Fair Work Ombudsman v Toyota Material Handling

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 406 of 2012

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

AND: TOYOTA MATERIAL HANDLING (NSW) PTY LIMITED (ACN 105 011 309)

JUDGE: KATZMANN J DATE: 4 APRIL 2012 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 Fair Work Ombudsman ("FWO") has applied for leave to appeal a judgment of a federal magistrate in which an order was made summarily dismissing six paragraphs of its application and statement of claim. In those paragraphs FWO sought pecuniary penalties for contraventions of the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act"). The respondent ("Toyota") successfully argued that the application for pecuniary penalties was brought more than two years after the alleged contraventions took place and so was statute-barred under s 18 of the Limitation Act 1969 (NSW) ("the Limitation Act"). The federal magistrate held that s 18 applied by reason of s 79(1) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). 2 Section 79(1) of the Judiciary Act provides: The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. (Emphasis added.) 3 Section 18 of the Limitation Act provides: 18 Penalty and forfeiture (1) An action on a cause of action to recover a penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims. (2) In this section penalty does not include a fine to which a person is liable on conviction for a criminal offence. 4 The application for leave to appeal is accompanied by a draft notice of appeal containing two grounds which make the same point. In substance, FWO wishes to contend that contrary to the federal magistrate's findings, the Limitation Act does not apply to an application for orders for the payment of penalties under the Workplace Relations Act as: 1. The action was not a cause of action to recover a penalty; 2. The penalty was not recoverable "by virtue of an enactment" (but as a result of a court order); and 3. In any event, "enactment" as used in s 18(1) of the Limitation Act does not apply to a Commonwealth enactment. In other words this was not a case to which this NSW law, at least, was applicable. 5 Both parties submitted that the application for leave to appeal and, if successful, the appeal, should be heard simultaneously or consecutively by the one court. There are sound reasons why this course is appropriate. The argument on the leave application will incorporate the argument on the appeal. It would therefore promote the overarching purpose of the civil procedure provisions of the Federal Court of Australia Act 1976 (Cth) ("FCA Act") to make such an order in that it would facilitate the just resolution of the dispute according to law as quickly, inexpensively and efficiently as possible. See s 37M. The parties are divided, however, about whether the Court should be comprised of a single judge or a Full Court. FWO asks that the application and the appeal be referred to a Full Court. Toyota submits that there is no good reason why the two matters should not be heard by a single judge. 6 FWO argues that the questions raised do not involve "a minor interlocutory squabble" over a matter of practice and procedure (see e.g. Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCA 47 ("Optiver") at [13]; TS Production LLC v Drew Pictures Pty Ltd [2008] FCA 1329 at [7]) but a matter of general importance with repercussions for other cases and with serious implications for the parties, particularly FWO. 7 In relation to an appeal from a judgment of the Federal Magistrates Court the appellate jurisdiction of this Court is to be exercised by a single judge unless a judge considers that it is appropriate for it to be exercised by a Full Court: FCA Act, s 25(1AA). Subsection 25(2) provides that applications for leave to appeal to the Court must also be heard and determined by a single judge unless (relevantly) a judge directs that the application be heard and determined by a Full Court. 8 Thus, the prima facie position is that both the leave application and the appeal be heard by a single Judge. Why, then, is it appropriate that they be heard by a Full Court? Why should the resources of three judges be taken up with deciding a matter that can be decided by one? 9 It seems to me that the following principles apply: (a) Whether or not the application and the appeal should be referred to a Full Court is discretionary; (b) There are no statutory limits on the exercise of the discretion apart from the requirement to exercise the power in the way that best promotes the overarching purpose: FCA Act, s 37M(3); (c) Nevertheless, the starting point is that parliament intended that both applications for leave and appeals be heard by a single Judge unless there is reason to think there is some value, benefit or advantage in the matter being heard by a Full Court (cf. Oswal v Burrup Fertilisers Pty Ltd (Receivers and Managers Appointed) [2011] FCA 536 at [12] per Barker J); (d) In general a matter concerning a question of "mere practice and procedure" is not suitable for referral to a Full Court (cf. Australian Equity Investors, an Arizona Limited Partnership v Colliers International (NSW) Pty Ltd [2011] FCA 1198; Optiver at [13]). 10 FWO relied on Optiver and Edwards v Santos Ltd [2010] FCA 34 ("Edwards v Santos"). In each of those cases the question was whether an application for leave to appeal from a judgment of a single judge of this Court should be referred to a Full Court under O 52 r 2AA(a) of the former Federal Court Rules. Nevertheless, some of the matters raised in those cases are plainly relevant here, too. In Edwards v Santos (at [10]) Collier J identified a number of relevant considerations. Those which bear upon the issue in this case are: (a) Whether the judgment concerns a "minor interlocutory squabble" or whether the orders have important and final consequences for the parties regardless of whether substantive rights were determined; (b) Whether the application/appeal raises issues of novel and general importance which should be the subject of consideration by a Full Court; (c) Whether prima facie it can be said that there are arguments of substance supporting the conclusion that the primary judgment is attended by sufficient doubt to warrant reconsideration by the Full Court or substantial injustice as a hopeless application should not be referred to the Full Court (Allphones Retail Pty Ltd v Weimann [2009] FCA 849 at [13]). 11 In SZFSV v Minister for Immigration and Citizenship [2007] FCA 1860 Gray J referred to the Full Court an appeal from a judgment of the Federal Magistrates Court where there was an important issue of principle affecting the operation of s 425 of the Migration Act 1958 (Cth), there was an apparent conflict between judgments of single judges of this Court and a lack of clear guidance from either the Full Court or the High Court. In Davis v Insolvency and Trustee Service Australia [2010] FCA 518 Jagot J referred an application for leave to appeal to a Full Court where the applicant had raised a constitutional issue concerning the validity of a section of the FCA Act. In SZKNX v Minister for Immigration and Citizenship [2008] FCA 67 Tracey J referred an appeal from the Federal Magistrates Court to the Full Court where the argument was complex and novel. In SZKJI v Minister for Immigration and Citizenship [2008] FCA 1193 Gyles J referred an appeal from the Federal Magistrates Court to the Full Court when his Honour considered it was time for the Full Court to reconsider one of its decisions and the case before him was a suitable vehicle. 12 There are a number of factors that favour referral to a Full Court. This case is not concerned with a "minor interlocutory squabble". The orders have important and final consequences for both parties. Although it would be wrong for me to venture into an assessment of the merits of the leave application, especially as I was not addressed on the subject, I do not think that the application is hopeless. The federal magistrate relied on a judgment of the NSW Court of Appeal in DTR Securities Pty Ltd v Deputy Commissioner of Taxation (1987) 8 NSWLR 204 ("DTR Securities") (an action for the recovery of additional (or penalty) tax under the Income Tax Assessment Act 1936 (Cth)) in which Samuels JA (who dissented in the result) made an obiter remark that the words "by virtue of an enactment" in s 18 of the Limitation Act are apt to pick up a Commonwealth statute. (The judgment was overturned in the High Court which assumed, without deciding, that the action was one to recover a "penalty" within s 18 of the Limitation Act; but held that s 64 of the Judiciary Act could not operate to apply the Limitation Act to the action: Deputy Commissioner of Taxation of the Commonwealth of Australia v DTR Securities Pty Ltd (1988) 165 CLR 55.) Samuels JA relied for the proposition in question on the judgment of the High Court in John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 ("John Robertson"), which, his Honour said, supports the conclusion that the action in DTR Securities was one to which s 18 applies. But, with respect, I agree with Hill and Beech SC, who observed that John Robertson is "rather inconclusive" on the question whether a State limitation period applying to causes of action arising under State legislation could be applied by s 79 to a cause of action arising under Commonwealth legislation: Graeme Hill and Andrew Beech SC, "'Picking up' State and Territory laws under s 79 of the Judiciary Act - three questions" (2005) 27 Aust Bar Rev 25 at 49. The authors concluded (at 55) that there was some uncertainty over the extent to which it is possible to translate the subject matter of State or Territory legislation to apply that legislation to the corresponding federal subject-matter in the case of legislation regulating the exercise of jurisdiction, like limitation periods. 13 Toyota argued that there has been no attempt to argue that Merkel J was wrong in Laing v Victoria (2005) 144 FCR 462 when his Honour said that s 5(5) of the Limitation of Actions Act 1958 (Vic) was picked up by s 79 of the Judiciary Act to prevent the applicant from recovering a penalty for contraventions of the Workplace Relations Act. But his Honour did not decide the point. It was not apparently argued. His Honour said it was common ground that the section applied to the proceeding by reason of s 79 of the Judiciary Act. Similarly, in Inspector-General in Bankruptcy v Bradshaw (2005) 144 FCR 64 - an application (amongst other things) that a former registered trustee in bankruptcy pay $100,000 for contravention of the condition of a bond - the applicants accepted that s 5(3) of the Limitation of Actions Act 1958 (Vic) applied by virtue of s 79 of the Judiciary Act (see [20]). 14 In Ardeshirian v Robe River Iron Associates (1993) 43 FCR 475 French J said "it seems probable" that s 79 of the Judiciary Act will operate to apply the Limitation Act 1935 (WA) to some classes of actions instituted in the Federal Court in Western Australia but found that it was not necessary to definitively answer the question. That was because his Honour held that the claim, which was made under the Racial Discrimination Act 1975 (Cth), was for compensatory and remedial relief and was not a penalty claim so that the question whether s 79 of the Judiciary Act operates to apply the WA Limitation Act or the relevant section (s 38) did not arise. 15 In Qantas Airways Ltd v Gama (2008) 167 FCR 537 at [18] the Full Court expressly left open the question whether certain complaints made to the Human Rights and Equal Opportunity Commission were statute-barred by reason of the NSW Limitation Act. 16 The issue therefore seems to me to raise an important question of principle that does not appear to have been considered in this Court and the resolution of which it could not be said is free from doubt. 17 On the other hand, Toyota argues (and there is force in the argument) that the federal magistrate's judgment is of limited significance. The Workplace Relations Act was repealed in 2009. The Fair Work Act 2009 (Cth), which replaced it, imposes a six-year limitation period in which applications may be made for orders under Pt 4-1, Div 2 in relation to a contravention of a civil remedy provision. Pecuniary penalties fall within that Division. Ms McDonald SC, who appeared for FWO, submitted that, despite the repeal of the Workplace Relations Act, there were other cases where FWO was seeking the imposition of penalties (or pecuniary penalties) so that the resolution of the question in this case would affect the outcome of other cases. No evidence was called to support the submission. I therefore have no idea of the number of cases likely to be affected. In any event, the number will be finite. Still, it is by no means clear to me that, despite the provision for time limits for the recovery of civil penalties in other Commonwealth legislation, the question could not have wider implications, which the parties did not explore. 18 I regard the considerations as finely balanced. 19 A decision of a single judge exercising the appellate jurisdiction of the Court is not amenable to appeal except by special leave to the High Court (see s 33(4) of the FCA Act) (and then not from a grant or refusal of leave to appeal: FCA Act, s 33(4B)(a)). In these circumstances, it seems to me that it is appropriate to refer the matter to a Full Court. 20 I would order, then, pursuant to s 25(2)(e) of the FCA Act, that the application for leave to appeal from the judgment of the Federal Magistrates Court given on 27 February 2012 be referred to a Full Court. I would also order that, subject to any contrary direction of the Full Court, the application for leave to appeal be heard concurrently with or, alternatively, immediately before any appeal. The question of costs should be reserved I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.