Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

1. The Applicant pay the Respondents' costs of the proceeding including the costs of the Respondents' Interlocutory Application of 11 April 2017. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMBERG J: 1 The Court delivered judgment in this proceeding on 23 October 2017 and published its reasons for judgment (Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245). At [180] of the reasons I stated that if any party sought its costs of the proceeding, I would determine the issue on the papers following the exchange of submissions. The respondents ("the Unions") seek an order for costs of the proceeding including the costs of the Unions' interlocutory application dated 11 April 2017 by which the Unions succeeded in setting aside the Originating Application of the applicant ("Energy Australia"). 2 These reasons deal with that application for costs. The reasons should be read with my earlier reasons. Abbreviations there used are here continued. 3 It is convenient to set out the questions raised by the Unions' interlocutory application by repeating the broad summary given in my earlier reasons as to the competing contentions of the parties: 1 By its Originating Application, the applicant ("Energy Australia") seeks a declaration that, on its proper construction, cl 5.3 of the EnergyAustralia Yallourn Enterprise Agreement 2013 ("the EA") has the effect that a casual employee who works overtime "is to be paid per hour two thirty-sixths of the weekly rate prescribed for the classification of work performed (double time) exclusive of any casual loading". … 4 The two questions raised by the Unions' interlocutory application are: (a) whether or not this Court has jurisdiction to hear and determine the Originating Application; and (b) whether or not the proceeding is an abuse of the Court's processes. 5 The competing contentions of the parties may be broadly expressed by way of introduction. Both parties accept that for the Court to have jurisdiction there must be a "matter" (s 562) arising under the Fair Work Act 2009 (Cth) ("FW Act"), and that the existence of a "matter" depends, in this case, on the existence of a justiciable controversy between the parties about the meaning and application of cl 5.3 of the EA. They also accept that an arbitration validly conducted under cl 28 of the EBA is properly to be characterised as a private arbitration and that the arbitrator's determination has the effect of extinguishing the dispute or controversy the subject of the determination, at least insofar as the controversy relates to the parties to the arbitration. 6 The Unions contended that there is no justiciable controversy in relation to the meaning and application of cl 5.3 of the EA because, although such a dispute existed, it was resolved by an arbitration conducted under cl 28 of the EA by the Full Bench of the Fair Work Commission ("FWC"), the outcome of which binds each of the parties to this proceeding. In the absence of a justiciable controversy, the Unions say there is no "matter" and thus this Court lacks jurisdiction. Conversely, Energy Australia denies that the controversy was extinguished by the determination of the Full Bench of the FWC because it contends that the FWC itself lacked jurisdiction to determine the dispute that its determination purported to resolve. That contention relies principally on a submission that, properly construed, cl 28 of the EA only permits an arbitration between Energy Australia and one or more of its employees and not, as Energy Australia contends happened here, between Energy Australia and one or more of the Unions. In response, the Unions deny that cl 28 is restricted to the arbitration of disputes between employees and Energy Australia and that the arbitral process provided by cl 28 was validly engaged by the AMWU. Alternatively, if so restricted, the Unions say there was here a dispute between Energy Australia and its employees the existence of which Energy Australia is estopped from denying. 7 As a secondary contention, Energy Australia contended that, if the FWC had jurisdiction in relation to the arbitration it conducted, only the controversy between it and the AMWU has been extinguished as, of the Unions, only the AMWU was a party to the private arbitration. To that, the Unions say that by its terms, cl 28 operates to bind each of the Unions whether they participated in the arbitration or not and accordingly any controversy as to the meaning of cl 5.2 between Energy Australia and the Unions has been extinguished. 8 Lastly, the Unions contend that even if the Court has jurisdiction, the proceeding is an attempt by Energy Australia to re-litigate the meaning of cl 5.2 of the EA and is an abuse of process and for that reason should be permanently stayed. 4 At [60] of my earlier reasons I stated that two conditions needed to be satisfied for the Court to have jurisdiction pursuant to s 562 of FW Act. The first, is that there must be a "matter" and the second, that the matter must "arise under the FW Act". As I there stated, what was at issue was the first condition, the existence of a "matter". If there was a "matter", it would have arisen under the FW Act because as I said at [57] (citations omitted): A genuine dispute as to the meaning and effect of a term of an enterprise agreement that confers rights or imposes obligations is a matter which may properly be said to arise under the FW Act. That is because the right or duty in question "owes its existence to [the FW Act] or depends upon [the FW Act] for its enforcement". 5 I concluded at [179] that: … there is no "matter" arising under the FW Act and that as a consequence this proceeding is incompetent. It follows that the Originating Application must be set aside. 6 That holding was based on the conclusion earlier expressed at [106] that the private arbitration by the FWC extinguished the justiciable controversy between Energy Australia and the Unions with the result that the Court lacked the jurisdiction to entertain Energy Australia's Originating Application. 7 In support of their application for costs, the Unions contended that s 570 of the FW Act does not apply and consequently there is no limitation imposed on the Court ordering costs. In the absence of any such limitation, the ordinary rule is that costs should follow the event. Energy Australia resisted any adverse cost order on the basis that s 570 of the FW Act applies and, as none of the circumstances in s 570(2) exist, no order as to costs may be made. That is the only basis upon which Energy Australia resists an adverse costs order. The question then is whether s 570(1) of the FW Act applies. 8 The relevant terms of s 570 of the FW Act are as follows: 570 Costs only if proceeding instituted vexatiously etc. (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. Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A. (2) … 9 In support of their submission that s 570(1) has no application, the Unions contended that the necessary corollary of the Court's holding that Energy Australia's Originating Application gave rise to no "matter" at all is that there is no "matter arising under the [FW Act]" for the purposes of s 570(1). It follows that there is no occasion for s 570(1) to apply because the proceeding is not "in relation to a matter arising under" the FW Act. 10 Energy Australia contended that the proceeding raised by its Originating Application was within the scope of s 570(1) of the FW Act, in that it was a proceeding "in relation to a matter arising under the Act". Energy Australia contended that that was so notwithstanding the Court's holding that the Court lacked jurisdiction. For that contention, Energy Australia sought to rely on Re McJannet; Ex parte Australian Workers' Union of Employees Queensland (No 2) (1997) 189 CLR 654 ("McJannet"). McJannet dealt with an application for costs. In the principal proceeding before the High Court (Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Qld) (1995) 184 CLR 620), the High Court issued writs of prohibition against the judges of the Federal Court in relation to a proceeding said by the High Court to have been outside the jurisdiction of the Federal Court and, in particular, outside the scope of the Federal Court's jurisdiction arising either under s 253X or s 253ZC of the Industrial Relations Act 1988 (Cth) ("IR Act"). The High Court held that the Federal Court had wrongly assumed jurisdiction because, in the factual circumstances of the case, the conditions made necessary by ss 253X or 253ZC of the IR Act to found the Federal Court's jurisdiction did not exist: at 643-644 (Brennan CJ, Deane and Dawson JJ): 657-659 (Toohey, McHugh and Gummow JJ). 11 Energy Australia principally relied upon the observation made by the High Court at 657 (Brennan CJ, McHugh and Gummow JJ) of McJannet that: [T]he proceeding before the Federal Court was in a matter arising under the Act because the respondents were claiming a right under the Act against the prosecutors. No order for costs could be made in respect of the proceeding in the Federal Court. 12 The limitation on the making of an order for costs to which that observation referred was contained in s 347(1) of the IR Act which provided as follows: 347 Costs only where proceeding instituted vexatiously etc. (1) A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable excuse. 13 Energy Australia contended that notwithstanding that the Federal Court was ultimately found to have no jurisdiction under the IR Act (a situation similar to that in the present case), the High Court observed at 657 of McJannet that s 347(1) of the IR Act did apply to the Federal Court proceeding. Energy Australia contended that the same result must follow in relation to s 570(1) of the FW Act, especially because, by the inclusion of the words "in relation to", s 570(1) was broader in its scope than was its predecessor.