Devine Marine Group Pty Ltd v Fair Work Ombudsman [2013] FCA 442 | Case summary

REASONS FOR JUDGMENT 1 This is an application for leave to appeal and, if leave is granted, an appeal from an interlocutory order made by a Federal Magistrate (now a Federal Circuit Court Judge) on 26 October 2012 in which the Federal Magistrate made an order that the first respondent in that proceeding, Devine Marine Group Pty Ltd (Devine Marine), make discovery of the documents set out in Attachment A to the application for discovery, by filing and serving an affidavit or affidavits of documents within 14 days of the date of the order. 2 Unfortunately, the Federal Magistrates Court (now the Federal Circuit Court of Australia) has sealed two orders on 26 October 2012, which differ. It is not clear from the documents before me which of the orders are said to be the orders of the Court made on that day. I have read the transcript of the proceeding before the Federal Magistrate and the transcript is of no assistance. 3 The respondent to this application for leave to appeal, Fair Work Ombudsman (FWO), is the applicant in the proceeding that was commenced on 31 May 2012 in the Federal Magistrates Court. 4 In that proceeding, FWO sought orders against Devine Marine as the first respondent, Mr Brett Devine as the second respondent, and Mr Arthur Boucaut-Jones as the third respondent, in a statement of claim which was filed on the same day. 5 Mr Devine is the sole director and secretary of Devine Marine and holds 170 of the 200 issued shares in the company. Devine Marine has been described on this application by its counsel as a "one person company". 6 In its statement of claim, FWO claims that Mr Devine was the sole director, secretary and the majority shareholder in Devine Marine and Mr Boucaut-Jones was the principal of the Adelaide Nautical College Incorporated (the College), which is not registered as a training provider for the purpose of the Training and Skills Development Act 2008 (SA) or any equivalent legislation in another State. 7 FWO claims that during the period between 13 April 2011 and 17 December 2011, Devine Marine employed certain persons mentioned in the statement of claim to work in Devine Marine's business, which was to provide shipping and marine salvage services. Their employment, it is pleaded in the statement of claim, was "covered by a Modern Award": paragraph 10. 8 It is claimed that Devine Marine failed to pay the employees a rate equal to the minimum hourly rate, casual loading and weekend rates provided for in the Award. It is also claimed that Devine Marine did not pay any superannuation contributions. 9 It is further claimed that Devine Marine was required to make, and keep for seven years, employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (Fair Work Regulations), with which obligation it did not comply and as a result of which Devine Marine contravened s 535 of the Fair Work Act 2009 (Cth) (Fair Work Act), which is a civil remedy provision pursuant to s 539 of the Fair Work Act. 10 Moreover, it is pleaded that Devine Marine failed to keep records relating to the rate of remuneration, the gross and net amounts, the deductions made, the hours worked and the details of loadings of the employees mentioned in the statement of claim. That failure is said to be also a contravention of s 535 of the Fair Work Act and subregulation 3.33 of the Fair Work Regulations. It is also complained that Devine Marine failed to keep records relating to overtime hours and superannuation contributions, both of which also are said to be contraventions of s 535 of the Fair Work Act. 11 FWO claims that on 24 November 2011 it served on Mr Devine, on behalf of Devine Marine, a notice to produce pursuant to s 712 of the Fair Work Act, with which Devine Marine failed to comply within the notice compliance period. It is pleaded that that failure is a contravention of s 712(3) of the Fair Work Act, which is also a civil remedy provision pursuant to s 539 of the Fair Work Act. 12 It is pleaded that Mr Devine and Mr Boucaut-Jones are liable as accessories to the contraventions by Devine Marine. 13 Lastly, it is pleaded that Mr Devine and Mr Boucaut-Jones are jointly liable by reason of an arrangement between Mr Devine and Mr Boucaut-Jones whereby the employees referred to in the statement of claim were to be ostensibly provided with training by the College but, in reality, would be employed by Devine Marine. It is pleaded that that arrangement is a contravention of s 550(2)(d) of the Fair Work Act. 14 FWO seeks a number of declarations: that Devine Marine contravened particular provisions of the Fair Work Act; and that Mr Devine and Mr Boucaut-Jones were involved in the contraventions. 15 FWO seeks payment to the employees of the amount of the underpayment of their entitlements, together with interest and payment of the unpaid superannuation. 16 FWO seeks the further orders: 73.1 the Company [Devine Marine] is to pay pecuniary penalties for its contraventions of sections 45 and 535 and subsection 712(3) of the Fair Work Act. 73.2 the Director [Mr Devine] is to pay pecuniary penalties for his contraventions of sections (sic) 45 and subsection 712(3) of the Fair Work Act. 73.3. Boucaut-Jones is to pay pecuniary penalties for his contraventions of sections (sic) 45 of the Fair Work Act. 17 FWO seeks an order that the pecuniary penalties be paid into the Consolidated Revenue Fund of the Commonwealth within 21 days. 18 On 13 September 2012, FWO filed an application seeking the following orders: 1. That this application be returnable on 19 September 2012 at 9:30am, contemporaneously with the directions hearing listed in this matter at that time. 2. Pursuant to sub-section 45 of the Federal Magistrates Act 1999, the Court declares that it is appropriate in the interests of justice to allow discovery by the: a. First and Second Respondents of the categories of document set out in Attachment A to this Application; and b. Third Respondent of the categories of document set out in Attachment B to this Application. 3. Pursuant to sub-rule 14.02(2)(a) of the Federal Magistrates Court Rules 2001, the Respondents make disclosure of the categories of document set out in Attachment A (Part 1) and B (Part 1) to this Application (as applicable) by: a. filing and serving an affidavit of documents within 14 days of these Orders; b. making the disclosed documents available for inspection and copying by the Applicant at a time and place to be agreed between solicitors for the parties. 4. Pursuant to sub-rule 7.23(2) of the Federal Court Rules 2011 (having application pursuant to sub-rule 1.05(2) of the Federal Magistrates Court Rules 2001), the Respondents make discovery of the documents set out in Attachment A (Part 2) and Attachment B (Part 2) to this Application (as applicable) by: a. filing and serving an affidavit of documents within 14 days of these Orders; b. making the discovered documents available for inspection and copying by the Applicant at a time and place to be agreed between solicitors for the parties. [Attachments referred to in orders not included.] 19 The attachments are very detailed. Only one was important; Attachment A. 20 FWO sought discovery of documents relating to the employees mentioned in the statement of claim, including their hours worked, their duties, the training undertaken by the employees, payments made to them, visa arrangements relating to them, their qualifications, the existence of any arrangements between the respondents in connection with the engagement and training of the employees, and documents relating to the second and third respondents' knowledge of, and involvement in, the alleged contraventions. 21 FWO also sought orders under the Federal Court Rules 2011 (Federal Court Rules) for discovery of documents relating to potential new claims against the respondents. 22 The application was supported by an affidavit sworn by Ms Megan Carter, who is a senior lawyer in the office of the FWO and authorised to make the affidavit. 23 It was put in FWO's written submission: The purpose of seeking discovery under Rule 7.23 is to overcome some insufficiencies in the presently available evidence to assist the Applicant to make a decision about whether to commence new proceedings against the Respondents (either by way of an entirely new application or by way of amendments to the current proceedings) in respect of the potential new claims. 24 It was contended that rule 7.23 of the Federal Court Rules applied because there was no equivalent in the Federal Magistrates Court Rules 2001 (Federal Magistrates Rules) and because in circumstances where the Federal Magistrates Rules are insufficient, the Federal Magistrates Court may apply the Federal Court Rules: r 1.05(2) of the Federal Magistrates Rules. 25 The Federal Magistrate gave ex tempore reasons in which he said that he had previously refused to make orders sought in paragraph 4 of the application, for reasons which he said he had provided earlier that day during the hearing, and upon which he would not elaborate. That order was not pressed by the FWO and therefore is not an issue on this appeal. 26 He said that it was in the "interest of justice" to make orders for discovery as sought in paragraphs 2 and 3 of the application, and he proposed to make a declaration that it was "appropriate, in the interests of administration of justice, to allow discovery by [Devine Marine] of the categories of documents set out in Attachment A" to the application. 27 He referred to rule 20.22 of the Federal Court Rules as to who would be required to make an affidavit of documents if Devine Marine were ordered to make discovery, and he noted the submission made by Devine Marine that there was no-one, other than Mr Devine, who was an officer as defined by the Corporations Act 2001 (Cth) (Corporations Act), who could comply with the order for discovery. 28 He noted the submission made by Devine Marine and Mr Devine that no order should be made because it would require Mr Devine to incriminate himself and would have the effect of denying Mr Devine's privilege from self-incrimination. 29 His Honour relied upon a decision of R v Ronen & Ors (2004) 62 NSWLR 707 and, in particular, the holding that the proper officer need not be an employee of the company to make the affidavit of documents. He noted that, in that case, any other person may be named or appointed to make the affidavit of documents if that person can more effectively supply the information. 30 He concluded there is no requirement that it be Mr Devine who has any involvement in the matter, saying other "person or persons can quite adequately swear the affidavit on the company's behalf and I do not believe there will be any compromise of the respondent's privilege." 31 At the time Devine Marine made this application, it filed an accompanying affidavit of Mr Devine and a draft notice of appeal. 32 Mr Devine deposed to two different orders made by the Federal Magistrate which were entered on 30 October 2012. The first orders were obtained on 30 October 2012 from the Commonwealth Courts Portal. They were: THE COURT ORDERS THAT: 1. Pursuant to Sub-section 45 of the Federal Magistrates Act 1999, the Court declares that it is appropriate in the interests of justice to allow discovery by the: a. First Respondent of the categories of documents set out in Attachment A to this Application; and 2. Pursuant to sub-rule 14.02(2)(a) of the Federal Magistrates Court Rules 2001, the Respondents make disclosure of the categories of document set out in Attachment A (Part 1) to the Application (as applicable) by: a. Filing and serving an affidavit of documents within 14 days of these Orders; b. Making the disclosed documents available for inspection and copying by the Applicant at a time and place to be agreed between solicitors for the parties. 3. Pursuant to Sub Rule 14.02 (2)(a) of the Federal Magistrates Court Rules 2001, the First Respondent, by its proper officer, or proper officers, whether already appointed or to be appointed make disclosure of the categories of documents set out in Attachment A (Part 1) to the Application as applicable by: a. Filing and serving an Affidavit or Affidavits of documents within 14 days of these orders; and b. Making the disclosed documents available for inspection and copying by the Applicant at a time and place to be agreed between solicitors for the parties. 4. The suspension of Order 3 of the Orders of 18 June 2012 suspending the mediation is dismissed. 5. Further consideration of this matter is adjourned to 9.15am on 20 February 2012 before FM Simpson for Directions. 33 On 5 November 2012, his solicitors received a copy of orders said to be made on 26 October 2012 from the Court (the second orders). They were: THE COURT ORDERS THAT: 1. Pursuant to Sub-section 45 of the Federal Magistrates Act 1999, the Court declares that it is appropriate in the interests of justice to allow discovery by the First Respondent of the categories of documents set out in Attachment A to this Application in a Case filed on 13 September 2012 ("the Application"). 2. Pursuant to Sub Rule 14.02 (2)(a) of the Federal Magistrates Court Rules 2001, the First Respondent, by its proper officer, or proper officers, whether already appointed or to be appointed, make disclosure of the categories of documents set out in Attachment A (Part 1) to the Application by a. Filing and serving an Affidavit or Affidavits of documents within 14 days of these orders; and b. Making the disclosed documents available for inspection and copying by the Applicant at a time and place to be agreed between solicitors for the parties. 3. Order 1 of the orders of 19 September 2012 suspending the operation of Order 3 of the Orders of 18 June 2012 is dismissed with the intention that the matter proceed to mediation at the earliest opportunity. 5. Further consideration of this matter is adjourned to 9.15am on 20 February 2012 before FM Simpson for Directions. 34 Paragraph 1 is different, but only in its layout and in the description of the application. 35 In the first orders, paragraph 2 requires all respondents to make disclosure of the categories of documents set out in Attachment A (Part 1) to the application by filing an affidavit of documents and making the disclosed documents available for inspection. 36 In the same orders, paragraph 3 requires Devine Marine, by its proper officer or proper officers, whether already appointed or to be appointed, to make disclosure of the same documents all three respondents have been ordered to make in paragraph 2. 37 Paragraph 4 of the first orders is irrelevant, but appears to be in error. 38 In the second orders, paragraph 2 of the first orders is omitted. Paragraph 2 of the second orders is in the same terms as paragraph 3 of the first orders. 39 Paragraph 3 of the second orders is again irrelevant, but some effort has been made to correct the order but it still speaks of an order being "dismissed". 40 Devine Marine has assumed that the second orders are those of the Court. It seeks leave to appeal from paragraphs 1 and 2 of those orders. 41 The Federal Magistrates Court has not attempted to explain how the Court has published two sets of inconsistent orders. There being no suggestion otherwise, I will proceed like the parties on the basis that the second orders are the Federal Magistrates Court orders. 42 Mr Devine has deposed on information and belief, because he was not present at the hearing, that the Federal Magistrate did not provide any explanation or reasons why it was appropriate to make the declaration in paragraph 1 of the second orders and did not address Devine Marine's submissions as to why no declaration should be made. He has also deposed that the Federal Magistrate did not "find or order" that it was in the interests of the administration of justice, as required by s 45(2) of the Federal Magistrates Act 1999 (Cth) (Federal Magistrates Act). 43 He has also deposed that the Federal Magistrate said: (c) his Honour, in relation to the conclusion that it was appropriate to make Order 2, failed with respect to consider the scope and nature of the categories of documents sought, or failed to give any or any sufficient explanation or reasons as to why the scope of the categories sought were capable of being discovered by a "proper officer" without requiring that I potentially infringe my privilege rather, with respect, apparently accepting that it was possible in all cases irrespective of the nature of the documents for a "proper officer" to comply with the discovery order; (d) his Honour, with respect, said words to the effect: "The orders I propose to make will not infringe the second respondent's privilege or for that matter the third respondent's privilege against incriminating themselves or exposing themselves to a penalty"; … 44 The Federal Magistrate gave short ex tempore reasons, which are not inconsistent with Mr Devine's evidence. The matters deposed to, however, are not put in dispute. 45 Devine Marine identified its grounds of appeal, if leave were granted, in its draft notice of appeal: 1. The learned Federal Magistrate erred in law by failing to give adequate reasons for his Honour's decision that it was in the interest of justice that a declaration pursuant to section 45 of the Federal Magistrates Act 1999 be made. 2. The learned Federal Magistrate erred in law by applying a test of "interest of justice" and not "interests of the administration of justice" to allow discovery under section 45 of the Federal Magistrates Act 1999. 3. The learned Federal Magistrate erred in law and fact by concluding that he would make a declaration under section 45 of the Federal Magistrates Act 1999. 4. The learned Federal Magistrate erred in law by failing to give adequate reasons for his conclusion that his orders would not infringe the second respondent's privilege against penalty. 5. The learned Federal Magistrate erred in law and fact by concluding that his orders would not infringe the second respondent's privilege against penalty. 46 The test in this Court for leave to appeal is that stated in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 ("Decor"). The judgment appealed from must be attenuated with sufficient doubt to warrant its reconsideration, and the applicant would suffer substantial injustice if leave were refused and the decision complained of was wrong. 47 Section 45 of the Federal Magistrates Act addresses interrogatories and discovery. Section 45 provides: (1) Interrogatories and discovery are not allowed in relation to proceedings in the Federal Magistrates Court unless the Federal Magistrates Court or a Federal Magistrate declares that it is appropriate, in the interests of the administration of justice, to allow the interrogatories or discovery. (2) In deciding whether to make a declaration under subsection (1), the Federal Magistrates Court or a Federal Magistrate must have regard to: (a) whether allowing the interrogatories or discovery would be likely to contribute to the fair and expeditious conduct of the proceedings; and (b) such other matters (if any) as the Federal Magistrates Court or the Federal Magistrate considers relevant. 48 The relevant rules in the Federal Magistrates Rules, which include subrule 14.02(2)(a) referred to in the second order, are: 14.02(1) A declaration may be made under subsection 45(1) of the Act to allow discovery on the application of a party or on the Court's own motion. (2) If a declaration is made, the Court or a Registrar may make an order for disclosure: (a) generally; or (b) in relation to particular classes of documents; or (c) in relation to particular issues; or (d) by a specified date. 14.03 A party who is ordered to disclose documents must file an affidavit of documents. 14.04 The Court may order a party to a proceeding to produce to it a document in the possession, custody or control of the party. 14.05(1) This rule applies if, on application for the production by a party of a document for inspection by the party making the application or to the Court: (a) privilege from production or inspection is claimed; or (b) objection is made to production or inspection on any other ground. (2) The Court may inspect the document for the purpose of determining whether the claim or objection is valid. 49 Those Rules, like paragraph 2 of the Federal Magistrate's orders, speak of disclosure. 50 Curiously, the Rules speak of disclosure whilst the Act speaks of discovery. 51 The presumption in s 45(1) of the Federal Magistrates Act is that discovery will not be permitted in any proceedings in the Federal Magistrates Court unless the Federal Magistrate has made the declaration provided for in s 45(1). 52 Section 45(1) assumes that, unless the declaration is made, discovery is not necessary for the orderly disposal of proceedings in the Federal Magistrates Court. That assumption is consistent with s 3(2) of the Federal Magistrates Act, which provides that the objects of the Act are for informality, streamlined procedures, and the use of appropriate dispute resolution processes. 53 The purpose of discovery is to assist in resolving disputes as to fact. Discovery can be a lengthy and expensive process. Because of the high cost to the parties of the discovery process, both in giving discovery and taking inspection, the modern trend is to contain the obligation to give discovery by giving the Court control over the process; by limiting the circumstances in which discovery is to be given; and, if discovery is to be given, by limiting the extent of the discovery given. The cost of discovery can far outweigh the benefits. 54 Section 45(2) identifies the circumstances in which it would be "appropriate", in "the interests of the administration of justice", to make an order for discovery, by requiring the Federal Magistrate to have regard to whether an order for discovery "would be likely to contribute to the fair and expeditious conduct of the proceedings" and any other relevant matter. An application for discovery in the Federal Magistrates Court should be approached on the basis that the application should be refused unless the making of an order requiring a party to give discovery would be likely to contribute to the fair and expeditious conduct of the proceeding or there is some other relevant matter that would mean that an order would be in the interests of the administration of justice. The expression, "the administration of justice", must be understood by reference to the scheme of the Act and the presumption that discovery is not usually necessary for the fair and expeditious disposal of the proceeding. 55 Proceedings of the kind with which the Federal Magistrate was concerned should be dealt with inexpensively and expeditiously. Too often, proceedings of this kind can cause the respondents to pay more in legal costs than they become obliged to pay in pecuniary penalties. That itself is a penalty. 56 In this case, FWO exercised the powers given to FWO under the Fair Work Act by giving notice to the respondents to provide documents with which the respondents did not comply. The respondents' failure to comply, if that is established, will itself be a contravention of the Act. FWO knew that, in bringing the proceeding in relation to other contraventions, FWO did not have available the documents which were not provided in accordance with the notice to produce given on 24 November 2011. 57 FWO will know whether FWO will be able or unable to prove FWO's case in relation to contraventions of the Fair Work Act when the respondents either respond or do not respond to the notice to produce. If FWO brings a proceedings of this kind, FWO should be in a position to prove FWO's case without the need for discovery. 58 The application that was before the Federal Magistrate looked very much like a fishing expedition. Paragraph 4 of the application showed that FWO was seeking to obtain documents for the purpose of bringing further proceedings against the respondents but FWO did not have sufficient proof, so it would seem, to bring the proceedings without obtaining discovery of those documents. 59 On an application for discovery the Federal Magistrate is obliged to consider whether, on the evidence before the Court, the Federal Magistrate should make a declaration that it is appropriate, in the interests of the administration of justice, to allow discovery: s 45(1). 60 In making that inquiry, the Federal Magistrate must, as I have said, have regard to whether the allowing of discovery would be likely to contribute to the fair and expeditious conduct of the proceedings and any other relevant matter. 61 The second orders suggest that the Federal Magistrate made a declaration, although there is nothing in the ex tempore reasons that would suggest that he did. However, even if he did make a declaration as the orders suggest and as he was obliged, in my opinion he fell into error. 62 Because the proceeding before the Federal Magistrate was for a civil penalty, no order for discovery could have been made against Mr Devine: R v The Associated Northern Collieries (1910) 11 CLR 738 at 747; Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at [39]. 63 However, a corporation does not enjoy the same privilege: Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477; Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96. Following these decisions, s 187 of the Evidence Act 1995 (Cth) was enacted, which provides that a body corporate is not entitled to refuse or fail to comply with the obligations to produce a document even if that obligation might intend to incriminate the body or make the body liable to a penalty: s 187(2). 64 A corporate respondent cannot refuse to make discovery on the ground that making discovery might tend to incriminate a natural person such as a director: Microsoft Corporation v CX Computer Pty Ltd (2002) 116 FCR 372 ("Microsoft v CX") at [32]; Australian Securities and Investments Commission v Mining Projects Group Ltd (No 2) [2008] FCA 951 ("ASIC v Mining Projects") at [7]. 65 Conversely, a natural person cannot complain about a corporate respondent giving discovery on the ground that the natural person might lose the privilege against self-incrimination or exposure to penalty: Microsoft v CX at [32]; ASIC v Mining Projects at [7]. 66 However, a court should not make an order requiring a corporate respondent to make discovery if, by complying with that order, a natural person would be denied the privilege otherwise entitled to that person: Microsoft Corporation v CX Computer Pty Ltd at [32]-[33]. 67 It follows, therefore, that if a corporate respondent can give discovery without thereby requiring a natural person to lose that person's own entitlement to privilege, an order can be made. If, however, the corporate respondent can only give discovery by requiring a natural person to forego that person's right to privilege, an order should not be made. 68 The Federal Magistrates Rules require "disclosure" to be made by affidavit, but do not provide for who should swear the affidavit when a corporation is ordered to give disclosure. As I have said, rule 1.05(2) of the Federal Magistrates Rules allows the Federal Magistrates Court to apply the Federal Court Rules if the Federal Magistrates Rules are insufficient. The Federal Magistrate did not purport to do so. 69 The Federal Magistrate's second orders require the affidavit to be made by Devine Marine's "proper officer … whether already appointed or to be appointed". The Federal Magistrate did not explain in his reasons or orders who Devine Marine's proper officer was, or might be, who could swear the affidavit of documents. A "proper officer" is not a term of art but would be understood as including a director or employee or agent who has the ability to make the proper search and inquiry to enable an affidavit to be sworn or affirmed that complies with the order. 70 In this case, the only officer of Devine Marine is Mr Devine. The order which has been made by the Federal Magistrate does not require Mr Devine to swear the affidavit, but there is no-one else who could unless a proper officer is appointed. 71 It is not enough, in my opinion, to say that Devine Marine could comply with the orders by employing another person to act as the proper officer without inquiry into the cost to Devine Marine in making such an appointment. That cost would bear upon the question of fairness, because the FWO claims that the jurisdiction being exercised is a "no costs" jurisdiction. The FWO is right that the parties to the proceeding in the Federal Magistrates Court cannot recover costs. Section 570(1) of the Fair Work Act provides that a party to proceedings in a court exercising jurisdiction under the Fair Work Act may only be ordered by the Court to pay the costs of another party in accordance with ss 570(2), 569 or 569A. Sections 569 and 569A are not relevant. Section 570(2) permits the Court to order a party to pay costs if the party has been guilty of the conduct in s 570(2). That subsection is not relevant here. Section 566 confers jurisdiction on the Federal Magistrates Court in relation to any civil matter arising under the Act. Section 567(a) provides that jurisdiction under s 566 is to be exercised in the Fair Work Division if an application is made to the Federal Magistrates Court under the Fair Work Act. 72 An application has been made under the Act. No order for the costs of the application for discovery or the costs of Devine Marine in making discovery can be made. Therefore, it follows that if Devine Marine is put to the cost of discovery, that cost is unrecoverable from the FWO even if Devine Marine successfully defends the proceeding. Moreover, Devine Marine has been put to the cost of the application for discovery. 73 That was, in my opinion, a relevant matter to which regard should have been had in making a declaration under s 45 of the Federal Magistrates Act. 74 In my opinion, the Federal Magistrate failed to have regard to the matters to which he was obliged to have regard in s 45(2) and thereby fell into error by making the declaration if he did, which is contained in the second orders, without a consideration of the relevant matters. 75 There was no evidence before the Federal Magistrate whereby he could have determined that it would be both fair and expeditious to make a declaration that it would be appropriate in the interests of the administration of justice to allow discovery. 76 It could not be said to be fair because, in my opinion, there was no evidence before the Federal Magistrate as to who might act as the proper officer for the purpose of making "disclosure" in accordance with the rules. It would not be fair to ask Mr Devine to make the affidavit. There was no evidence that there was anyone else who could have made the affidavit in which that person would have to depose to the documents which are or have been in the possession, custody or power of Devine Marine. Nor was there any evidence that that person would be able to say, if the documents were no longer in the possession, custody or power of Devine Marine, the circumstances in which they ceased to be and where the documents could now be located. There was no evidence or inquiry into the cost to Devine Marine in appointing a proper officer. 77 In considering the question of fairness, regard also has to be had to the fact that FWO started this proceeding after having given a notice to produce, which had not generated any documents. FWO knew when it started this proceeding that, as it alleges, Devine Marine had not complied with the notice to produce; it knew when it started the proceeding in the Federal Magistrates Court that discovery was not allowed in relation to proceedings in the Court unless a declaration was made; and it was a model litigant who must have formed an opinion that it had sufficient evidence upon which to start the proceeding. 78 Another matter that needed to be taken into account was the cost to Devine Marine of giving discovery. The costs incurred in the making of discovery are not recoverable for the reasons earlier given. 79 In those circumstances, it could not be said to be fair, balancing the interests of FWO on the one hand, and Devine Marine and Mr Devine and Mr Boucaut-Jones on the other hand. 80 Insofar as FWO alleged that the respondents have contravened the Fair Work Act in relation to the underpayment of wages and emoluments and superannuation contributions, FWO could not have started this proceeding unless it had, in its opinion, sufficient evidence to establish the contravention. 81 A model litigant is not entitled to use the Court's processes for the purpose of fishing to obtain evidence to justify a proceeding already started. 82 Insofar as FWO complains of the failure by Devine Marine to respond to the notice to produce, the documents are irrelevant. 83 For all of those reasons, FWO could not make out that it was fair to make the declaration. Nor, in my opinion, could it make out the other conjunct of the expression in s 45(2)(a) and establish that such a declaration should be made because it would expedite the proceeding. 84 The proceeding would have been delayed while Devine Marine tried to find someone who was prepared to act as a proper officer and who was prepared to take the responsibility for making an affidavit deposing to the matters to which I have referred. There was no evidence that the making of such an order would expedite the proceeding and, indeed, having regard to the nature of the proceeding, there could be no evidence to that effect. 85 The Federal Magistrate was obliged to take into account, under s 45(2)(b), any other relevant matter that would bear upon the appropriateness or otherwise of making the declaration, but no other relevant matters were put to the Federal Magistrate and none have been put on this appeal. 86 In my opinion, the declaration that was sought should not have been made and, in those circumstances, without a declaration, no order could have been made. 87 In my opinion, the application for leave to appeal should be allowed. I am satisfied that both limbs of Decor have been made out. I think that Devine Marine would suffer substantial hardship if the order made by the Federal Magistrate were allowed to stand. The draft notice of appeal should be accepted for filing as a notice of appeal. The appeal should be allowed and the orders made by the Federal Magistrate on 26 October 2012 should be set aside and in lieu thereof there should be an order that FWO's application for discovery should be dismissed. 88 That leaves the question of costs of the appeal. FWO contended that the appeal was also a "no costs" jurisdiction. Devine Marine contended that it should be entitled to the costs of the appeal because s 570 of the Fair Work Act has no application on the appeal. 89 Because of s 43(1) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), it is s 570 that governs the question of costs. If s 570 has no application, the Court is left with the general discretion given in s 43(1) of the Federal Court Act. 90 FWO relied upon s 570, which provides: (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising 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 or 569A. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) the court is satisfied of both of the following: (i) the party unreasonably refused to participate in a matter before the FWC; (ii) the matter arose from the same facts as the proceedings. 91 FWO argued that the section was plain and includes an appeal. 92 FWO also referred to s 562, which confers jurisdiction on the Federal Court in relation to any matter (whether civil or criminal) arising under the Fair Work Act. 93 Next, reference was made to s 563, which relevantly provides: The jurisdiction conferred on the Federal Court under section 562 is to be exercised in the Fair Work Division of the Federal Court if: (a) an application is made to the Federal Court under this Act; or … (f) an appeal is instituted in the Federal Court from a judgment of the Federal Magistrates Court or a court of a State or Territory in a matter arising under this Act; or (g) proceedings in relation to a matter arising under this Act are transferred to the Federal Court from the Federal Magistrates Court; or (h) the Federal Magistrates Court or a court of a State or Territory states a case or reserves a question for the consideration of the Federal Court in a matter arising under this Act; or … 94 I do not think that s 563 is relevant in a consideration of this issue. Section 563 simply identifies what matters will be heard in the Fair Work Division of the Federal Court. The Fair Work Division is provided for in s 13(3) of the Federal Court Act, which provides that the proceeding can only be assigned to a judge whose commission allows the judge to sit in that Division. 95 A judge who is not assigned by the Governor-General to either the General or Fair Work Division of the Court may exercise the powers of the Court in either Division: s 15(1C) of the Federal Court Act. I am so entitled, so s 563 is irrelevant. The question depends upon the construction of s 570 itself. 96 In Construction, Forestry, Mining and Energy Union v CSBP Limited (No 2) (2012) 202 FCR 149 ("CFMEU v CSBP"), the Full Court dismissed an appeal from an order of a judge of the Court in relation to an appellant's right to enter the respondent's premises under s 481 of the Fair Work Act. 97 The Court held that the primary judge was exercising the original jurisdiction of the Federal Court in relation to a matter arising under the Fair Work Act and given by s 562 of the Fair Work Act. 98 However, the Court noted that the Federal Court Act distinguishes between the Court's original and appellate jurisdiction. It held that whilst the primary judge was exercising the original jurisdiction of the Court vested in it by s 562 of the Fair Work Act, the Full Court was exercising the appellate jurisdiction conferred on it by s 24(1)(a) of the Federal Court Act. 99 It held that the appeal to the Full Court was not a proceeding in a Court exercising jurisdiction under the Fair Work Act because the proceeding by way of appeal was not conferred by s 562 of the Fair Work Act, but by force of s 24(1)(a) of the Federal Court Act. 100 However, importantly for the purpose of this appeal and this issue, the Full Court said at [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. 101 The Full Court must be referring to appeals from the Federal Magistrates Court because s 563(f) refers to appeals from that Court. Section 565 refers to appeals from eligible State and Territory courts exercising jurisdiction under the Fair Work Act. 102 If I were to follow that direction, I would hold that s 570 operates to the exclusion of s 43 of the Federal Court Act and there should be no order as to costs. 103 However, I do note that the right to appeal from the Federal Magistrates Court to this Court is not given by the Fair Work Act but by s 24(1)(d) of the Federal Court Act. In that regard, there is no distinction between the jurisdiction exercised by a single judge in the appellate jurisdiction of the Federal Court and the Full Court in an appeal from a single judge of this Court. In both circumstances, the jurisdiction to hear the appeal is given by the Federal Court Act. 104 Although the dicta of the Full Court seems clear enough, as I have said, s 563(f) does not confer jurisdiction on the Court at all but simply provides for the Division in which the appeal is to be heard. Indeed, the Full Court said the same in CFMEU v CSBP at [14]. It is difficult to reconcile the Full Court's statement in that paragraph with the dicta in [11] of its reasons. 105 It could be argued that the appeal to which s 570 is speaking is the appeal which is given, pursuant to an appeal to the Federal Court from an eligible State or Territory court exercising jurisdiction under the Act, in s 565(1) of the Fair Work Act. However, that would have the incongruous result that if this Court were hearing an appeal from a State or Territory court under s 565(1) of the Fair Work Act the Court could not make an order for costs, but if it were hearing an appeal from the Federal Magistrates Court it could. 106 Consistent therefore with the dicta of the Full Court, I hold, with some hesitation for the reasons expressed, that I do not have jurisdiction to order costs. Accordingly, the application for costs by the appellant should be refused. I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Devine Marine Group Pty Ltd v Fair Work Ombudsman

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