BGC Contracting Pty Ltd v The Construction Forestry Mining &

Federal Court of Australia|2005-07-01|Before: French J

REASONS FOR JUDGMENT ON COSTS Introduction 1 On 17 February 2004 BGC Contracting Pty Ltd (BGC) instituted proceedings in this Court seeking declarations that representatives of the Construction, Forestry, Mining and Energy Union of Workers (CFMEU), a State-registered union, had no right under the Industrial Relations Act 1979 (WA) (the IRA) to enter a construction site for an ammonia plant on the Burrup Peninsula. The basis of the application was that the workers at the site were employed under Australian Workplace Agreements (AWAs) made under the Workplace Relations Act 1996 (Cth) (the WRA). The rights of entry created by the WRA in respect of AWA employees were said to be inconsistent with, and therefore to render inoperative, the rights of entry conferred under the IRA in so far as they purported to apply to the Burrup site. Shamrock Holdings Pty Ltd (Shamrock) and SNC-Lavalin (SA) Inc (SNC) were joined to the proceedings as applicants. The Attorney-General of Western Australia and the Minister for Employment and Workplace Relations of the Commonwealth intervened. 2 The hearing proceeded over two days on 5 and 6 July 2004. On 29 July 2004 the application was dismissed. The parties were given leave to file written submissions on the question of the costs of the application. The CFMEU submitted that it was entitled to an order for costs. The applicants and the Minister made submissions opposing the CFMEU's application for costs. They did so on the basis that the proceedings were proceedings in a matter arising under the WRA and that in such cases s 347 of the WRA confines the power to award costs to circumstances in which the proceedings have been instituted frivolously or vexatiously. The legal debate in the submissions about costs turned on whether these proceedings were proceedings in a matter arising under the WRA. For the reasons that follow I am satisfied that they were and that no order for costs should be made. Statutory framework 3 The WRA contains a provision limiting the power of the Court to award costs in matters arising under that Act. Section 347 provides: 'Costs only where proceeding instituted vexatiously etc. (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. (2) In sub-section (1): costs includes all legal and professional costs and disbursements and expenses of witnesses.' The restrictive provisions of s 347 do not apply to the Minister intervening in a proceeding. Section 471 confers the right upon the Commonwealth Minister to intervene in the public interest in a proceeding before the Court in a matter arising under the WRA. It also provides in s 471(2): 'If the Minister intervenes in a proceeding before the Court, the Court may, despite section 347, make an order as to costs against the Commonwealth.' 4 The principal issue debated in the written submissions was whether the application answered the description of a proceeding in a matter arising under the WRA. Reference was made to the general jurisdiction of the Court in matters arising under laws of the Commonwealth and the argument advanced that the proceedings did not in truth arise under the WRA and so did not attract the restrictive application of s 347. In that connection the relevant sources of the Court's jurisdiction should be set out. 5 Section 19 of the Federal Court of Australia Act 1976 (Cth) provides: '(1) The Court has such original jurisdiction as is vested in it by laws made by the Parliament. (2) The original jurisdiction of the Court includes any jurisdiction vested in it to hear and determine appeals from decisions of persons; authorities or tribunals other than courts.' 6 Section 39B of the Judiciary Act 1903 (Cth) confers a wide ranging jurisdiction on the Federal Court in respect of various classes of matter and relevantly provides: '(1) Subject to subsections (1B) and (1C), the original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. (1A) The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: (a) in which the Commonwealth is seeking an injunction or a declaration; or (b) arising under the Constitution, or involving its interpretation; or (c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.' Section 39B(1A) was inserted into the Judiciary Act by the Law and Justice Legislation Amendment Act 1997 (Cth), No 34 of 1997 and became effective on 17 April 1997. The qualification in par (c) relating to criminal matters was introduced by the Law and Justice Legislation Amendment Act 1999 (Cth) No 125 of 1999. The succeeding subsections of s 39B deal with qualifications and limitations on the jurisdiction, particularly by reference to criminal proceedings and are not relevant for present purposes. 7 The WRA has a specific provision conferring jurisdiction on the Federal Court. Section 412 provides: 'Jurisdiction of Court (1) The Court has jurisdiction with respect to matters arising under this Act in relation to which: (a) applications may be made to it under this Act; or (b) actions may be brought in it under this Act; or (c) questions may be referred to under this Act; or (d) appeals lie to it under section 422; or (e) penalties may be sued for and recovered under this Act; or (f) prosecutions may be instituted for offences against this Act. (2) For the purposes of section 44 of the Judiciary Act 1903, the Court is taken to have jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth holding office under this Act or the Coal Industry Act 1946. (3) The Court has jurisdiction with respect to matters remitted to it under section 44 of the Judiciary Act 1903.' As explained below however, the jurisdiction conferred upon the Court by s 39B(1A)(c) of the Judiciary Act is additional to and subsumes that conferred by s 412 of the WRA. 8 In addition to the original jurisdiction defined by the WRA, the Court has an appellate jurisdiction conferred by s 422 of the WRA: 'Appeals from State and Territory Courts (1) An appeal lies to the Court from a judgment of a court of a State or Territory in a matter arising under this Act. (2) It is not necessary to obtain the leave of the Court or the court appealed from in relation to an appeal under subsection (1). (3) An appeal does not lie to the High Court from a judgment from which an appeal may be made to the Court under subsection (1).' That appellate jurisdiction which is confined to appeals from the courts of the States and Territories in matters arising under the WRAis supplementary to the general appellate jurisdiction of the Court in respect of decisions of its own judges exercising original jurisdiction. That general appellate jurisdiction is conferred by s 24 of the Federal Court Act which also picks up, in an ambulatory way, appellate jurisdiction relating to State and Territory courts exercising federal jurisdiction where specific statutes so provide. 9 The Court has conferred upon it by the Federal Court Act, general powers in the exercise of its original and appellate jurisdiction. Section 21 of the Federal Court Act provides: '(1) The Court, may in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed. (2) A suit is not open to objection on the ground that a declaratory order only is sought.' Section 23, also relied upon by the CFMEU in this case, provides: 'The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.' 10 The general power of the Court to award costs in the exercise of its jurisdiction is conferred by s 43 of the Federal Court Act which provides, inter alia: '(1) Subject to subsection (1A), the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded. ... (2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.' The nature of the proceedings - contentions 11 The CFMEU submitted that the proceeding was in a matter in which the question to be resolved was whether the rights of entry and inspection created by the IRA were rendered invalid in respect of the Burrup site by virtue of s 109 of the Constitution. The 'matter' involved the existence of a justiciable controversy as to the immunity from the requirement to observe the right of entry provisions of the State law. The source of the immunity was s 109 of the Constitution. The matter therefore involved the interpretation of the Constitution and consequently an exercise of federal jurisdiction. The CFMEU referred to cases in which, it said, disputes involving an alleged inconsistency between State and Federal law under s 109 of the Constitution have been regarded as involving the interpretation of the Constitution - Collins v Charles Marshall Pty Ltd (1955) 92 CLR 529 and Hume v Palmer (1926) 38 CLR 441. In the alternative it said that s 109 of the Constitution having been raised, the matter could be described as 'arising under' the Constitution - Ex parte McLean (1930) 43 CLR 472; AMS v AIF (1999) 199 CLR 160 and Croome v Tasmania (1997) 191 CLR 119. 12 The CFMEU submitted that the application involved an interpretation of the Constitution or arose under it and that neither of those descriptions would bring the matter within s 347 of the WRA. Although the proceedings required the Court to address the issue of construction of both State and Federal Acts it was said that 'a matter does not arise under a law made by the Parliament merely because the interpretation of the law is involved' - Felton v Mulligan (1971) 124 CLR 367; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 and Collins v Charles Marshall. 13 The CFMEU placed reliance upon Collins v Charles Marshall as standing for the proposition that s 109 proceedings do not involve a matter arising under the federal legislation relied upon as the paramount Act. By parity of reasoning, it was said, the present case did not involve a proceeding or matter under the WRA. It involved applications seeking orders under ss 21 and 23 of the Federal Court Act in relation to relief sought in the applications pursuant to jurisdiction conferred on the Court under s 39B(1A)(b) of the Judiciary Act.

14 The CFMEU submitted that the applicants' reliance upon s 170VR(1) of the WRA,as supporting paramountcy of the Commonwealth right of entry provisions, had no implication for the costs question. The section could have no effect as a repeal or amendment of any part of the IRA. Section 109 of the Constitution remained the source of the claimed immunity.

15 The CFMEU relied upon the decision of the High Court in Re McJannet; Ex parte The Australian Workers' Union of Employees, Queensland (No 2) (1997) 189 CLR 654. In that case a proceeding before the Federal Court was characterised as a matter arising under the Act because the respondents were claiming a right under the WRA against the prosecutors. The proceedings therefore attracted no order for costs. However the subsequent proceeding in the High Court was of a different nature. In the High Court the prosecutors had asserted the absence of jurisdiction in the Federal Court to continue with the proceedings then pending. The jurisdiction they invoked was that conferred by s 75(v) of the Constitution. The principle so enunciated was said to have been accepted in respect of s 347 in Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission (2001) 203 CLR 645; Re Commonwealth of Australia; Ex parte Marks (2000) 75 ALJR 470 and Quickenden v O'Connor (2001) 109 FCR 243. In the event it was submitted that the power of the Court to award costs pursuant to s 43(1) of the Federal Court Act was untrammelled by s 347 of the WRA. The ordinary rule that costs follow the event was said to apply with the result that the applicants and the Federal Minister intervening should be ordered to pay the costs of the CFMEU.

16 BGC began its submissions by referring to its reliance upon s 170VR of the WRA. Paragraph 13 of its amended statement of claim of 2 June 2004 had contained a pleading of the alleged invalidity of Div 2G of Pt II of the IRA by virtue of the operation of s 170VR of the WRA. This was expressly pleaded in the alternative to the plea of invalidity based upon the operation of s 109 of the Constitution. The reliance upon s 170VR involved consideration of the terms of AWAs and whether there was any relevant inconsistency with the rights conferred by the IRA. The allegation of invalidity by virtue of the operation of s 170VR was said to have involved a matter arising under the WRA. The position was said to be indistinguishable from that in Australian Education Union v Department of Training and Employment and Others (2002) 121 FCR 71. Section 152 of the WRA, which was expressly referred to in that case, is in similar terms to s 170VR.

17 BGC also submitted that the decision not to award costs in the Australian Education Union case did not depend upon the fact that the application there was made under s 413A of the WRA. The proceedings were there said to have been 'proceedings in a matter arising under the Act regardless of whether the jurisdiction invoked was properly characterised as that conferred by s 412 of the WRA or that conferred by s 39B(1A)(c) of the Judiciary Act.

18 BGC submitted that the current proceeding was clearly in a matter arising under the WRA because the declaratory relief which it sought was in respect of persons who were parties to AWAs registered under the WRA and because the declaratory relief sought required the Court to determine whether provisions of the WRA conferred the rights which BGC claimed in the proceeding. At their highest, it was said, the CFMEU's submissions supported a finding that the current proceeding was in a matter arising under the WRA as well as a matter arising under the Constitution. It referred in that respect to what was said in the Australian Education Union case and also cited Gummow J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 at [81] and [82].

19 BGC pointed out that the Collins case was concerned with a purported limitation, imposed by s 31 of the Conciliation and Arbitration Act, on rights of appeal in relation to 'proceedings' arising under that Act. It sought to distinguish the relevant part of s 31 in that case from s 347 in this case on the basis that the latter section speaks of 'matters'. BGC also submitted that as a discretionary matter no order for costs should be made. It argued that the basis upon which the application for declaratory relief was dismissed was the Court's finding of no inconsistency between State rights of entry and rights conferred with respect to AWA employees under the WRA. The finding was stated to be subject to the important limitation that the IRA could not authorise employees to stop work for discussions at a time or in a manner which would breach their AWA obligations. This was a finding which was not asserted by the CFMEU and in fact was contested in circumstances where the agreed facts were that the CFMEU's representatives sought entry at a time when employees under the AWAs were working.

20 The second applicant, Shamrock, adopted BGC's submission. The third applicant, SNC, submitted that the controversy before the Court was one which had involved the assertion by the CFMEU of a right provided by the WRA. The relief which the applicant sought necessarily involved the enforcement of a right conferred by that Act. The matter before the Court required it to examine the WRA for the purpose of determining direct and indirect inconsistency. Had the application succeeded it would have been because of the paramountcy of those rights by reason of s 109 of the Constitution. In the alternative, the proceedings required an examination of the rights that attached to AWAs made and approved under the WRA and, in particular, the operation of s 170VR. If the relevant employees were not covered by AWAs which owed their existence to the WRA, the constitutional issue would not have arisen.

21 The fact that the proceedings were commenced under the Federal Court Act did not mean that the matter arose under that Act. The Federal Court Act was simply relied upon for the purpose of establishing the jurisdiction of the Federal Court to hear the justiciable controversy.

22 SNC also submitted that if the Court were to make an award of costs in favour of the CFMEU it should not allow any costs in relation to its abandoned estoppel arguments. SNC submitted that it ought to be awarded its costs, including costs thrown away in relation to its defence of estoppel arguments which were raised by the CFMEU and were abandoned shortly before the substantive hearing.

23 The Minister made submissions acknowledging that under s 471(2) of the Act the Court is empowered, despite s 347, to make an order as to costs against the Commonwealth. The Minister contended that his intervention had been confined to matters of law and expressly eschewed factual matters or the inter partes dispute. The additional time occasioned by the Minister's written and oral submissions was minimal. In its submission in reply on costs the CFMEU stated that it did not press its claim for costs against the Minister.

Whether the proceedings were in a matter arising under the WRA 24 The jurisdiction conferred on the Court by s 412 of the WRA is defined by reference to specified classes of proceedings being applications and actions that may be brought under the Act, questions that may be referred, appeals that lie under s 422 of the Act and prosecutions instituted and penalties sued for and recovered under the Act. The proceedings instituted by the applicants in this case did not fall into any of those categories. 25 The specification in s 412 of categories of case in which jurisdiction is conferred on the Federal Court by the WRA is not to be taken as precluding the application of the general jurisdiction which was later conferred by s 39B(1A)(c) of the Judiciary Act. In Transport Workers' Union of Australia v Lee (1998) 84 FCR 60, the Full Court rejected a contention that s 412 operates as an exhaustive grant of jurisdiction in matters arising under the WRA to the exclusion of the jurisdiction conferred by s 39B(1A)(c): 'The point about s 39B(1A) is, however, that it operates according to its terms as a general conferral of jurisdiction. The respondent's argument cannot be sustained having regard to the later enactment of s 39B(1A) as a general conferral of jurisdiction in respect of matters arising under any laws made by the parliament. Section 39B(1A) stands in contrast to the prior history of limited Act by Act conferral of jurisdiction upon the Federal Court ...' A similar point was made in Hooper v Kirella Pty Ltd (2000) 96 FCR 1 about the relationship between s 39B(1A)(c) and the specific jurisdiction conferred upon the Court by s 86 of the Trade Practices Act 1976 (Cth). 26 The question that then arises is whether the proceedings in this case were proceedings arising under the WRA. It may be, as the CFMEU submits, that they were proceedings in a matter arising under the Constitution or involving its interpretation because of the reliance on s 109. That does not preclude their concurrent characterisation as proceedings arising under the WRA. 27 Collins v Charles Marshall, which the CFMEU cited, was a case involving a prosecution brought before a magistrate for failure to make a payment in respect of long service leave in contravention of the Factories and Shops (Long Service Leave) Act 1953 (Vic). The magistrate dismissed the prosecution on the basis that the requirement for payment in lieu of long service leave imposed by the State Act was inconsistent with the terms of the applicable federal award under the Conciliation and Arbitration Act 1904 (Cth). Section 31(1) of the Conciliation and Arbitration Act provided that an appeal lay to the Conciliation and Arbitration Court 'in proceedings arising under this Act' but that no appeal would lie other than as provided by that section. The High Court held the section invalid for reasons not directly relevant here. In the course of the judgment of the majority it was said (at 540): 'Clearly enough a matter or a proceeding may involve the interpretation of the Act or of an order or of an award, although the proceeding does not arise under the Act. This very case is an example and it may be said that almost always it will be so where the Act order or award is relevant only to some matter of defence to a proceeding based on some cause of action or ground which is prima facie independent of the Act order or award.' 28 Their Honours there were considering the word 'proceeding' rather than 'matters'. That does not mean however that the reasoning is inapposite to the construction of the term 'matters arising under the Act'. Taylor J said (at 556-557): 'Quite apart from the difficulties which arise from the use of the word "proceedings" it is clear that neither matters involving the interpretation of the Act nor matters involving the interpretation of an order or award, by virtue of that character alone, fall within the specification of matters contained in ss 75 and 76. Nor, I should think, do matters "arising under an order or award". Matters of these descriptions may on occasions, of course, present other features which would bring them within the purview of those sections as they would, for example, if they arose between residents of different States, or if any such matter should also involve the interpretation of the Constitution or if it arose under any laws made by Parliament, but the descriptions which have been selected by s 31 are quite inappropriate, in the main, to describe matters in respect of which the High Court is given original jurisdiction under s 75 or in respect of which it may be conferred upon it by s 76.' 29 There is difficulty in distinguishing between a matter involving the interpretation of an Act and a matter arising under the Act. This was thrown up in Felton v Mulligan, a case involving action on a deed in the equitable jurisdiction of the Supreme Court of New South Wales. The deed entered into by a husband and wife shortly prior to the dissolution of their marriage provided that the husband and his heirs, executors and administrators would pay periodical maintenance to the wife during her lifetime. Following her husband's death the wife sought to enforce the deed against his executors who raised in defence that the deed was void as purporting to oust the jurisdiction of the court under the Matrimonial Causes Act 1959 (Cth). The High Court held by majority that the Supreme Court was exercising jurisdiction in a matter arising under the Matrimonial Causes Act thus precluding appeal to the Privy Council. Dr Wynes observed that in the light of the decision in Felton v Mulligan it is difficult to imagine a case in which 'mere' interpretation of a Federal Act is involved and which does not arise thereunder - Wynes, WA Legislative Executive and Judicial Powers in Australia LBC 5th Edition (1976) (at 479). Barwick CJ, who was in the majority in Felton v Mulligan, said (at 374): 'The point at which interpretation of the federal statute, prima facie an apparently incidental consideration, may give rise to a matter arising under the statute is not readily expressed in universally valid terms. But the distinction between the two situations must be maintained.' Walsh J cited the passage quoted earlier from the joint judgment in Collins which made that distinction and said (at 409): '... in my respectful opinion, the statement quoted restricts unduly, in so far as it relates to a matter of defence based directly upon an Act of the Parliament, the scope of the matters which may be held to arise under an Act.' In the context of what constitutes matters arising under the Constitution or involving its interpretation within the meaning of s 76(i) of the Constitution, Professor Zines observed, in the light of James v South Australia (1927) 40 CLR 1 and Felton v Mulligan: 'In the light of the decision of the majority in Felton v Mulligan, however, there would seem to be very few matters involving the interpretation of the Constitution that do not arise under the Constitution.' He also referred to Dr Wynes' observation about the effect of Felton v Mulligan - Cowen and Zines, Federal Jurisdiction in Australia 3rd Edition (2002) (at 69). 30 In my opinion what was said in Collins v Charles Marshall which related, in the context of that case to proceedings brought under a State Act do not apply in the present case. In the present case the primary relief sought was by way of declarations that the representatives of the CFMEU had no right under the IRA to enter the Burrup site. The basis of that argument was that any such right of entry would be inconsistent with the restrictive right of entry conferred by the WRA in relation to AWA employees. Central to that argument were contentions about the scope of the rights of entry conferred by the WRA in respect of AWA employees and whether they were inconsistent with rights of entry conferred by the IRA. It also involved a determination about the effect of obligations created by AWAs registered under the WRA in limiting the application of the rights of entry under the IRA. That the case required consideration of s 109 of the Constitution as placing limits upon the valid operation of rights of entry under the IRA in relation to any inconsistency does not mean that the case did not involve a matter arising under the WRA. 31 In my opinion the declaration sought necessarily involved a determination about the scope and operation of the right of entry under the WRA. 32 It is well settled that a matter arises under a law of the Commonwealth if a right or duty or a power or immunity in question in the matter '... owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law' - R v Commonwealth Board of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154. See also Felton v Mulligan at 387, 408 and 416; Moorgate Tobacco Co Ltd v Philip Morris Ltd (1979) 145 CLR 457 at 476; LNC Industries Ltd v BMW (Australia) Limited at 581-582. That principle was applied in a context relevant to the present case, by the High Court in Re Polites; Ex parte The Hoyts Corporation Pty Ltd (1991) 173 CLR 78. The Court held that an application for mandamus to a Deputy President of the Industrial Relations Commission to hear and determine a matter pending before him was a matter arising under what was then the Industrial Relations Act 1988 (Cth). Section 347 was held to apply to prevent the recovery of costs in that case. The duty which the Deputy President was to be required to carry out was a duty imposed upon him by the Industrial Relations Act 1988. 33 In theAustralian Education Union casedeclarations were sought that workplace agreements under the Workplace Agreements Act 1993 (WA) were inconsistent with federal certified agreements under the WRA and therefore unable to be validly registered. It was so held but costs were refused on the basis that the declarations sought were dependent upon the operation of the certified agreement under the WRA. The application therefore concerned a matter arising under the WRA and s 347 applied. 34 In my opinion, for similar reasons, the application for the determination here sought depended for its success upon the existence of rights of entry under the WRA which were inconsistent with those conferred by the IRA. It therefore involved a matter arising under that Act. It is not suggested, and I would not accept the suggestion, that the proceedings were instituted vexatiously or without reasonably cause. Conclusion 35 In my opinion there should be no costs order made in this case. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Counsel for the First Applicant: Mr MP McDonald

Solicitor for the First Applicant: Hotchkin Hanly Counsel for the Second Applicant: Mr DC Heldsinger Solicitor for the Second Applicant:

David Heldsinger Counsel for the Respondent: Mr H Borenstein SC and Mr TJ Dixon

Solicitor for the Respondent: Timothy Kucera Counsel for the Attorney-General for Western Australia Intervening: Mr RJ Andretich Solicitor for the Attorney-General for Western Australia Intervening: State Solicitor for Western Australia Counsel for the Minister for Employment and Workplace Relations Intervening: Mr RL Hooker Solicitor for the Minister for Employment and Workplace Relations Intervening: Australian Government Solicitor Date of Written Submissions: 10, 12, 19, 20 and 27 August 2004

Date of Judgment: 1 July 2005

Workplace Relations Act 1996(Cth)s 347, s

Act' Industrial Relations Act 1979(WA)

Law and Justice Legislation Amendment Act 1997(Cth)

Law and Justice Legislation Amendment Act 1999(Cth)

Trade Practices Act 1976(Cth)

Factories and Shops (Long Service Leave) Act 1953(Vic)

Conciliation and Arbitration Act 1904(Cth)

Industrial Relations Act 1988(Cth)

Workplace Agreements Act 1993(WA)

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