Construction, Forestry, Maritime, Mining and Energy Union v One Key Workforce Pty Ltd

THE COURT: 1 The applicant, Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) applies for leave to appeal, and if leave is granted, appeals Order 1 of the orders made on 28 February 2019 that certain monies held in trust be discharged to the first respondent, One Key Workforce Pty Ltd (now One Key Workforce Pty Ltd (in liquidation)) (OKW), to be dealt with by its liquidators in accordance with their statutory responsibilities. The reasons for making that order were published on 20 February 2019 in Construction, Forestry, Maritime, Mining and Energy Union v One Key Workforce Pty Ltd [2019] FCA 153 (Primary Judgment). 2 The application for leave to appeal and the appeal were heard together. Only the first respondent, OKW, participated in the proceeding. The second respondent, the Fair Work Commission (FWC), filed a submitting notice save in relation to the question of costs. 3 Both the CFMMEU and OKW filed applications to adduce further evidence in the appeal. 4 Before proceeding further it is convenient to set out the background to the appeal and the applications that are now before us.

Background 5 OKW, formerly known as RECS (Qld) Pty Ltd, was part of a group of companies which together operated a business known as One Key Resources. It was a labour hire business which on-hired its employees to clients in a range of industries including the black coal mining industry. OKW primarily hired employees as casual workers. Casual employment was not permitted under the Black Coal Mining Industry Award 2010 (Award). 6 Between March and August 2015 OKW recruited Messrs Kevan O'Brien, Reuben Raymond and Vernon Marfell as employees. In August 2015 a process was initiated by which each of Messrs O'Brien, Raymond and Marfell was invited to vote on a proposed enterprise agreement. On 25 August 2015, in response to an email request, each of those employees voted in favour of the proposed enterprise agreement. 7 The proposed enterprise agreement was then submitted to the FWC for approval and on 30 October 2015 the FWC granted its approval. The agreement as approved became known as the RECS (Qld) Pty Ltd Enterprise Agreement 2015 (Enterprise Agreement). No application for leave to appeal from the FWC's decision was made pursuant to s 604 of the Fair Work Act 2009 (Cth) (Fair Work Act). 8 On 28 November 2016 the CFMMEU (which at the time was known as the Construction, Forestry, Mining and Energy Union) commenced proceeding NSD 2058 of 2016 against OKW as first respondent and the FWC as second respondent by filing an originating application in this Court for relief under s 39B of the Judiciary Act 1903 (Cth) (First Instance Proceeding). In its application the CFMMEU sought an order declaring that the Enterprise Agreement was void and of no effect; in the alternative, a writ of certiorari quashing the approval by the FWC of the Enterprise Agreement; and in the further alternative, a writ of mandamus directed to the FWC. 9 On 8 November 2017 the primary judge ordered that the parties bring in short minutes to give effect to the reasons published by his Honour on that day: see Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 (CFMEU v One Key). 10 The primary judge concluded that the approval of the Enterprise Agreement should be quashed and a declaration made that the Enterprise Agreement is void and of no effect. His Honour found that the Enterprise Agreement was not an agreement susceptible of approval by the FWC under s 186 of the Fair Work Act: see CFMEU v One Key at [7]. 11 On 23 November 2017 the primary judge made the following orders (November 2017 Orders): 1. Subject to Order 2, the approval by the Fair Work Commission of the RECS (QLD) Pty Ltd Enterprise Agreement 2015 on 30 October 2015 in proceedings AG 2015/5383 as recorded in [2015] FWCA 7516 is void and of no effect. 2. These Orders operate on and from the 22nd day after the date of this Order. 12 On 27 November 2017 OKW commenced proceeding NSD 2073 of 2017 by filing a notice of appeal from Order 1 of the November 2017 Orders which gave effect to his Honour's reasons in CFMEU v One Key (Appeal Proceeding). On 29 November 2019, OKW filed an interlocutory application in the Appeal Proceeding in which it sought an order that Order 1 of the November 2017 Orders does not come into operation and has no force and effect until further order or until all avenues of appeal are exhausted and are unsuccessful, and an order that the exercise by the CFMMEU or any other person of any rights of any kind whatsoever as a result of Order 1 of the November 2017 Orders is stayed as against OKW until further order or until all avenues of appeal are exhausted and are unsuccessful (Interlocutory Application). 13 On 19 and 21 December 2017 the Interlocutory Application was heard by the primary judge. In the course of the hearing of that application OKW raised its possible insolvency. This was because setting aside the Enterprise Agreement would have the effect that OKW's employees would become entitled to accrued unpaid entitlements, to unpaid annual leave and possibly other payments, under the Award. 14 On 21 December 2017 the primary judge made the following orders (December 2017 Orders) by consent: 1. Provided that there is compliance with order 2 below: (a) Order 1 of the orders of Flick J made on 23 November 2017 in proceedings NSD2058 of 2016 does not come into operation until the determination of the appeal in NSD2073 of 2017 or further order. (b) The exercise by the [CFMMEU] of any rights of any kind whatsoever that are declared by or arise as a result of the rights declared by Order 1 of the orders made on 23 November 2017 in proceedings NSD2058 of 2016 is stayed as against [OKW] until the determination of this appeal or further order. 2. On or before 31 December 2017, there is to be paid, by [OKW] or by another person on its behalf, into an interest bearing trust account administered by Ashurst Australia, the sum of $1 million. 3. Subject to any other order of the Court, the monies held in trust (including all interest thereon) pursuant to order 2 be dealt with only as follows: (a) in the event that [OKW's] appeal is allowed, and order 1 of the orders of 23 November 2017 in proceedings NSD2058/2016 is set aside and in its place the proceedings are dismissed, then the said monies be released from trust to [OKW]; (b) in the event [OKW's] appeal is dismissed or discontinued, the monies be distributed to members of the [CFMMEU] as at the date of determination or discontinuance of the appeal claiming an interest therein in accordance with further orders of the Court. 15 In accordance with Order 2 of the December 2017 Orders, $1 million was paid into an account held by Ashurst Australia (Trust Monies). 16 On 25 May 2018 a Full Court of this Court (Bromberg, Katzmann and O'Callaghan JJ) published its reasons for decision in the Appeal Proceeding: see One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (2018) 262 FCR 527. At [237]-[238] the Court said: 237 On 21 December 2017, the primary judge made orders by consent suspending the operation of the final orders made on 23 November 2017. The orders made on 21 December 2017 are expressed so that this stay will operate until the determination of this appeal, or further order. 238 At the conclusion of the hearing, OKW asked to be heard on the question of the stay before the Court makes final orders determining the appeal. The day before judgment was due to be delivered, however, the parties jointly requested that the Court not make any orders. Instead, they requested that the Court adjourn the matter for 28 days to allow them to consider the reasons for judgment. We have decided to accede to the request but also to require that within that period of time the parties file submissions as to the appropriate form of orders. If agreement can be reached, so much the better. If not, the question will be determined on the papers. 17 On 14 June 2018 the One Key Resources Group and the Fircroft Group (collectively referred to as the Group, which was defined in the HOA to mean 18 named companies including OKW) and the CFMMEU entered into a heads of agreement (HOA). The HOA set out key terms of an agreement reached between the parties "with respect to resolving all outstanding industrial issues between them and establishing a framework for the future conduct of their relationship". The HOA relevantly included: 2. RESOLUTION OF PROCEEDINGS (a) NSD2073/2017 One Key Workforce Pty Ltd and the CFMMEU agree to the Full Court of the Federal Court in proceedings NSD2073/2017 (Appeal Proceedings) making the orders set of in Schedule 1. The parties will take all reasonably necessary steps to resolve the Appeal Proceedings in accordance with the above. … (d) Other proceedings The CFMMEU will not commence any new legal proceedings against any entity in the Group (or any of its current or former directors, officers, employees or agents) in respect of matters presently in dispute or which arise out of or are in any way related to, the industrial arrangements or structure of the Group up until the date of this Heads of Agreement. 3. PAYMENTS TO EMPLOYEES The Group will pay a gross amount of AUD $3 million (inclusive of the $1 million plus interest current held in trust by virtue of orders in proceedings NSD2073/2017), to be distributed to certain employees identified by the CFMMEU in the amounts identified by the CFMMEU. The payment of the AUD $3 million is in full and final settlement of all current litigation, claims, rights, demands and set offs between the parties and relevant employees, whether in this jurisdiction or any other, whether or not presently known to the parties and relevant employees or to the law arising out of any current litigation or in any way connected to the industrial arrangements or structure of the Group up until the date of this Heads of Agreement. The employees will be current or former employees of One Key Workforce Pty Ltd, One Key Resources (NSW) Pty Ltd, One Key Resources (Mining) Pty Ltd or One Key Resources (QLD) Pty Ltd who were or are employed as production and engineering employees on a casual basis. Former employees who have already received a payment and signed a deed of release are not entitled to any payment. The parties will liaise with each other and reach agreement on the list of employees to whom payments will be made. Payments to employees will be taxed according to law. (Original emphasis.) 18 Clause 5 of the HOA required the CFMMEU to sign a deed of release prior to any payments being made to employees and required employees to enter into a deed of release prior to receiving any payment pursuant to cl 3. The extent of the release to be provided in each case was also set out in cl 5. 19 Schedule 1 to the HOA, referred to in cl 2(a), provided: BY CONSENT THE COURT ORDERS THAT: 1. Order 1 made by the Primary Judge on 23 November 2017 be set aside. 2. Ground 2 of the [CFMMEU's] Notice of Contention be upheld. In all other aspects the Notice of Contention be dismissed. 3. The appeal should otherwise be dismissed. 4. The monies held in trust (including all interest thereon) pursuant to order 2 made by the Primary Judge on 21 December 2017 be made available for distribution to the [CFMMEU's] members claiming an interest therein. 20 On 21 June 2018 OKW (and 14 other companies) and the CFMMEU entered into a deed of settlement pursuant to the terms of which they agreed to settle, among others, the First Instance Proceeding and the Appeal Proceeding (Settlement Deed). For the purposes of the Settlement Deed, OKW and 14 other named companies were referred to as the Group. 21 Clause 2.1 of the Settlement Deed relevantly defined: (1) "Additional Sum" to mean the amount of $2 million; (2) "Effective Date" to mean the date of the Settlement Deed; (3) "Employees" to mean "the employees identified in the Employee List"; (4) "Employee Deeds" to mean the Deed of Settlement in the form annexed to the Settlement Deed at annexure A executed by the relevant employing entity and each of the Employees in accordance with cl 3.4; (5) "Employee List" to mean a list of current or former employees comprising of: • OKW employees and employees of One Key Resources (QLD) Pty Ltd who were employed as production and engineering employees on a casual basis and identified by the CFMMEU and agreed in writing by the Group to be the employees to be included on the Employee List; and • Employees, as listed in a schedule to be prepared by the CFMMEU in relation to the OKR Proceeding. (6) "Settlement Sum" to mean "the total amount of the Trust Monies and the Additional Sum as at the Payment Date"; (7) "Trust Account" to mean "the trust account in which the Trust Monies are held"; and (8) "Trust Monies" to mean "the amount paid by OKW and any accrued interest held in the trust account of Ashurst Australia pursuant to the Orders of the Court dated 21 November 2017 in the Appeal". 22 Clause 3.1 headed "settlement terms" included: 3.1 From the Effective Date, the Parties: (a) consent to the orders being made in the Appeal in the terms set out in Schedule 1 (or, in the event the Court does not make those orders, in terms as agreed by the Parties) and will, within 24 hours of the Effective Date, take all steps necessary to have those orders (or other orders agreed between the parties) made by the Court; and … 3.3 Within seven days from the date the Court makes the orders referred to in paragraph 3.1(a), and subject to those orders being made, without any admission of liability, the Group will make payment of the Additional Sum into the Trust Account to be held on trust for the CFMMEU and the Group. 3.4 Within seven day of the orders being made in accordance with clause 3.1, the CFMMEU will provide to the Group the Employee List. The CFMMEU will also identify the amounts to be distributed to the Employees. To the extent that there is any disagreement concerning the Employee List, the parties will liaise with each other and use their best endeavours to reach agreement on the Employee List. 3.5 Within seven days of the date that the CFMMEU provides the Group with the Employee List in accordance with clause 3.3, the Group will provide to the CFMMEU the Employee Deeds duly executed by the Group to be held in escrow by the solicitors for the CFMMEU pursuant to the terms of this Deed. 23 Clause 4 provided for payment and distribution of the Settlement Sum. Among other things it required that Employee Deeds could be released only after cl 3 had been satisfied and that an Employee was required to enter into an Employee Deed before any payment could be made from the Settlement Sum. 24 Schedule 1 to the Settlement Deed, referred to in cl 3.1(a), provided: BY CONSENT THE COURT ORDERS THAT: 1. Order 1 made by the Primary Judge on 23 November 2017 be set aside. 2. Ground 2 of the [CFMMEU's] Notice of Contention be upheld. In all other aspects the Notice of Contention be dismissed. 3. The appeal should otherwise be dismissed. 4. The monies held in trust (including all interest thereon) pursuant to order 2 made by the Primary Judge on 21 December 2017 be made available for distribution to the [CFMMEU's] members claiming an interest therein. 25 On 26 June 2018 and 7 and 28 August 2018 the Appeal Proceeding was listed before the Full Court for directions hearings. 26 On 26 June 2018 the parties jointly asked the Full Court to make the following orders: 1. Order 1 made by the Primary Judge on 23 November 2017 be set aside. 2. A writ of certiorari issue quashing the approval by the [FWC] of the RECS (QLD) Pty Ltd Enterprise Agreement 2015 on 30 October 2015 in proceedings AG2015/5383 as recorded in [2015] FWCA 7516. 3. … 4. The appeal should otherwise be dismissed. 5. Order 2 be stayed until further order. 6. The monies held in trust (including all interest thereon) pursuant to order 2 made by the Primary Judge on 21 December 2017 be made available for distribution to the [CFMMEU's] members claiming an interest therein. 27 At the hearing on 26 June 2018: (1) senior counsel for OKW informed the Court that the parties had filed "a draft minute of six orders" that they jointly asked the Court to make and that they particularly wished to address proposed orders 5 and 6, that "[OKW] and the [CFMMEU] have reached a wide ranging agreement" and the "agreement … deals in a comprehensive way with the distribution of the monies that are the subject of proposed order 6" and that it was the parties' joint position that "the making of order 6 is all that it is necessary for the court to do to deal with the monies that are presently held on trust … as a consequence of the orders" made by the primary judge; (2) members of the Full Court queried whether, as well as issuing a writ of certiorari as contemplated by the draft orders, it would be necessary to issue a writ of mandamus, in effect, directing the FWC to deal with the application for approval in accordance with law; (3) senior counsel for OKW informed the Court that if their Honours could not be persuaded "to make order 5, then we would ask that your Honours not make any order today, because the whole of the agreement will need to be revisited"; (4) in response to a query from the Court about why OKW was so sensitive about the issuing of a writ of certiorari, senior counsel for OKW said that "the sensitivity concerns the financial liabilities that would arise immediately upon the making of an order - an operative order - for a writ that quashed the approval". Thereafter Katzmann J said: Well, you see, therein lies a fundamental problem, as I see it anyway, and that is that this is not like an ordinary inter partes matter where the parties should be permitted to settle their grievances even at the eleventh hour in any way they see fit, because the effect of the orders you propose is far more wide ranging than even the interest of the union represent. So why shouldn't we be troubled by the fact that we are being invited to make a decision which could have a deleterious effect on the interests of I don't know how many employees who, but for orders of the kind you propose, would be owed - are likely to be owed monies over a number of years? (5) after hearing from counsel for the CFMMEU, to like effect, Bromberg J said: Ms Howell, all those arguments might be persuasive if we were concerned only with the immediate interests of the parties of the appeal. But as has already been noted, the orders that we could make, that is, orders that reflect our reasons will likely have an impact on persons beyond the parties to the litigation. Now, the interests of those persons are not necessarily interests that are - one might expect would necessarily be protected by the parties to the litigation. And, really, there's no one other than the court to ensure that those interests are appropriately protected. And without knowing what those other interests are and how they might be affected, I must say - speaking for myself, it would be difficult to exercise the discretion you speak of in an appropriate way. (6) the parties sought and were given further time to reconsider the terms of their agreement embodied in the Settlement Deed. 28 Prior to the next hearing date, 7 August 2018, the parties filed affidavits. OKW filed the affidavit of Ian Grant Humphreys, a partner of Ashurst Australia, the solicitors for OKW, sworn on 3 August 2018 and the CFMMEU filed the affidavit of Branko Alexander Bukarica, national legal director of the CFMMEU, affirmed on 3 August 2018. Those affidavits were ultimately not read in the Appeal Proceeding. 29 At the commencement of the hearing on 7 August 2018 Bromberg J made the following observations on behalf of the Court: Before the parties commence and before, in particular, the affidavits that you seek to be relied on are read, there are some observations that the court wants to make. … it seems to the court at the moment, that the consent orders that have been sought may adversely affect the interests of unrepresented third parties who have rights and entitlements against OKW under the relevant award. And it's at least arguable that what the court is being asked to do is facilitate in what is arguably a scheme to effect a preference in the distribution of the assets of OKW to a discreet group of unsecured creditors over the rights of other unsecured creditors. Furthermore, we wonder whether the parties have properly considered part 5.8A of the Corporations Act and in particular, section 596AB, which deals with agreements made or transactions entered into to avoid employee entitlements. 30 The "consent orders" referred to by Bromberg J were as follows: 1. Order 1 made by the Primary Judge on 23 November 2017 be set aside. 2. Ground 2 of the [CFMMEU]'s Notice of Contention be upheld. In all other aspects the Notice of Contention be dismissed. 3. The appeal should otherwise be dismissed. 4. The amount held in trust pursuant to order 2 made by [the primary judge] on 21 December 2017 be released to [OKW] to be disbursed in accordance with the [Settlement Deed]. 31 After a short adjournment the Court indicated, among other things, that it would be assisted by hearing from a contradictor. Counsel were appointed to act as amicus curiae in the role of contradictor and filed submissions. 32 At [1] of their submissions filed in the Appeal Proceeding, counsel appointed to act in the role of amicus curiae (who we will refer to as the Contradictor) noted that they had been appointed to "assist the Court in determining what orders should be made consequent upon the Court's reasons for judgment in this matter which were handed down on 25 May 2018". At [33] of their submissions it was observed that the Contradictor had expressly been invited by the Full Court to provide submissions about the potential operation of Pt 5.8A of the Corporations Act 2001 (Cth) (Corporations Act) in the present circumstances. In that context the submissions relevantly included: (1) under the heading "What is the effect of Pt 5.8A, and in particular, s 596AB of the Corporations Act on the [Settlement Deed] (and if it is still operative, the [HOA])?": 52. On any view it is clear that s 596AB evinces a clear legislative intention that as a matter of public policy agreements or transactions entered into with the intention of seeking to prevent or significantly reduce the entitlements of employees of a company are considered against the public interest. Effect on the HOA and [Settlement Deed] 53. The HOA and the [Settlement Deed] were entered into, not simply by the parties to this appeal, but by various entities in the corporate group to which OKW belongs on the one hand, and the [CFMMEU] on the other hand. We have been told in answer to a direct inquiry by us that OKW and the [CFMMEU] consider both the HOA and the Deed are still on foot and operative, and seemingly they are operating concurrently. 54. As we have noted above, the HOA and the [Settlement Deed] purport to create a scheme designed to resolve not only the current appeal proceedings, but also other proceedings, including proceedings with other entities in the wider OKW corporate group. Neither the HOA nor the [Settlement Deed] purport to directly extinguish or release any entitlement of any employee. They contemplate a scheme under which such employees can claim a payment from a pool established, but neither the HOA nor the [Settlement Deed] specify how the quantum of any such payment is to be determined, rather the [Settlement Deed] provides that it is for the [CFMMEU] to identify the amounts payable to "Employees" on the "List of Employees" (cl 3.4 of the [Settlement Deed]). 55. It is not possible on the evidence before the Court, or on the face of the HOA or the [Settlement Deed], to determine whether if any particular Employee on the List of Employees were to receive a payment pursuant to the scheme contemplated by it, that such a payment coupled with a release, would in fact lead to the prevention of the recovery of any employee entitlement, or the substantial reduction of any such entitlement. 56. On the scant material presently available, and given how the issue has arisen, the Court would be likely to have difficulty in finding on the balance of probabilities that the entry into either the HOA or the [Settlement Deed] was done with the proscribed intention in s 596AB. That is not to say that that has not occurred, but rather, that it is not possible on the material available, adduced only by OKW and the [CFMMEU], to reach an affirmative conclusion that there has been a contravention. 57. Given that OKW and the [CFMMEU] seek to deploy and rely upon the HOA and the [Settlement Deed] as the central basis for the Court to not only decline to issue writs of certiorari and mandamus, but also to make the Proposed Orders, and given that the Court has expressed concerns as to the potential application of s 596AB and invited the parties to address those concerns, it is really for OKW and [CFMMEU] to place sufficient material before the Court to assuage any concerns that the Court has in this regard. 58. Given the strong public policy interest implicit in Pt 5.8A and the prohibitions that it contains, the Court would be slow to make the Proposed Orders which are clearly designed to facilitate a scheme contemplated by the HOA and the [Settlement Deed], unless its concerns in this regard were resolved by satisfactory evidence from the OKW and the [CFMMEU]. 59. The Court could not be affirmatively satisfied on the scant material available that there is no basis for any concern that the entry into the HOA or the [Settlement Deed] may have been made with the requisite intention, or that the scheme contemplated by those instruments may be a transaction to be undertaken with that intention. The Court could not in the present circumstances dismiss such concerns out of hand as being unfounded or fanciful. In those circumstances, absent positive satisfaction that concerns about the application of s 596AB are groundless, the Court would not be prepared to make the Proposed Orders. (2) under the heading "Would the making of the Proposed Orders involve the Court facilitating a scheme, the effect of which would be to confer a preference in the distribution of the assets of OKW to a discrete group of unsecured creditors, in preference to and at the expense of another group of unsecured creditors?": 67. OKW and the [CFMMEU] seek: a. to avail themselves of the conclusions reached by the Court in the Judgment to allow the appeal, to the extent necessary to have the declaration made (although apparently having never taken effect) by the primary judge set aside; b. at the same time, urge the Court to ignore the balance of the Court's determination in the Judgment, by making no further order in lieu of the declaration made at first instance, despite the Court's conclusions as to jurisdictional error; c. via the Proposed Orders have released to them an amount of $1 million held in OKW's solicitors' trust account pursuant to orders made by the primary judge on 21 December 2017 as part of the orders made preventing the declaration made by the primary judge from coming into effect; and d. to utilise the $1 million as part of a fund to be distributed under the scheme contemplated by the HOA and the [Settlement Deed]. 68. If at first instance the primary judge had only found jurisdictional error, the relief claimed by the [CFMMEU] in its originating application filed on 30 November 2016 was for writs of certiorari and mandamus to issue. The Primary Judgment directed at [168] for short minutes [of] order to be brought in to give effect to the reasons. The likelihood is if only jurisdictional error had been found, writs of certiorari and mandamus would have been issued by the primary judge. If that had occurred, there would be no basis, given the conclusions reached in the Judgment, to set aside the issue of such writs. On the same basis, the Judgment having been handed down, there is no basis to decline to order the grant of such writs now. 69. OKW and the [CFMMEU] now seek to set aside the operative declaration made below, but prevent the issue of writs designed to give formal effect to the conclusions reached in the Judgment. They do so on the basis of the "settlement" they have reached under the HOA and the [Settlement Deed]. We note that notwithstanding the centrality of this settlement to their resistance to any prerogative writs issuing, they also seek to keep this settlement confidential, including it would seem, from the [FWC], as well as any non-[CFMMEU] current and former employees. 70. OKW and the [CFMMEU] urge the Court to accept that if it grants prerogative relief, then this will "crystallise" (OKW's term, see: OKW submissions at [7] and [57]) a liability which, implicitly, does not currently exist. For the reasons already addressed above, that liability already exists. They say that this will in tum lead to a problem with the solvency of OKW which will detrimentally affect everyone. 71. OKW is correct that the technical concepts of "preference" under the Corporations Act operate only in the course of insolvent administration of a company (OKW submissions at [43]), but the Court should not, we submit, permit OKW to seek to avoid the financial consequences of the conclusions that the Court has reached in the Judgment, because of assertions from some (but by no means all) parties who may be creditors of OKW. If OKW is insolvent or likely to be insolvent that is a product of the fact that the [FWC's] approval is ineffective in law, and OKW has an unaccounted for liability. More importantly, it should not allow the [CFMMEU] to obtain the exclusive benefit of the $1 million that was "quarantined'" by the primary judge for the purposes of the scheme contemplated by the HOA and the [Settlement Deed]. 72. There is an incongruity in the position adopted by OKW where: a. it says that if the writs are issued, there are likely to be immediate claims, particularly from members of the [CFMMEU] (Humphreys 03.08.2018 at [37]); b. it also says that third parties will not be adversely affected because they can still claim, and their ability to recover entitlements under the [Award] is protected by avoiding OKW's insolvency (OKW submissions at [33], [46]); c. yet apparently, despite these matters, OKW has not, it would seem, recognised any actual or contingent liabilities for these claims, and contends that employees do not presently have any entitlements under the [Award] (OKW submissions at [32]); and d. it says the issue of the writs will cause an immediate solvency crisis for OKW (Humphreys 03.08.2018 at [39]; OKW submissions at [7], [46]). 73. If we are correct in our submissions as to the effect of the conclusions as to jurisdictional error in the Judgment, then the calamity that OKW seeks to avoid by preventing the grant of prerogative writs is already upon it. The Enterprise Agreement was never validly in operation. OKW always had and still has whatever liabilities arise under the relevant award. 74. Furthermore, in these circumstances (that is, the liabilities already exist), on OKW's evidence OKW does not have assets or cash flow to meet this liability and would need to appoint voluntary administrators (Humphreys 03.08.2018 at [38]-[39]). OKW submits that it would be for the administrator to determine if OKW is in insolvent and that it is presently only a matter of speculation (OKW submissions at [43]). 75. The Court cannot, in the context of considering submissions by the parties (and us in our capacity as a contradictor) about the orders that should be made consequent upon the Judgment, and on the current evidence, attempt to resolve in any satisfactory way, factual questions about whether: a. OKW is or may be insolvent; b. certain creditors of OKW will or will not be better off if it does or does not grant prerogative relief; and c. whether other creditors will or will not be no worse off if it does or does not grant prerogative relief. 76. It should not be the role of the Court, in making orders consequent upon considered reasons for judgment on other fully litigated issues, to attempt to work out on the most slender of evidence, in a context where all those with a potential interest are not parties, what the financial consequences of its orders might be, and whether various classes of people will or will not be adversely affected. 33 On 28 August 2018 the Full Court made the following orders in the Appeal Proceeding (Appeal Orders): 1. The name of the first respondent be amended to read "Construction, Forestry, Maritime, Mining and Energy Union". 2. The appeal allowed in part. 3. Order 1 made by the primary judge on 23 November 2017 be set aside and in lieu thereof: a. a writ of certiorari issue quashing the approval by the [FWC] of the RECS (QLD) Pty Ltd Enterprise Agreement 2015 on 30 October 2015 in proceeding AG 2015/5383; and b. a writ of mandamus issue to the [FWC] that it determine according to law the application for approval in matter number AG 2015/5383. 4. The appeal be otherwise dismissed. 5. Order 3 of the orders made by the primary judge on 21 December 2017 be set aside, and until further order, the monies referred to in order 2 of those orders remain in the trust account administered by Ashurst Australia. 6. The question of what further orders are to be made arising from order 5 be remitted to the primary judge for determination. According to the transcript of the hearing which took place on 28 August 2018, OKW supported the making of Order 5 set out above. 34 On 31 August 2018 Justin Walsh and Adam Nikitins were appointed as voluntary administrators of OKW and in September 2018 OKW went into liquidation. 35 On 28 December 2018 the First Instance Proceeding was listed for hearing before the primary judge in relation to Order 6 of the Appeal Orders, that is to determine what further orders should be made arising from Order 5 of the Appeal Orders. 36 On 20 February 2019 the primary judge published his Honour's reasons for decision. The only order made at that time was that the parties bring in short minutes of order to give effect to his Honour's reasons within seven days. On 28 February 2019 the primary judge made the following orders: 1. The monies held in trust by Ashurst Australia pursuant to Order 5 made by the Full Court of the Federal Court on 28 August 2018 in matter NSD 2073 of 2017 (including the interest thereon) be disbursed by Ashurst Australia to [OKW] to be dealt with by its liquidators in accordance with their statutory responsibilities. 2. Provided that Order 1 above will not come into effect until: a) 22 days from the date of this Order; or b) in the event that an appeal is filed in respect of the Judgment in this matter dated 20 February 2019, until further order of the Court. 3. There be no order as to costs. (Original emphasis.) It is from Order 1 set out above that the CFMMEU now seeks leave to appeal and, if leave is granted, appeals. 37 On 20 March 2019 the primary judge, having noted that the CFMMEU had filed an application for leave to appeal from the orders made on 28 February 2019, ordered that: 1. Order 2 of the Order made on 28 February 2019 be vacated. 2. Order 1 of the Order made on 28 February 2019 will not come into effect until further order of the Court. (Original emphasis.)

The primary judgment 38 After setting out the history of the First Instance Proceeding and the Appeal Proceeding the primary judge noted at [10]-[11] that: 10 In May 2018, the Full Court published its reasons for decision: One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77, (2018) 277 IR 23. In summarising its conclusions, the Full Court said (at 73): [234] In short, although he made some errors, the primary judge was correct to find that the Commissioner fell into jurisdictional error by failing to have regard to the content and terms of the explanation [OKW] purportedly gave the three employees when reaching his satisfaction that s 180(5) had been complied with. The primary judge was also correct to find that the Commissioner had not reached the requisite state of satisfaction that the Agreement had been genuinely agreed to by the employees covered by it. Consequently, the basis for the exercise of the power conferred on the Commission to approve the Agreement was absent. It follows that the declaration the primary judge made should be set aside and different relief granted, but the appeal should otherwise be dismissed. On 28 August 2018, the Full Court made orders giving effect to its reasons. The declaration was set aside but the Full Court ordered that the Agreement be quashed. One issue of concern to the Full Court was the fate of the monies held in trust in accordance with Order 3 as made on 21 December 2017. In addressing that concern, the orders made by the Full Court on 28 August 2018 of present relevance are the following: 5. Order 3 of the orders made by the primary judge on 21 December 2017 be set aside and, until further order, the monies referred to in order 2 of those orders remain in the trust account administered by Ashurst Australia. 6. The question of what further orders are to be made arising from order 5 be remitted to the primary judge for determination. One of the concerns of the Full Court would appear to be that the order made in December 2017 confined the deployment of monies to "members of the [CFMMEU] … claiming an interest therein", namely the employees of [OKW] who were also members of the CFMMEU. Confined in that manner, the employees of [OKW] who were not members of the CFMMEU - but who also would have accrued entitlements - would not benefit from the deployment of the $1 million trust monies. 11 If the $1 million is confined to the CFMMEU employees, those employees will not receive their full entitlements; if the $1 million is to be deployed to all employees, the amount each employee would receive is comparatively negligible. (Original emphasis.) 39 The primary judge then referred to the competing orders sought by the parties. On the one hand the CFMMEU sought an order that the Trust Monies be distributed to its members identified in annexure B-8 to the affidavit of Branko Alexander Bukarica affirmed on 18 October 2018 in the amounts there specified. Mr Bukarica described annexure B-8 as "setting out the names of members of the [CFMMEU] claiming an interest in the sum held in trust, detailing the amounts to be distributed to each of those members". On the other hand, the liquidators of OKW sought orders that the Trust Monies be distributed either to OKW to be dealt with by its liquidators in accordance with their statutory responsibilities or to all former employees of OKW who have outstanding entitlements under the Award. 40 At [12], the primary judge concluded that the first form of order sought by OKW should be made, namely that the Trust Monies should be distributed to OKW to be dealt with by its liquidators in accordance with their statutory responsibilities. His Honour reached that conclusion for the following three reasons: (1) as a matter "not without fundamental importance", Order 3 of the December 2017 Orders was set aside by the Full Court, "with that Court expressing concerns going beyond the form of the order then made"; (2) from the outset the proceeding was not properly characterised as one in which only the parties to it had an immediate interest. His Honour noted that "[i]f the Agreement was set side, being in substance the order sought in the Originating Application, that relief would benefit not only the CFMMEU employees but other employees as well". Nor was the proceeding in the nature of a recovery proceeding in which the CFMMEU was seeking a quantifiable amount of money said to be due and payable to its members who were employees; and (3) Order 3 of the December 2017 Orders was made by consent without the benefit of an independent advocate voicing the concerns of the non-CFMMEU employees and without any consideration being given to the potential that the securing of monies for distribution to one group of employees and not others could give rise to a contravention of s 596AB of the Corporations Act, see Primary Judgment at [14]. 41 At [15] the primary judge said that the resolution of the issue came down to an exercise of the Court's discretion and that, in the exercise of that discretion, his Honour had reached the conclusion that the case advanced on behalf of the liquidators of OKW should prevail.

The application for leave to appeal and the appeal 42 In its application for leave to appeal the CFMMEU relies on the following grounds: 1. The orders of the primary judge are, in effect, final orders as to the disposition of $1 million ("trust monies") which had been placed in a contingent trust for the benefit of members of the [CFMMEU] in accordance with orders of the Court made on 21 December 2017. 2. It is strongly arguable that the primary judge erred in law and/or in the exercise of his discretion as set out in the Draft Notice of Appeal by ordering that the trust monies be paid to [OKW]. The decision is attended by sufficient doubt to warrant it being reconsidered by a Full Court. 3. Significant injustice to the [CFMMEU] and its members will arise if leave to appeal is not granted, supposing the decision to be wrong. 43 In its draft notice of appeal the CFMMEU raises the following ground of appeal: The primary judge erred in ordering that monies held in trust pursuant to order 2 of the Court's orders of 21 December 2017 and order 5 made by the Full Court in matter No NSD2073/2017 on 28 August 2018 ("trust monies") be paid to [OKW] in circumstances where: a. the terms of order 3(b) of 21 December 2017 required that, in the event that [OKW] failed in its appeal against order 1 of the primary judge's orders of 23 November 2017, and the appeal was dismissed, the trust monies be disbursed to members of the [CFMMEU] having a claim against [OKW]; and b. [OKW's] appeal against the primary judge's orders of 23 November 2017 was, in substance, unsuccessful.

Should leave to appeal be granted? 44 The principles governing an application for leave to appeal were not in dispute. An applicant for leave must demonstrate that the decision of the primary judge is attended by sufficient doubt to warrant its reconsideration by a Full Court and that substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (Decor Corporation) at 398-399. Leave will more readily be granted in the case of an interlocutory decision that determines a substantive right: Decor Corporation at 400. In Ashby v Slipper (2014) 219 FCR 322 at [46] Mansfield and Gilmour JJ said: In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [43], citing Ex parte Bucknell (1936) 56 CLR 221 at 225, French J, with whom the other members of the Court agreed, said that a "prima facie case exists for granting leave to appeal" if the judgment, although interlocutory, has the practical operation of finally determining the rights of the parties. 45 The CFMMEU submits that the decision of the primary judge is interlocutory because it does not finally determine the rights of the parties in a principal cause pending between them but deals with an ancillary issue, namely the disposition of the Trust Monies. However, the CFMMEU also submits that the primary judge's decision, although interlocutory, effectively determined a substantive right. OKW opposes the grant of leave to appeal. It says that the primary judge's decision is not attended by sufficient doubt to warrant the grant of leave to appeal, that refusing leave to appeal would bring finality to the long running litigation and that the proposed appeal does not involve any important question of law. 46 In our opinion leave to appeal should be granted. The order made by the primary judge disbursing the Trust Monies is in substance final. It has the practical effect of determining the fate of those monies on a final basis. There is thus a prima facie case for leave to appeal. The matter is not without its complexity and we are satisfied that the decision is attended by sufficient doubt to warrant its reconsideration on appeal. Further, we accept that there will be substantial injustice to the CFMMEU and its members if leave is refused, supposing the decision of the primary judge to be wrong.

Applications to adduce further evidence on appeal 47 Each of the CFMMEU and OKW made applications to adduce further evidence in the appeal. Those applications were not made in conformity with r 36.57 of the Federal Court Rules 2011 (Cth) (Rules) in that they were filed beyond the time permitted in that rule. However, neither party made any complaint about that. To the extent required we would dispense with compliance with r 36.57 of the Rules. 48 In its application, the CFMMEU seeks to admit into evidence an affidavit affirmed by Adam John Walkaden, senior national legal officer employed by the mining and energy division of the CFMMEU, on 15 August 2019. In summary Mr Walkaden deposes to the following matters: (1) the CFMMEU is in the final stages of negotiating an agreement with companies in the One Key Resources Group and the Fircroft Group whereby payments will be made to certain members of the CFMMEU who are employees or former employees of companies which form part of the One Key Resources Group and the Fircroft Group and also employees of OKW (Proposed Settlement). As at the date of Mr Walkaden's affidavit no former employee of OKW or the One Key Resources Group or the Fircroft Group had received any payments; (2) if the CFMMEU is successful in the appeal it is expected that CFMMEU members who are former employees of OKW will receive two sums of money for their unpaid entitlements, one from the Trust Monies and one from the Proposed Settlement; (3) Mr Walkaden has caused a schedule to be prepared, which is annexed to his affidavit, setting out the names of those members and detailing the approximate amounts they would receive from distribution of the Trust Monies and the further amount to which it is anticipated they would be entitled as a result of the Proposed Settlement. He also annexed a document explaining the methodology used to estimate these entitlements; (4) Mr Walkaden has undertaken some sample calculations based on detailed information about five individual employees to test the reliability of his assessment and "indicative testing" based on "common hourly rates and rostering patterns". Those calculations and his analysis are also annexed to his affidavit; and (5) Mr Walkaden has not been able to calculate the precise amount of outstanding entitlements for each member as he does not have all the relevant information but has taken steps, which he sets out, to confirm that if members receive both of the payments set out in the schedule referred to at subpara (3) above they will not receive in excess of their total outstanding entitlements. 49 In its application, OKW seeks to admit into evidence an affidavit sworn by Justin Denis Walsh, one of its liquidators, on 23 August 2019 in which Mr Walsh provides: (1) a copy of a transaction listing from OKW's internet banking facility (OKW Account) which shows: (a) a payment of $1 million from OKW's bank account with the narrative "Deposit Trust acco Pmt 000109302228 RECS QLD PL AUTOMATIC DRAWING" on 2 January 2018; and (b) two transfers which were also made on 2 January 2018 and which preceded that payment: (i) a transfer of $10,000 with the narrative "INTERNET TRANSFER OKW OKR Mining TRANSFER CREDIT"; and (ii) a transfer of $925,000 with the narrative "INTERNET TRANSFER OKW OKR working TRANSFER CREDIT"; and (2) a copy of a controlled money statement of Ashurst Australia dated 6 September 2018 showing a deposit of $1 million on 2 January 2018 with the narrative "One Key Workforce (RECS QLD PL) A/c Settlement" (Controlled Money Statement). 50 Section 27 of the Federal Court of Australia Act 1976 (Cth) provides that the Court may receive further evidence on appeal. In Reece v Webber (2011) 192 FCR 254 a Full Court of this Court (Jacobson, Flick and Reeves JJ) observed at [12] that the discretion conferred by s 27 is not constrained by any requirement that special grounds need be made out or that the further evidence need be "fresh evidence". Their Honours said that "[t]he discretion is unconstrained by the circumstances in which evidence could be admitted on appeal at common law". At [13]-[14], after referring to the decision of Gaudron J in CDJ v VAJ (1998) 197 CLR 172 at [52], their Honours referred to other authorities which have subsequently considered the exercise of the discretion to admit further evidence on appeal. At [15] the Court concluded: The result, it is considered, is that the discretion conferred by s 27 to adduce further evidence is thus unconfined by any express limitations. But the discretion is to be exercised in a statutory context where the appeal being entertained is an appeal by way of rehearing for the purpose of determining the rights of the parties in accordance with law. Although not constrained by common law principles, the considerations to which the common law had regard remain considerations relevant to the exercise of the discretion conferred by s 27. The exercise of the discretion conferred by s 27 may be informed by reference to these principles but is not to be constrained by them. 51 We will consider each application in turn.

CFMMEU's application 52 The CFMMEU submits that it seeks to lead the further evidence in order to make the Court aware of the fact that there is an ongoing negotiation with the One Key Resources Group and the Fircroft Group and thus to bring the Court up to date with events since the matter was before the primary judge. It contends that the negotiation may result in an agreement by which the CFMMEU will receive additional amounts for the benefit of its members who are employees or former employees of companies within that group. The members who may receive a payment would include former employees of OKW. The evidence is intended to demonstrate, in the event that leave to appeal is granted and the CFMMEU is successful on the appeal, that those members would not receive more than the amount to which they are legally entitled. The CFMMEU submits, in light of the possibility that its members may have the benefit of access to an additional fund, that it is appropriate that the Court not only be made aware of that but that it be satisfied that the relevant members would not receive more than the amount to which they are entitled, given that the CFMMEU asks this Court to exercise a discretion. 53 OKW opposes the CFMMEU's application to adduce further evidence on appeal on three bases. First, it says that the evidence given by Mr Walkaden ought to have been put before the primary judge but was not and that the CFMMEU should not now have the opportunity to lead the evidence. Secondly, OKW says that Mr Walkaden's evidence is controversial in that there is a dispute between the CFMMEU and the liquidators as to the correct methodology to adopt in order to calculate employee entitlements which remains unresolved, the fact of that dispute was the subject of evidence before the primary judge and there is no evidence establishing that the method Mr Walkaden has adopted is reasonable or appropriate. Thirdly, OKW objects to opinion evidence given by Mr Walkaden in his affidavit. 54 In our opinion, leave should be granted to the CFMMEU to lead the further evidence on appeal. The negotiation the subject of Mr Walkaden's evidence has occurred since the matter was last before the primary judge. It is a new matter and is relevant to the subject matter of the appeal. While the calculations undertaken by Mr Walkaden could have been undertaken earlier, the issue to which they relate, namely the potential payment to OKW's employees who are members of the CFMMEU of the Trust Monies plus additional monies derived from a settlement with companies in the One Key Resources Group and Fircroft Group, seems only to have crystallised since the matter was last before the primary judge. We do not understand Mr Walkaden's evidence in that regard to be given on the basis that he has undertaken a settled or agreed method by which the amounts claimed by or due to former OKW employees would be calculated or that where Mr Walkaden expresses an opinion, it rises any higher than constituting his own understanding or belief.

OKW's application 55 OKW submits that the evidence it seeks to adduce is responsive to submissions put by the CFMMEU to the effect that: (1) there was no evidence before the primary judge as to whether the Trust Monies were paid by OKW or another person on its behalf, as contemplated by Order 2 of the December 2017 Orders, and OKW called no evidence to suggest that the Trust Monies would be available to other creditors; and (2) in relation to the issues surrounding s 596AB of the Corporations Act, OKW argued before the primary judge that there had been a breach of s 596AB and that an essential element for the purposes of s 596AB is an intention that the monies available to employee creditors is reduced. OKW argued that this element would require that the monies in question would otherwise have been available for creditors and given that OKW operated on a cost recovery basis, in the absence of evidence, the inference to be drawn is that the $1 million was provided by an associated entity for the purpose of satisfying the December 2017 Orders and would not otherwise have been available for creditors. 56 OKW seeks to lead the evidence to demonstrate that the Trust Monies came from its bank account. It submits that before the primary judge, the CFMMEU did not contest that OKW put up the Trust Monies and that, to the contrary, the CFMMEU's evidence was to the effect that it was OKW that paid those monies, referring to [11] of Mr Bukarica's affidavit affirmed on 18 October 2018. It submits that there was no consideration of any contrary submission by the primary judge. OKW also submits that the CFMMEU did not in its written or oral submissions contend that any party other than OKW put up the $1 million. On that basis OKW submits that the CFMMEU should not be permitted to rely on the submission on appeal but that if it is permitted to do so then it seeks to rely on the OKW Account and the Controlled Money Account annexed to Mr Walsh's affidavit to establish the money did in fact come from the OKW bank account. 57 In oral submissions senior counsel for the CFMMEU submitted that the CFMMEU did not oppose OKW's application to put the further evidence before the Court but also submitted that the tender of the evidence, in relation to the OKW Account, should be conditional on the tender of a further document being admitted which senior counsel for CFMMEU described as a further business record that, as we understand it, showed where the money in the OKW Account came from. That further document has not been provided to the Court. 58 We will grant leave to OKW to adduce the further evidence being the affidavit of Mr Walsh sworn on 23 August 2019. The application is made because the CFMMEU seeks to raise a new argument on appeal and the further evidence is relied on for the sole purpose of meeting that argument. If the new argument is permitted, OKW should not be prejudiced and should be permitted to adduce and rely on the further evidence. OKW only seeks to rely on the OKW Account and the Controlled Money Account to establish that the Trust Monies came from OKW. However to the extent that the tender of the evidence is made on that limited basis we would not permit it. The whole of the OKW Account should be admitted into evidence.

The grounds of appeal 59 The CFMMEU submits that the primary judge erred in failing to make orders disposing of the Trust Monies in the manner contemplated by Order 3(b) of the December 2017 Orders: (1) because OKW was, in substance, unsuccessful in its appeal; (2) having regard to the terms of the December 2017 Orders; and (3) having regard to the circumstances in which the December 2017 Orders came to be made by consent. 60 Before turning to consider his Honour's reasons it is necessary to recall that in making the order about the disbursement of the Trust Monies, the primary judge exercised a discretion. Thus in order to identify error the CFMMEU must establish that the primary judge acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or failed to take into account a material consideration. In those circumstances the determination of the primary judge should be reviewed and the appellate court may exercise its own discretion if it has the materials to do so. Alternatively, if the reasoning of the primary judge is not exposed but upon the facts the result appears unreasonable or plainly unjust, the appellate court may infer that there was a failure properly to exercise the discretion and may exercise its own discretion in substitution. It is not enough that we might consider, had we been in the primary judge's position, that we would have arrived at a different conclusion: House v The King (1936) 55 CLR 499 at 504-505. 61 The CFMMEU seeks to establish that the primary judge's exercise of discretion miscarried having regard to the three reasons articulated by his Honour for reaching his conclusion and making the order for the reasons given. We consider each of those reasons in turn.

The first reason - the concerns of the Full Court 62 At [14] of his Honour's reasons, the primary judge identified, as the first reason for preferring the position advocated by OKW, that the Full Court had set aside Order 3 of the December 2017 Orders, with that Court expressing concerns going beyond the form of the order. The primary judge observed that this was a matter that was "not without fundamental importance". The CFMMEU contends that, in the circumstances, it was an error for the primary judge to have regard to the views of the Full Court and to regard them as matters of "fundamental importance" in determining the proper disposition of the Trust Monies. 63 The CFMMEU submits that the Full Court, having found jurisdictional error, was required to determine whether to grant discretionary relief by quashing the decision of the FWC approving the Enterprise Agreement. It notes that the parties initially submitted, having reached an agreed position, that as, a matter of discretion, the Full Court should not quash the approval of the Enterprise Agreement. But, the Full Court was concerned about the possibility that this outcome would adversely affect the position of employees not represented by the CFMMEU and thus it put a process in place so that the issues could be argued. However, the CFMMEU says that the issues were not ultimately canvassed and on 28 August 2018 the Full Court ordered, by consent, that the FWC's decision approving the Enterprise Agreement be quashed without hearing any argument on, or expressing any concluded views about, the appropriate disposition of the Trust Monies. Rather, the Full Court said that it was a matter "for another day" and remitted the question to the primary judge. 64 The CFMMEU submits that the fact that Order 3 of the December 2017 Orders was set aside by the Full Court, rather than being left in place until final orders were made disposing of the Trust Monies, should be taken to reflect the Full Court's concerns, expressed in argument, that: (1) the form of Order 3 was imprecise as to the identity of those to whom the Trust Monies should be paid and consequently may give rise to difficulties of enforcement; and (2) absent any further order, Order 3, at least arguably, required the Trust Monies to be distributed "without further order".

Consideration 65 The CFMMEU takes a narrow view of the context in which Order 3 of the December 2017 Orders was set aside contending that in doing so it reflected the two concerns set out at [64] above. Those matters were indeed concerns of the Full Court. As to the form of Order 3 of the December 2017 Orders being uncertain in its terms, as the CFMMEU identifies at the hearing on 26 June 2018 Katzmann J said: Obviously something needs to be done about those funds that are being held in trust, but at least one difficulty the court has is with the terms of the proposed order. They are uncertain. The court is, to put it mildly, reluctant to make an order which is uncertain in its terms because problems with enforcement, should that arise. So if you want the court to make an order about the distribution of the trust monies, it will have to be phrased in a way which makes it abundantly clear who the money is to be paid out to and what is meant by the expression "claim an interest therein". There her Honour was referring to the form of proposed orders provided to the Full Court at that time and in particular proposed order 6 (see [26] above), which was in similar terms to Order 3(b) of the December 2017 Orders. The concern that, absent any order, Order 3 of the December 2017 Orders at least arguably, required the Trust Monies to be distributed "without further order" reflects an issue raised at the hearing on 28 August 2018 when the Full Court was considering proposed orders which, we infer, did not include an order setting aside Order 3. 66 However, we do not accept that the Full Court's reasons for setting aside Order 3 were limited to the two concerns identified by the CFMMEU at [64] above. Rather, the Full Court made its orders including setting aside Order 3 of the December 2017 Orders because of a suite of concerns it had about the effect of its judgment which can be discerned having regard to the course of the proceeding before the Full Court summarised at [12]-[33] above. Those concerns included that: (1) the Full Court's determination that the FWC's approval of the Enterprise Agreement was affected by jurisdictional error had consequences for persons who were not party to the proceeding and the proceeding was not like ordinary inter partes litigation; (2) in determining orders the Full Court should make, it was appropriate to have regard to the interests of all persons affected by its determination including non-parties, namely employees of OKW who were not members of the CFMMEU and who may have unpaid accrued entitlements; and (3) in determining whether it was appropriate for the Trust Monies to be paid to CFMMEU members as contemplated by the Settlement Deed, the Court may need to consider: (a) the interests of OKW employees who were not CFMMEU members; (b) the question of whether, by the contemplated orders, the Court was being asked to facilitate a scheme to effect a preference to one group of unsecured creditors in the distribution of OKW's assets; and (c) the possible application of s 596AB of the Corporations Act. 67 The effect of setting aside Order 3 of the December 2017 Orders was to "wipe the slate clean". The issue was remitted to the primary judge to be considered afresh. At that point, as OKW submits, the contest for the Trust Monies was between the CFMMEU, acting on behalf of its members who were also employees of OKW, and the liquidators, acting in the interests of all of OKW's creditors. 68 Before the primary judge the CFMMEU sought an order that the Trust Monies be distributed to its members identified in annexure B-8 of Mr Bukarica's affidavit affirmed on 18 October 2018 in accordance with the break up included therein. OKW relied on an affidavit sworn by Mr Walsh on 26 November 2018 annexing a letter from Mr Walsh to the CFMMEU dated 13 November 2018 in which Mr Walsh indicated that there were 2,299 "Relevant Employees" who they understood to be OKW employees entitled to accrued leave and other entitlements as a result of the Full Court's orders quashing the Enterprise Agreement. The letter included: I wrote to you on 12 October 2018 setting out what I consider to be an appropriate methodology for quantifying the claims of OKW's former employees. You responded by letter dated 26 October 2018 setting out an alternative methodology. Which methodology is ultimately adopted will materially affect the amount which is determined to be provable in the liquidation by the former employees. As set out in my letter of 12 October, it is my intention to seek directions/a declaration from a court regarding the appropriate methodology to be used. Until these directions/declaration are obtained, I am not able to definitively quantify the amounts due to employees. I am aware that prior to my appointment, OKW estimated that the total amount due to all former employees as at November 2017 was somewhere between $40.3 million and $75.5 million, but I am not presently in a position to comment on the accuracy or otherwise of that range. 69 There was thus evidence before the primary judge that the effect of the Full Court's judgment and orders was that 2,299 OKW employees could be entitled to unpaid leave and other benefits. His Honour also had before him, among other things, the transcript of the hearings before the Full Court on 26 June 2018 and 7 and 28 August 2018. 70 In the circumstances it was appropriate for the primary judge to have regard to the concerns expressed by the Full Court and it is apparent that in considering the matter the primary judge was aware of those concerns. His Honour's reasons, albeit brief, demonstrate that to be the case. First, at [10] of the Primary Judgment, after noting that an issue of concern for the Full Court was the fate of the Trust Monies, his Honour said: One of the concerns of the Full Court would appear to be that the order made in December 2017 confined the deployment of monies to "members of the [CFMMEU] … claiming an interest therein", namely the employees of [OKW] who were also members of the CFMMEU. Confined in that manner, the employees of [OKW] who were not members of the CFMMEU - but who also would have accrued entitlements - would not benefit from the deployment of the $1 million trust monies. (Original emphasis.) 71 Secondly, his Honour observed in expressing his view that one reason for making an order in the form sought by OKW was that the Full Court had set aside Order 3 with that Court expressing concerns going beyond a concern about the form of that order. We would infer that in making this statement his Honour was referring to the totality of the Full Court's concerns made apparent during the hearings before it. They were matters of direct relevance to the application before the primary judge in relation to the fate of the Trust Monies. 72 That the issues which were raised by the Full Court were not ultimately canvassed does not detract from the relevance of those issues to the issue for consideration by the primary judge. The issues raised by the Full Court include, as the CFMMEU accepts, its concern that if orders were made in the form sought by the parties the rights of employees not represented by the CFMMEU may be adversely affected. His Honour could not be expected to determine the question remitted to him by the Full Court in a vacuum and without regard to what had transpired before that Court.

The second reason - the proceeding was not a recovery proceeding 73 The second reason given by the primary judge for determining that the position advocated by OKW should prevail was that from the outset the proceeding was not properly characterised as one in which only the parties to the proceeding had an immediate interest and it was not in the nature of a recovery proceeding in which payment of monies to CFMMEU members was sought: Primary Judgment at [14]. 74 The CFMMEU submits that the nature of the proceeding was irrelevant to the disposition of the Trust Monies. It contends that the circumstances in which the December 2017 Orders came to be made take the issue out of the realm of public law and, as the primary judge identified, are analogous to a security for costs issue. The CFMMEU submits that, although it sought public law remedies, the proceeding was taken to protect the interests of its members and was funded exclusively through members' funds at considerable (and unrecoverable) cost. 75 The CFMMEU observes that in the Interlocutory Application, OKW contended that there was a real risk that if orders "staying" the primary judge's declaration of 23 November 2017 and restraining the commencement of underpayment proceedings were not made, it would become insolvent and the appeal would be rendered nugatory. The CFMMEU contends that OKW took the position that the orders it sought would protect its position and permit it to continue to operate, pending its appeal, and that the orders proposed by OKW gave rise to the possibility that if OKW lost the appeal, its members would not, on account of OKW's impending insolvency, be able to recover outstanding entitlements (including those which would have continued to accrue pending the determination of the appeal). 76 The CFMMEU submits that it had intended, up to the morning of 21 December 2017, immediately to commence proceedings against OKW for outstanding entitlements on the basis of the reasoning in the Primary Judgment that the Enterprise Agreement was invalid. It says that its unchallenged evidence was that, but for the guarantee in Order 3(b) of the December 2017 Orders, it would not have agreed to any interlocutory orders being made and that it consented to a restraint (Order 1(b) of the December 2017 Orders) upon its right to take underpayment proceedings, conditional on the position of its members being protected by Orders 2 and 3(b) of the December 2017 Orders. The CFMMEU contends that the restraint in Order 1(b) of the December 2017 Orders applied only against it and that no other person or party was restrained from proceeding against OKW for the recovery of outstanding entitlements or was forgoing any right as a result of those orders. 77 The CFMMEU submits that OKW enjoyed the benefit of the December 2017 Orders in two significant respects. First, it was able to continue to operate its business from 21 December 2017 until 28 August 2018 as if the Enterprise Agreement applied. Secondly, it was able to do so without facing any claim by the CFMMEU (which would otherwise have occurred) on behalf of its members in respect of unpaid entitlements. The CFMMEU submits that the situation before the primary judge on 28 December 2018, being the insolvency of OKW, was not an unforeseen development but was precisely the circumstance in which the parties (and the Court's orders) contemplated that the Trust Monies would be applied towards monies claimed on behalf of the CFMMEU's members. It contends that where parties reach a position of consent, which is then accepted and formalised by way of Court orders, it is generally in the interests of justice that the letter and intent of those orders be upheld. 78 The CFMMEU submits that in those circumstances it was an error to have regard, or to give any weight, to the fact that the proceeding sought public law remedies which did not directly seek payments to CFMMEU members, and to fail to take into account, or to give proper weight to, the circumstances in which the December 2017 Orders came to be made.

Consideration 79 We do not agree that the nature of the litigation was irrelevant to resolving the issue of disposition of the Trust Monies. On the contrary, it was a relevant consideration. 80 As set out at [8] above, in the First Instance Proceeding the CFMMEU relevantly sought the following relief: 1. A declaration that the approval by the Fair Work Commission of the RECS (QLD) Pty Ltd Enterprise Agreement 2015 on 30 October 2015 in proceedings AG 2015/5383 as recorded in [2015] FWCA 7516 is void and of no effect. 2. In the alternative to order (1) above, a writ of certiorari quashing the approval by the Fair Work Commission of the RECS (QLD) Pty Ltd Enterprise Agreement 2015 on 30 October 2015 in proceedings AG 2015/5383 as recorded in [2015] FWCA 7516. 3. Further in the alternative to order (1), an order that a writ of mandamus be issued to the Fair Work Commission requiring it to hear and determine matter AG 2015/5383 in accordance with the law. 81 The consequence of granting that relief and of the November 2017 Orders and ultimately the Appeal Orders was that all employees of OKW who were subject to the Enterprise Agreement have an entitlement to additional benefits. That is, self-evidently and as must have been patently obvious to the CFMMEU, if the CFMMEU was successful the relief would not only benefit the CFMMEU member employees in whose interest the CFMMEU were acting but all affected employees. 82 By December 2018, when the primary judge came to consider the issue of how the Trust Monies should be disbursed, OKW was in liquidation. That, coupled with the nature of the proceeding, were facts against which the primary judge needed to consider and resolve the issue between the parties about the fate of the Trust Monies. That OKW was in liquidation made the nature of the proceeding even more critical. 83 That the CFMMEU, and thus implicitly its members, had brought and funded the litigation did not make the nature of the proceeding an irrelevant consideration. Similarly, the dealings between the parties which led to the CFMMEU agreeing to the December 2017 Orders do not displace the nature of the litigation as a matter to which the primary judge could and should have regard. In any event, as OKW submits, the December 2017 Orders were not immutable. Order 3 of those orders was expressed to be "[s]ubject to any other order of the Court". 84 The matters identified by the CFMMEU did not change the potential for the proceeding to be one from which employees other than CFMMEU members would benefit nor make the nature of the proceeding a matter to which the primary judge should not have regard in considering, in the context of all that had transpired including the facts as at December 2018, the appropriate orders to be made in relation to the Trust Monies. As at December 2018: (1) OKW was in liquidation, as an insolvent company; (2) there was evidence to the effect that the Full Court's determination was to enliven employee entitlements in 2,299 former employees; (3) the preferred position of the CFMMEU member employees by virtue of Order 3 had been eroded when that order was set aside; (4) the liquidators had a claim to the Trust Monies that was superior to the claim of a group of unsecured creditors; and (5) to order payment of the Trust Monies in the manner that the CFMMEU proposed would be to prefer one group of unsecured creditors. 85 Further, contrary to the submission made by the CFMMEU, the primary judge was aware of, and had regard to, the circumstances in which the December 2017 Orders were made. So much is apparent from the summaries of those circumstances and of the CFMMEU's submissions included in his Honour's reasons: see Primary Judgment at [8] and [13].

The third reason - potential contravention of s 596AB of the Corporations Act 86 The third reason given by the primary judge for finding that the Trust Monies should be disbursed to OKW's liquidators concerned the potential for contravention of s 596AB of the Corporations Act. 87 The CFMMEU submits that before the primary judge the liquidators relied upon the proposition that there was a "material possibility" that the "payment of the monies into trust" and/or any "payment of the monies out to the CFMMEU" could constitute a contravention of s 596AB of the Corporations Act. It says that the latter suggestion, of payment to the CFMMEU, was misconceived as payment to it was never contemplated by the December 2017 Orders or otherwise. 88 The CFMMEU submits that the primary judge's finding that the Court "could not in the present circumstances dismiss such concerns out of hand as being unfounded or fanciful" was without foundation because the relevant intention for the purposes of s 596AB of the Corporations Act simply did not exist. It says that there was no evidence to suggest that the Trust Monies would otherwise have been available to creditors. 89 The CFMMEU contends that it remains unclear whether the relevant "agreement" or "transaction" referred to in s 596AB is said to be the agreement of the parties to the December 2017 Orders, the making of those orders by the Court or the payment of the $1 million into the Ashurst Australia account pursuant to Order 2 of the December 2017 Orders. It says that whatever conduct constitutes the alleged agreement or transaction the evidence demonstrates that the sole intention of OKW in consenting to the December 2017 Orders was to secure orders as sought in the Interlocutory Application so that it could continue to trade pending the outcome of the appeal. 90 In relation to the issue of intention, the CFMMEU says that the first time the issue of "security" for employee entitlements was raised was at the hearing on 19 December 2017. In its written submissions it sets out the circumstances in which that occurred and submits, based on the sequence of events, that it is clear that the sole intention of OKW in consenting to Order 2 of the December 2017 Orders was to secure orders which would enable it to continue to trade pending the appeal, in the hope of a favourable outcome. The CFMMEU notes that there is no suggestion that OKW did not, at the time of the December 2017 Orders, have a reasonable basis to think that it might be successful in the appeal. 91 As to the issue of the availability of the Trust Monies to creditors generally, the CFMMEU submits that the evidence does not support the proposition that a reduction in monies available to employee creditors could occur, let alone that this was an intended result. It says that there was no evidentiary basis to infer that other employee creditors would have benefited from the $1 million had it not been placed in trust. It contends that the evidence before the Court was that OKW did not trade independently of its sole shareholder, One Key Resources Pty Ltd (OKR). Rather, "OKW charged OKR an amount equivalent to the cost of employing the individuals made available to OKR. There was no profit margin charged. This meant that OKW recovered its costs but did not generate a profit". The CFMMEU submits that there was no evidence as to whether the $1 million was paid by OKW or by another person on its behalf, as contemplated by Order 2, and that OKW called no evidence to suggest that the $1 million would otherwise have been available to creditors. 92 The CFMMEU submits that the placement of money in a trust account for the contingent benefit of an identified group of employees who constituted potential creditors could not, without more, be capable of constituting a contravention of s 596AB of the Corporations Act and that the effect of the consent orders, if the appeal was unsuccessful, would be to reduce the total amount of entitlements owed to OKW employees. It further submits that the sole beneficiaries, if the appeal was unsuccessful, were employee creditors, that there is no basis upon which to conclude that a possible intention of any person in agreeing to or complying with the December 2017 Orders was to "significantly reduce the monies available to meet employee entitlements" and that the primary judge was in error in treating the unsubstantiated suggestion of a contravention of s 596AB as a relevant consideration.

Consideration 93 In the third reason given by the primary judge for making the orders sought by OKW his Honour said that the December 2017 Orders were made without any consideration being given to the potential that the securing of monies to one group of employees could potentially give rise to a contravention of s 596AB of the Corporations Act. His Honour expressed concurrence with a submission made by the Contradictor in the Appeal Proceeding to the effect that, on the basis of the available material, the Court could not presently "dismiss such concerns as being unfounded or fanciful". The CFMMEU contends for the reasons summarised at [87]-[92] above that the primary judge was in error to treat what it describes as "the unsubstantiated suggestion of a contravention of s 596AB" as a relevant consideration. 94 Before considering whether that is so it is convenient to first set out s 596AB of the Corporations Act which relevantly provides: Offences of entering into relevant agreement or transaction (1) A person contravenes this subsection if the person enters into a relevant agreement or a transaction with the intention of, or with intentions that include the intention of: (a) avoiding or preventing the recovery of the entitlements of employees of a company; or (b) significantly reducing the amount of the entitlements of employees of a company that can be recovered. (1A) A person contravenes this subsection if: (a) the person enters into a relevant agreement or a transaction; and (b) the person is reckless as to whether the relevant agreement or the transaction will: (i) avoid or prevent the recovery of the entitlements of employees of a company; or (ii) significantly reduce the amount of the entitlements of employees of a company that can be recovered. … Application of offence provisions (2) Subsections (1) and (1A) apply even if the company is not a party to the relevant agreement or the transaction. (2A) Subsections (1), (1A), (1B) and (1C) apply even if: (a) the relevant agreement or the transaction is approved by a court; or (b) the relevant agreement or the transaction has not had the effect or effects mentioned in paragraph (1)(a) or (b), (1A)(b), (1B)(c) or (1C)(c), as the case may be; or (c) despite the relevant agreement or the transaction, the entitlements of the employees of the company are recovered. (2B) However, subsections (1), (1A), (1B) and (1C) do not apply if the relevant agreement or the transaction is, or is entered into under: (a) a compromise or arrangement between the company and its creditors or a class of its creditors, or its members or a class of its members, that is approved by a Court under section 411; or (b) a deed of company arrangement executed by the company. (2C) Subsections (1A) and (1C) do not apply if a liquidator or provisional liquidator of the company causes the relevant agreement or the transaction to be entered into in the course of winding up the company. Definitions (3) A reference in this section to a relevant agreement or a transaction includes a reference to: (a) a relevant agreement and a transaction; and (b) a series or combination of: (i) relevant agreements or transactions; or (ii) relevant agreements; or (iii) transactions. (Notes omitted.) 95 The possible application of s 596AB was raised by the Full Court and was then the subject of detailed submissions by the Contradictor. It is clear that the issue of its application was raised by the Full Court in the context of the HOA and the Settlement Deed and the orders that the parties jointly asked the Full Court to make as a result of having entered into those agreements. They were the arrangements against which the Contradictor made submissions. 96 The CFMMEU relies on the circumstances leading up to the making of the December 2017 Orders in support of its submission that there was no evidence that it and OKW had the relevant intention required by s 596AB when the December 2017 Orders were made or when the Trust Monies were paid into the Ashurst Australia account. While that may be so, as we have already observed and as is apparent from the history of the proceedings described at [8]-[33] above, the Full Court in raising s 596AB of the Corporations Act was not concerned with the circumstances that led to the making of the December 2017 Orders. It was concerned with the facts as they existed from June 2018, after the Full Court had published its reasons, when the CFMMEU and OKW entered into the HOA and the Settlement Deed. 97 Similarly, the primary judge was not concerned with the facts as they existed as at the time of making the December 2017 Orders and whether the circumstances leading to the making of those orders might constitute a possible contravention of s 596AB of the Corporations Act. The primary judge considered the question of the order to be made about the Trust Monies afresh as at December 2018 and, as we have said before, having regard to the facts as they existed as at that date. The competing orders sought by the parties as at that time were, on the part of the CFMMEU, that the Trust Monies be paid to employees who were CFMMEU members, and on the part of OKW, that they be paid to OKW which at that time was in liquidation, or, in the alternative, to all former OKW employees with outstanding entitlements under the Award. 98 The evidence before the primary judge on the remitter included the Contradictor's submissions. In argument, OKW took the primary judge to that part of the Contradictor's submissions where the potential operation of s 596AB, in the context of the HOA and the Settlement Deed, was considered (set out at [32(1)] above). The Contradictor did not conclude that the transaction the subject of the HOA and Settlement Deed did contravene s 596AB. On the contrary, the Contradictor said that based on the available material it was not possible to reach an affirmative conclusion that there had been a breach. The submission continued to the effect that, given that the CFMMEU and OKW sought to rely on the HOA and the Settlement Deed as the basis on which the Court would not only decline to issue writs of certiorari and mandamus but to make the proposed orders and given the Court's expressed concerns about the possible application of s 596AB and its invitation to the parties to address those concerns, it was for the CFMMEU and OKW to place sufficient material before the Court to allay its concerns. The Contradictor concluded that the Court would be loath to make the proposed orders unless its concerns were resolved by satisfactory evidence from the CFMMEU and OKW. 99 Before the primary judge counsel for OKW put the same submission. He said that: And your Honour will recognise that that's precisely the position I'm advancing now. We simply don't know whether there has been a breach, and the evidence is in the hands of the [CFMMEU], but this point has now been raised squarely twice, once by the contradictor before the Full Court and now again in our written submissions, and it's really a matter for the [CFMMEU] to show there hasn't been a breach, but certainly it was a point … 100 In other words OKW relied on the Contradictor's submissions in relation to this issue and put to the Court that the position had not changed since the issue had been raised by the Full Court. That is, the potential for breach remained. 101 The CFMMEU contends that the allegation of breach was unsubstantiated and in those circumstances the primary judge erred in relying on that matter in the exercise of his Honour's discretion. However, in the absence of there being any evidence led by either party as to whether there was the requisite intention, the primary judge remained in the same position as the Full Court in relation to the proposal by the CFMMEU as to the disbursement of the Trust Monies. In those circumstances, his Honour did no more than to acknowledge that the December 2017 Orders had been made without any consideration been given to the operation of s 596AB of the Corporations Act and, we would infer, based on the facts then available to his Honour, expressed his concurrence with the submission made to the Full Court by the Contradictor that the Court could not, "on the scant material available", dismiss a concern as to the potential for a breach. 102 The CFMMEU also raises as a factor that there was no evidence that the Trust Monies would otherwise have been available for creditors generally and says that it was for OKW to demonstrate that was the case. OKW submits that this submission was not made before the primary judge and seeks to adduce the further evidence set out at [49] above to demonstrate that the Trust Monies came from OKW's account. Putting that to one side, our comments at [101] above apply equally here. The primary judge was in no better position than the Full Court. In the absence of evidence his Honour was left in the same situation as the Full Court and the inability to determine the matter one way or another. 103 There are two further matters which we briefly address. First the further evidence adduced by OKW does no more than establish that the Trust Monies were paid from an account in the name of OKW. It does not of itself address whether those monies would otherwise have been available more generally to creditors if those monies had not been paid into the Ashurst Australia account in accordance with Order 2 of the December 2017 Orders. Any arrangements between OKW and OKR, the company which paid two amounts into OKW's account bringing the balance of that account from $82,973.80 to $1,017,973.80 on 2 January 2018 prior to the payment of $1 million into the Ashurst Australia account, are unknown. It is not possible to infer, as the CFMMEU urges we would, that on no basis could that money "easily be seen as [OKW's] money". As said above, by the time the issue of the possible application of s 596AB had come to be considered by the primary judge, the factual matters relied on by the CFMMEU had become of historical interest only. What was relevant was that, whether the Trust Monies had been gifted or lent to OKW, the monies had passed to OKW and it had paid them into the Ashurst Australia account before it went into liquidation. Order 3 of the December 2017 Orders had been set aside and the question was how the Trust Monies should be disbursed in light of OKW's changed status. 104 Secondly, OKW submits that the evidence before the primary judge from the administrators/liquidators about the financial state of OKW indicated that directing payment of the Trust Monies to the CFMMEU members might well have an effect of reducing the prospect of recovery for the non-CFMMEU creditors. According to OKW that evidence can be summarised as follows: (1) OKW had about $700,000 cash in the bank; (2) net debt owed to OKW by related companies in the One Key Resources Group was about $800,000; (3) OKW had no other tangible assets and its business was unsaleable; (4) OKW had liabilities to unsecured creditors other than former employees of approximately $1 million; and (5) the liquidators had not determined the quantum of liabilities to former employees but the directors of OKW had estimated OKW's liabilities consequent upon the invalidity of the FWC approval of the Enterprise Agreement in the range of $40 million to $75 million. 105 That being the case, on the assumption that the Trust Monies came from OKW, as OKW submits, directing the payment of the Trust Monies to the CFMMEU may well have the effect of reducing the monies available for non-CFMMEU employees and/or creditors. 106 There was no error on the part of the primary judge in having regard to the Contradictor's submissions on the s 596AB issue and expressing concurrence in the way his Honour did with a part of those submissions in reaching his decision.

Conclusion 107 The CFMMEU has failed to establish that the primary judge's discretion miscarried in making the order that he did in relation to the disbursement of the Trust Monies. It follows that orders should be made granting the CFMMEU leave to appeal but dismissing the appeal. Orders should also be made allowing each of the applications seeking to adduce further evidence on appeal. The CFMMEU should pay OKW's costs of the appeal. 108 The primary judge also made an order on 20 March 2019 that Order 1 of the orders made on 28 February 2019 will not come into effect until further order of the Court (see [37] above). In the event that, relevantly, the appeal is dismissed, OKW seeks a further order bringing Order 1 of the orders made on 28 February 2019 into effect and thereby obviating the need for the matter to be relisted before the primary judge. It is appropriate that we do so and we will make an order vacating the relevant order made on 20 March 2019. 109 We will make orders accordingly. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices McKerracher, Farrell and Markovic.