building industry participant. 73A Director etc. must not institute court proceedings in relation to settled matters (1) This section applies if: (a) a building proceeding was instituted in a court; and (b) neither the Director nor an inspector: (i) was a party to the proceeding; or (ii) had intervened in the proceeding; and (c) the matter that was the subject of the proceeding was settled between the parties to the proceeding (or if more than one matter was the subject of the proceeding - one or more of those matters was settled between the parties to the proceeding); and (d) a notice was filed in the court discontinuing the proceeding to the extent that it related to the settled matter or matters. (2) The Director (or an inspector) must not institute a building proceeding in a court if the conduct giving rise to the proceeding was the subject of the settled matter or matters referred to in paragraph (1)(c). (3) In this section: building proceeding has the same meaning as in subsection 73(4). 12 Each of the Holland proceeding and the proceeding which came before the primary Judge was a "building proceeding" within the meaning of ss 73 and 73A. 13 Before the primary Judge, the respondents contended that s 73(2) of the FWBI Act was to be read as precluding the Director from commencing a new proceeding, in addition to its literal reading under which the Director was precluded from continuing to participate in the settled proceeding. Because s 73A had no application where the Director had intervened in the settled proceeding, it would not stand in the way of him effectively frustrating what was submitted to be the clear intent of s 73(2) by commencing a new proceeding in circumstances where he could not continue to participate in the settled proceeding. The primary Judge was sympathetic to that contention. Indeed, his Honour considered that giving s 73(2) its literal meaning would lead to a result that was "manifestly absurd or unreasonable" in the sense that the subsection would "serve no useful purpose while causing wastage of public resources". Under s 15AB(1)(b)(ii) of the Acts Interpretation Act 1901 (Cth) that opened the way for his Honour to consider extrinsic materials as an aid to his construction of s 73(2). 14 Having giving attention to what had been said by the responsible Minister at the time when the provisions which became ss 73 and 73A were introduced into the House of Representatives, his Honour expressed two conclusions: first, that the legislature is likely to have intended that s 73(2) operate not only to prohibit the Director from continuing to participate in a building proceeding to which that provision applied, but also to prohibit the Director from commencing a new proceeding in relation to the settled matter or matters, and secondly, that that intention was not reflected in the ordinary or natural language of s 73(2). Notwithstanding those conclusions, however, his Honour held that the construction for which the respondents contended would amount to a rewriting of the provision, and was not reasonably open. In the result, his Honour construed s 73(2) according to its literal meaning. 15 On the cross-appeal, the respondents submit that it was an error for his Honour to have done so. They support a construction which would conform with what his Honour perceived to be the intention of the legislature. This was a case, they submitted, in which the approach which attracted itself to Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commission of Taxation (1981) 147 CLR 297, 320-321 should have been taken by the primary Judge. By contrast, the Director submitted that this was in the class of case in which any search for legislative intention should begin and end in the terms of the statute itself, relying in this respect on what had been said by Hayne, Heydon, Crennan and Kiefel JJ in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 46-47 [47]. 16 In the controversy which has arisen in the present case, the starting-point is provided by the literal meaning of s 73(2). This is not one of those cases in which an ambiguity or obscurity appears on the face of the provision in question; or in which the statute would be unworkable if read according to its literal meaning. Rather, the respondents' argument proceeds from a perception of what it was the legislature was seeking to achieve, and then testing the sense, or alternatively the nonsense, of the literal meaning against that perception. This was the approach which the primary Judge took, although ultimately he decided the point adversely to the respondents. On the cross-appeal the constructional issue arises again, in which context the Director's submission directly placed in contest his Honour's conclusion that the application of the literal meaning of s 73(2) would produce a result that was manifestly absurd or unreasonable. 17 With respect, we do not agree with the primary Judge's view on this aspect of the case. Section 73 dealt with two alternative situations: one where the Director was a joint applicant and the other where he or she had intervened. For the sake of understanding how the section worked, we take first a simple situation in which the Director and one other joint applicant (to whom we shall refer as "the private applicant") made undifferentiated allegations and claimed the same relief. Also, to avoid complications brought about by the need to obtain consent or the leave of the court, we assume that pleadings had not closed, and that either applicant might discontinue as of right. 18 If the only relevant fact were that the private applicant discontinued, the proceeding would have continued with only the Director as applicant. The discontinuance would not have stood in the way of the private applicant commencing a new proceeding, making exactly the same claims, against the respondent or respondents to the original proceeding. For his or her part, the Director could have continued to prosecute his or her claims in the original proceeding. Alternatively, he or she could have taken the same course as the private applicant, discontinued that proceeding and, if the course attracted itself to him or her, commenced a new proceeding making exactly the same claims against the original respondent or respondents. Section 73 would have had nothing to say on the subject: there having been no settlement of the underlying matter, para (b)(i) of subs (1) would not have been engaged. 19 Next, assume that the private applicant's discontinuance was the result of a settlement of the matter that was the subject of the proceeding. Then, as between the private applicant and the respondent or respondents, whether the former would have been free to commence a new proceeding would have depended on the terms of the settlement. It would not have depended upon the fact that his or her claims in the original proceeding had been terminated by discontinuance. So far as the Director's claims were concerned, s 73(2) would have been engaged: he or she could not have continued to participate in the proceeding to the extent that it related to the settled matter or matters (and, in the example postulated, if the private applicant had settled all of his or her claims, the Director would have been prevented from any further participation in the proceeding). However, the Director not having been a party to the settlement, he or she would have been in a position which differed materially from that occupied by the private applicant: it could not have been the settlement which stood in the way of him or her commencing a new, identical, proceeding. Would s 73(2) have had that effect? In other words, would s 73(2) have operated to bring about a situation in which the Director's position was assimilated to that of the private applicant not only apropos the discontinuance but also apropos the settlement? 20 It would, in our view, be a large step to construe a statute as having the effect of depriving a litigant of his or her right to continue a proceeding upon no foundation other than that a co-applicant has exercised his or her right to discontinue in obedience to a settlement to which the litigant was not a party and which may have been achieved for reasons wholly unrelated to the merits of the case. Is there a viable justification for the clear words of s 73(2) which does not involve the perception that the subsection had this effect? In our view, there is. If s 73(2) were to be construed according to its literal meaning, it would have had the effect of assimilating the Director's position to that of the private litigant apropos the discontinuance but not apropos the settlement. It would, in effect, have imposed upon the Director the obligation to follow the private litigant in discontinuing the proceeding, but would not have burdened him or her with such releases or other obligations as the private litigant may have agreed to as part of the settlement. 21 Changing the facts slightly, if the Director had been not a joint applicant but an intervener, the analysis laid out above would equally apply, mutatis mutandis. There may then have been an even stronger case for construing s 73(2) so as not to cut the Director out of such right to bring a new proceeding as he or she may have had, but we would not place any store by that consideration. Whatever was the correct construction of s 73(2), it could not have varied as between the situations referred to in subparas (i) and (ii) of para (a) of subs (1). 22 At this point, the respondents would say, "all very well, but how does that explain the operation of s 73A?". We accept that these two sections were enacted together and should, if possible, be construed so as to avoid making a nonsense of either. But we do not accept the respondents' submission that the construction of s 73(2) for which the appellant contends would make a nonsense of s 73A. That section related to a proceeding from which the Director was wholly absent. If, in the context of such a proceeding, the parties directly involved settled their underlying differences, for the Director then to have emerged from the wings with a new proceeding relating to the same matter might, and usually would, have been perceived as disturbing the settlement in a way that had never been anticipated. By making s 73A applicable only in situations in which the Director had not intervened in the earlier proceeding, the legislature was, in our view, recognising that his or her participation by intervention would put the parties squarely on notice that, whatever other assumptions they might have made about the outcome of their settlement, they should not have assumed that the Director would not commence a new proceeding. 23 For those reasons, we reject the respondents' challenge, by cross-appeal, to the answer which the primary Judge gave to the first question which he identified. Unlike his Honour, we have no difficulty perceiving the policy to which the legislature intended to give effect by the enactment of ss 73 and 73A of the FWBI Act. Against that perception, a literal reading of these provisions produces a construction which is both intelligible and internally consistent. 24 The respondents next submit that, upon the matter underlying the Holland proceeding having been settled as between the parties to that proceeding, there ceased to be a justiciable controversy which would found the court's jurisdiction under Ch III of The Constitution. They rely on the judgment of Goldberg and Finkelstein JJ in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 125 FCR 529. That was an application for leave to appeal made by an applicant which had not been a party to the proceeding out of which the relevant judgment - which it was sought to challenge on appeal - arose. One of the arguments advanced in opposition to that application was that, upon the judgment having been pronounced, and absent any challenge to it by one of the original parties, there was no longer a justiciable controversy with which the Full Court could deal. Rejecting that proposition, their Honours said (125 FCR at 555 [83]): Inevitably a justiciable controversy must come to an end, with the consequence that the "matter" will cease to exist. Usually this will occur either when a dispute is settled or when the court rules in favour of one party or the other and grants the appropriate remedy. In most cases an unsuccessful party has a right of appeal, although in some cases leave is required. Whenever there is a right of appeal the justiciable controversy will not be at an end until the rights of appeal are exhausted or foregone. And (125 FCR at 556 [88]): To summarise, in our view a justiciable controversy which is brought before a court will come to an end either when the court (including an appeal court) has resolved the controversy by ruling on the issue in dispute or, if the controversy concerns a matter of private law, when the parties have resolved their differences by agreement. Before those events occur the court retains jurisdiction to enter upon the controversy. 25 In the submission of the respondents, these observations are authority for the proposition that the whole "matter" which underlay the Holland proceeding, including any potential claim by the Director, could have no existence beyond the point at which the parties to that proceeding "resolved their differences by agreement". This submission should be rejected. 26 We first point out that Australian Industry Group itself did not concern a proceeding which had been settled, or differences which had been resolved, by agreement. What Goldberg and Finkelstein JJ said on the subject was, therefore, strictly obiter. The extent to which a justiciable controversy would remain alive subsequent to the execution of a settlement agreement would depend upon the terms of the agreement, the extent to which the parties abided by those terms, the extent to which they were precluded by the general law from re-litigating closed issues, and other like matters. With respect, the proposition that the court would be deprived of jurisdiction as a matter of constitutional law whenever the parties to a matter being litigated resolved their differences by agreement could only be regarded as the very highest-level of starting points. 27 Secondly, their Honours' proposition was in terms limited to controversies that concerned matters of private law. It is true that the case which came before the primary Judge was not, procedurally, a "public law" case, but we doubt that their Honours intended to refer to that distinction. What they probably had in mind, rather, was a controversy that concerned only the respective rights and liabilities of private litigants. Their attention had not been drawn to the specific instance of civil penal proceedings. When such a proceeding is instituted by a regulator, it would not, in our view, be appropriate to treat it as no more than a matter of private law. 28 Thirdly, to the extent that the Director's position in the Holland proceeding (and he was undoubtedly a party thereto by the operation of s 71(2) of the FWBI Act) might have been assimilated to that of a private litigant, he did not resolve his differences with the other parties to that proceeding. The respondents accept that, but submit that s 73(2) of the FWBI Act operated, effectively, as a statutory quelling of the controversy which existed as between the Director and those other parties. The difficulty with this submission, however, is that it brings the debate back into the realm of s 73(2) itself. Once s 73(2) is construed as saying nothing on the subject of a new proceeding in the name of the Director, which we consider it should be, it becomes impossible to read the subsection as having had the effect for which the respondents contend. 29 For those reasons, we reject the respondents' challenge to the answer which the primary Judge gave to the second question. 30 That brings us to the Director's challenge to the primary Judge's abuse of process judgment. The respondents' case before the primary Judge was that the commencement of the new proceeding by the Director was an abuse of process in the sense of amounting to "the use of the court's procedures [in a way that] is unjustifiably oppressive to one of the parties": Rogers v The Queen (1994) 181 CLR 251, 286 per McHugh J, approved by Gleeson CJ, Gummow, Hayne and Crennan JJ in Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256, 267 [15]. The respondents relied also on Walton v Gardiner (1993) 177 CLR 378, 393 per Mason CJ, Deane and Dawson JJ, and on Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507, 518-519 [25]-[26] per French CJ, Bell, Gageler and Keane JJ. The principle on which the respondents relied was, and is, not in doubt. 31 The question which the primary Judge had to determine was whether, notwithstanding that the Director had not previously sued the respondents in respect of the allegations which he then made, notwithstanding that he was not a party to the settlement agreement in the Holland proceeding, and notwithstanding that s 73(2) of the FWBI Act did not stand in the way of him commencing the proceeding with which his Honour was concerned, that proceeding should nonetheless be regarded as unjustifiably oppressive to those of the present respondents who were also respondents to the Holland proceeding to the extent that that proceeding was overlapped by the present proceeding. His Honour held that it should. 32 In his reasons of 7 April 2016, the primary Judge said: 72. Although s 73(2) does not make the Director a party to the settlement of the previous proceeding, by providing that the Director must not continue to participate in the settled proceeding, s 73(2) has the same practical effect as if the Director were bound to the term by which the building industry participants agreed to discontinue the proceeding. The previous proceeding was brought to an end by the filing of a notice of discontinuance by all parties, including the Director. The Director now seeks to relitigate matters already disposed of by the settlement between the building industry participants in the previous proceeding. In doing so, the Director seeks to proceed in a way that is inconsistent with the agreement to discontinue the proceeding, to which the Director is, in effect, bound by s 73(2); and inconsistent with the discontinuance itself. On appeal, it was common ground that the Director did not file, or participate in the filing of, a notice of discontinuance in the Holland proceeding. 33 The primary Judge noted that, if the applicants in the Holland proceeding had commenced a new proceeding, seeking to relitigate the same matters, the new proceeding would be an abuse of process because the parties had agreed to settle the Holland proceeding, and had discontinued that proceeding under the terms of the settlement. The new proceeding, his Honour held, would be unjustifiably vexatious and oppressive. His Honour continued: 74. The settlement between the building industry participants and discontinuance of the previous proceeding meant that s 73(2) operated to require the Director to discontinue the previous proceeding, or to withdraw as intervenor [sic]. The connection between the settlement and the statutory prohibition upon the Director, make the Director's commencement of the current proceeding analogous to the commencement of a new proceeding by the applicants to the discontinued proceeding. In my opinion, the commencement of the new proceeding by the Director is unjustifiably vexatious and oppressive to those respondents who were parties to the previous proceeding. 34 On appeal, the Director submitted that it was an error for the primary Judge to have perceived in s 73(2) - albeit that it did not directly apply in the circumstances - a basis for assimilating the position of the Director to that of John Holland. He submitted that it was wrong to see s 73(2) as having "the same practical effect as if the Director were bound to the term by which the building industry participants agreed to discontinue the proceeding"; and that it was wrong to see s 73(2) as providing the link which made the proceeding which came before his Honour "analogous to the commencement of a new proceeding by the applicants to the discontinued proceeding". These submissions should be accepted. 35 With respect, what is striking about the primary Judge's reasoning in the present case is that it was only via the operation of s 73(2) of the FWBI Act that his Honour was able to form the view that the Director's proceeding was oppressive. Otherwise, it could not be suggested that it was an abuse. But s 73 made a clear distinction between the parties to the proceeding in question and the Director, either as a party in his or her own right or as an intervener. It operated only where the parties other than the Director had reached a settlement. How the Director was to proceed was specifically dealt with in subs (2). In our respectful view, the subsection cannot be read as having a "practical effect" more restrictive of the Director than that for which its terms provided. It certainly did not have the effect of imposing on the Director the same obligations as fell on the parties directly involved in the settlement. To the contrary: s 73 was premised on the situation that the Director was not a party to the settlement concerned. And, for the very reason that s 73(2) did not impose upon the Director the obligations of a party to the settlement, it was, with respect, an error for the primary Judge to have treated his (the Director's) position as analogous to that occupied by John Holland. 36 At base, once it was held, as the primary Judge correctly did, that s 73(2) of the FWBI Act did not stand in the way of the Director commencing a new proceeding, there was nothing in the facts of the case, and certainly no special character imposed on those facts by the operation of that subsection, which would have made such a new proceeding unjustifiably oppressive to those of the respondents who were parties to the Holland proceeding. In our view, his Honour was in error to have held that the proceeding which came before him was an abuse of process. 37 We shall allow the appeal, dismiss the cross-appeal, set aside Orders 1-7 made by the primary Judge on 2 June 2016, and order that the respondents' Interlocutory Application of 3 August 2015 be dismissed. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jessup, Tracey and Reeves.

Australian Building and Construction Commissioner v Ingham

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