Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union

BROMBERG J: 1 By its interlocutory application of 7 May 2018 ("interlocutory application"), the first to seventh respondents and the ninth respondent seek an order pursuant to r 30.01 of the Federal Court Rules 2011(Cth) ("Rules") that the Court hear and determine the following question separately: (a) Whether, on or by 13 November 2015, the MV Portland had ceased to "operate in the trade" within the meaning of clause 4 of the ASP Ship Management Pty Ltd Seagoing Ratings Enterprise Agreement 2012 (the Agreement) referred to in paragraph 6 of the Statement of Claim; (b) If the answer to question (a) above is "yes", whether, from 13 November 2015, the Agreement ceased to cover the 2nd to 10th Respondents. 2 That application is supported by the eighth respondent. It is opposed by the applicant ("Ombudsman"). The tenth respondent did not appear. It is convenient that I refer to the first to seventh and the ninth respondents as the "Respondents". 3 It is necessary to say something about the underlying proceeding in which this application is brought. 4 Section 417 of the Fair Work Act 2009 (Cth) ("FW Act"), relevantly and in substance, provides that an employee or employee organisation "covered by" an enterprise agreement must not organise or engage in industrial action in the period between when the enterprise agreement is approved until its nominal expiry date. Broadly stated, the Ombudsman's case is that the second to tenth respondents ("Employee Respondents") were each ship's crew employed by ASP Ship Management Pty Ltd ("ASPSM") and covered by the ASP Ship Management Pty Ltd Seagoing Ratings Enterprise Agreement 2012 ("EA"), and that whilst "covered by" the EA, the Employee Respondents engaged in industrial action which the first respondent ("CFMMEU") organised. Accordingly, the Ombudsman alleges that various contraventions of s 417 of the FW Act occurred over many days. 5 The Ombudsman seeks declarations of contravention of s 417 of the FW Act and the imposition of pecuniary penalties. 6 The defences of the Respondents are multi-layered. Of central relevance to the interlocutory application is the Respondents' denial that the Employee Respondents were "covered by" the EA at the relevant time. They say that if the Employee Respondents were not "covered by" the EA at the time that the alleged industrial action was taken, neither the Employee Respondents nor the CFMMEU could have contravened s 417 of the FW Act. They say that the Employee Respondents were not "covered by" the EA because of the terms of cl 4 of the EA which sets out the application or scope of the EA in the following terms: This Agreement relates to the employment arrangements for and work performed by ratings and caterers who may be members of the Maritime Union of Australia and are employed by ASPSM as specified in the schedules to this Agreement on the day of lodgement of this Agreement, pursuant to the provisions of the Award, the Enterprise Employment Agreement, the Act and the Navigation Act 1912, and all industry regulations whilst these vessels continue to operate in the trade. 7 The Respondents contend that the critical limitations contained in cl 4 are found in the concluding phrase, "whilst these vessels continue to operate in the trade". Relevantly, they say that the phrase "the trade" is a reference to the Australian coastal trade. They further contend that the vessel upon which the Employee Respondents were employed was not operating in the Australian coastal trade at the time that the alleged industrial action occurred. They submit, and it was not contended otherwise by the Ombudsman, that if they succeed on their contention that the phrase "the trade" as utilised in cl 4 means the Australian coastal trade, the Ombudsman's proceeding against them must fail. 8 It is the determination by separate question of that contention which this interlocutory application raises. 9 There are, broadly speaking, two other defences raised by the Respondents' defences which I should mention. The first is raised in paragraph 8(c) of the Amended Defence where it is contended that the second, third, fourth, ninth and tenth respondents were not "covered by" the EA in relation to their employment as they were not employed as "specified in the schedules to this Agreement" within the meaning of cl 4 of the EA, in that they were not employees who transferred to ASPSM from Inco Ships within the meaning of cl 1.1.1 of Sch 3 of the EA. 10 The second is constituted by the Respondents' denial or non-admission that they either organised or engaged in industrial action as alleged. There are some 26 instances of industrial action alleged in the Amended Statement of Claim. It appears to me that those matters, if they continue to be contested, will likely raise multiple and complex factual issues. 11 The principles which govern the exercise of the Court's discretion under r 30.01 of the Rules are reasonably well settled. So much was said by Edmonds J in Buchanan v TAL Life Limited [2015] FCA 42 at [27]. His Honour in that paragraph identified the summary of the relevant principles (by reference to O 29 of the Rules as they were at that time) given by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 240 FCR 276 at [8] as follows: (a) the term "question" in O 29 r 1 includes any question or issue of fact or law in a proceeding. The distinction in the rule between an "issue" and a "question" is the distinction between that which, when resolved, will result in an adjudication in favour of one party or the other, being an "issue", and less decisive matters of dispute being "questions" (Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421 at 425; 113 ALR 643 at 647); (b) a question can be the subject of an order for a separate decision under O 29 r 2 even though a decision on such a question will not determine any of the parties' rights (Landsal Pty Ltd (in liq) v REI Building Society at FCR 425; ALR 647); (c) however, the judicial determination of a question under O 29 r 2 must involve a conclusive or final decision based on concrete and established or agreed facts for the purpose of quelling a controversy between the parties (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; 161 ALR 399; [1999] HCA 9 at [45]); (d) where the preliminary question is one of mixed fact and law, it is necessary that the question can be precisely formulated and that all of the facts that are on any fairly arguable view relevant to the determination of the question are ascertainable either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined (Jacobson v Ross [1995] 1 VR 337 at 341, referring to Nissan v Attorney-General [1970] AC 179 at 242-3; [1969] 1 All ER 629 at 663-4 per Lord Pearson; Bass v Perpetual Trustee at [53]); (e) care must be taken in utilising the procedure provided for in O 29 r 1 to avoid the determination of issues not "ripe" for separate and preliminary determination. An issue may not be "ripe" for separate and preliminary determination in this sense where it is simply one of two or more alternative ways in which an applicant frames its case and determination of the issue would leave significant other issues unresolved (CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601 per Kirby P at 606); (f) factors which tend to support the making of an order under O 29 r 2 include that the separate determination of the question may: (i) contribute to the saving of time and cost by substantially narrowing the issues for trial, or even lead to disposal of the action; or (ii) contribute to the settlement of the litigation (CBS Productions Pty Ltd v O'Neill per Kirby P at 607); (g) factors which tell against the making of an order under O 29 r 2 include that the separate determination of the question may: (i) give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial (GMB Research & Development Pty Ltd v Commonwealth [1997] FCA 934; (ii) result in significant overlap between the evidence adduced on the hearing of the separate question and at trial - possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding: GMB Research & Development Pty Ltd v Commonwealth; Arnold v Attorney-General (Vic) [[1995] FCA 727)]. This factor will be of particular significance if the Court may be required to form a view as to the credibility of witnesses who may give evidence at both stages of the hearing of the proceeding; or (iii) prolong rather than shorten the litigation (GMB Research & Development Pty Ltd v Commonwealth). 12 At [28], Edmonds J also referred to and relied upon the following observation made by Stone J in University of Sydney v ResMed Limited (No 5) [2012] FCA 232 at [41]: [41] In general all issues in proceedings should be determined at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141-142; Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 at [7]. That is not invariably the case and in the exercise of its wide ranging powers of case management the Court may determine that consistent with s 37M of the Federal Court of Australia Act 1976 (Cth), the most efficient and inexpensive approach will be to separate some issues or questions for earlier determination: see Olbers v Commonwealth of Australia (No 3) [2003] FCA 651 at [8]. Sometimes the early determination of some issues will substantially narrow the issues to be determined at trial or even lead to partial or total settlement of the proceeding: Novartis Crop Protection Australasia Pty Ltd v Orica Australia Pty Ltd [2001] FCA 1013. 13 As the Ombudsman submitted, to those observations ought be added the cautionary statements made by Kirby and Callinan JJ (with whom Gaudron J agreed) in Tepko v Water Board (2001) 206 CLR 1 at [52] and [168]-[170]. 14 The Ombudsman also referred to, and relied upon, the judgment of White J in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Bruce Highway Separate Question Case) [2018] FCA 771. In that case, his Honour referred to the considerations or principles to which I have largely, if not entirely, just referred. To my mind, as the Respondents contended, the refusal of White J to order a separate question in that case was significantly dictated by his Honour's view expressed at [25] that a Full Court had already considered issues that would be raised by the separate question there proposed. 15 When this proceeding was last before me for case management (including of the interlocutory application) on 8 May 2018, the Ombudsman resisted the application for a separate question, for the reason that the Respondents had not particularised the basis for their contention that the phrase, "the trade" meant the Australian coastal trade. To accommodate a better understanding of what the issues raised by the proposed separate question would be, I ordered that affidavits setting out the evidence to be relied upon on the hearing of the proposed separate question be filed and served by the Respondents. That was done on the basis of the Respondents' indication that they intended to rely upon evidence of a common understanding held by those who negotiated the EA of the phrase, "the trade" in cl 4. The Respondents have filed two affidavits, an affidavit of Mr Ian Bray and an affidavit of Mr David Cushion. 16 Each of those affidavits was filed and served some two weeks ago. The Respondents contended that the proposed separate question raises a threshold question of law, being a narrow issue of construction of cl 4 of the EA, which can be dealt with in a day and has the capacity to determine the proceeding and thus avoid a trial requiring a week or more of hearing days. They contended that a separate question would be highly conducive to the efficient case management of this proceeding. They say that it would shorten rather than prolong the litigation. They conceded that some factual matters may be raised, namely, the common understanding upon which they rely, but say those facts are limited, may not be in contest at all and are facts separate from and not capable of overlapping with the facts that may be raised by the remainder of the proceeding. 17 I consider the Respondents' case for a separate question to be consistent with and supported by the relevant principles and ultimately persuasive. 18 Each of the objections raised by the Ombudsman has been effectively countered by the Respondents. The Ombudsman has not established that the proposed separate question will raise significant contested factual issues. Its submissions to that effect were speculative and were based on what is currently being explored by the Ombudsman, rather than any concrete conclusions reached by the Ombudsman as to what facts are truly in contest and what, if any witnesses, would be called by the Ombudsman should a separate question be ordered. 19 An opportunity for an adjournment in order that the Ombudsman could provide firm particulars of what, if any, facts would be disputed was not taken up. In the circumstances, I consider that I should proceed on the assumption that if any facts will be in contest, the factual contest will be limited. 20 The Ombudsman also contended that witnesses may need to be called twice, once on the separate question and then again at trial, should the Respondents fail on the separate question. The only witness that the Ombudsman could point to in that respect was Mr Bray, against whom some involvement in the alleged industrial action is alleged in the Amended Statement of Claim. However, as the Respondents contended, Mr Bray's intended evidence on the separate question is on a topic entirely separate and distinct from any other evidence he may later give. There is, in those circumstances, no potential for overlap and, including because of the limited evidence he intends to give on the separate question and the nature of that evidence, there is in my view little room for a concern that an issue about Mr Bray's credibility will arise. That conclusion is reinforced by the fact that at present, the Ombudsman has not indicated that Mr Bray's intended evidence will actually be contested and if so, on what basis. 21 Furthermore, the Ombudsman contended that a hearing of the separate question proposed, would deny it an opportunity to test the CFMMEUs construction of the phrase, "in the trade" with any other witnesses that the CFMMEU may call at the liability hearing. I consider that consideration to be peripheral. The Ombudsman will have the opportunity to call whatever witnesses it seeks to call on that issue at the hearing of the separate question. In any event, the question depends upon an objective consideration of the meaning of the phrase in question which is unlikely to be much assisted by any subjective view expressed by one or more employees. 22 The Ombudsman also contended that a separate question would bring about delay and increased costs in the proceeding. It was said that additional time and resources would be expended on the preparation and presentation of submissions. In my view, if any additional cost and expense should eventuate, it is unlikely to be substantial and I consider that matter to be a consideration of little weight. 23 The possibility of an appeal of the determination of the proposed separate question was also raised as a factor which would bring about delay. However, as the Respondents submitted, there is a safeguard. Any appeal would require leave to appeal to be granted and the integrity of the efficient management of the trial can be addressed at that juncture. 24 Lastly, the Ombudsman raised and relied upon paragraph 8(c) of the Amended Defence, the content of which I have earlier recorded. The Ombudsman contended that the issues raised by that paragraph potentially require evidence to be called about the meaning of Sch 3 of the EA. It was suggested that such evidence may overlap with the extrinsic evidence that may be called on the proposed separate question. However, it does not appear to me that paragraph 8(c) of the defence raises any issue as to the meaning of "the trade" in cl 4 and I am not satisfied that the potential for overlap is real. 25 Finally, the parties were at issue as to whether, if the Respondents lost the separate question, that loss would provide some better opportunity for the proceeding to be disposed of by way of mediation. My sense of the issue raised for the proposed separate question is that it is a significant and central plank in the Respondents' defence which, if lost, may well substantially affect the attitude of the Respondents to the resolution of the proceeding. In my view, this is a factor which weighs in favour of an order for a separate question. 26 Having regard to the relevant principles and the submissions of the parties, I am ultimately of the view that it would be just and convenient for the question raised by the interlocutory application to be determined as a separate question. I will make an order providing for that course. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

SCHEDULE OF PARTIES VID 337 of 2017 Respondents Fourth Respondent: BRETT KOLPIN Fifth Respondent: LIAM CONAGHAN Sixth Respondent: MARK JONES Seventh Respondent: ALLAN KELMAN Eighth Respondent: CRAIG GANIM Ninth Respondent: WARREN HOPKINS Tenth Respondent: RONALD BULLOCK