Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union
[2019] FCCA 3261
•13 November 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER v CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION & ORS | [2019] FCCA 3261 |
| Catchwords: PRACTICE AND PROCEDURE – Change to relief sought – whether amendment to statement of claim necessary. |
| Legislation: Fair Work Act 2009, s.546 |
| Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 Water Board v Moustakas (1988) 180 CLR 491 Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 Strazdins v Birch Carroll & Coyle Ltd (2009) 178 FCR 300 |
| Applicant: | AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
| First Respondent: | CONSTRUCTION, FORESTRY, MARITIME, MINING & ENERGY UNION |
| Second Respondent: | TONY SLOANE |
| Third Respondent: | LUKE COLLIER |
| File Number: | SYG 1132 of 2015 |
| Judgment of: | Judge Cameron |
| Hearing dates: | 6 November 2019 |
| Date of Last Submission: | 6 November 2019 |
| Delivered at: | Sydney |
| Delivered on: | 13 November 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Y Shariff |
| Solicitors for the Applicant: | Corrs Chambers Westgarth |
| Counsel for the Respondents: | Mr I Latham |
| Solicitors for the Respondents: | Taylor & Scott |
ORDERS
Unless the statement of claim is amended to seek that relief, the applicant may not seek orders which will prevent the second and third respondents from soliciting the first respondent to pay such penalties as may be imposed on them or from accepting financial support from the first respondent referable to those penalties.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1132 of 2015
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
Applicant
And
| CONSTRUCTION, FORESTRY, MARITIME, MINING & ENERGY UNION |
First Respondent
| TONY SLOANE |
Second Respondent
| LUKE COLLIER |
Third Respondent
REASONS FOR JUDGMENT
INTRODUCTION
In reasons for judgment delivered in this matter on 7 August 2019, it was found that the respondents had contravened the Fair Work Act 2009 (“FW Act”) in various, identified respects. A hearing into what, if any, penalties should be imposed as a consequence has been listed for
26 November 2019.
THE PRESENT ISSUE – NON-INDEMNIFICATION ORDERS
In his statement of claim the applicant (“Commissioner”) relevantly sought the following relief:
…
15.Pursuant to section 546 of the FW Act, order that the [sic] each Respondent pay pecuniary penalties in respect of each of the contraventions by that Respondent.
…
In his written submissions on the question of penalty the Commissioner sought an order that the second respondent, Mr Sloane:
… pay the penalties required by Order 2 personally in that he not, whether before or after the payment of those penalties:
(a)seek to have or encourage the First Respondent in any way whatsoever, directly or indirectly, to pay to him or for his financial benefit in any way whatsoever, any money or financial benefit referable to the payment of the penalties, whether in whole or in part; and
(b)accept or receive from the First Respondent in any way whatsoever, any money or financial benefit referable to the payment of the penalties, whether in whole or in part. (“non-indemnification order”).
A non-indemnification order was also sought in respect of the third respondent, Mr Collier.
The Commissioner annexed to his written submissions a form of the orders he sought. That draft bore an endorsement pursuant to r.29.07 of the Federal Circuit Court Rules 2001 (“Rules”) which provides:
29.07 Endorsement on order
If an order requires a person to do, or not to do, an act or thing, whether within a certain time or not, and the consequences of failing to comply with the order may be committal, sequestration or punishment for contempt, the order must carry an endorsement that the person to be served with the order will be liable to imprisonment, sequestration of property or punishment for contempt if:
(a)for an order that requires the person to do an act or thing—the person neglects or refuses to do the act or thing within the time specified in the order; or
(b)for an order that requires the person not to do an act or thing—the person disobeys the order.
The respondents objected to those parts of the Commissioner’s written submissions on the basis that they did not reflect the relief which had been sought in the statement of claim. There was, however, no dispute that the Court has power to make such orders: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157.
On 6 November 2019 the parties presented their arguments on whether the statement of claim had to be amended in order that the Commissioner might seek non-indemnification orders against Messrs Sloane and Collier. These reasons concern that hearing.
Respondents’ submissions
The respondents’ position was that the prayers for relief in the Commissioner’s statement of claim had not mentioned non-indemnification orders and they characterised the proposal that such orders be made as an attempt to depart without leave from the pleaded case. The respondents objected to the Commissioner now conducting his case “on a different basis” and invited him to seek leave to amend the statement of claim.
The respondents submitted that the Commissioner’s failure to alert them to his intention to seek non-indemnification orders meant that:
a)Messrs Sloane and Collier had not turned their minds to:
i)
making early admissions that they had contravened the
FW Act; and
ii)seeking leniency on that account;
b)Mr Collier was not given an opportunity to make a fully informed decision about whether to defend the action rather than simply maintain his privilege against self-exposure to penalty as he did; and
c)Messrs Sloane and Collier never considered whether their interests might not coincide with those of the first respondent (“CFMMEU”) or whether they should have sought separate representation on the basis that they did not.
The respondents further argued that the proposed r.29.07 penal endorsement was something quite different from what had been foreshadowed previously.
The respondents also pointed to r.16.02 of the Federal Court Rules 2011 which relevantly provides:
16.02 Content of pleadings—general
(1) A pleading must:
…
(f) state the specific relief sought or claimed.
…
(4)A party is not entitled to seek any additional relief to the relief that is claimed in the originating application.
…
The respondents submitted that this Court ought to apply those rules by using the power to do so found in r.1.05(2) of the Rules which provides that if, in a particular case, the Rules are insufficient or inappropriate, the Court may apply the Federal Court Rules in whole or in part and modified or dispensed with, as necessary. In the alternative, the respondents submitted that if the Court did not apply those parts of Federal Court Rules it would nevertheless apply the principles they manifest on the basis that a party is entitled to fair notice “of the other party’s position”.
Applicant’s submissions
The Commissioner’s position was he did not need to seek leave to amend the statement of claim in order to obtain non-indemnification orders because para.15 of that part of the statement of claim which pleaded the relief sought was already a prayer for relief of that kind in that it sought orders which would ensure that Messrs Sloane and Collier were:
… personally responsible for paying any penalties imposed on them, and to restrain them from seeking or receiving direct or indirect indemnity with respect to those penalties from the CFMMEU.
The Commissioner submitted that the orders he sought “arise from the statement of claim as drafted”.He also relied on para.16 of the relief section of the statement of claim which prayed that the Court make any other order which it thought appropriate.
The Commissioner further observed that no evidence had been adduced by Messrs Sloane or Collier to indicate how the presentation of their cases at the contravention hearing stage would have been different if the statement of claim had been expressed as the written submissions are.
DISCUSSION
I do not agree with the Commissioner that para.15 of the relief section of his statement of claim seeks the relief which is now pursued. For instance, the statement of claim makes no suggestion that if Messrs Sloane and Collier were to pay any pecuniary penalty imposed on them from their own resources, they should not then be able to seek indemnification from the CFMMEU. However, that is clearly something that the non-indemnification orders, if made, would prohibit. The Commissioner’s submissions therefore seek something which was not foreshadowed in his pleading. The question therefore now becomes: can the Commissioner seek the newly claimed relief without an amendment to the statement of claim?
The first limb of the respondents’ arguments concerning procedural fairness raised the application in this proceeding of provisions found in the Federal Court Rules. Certain of the Federal Court’s rules are expressly adopted for use in this Court in matters such as this one: r.1.05(3)(b) of the Rules; but the rules cited by the respondents, rr.16.02(1)(f) and 16.02(4), are not amongst them: pt.2, sch.3 to the Rules. Further, given that the Court is to operate without undue formality: s.42 of the Federal Circuit Court of Australia Act 1999; and that the Rules are intended to help the Court operate as informally as possible: r.1.03 of the Rules; it is unsurprising that Federal Court rr.16.02(1)(f) and 16.02(4) have not been picked up for use in this Court. Presumably this is because, for the reasons which follow, parties enjoy regardless general rights and obligations regarding notice. That being so, it is unnecessary to apply Federal Court rr.16.02(1)(f) or 16.02(4) in this case by relying on r.1.05(2) of the Rules.
As parties to a proceeding, the respondents are entitled to be put on notice of matters likely to arise in the Commissioner’s case which might affect their interests. Further, a party cannot vary its case without leave or consent, situations such as those seen in Water Board v Moustakas (1988) 180 CLR 491, which does not apply here, aside.
The relief prayed for in a proceeding is of as much importance to a respondent as the allegations on which the prayer is based and a change in the relief sought may very well be material to a respondent: Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J, 288-289 per Brennan J, 297 per Dawson J, 304 per Toohey J. An applicant cannot claim relief which is inconsistent with the relief which has been explicitly claimed and if an amendment to the claimed relief is sought in the course of the trial:
… the court should not give relief of that kind, at any rate without offering the opposing party an opportunity for an adjournment, and giving them an opportunity to say whether they have been taken by surprise, or have been prejudiced by the fact that that particular form of relief had not been explicitly claimed earlier. (Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 at 269 per Buckley LJ, Orr LJ agreeing at 270)
To similar effect, in Strazdins v Birch Carroll & Coyle Ltd (2009) 178 FCR 300 Lander J said:
Absent any claim for relief in the statement of claim, a respondent may properly assume such a claim is not being pursued.
By inference it may concluded from his Honour’s statement that if additional relief is claimed, an amendment to the pleading would be necessary.
The fact that the Rules do not spell out the requirement for the clear pleading of prayers for relief in the way the Federal Court Rules do does not derogate from the fact that procedural fairness requires that a respondent be put on notice of the relief sought by an applicant which, if not already pleaded, requires consent or leave in order to be pursued.
Whether the respondents might have approached the case differently if non-indemnification orders had been sought from the outset is not relevant to whether the relief sought should be stated clearly in the pleading. What the respondents might have done differently if other things had been done differently raises questions of potential prejudice which are relevant to whether an amendment should be permitted at this point, not to whether an amendment is required in order to prosecute the claim. To say that the respondents have not demonstrated prejudice at this point puts the cart before the horse.
As the respondents do not consent to the Commissioner being able to seek non-indemnification orders, he must seek leave to amend his statement of claim if he wishes to pursue the issue.
As to the remaining matters raised by the parties, para.16 of the relief section of the statement of claim has been referred to but I do not think it permits the Commissioner to seek any order he likes without giving prior notice to the respondents and amending the statement of claim as necessary. Prayers such as that prevent the Court from being confined to the particular or precise form of relief pleaded by an applicant and permit the Court to substitute relief it considers more appropriate in light of the facts as proved, albeit the Court does not have a free hand to surprise the parties.
Additionally, it should be recorded, as the respondents appeared to concede, that the proposed r.29.07 penal endorsements were not relevant to the present debate. Such endorsements are concerned with the enforcement of orders rather than with their substance and, if placed on a properly served order, make it easier to conclude that disobedience of the order is wilful, thus increasing the possibility that the Court will deal with the contravener by committal, sequestration or punishment for contempt. An endorsement of that sort can be placed on any order of the Court at the option of the party serving it, if failure to observe the order may lead to committal, sequestration or punishment for contempt, and is no more than an ordinary incident and consequence of litigation that does not need to be foreshadowed.
CONCLUSION
The Commissioner cannot seek non-indemnification orders unless the statement of clam is amended to seek that relief.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Judge Cameron
Associate:
Date: 13 November 2019
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