Construction, Forestry, Mining and Energy Union v CSBP Limited

JUDGES: KEANE CJ, SIOPIS & RARES JJ DATE OF ORDER: 7 May 2012 WHERE MADE: perth

1. The application be dismissed; and
2. The appellant pay the respondent's costs of the application to be taxed if not earlier agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 357 of 2011

BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

JUDGES: KEANE CJ, SIOPIS & RARES JJ DATE: 7 May 2012 PLACE: Perth

REASONS FOR JUDGMENT 1 On 2 April 2012 this Court dismissed the appeal and ordered the appellant to pay the respondent's costs of the appeal. See Construction, Forestry, Mining and Energy Union v CSBP Limited [2012] FCAFC 48. Pursuant to r 39.04 of the Federal Court Rules 2011, the appellant applies for an order that the order for costs be set aside and that no order be made as to costs. 2 The power of the Court to award costs in proceedings before the Court is conferred by s 43(1) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act). It is relevantly in the following terms: (1) Subject to … section 570 of the Fair Work Act 2009, the Court or a Judge has jurisdiction to award costs in all proceedings before the Court … other than proceedings in respect of which this or any other Act provides that costs shall not be awarded. 3 In support of the application, the appellant advances two broad submissions to the effect that this Court's power under s 43(1) of the Federal Court Act does not extend to the making of an order for costs in this case: first, that this Court, in determining the appeal, exercised jurisdiction under the Fair Work Act 2009 (Cth) (the FW Act) with the consequence that s 570 of the FW Act confines this Court's authority to order costs to circumstances that do not apply here; and secondly, that the appeal to this Court is a proceeding in a matter arising under the Fair Work (Registered Organisations) Act 2009 (Cth) (the FWRO Act) with the consequence that s 329 of the FWRO Act requires that the appellant should not be ordered to pay costs in the absence of a finding, which has not been sought and should not be made, that the appeal was instituted vexatiously or without reasonable cause. 4 We will discuss these submissions in turn.

Section 570 of the FW Act 5 Section 570 of the FW Act relevantly provides: (1) A party to proceedings (including an appeal) in a court … exercising jurisdiction under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection 2 or section 569 and 569A … 6 It is common ground that s 570(2) and ss 569 and 569A of the FW Act are not material in the circumstances of this case. 7 The appellant's first submission is that the appeal is a proceeding in which this Court exercises jurisdiction under the FW Act. It is said that the controversy between the parties was as to the appellant's right to enter the respondent's premises, and that the jurisdiction of the Federal Court to determine that controversy arose under s 481 of the FW Act. That provision entitled the appellant to enter the respondent's premises if the appellant was entitled to represent the industrial interests of members of the appellant who perform work on the premises. The appellant argues that s 481 of the FW Act was the source of the Full Court's jurisdiction to hear the appeal. In this regard, the appellant notes that it sought a declaration, in the appeal, that it "is entitled to represent the industrial interests" of employees of the respondent in relation to work performed by them as Process Technicians. 8 The appellant's first submission must be rejected. It fails to recognise that this Full Court's appellate jurisdiction to hear and determine an appeal from a judgment of the Federal Court constituted by a judge exercising the original jurisdiction of the Court was not conferred by the FW Act at all. 9 The proceeding in the Full Court was an appeal to this Court from the decision of the primary judge. The primary judge was exercising the original jurisdiction of the Federal Court in relation to a matter arising under the FW Act that was conferred on the Federal Court by s 562 of the FW Act. The Federal Court Act distinguishes between this Court's original and appellate jurisdiction. Critically, s 19(1) provides that the Federal Court has such jurisdiction as is vested in it by laws made by the Parliament. Section 562 of the FW Act is such a law. The primary judge was exercising the original jurisdiction of the Court vested in it by s 562 of the FW Act. In contrast, s 24(1)(a) of the Federal Court Act itself confers appellate jurisdiction on the Federal Court by providing: 24 Appellate jurisdiction (1) Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine: (a) appeals from judgments of the Court constituted by a single Judge exercising the original jurisdiction of the Court; The appeal to the Full Court was not a proceeding in a court exercising jurisdiction under the FW Act. The proceeding by way of the appeal to this Court was not conferred by s 562 of the FW Act, but by force of s 24(1)(a) of the Federal Court Act. 10 As to this point, the appellant relies upon Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [52] (Khiani) and Barclay v Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212 (Barclay) at 235 [83] per Gray and Bromberg JJ. In each case, it was assumed, the point apparently not being argued, that s 570 of the FW Act applies to an appeal to the Full Court against the decision of a single judge of the Federal Court exercising jurisdiction under the FW Act. Because the point in question was not argued, neither Khiani nor Barclay stands in the way of this Court acting on the propositions that the relevant "proceeding" for present purposes, is the appeal to this Court, and that the Court's jurisdiction in respect of that proceeding is conferred by s 24(1) of the Federal Court Act. 11 Section 570(1) of the FW Act, in speaking of "proceedings (including an appeal) in a court … exercising jurisdiction under this Act", is speaking, in terms, of proceedings including appeals brought in the Federal Court pursuant to ss 563(f) and 565 of the FW Act from other courts and tribunals. The FW Act makes no provision for an appeal from a single judge of the Federal Court to a Full Court of this Court. It is only s 24(1)(a) of the Federal Court Act which confers jurisdiction on this Court to determine appeals from a single judge of the Federal Court. This distinction between the original and appellate jurisdiction of the Federal Court is of fundamental importance. It is well settled that clear language is required if a court is to attribute to the legislature an intention to obliterate the distinction between original and appellate jurisdiction: CDJ v VAJ (1998) 197 CLR 172 at 201-201 [111] per McHugh, Gummow and Callinan JJ citing Lord Westbury LC's classic exposition of the distinction in Attorney-General v Sillem (1864) 10 HLC 704 at 724; 11 ER 1200 at 1209: [a]n appeal is the right of entering a superior Court, and invoking its aid and interposition to redress the error of the Court below (see too Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 203-204 [13]-[14] per Gleeson CJ, Gaudron and Hayne JJ). 12 The appellant also relies on ss 562 and 563 of the FW Act. The former provision confers jurisdiction on the Federal Court in relation to any "matter arising under" the FW Act. The latter provision requires the jurisdiction conferred on the Federal Court to be exercised in the Fair Work Division of the Court. 13 As to s 562 of the FW Act, it may be accepted that the "matter", ie the controversy between the parties, arose under the FW Act. The exercise of the appellate jurisdiction of this Court on appeal from a single judge of the Federal Court must not be confused with an appeal of the kind authorised by s 562 of the FW Act from another tribunal to a single judge of the Federal Court. 14 Section 563 of the FW Act does not purport to confer jurisdiction at all: it simply provides that where jurisdiction is conferred on the Federal Court, that jurisdiction is to be exercised by the Fair Work Division of the Court. This provision tends to confirm that the jurisdiction with which it, and the provisions collocated with it in the FW Act, are concerned is not the appellate jurisdiction of the Federal Court.

Section 329 of the FWRO Act 15 The appellant's second broad submission was that s 329 of the FWRO Act applies in this case. 16 Section 329 of the FWRO Act provides relevantly: (1) A person who is a party to a proceeding (including an appeal) in a matter arising under this Act must not be ordered to pay costs incurred by any other party to the proceeding unless the person instituted the proceeding vexatiously or without reasonable cause … 17 The appellant emphasises that the question whether a court is exercising jurisdiction under an Act, is a different question from whether a matter arises under an Act. The appellant relies upon the following statement in Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at [26] in relation to a provision similar to s 329 of the FWRO Act which appeared in earlier legislation: We reject the submission of the appellants that the right or duty put in issue by the Notice of Objection to Competency related solely to the right of appeal under s 24(1)(a) of the FCA Act. This submission is not supported by the text of s 824(1) of the WR Act. The text of the provision requires that one must look to the enactment from which the matter before the Court arises, not merely the proceeding. If the enactment thus identified as the source of the matter is the WR Act, then no costs order can be made. In this case, the justiciable controversy is whether the appellants engaged in industrial action before the nominal expiry date of a certified agreement contrary to s 170MN(1) of the WR Act, and whether they breached a term of a certified agreement contrary to s 178(1). Although in the course of litigating this controversy particular proceedings were instituted pursuant to provisions in the FCA Act (s 24(1)(a) for the Notice of Appeal) and the Federal Court Rules (O 52 r 18(1) for the Notice of Objection to Competency and O 52 r 22(3) for the Notice of Contention), that is not to the point. The matter arises out of the WR Act, and consequently the usual prohibition in s 824(1) on the making of costs orders applies. (Original emphasis.) 18 It may be accepted that the appellant is right to draw this distinction. The question to which the passage cited directs attention is whether the appeal to this Court is a "proceeding in a matter arising under" the FWRO Act. The appellant contends for an affirmative answer to this question, quite inconsistently with its first submission, on the basis that s 166(1) of the FWRO Act provides for the entitlement of a person to become a member of an organisation of employees. 19 This submission must be rejected. It substantially mis-describes the "matter" in controversy between the parties. The controversy between the parties was the dispute as to the appellant's right of entry onto the respondent's premises. The right of access which the appellant wished to assert, and which the respondent disputed, was conferred by s 481 of the FW Act. However, unless the appellant could establish that any of the respondent's employees fell within the eligibility rule in the appellant's registered rules, no employee of the respondent could be one of its members. It follows that no immediate right or duty of any person arising under a law made by the Parliament was in issue in respect of s 481. The appellant could not investigate any suspected contravention of the FW Act "that relates to, or affects, a member of the [appellant's] organisation" until, first, it established that its eligibility rule applied to an employee of the respondent and, secondly, any such employee was a member of the appellant. 20 Thus, the subject matter of the proceedings before the primary judge and this Court was whether, properly construed, the appellant's eligibility rule applied to any employee of the respondent. 21 In LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581-582 Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ said: It is true to say that a matter does not arise under a law made by the Parliament merely because the interpretation of the law is involved: Felton v Mulligan (1971) 124 CLR 367 at 374, 382, 396, 408, 416. On the other hand, a matter may arise under a law of the Parliament although the interpretation or validity of the law is not involved: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154. The conclusion reached by Latham CJ in that case, and stated in a passage that has often been cited with approval, is "that a matter may properly be said to arise under a federal law if the right or duty in question in the matter owes its existence to federal law or depends upon federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law". Equally, there is a matter arising under a federal law if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is a law of the Commonwealth: Felton v Mulligan (1971) 124 CLR at 408. When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law. A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law. In R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141, Latham CJ said that the view which he expressed was in accordance with Federal Capital Commission v Laristan Building and Investment Co. Pty. Ltd (1929) 42 CLR 582 at 585-586 where Dixon J said: The Seat of Government is an integral part of the Federal System, and I see no reason for denying the application of sec 76 to laws made pursuant to sec 52(I). It would follow that a law of the Parliament conferring jurisdiction on the High Court is warranted by sec 76(II), at least in relation to matters which arise as the result of enactments of the Parliament. It may well be that all claims of right arising under the law in force in the Territory come within this description, because they arise indirectly as the result of the Seat of Government Acceptance Act 1909 (see sec 6), and the Seat of Government (Administration) Act 1910 (see secs 4 to 7 and 12). But it is at least clear that a claim to a right conferred by or under ordinances made by the Governor-General in Council under sec 12 of the Seat of Government (Administration) Act is a matter arising under an enactment of the Parliament. 22 Here, no question of whether any employees of the respondent had a right to join the appellant union arose under s 166 of the FWRO Act. No employee of the respondent had made such a claim. The only controversy was whether the appellant could establish that it had an entitlement to seek to interest employees of the respondent to become members of the appellant. 23 The right or duty that the appellant was seeking to assert arose under, or owed its existence to, s 481 of the FW Act, not the FWRO Act. There is a distinction between a matter arising under any law made by the Parliament and a matter arising under a particular law. Section 329 of the FWRO Act deals with "a proceeding … in a matter arising under" that Act. The scope of s 329 of the FWRO Act is wider than s 570 of the FW Act. First, the inclusion of an appeal in s 329 must refer to an appeal to a Full Court of this Court from a judge of the Court exercising the plenary original jurisdiction conferred by s 338 of the FWRO Act which is expressed in the following terms: Jurisdiction is conferred on the Federal Court in relation to any matter (whether civil or criminal) arising under this Act. 24 In support of its argument, the appellant relies upon this Court's reference at [40] of its reasons published on 2 April 2012 to s 166 of the FWRO Act. But that was a reference to the statutory context in which the eligibility rule was to be construed, that context being an aid to construing the rule. This passage does not suggest that the matter in controversy before the primary judge, or before this Court, arose under s 166(1) of the FWRO Act. It would have been quite wrong to suggest that it did. 25 A matter arises under a law of the Commonwealth when rights arising under that law are the subject of the controversy which is put in suit between the parties to the controversy: In re Judiciary and Navigation Acts (1921) 29 CLR 257, 265; Hooper v Hooper (1955) 91 CLR 529, 536; Minister for Immigration and Multicultural Affairs v B (2004) 219 CLR 365 [7]-[13]. In the present case the matter to be resolved did not concern a claim by any person, including the appellant, under s 166(1) of the FWRO Act which confers a right of membership of an industrial organisation on persons. The controversy of which the Court was seized did not involve the assertion by any person of his or her right to membership in an industrial organisation. Rather, it involved the appellant's assertion of a right to enter the respondent's premises arising under s 481 of the FW Act. The respondent, as applicant in the proceedings before the primary judge, sought a declaration that the appellant union was not entitled to represent the interests of persons employed by the respondent (as applicant). The controversy arose because an official of the appellant, who was a permit holder for the purposes of s 481 of the FW Act, claimed that he had a right of entry to the respondent's premises under that section. 26 In Re McJannett; Ex parte Australian Workers' Union of Employees, Queensland [No 2] (1997) 189 CLR 654 at 656, Brennan CJ, McHugh and Gummow JJ, said of an analogue of s 329, that the test for determining "whether a proceeding is a matter arising under the Act … is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act". 27 Because no person employed at the respondent's premises was a member of the appellant, the right of entry under s 481 of the FW Act that the appellant sought to enforce could not owe its existence to a provision of the FWRO Act. The primary judge and this Court held, moreover, that none of those employees was eligible to be a member of the appellant under its rules. The substantive issue litigated was whether, on their proper construction, those rules were capable of creating a right of any of the respondent's employees to be a member of the appellant. But even if it were held that the rules did create such a right, no matter arose under the FWRO Act. That is because the entitlement to membership of an organisation, including the appellant, under that Act is enforceable as between the organisation and the person who is, or claims to be, a member of it. On an application by either the person or the organisation s 167(1) of the FWRO Act gives the Federal Court jurisdiction to make a declaration as to that person's entitlement to membership. Here, the respondent was not capable of making an application under s 167(1) since it was neither a person applying for membership nor an organisation. Thus, when the respondent, as applicant, commenced the proceedings below they were not, and could not have been, brought under the FWRO Act. 28 Moreover, s 167(6) of the FWRO Act required that if the organisation brought an application under s 167(1), the person whose entitlement was in question had to be given the opportunity of being heard by the Court and, if that person brought such an application, the organisation had to be given the same opportunity. 29 Thus any matter arising under the FWRO Act in relation to a person's eligibility to be a member of an organisation such as the appellant, had to have as parties at least both the person whose entitlement was in question and the organisation. The prohibition in s 329 of the FWRO Act is enlivened in such a matter. But these appellate proceedings and those below do not answer the requirements of a matter arising under the FWRO Act because none of the employees was a party. 30 Accordingly, we would reject the appellant's second submission.

DISCRETION 31 The appellant also argues that this Court should exercise its discretion under s 43 of the Federal Court Act "by having regard to the clear policy evident in the FW Act that, in industrial matters, costs orders are usually not … made". The appellant refers, in this regard, to the observations of von Doussa J in Hatchett v Bowater Tatt Industries Pty Ltd (No 2) (1991) 28 FCR 324 especially at 326 where his Honour makes the point that, even if the conditions upon the award of costs are met, the court "may in the exercise of its discretion, and having regard to the general policy" (emphasis added) of the legislation make no order as to costs. Two points may be made here: first, legislation which denies the possibility of an order for costs in some cases, but permits orders for costs to be made in other cases can hardly be said to exhibit a policy that there should not be orders for costs made in the second category of cases; secondly, von Doussa J was concerned to emphasise the existence of a discretion in the Court, the exercise of which is not controlled merely by establishing the occasion for its exercise. 32 Importantly, except for those cases to which s 570 of the FW Act and s 329 of the FWRO Act apply, the Parliament left the Court with its discretion in s 43(1) of the Federal Court Act unfettered. The Parliament recognised that the prohibition against awarding costs under s 570 of the FW Act should not be expressed or extend as widely as that in s 329 of the FWRO Act. Since these appellate proceedings do not fall within s 570 of the FW Act, and do not concern a matter arising under the FWRO, the Court is free to exercise the discretion under s 43(1) on ordinary principles governing the award of costs. However, s 570 of the FW Act is a relevant consideration because it makes a special provision in matters arising in the original jurisdiction of the Federal Court and those in its appellate jurisdiction on an appeal from the Federal Magistrates Court or a court of a State or Territory in a matter arising under the FW Act (s 563(f)). The width of this Court's discretion under s 43(1) has been discussed in Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at 62-65 [25]-[34]; see too Kazar v Kargarian (2011) 197 FCR 113. 33 In this case, the exercise of discretion conferred on this Court by s 43(1) of the Federal Court Act may properly be informed by consideration of the reasonableness or otherwise of the appellants in putting the respondent to the further expense of resisting the pursuit on appeal of arguments that had been ventilated before, and comprehensively rejected by, the primary judge. 34 While it may not be fair to describe the appellant's appeal as "vexatious" or "without reasonable cause", it will have been apparent from the Court's reasons for dismissing the appeal that the appellant's arguments were distinctly adventurous. And while the primary judge may not have been minded to require the appellant to pay the costs which the respondent was obliged to incur by reason of the appellant's expansionist claims at first instance, the arguments urged by the appellant were certainly not so worthy of repetition that the appellant should, having regard to the different policies of the FW Act and the FWRO Act, be allowed to ventilate them again in this Court free of the risk that it would be required to compensate the respondent for its costs of the exercise: see Elkington v Shell Australia Ltd (1993) 32 NSWLR 11, 23-24. 35 In our respectful opinion, there is no good reason why the costs of the appeal should not follow the event.

CONCLUSION 36 We would reject the appellant's application, and order that the appellant pay the respondent's costs of this application to be taxed if not earlier agreed. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Keane and the Honourable Justices Siopis and Rares.