McIlwain v Ramsey Food Packaging Pty Ltd

REASONS FOR JUDGMENT 1 On 2 September 2005, I gave judgment in an application by notice of motion by all four respondents in the proceeding for: orders for non-party discovery pursuant to order 15A, rule 8 against particular respondents; orders pursuant to order 15, rule 8 against the applicant in the proceedings (the Employment Advocate); and orders for leave to issue subpoenas to a number of non-parties, the Employment Advocate and particular individuals, seeking various classes of documents. 2 In the result, the applicants for the orders were unsuccessful except to the extent that leave was granted to issue a subpoena to the Secretary of the Australasian Meat Industry Employees' Union (the Federal Union), the Newcastle and Northern Branch of the Australasian Meat Industry Employees' Union (the State Branch of the Federal Union) and the Newcastle and Northern Branch of the Australasian Meat Industry Employees' Union registered under the Industrial Relations Act 1996 (NSW) (the State Union) and to John Graham Broadway requiring the production of documents identified at paragraphs 10.2 and 10.3 of a report prepared by him dated 12 August 2003; McIlwain v Ramsey Food Packaging Pty Ltd [2005] FCA 1233. 3 As a result of the determination of those matters, an application was made by Northern Co-operative Meat Company Limited ("NCMCL") for an order that the costs incurred in resisting the application made against it pursuant to order 27A, rule 2 for leave to issue a subpoena calling for the production of five classes of documents described at paragraph 6 of the reasons of 2 September 2005, be paid by the applicant respondents. These reasons deal with the resolution of the application for the order for costs incurred by NCMCL. Reasons for judgment in the proceeding consequent upon the trial of the proceeding were published on 30 June 2006: McIlwain v Ramsey Food Packaging Pty Ltd [2006] FCA 828. 4 In support of the application made by NCMCL, the solicitors for the company say that an order for costs should be made in its favour for these reasons: (a) the application by the respondent applicants so far as it related to NCMCL failed completely; (b) NCMCL was a complete stranger to the principal proceeding; (c) NCMCL was not served with the notice of motion and supporting affidavit of Francis Gregory Hannigan until three business days prior to the hearing of the application and therefore required legal representation to deal with and respond to the matter urgently; (d) no notice was given to the solicitors for NCMCL that extensive further affidavit material (18 affidavits in all) would be relied upon by the respondent applicants on the motion; (e) in order to respond to the application seeking access to the classes of documents held by NCMCL it was proper and necessary to incur legal costs and representation on the application; (f) in Council of the City of Sydney v Goldspar Pty Ltd [2003] FCA 769, Justice Gyles observed at paragraph [5] that: "… there is a strong prima facie entitlement of a third party which is called upon to give discovery to recover costs both of appearing on the application, and in providing the discovery. A third party has no interest in the litigation at all, and there is no reason why it should be out of pocket for a reasonable approach to what is required of it. In my view, a respondent to a motion for third party discovery will almost always be entitled to appear on the return of the motion. That party does not know anything about the principal proceeding in any direct way, and is entitled to protect itself in all respects. The solicitors for NCMCL say that these principles equally apply in relation to a response to an application for leave to issue a subpoena and reliance is placed upon Kennedy v Wallace [2004] FCA 636, paragraph 28. 5 Having regard to all of these matters, NCMCL says that the discretion in relation to costs should be exercised by making an order that the costs of and incidental to the notice of motion incurred by NCMCL should be paid by the respondent applicants. 6 The answer to NCMCL's application for orders for costs is said by the respondents (the applicants for the order) to be the immunity provided by s 347 of the Workplace Relations Act 1996 which is in these terms: "SECTION 347 COSTS ONLY WHERE PROCEEDING INSTITUTED VEXATIOUSLY ETC. 347(1) [Payment of costs] A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) 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 cause. 347(2) ['Costs'] In subsection (1): "costs" includes all legal and professional costs and disbursements and expenses of witnesses." 7 The respondent applicants say that the notice of motion is properly characterised as a proceeding in a matter arising under the Workplace Relations Act. They say the question is not whether the proceeding arises under the Act but rather whether the proceeding involves "a matter" arising under the Act and reliance is placed upon the decision in Thompson & Ors v Hodder & Ors 21 FCR 467 (Keely, Grey and Ryan JJ). 8 In Thompson's case, members (the appellants) of the Australian Workers Union (the Union) sought and obtained a rule to show cause against the Executive Council of the Union (the respondents) concerning certain charges laid against the appellants pursuant to the rules of the Union. An order was sought that the Executive Council of the Union dismiss the charges. Von Dousa J made an initial order, pending trial, restraining the respondents from proceeding with the charges. At the trial, Northrop J discharged the rule to show cause. Further steps occurred including the filing of a notice of appeal, an application for a stay of the discharge order (which was unsuccessful) and an unsuccessful application for leave to appeal from the unsuccessful stay application. The respondents then sought an order for the costs of the application for leave to appeal and, in answer, the appellants relied upon the prohibition contained in s 347 of the Workplace Relations Act 1996 (Cth) ('the Act'). Their Honours made these observations at 469: "The prohibition on orders to pay costs is applicable not to a proceeding arising under the Act, but to a proceeding in a matter arising under the Act. There is much authority as to what constitutes a 'matter' for the purposes of Ch III of the Constitution. In substance, a 'matter' is a 'single justiciable controversy'. See the joint judgment of Mason, Murphy, Brennan and Dean JJ in Fencott v Muller (1983) 152 CLR 570 at 608. In the present case, the justiciable controversy between the parties embraces the question whether the respondents should perform and observe the rules of the Union … The alleged obligation to perform and observe the rules … is thus the 'matter' upon which each proceeding between the present parties has been founded, namely the rule to show cause granted on 7 June, the interim orders made on 9 June, the appeal filed on 17 October, the motion for a stay of judgment filed on 25 October and the application for leave to appeal ... . Each of those steps is a 'proceeding' as defined in section 4 of the Federal Court of Australia Act. It is enough to say that, on any view, an application for leave to appeal, even from an interlocutory judgment, is a proceeding in its own right. That proceeding is, however, one in the same matter as were each of the earlier steps. It is plain that the matter arises under the Act." 9 Their Honours thus determined that the prohibition in s 347 operated subject to the question of whether the proceeding was instituted without reasonable cause. In the result, their Honours determined that the application for leave to appeal had been instituted without reasonable cause. 10 In the principal proceeding commenced by the Employment Advocate against the respondent applicants, the essential question was whether, in respect of the termination of employment in August or September 2002 of 12 individuals by the relevant employer entity amongst the four respondent entities engaged in activity at the South Grafton Abattoir and the failure to re-employ any one of 11 of those individuals (recognising that one of them - Susan Jane Young - was not said to have been refused re‑employment), once the process of re-engagement began in September 2002, occurred for reasons that either were or included prohibited reasons under the Act. The guiding mind of the respondent entities, Mr Stuart Bruce Ramsey, contended in his affidavit sworn 17 November 2004 that a shortage of available stock due to the combined affect of the loss by the abattoir of a proportion of a United States Beef Quota allocation (with a significant reduction in access to the United States market for beef product produced by the abattoir) together with the continued affect of drought conditions were the reasons for the closure of the abattoir. As to the incremental re‑engagement, Ramsey contended that re‑engagement was a function of demand and the particular individuals re‑engaged were determined by officers of the relevant respondent entity on a skills basis. 11 That is the justiciable controversy between the parties framed by the proceeding and is the 'matter' upon which the proceeding has been founded. 12 It seems to me that a notice of motion seeking the orders previously described and more comprehensively dealt with in McIlwain v Ramsey Food Packaging Pty Ltd [2005] FCA 1233 may be characterised as a proceeding between the respondent applicants and each respondent to the notice of motion in a matter arising under the Act. In relation to NCMCL, the notice of motion involves an application for leave to issue a subpoena seeking the production of five classes of documents described at [6] of the McIlwain decision [2005] (supra) all of which are directed to demonstrating that because NCMCL was able to secure and sustain a particular United States Beef Quota allocation and therefore maintain utilisation rates within the abattoir (so as to avoid the need to terminate the employment of workers and manage incremental re‑employment), an inference might be drawn that a reduction in the quota allocation for the United States market available to the relevant Ramsey entity made it necessary to terminate the employees thus supporting the reason given by Mr Ramsey for the impugned conduct. In other words, the documents sought by the application are said to evidence facts from which inferences might be drawn about a fact in issue, that is, a non‑prohibited reason. It seems to me that a proceeding by way of a notice of motion seeking access to documents by means of an order pursuant to order 27A, rule 2 or order 15A, rule 8 going to the central question in the principal proceeding might properly be characterised as a proceeding in 'a matter' arising under the Act. However, it seems to me that the preferred view is that 'proceeding' for the purposes of s 347 of the Act involves a proceeding between parties to the justiciable controversy concerning the matter arising under the Act. A non‑party to that proceeding or an addressee of a subpoena who is also a non‑party, has no interest in the matter. The scope of the immunity is one which protects a party to the proceeding in the matter the subject of the controversy from an order for costs by another party to that proceeding. The immunity does not extend to prevent an order for costs being made in favour of a non‑party who has successfully resisted an application for an order. If the scope of the immunity does extend to a proceeding framed by a notice of motion issued by a party to the principal proceeding against a non‑party so as to prevent an order for costs being made against the applicant party, a further question arises as to whether the relevant proceeding was instituted 'without reasonable cause'. 13 For the reasons indicated in the McIlwain [2005] decision (supra) at paragraphs [49], [50], [51] and [52], I took the view that the application for leave to issue subpoenas addressed to NCMCL was an entirely collateral analysis which would not provide evidence relevant to any matter in issue nor provide a basis upon which any inferences could be drawn about the matters in issue between the Employment Advocate and the respondents in the principal proceeding. 14 Accordingly, the application by the respondents was made without reasonable cause, in all the circumstances. 15 The prohibition does not operate. I am satisfied that according to normal principles, NCMCL would be entitled to an order for costs to be taxed subject to the question of whether those principles give way to the prohibition contained in s 347 of the Act. For the reasons indicated, it seems to me that the prohibition does not arise in the circumstances of the particular application and, in any event, the application is made without reasonable cause. 16 NCMCL is entitled to an order for costs of and incidental to the notice of motion to be taxed and accordingly I make an order to that effect. I certify that the preceding sixteen [16] numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate: Dated: 14 July 2006