Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Ors (No.4)

[2018] FCCA 192

FEDERAL CIRCUIT COURT OF AUSTRALIA

AUSTRALIAN BUILDING & CONSTRUCTION COMMISSIONER v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION & ORS (No.4) [2018] FCCA 192

Catchwords:
PRACTICE AND PROCEDURE – Costs – application by twelfth respondent against whom proceeding was discontinued for an order for costs under s.570 of the Fair Work Act 2009 (Cth) – whether proceeding brought against him was vexatious or brought without cause – application dismissed.

Legislation:

Evidence Act 1995 (Cth), ss.48(4), 59, Schedule, Section 3, Part 1

Fair Work Act 2009 (Cth), s.570

Cases cited:

Australian Rail, Tram and Bus Industry Union v Railway Employment Co Pty Ltd [2015] FCA 710
Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No.2) [2014] FCA 351
Fair Work Ombudsman v Skilled Offshore (Australia) Pty Ltd (No.2) [2015] FCA 1509
Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257
Ryan v Primesafe Pty Ltd [2015] FCA 8
Shamir v Commonwealth of Australia (Australian Taxation Office) [2015] FCA 1463
Smith v R [2001] HCA 50
Spotless Services Australia Ltd v The Honourable  Senior Deputy President Jeanette Marsh [2004] FCAFC 155

Applicant: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

First Respondent: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Respondent: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH)

Third Respondent: BRIAN PARKER

Fourth Respondent: RITA MALLIA

Fifth Respondent: MICHAEL GREENFIELD

Sixth Respondent: DARREN GREENFIELD

Seventh Respondent: LUKE COLLIER

Eighth Respondent: TONY SLOANE

Ninth Respondent: ROBERT KERA

Tenth Respondent: SALVATORE MANNA

Thirteenth Respondent: FRANCIS O’GRADY

Fourteenth Respondent: MARTIN WYER

File Number: SYG 332 of 2016

Judgment of: Judge Manousaridis

Hearing date: 2 August 2016

Date of Last Submission: 2 August 2016

Delivered at: Sydney

Delivered on: 5 February 2018

REPRESENTATION

Counsel for the Applicant: Mr M S White SC

Solicitors for the Applicant: Corrs Chambers Westgarth

Counsel for Michael O’Connor: Mr S Crawshaw SC with Mr G Kozminksy

Solicitors for Michael O’Connor: Slater and Gordon Lawyers

Counsel for the First to Tenth and Fourteenth Respondents: Mr J H Pearce

Solicitors for the First to Tenth and Fourteenth Respondents: Taylor & Scott Lawyers

No appearance by or on behalf of the Thirteenth Respondent

ORDERS

1. The application for costs made by Mr Michael O’Connor is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 332 of 2016

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

And

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

First Respondent

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH)

Second Respondent

BRIAN PARKER

Third Respondent

RITA MALLIA

Fourth Respondent

MICHAEL GREENFIELD

Fifth Respondent

DARREN GREENFIELD

Sixth Respondent

LUKE COLLIER

Seventh Respondent

TONY SLOANE

Eighth Respondent

ROBERT KERA

Ninth Respondent

SALVATORE MANNA

Tenth Respondent

FRANCIS O’GRADY

Thirteenth Respondent

MARTIN WYER

Fourteenth Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr O’Connor, who was initially joined as the twelfth respondent in this proceeding, applies for an order that the applicant (Commissioner) pay his costs of the proceeding up to and including 20 May 2016, being the day on which the predecessor of the Commissioner (Director) filed a notice of discontinuance of the proceeding as against Mr O’Connor. Mr O’Connor seeks that order under to s.570 of the Fair Work Act 2009 (Cth) (FW Act). In short, Mr O’Connor claims the Director instituted the proceeding against him vexatiously and without reasonable cause.

Background

1. On 15 February 2016 the Director commenced this proceeding by filing an application and a statement of claim (SOC) against fourteen respondents, one of which was Mr O’Connor. The SOC alleged that on five occasions during the period commencing on 13 February 2015 and ending on 17 February 2015 the first and second respondents (CFMEU and CFMEU NSW respectively), and one or more of the other respondents, organised, and took action with others to prevent or hinder the employees of subcontractors from carrying out concrete pouring work at two building sites. The SOC alleged the respondents organised and participated in that action because the CFMEU and CFMEU NSW were in dispute with De Martin & Gasparini Pty Ltd (DMG), being the company who had engaged the subcontractors to perform the work at the building sites. The dispute related to the terms of a proposed enterprise agreement that was to be binding on members of the CFMEU, and which was to replace an enterprise agreement whose term was due to expire. 

2. Relevant to Mr O’Connor’s application for costs is paragraph 107 of the SOC. It alleged that from at or about 5 am on 16 February 2015 and at times after that time on the same day (Relevant Time), a “group of persons attended and assembled at the entrance to the Barangaroo Site on Lime Street” and that Mr O’Connor was “amongst the group of people”.

3. By letter dated 20 April 2016 to the solicitors for the Director, Mr O’Connor’s solicitors claimed the Director brought the proceeding against Mr O’Connor “for improper and political purposes”, and that Mr O’Connor proposed to apply to the Court for an order that the proceeding against him be dismissed.[1] Mr O’Connor’s solicitors stated Mr O’Connor instructed them that he did not attend any protest at the Barangaroo site at the Relevant Time.

   [1] Affidavit of M R Clayton 31.05.2016, annexure “MRC-15”, page 100

4. The Director’s solicitors responded by letter dated 22 April 2016.[2] They stated the Director initiated the proceedings “in accordance with its statutory mandate and based on evidence made available to it”. The solicitors for the Director further stated the Director relied on evidence “available to it that establishes the factual basis for the allegations in the statement of claim against your client Mr O’Connor”; and that the evidence included the affidavit of Mr Paul Young, a solicitor employed by the solicitors for DMG. The Director’s solicitors attached a copy of Mr Young’s affidavit, and directed attention to a copy of a photograph that is annexed as “page 20 of exhibit PY-2” to that affidavit, and stated that Mr Young identified Mr O’Connor as present and participating in the blockade at the Barangaroo site at the Relevant Time. That was a reference to the following passage from Mr Young’s affidavit:

   17.At about 6:55am I saw Mr Parker address the Group in front of the gate. I could see Mr Parker speaking, but could not hear what was being said.

   18.A photo I took of the Group at 7:02am is marked ‘A’ in a bundle of photos attached to this affidavit . . . . Included in this Group (and marked on the photo) was . . . Michael O’Connor (CFMEU National Secretary). I recognised Mr O’Connor from a video I had viewed the previous night of him addressing workers on CFMEU’s Facebook site . . . .

   [2] Affidavit of M R Clayton 31.05.2016, annexure “MRC-16”, page 105

5. The Director’s solicitors concluded the letter by inviting Mr O’Connor “to put the evidentiary basis for his position” that he was not present at the Barangaroo site at the Relevant Time.

6. By letter dated 5 May 2016 the solicitors for Mr O’Connor repeated Mr O’Connor was not at the Barangaroo site at the Relevant Time. The solicitors said that at the Relevant Time Mr O’Connor was on a flight from Melbourne to Sydney.[3] Mr O’Connor’s solicitors attached emails from the Qantas Club and Frequent Flyer Service Centre which confirmed that on 16 February 2015 Mr O’Connor travelled on a particular flight which departed from Melbourne at 6:59am and arrived in Sydney at 8:24am.

   [3] Affidavit of M R Clayton 31.05.2016, annexure “MRC-20”, page 149

7. The Director discontinued the proceeding as against Mr O’Connor on 20 May 2016.

Principles

1. It was common ground between the parties that whether or not I should make an order for costs depends on the application of s.570(2)(a) of the FW Act which provides:

   The party may be ordered to pay the costs only if:

   (a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

   (b)the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

   (c)the court is satisfied of both of the following:

   (i)the party unreasonably refused to participate in a matter before the FWC;

   (ii)the matter arose from the same facts as the proceedings.

2. There is no dispute between the parties about the principles that apply when determining whether an order for costs should be made under s.570(2) of the FW Act. These were helpfully identified in the written submissions of Mr O’Connor’s counsel, and may be summarised as follows:

   a)While the power to make an order under s.570 of the FW Act should be exercised cautiously,[4] and s.570 expresses “a general policy against awarding costs”,[5] it is not necessary that the Court be satisfied that “exceptional circumstances” exist,[6] or that the proceeding was misconceived.

   b)A proceeding will be instituted without reasonable cause if it has no real prospects of success or was doomed to failure; and that one way of testing whether a proceeding was instituted without reasonable cause was to ask whether, on “the facts apparent to the applicant at the time of instituting the proceeding, there was no “substantial  prospects  of success””.[7]

   c)A proceeding will be instituted vexatiously if it is instituted with the intention of annoying or embarrassing the respondent, or for a collateral purpose, or if the proceeding is untenable.[8]

   d)Where a party relies on s.570(2)(b) of the FW Act, the Court must be satisfied that the party against whom the order is sought to be made engaged in an unreasonable act of omission, and that act or omission caused the other party to incur costs.[9]

   [4] Ryan v Primesafe Pty Ltd [2015] FCA 8 at [64]

   [5] Shamir v Commonwealth of Australia (Australian Taxation Office) [2015] FCA 1463, [2]

   [6] Spotless Services Australia Ltd v The Honourable  Senior Deputy President Jeanette Marsh [2004] FCAFC 155 at [13] speaking of s.470(1) of the Workplace Relations Act 1996 (Cth) which is equivalent to s.570(2)(a) of the FW Act.

   [7] Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No.2) [2014] FCA 351, [8] (Pagone J quoting from the judgment of Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257

   [8] Australian Rail, Tram and Bus Industry Union v Railway Employment Co Pty Ltd [2015] FCA 710 at [24]

   [9] Fair Work Ombudsman v Skilled Offshore (Australia) Pty Ltd (No.2) [2015] FCA 1509, [11]

Submissions

1. In his written submissions counsel for Mr O’Connor relies on a number of matters for submitting an order for costs should be made. First, counsel submitted the Director was not in possession of any admissible evidence that was relevant to proving the allegation made in paragraph 107 of the SOC. In particular, Counsel submitted there “was no arguable point of law as to the admissibility of paragraph 18(c)” of Mr Young’s affidavit. That is a reference to the passage from Mr Young’s affidavit I have reproduced in paragraph 5 of these reasons.[10]

   [10] Outline of Submissions on the Twelfth Respondent on Costs, [37]

2. Second, at no time did the Director attempt to obtain a copy of the video that Mr Young deposed to having seen on the CFMEU’s Facebook page, or of the video recording Mr Young deposes elsewhere in his affidavit was taken by another person, or of CCTV footage that is also referred to by Mr Young in his affidavit. Counsel submits it was unreasonable for the Director not to obtain the videos and the CCTV footage in circumstances where the Director had no admissible evidence Mr O’Connor was present at the Barangaroo site at the Relevant Time as alleged in paragraph 107 of the SOC.[11]

   [11] Outline of Submissions on the Twelfth Respondent on Costs, [40]

3. Third, counsel for Mr O’Connor submitted it should be inferred that the Director commenced the proceeding against Mr O’Connor for the purpose of providing political support for the reintroduction of the Australian Building and Construction Commission (ABCC) before the Senate sat to debate that question. Mr O’Connor relies on the following matters:[12]

   a)The SOC is dated 15 February 2015 (presumably counsel means 15 February 2016) and was lodged at 4:04 pm that day.

   b)On 15 February 2016 a draft media release was prepared which did not mention Mr O’Connor,

   c)The application and SOC were not served on the CFMEU until 19 February 2016 and on the other respondents until after 21 February 2016.

   d)The “timing and content of the media release published by the applicant on 21 February 2016 (and in particular the mention of Mr O’Connor)”.[13]

   e)The “likely and actual impact of that media release in terms of media publications relating to the reintroduction of the ABCC.[14]

   f)The Senate was due to sit to consider the reintroduction of the ABCC on 22 February 2016.

   g)The number of media releases made by the Director before the Senate sitting to consider the reintroduction of the ABCC.

   [12] Outline of Submissions on the Twelfth Respondent on Costs, [42]

   [13] Outline of Submissions on the Twelfth Respondent on Costs, [42(d)]

   [14] Outline of Submissions on the Twelfth Respondent on Costs, [42(e)]

4. Finally, counsel for Mr O’Connor relies on the following matters:[15]

   a)The SOC made allegations of knowledge without particulars and, inadequate particulars were provided when the Director was requested to provide them.

   b)The “need for section 570 to operate as an access to justice provision is of less significance when the applicant is the Commonwealth”.[16]

   [15] Outline of Submissions on the Twelfth Respondent on Costs, [43]

   [16] Outline of Submissions on the Twelfth Respondent on Costs, [43(c)]

5. Counsel for the Director, on the other hand, submitted the affidavit of Mr Young provided a reasonable basis for the Director alleging in paragraph 107 of the SOC that Mr O’Connor was present at the Barangaroo site at the Relevant Time. Counsel submitted it was not necessary that an allegation made in a statement of claim be based on evidence that will be admissible at a hearing. In any event, counsel submitted Mr Young relied on evidence that would be admissible.

Was the Director required to hold admissible evidence?

1. An important, not to say essential, element of Mr O’Connor’s application for costs is the contention that, at the time he commenced the proceeding, the Director did not possess any admissible evidence to establish Mr O’Connor was present at the Barangaroo site at the Relevant Time. That implies the submission that a proceeding will be brought vexatiously or without reasonable cause if, at the time the proceeding is commenced, the applicant does not have evidence that is admissible to prove all elements of the cause of action on which the applicant intends to rely. I do not accept that submission.

2. Whether at the time a proceeding is commenced an applicant has reasonable cause to do so does not depend on the material on which the applicant relied when deciding to commence the proceeding being admissible evidence. The relevant question is whether the applicant has reasonable grounds for believing that, at the trial of the matter, he or she will be able to adduce admissible evidence to prove each element of the cause or causes of action on which the applicant relies. Examples can readily be imagined where it would be reasonable for an applicant to commence proceedings without having admissible evidence to prove an essential element of a cause of action on which the applicant intends to rely.

3. Assume an applicant possesses a statement made by person A that he heard person B utter certain statements that, if true, would support an element or elements of the cause of action on which the applicant intends to rely. Unless some exception to the hearsay rule prescribed by s.59 of the Evidence Act 1995 (Cth) (Evidence Act) applies, the evidence of the statements person A heard person B make would be inadmissible to prove the truth of the statements person B made. In those circumstances it would be reasonable for the applicant to commence proceedings if the applicant intends to secure person B’s attendance at the hearing by a subpoena, and the applicant has reasonable grounds for believing he or she will be able to secure person B’s attendance at the hearing.

4. I am not satisfied that Mr Young’s deposing to the presence of Mr O’Connor at the Barangaroo site at the Relevant Time did not constitute a reasonable basis for the Director making the allegation contained in paragraph 107 of the SOC. I am not satisfied the Director had no reasonable prospects of and, hence, no basis for reasonably believing that he would be able to secure admissible evidence to support the allegation made in paragraph 107 of the SOC. For example, I am not satisfied the Director did not retain a copy of the video on the CFMEU Facebook page on which Mr Young deposed he relied to identify Mr O’Connor in the photograph annexed to his affidavit or, if the Director did not retain a copy of the video, the Director had no reasonable prospects of obtaining a copy of the video for the purposes of tendering it at trial.

Was Mr Young’s evidence inadmissible?

1. It would not have been open to the Director to prove Mr O’Connor was present at the Barangaroo site at the Relevant Time by relying on Mr Young’s affidavit as an opinion that the person Mr Young identified on the CFMEU’s Facebook page as Mr O’Connor was the same person he identified in the photograph as Mr O’Connor.[17] But the matters on which Mr Young relied for reaching that opinion would not be inadmissible or, at least, would not be clearly inadmissible to prove that the person identified by Mr Young in the photograph and on the video Mr Young watched on CFMEU’s Facebook page was one and the same person, namely, Mr O’Connor. That evidence would be the photograph and the video Mr Young observed. On the basis of the reception of that evidence, the submission could have been made that the person in the video addressing a crowd was Mr O’Connor and that the person identified in the photograph as Mr O’Connor was the same person as the person in the video addressing the crowd.

   [17] See Smith v R [2001] HCA 50

2. Counsel for Mr O’Connor submitted that evidence by Mr Young to describe what he observed on the Facebook page would be inadmissible hearsay. That submission rests on the assumption that the Director does not hold a copy of the video Mr Young says he observed. I am not, however, prepared to accept that assumption. If, contrary to this assumption, the Director retained a copy of the video, it is unlikely Mr Young would have been called to give evidence of its contents. Assuming the video is authentic, evidence of the contents of the video would be given by adducing the video itself into evidence. But even if it is to be assumed the Director does not hold a copy of the video, and Mr Young were to be called to give evidence of the contents of the video, that would not be hearsay within the meaning of s.59 of the Evidence Act. The video would be a “document” within the meaning given to that word by the Dictionary to the Evidence Act; and, under s.48(4) of the Evidence Act, where a document (in this case the video) is not available to a party, the party may adduce evidence from a witness of the contents of the document. Mr Young’s evidence, therefore, would simply be evidence of the contents of the video.

1. I appreciate that Mr Young does not in his affidavit say whether the Director retained a copy of the video Mr Young observed; and that Mr Young does not identify the matters on which he relied for asserting that the person he observed in the video as addressing a crowd was Mr O’Connor. That, however, does not mean I am compelled to conclude the contents of the video were incapable of sustaining the inference that the person addressing the crowd was Mr O’Connor; or that, if he were to be required to give evidence of the contents of the video, Mr Young would be unable to provide evidence of the matters on which he relied for stating it was Mr O’Connor that appeared in the video. The onus is on Mr O’Connor to prove that the Director had no reasonable grounds for joining Mr O’Connor as a party to the proceeding. Counsel for Mr O’Connor did not submit that a video of Mr O’Connor addressing a crowd had not been posted on the CFMEU Facebook page, or that it was not available on Facebook to be viewed on the date on which Mr Young said he observed it.

Failure by Director to obtain video

1. I next turn to the submission that it was unreasonable for the Director not to obtain the video on which Mr Young relied. That submission relies on the submission that the Director otherwise did not have admissible evidence that Mr O’Connor was present at the Barangaroo site at the Relevant Time. For reasons I have already given, I am not prepared to find the Director did not have available to him admissible evidence to support the allegation made in paragraph 107 of the SOC. Even if the Director did not have admissible evidence available to him, I have already concluded it was not necessary that the Director have admissible evidence to make the allegation in paragraph 107 of the SOC and that, assuming the Director did not hold a copy of the video, I was not satisfied the Director would not have had reasonable grounds for believing he would be able to obtain the video for the purposes of tendering it at the hearing.

2. In my opinion, therefore, assuming the Director did not hold the video to which Mr Young refers, that did not render unreasonable the Director’s relying on Mr Young’s affidavit to make the allegation in paragraph 107 of the SOC.

Political purpose?

1. The matters on which Mr O’Connor relies for claiming he was joined for improper political purposes – and in particular, to influence the debate in the Senate about the reintroduction of the ABCC – are incapable of sustaining that conclusion.

2. Further, Mr O’Connor was but one of fourteen respondents initially joined in the proceeding. The other respondents have not applied to strike out the proceeding on the ground that it was brought for improper political purposes. It is reasonable to expect, therefore, that Mr O’Connor’s claim to having been joined for improper political purposes would be based on matters that differentiate him from the other respondents. Apart from Mr O’Connor’s not having been included in the draft media release but then being included in the media release that was issued, the matters on which Mr O’Connor relies do not purport to differentiate him from the other respondents, but are matters that apply to all respondents.

3. Quite apart from the inability of the matters on which Mr O’Connor relies to sustain the inference that he was joined for an improper political purpose, the evidence suggests his having been joined was based on a genuine mistake. Once Mr O’Connor’s solicitors provided evidence to the Director’s solicitors that Mr O’Connor could not have been present at the Barangaroo site at the Relevant Time, the Director discontinued the proceeding against him.

Other matters

1. That the Director may have failed to provide particulars or adequate particulars does not appear to be relevant to Mr O’Connor’s application for his costs of the proceeding. Not providing adequate particulars does not by itself compel the conclusion that the proceeding was brought vexatiously or without reasonable cause. Further, Mr O’Connor does not claim the costs of his solicitors requesting particulars of any allegation contained in the SOC affecting Mr O’Connor. That, perhaps, is not surprising.

2. Mr O’Connor, from the time he was served with the SOC, would have known, and it is reasonable to suppose that Mr O’Connor readily had available to him evidence that showed, that he could not have been at the Barangaroo site at the Relevant Time. It was open to Mr O’Connor, therefore, to have instructed his solicitors to provide to the Director’s solicitors at the outset of the proceeding the emails his solicitors provided to the Director only on 5 May 2016 before his solicitors took any active steps in the proceeding on his behalf. Instead, Mr O’Connor appears to have been content to instruct his solicitors to write expansive letters to the Director’s solicitors complaining of abuse of process and to request particulars. That Mr O’Connor may have incurred legal costs in these circumstances cannot reasonably be attributed to anything the Director did or did not do.

3. Thus, even if I were to conclude the Director commenced the proceeding against Mr O’Connor without reasonable cause, I would have ordered that the Commissioner pay no more than would cover the reasonable costs of Mr O’Connor’s instructing his solicitors to send, and his solicitors sending, a letter to the Director’s solicitors that stated nothing more than that Mr O’Connor was not at the Barangaroo site at the Relevant Time because he was on a flight from Melbourne to Sydney, and which referred to attached emails as proof of that statement.

Disposition

1. I propose to order that Mr O’Connor’s application for costs be dismissed.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date:  5 February 2018