Australian Building and Construction Commissioner v O'Halloran

1. The application for leave to appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

LOGAN J: 1 The Australian Building and Construction Commissioner (Commissioner) has instituted civil penalty proceedings in this Court's Fair Work Division against the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia (as third respondent - (CEPU)), Mr Gary Leonard O'Halloran (the first respondent), and 26 other individuals (respectively, the second and fourth to twenty-eighth respondents). 2 It is apparent from the Commissioner's statement of claim that the proceedings arise out of events in November and December 2017, at and in relation to a project at, 269 Grey Street, South Brisbane for the construction of a 22 storey apartment and hotel complex by J Hutchinson Pty Ltd (trading as Hutchinson Builders) (Hutchinson), at what was termed the "Southpoint A" site. Planet Plumbing (Qld) Pty Ltd (Planet) was engaged by Hutchinson as a plumbing contractor for that construction project. 3 Planet's project manager at the Southpoint A site was a Mr Travis Walkley (Mr Walkley). There was, it seems, some history between the CEPU and Mr Walkley. The Commissioner alleges that, on the early morning of 1 December 2017, Mr Andrew Blakeley (the second respondent), a CEPU organiser, entered the Southpoint A Site, purportedly pursuant to an entry permit notice given under s 119 of the Work Health and Safety Act 2011 (Qld). It is alleged that, thereafter, Mr Blakeley convened an employee site meeting as a result of which employees decided not to undertake work at the Southpoint A site unless and until Planet removed Mr Walkley as its project manager. It is alleged that employees thereafter that day refused or failed to commence work at the scheduled 6:30 am commencement time. It is further alleged that, later that morning, in the course of a telephone conversation between Mr O'Halloran, the CEPU's State Secretary of its Queensland Plumbing Division and a Mr Cameron Smart, Planet's Queensland Manager, words to the following effect were exchanged: … Mr O'Halloran said to Mr Smart words to the effect that "the boys on site are wanting Travis [Mr Walkley] removed permanently off the Southpoint site or terminated from Planet Plumbing altogether". … Mr Smart informed Mr O'Halloran that he would ask Mr Walkley to leave the Southpoint A Site for the day. Mr O'Halloran responded with words to the effect that "if Travis is removed from the site, I will have the boys return to work at 10.30am as they are already going to be docked four hours of their pay". 4 At the time of the events alleged in the statement of claim, Planet's employees at the Southpoint A site were covered by an enterprise agreement: the "Planet Plumbing Qld Pty Ltd and CEPU Plumbing Division Enterprise Agreement 2015 - 2019". 5 The Commissioner alleges that the respondents have, either as a principal or an accessorial party, engaged in unlawful industrial action in contravention of, inter alia, s 46 and s 52 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) and ss 417, 355, 348 and 500 of the Fair Work Act 2009 (Cth) (FW Act). At the heart of the Commissioner's case is his allegation that on 1 December 2017 the CEPU, by its officials, engaged in coercion of Planet with respect to Mr Walkley, contrary to s 348 of the FW Act. 6 Flowing from the exceptions found in s 19(2) of the FW Act and s 7(2) of the BCIIP Act, in the respective definitions in those Acts of "industrial action", the Commissioner's statement of claim is, either expressly or by necessary implication, replete with many a "negative pregnant". In other words, a denial of a pleaded allegation may carry with it an affirmative allegation. In this case, given the statutory exceptions, any such affirmative allegation would be that the circumstances fall within one or the other of the exceptions to what constitutes "industrial action" for the purposes of the FW Act or, as the case may be, the BCIIP Act. 7 In their defence, the individual respondents claimed and reserved their right to claim the privilege against self-exposure to civil penalties, and denied each allegation in the statement of claim. 8 Unfortunately, the Commissioner, as he ought to have done, did not raise at an interlocutory case management hearing a contention that a pleading of the defence in this way carried with it an inability on the part of the individual respondents, in the absence of a pleaded identification of the exception, to put forward at trial a case that the circumstances fell within one or the other of the statutory exceptions mentioned. Instead, as the learned primary judge related in her reasons for judgment, the point arose in this way at the commencement of the trial. 9 At the commencement of the trial it became apparent that the Commissioner anticipated objecting to any questions in cross-examination posed by either counsel for the individual respondents which introduced material going beyond a response to the case pleaded by the Commissioner. Mr C Murdoch QC and Mr A Smith for the Commissioner submitted to her Honour that any such questions were irrelevant to matters currently in issue in the proceeding, and should not be permitted by the Court. As her Honour further recorded, it was clear that the Commissioner anticipated opposing the raising of any positive defence which, in his submission, ought to have been pleaded by the individual respondents prior to the Commissioner's opening his case. The consequential submissions on behalf of the individual respondents asserted that they were permitted to file an amended defence raising a positive defence, if so advised, following the close of the Commissioner's case. 10 It was against this background that her Honour considered it necessary to make the following order, indicating that she would shortly thereafter publish her reasons: If at the conclusion of the applicant's case the individual respondents (or any of them) elect to waive the privilege against self-exposure to a penalty and advance a positive defence, those respondents are at liberty to file and serve any amended defences, affidavits and any outline of submissions immediately following the close of the applicant's case or otherwise in accordance with orders of the Court. 11 The reasons for judgment published by her Honour - Australian Building and Construction Commissioner v O'Halloran [2020] FCA 1291 (ABCC v O'Halloran) - disclose that, in making this order, she followed a practice evident in a series of cases each also decided in the original jurisdiction, the origins of which are to be found in a judgment of Finkelstein J in Australian Securities and Investments Commission v Mining Projects Group Ltd (2007) 164 FCR 32 (ASIC v Mining Projects). 12 Before any detailing of the reasoning of Finkelstein J in ASIC v Mining Projects, it is first necessary to determine whether the Commissioner should be granted leave to appeal against what is, undoubtedly, an interlocutory order. 13 In Adam P Brown Male Fashions Pty Ltd v Philip Morris Incorporated (1981) 148 CLR 170 (Adam P Brown), at 177, it was emphasised that courts with an appellate jurisdiction should be circumspect in permitting challenges to interlocutory value judgements in respect of matters of practice and procedure or exercises of discretion made in an exercise of original jurisdiction. That emphasis was hardly a revelation. In In re the Will of FB Gilbert (deceased) (1946) 46 SR (NSW) 318, at 323, cited with approval in Adam P Brown, at 177, Jordan CJ had stated: [T]here is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. Recently, in Gambaro v Mobycom Mobile Pty Ltd [2021] FCA 211, at [21], and with reference to these statements, I observed that: This circumspection is no less applicable to the industrial jurisdiction than it is to other civil proceedings. In one sense, it is even more applicable in industrial cases, as there are invariably strong commercial, private and public interests at large in their prompt resolution. 14 The present case offers a paradigm example of the delay that can be introduced by a challenge to an interlocutory order. This delay is in addition to the inevitable lag between complaint, investigation and institution of most civil penalty proceedings and the uncertainties in relation to many trial listings introduced by episodic, public health restrictions associated with the present pandemic. Even for witnesses doing their honest best, memories can fade over time. Further, the essential purpose of a civil penalty regime, deterrence, is not well served by a lengthy delay between occurrence of events and determination of whether those events disclose a contravention of norms of conduct ordained by Parliament. 15 For all that, ASIC v Mining Projects is not, with respect, readily reconcilable with views earlier expressed by the majority of the New South Wales Court of Appeal in MacDonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612 (MacDonald), by the Full Court in Adams v Director of the Fair Work Building Industry Inspectorate (2017) 258 FCR 257 (Adams), at [104], (with reference to MacDonald), by the Full Court of the West Australian Supreme Court in Bridal Fashions Pty Limited v Comptroller-General of Customs (1996) 17 WAR 499 (Bridal Fashions) and by Gyles J in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union (2005) 226 ALR 247 (Silvestri), at [17], in relation to pleading practice and procedure applicable to civil penalty regimes. Neither, as I pointed out in the course of oral argument, is it reconcilable at all with an earlier judgment of the Court of Appeal for England and Wales, Inland Revenue Commissioners v Jackson [1960] 1 WLR 873 (Jackson) and the apparently settled practice in the United Kingdom in relation to suits for the recovery of pecuniary penalties by the Crown and emanations thereof, as revealed in Atkin's Court Forms for which Jackson is cited as authority. Related to this, the practice ordained in ASIC v Mining Projects, as its application in the present case illustrates, is fraught with the prospect of a fragmented trial. The time has well and truly come for the correctness of that practice to be considered by a Full Court. A grant of leave to appeal is therefore warranted. 16 The learned primary judge offered (ABCC v O'Halloran, at [25] - [39]) a comprehensive summary both of the reasoning of Finkelstein J in ASIC v Mining Projects and of its subsequent reception in the original jurisdiction. This I now gratefully incorporate without further attribution. The individual respondents adopted that reasoning and that reception in their submissions. 17 In relation to the pleading dispute in ASIC v Mining Projects, ASIC delivered a detailed statement of claim and the defendants each filed defences. ASIC contended that the defences were deficient in several respects and sought orders for the provision of further and better particulars. 18 In their defences in ASIC v Mining Projects the directors opened with a statement that they claimed and reserved their right to claim penalty privilege in the proceeding. They admitted certain facts, denied some facts, admitted other facts but asserted other facts which could answer them; and set up a positive case in answer to the various claims set up. Justice Finkelstein observed that although the directors had provided considerable detail, including particulars of many of the allegations, no part of the defence amounted to an allegation of the truth of the facts therein. Rather, the statements in the defence were only to be treated as statements outlining the case which each director wished to raise for resolution by the Court. 19 The directors submitted that if their pleadings were deficient they could not be compelled to provide further information because of penalty privilege or the privilege against self-incrimination. 20 His Honour found that, in view of the claims made by ASIC, each privilege was engaged. After observing that penalty privilege was claimed in the context of a civil action, his Honour observed, at [11], that the circumstances in which penalty privilege may be claimed were not settled. At [12], his Honour continued: That the rule has a wider application than merely preventing a plaintiff from obtaining discovery or interrogatories reflects the broad object of penalty privilege. In Daniels Corporation [2002] HCA 49; 213 CLR 543, 559 Gleeson CJ, Gaudron, Gummow and Hayne JJ said that penalty privilege "serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it." That is, the plaintiff must prove his case without any assistance from the defendant: Abbco Iceworks [1994] FCA 1279; 52 FCR 96, 129; Rich [2004] HCA 42; 220 CLR 129, 142. So it has been held that although in a civil action a defendant is required to deliver a defence he cannot be compelled to make any admissions in relation to the matters alleged against him. That is, penalty privilege operates to relieve a defendant from the need to deliver a defence that complies with the pleading rules if the rules would override the privilege. To the extent that pleading rules purport to impose such an obligation they must give way to the privilege: Hadgkiss v Construction, Forestry, Mining and Energy Union [2005] FCA 1453; (2005) 146 IR 106, 111 - 112; A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; (2005) 226 ALR 247, 251. [Emphasis added by the primary judge] 21 In addition to commenting in respect of the operation of the penalty privilege, his Honour continued in respect of positive defences as follows: 13. There is a potential problem if, as in this case, a defendant wishes to run a positive case. Ordinarily a positive case must be raised in the defence. Whether it must be raised in a defence in a civil action to recover a penalty is by no means clear. The view I favour is that there can be no such requirement as it would be inconsistent with the privilege. On the other hand, if a defendant who wishes to run a positive case is required to plead his case that can be accommodated while maintaining the privilege. What should occur is that the defendant should be entitled to rely on the privilege until the plaintiff's case is concluded. If at that point the defendant decides to run a positive case he can deliver an amended defence that will outline his case. In an exceptional case the judge may grant a short adjournment to allow the plaintiff time to prepare, if he is otherwise taken by surprise. In most cases that will not be necessary. By the time the plaintiff has closed his case the nature of the defence will usually be apparent. That is the experience of those who prosecute criminal cases. The advocate who runs a civil penalty proceeding should be equally adept at dealing with the defendant and his witnesses without knowing in advance every word they are about to say. [Emphasis added by primary judge] 22 At [16], after examining Bridal Fashions, his Honour continued: … both penalty privilege and self-incrimination privilege protect not only against the risk of exposure to penalty or incrimination by direct evidence but also by indirect or derivative evidence. Disclosing a positive case at the pleadings stage will often provide the plaintiff with an opportunity to follow leads and open up fresh fields of inquiry. A defendant cannot be required to provide information that may be the basis of an investigation that may lead to the discovery of real evidence: Reid v Howard [1995] HCA 40; (1995) 184 CLR 1, 6 - 7. If a defendant is required to plead a positive case there is a risk of that happening: Chief Executive Officer of Customs v Camile Pty Ltd [2004] NSWSC 1256; (2004) 58 ATR 163, 169. [Emphasis added by primary judge] 23 His Honour then said: 17. In any event even if, contrary to my view, Bridal Fashions stands for the proposition that a positive defence can never incriminate a defendant or expose him to a penalty, it says nothing about when the defence must be delivered. On my alternative approach a defendant can rely on the privilege up to the point he decides to go into evidence. It is only at that moment, if the defendant elects to run a positive case, that he must give up the privilege and file a defence that outlines the case he intends to run. [Emphasis added by primary judge] 24 The views expressed in ASIC v Mining Projects have been adopted and applied in numerous decisions in this Court's original jurisdiction: Frugtniet v Migration Agents Registration Authority (2017) 73 AAR 1; Fair Work Ombudsman v Hu [2017] FCA 1081; Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 3) (2018) 357 ALR 695; Singh v Fair Work Ombudsman [2019] FCA 664; and Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 2) [2020] FCA 348. The learned primary judge extracted the pertinent passages in these cases in her reasons for judgment. None differ from the reasoning exposed in the passages from ASIC v Mining Projects set out above. 25 A necessary starting point for consideration of this line of authority is s 551 of the FW Act and its analogue in the BCIIP Act, s 86. Each of these provisions provide that this Court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention, or proposed contravention, of a "civil remedy provision" as defined. Each of the contraventions alleged by the Commissioner is of a "civil remedy provision". 26 As, with the concurrence of Collier J, I highlighted in Heiko Constructions T/A Heiko Constructions Pty Ltd v Tyson [2020] FCAFC 208 (Heiko Constructions), at [62], provisions applying civil practice and procedure to suits by officers or emanations of the Crown in right of the Commonwealth have been found on the Federal statute book from the earliest days of Federation. In turn, as I also highlighted in that case, at [64], this was not an antipodean idiosyncrasy. Rather, it replicated a practice in the superior courts of England and Wales in relation to suits by officers of the Crown for the recovery of pecuniary penalties. The Rules of the Supreme Court 1883 (Eng), introduced as a sequel to the merger of courts which followed the Judicature Acts 1873 and 1875, provided, by O LXVIII, that the provisions of those rules applied to such proceedings, which were heard on the Crown or Revenue side of the Queen's Bench Division of the High Court of Justice. This was the successor forum to the Court of Exchequer for the hearing and determination of suits "touching the profit of the Crown": G S Robertson, The Law and Practice of Civil Proceedings by and Against the Crown and Departments of the Government (1908), pp 583-584 (Robertson). 27 Robertson, as I pointed out in Heiko Constructions, at [64], was regarded by Williams, Webb, Kitto and Taylor JJ in Naismith v McGovern (1953) 90 CLR 336 (Naismith v McGovern), at 340, as an authoritative source of guidance in relation to civil penalty proceeding practice when considering a point of practice with respect to discovery under a civil penalty regime for which provision was once made in the now former Pt VII of the Income Tax Assessment Act 1936 (Cth) (ITAA1936). Like the FW Act and the BCIIP Act, that regime provided that such proceedings were to be tried in accordance with the usual practice and procedure of the Court in civil cases (in the absence, as was the case with the High Court, of any particular rules for Crown suits in revenue matters): see the former s 237 of the ITAA1936. 28 It will be necessary to return shortly to Naismith v McGovern. Before so doing, consideration of English practice in relation to suits for penalties should be completed. Regard to Robertson discloses that the penal nature of such a proceeding did not mean that only a general joinder of issue was required of a defendant. Thus, Robertson includes, at 263, in a precedent answer to an Attorney-General's information filed on the Revenue Side for the imposition of pecuniary penalties in respect of alleged customs offences, not just a plea of "not guilty" but also what was known as a plea of "non devenerunt", by which a defendant made a positive allegation that the goods in question or any part thereof had not come into his possession. 29 The absence in English practice of any objection, based on the penal nature of a suit for the recovery of a pecuniary penalty, to the pleading in the first instance of a positive defence is made even starker in the more modern but no less authoritative English practice work, Atkin's Court Forms. There (Atkin's Court Forms, 2nd Edn., Vol. 34, Title, "Revenue", p 223, Form 66, note 2), one finds this annotation in respect of a precedent defence to a suit on the Revenue Side of the Queen's Bench Division of the High Court of Justice for the recovery of pecuniary penalties in respect of a failure to file taxation returns as and when required. The precedent defence includes a paragraph expressly denying a failure to lodge returns as alleged and is annotated by the editors of that work, "If not given, particulars may be ordered." The authority cited for that proposition is Jackson. 30 Jackson was a civil penalty proceeding filed on the Revenue Side of the Queen's Bench Division for a failure to lodge taxation returns. The statement of claim of the Inland Revenue Commissioners alleged that Mr Jackson had been required by notices in writing to furnish on or before a specified date, particulars as to the several sources of his income, and that he "without reasonable excuse" had failed to do so within the time specified. By his defence Mr Jackson admitted that he had not furnished all the particulars required within the time specified; but he specifically denied "that he failed to furnish any such particulars without reasonable excuse." The commissioners applied for particulars of that denial, "specifying whether it is alleged that there was a reasonable excuse for not furnishing the particulars within the time and if so giving full particulars of such alleged excuse". The master in the Queen's Bench Division ordered the taxpayer to give these particulars. This ruling was upheld by a chamber judge from whose judgment Mr Jackson then appealed to the Court of Appeal. That appeal was, unanimously, dismissed. The affinity as between the issue in that case and the present is so strong that extensive reference to it is warranted. 31 The point pressed on appeal on behalf of Mr Jackson was exactly that pressed on behalf of the individual respondents in the present case and taken up by the learned primary judge in reliance upon the line of original jurisdiction authorities commencing with ASIC v Mining Projects. This is revealed by the summary of that argument in the authorised report of Jackson, at 875: The onus of establishing that there has been a failure to deliver the particulars within the prescribed time "without reasonable excuse" falls on the commissioners, and if the particulars ordered by the master are given they will assist the commissioners to establish their case; and on the authorities that is just what they are not allowed to have. The commissioners say that the defence involving a double negative has implied in it a positive averment that the taxpayer had a reasonable excuse. But this is not an ordinary civil action. It is a claim for penalties; and the approach of the law to such an action is quite different from that to an ordinary civil action. It is also obvious from an exchange which occurred in the course of oral argument in Jackson, at 876, that the court was well-seized of exactly the same consequence that may in the present case bedevil a failure to require the identification of a particular defence in the ordinary course of pleadings: [Counsel for Mr Jackson] If his excuses are good no harm can befall him; but if they are inadequate the commissioners would be able to present their case better than they could without the particulars. [PEARCE L.J. It would make no difference, for the judge would simply grant an adjournment at the taxpayer's expense on the ground that the commissioners required more evidence.] 32 The concern voiced on behalf of Mr Jackson, as in the present case by the individual respondents and in the authorities upon which they rely, was that to insist on particularity in a defence in a civil penal proceeding was to advantage the authority which had brought the proceeding in the proof of the contravention alleged. The point made in response in argument by Pearce LJ is the same as has been apprehended both in this case and in some Australian cases. If particularity of defence is given at a late stage of proceedings, procedural fairness may well dictate that a trial be adjourned part heard at the request of a plaintiff/applicant. 33 Another noteworthy feature of Jackson is that the point advanced on behalf of Mr Jackson was not regarded by the Court of Appeal as warranting calling upon counsel for the respondent commissioners to make oral submissions. 34 Submissions of counsel and views expressed judicially in the course of those submissions are, of course, not authoritative. But it is helpful in this instance to set them out to give context to the views which were expressed in the judgments delivered in Jackson. 35 In Jackson, at 878, Sellers LJ, having stated the facts referred to and disposed of the submissions for Mr Jackson in this way: One can simply take this case as a claim for penalties. It is not a criminal proceeding. The form of the pleading is of the usual kind and normal so far as particulars are required of the averments in the pleading. I support the judge entirely in thinking that when the defendant pleads in the way I have read in paragraph 2 of the defence he is of necessity and by clear implication setting up an implied affirmative. It does not go to establish the plaintiffs' case but operates substantially for the benefit of the defendant who is thereby setting up an affirmative case. The plaintiffs' claim stands on its own feet and needs no support from the defendant. On these pleadings as they stand the defendant proposes to set up that there was reasonable excuse for not giving the information required. Unless the particulars of the defence which have been asked for are given before the trial there may well be surprise, delay and undue expense. 36 Having so done, Sellers LJ then quoted, at 879, with approval a passage from Duke's Court Estates Ltd. v. Associated British Engineering Ltd [1948] Ch. 458, at 463, in which Harman J had, with reference to observations made by Goddard LJ in Pinson v. Lloyds and National Provincial Foreign Bank Ltd [1941] 2 K.B. 72 (Pinson), stated the usual civil pleading consequence of the denial in a defence of a negative pregnant in a statement of claim: As the Lord Chief Justice [Goddard L.J.] said, 'A bare traverse is a perfectly good plea provided that all that is thereby intended is to put the plaintiff to proof of his case, but it may be that, concealed in a traverse, is an affirmative case, and this may well be so when the traverse is of a negative averment. If it is clear to the court, either from the nature of the case or from the admission of counsel or otherwise, that it is intended to set up an affirmative case, so that the traverse is what has been described as a negative pregnant, it seems to me that particulars of the affirmative case ought to be delivered. Otherwise, the opposite party and the court will be in doubt as to what issues are to be determined at the trial.' 37 Also in Pinson, as Sellers LJ highlighted in Jackson, at 879, Stable J had stated, at 463-464: "'(ii) it may be a negative pregnant which contains within the double negative an affirmative allegation.'" Then Stable J. said: "'If it falls under the second head, the double negative extends beyond a mere traverse and amounts as in the present case to this: "If you establish a prima facie case that I sold or purchased shares for you and that in so doing I acted without authority, then I intend to call evidence to establish that on each or some of the occasions there was an express authority to act as I did or an implied authority to be derived from certain facts." That, in my judgment, is to set up an affirmative case of which particulars ought to be given and that, none the less, though the affirmative case is concealed, albeit imperfectly, in a negative shell.'" His Lordship then added, at 879, "It was pointed out that if the particulars are not given then it may preclude a defendant in those circumstances from advancing an affirmative case at the trial." Once again, that is exactly the point that in the present case the Commissioner advanced before her Honour the learned primary judge as to a consequence of a failure on the part of the individual respondents to give particulars of a defence which traversed a negative pregnant in the statement of claim. 38 Also in Jackson, in expressing his concurrence with the judgment delivered by Sellers LJ, Pearce LJ stated, at 879 - 880: It is clear from the pleadings that the traverse is a negative pregnant. The admissions of counsel have made it even clearer that the defendant intends to set up an affirmative case. The only object of the defendant in seeking to avoid giving these particulars is admittedly to prevent the plaintiffs knowing before the trial what the defendant's case is, and thus to give the defendant the advantage of surprise. That is an unmeritorious object and would probably lead to an inconvenient adjournment in the middle of the hearing. 39 The conclusion reached in Jackson is emphatic and, as the above analysis of the submissions and judgments discloses, in no way turned upon the limited admission made by Mr Jackson in his defence. 40 The particular importance of Jackson is that a requirement to deliver a particularised defence was at no stage in the judicial hierarchy in England which culminated in the judgment of the Court of Appeal regarded as incompatible with the privilege in respect of exposure to a penalty. The correctness of Jackson has never since been questioned in the United Kingdom. 41 The position which obtains in civil proceedings under this Court's pleading rules, as found in the Federal Court Rules 2011 (Cth) (Federal Court Rules), is exactly the same as that described in Jackson with reference to Pinson. A denial in a defence of a negative pregnant in a statement of claim "is to set up an affirmative case of which particulars ought to be given". In Jackson, the penal character of a suit for the recovery of a pecuniary penalty, nonetheless tried in accordance with the court's civil practice, made no difference whatsoever to this position. 42 In Naismith v McGovern the point at issue was whether the Commissioner of Taxation, as prosecutor in the civil penalty proceeding could be required to give discovery, because the defendant could not be so required. That the latter was a given flowed from acceptance by the High Court of the applicability to a proceeding conducted in accordance with its civil practice rules of the long prevailing position in England with respect to civil penalty proceedings. That applicability and English position is revealed by the following passage in the joint judgment of Williams, Webb, Kitto and Taylor JJ, at 341 - 342: We are here primarily concerned with the sections in Pt. VII. relating to the procedure laid down for the recovery of pecuniary penalties for offences and not with the nature of the offences themselves and nothing that was held in Mallan v. Lee throws any doubt upon the remarks of Williams J. and Fullagar J in the cases cited. The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature. It is clear that the actual procedure by which an order for the recovery of a penalty is obtained in this Court is, in the absence of a special order, the civil procedure of this Court. This is expressly provided for by s. 237 of the Assessment Act. Discovery and the administration of interrogatories are part of the ordinary civil procedure of the Court. The practice is now regulated by O. 32 of the Rules of Court. Originally orders for discovery were not obtainable at common law, except to a limited extent, and a party to a common law action who desired general discovery had to proceed by bill in equity. But the Court of Equity would not make an order for discovery or for the administration of interrogatories in favour of the prosecutor whether the prosecutor was the Crown or a common informer or any other person where the proceeding was of such a nature that it might result in a penalty or forfeiture: "nemo tenetur seipsum prodere". When discovery and interrogatories were provided for under the rules made under the Judicature Act the same principle was applied. It was held that the orders were not intended to confer a right to discovery, Hunnings v. Williamson; or to administer interrogatories, Martin v. Treacher, where prior to the Judicature Act such orders were not obtainable. See also Mexborough (Earl) v. Whitwood Urban District Council; Colne Valley Water Co. v. Watford & St. Albans Gas Co. The subject is discussed in the judgment of Isaacs J., as he then was, in R. v. Associated Northern Collieries. The proceedings there in question were brought under s. 13 (1) of the Australian Industries Preservation Act 1906-1910 which provided that proceedings for the recovery of pecuniary penalties for offences, other than certain offences, should be instituted in the High Court by way of civil action and should be tried before a justice of that Court without a jury. His Honour held that in a civil action for penalties, in the absence of statutory provision to the contrary, the plaintiff is not entitled to an order for discovery of documents against the defendant and that this rule applies equally both to actions by the Crown and actions by a common informer. In the present proceedings, therefore, assuming these principles are applicable, the plaintiff could not obtain an order for discovery or for interrogatories against the defendant. [Footnote references omitted] 43 The conclusion that discovery did not go against a defendant in a suit for the recovery of a penalty reflected the by then long settled position in England: see Daniell's Chancery Practice, 8th Edn, p 571. 44 Their Honours went on to hold in Naismith v McGovern that the principle encapsulated in the maxim "nemo tenetur seipsum prodere" - no one is bound to accuse himself, which underpinned the refusal to lend the processes of discovery and interrogatories against a defendant in a penal proceeding, did not have the reciprocal consequence that the Commissioner was relieved from giving discovery in accordance with the usual practice applicable to civil cases. Put another way, Naismith v McGovern stands for the proposition that those usual rules are rendered inapplicable only to the extent that they are inapplicable with the privilege against self-incrimination or exposure to a penalty. 45 The starting point for the reasoning in ASIC v Mining Projects is Daniels Corporation International Pty Ltd v Australian Competition & Consumer Commission (2002) 213 CLR 543, in which, at 559, Gleeson CJ, Gaudron, Gummow and Hayne JJ held that this same privilege "serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it." That holding had nothing to do with pleading practice but was directed to why it was that the recipient of a statutory notice to produce could not be compelled to produce documents sought by that notice in circumstances where that privilege was applicable and the statute concerned neither expressly nor by necessary implication abrogated the privilege. That it is a common law privilege and not merely a practice relating to discovery was confirmed in Pyneboard Proprietary Limited v Trade Practices Commission (1983) 152 CLR 328, at 336; see also Sorby v Commonwealth of Australia (1983) 152 CLR 281, at 309. The antithetical discovery practice grounded in a refusal to assist subjection to penalties is a manifestation of the privilege. 46 Bridal Fashions was a customs prosecution filed in the West Australian Supreme Court. Being so filed and there being no rules in that court specifically relating to Crown suits in revenue matters, the effect of s 247 of the Customs Act 1901 (Cth) (Customs Act) was that the usual rules of court in civil proceedings were applicable. In relation to pleadings, the position concerning the adequacy of a defence was complicated by s 255 of the Customs Act, which makes an averment of a fact in a statement of claim prima facie evidence of that fact. There is no equivalent provision in either the FW Act or the BCIIP Act. For present purposes, the utility of Bridal Fashions lies not in how the Full Court reasoned through the ramification for the pleading of an adequate defence in the face of averments but rather for some introductory observations made by the Full Court, at 515, in relation to the pleading of a defence in a civil penalty case, taking into account the privilege against exposure to a penalty: The privilege against self-incrimination is not confined to oral evidence given at trial. It also applies in pre-trial interlocutory proceedings such as answers to interrogatories, discovery and inspection of documents and the production of documents in answer to a subpoena. The learned Master noted that no case had been cited to him in which the principle had been extended to pleadings. We were unable to find any such case. Accordingly, it is necessary to consider the question in the context of the pleading rules. These rules must necessarily be considered in the context of a Customs prosecution under the statutory regime contained in the Act. The result of the conclusion that the privilege against self-exposure to a penalty is not available to a corporation means that the appellant will have to plead to the statement of claim in the conventional fashion. So far as concerns the second respondent [an individual], counsel made this submission: "... in relation to the claim as a whole, any admission by the defendant in relation to matters such as this where the defendant is liable to exposure to a penalty, the defendants are entitled to say, 'We are not obliged to assist the prosecutor in any way at all' and that is by an admission on any matters." We think this over-simplifies the point. It is not a question of "helping the prosecutor"'. A defendant must raise a plea that will take the matter to trial and to the extent that they are consistent with the existence of the privilege the normal rules of pleading must be followed. 47 The passage just cited confirms that Jackson was not cited or otherwise discovered in Bridal Fashions, so the reasoning is from first principles. So reasoning, the Full Court eschewed the notion that a requirement for the pleading of a defence in itself assisted a prosecutor. Instead, the Full Court considered that the usual pleading rules were applicable to the extent which they were consistent with the privilege. 48 Australian Competition & Consumer Commission v FFE Building Services Ltd (2003) 130 FCR 37 (FFE Building Services), is a judgment of the Full Court which stands for the proposition that a necessary consequence of the privilege against exposure to a penalty is that an individual respondent party cannot be compelled by interlocutory order in advance of trial to file statements of evidence in a civil penalty proceeding. In so holding, the Full Court observed, at [35], "Pretrial disclosure of the evidence to be called by an individual respondent may assist the Commission to improve its case against that respondent." No pleading point arose in FFE Building Services. 49 Hadgkiss v Construction, Forestry, Mining and Energy Union (2005) 146 IR 106 (Hadgkiss v Construction, Forestry, Mining and Energy Union), is cited in ASIC v Mining Projects as an authority which supports the conclusions reached. However, in my respectful view, that is to assign to that case more weight than it can bear. A pleading point did arise in Hadgkiss v Construction, Forestry, Mining and Energy Union, which was a civil penalty proceeding to which by statute the Court's civil practice was applicable. In respect of individual respondents and having considered Bridal Fashions, Graham J stated, at [31] - [34]: 31. In my opinion, the Third and Fourth Respondents can be required to file defences. Should they wish to waive the privilege to which they are entitled and make admissions, they may choose to do so either expressly or by refraining from pleading to specific allegations of fact in the Statement of Claim. 32. Plainly, should they choose to make specific denials or statements of specific non-admission, such a course would be consistent with their rights to rely upon their privilege against exposure to penalties. 33. It should be remembered that there is no requirement under the Rules for pleadings to be verified. 34. In the light of O 11, r 13(1) of the Rules, I do not consider that the Third and Fourth Respondents could refrain from pleading to discrete allegations in the Statement of Claim in words to the effect "I decline to plead to the facts and matters alleged in paragraph X of the Statement of Claim on the ground that to do so may expose me to liability for a penalty" without risking deemed admissions in accordance with the Rule. However, it would seem to me perfectly proper for statements of specific non-admission to be made in such circumstances and it would be a matter for the Respondents to decide whether the basis of the statements of non-admission was included in their pleading or not. The Federal Court Rules contain, in r 16.07(2), a deemed admission equivalent of the former O 11 r 13(1). I do not, with respect, see how a rule imposing a deemed admission could be compatible with the common law privilege, but I agree with Graham J that a respondent could not merely state, "I decline to plead to the facts and matters alleged in paragraph X of the Statement of Claim on the ground that to do so may expose me to liability for a penalty". Rather, an individual respondent would have to comply with the general requirement in r 16.07(1) that, "A party pleading to an allegation of fact in another party's pleading must specifically admit or deny every allegation of fact in the pleading." Only the default found in r 16.07(2) would be rendered inapplicable by the privilege. A party choosing not to waive the privilege would not admit particular allegations but instead deny them. Jackson was not cited to Graham J in Hadgkiss v Construction, Forestry, Mining and Energy Union. Beyond this, it seems to me that Hadgkiss v Construction, Forestry, Mining and Energy Union stands for nothing more than the proposition, with which I respectfully agree, that the privilege does not prevent an individual respondent from waiving it and making such admissions as he or she may be advised in a defence. 50 A pleading point also arose in Silvestri, another civil penalty proceeding to which the usual civil practice rules were expressed to be applicable. In opining that an individual respondent was obliged to plead a positive defence, Gyles J stated, at [17]: A personal respondent to a penalty proceeding is entitled to put the applicant to proof of its case. Such a respondent cannot be forced to make an admission and no solicitor acting for that person can be held responsible for not ensuring that a party plead in a way which goes further than this. In other words, such a respondent can decline to admit matters alleged against it. To the extent that the rules of pleading require to be modified to enable this to take place, that will be done. There is no occasion, however, for relieving respondents of a duty to plead. Even in a criminal trial, a defendant pleads guilty or not guilty. The issue would arise in a case where a personal respondent proposes to rely upon a positive defence. Penalty proceeding or not, means must be found to advise the applicant and the court of any positive defence so that the trial can be properly prepared and conducted. [Emphasis added] Jackson was not cited to his Honour. However, the reasoning of Gyles J is uncannily similar to what was evidently regarded in Jackson as elementary. Having set out his view in Silvestri, Gyles J added, at [17], "It is at that point that there may be a debate as to the appropriate course, which may involve a closer examination of the decisions in Bridal Fashions and Hadgkiss." His Honour then noted that the point had not yet arisen yet in that case. Silvestri is not, with respect, a case which supports the conclusions reached in ASIC v Mining Projects. If anything, although it was unnecessary for his Honour to decide the point, the opinion expressed by Gyles J rather tends to the contrary. In Jackson, where the point unnecessary for Gyles J to resolve did arise, it was resolved by requiring a positive defence to be pleaded in advance of trial. 51 Bridal Fashions, FFE Building Services and Silvestri but not Jackson were amongst the cases which were considered by the New South Wales Court of Appeal in MacDonald, which was an interlocutory appeal on a pleading point concerning what was required in a defence in a civil penalty proceeding. The conclusions reached in that case concerning pleading requirements are not affected by the later High Court appeal, Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 which followed the subsequent trial. Like the present, MacDonald was also a case required by statute to be tried in accordance with the usual rules of practice applicable to civil proceedings. The applicable rules were the Uniform Civil Procedure Rules 2005 (NSW), which materially provided: 14.14 General rule as to matters to be pleaded specifically … (2) In a defence or subsequent pleading, a party must plead specifically any matter: (a) that, if not pleaded specifically, may take the opposite party by surprise, or (b) that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or (c) that raises matters of fact not arising out of the preceding pleading. (3) Matters which must be pleaded pursuant to subrule (2) include (but are not limited to) fraud, performance, release, statute of limitation, extinction of right or title, voluntary assumption of risk, causation of accident by unknown and undiscoverable mechanical defect and facts showing illegality. 15.1 Pleadings must give all necessary particulars (1) Subject to this Part, a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet. 52 Having set out the passage from FFE Building Services quoted above and with reference to these rules of court, Mason P, with whom Giles JA agreed in this regard, stated, at [71] - [74]: 71. In my opinion, these principles mean that the claimant should not be compelled to include in his Defence any information that may have the tendency to expose him directly or indirectly to the penalties being sought by ASIC. 72. To draw the line conceptually at this point will not relieve the claimant from compliance with Uniform Civil Procedure Rules, r 14.14 and r 15.1, so far as disclosing in his pleading his intention to invoke the statutory defences or any other "positive" defence, regardless of where the onus lies in establishing that defence. Not every form of affirmative defence has the requisite tendency. I see nothing wrong with a pleading in the following form: "If, which is denied, the matters alleged in para X constitute a contravention of sY of the Corporations Law, the defendant says that the matters alleged by ASIC also establish that the claimant relied upon information or professional or expert advice (etc) / acted honestly (etc). The defendant reserves the right to advance in his case additional material in support of his defence, the details whereof will be disclosed by amending this paragraph after the close of ASIC's case." See also Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 86, Bridal Fashions (at 516). 73. In the Matter of Water Wheel Mills Pty Ltd (Victorian Supreme Court, Mandie J, 22 June 2001, unreported) involved a civil penalty claim under the Corporations Law (Cth). Mandie J declined to order a defence to be filed going beyond one indicating the matters admitted, denied or not admitted. His Honour was not persuaded to follow Bridal Fashions. He considered that any meaningful pleading of affirmative allegations by way of defence might expose the defendants to a civil penalty or put the plaintiff upon notice of a train of enquiry which might expose the defendants to a civil penalty. 74. I respectfully disagree. In my view, the Rules ought to be departed from no more than is necessary to give effect to the privilege. The pleading mechanism I have suggested would require the claimant to invoke from the outset any relevant defence or statutory ground of dispensation; and it would require him to identify any parts of ASIC's own allegations intended to be relied upon in that regard. There would also be a framework that defines the legal issues throughout the trial against which rulings as to admissibility could be made (at least in some circumstances). If and to the extent that the claimant exercised his right to plead and particularise in the manner indicated and not to waive his privilege by venturing further, there will still be the likelihood of ASIC's evidentiary case being split more than it otherwise might be, but at least this consequence would be reduced to a minimum. [Emphasis added] 53 An analogous rule to those considered in MacDonald is to be found in r 16.08 of this Court's rules. The purpose of r 16.08 is to advise an applicant and the Court a positive defence. It provides: 16.08 Matters that must be expressly pleaded In a pleading subsequent to a statement of claim, a party must expressly plead a matter of fact or point of law that: (a) raises an issue not arising out of the earlier pleading; or (b) if not expressly pleaded, might take another party by surprise if later pleaded; or (c) the party alleges makes another party's claim or defence not maintainable. 54 I respectfully agree with the statement by Mason P in MacDonald that the rules of court ought to be departed from no more than is necessary to give effect to the privilege. However, agreeing as I do with everything stated by the members of the Court of Appeal in Jackson, I respectfully disagree with his Honour as to where that line is to be drawn. As drawn by his Honour and in ASIC v Mining Projects and later authorities in the original jurisdiction, the prospect exists of an applicant being taken by surprise as to an issue in the proceedings and thereby having good cause to seek and obtain an adjournment. In my view, the individual respondents in the present case ought to have been required to give particulars of a denial of the negative pregnant in the statement of claim. 55 MacDonald was, in turn, considered by a Full Court of this Court in Adams, yet another civil penalty case, but that consideration did not entail any reference to ASIC v Mining Projects. Nonetheless, as I understood the Commissioner to submit, certain observations in Adams about the pleading of a defence are not readily reconcilable with ASIC v Mining Projects. Thus, at [104] - [105], having referred to the statements, quoted above, made by Mason P in MacDonald, the Full Court observed: 104. To the extent that the decision relies upon New South Wales legislation and rules, there appears to be little difference between the position in that State and that which prevails in this Court. It is important to note that at [72], Mason P made it clear that when he spoke of a "defence", he included statutory defences and any other "positive" defence, regardless of where the onus might be in establishing that defence. Much of his Honour's reasoning seems to have been based on the simple proposition that pleading the facts necessary to establish a defence (or raise it) will not necessarily amount to exposure to the risk of incurring a penalty. 105. We have little doubt that for the appellants to rely upon alleged authorization or agreement, is to advance a "positive" defence which, according to the decision in MacDonald, should have been pleaded. We would say the same about a claim of illness, that a particular appellant was unable to access the site or that such an employee was "off", if that term meant anything more than that he was engaging in industrial action. However it is not necessary for us to decide this matter. Fair Work seems to have been content to conduct the case on the basis that the appellants were not obliged to plead these matters. Rather, it asserted that the appellants had not satisfied evidential burdens concerning them. [Emphasis added] 56 As is apparent from the passage quoted, it was not necessary in Adams for the Full Court to reach any concluded view about pleading practice, because of the stance adopted in the original jurisdiction on that case by the applicant prosecutor. The Commissioner has adopted a different stance in the present case. Although Jackson was not cited in Adams, the emphasised statement in Adams, at [104], of the proposition flowing from MacDonald that the pleading of a positive defence "will not necessarily amount to exposure to the risk of incurring a penalty" is certainly consistent with Jackson, as is the Full Court's characterisation of that proposition as "simple". I respectfully agree with the observations made in Adams. 57 In addition to what is stated in Jackson, that requiring such a pleading is not inconsistent with the privilege is in accordance with the general object of pleadings, as expressed by Mason CJ and Brennan J in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 (Laws), at 86: The suggestion that pleadings should be treated in the same way as any other form of admission fails, in our view, to take account of the function and object of pleadings, when they are not required to be verified, in outlining the party's case and defining the issues to be tried. Especially is this so in the case of pleading defences. A defendant is entitled to put a plaintiff to proof of his or her cause of action and to raise alternative matters of defence which may possibly answer the plaintiff's claim, without asserting in an absolute sense the truth or correctness of the particular matters pleaded. 58 Under this Court's rules, pleadings serve a like purpose to that described in Laws and are not required to be verified. They define the issues for trial and prevent surprise as to those issues. Identifying, for example, what is a reasonable excuse or an exception to what constitutes "industrial action" does not assist an applicant prosecutor in the proof of the elements of an alleged contravention but it does ensures that the issues for trial are exposed in advance of the trial. A defence so particularised contains no statement which could be tendered against an individual respondent by way of admission. Rather, by its very nature, a positive defence is antithetical to an element of a contravention. 59 With great respect, ASIC v Mining Projects has given rise to a false line of authority in the original jurisdiction in relation to the pleading of a defence by an individual respondent in a civil penalty proceeding conducted in accordance with the civil practice of this Court. It is, with respect, an error to conflate pleadings with compulsory processes such as discovery or interrogatories. The extent of the inconsistency between the privilege and the pleading rules is reached by the recognition that the provision in the rules for deemed admission is not applicable to a civil penalty proceeding. By this means, there is no coercion of a respondent to make an admission subversive of an entitlement to claim privilege. Subject to this, a respondent must conform to the pleading rules, which include a requirement to particularise a defence which denies a negative pregnant in a statement of claim. 60 For these reasons, I would allow the appeal and set aside the order made in the original jurisdiction. To accommodate the contingency that the individual respondents may now wish to plead a positive defence in response to their denial of the negative pregnant in the statement of claim, I would grant leave to the individual respondents to file and serve such amended defence as they may be advised within 14 days. Thereafter, the proceedings should continue to trial in the original jurisdiction on the basis of the issues as revealed by the pleadings as they may come to be amended. If not amended, the individual respondents would, as the Commissioner submitted, be precluded from putting forward at trial a case that they fell within an exception. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Logan.