Coal Mining Industry (Long Service Leave Funding) Corporation v DAC Mining Services Pty Ltd

Federal Court of Australia|2021-09-28|Before: Mr J, Perram J

The Respondent's interlocutory application dated 19 August 2021 be dismissed.
The question of costs of the interlocutory application dated 19 August 2021 be deferred to the trial. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 By an interlocutory application filed on 20 August 2021 the Respondent seeks leave to file an Amended Defence. Initially, the proposed Amended Defence was set out at Tab 2 of Exhibit KJR-1 to the affidavit of Kara Jade Reynolds dated 19 August 2021. During the course of the hearing of the application, a revised version of the Amended Defence was proposed. The amendment is resisted by the Applicant. 2 The only amendment proposed is to s5 of the Defence. Nevertheless, in order to understand the debate between the parties it is first necessary to understand the context in which s5 appears. The Applicant is a federal statutory corporation charged with the administration of three statutes: the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Cth), the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Cth) and the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) (respectively, 'the Levy Act', 'the Levy Collection Act' and 'the Administration Act'). 3 The aim of this suite of statutes is to collect from employers in the black coal mining industry monies representing their liability to pay their employees long service leave and for the formation of a fund therefrom. In the usual course, if an employer meets its long service obligations to an employee it receives a refund of the levy which has been collected from it. If for some reason the employer does not meet the obligation, the employee may make a claim on the fund. The statutes work, in part, by reference to the concept of an 'eligible employee' which is defined in s 4 of the Administration Act in these terms: eligible employee means: (a) an employee who is employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine; or (b) an employee who is employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine; or (c) an employee permanently employed with a mine rescue service for the purposes of the black coal mining industry; or (d) a prescribed person who is employed in the black coal mining industry; but does not include a person declared by the regulations not to be an eligible employee for the purposes of this Act. Note: For prescription or declaration by class, see subsection 13(3) of the Legislation Act 2003. 4 The 'black coal mining industry' is defined in the same provision to have the meaning it bears in the Black Coal Mining Industry Award 2010 as it was in force on 1 January 2010. For present purposes, that definition may be summarised, perhaps not with perfect accuracy, as being the industry involved in the mining of black coal. 5 The Collection Act imposes obligations on employers of eligible employees to make payments of levy to the Applicant. The functions of the Applicant are set out in s 7 of the Administration Act and include matters such as managing the fund and advising the Minister on the appropriate rate of payroll levy but also, by s 7(d)-(e) these particular functions: (d) to monitor payments of the payroll levy and keep the Minister informed of any failure by an employer to pay the payroll levy; and (da) to maintain records relating to: (i) the employment of eligible employees; and (ii) the qualifying service completed by, and the long service leave entitlements of, eligible employees; and (iii) employers of eligible employees; and (iv) amounts that are, or may become, payable to employers under Part 7; and (e) to advise the Minister generally on the operation of this Act, the Payroll Levy Act and the Payroll Levy Collection Act; 6 Part 8 of the Administration Act is entitled 'Miscellaneous' and includes by s 52A a power to require persons to produce information or documents. It is in these terms: 52A Power to require persons to produce information or documents (1) This section applies if the Corporation believes on reasonable grounds that a person has information, or a document containing information, of any of the following kinds: (a) information relating to the employment of an eligible employee; (b) information relating to an employer of an eligible employee; (c) information that is reasonably necessary to enable the Corporation to perform its functions under section 7. (2) The Corporation may, by written notice, require the person to: (a) give the information to the Corporation by the time, and in the manner and form, specified in the notice; or (b) produce the document, or a certified copy of the document, to the Corporation by the time, and in the manner, specified in the notice. (3) The notice must set out the effect of: (a) subsections (6) and (7) of this section; and (b) sections 137.1 and 137.2 of the Criminal Code (about giving false or misleading information or documents); and (c) section 149.1 of the Criminal Code (about obstructing Commonwealth public officials). (4) The time specified under paragraph (2)(a) or (b) must be at least 28 days after the day the notice is given to the person. (5) If a person is given a notice under subsection (2), the person must comply with the notice. Civil penalty: 60 penalty units. (6) A person commits an offence of strict liability if the person contravenes subsection(5). The physical elements of the offence are set out in that subsection. Penalty: 30 penalty units. Note: For strict liability, see section 6.1 of the Criminal Code.

The Pleadings 7 Returning to s5 of the proposed Amended Defence, it is in response to s11 of the Statement of Claim. It is best seen in the context of ss10-12 which are as follows: Notice under s 52A of the Administration Act 10. By s 52A of the Administration Act, if Coal LSL believes on reasonable grounds that a person has information, or a document containing information, of any of the following kinds: a. information relating to the employment of an eligible employee; and/or b. information relating to an employer of an eligible employee; and/or c. information that is reasonably necessary to enable to Corporation of perform its functions under section 7, then Coal LSL may, by written notice, require the person to give the information to Coal LSL by the time and in the manner and form specified in the notice, or produce a document or a certified copy of a document to Coal LSL by the time and in the manner specified in the notice. Particulars The kinds of information described at paragraphs 52A of the Administration Act are alternatives, and Coal LSL has the power to issue a written notice if it has a belief on reasonable grounds in relation to only one of those limbs. Issue of the Notice under s 52A 11. As at 22 May 2020, Coal LSL believed, on reasonable grounds, that DAC Mining had information or a document or documents containing information: a. relating to the employment of an eligible employee; and/or b. relating to an employer of an eligible employee; and/or c. that is reasonably necessary to enable Coal LSL to perform its functions under section 7 of the Administration Act. 12. On 22 May 2020, Coal LSL issued a Statutory Notice to DAC Mining, in accordance with section 52A of the Administration Act (the Statutory Notice). Particulars Document issued by Coal LSL to DAC Mining dated 22 May 2020, with Statutory Notice Number 2020.51.001, titled "Notice to Produce Information or Documents: Issued under section 52A of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth)". The Statutory Notice was provided by Coal LSL to DAC Mining by email and registered post, and was accompanied by a letter from Peter Kembrey, General Manager Legal at Coal LSL, to the Proper Officer of DAC Mining, dated 22 May 2020. 8 Turning then to s5, there are three versions of this paragraph involved. These are the current form of s5 in the Defence, the initial amended form of s5 annexed to Ms Reynolds' affidavit and the final form of s5 handed up (virtually) by Mr McMillan, counsel for the Respondent, during the course of the hearing. Each, for differing reasons, is relevant. 9 Paragraph 5 of the current Defence is as follows: The Respondent does not admit paragraph 11 and seeks further and better particulars of the allegedly reasonable grounds for the belief alleged in each of subparagraphs (a), (b) and (c). 10 Paragraph 5 of the initial form of the proposed Amended Defence is in these terms: The Respondent denies paragraph 11 for the reasons pleaded in this Amended Defence. 11 Paragraph 5 of the final form of the proposed Amended Defence is in these terms: The Respondent denies paragraph 11 for the reasons pleaded in this Amended Defence at paragraphs [9] to [12]. Particulars a) The Respondent advised the Applicant, in correspondence dated i. 17 January 2018 ii. 17 July 2019 iii. 9 August 2019 iv. 27 May 2019 v. 17 June 2020 vi. 4 December 2020, that the employees identified in the Applicants correspondence were not 'eligible employees' for the purposes of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) and the Applicant was therefore on notice that the Respondent did not have in its possession information or documents containing information of the kind described in sub-paragraphs a, b, and c of paragraph 11 of the Statement of Claim. 12 It will be seen that s5 of the final form of the proposed Amended Defence cross-references s9 to s12 of the Defence which are in these terms: 9. Further, as to paragraph 16, the Respondent says that by its letter of 17 June 2020 to the Applicant, the Respondent informed the Applicant it did not have any records to produce in response to the notice. 10. As to paragraph 17, the Respondent: (a) admits that the correspondence was sent on or about 7 July 2020 but denies the notice referred to in the correspondence was validly issued by the Applicant to the Respondent; and (b) otherwise relies on the document in its entirety, for its full terms and affects. 11. As to paragraph 22, the Respondent admits that it has not produced any documents in response to the purported notice, but otherwise denies the allegation and says that: (a) the purported notice was not a valid exercise of power pursuant to section 52A of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth); (b) the Respondent was not obliged to comply with the purported notice requirements; and (c) in any event, for the reasons pleaded in paragraph 9 of this defence, the Respondent did comply with the purported notice by informing the Applicant that it did not possess any documents responsive to the purported notice. 12. As to paragraph 23: (a) for the reasons pleaded above, the Respondent denies paragraph 23; (b) in the event the Court finds the Respondent employs "eligible employees" pursuant to section 4 of the Coal Mining Industry (Long Service Leave) Act 1992 (Cth), the Respondent relies on section 95 of the Regulatory Powers (Standard Provisions) Act 2014 (Cth) in defence of the alleged contraventions. 13 Finally, s1 of the Applicant's Reply responds to the current form of s5 in these terms: In answer to the allegations at paragraph 5 of the Defence, the Applicant: a. says that by that paragraph, by the Respondent having failed to state any basis for the non-admission, but having not denied the allegation, the Respondent has made a deemed admission; alternatively, if the paragraph does not amount to a deemed admission (which is denied), the paragraph does not disclose the basis for the purported non-admission and is liable to be struck out; b. says that insofar as that paragraph contains a request for further and better particulars embedded within it, that request was responded to by letter dated 4 May 2021; c. says that the issuing of the Notice was a valid exercise of power and the Notice was validly issued; and d. otherwise denies the paragraph

The Parties' Positions 14 The debate between the parties is twofold. First, the Applicant says that the form of s5 of the current Defence constitutes an admission of the contents of s11 of the Statement of Claim and that leave is therefore required to withdraw it. Secondly, the Applicant says that the particulars to s5 of the proposed Amended Defence are not sufficient to justify the denial which it pleads.

Is s5 of the current Defence an admission? 15 It may seem surprising that a paragraph which is explicit in saying that it does not admit s11 of the Statement of Claim should be deemed to be an admission that it does. The Applicant's submission that this is so turns on r 16.07 of the Federal Court Rules 2011 (Cth) which provides: 16.07 Admissions, denials and deemed admissions (1) 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. (2) Allegations that are not specifically denied are taken to be admitted. (3) However, a party may state that the party does not know and therefore cannot admit a particular fact. (4) If a party makes a statement mentioned in subrule (3), the particular fact is taken to be denied. Note: This rule requires a party to address each material fact pleaded in an opposing party's pleading. A general denial or an evasive answer will not be sufficient. 16 The Applicant says that the effect of subrules (2)-(4) is that a party who pleads that the party does not know and cannot admit an allegation of fact is taken to deny it. But if the party pleads that the party does not admit the fact then subrule (3) does not apply so that subrule (2) does. This results in an admission of the allegation of fact. In this case, the Applicant says that s5 of the current Defence has fallen into this trap. 17 Others have fallen into the trap before: Geneva Laboratories Ltd v Prestige Premium Deals Pty Ltd (No 4) [2016] FCA 867; 120 IPR 133 at [13]-[24] per Bromwich J; Ford v Inghams Enterprises Pty Ltd (No 3) [2020] FCA 1784 at [176] per Collier J. Although I have some sympathy for the pleader, I do not think I can disregard the terms of r 16.07 and am driven, perhaps reluctantly, to the conclusion that despite apparently being a non-admission of s11 of the Statement of Claim, the current form of s5 is in fact an admission of that paragraph. 18 What is the significance of this? In a sense, this question has been overcome by subsequent events. When the Respondent sought leave to amend in the initial form of s5 of the proposed Amended Defence, it did not provide any particulars for the denial which it contained. This provoked, in the Applicant's camp, a contention that leave to withdraw the admission ought not to be granted where the proposed denial was unparticularised. Further, the Applicant also submitted that it had the benefit of a presumption that the notice referred to in s12 of the Statement of Claim was regularly issued. As will be appreciated, the state of mind averred in s11 constitutes the statutory precondition for the coming into existence of the power to issue the notice in s 52A. The Applicant says that it has long been clear that it proposes to prove s11 simply by relying on the notice and the presumption of regularity. In its view, a mere denial of s11 could not succeed and there needed to be some positive allegation that the notice was not validly issued. 19 There is, of course, a positive allegation in the final form of s5. By way of explanation, the correspondence referred to in the particulars is correspondence passing between the parties in which the Respondent informed the Applicant that the employees it was asking about were not eligible employees. It also makes the positive assertions contained in ss9-12 of the Defence which are cross-referenced. 20 At this point the two debates merge into one. If the positive allegation contained in the final form of s5 is sufficient to maintain the denial the Respondent pleads, then it will be appropriate to grant leave to withdraw the admission. There will be a real reason to do so and I am prepared to infer that a sufficient explanation for why the admission was initially made can be gleaned from the less-than-friendly operation of r 16.07. 21 On the other hand, if the particulars are not sufficient to support the denial leave to amend will be refused. At that point the question of whether the admission contained in the current form of s5 may be withdrawn will evaporate because there will be on foot no attempt to withdraw it. It follows that the question of substance is whether the particulars now provided are sufficient to justify the denial. 22 As I have said, there are two elements to the denial. One is the fact that the Respondent informed the Applicant on more than one occasion that the employees identified by the Applicant were not 'eligible employees' and the other is the matters pleaded in ss9-12 of the Defence. 23 Dealing with ss9-12 first, s9 does not add to the picture for it is just a pleading of more correspondence in which the Respondent told the Applicant it did not have any records to produce. As for s10, it refers to a letter referred to in s17 of the Statement of Claim. This was a letter in which the Applicant told the Respondent that its notice was valid and that it was being given a further opportunity to comply with it. I do not think the pleading in s10 therefore advances a case that the Applicant did believe on reasonable grounds the matters in ss11(a)-(c). As for s11, this contains an admission that it has not produced any documents and an allegation that the notice was invalid. However, that allegation does not throw any light on why the Applicant did not believe on reasonable grounds the matters in s11(a)-(c). As for s12, the reference to s23 of the Statement of Claim is a reference to an allegation that the Respondent had failed to comply with the notice and therefore the Administration Act. The denial of that allegation does not assist in the advancement of a case that the Applicant did not believe on reasonable grounds the matters in s11(a)-(c). 24 That leaves the correspondence in which the Respondent informed the Applicant that employees it was seeking information about were not eligible employees. The short question is whether an inference is open from that fact that the Applicant did not believe on reasonable grounds the matters in s11(a)-(c). I do not think that it is. There are two reasons for this. First, four of the items of correspondence pre-date the issue of the notice and two post-date it. The issue of the notice and the correspondence proceeding it certainly allow one to infer that the Applicant and the Respondent had different views about whether the Respondent had eligible employees. It allows one to infer that the Applicant believed that the Respondent did have eligible employees and that the Respondent did not believe this. But the existence of the Respondent's belief that it had no eligible employees and the Applicant's knowledge of the Respondent's views about that throw no light on whether the Applicant's belief was held on reasonable grounds. To embrace any other view would, as Mr Clarke SC for the Applicant pointed out, lead to the situation that the recipient of any notice from the Applicant could resist it simply by writing to the Applicant and claiming not to have any eligible employees. 25 Secondly, even if that were not so, s5 fails to address the implications of s11(c). The pleading is that the Applicant believed on reasonable grounds that it was necessary to obtain documents or the information 'that is reasonably necessary to enable Coal LSL to perform its functions under section 7 of the Administration Act'. Some of those functions are set out above. They include the functions of monitoring payment of the payroll levy, maintaining records relating to the employment of eligible employees and advising the Minister on the operation of each of the three statutes. The discharge of those functions plainly includes ascertaining whether particular employers have eligible employees even though they might protest that they do not. 26 None of this is to say that the question of whether the Respondent has any eligible employees can be definitively determined by the Applicant. At the end of the day, if the Applicant sues for recovery of the levy from the Respondent or commences civil penalty proceedings against it for not paying the levy, then the Applicant will need to prove that the employees in question are eligible employees. At that time, that issue will be decided by a Court. But the power in s 52A is in no way circumscribed by such a limitation and, in practical terms, the imposition upon it of such a requirement would render the enforcement provisions of the legislation an empty vessel able to be defeated by the mere assertion by an employer that it had no eligible employees.

Conclusion and Orders 27 For those reasons, I do not accept that the particulars now proffered in support of the final form of s5 of the proposed Amended Defence can sustain the denial that the paragraph asserts. In that circumstance, leave to amend must be refused. As I have previously indicated, the question of whether the Respondent should have leave to withdraw the admission which is embodied in the current form of s5 of the Defence does not arise as there is no suggested amendment to it apart from the one I have rejected. 28 At the conclusion of the hearing of the present application on 23 September 2021, the matter was fixed for trial in a few weeks on 20 October 2021. The question of costs may be debated then. The order will be that the Respondent's interlocutory application dated 19 August 2021 be dismissed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.

Coal Mining Industry (Long Service) Payroll Levy Act 1992(Cth)

(Cth), the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992(Cth)

Coal Mining Industry (Long Service Leave) Act 1992(Cth)

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