CFMEU v Hadgkiss

Federal Court of Australia (Full Court)|2007-12-20|Before: Buchanan JJ, North J

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

REASONS FOR JUDGMENT NORTH J: 1 This appeal raises a question of the construction of s 298SC of the Workplace Relations Act 1996 (Cth). The section provides: A person must not make a false or misleading representation about: (a) another person's liability to pay a bargaining services fee; or (b) another person's obligation to enter into an agreement to pay a bargaining services fee; or (c) another person's obligation to join an industrial association. 2 The question is whether the words 'false or misleading' in this section mean purposely false or misleading or whether they mean false or misleading in fact. 3 The primary judge held that false or misleading means false or misleading in fact. Thus, the maker of such a representation may contravene the section notwithstanding that the person does not know that the representation is false or misleading, and thus, does not intend to make a representation of that character. 4 The facts which give rise to the construction question are set out in the judgment of Buchanan J and there is no need to repeat them. 5 A relevantly identical question was determined in Murphy v Farmer (1988) 165 CLR 19 (Murphy). The majority (Deane, Dawson and Gaudron JJ) held that the word false meant purposely, deliberately, or intentionally untrue. It follows from an application of Murphy that the appeal should be allowed. 6 In Murphy the Court considered the construction of s 229(1)(i) of the Customs Act 1901 (Cth) which provided for the forfeiture of goods in respect of which a representation that was false or wilfully misleading was made. The reasoning of the majority took the following steps: · The word 'false' viewed in isolation contains a latent ambiguity. It can mean either 'untrue' or 'wrong' on the one hand, or 'purposely untrue' on the other hand: at 26. · The arguments concerning the meaning of the word 'false' in s 229(1)(i) of the Customs Act were evenly balanced and did not resolve the latent ambiguity: at 28. · The provision was penal or quasi-penal in character: at 28-29. · The rule should be applied that where the words are equally capable of a construction which would inflict the penalty and one which would not, the latter should be adopted. The rule was explained thus at 28-29 as follows: … The provision is, in our view, properly to be seen as penal or quasi-penal in character and as attracting the rule that '[t]hose who contend that [a] penalty may be inflicted, must shew that the words of the Act distinctly enact that it shall be incurred under the present circumstances. They must fail, if the words are merely equally capable of a construction that would, and one that would not, inflict the penalty': Dickenson v. Fletcher (1873) L.R. 9 C.P. 1, at p.7. In Lyons v. Smart (1908) 6 C.L.R. 143, at pp. 157-158, Barton J. quoted the above words of Lord Esher (then Brett J) in Dickenson v. Fletcher with approval and continued: It is as true now as when Blackstone wrote it, that 'The law of England does not allow of offences by construction'. To these expressive authorities I may add, for the sake of the clear way in which it is put, a quotation from the American case of United States v. Lacher (1890) 134 U.S. 624, at p. 628. The words are those of Fuller C.J. delivering the opinion of the Court. He said: "As contended on behalf of the defendant, there can be no constructive offences, and before a man can be punished, his case must be plainly and unmistakably within the Statue. (See also, as to the need to read such a provision "strictly", Forbes (1971) 126 C.L.R., at pp. 442, 447. 7 The first respondent relied on two arguments which in effect address the second step in the reasoning in Murphy. The arguments needed to establish that the latent ambiguity was resolved by reference to the context of the Act viewed as a whole. It could not be resolved where equally compelling arguments existed for both constructions. 8 The first respondent contended that the context in which the section appears resolves any ambiguity. Section 298SC was added to Part XA which deals with freedom of association. The detailed provisions of the Part are explained in the judgment of Lander J and need not be set out again in these reasons. The first respondent argued in his written submissions: The purpose of Part XA is not advanced by requiring that any false representations be deliberately incorrect. Indeed, to impose a requirement of knowledge of falsity of the representation is at odds with the stated purpose of Part XA to protect freedom of association. 9 It cannot be said that limiting the prohibition of making false or misleading representations to those made knowingly does not advance the purpose of freedom of association. It is not, as was submitted by the first respondent, at odds with such a purpose. The construction for which the first respondent contends may advance the purpose of Part XA to a greater degree by providing a wider net of prohibited conduct, but both constructions advance the purpose of Part XA. 10 In the second argument, the first respondent drew attention to many examples in the Act where the making of false or misleading statements is proscribed, and in each case there is an express requirement that the statement be made knowingly. The sections referred to were ss 170VP, 170WG, 307(1) and a number of sections in Schedule 1B to the Act, namely, ss 52(3), 104(3), 175, 176, 192(3), 198(8), 233(3), 237(3), 257(10), 267 and 337(1). It followed, so the first respondent argued, that in s 298SC where no express requirement of knowledge appeared, Parliament intended that no such requirement applied. This argument reflects the canon of construction expressio unius est exclusio alterius, that is to say, an express reference to one matter indicates that other matters are excluded. 11 There is an initial difficulty with this argument because, while s 298SC concerns representations, the other sections relied upon by the first respondent concern statements. Statements and representations are not equivalent concepts. Representations involve a broader concept than statements. Thus, a representation may be constituted by conduct or by silence. Neither of these circumstances would constitute a statement. There is no reason to think the treatment of statements in the Act was to be related to the treatment of representations. The latent ambiguity in the concept of a false or misleading representation is arguably unaffected by the sections concerning statements relied upon by the first respondent. 12 Leaving aside this initial problem, and approaching the matter as if the treatment of statements in the Act can be related to the treatment of representations in s 298SC, it is necessary to examine the application of the expressio unius est exclusio alterius canon of construction. In Houssein v Under Secretary, Department of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94, the High Court said that: … That maxim must always be applied with care, for it is not of universal application and applies only when the intention it expresses is discoverable upon the fact of the instrument … It is 'a valuable servant, but a dangerous master' … . (references deleted) After reviewing relevant authorities, the authors of Pearce and Geddes, Statutory Interpretation in Australia, 6th ed, said at 4.28 … [T]he application of the expressio unius approach will be largely one of impression. Factors affecting the question will include the precision in the drafting of the legislation and the similarity of the subject matter in the provisions being considered (see DFCT v Lincoln Industrial Cleaners Pty Ltd (1975) 7 ALR 118; Lyford v Commonwealth Bank of Australia (1995) 130 ALR 267 at 270, citing the comment above). Probably, also, it will be relevant to consider whether the Act in which the provisions occur has been amended extensively as this increases the risk of provisions being inconsistent unintentionally. Because of these problems with respect to its use, the expressio unius est exclusio alterius rule is applied by the courts with extreme caution. When it is followed, it is used more often as a bolster to a predetermined interpretation than as a rule that produces a result in itself… In Murphy itself, the majority said of the presumption that the same meaning should be given to the same word wherever it occurs in a statute: … [A]s Gibbs J commented in Clyne v Deputy Commissioner of Taxation (NSW) (1981) 150 CLR 1 at 10, the presumption that a word is used with a uniform meaning in a statute is not one 'of very much weight … it all depends on the context'. In the same case, Mason J pointed out (150 CLR at 15) that the 'presumption readily yields to the context'. The presumption of a consistent use of the word 'false' is, in any event, of little assistance in relation to the construction of a statute such as the Act where, as Priestley JA pointed out in the Court of Appeal, there does not appear to have been any attempt by the legislature to achieve a 'high degree of consistency' in the use of terms such as false, untrue and misleading. 13 As the first respondent's argument recognises, wherever in the Act the making of a false or misleading statement is proscribed, the Act requires that the statement be made knowingly. If contrary to my view expressed in [11], it is right to treat representations and statements as comparable, then, in those circumstances, it is open to conclude that the proscription in s 298SC was also to depend on the maker acting knowingly. On this view, the absence of the word 'knowingly' was inconsequential. It was in effect to be supplied by the context of the Act read as a whole. 14 This conclusion is supported by the commonality of the subject matter of s 298SC and many of the other sections relied upon by the first respondent. That is to say, all the sections deal with the making of false or misleading statements. There is no obvious reason arising from the subject matter why knowledge would be required in the sections referred to by the first respondent but not required by s 298SC. For instance, s 170WG prohibits a person knowingly making a false or misleading statement to another with the intention of persuading the other to make or not make an Australian Workplace Agreement. This section is concerned with freedom of choice in one aspect, namely freedom to contract. Section 298SC is concerned with freedom of choice in another aspect, namely, freedom to associate. In the context of the Act, the requirement as to knowledge should be regarded as the same in both cases. Furthermore, contravention of both sections attracts the same penalty: see s 170VV(2) and s 298U(a). 15 Further, the Act has been repeatedly and extensively amended. Section 298SC was enacted in 2003, at a different time from the sections referred to by the first respondent, which were added in four amendments from 1996 to 2003. The expressio unius est exclusio alterius canon of construction might have been more likely to apply where legislation displays uniformity and had all the provisions been enacted at the same time, but they were not. 16 Finally, no assistance is to be gained from the immediate context of s 298SC. No other section in Part XA concerns representations. To the extent that some provisions require action to be taken for a particular reason, they support the view that s 298SC requires intentional action. However, there is an equal argument in the other direction, namely, that if Parliament intended the section to cover intentional action it could have said so. 17 I agree with Lander J that no assistance can be obtained from the interpretation of the s 53(a) of the Trade Practices Act: see [56]. 18 In the result, as in Murphy, the arguments for and against the contending constructions are evenly balanced. Applying the 'clear rule' recognised in Murphy, the same conclusion follows, namely, the words false or misleading in s 298SC should be strictly construed in favour of the subject as meaning purposely or deliberately or intentionally untrue. The appeal should be allowed. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

CONSTRUCTION, FORESTRY, MINING AND ENERGY, INDUSTRIAL UNION OF EMPLOYEES, QUEENSLAND

LANDER J: 19 The appellants were found by a Judge of this Court to have engaged in conduct in contravention of s 298SC of the Workplace Relations Act 1996 (Cth) (the Act) and penalties were imposed upon each of them. This appeal is brought against the declaration and orders made by the primary judge. 20 The appellant, Mr Oskam, is an officer of the Construction, Forestry, Mining and Energy Union (CFMEU) and the Construction, Forestry, Mining and Energy Industrial Union of Employees, Queensland (CFMEU Qld) (the Unions). The primary judge found that he told three employees of the second respondent, Sunland Constructions Pty Ltd (Sunland), they were obliged to join the Unions and that they could not work with Sunland unless they did so. She also found that he told those employees that if they did not join the Unions the other employees would strike. The first respondent, who is a delegate of the Employment Advocate appointed under Part IVA of the Act,brought the proceedings against Mr Oskam and the Unions alleging that Mr Oskam had made false and misleading statements to the three employees concerning their obligation to become members of the Unions in contravention of s 298SC of Part XA of the Act. 21 The primary judge found the statements which were made by Mr Oskam, on behalf of the Unions, amounted to a contravention by all three appellants of s 298SC. The primary judge did not make a finding that Mr Oskam knew that the statements he made were false or misleading, or that he intended to make a false or misleading representation. 22 It was argued before the primary judge that it was an essential element of a contravention of s 298SC that the maker of the statement intends to make a false or misleading representation, relevantly, about a person's obligation to join an industrial association. The primary judge found that a reference to a statement being false or misleading does not necessarily imply that it was made knowingly and that the state of the mind of the person who made the statement was irrelevant to the question whether there had been a contravention of s 298SC: Hadgkiss v Sunland Constructions Pty Ltd [2007] FCA 346 at [34]. 23 It is against that specific holding that this appeal is brought. It is contended on this appeal that there can be no contravention of s 298SC of the Act unless it is established to the requisite standard of proof that the maker of the statement knew or intended that the statement was false or misleading. 24 Section 298SC relevantly provides: A person must not make a false or misleading representation about: … (c) another person's obligation to join an industrial association. 25 It is the Court's duty in interpreting any statutory provision to give the words of that provision the meaning that the legislature intended they have, which will usually be their grammatical meaning: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 per McHugh, Gummow, Kirby and Hayne JJ. 26 Plainly, s 298SC does not include any reference to any knowledge or intention on the part of the person making a false or misleading representation. However, it was argued by the appellants that because "[s]ection 298SC(c) is a provision that derogates from the right of free speech … it should be construed strictly." In support of that submission the appellants relied upon the dicta of Gray J in Employment Advocate v Williamson (2001) 111 FCR 20 at [25]. However, his Honour did not there say that because the provision under consideration derogated from free speech the provision had to be construed strictly. He simply noted that when considering the construction of s 298P(3) of the Act "it must be borne in mind that the provision derogates from the right of free speech." Section 298P(3) is not concerned with false or misleading statements. 27 It is clear that where legislation might interfere with a basic freedom, express words are necessary. "The courts should not impute to the legislature an intention to interfere with fundamental rights.": Coco v The Queen (1994) 179 CLR 427 at 437. 28 However, it is not plain, at least to me, that s 298SC derogates from the right of free speech. All it does is seek to prevent a person from making a false or misleading statement about the subject matter in the section. To that extent, it derogates from the right, if there be a right, to make a false or misleading statement about those matters. It must also be recognised that to the limited extent that the provision does derogate from freedom of speech, it does so for the purpose of protecting another freedom, the freedom of association. In any event, even if the provision does derogate from the right of free speech, it does not follow that the words ought to be given a meaning that the legislature did not intend. 29 The appellants also contended that because s 298SC is a quasi-penalty provision it attracts the rule that "those who contend that a penalty may be inflicted, must shew that the words of the Act distinctly enact that it shall be incurred under the present circumstances. They must fail, if the words are merely equally capable of a construction that would, and one that would not, inflict the penalty.": Murphy v Farmer (1988) 165 CLR 19 at 29 per Deane, Dawson and Gaudron JJ (footnotes omitted). 30 Murphy v Farmer 165 CLR 19 involved the construction of s 229(1)(i) of the Customs Act 1901 (Cth) which then provided "[a]ll goods in respect of which any entry invoice declaration answer statement or representation which is false or wilfully misleading in any particular has been delivered made or produced" should be forfeited to the Crown. 31 The majority in that case held that "false" in that subsection meant purposely, deliberately or intentionally untrue. 32 In reaching that conclusion they said: … it seems to us to be more strongly arguable that clear words should be required before there is attributed to the Parliament an intention to take the draconian step of imposing automatic forfeiture as a penalty for "any" wrong "entry invoice declaration answer statement or representation" regardless of whether the wrong information was provided as the result of an innocent mistake or excusable ignorance. The effect of the penalty of automatic forfeiture under s 229(1)(i) can be devastating and quite disproportionate in that it applies regardless of the value of the goods or the importance or effect of the wrong statement which was made. 33 The majority found that there were arguments which favoured both the view that "false" merely meant "wrong in fact" and the alternative view that "false" meant "purposely untrue". In the end, because they held the word "false" was latently ambiguous, they applied the rule mentioned above and refused to inflict a penalty upon the respondent. 34 The section with which this Court is concerned on this appeal does not have the same draconian consequences that applied in Murphy v Farmer 165 CLR 19. True it is the section makes a person who makes a false or misleading statement about the matters in the section liable to a civil penalty, but that is in circumstances where the false or misleading statement is itself liable to interfere with another person's freedom of association. The section has been enacted to protect a freedom. Unlike in Murphy v Farmer 165 CLR 19, there is no automatic penalty for having made a false or misleading statement and it would be a relevant fact in the assessment of any penalty to take into account whether the person who made the false or misleading representation knew it to be false or misleading when it was made. Indeed, her Honour did exactly that in this case. 35 The decision in Murphy v Farmer 165 CLR 19 may be contrasted with the decision in Sternberg v The Queen (1953) 88 CLR 646 which was itself cited apparently with approval by all members of the Court in Murphy v Farmer 165 CLR 19. In Sternberg v The Queen 88 CLR 646, the Court was concerned with the construction of s 234(d) of the Customs Act 1901 which relevantly provided "No person shall … Make any entry which is false in any particular". In that case, the High Court held that "false" meant "contrary to fact". In my opinion, there is nothing in Murphy v Farmer 165 CLR 19 which compels a construction of s 298SC of the Act requiring knowledge or intent on the part of the maker of the representation. 36 However, it would be appropriate, having regard to the reasoning in Murphy v Farmer 165 CLR 19 to proceed upon the basis that there is in s 298SC a latent ambiguity and to address that latent ambiguity. Mr White, who appeared on behalf of the respondent, argued that the latent ambiguity referred to in Murphy v Farmer 165 CLR 19 arose out of the concession by counsel and this Court should not proceed upon the basis that the High Court was actually of the view that there was such a latent ambiguity. In my opinion, that contention is not correct. It is clear from the reasons of the majority that they also concluded for themselves that there was such a latent ambiguity. 37 It is necessary therefore to have regard to the words of the provision in the context in the Part of the Act in which it appears and the whole of the Act: K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 per Mason J; Project Blue Sky Inc v Australian Broadcasting Authority 194 CLR at 381 per McHugh, Gummow, Kirby and Hayne JJ. 38 Section 298SC forms part of Part XA of the Act as it stood at the relevant time. Part XA is concerned with freedom of association of employers, employees and independent contractors. 39 Section 298A of the Act, as at the relevant period, provides: As well as the objects set out in section 3, this Part has these objects: (a) to ensure that employers, employees and independent contractors are free to join industrial associations of their choice or not to join industrial associations; and (b) to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members or officers of industrial associations. 40 The objects of Part XA are plain. The Part is designed to protect a person's freedom to associate or not. The Part is designed to ensure that freedom is maintained by proscribing any discrimination or victimisation which might be designed to impact on that freedom. 41 An "industrial association" includes a registered association of employees, a union and a branch of a union: s 298B(1) of the Act. 42 Division 3 prescribes conduct by employers which is prohibited under the Act; Division 4 prescribes conduct by employees which is prohibited under the Act; and Division 5 prescribes conduct by industrial associations which is prohibited under the Act. Section 298SC is the only provision in Division 5A which applies to all persons, although that section is subject to the provisions of s 298D which prescribes to whom Part XA applies. 43 The purpose of Part XA is to protect all persons from conduct or representations which would conflict with their freedom to associate or not to associate with industrial associations, in this particular case, unions. 44 However, Part XA only applies to the extent provided in Division 2 and, in particular, to the extent provided for in s 298D. 45 That section provides: 298D Organisations This Part applies to: (a) conduct by an organisation; and (b) conduct by an officer of an organisation acting in that capacity; and (c) conduct carried out with a purpose or intent relating to a person's membership or non-membership of an organisation. 46 It follows from s 298D that the Part only applies to conduct by an organisation and by an officer of an organisation with a purpose relating to a person's membership or non-membership of an organisation. The application of s 298SC is therefore limited by the provisions of Part XA itself. The officers to whom the Part applies by reason of s 298D are more likely to be aware of the correctness or otherwise of the facts contained in the representation because they will be officers of an organisation, including an organisation such as a union. It follows that the purpose of Part XA will not be achieved by imposing a requirement that the maker of representation of the kind prescribed by s 298SC either knew or intended that the representation was false or misleading. In my opinion, in the context of Part XA, there is nothing to warrant reading into the section any element of knowledge. 47 The section should also be examined in the context of the Act as a whole and in doing so, it is relevant to have regard to the history of the Act. 48 The Act was formerly known as the Industrial Relations Act 1988 (Cth). The title was amended by the Workplace Relations Act and Other Legislation Amendment Act 1996 (Cth) (the amending Act). 49 Part XA was included in Schedule 15 of the amending Act. At the time of its introduction, Part XA did not include Division 5A and therefore did not include s 298SC. The section under consideration was introduced into the Act by the Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003 (Cth). It may be assumed that s 298SC was introduced to further strengthen that Part dealing with freedom of association. 50 There are other provisions of the Act which should be noticed. Section 4(7) was enacted as part of the Industrial Relations Act 1988. Schedule 1B to the Act was introduced by the Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002 (Cth) which, of course, was prior to the enactment of s 298SC. 51 There are three other sections in the Act itself (s 170VP, s 170WG(2) and s 307(1)) which refer to false or misleading statements, none of which are in Part XA. Those three sections each expressly require knowledge on the part of the maker of the statement that the statement is false or misleading. Moreover, Section 4(7) of the Act provides: In this Act, a reference to a person making a statement that is to the person's knowledge false or misleading in a material particular includes a reference to a person making a statement where the person is reckless as to whether the statement is false or misleading in a material particular. 52 That subsection makes recklessness sufficient to prove knowledge or intent. Of course, s 4(7) could have no application to s 298SC, because s 298SC does not speak directly to a person's knowledge. As previously noticed, s 4(7) was already part of the Act at the time that s 298SC was introduced into the Act. Section 170VP, s 170WG(2) and s 307(1) were also already in the Act when s 298SC was enacted. It follows, therefore, that other than for s 298SC in the Act, the legislature has consistently required that knowledge be established to prove a contravention of the Act for a false or misleading statement. 53 A fundamental rule of construction is that unless a contrary intention appears the words in a statute are used consistently: Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 at 452 per Hodges J. Mason J also said in Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618, "It is a sound rule of construction to give the same meaning to the same words appearing in different parts of the statute unless there is reason to do otherwise." The corollary of that proposition must be that where in an Act the same words are used differently the words must have a different meaning. In the Act the legislature has expressly provided in a number of sections that knowledge is a requirement of the prescribed conduct in making a false or misleading statement and only on one occasion in the same Act, which is in a later enacted provision, has not included knowledge as a requirement of the prescribed conduct. 54 Schedule 1B to the Act addresses Registration and Accountability of Organisations. That Schedule also contains a number of references to false or misleading statements: ss 52(3), 104(3), 175, 176, 192(3), 198(8), 233(3), 237(3), 257(10), 267 and 337(1). In all of those sections, the maker of the statement is required to either have knowledge that the statement is false or misleading or be reckless in relation to that statement. Again, the point can be made that the legislature included s 298SC in the Act whilst aware of the different language used in the provisions of Schedule 1B. 55 Thus it is that the Act, including the Schedule, contains a number of additional references to false or misleading statements, all of which require either proof of knowledge or recklessness. The only provision in the Act or the Schedule which does not in its terms require knowledge on the part of the maker of the false or misleading representation is s 298SC, which is contained in Part XA of the Act. In those circumstances, the unavoidable inference is that Parliament intended that the section would be contravened without proof of knowledge or intent on the part of the maker of the representation. 56 In my opinion, that would be enough to dispose of the construction argument. However, a further argument was advanced by the respondent in support of the construction which the primary judge and I favour. In 1977, s 53(a) of the Trade Practices Act 1974 (Cth) provided for an offence where a corporation or a person falsely represented that goods were of a particular quality. In Given v CV Holland (Holdings) Pty Ltd (1977) 29 FLR 212, Franki J held that the offence would be made out if a representation of that kind was in fact not correct, even if it was not false to the knowledge of the person making the representation. In doing so, he relied upon Sternberg v The Queen 88 CLR 646. A similar result was arrived at by Bowen CJ in Riley McKay Pty Ltd v Bannerman (1977) 31 FLR 129 at 134. At that time, s 85(1) of the Trade Practices Act 1974 also provided a defence if the person charged could establish that the contravention was due to reasonable mistake including a mistake caused by reasonable reliance on information supplied by another person. I would not accept that argument as an aid to construction. I would not rely on authorities which construed a differently worded section in a different Act containing a statutory defence not included in the subject Act for the purpose of construing the subject section. It is better, in my opinion, to construe the section under consideration in the Act contextually. 57 For those reasons, in my opinion, the appeal must be dismissed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

CONSTRUCTION, FORESTRY, MINING AND ENERGY, INDUSTRIAL UNION OF EMPLOYEES, QUEENSLAND

REASONS FOR JUDGMENT BUCHANAN J: 58 This appeal concerns the construction of s 298SC of the Workplace Relations Act 1996 (Cth) ('the Act') as it stood in 2004. At that time s 298SC provided: 'A person must not make a false or misleading representation about: (a) another person's liability to pay a bargaining services fee; or (b) another person's obligation to enter into an agreement to pay a bargaining services fee; or (c) another person's obligation to join an industrial association.' 59 The sole ground of appeal is to the effect that a representation referred to in s 298SC must, to be actionable, be 'intentionally false and/or intentionally misleading'. 60 The judgment under appeal (Hadgkiss v Sunland Constructions Pty Ltd [2007] FCA 346) dealt with an allegation that the third appellant (a union delegate) (and through him the first appellant, a Federal union and second appellant, a State union) made false and misleading statements to three employees of the second respondent (Sunland). The events in question are alleged to have occurred in September 2004 at a factory operated by Sunland where the three employees were working. Evidence was given that the union delegate told the employees that it was necessary for them to be in the unions and also that the other employees at the factory would go on strike if they were not. The union delegate's version of events was to the effect that he did no more than encourage membership. At the conclusion of the conversation each of the three employees applied to join both the Federal and State unions. 61 The primary judge found that the union delegate told the employees that they were obliged to join the two unions and could not work at the factory unless they did so. The primary judge also found that the delegate stated that the other employees would strike if they did not join. The statements were found to be both false and misleading. 62 In a separate judgment dealing with the question of relief (Hadgkiss v Construction Forestry Mining and Energy Union [2007] FCA 524) the primary judge accepted that the union delegate did not knowingly breach s 298SC, saying (at [5]): 'As difficult as it may be to believe that anyone could not know about a person's freedom to join, or not join, an industrial association, I am prepared to accept that he did not.' and: 'He did not understand what he said was wrong.' A little earlier the primary judge said (also at [5]): 'The conduct of the fifth respondent occurred on one occasion, although his lack of understanding, and his evidence that he said the same thing on each occasion that he sought to have new employees join the third and fourth respondents makes it highly likely that he had done so on other occasions.' 63 These findings suggest that although the delegate's statements to the three employees were made intentionally they were made without knowledge that they were false, at least so far as any obligation to join the unions was concerned. It will be necessary to say something about each of these aspects, namely intention and knowledge. They are not necessarily coextensive and were not in the present case. 64 Section 298SC appears in Part XA of the Act. That part is concerned with proscribing conduct of various kinds and characters. Most of the proscriptions explicitly incorporate notions of intention. Some, like s 298SC, do not, at least explicitly, do so. The first respondent argued on the appeal that the legislation would have explicitly identified intent or knowledge as an integral element if the meaning of s 298SC for which the appellant contended was intended. 65 The distinction between provisions in which intent is stated as an essential ingredient and those where it is not specified is reflected in s 298V (in Division 6 of Part XA where remedies for contravention of Part XA are also provided) which provides: 'If: (a) in an application under this Division relating to a person's or an industrial association's conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and (b) for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part; it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise.' 66 Apart from conduct proscribed by s 298SC proscriptions as to conduct made by Part XA are also contained in ss 298K, 298M, 298N, 298P, 298Q, 298R, 298S, 298SA and 298SB. Most of these latter provisions (excepting s 298M and s 298SB), in one way or another, make intent or reason an essential element of the proscribed conduct. Thus, s 298K refers to a 'prohibited reason' which s 298L defines as something done 'because' of another identified circumstance; s 298N proscribes conduct 'because' of an identified circumstance; s 298P and s 298R also use that formula and refer as well to 'intent'; s 298Q refers to 'intent' and proscribes conduct 'for the reason that' something has occurred or may occur; s 298S proscribes conduct 'because' something has occurred, action taken with certain 'intent' and action for a 'prohibited reason'; s 298SB proscribes identified conduct with a specified 'intent'. 67 By the operation of s 298V upon each of the provisions I have just identified the relevant intention or reason is presumed in proceedings alleging the proscribed conduct unless there is proof to the contrary. This is a significant aspect of the statutory scheme and emphasises that the legislature has generally been concerned to make explicit when breach of provisions in Part XA involves some subjective element, such as intent. 68 Apart from s 298SC, which is the subject of the present argument, only ss 298M and s 298SA do not, in terms, make intention or reason an element of the proscribed conduct. 69 Section 298SA provides: '(1) An industrial association, or an officer or member of an industrial association, must not demand (whether orally or in writing) payment of a bargaining services fee from another person. (1A) Nothing in this section prevents an industrial association from demanding payment of a bargaining services fee that is payable to the association under a contract for the provision of bargaining services. (2) In this section: demandincludes: (a) purport to demand; and (b) have the effect of demanding; and (c) purport to have the effect of demanding.' 70 Although, by the definition of 'demand' in s 298SA(2), paragraphs (a) and (c) obliquely introduce elements of intent or purpose, as presently advised s 298V would not, in my opinion, have any role in relation to s 298SA. It seems tolerably clear, as a matter of general construction, that s 298V is intended to operate on those provisions in Part XA which make it necessary to specifically allege 'that the conduct was, or is being, carried out for a particular reason or with a particular intent' in order to raise a proper case that breach of the particular provision has occurred. Moreover, so far as s 298SA is concerned, aspects of conduct concerned with a demand for a bargaining services fee which might turn on matters of intention or reason are separately addressed by s 298S(3) and (4) and s 298SB, to each of which s 298V applies. 71 The other exception to the general position is s 298M. Section 298M provides: 'An employer, or a person who has engaged an independent contractor, must not (whether by threats or promises or otherwise) induce an employee, or the independent contractor, (as the case requires) to stop being an officer or member of an industrial association.' 72 It is now accepted that proof of intention may be relevant in establishing a contravention of this provision (BHP Iron Ore Pty Ltd v Australian Workers' Union (2000) 102 FCR 97 at [60]). However, there is no unanimity in decisions of this Court about whether intention is a necessary element in proof of contravention of s 298M (see, for example, the discussion by Kenny J in Australian Workers' Union v BHP Iron-Ore Pty Ltd (2001) 106 FCR 482 at [70] to [83]). Kenny J found that s 298V does not apply to allegations of breach of s 298M, whether or not intention is an essential ingredient in s 298M. 73 The primary judge dealt with the legal proposition upon which the appeal is based in the following way (at [33] and [34]): '33. The CFMEU and CFMEU (Qld) submitted that a requirement of proof of intention was to be implied in s 298SC. The words of the section however contain no hint of such a requirement. The unions submit that the nature of the contravention, which involves false and misleading statements, may require it and this was confirmed by a reading of the WRA as a whole or of Part XA. 34. A reference to a statement being false or misleading does not necessarily imply that it was made knowingly so. The cases upon which the unions relied in support of their argument were concerned with s 298M, which contains the element of inducement. An object of Part XA is the maintenance of the freedom of employees to join or not to join industrial associations. Section 298SC(c) sees that freedom as impaired if false or misleading statements are made about the employee's obligation to become a member of the association. It is concerned with the effect upon the employee. So understood, the state of mind of the person making the statement is irrelevant to the question whether the provision has been breached, although it may be relevant to penalty.' 74 In my view that reasoning should be accepted. Accordingly, as a matter of construction of s 298SC itself, having regard to the immediate context in which it appears in Part XA of the Act, the contention upon which the appeal depends, namely that a representation referred to in s 298SC must, to be actionable, be 'intentionally false and/or intentionally misleading' should be rejected. There are other reasons also why the construction advanced by the appellants should not be accepted. 75 Although the notice of appeal, and the written submissions of the appellants in support of it, concentrated on a suggested requirement of intention, debate about the matter on the appeal extended to the question whether, apart from any question of intention, s 298SC incorporated a requirement that a representation about the matters identified in paragraph (a), (b) and (c) must be knowingly false and/or knowingly misleading. 76 Intent and knowledge of falsehood or inaccuracy may not be co-existent. It would certainly be possible to intentionally make a representation which was, as a matter of objective fact, false or misleading, but which was not known to be so. That is what the primary judge found, in effect, had happened in the present case. 77 None of the provisions in Part XA deal specifically with the question of knowledge about the accuracy or reliability of representations. The respondent, however, referred to the wider statutory context set by other provisions of the Act. He referred to the fact that some provisions, such as s 170VP, s 170WG, s 307(1) and certain provisions of Schedule 1B to the Act (ss 52(3), 104(3), 175, 176, 192(3), 198(8), 233(3), 237(3), 257(10), 267 and 337(1)) all expressly prohibit statements known to be false or misleading. Section 298SC is the sole exception in the Act to this general position. I agree that those are powerful indications, drawn from the overall statutory context, that where the legislature intended knowledge to be an essential part of proscribed conduct, it said so. 78 Finally, the respondent relied on judicial attention to similar legislative provisions in other statutes, including the Trade Practices Act 1974 (Cth)('the TP Act') in which, it was argued, there could be discerned a policy of protection for consumers which was analogous to the policy in Part XA of the Act of protecting freedom of association. 79 Section 52(1) of the TP Act prohibits a corporation from, in trade or commerce, engaging 'in conduct that is misleading or deceptive' or likely to be so. It has been held that knowledge is not an essential element in making out a case of misleading or deceptive conduct constituted by a representation or by non-disclosure. 80 In Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 a Full Court said (at 88): 'If a corporation is alleged to have contravened s. 52(1) by making a statement of past or present fact, the corporation's state of mind is immaterial unless the statement involved the state of the corporation's mind. Whether or not s. 52(1) is contravened does not depend upon the corporation's intention or its belief concerning the accuracy of such statement, but upon whether the statement in fact contains or conveys a meaning which is false; that is to say whether the statement contains or conveys a misrepresentation. Most commonly, such a statement will contain or convey a false meaning if what is stated concerning the past or present fact is not accurate; but a statement which is literally true may contain or convey a meaning which is false.' 81 Later, in Fraser v NRMA Holdings Limited (1995) 55 FCR 452 another Full Court said (at 467): '… for the purposes of s 52, if by reason of what was said and what was left unsaid the conduct of the corporation is misleading and deceptive or likely to mislead or deceive, a contravention would occur even if the corporation through its directors and officers did not have knowledge of the undisclosed facts which rendered the conduct in breach of s 52. A contravention of s 52 may occur without knowledge or fault on the part of the corporation, and notwithstanding the exercise of reasonable care: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd at 197.' 82 More recently, in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564, French J (with whom Beaumont J and Finkelstein J agreed) said ( at [64]): 'Conduct may be misleading or deceptive because it involves an express representation which is false.' and (at [66]): 'There is a question whether, in non-disclosure cases, the facts which are not disclosed must be known to the party failing to make disclosure. As a general proposition it is not necessary in order to show misleading or deceptive conduct for the purposes of s 52, that the contravenor intended to mislead or deceive - Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd at 228 (Stephen J, Jacobs J agreeing); 234 (Murphy J). In the case of an alleged non-disclosure it is not necessary to show that the contravenor knew of the facts not disclosed.' 83 In Marleef Pty Ltd v Metcash Trading Ltd [2001] FCA 1316 Weinberg J summarised the position in this way (at [57]): 'As a general rule, for conduct to be misleading or deceptive, the conduct must convey a misrepresentation: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177. Section 52 is not confined to conduct which is intended to mislead or deceive: Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994 at 50, 950. A corporation which acts honestly and reasonably may nonetheless contravene the section: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (supra) at 197. Whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and the relevant surrounding facts and circumstances.' 84 Similarly, in prosecutions under s 53 of the TP Act (proscribing false representations) knowledge a representation is false has been held not to be necessary. In Given v C V Holland (Holdings) Pty Ltd (1977) 15 ALR 439 Franki J said (at 443): 'The next matter to consider is whether the words "falsely represent" in s 53(a) of the Act are satisfied if the representation is not correct, or whether it must be known to be false by the person making the representation. It was also argued for the defendant, that since it was a corporation, the representation must be one false to the knowledge of a person of sufficient seniority in the company to be able to bind the company. I am satisfied that, if a representation is in fact not correct, it comes within the words of the section, even if it is not false to the knowledge of the person making the representation, and even if the person making the representation is a servant of the company of insufficient significance in the company for his knowledge, according to the ordinary principles of the common law, to be deemed to be the knowledge of the company.' 85 Franki J went on to refer to a similar approach being taken by the High Court to the construction of s 234(d) of the Customs Act (see Sternberg v R (1953) 88 CLR 646 and Davidson v Watson (1953) 28 ALJ 63). Bowen CJ expressed a similar view about s 53(a) of the TP Act in Riley McKay Pty Limited v Bannerman (1977) 15 ALR 561 at 566. 86 None of the cases relied on by the respondent considered the exact phrase under consideration in the present appeal - i.e. 'false or misleading representation'. That is a phrase which occurs in a number of provisions in the TP Act. For example, it appears in provisions in 'Division 1 - Unfair Practices' in 'Part V - Consumer Protection' of the TP Act in s 53(e), (ea), (eb), (f), (g), s 53A(1)(b) and s 59(1). The proscriptions re-appear in identical terms in 'Division 2 - Offences relating to unfair practices' in 'Part VC - Offences' in s 75AZC(1)(g), (h), (i), (j), (k); s 75AZD(1)(b) and s 75AZM(1) (except that they there identify offences of strict liability - see s 75AZC(2); s 75AZD(5) and s 75AZM(3)). I have not found any decided case dealing directly with any of these provisions. None of the provisions refer to knowledge that a representation is false or misleading and it would appear from the authorities (for example about other provisions in s 53, and hence s 75AZC) and the strict nature of the liability imposed by the provisions in Part VC that knowledge is not an element which need be present. This view is reinforced by the fact that the TP Act (like the Act) also contains a number of provisions which refer to knowing provision of false or misleading documents or information (ss 152DH, 155(5), 155B(3)(b)) and also provisions which refer to conduct in which another person may be 'knowingly concerned' (eg ss 75B(1)(c), 76(1)(e), 78(e), 79(1)(c) and 80(1)(e)). 87 All of these matters tend against the construction advanced by the appellants, to a greater or lesser degree. 88 The major plank in the appellants' argument was reliance on the decision of the High Court in Murphy v Farmer (1988) 165 CLR 19. The case concerned s 229(1) of the Customs Act 1901 (Cth) which provided for forfeiture of goods, including: 'All goods in respect of which any entry invoice declaration answer statement or representation which is false or wilfully misleading in any particular has been delivered made or produced.' The minority judges (Brennan and Toohey JJ) said (at 21): 'The point is whether "false" in par. (i) means no more than wrong in fact or whether it imports intentional untruth on the part of the person delivering, making or producing any entry or other matter referred to in the paragraph.' They remarked (at 22): 'It may be accepted that "false" is not a precise adjective. Nevertheless, it is significant that The Shorter Oxford English Dictionary, 3rd ed. (1974), vol. 1, p. 722 gives as the word's primary meaning: "1. Erroneous. 2. Not according to rule, principle, or law; wrong ME. 3. Incorrect; unfair ME. 4. Defective 1523." The notion of purposely untrue or deceitful appears as a secondary meaning.' and concluded (at 25): 'The tide of authority on s. 229 runs strongly against the respondent. The word "false" in s. 229(1)(i) means no more than wrong in fact.' 89 The majority (Deane, Dawson and Gaudron JJ) took a different view. Their reasoning had three principal aspects. First, they confirmed as correct a concession by the parties that an ambiguity was presented by the use of the term 'false', saying (at 26): 'It was common ground in argument in this Court, as it apparently was in the Court of Appeal, that the word "false", when viewed in isolation, is a latently ambiguous one. As the dictionaries confirm, it can mean merely "untrue" or "wrong". Or it can involve both subjective and objective elements and mean "purposely untrue".' 90 Secondly, they concluded that the ambiguity was not resolved by ordinary techniques of construction. They said (also at 26): 'Nor is the latent ambiguity of the word "false" in s. 229(1)(i) resolved by a consideration of the substantive content of that provision or of the context provided by the Act as a whole.' 91 They considered various arguments in that regard but concluded that none was determinative, saying (at 28): 'The above arguments and presumptions favouring one or other of the permissible meanings of the word false are, in our view, fairly evenly balanced. If it were necessary that we decide the matter by reference to them alone, we would incline to the view that the word "false" in s.299(1)(i) should be read as meaning "purposely untrue". However, we find it unnecessary to dispose of the appeal on that basis. It seems to us that, regardless of what view one takes of the comparative weight of the competing arguments and presumptions, the latent ambiguity of the word "false" remains.' 92 Thirdly, in the context thereby revealed, the ambiguity (and hence the question of construction) was resolved by reference to a principle or rule which (excluding citations and quotations) was stated thus (at 28 - 29): 'The provision is, in our view, properly to be seen as penal or quasi-penal in character and as attracting the rule that "[t]hose who contend that [a] penalty may be inflicted, must shew that the words of the Act distinctly enact that it shall be incurred under the present circumstances. They must fail, if the words are merely equally capable of a construction that would, and one that would not, inflict the penalty…" ... In the context of that clear rule, we agree with the conclusion reached by the learned trial judge and by all members of the Court of Appeal that the word "false" in s 229(1)(i) should be strictly construed, in favour of the subject, as meaning purposely or deliberately or intentionally untrue.' 93 Breach of s 298SC exposes a person to a civil penalty. Although the proceedings are not criminal in nature nevertheless the preservation of traditional protections and privileges in connection with proceedings which might expose a person to penalties continues to be important and legally obligatory, at least so far as individuals are concerned (see Rich v Australian Securities and Investments Commission (2004) 220 CLR 129). 94 The difficulty, however, which the appellants' argument faces, in the present statutory context, is that the issue of construction is not evenly balanced. There is no occasion to apply the rule identified in Murphy v Farmer to resolve a persisting and otherwise unresolved 'latent ambiguity'. Allowing that the phrase 'false or misleading representation', viewed in isolation, is capable of incorporating, or not incorporating, a requirement for knowledge or intention as the case may be, nevertheless the indications that it should, in s 298SC, be construed as not depending on either element are, in my view, sufficiently strong that no occasion arises for the application of that rule. 95 Accordingly, in my view, the construction adopted by the primary judge should be affirmed and the appeal dismissed. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Associate: Dated: 20 December 2007 Counsel for the Appellants: J H Pearce

Trade Practices Act 1974(Cth)s 52(1), s

Workplace Relations Act 1996(Cth)s 4(7), s

Industrial Relations Act 1988(Cth)

Other Legislation Amendment Act 1996(Cth)

Workplace Relations Amendment (Prohibition of Compulsory Union Fees) Act 2003(Cth)

Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002(Cth)

At a glance

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Judgment (14 paragraphs)

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Legislation Cited (7)

Cases Cited (25)

Cited By (12)