Australian Building and Construction Commissioner v McDermott

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FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v McDermott [2017] FCA 504

File number: SAD 39 of 2016
Judge: CHARLESWORTH J
Date of judgment: 12 May 2017
Catchwords: PRACTICE AND PROCEDURE — application to amend statement of claim — civil remedy proceedings —after close of parties’ cases on evidence — pleader’s inadvertence — whether amendments infringe or undermine the individual respondents’ privilege against self-exposure to penalty — whether a corporate respondent in civil remedy proceedings has an obligation to plead matters rendering applicant’s case not maintainable — leave to amend granted
Legislation:

Fair Work Act 2009 (Cth), ss 348, 363, 481, 482, 483, 484, 494, 495, 496, 497, 498, 499, 500, 510, 513, 793

Federal Court of Australia Act 1976 (Cth), s 37M

Trade Practices Act 1974 (Cth)

Work, Health and Safety Act 2012 (SA), ss 117, 118

Federal Court Rules 2011, r 16.08, 16.53

Cases cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Australian Competition and Consumer Commission v FFE Building Services Ltd (2003) 130 FCR 37

Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261

Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1287

Intelmail Explorenet Pty Limited v Vardanian (No 2) [2009] FCA 1018, (2009) 82 IPR 281

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] FCA 1032

Ketteman v Hansel Properties Ltd [1987] AC 189

Pascoe v Boensch [2009] FCA 1240

Perry v Police [2006] SASC 136

Ramsey v Sunbuild (2014) 221 FCR 213

Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2, (2016) 332 ALR 19

Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamaya Resources Limited (in liq) [2015] FCA 1098

Water Board v Moustakas (1988) 180 CLR 491

Date of hearing: 21 December 2016, 31 March 2017
Registry: South Australia
Division: General Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 111
Counsel for the Applicant: Mr M Roder SC with Ms A Barnett
Solicitor for the Applicant: Minter Ellison
Counsel for the Respondents: Mr M Abbott QC with Mr M Ats
Solicitor for the Respondents: Lieschke and Weatherill Lawyers

ORDERS

SAD 39 of 2016
BETWEEN:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant
AND:

MICHAEL MCDERMOTT

First Respondent

MARK GAVA

Second Respondent

JAMES O’CONNOR (and another named in the Schedule)

Third Respondent

JUDGE:

CHARLESWORTH J

DATE OF ORDER:

12 MAY 2017

THE COURT ORDERS THAT:

1.The name of the applicant in the proceedings be amended to read “Australian Building and Construction Commissioner”.

2.Leave to make the amendment marked in paragraph 16.1 of the proposed second amended statement of claim forming annexure ADS-5 to the affidavit Andrew Short sworn 23 February 2017 is refused.

3.On the condition specified in paragraph 4:

(a)the…

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Details
Case
[2017] FCA 504
Decision Date

CaseChat Overview and Summary

The Australian Building and Construction Commissioner (Commissioner) sought leave to amend the statement of claim in civil remedy proceedings against several respondents, including Mr McDermott, Mr Gava, and Mr O'Connor. The Commissioner's case involved allegations of contraventions of the Fair Work Act, and the respondents, including the CFMEU, asserted claims of privilege against self-exposure to penalty. The central issue before the court was whether the Commissioner should be granted leave to amend the statement of claim after the close of the parties' cases on evidence, and if such amendments would infringe or undermine the respondents' privilege against self-exposure to penalty.

The court considered whether the amendments would cause serious prejudice to the respondents, particularly in light of their claims of privilege. The Commissioner argued that the amendments were necessary to clarify and strengthen the case, while the respondents contended that allowing the amendments would infringe on their privilege and potentially prejudice their case. The court found that the respondents had not demonstrated that they would suffer serious prejudice if the amendments were allowed, as they had not provided clear evidence of how their case presentation would have differed had the amendments been made earlier. Additionally, the court noted that the respondents had the option to re-open their case if they deemed it necessary.

In conclusion, the court granted the Commissioner leave to amend the statement of claim, subject to certain conditions. The respondents were permitted to re-open their case if they chose to do so, and the Commissioner was required to file and serve the amended originating application and statement of claim by a specified date. The decision balanced the need for clarity and strength in the Commissioner's case against the respondents' claims of privilege and potential prejudice.

Orders

Orders of the court

1. The name of the applicant in the proceedings be amended to read “Australian Building and Construction Commissioner”.

2. Leave to make the amendment marked in paragraph 16.1 of the proposed second amended statement of claim forming annexure ADS-5 to the affidavit Andrew Short sworn 23 February 2017 is refused.

3. On the condition specified in paragraph 4:

(a) the applicant has leave to file and serve a second further amended originating application in the form of Exhibit A1 tendered on 31 March 2017;

(b) the applicant has leave to file and serve a second further amended statement of claim containing:

(i) the amendments marked in paragraphs 1 and 29 of the proposed second amended statement of claim marked as annexure ADS-4 to the affidavit of Andrew Short sworn on 7 December 2016; and

(ii) the amendments marked in paragraphs 2.1, 3.1, 4.1, 12, 17, 21, 29, 30, 32, 34, 36 and 38 of the proposed amended second statement of claim forming annexure ADS-5 to the affidavit of Andrew Short sworn 23 February 2017 and marked as annexure ADS-5.

4. The respondents have leave to re-open their case, if so advised, to adduce evidence relevant to or consequent upon the amendments forming the subject of the grant of leave in paragraph 3.

5. The applicant is to file and serve a second further amended originating application and second further amended statement of claim in accordance with these orders on or before 17 May 2017.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In determining whether substantive unfairness has or might occur, the focus is on the presentation of the parties’ cases, conceived in a broad sense to include all steps preparatory to trial as well as the conduct of the trial itself. It is relevant to consider whether the person alleging prejudice might have presented his or her case differently had the pleadings been in their intended form at the appropriate time, namely (in most cases) at the outset of the action.Facts No application to re-open the Commissioner’s case will be made in the event that the proposed amendments are allowed, and any application by the respondents to re-open will not be opposed by the Commissioner. Any grant of leave to make the amendments should, in the circumstances, be made on the condition that the respondents have leave, if so advised, to re-open their case. As will be seen, the question of whether or not the respondents would exercise any such leave remains uncertain. Each of Mr McDermott, Mr Gava and Mr O’Connor expressly asserted their claims of privilege at the pre-trial stages. The claim was made expressly in their filed defences, in outlines of anticipated evidence and in their written opening submissions. Each of the respondents pleaded denials to the allegations which the Commissioner now seeks to amend, except the status of Mr McDermott, Mr Gava and Mr O’Connor are each an “officer” or “agent” of CFMEU within the meaning of s 793(1)(a) of the FW Act. The words “officer” and “agent” also appear in s 363(1)(b), upon which the Commissioner seeks to rely. Neither Mr McDermott nor Mr Gava gave oral or affidavit evidence at the trial, although they did “go into” evidence in the limited sense that documentary evidence was tendered and witnesses were called in support of the respondents’ cases in the course of a joint trial. Mr O’Connor gave oral evidence and was cross-examined. The respondents rely on the affidavit of their solicitor, Mr Ats, sworn on 8 March 2017 annexing a letter from Mr Ats to Ms O’Keefe of Minter Ellison of the same date. The letter states that on the advice of Senior Counsel, Mr Abbott QC, Mr O’Connor gave evidence but Mr Gava and Mr McDermott did not. The letter further states that Mr Abbott QC had informed Mr Ats that the following factors were relevant to the advice he had given to Mr McDermott, Mr Gava and Mr O’Connor:A.the nature of the proceedings, being civil penalty proceedings, in which both the privilege against self-exposure to a penalty and the privilege against self incrimination applies:B.the way in which the hearing was conducted by Senior Counsel for the [Commissioner] and by Mr Abbott;C.the applicant’s pleaded case;D.the examination and cross examination of the witnesses for both the applicant and respondents and the evidence thereby obtained; andE.the potential consequences of findings adverse to the respondents having regard to circumstances particular to each respondent. Counsel’s advice was also stated to have been based on his analysis of these matters and the submissions he proposed to make in his closing address. I proceed on the basis that the arguments then planned for the closing address are the same as those now made in the respondents’ written closing submissions dated 19 December 2016. Among other things, the submissions expose, and mount arguments based upon, the omissions in the pleadings that now form the subject of this amendment application.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

None of what I have said thus far should be taken as a suggestion that irretrievable and serious prejudice of the kind to which I have referred must be shown in answer to an application of this kind. I am at present dealing only with the respondents’ positive claim that they would in fact suffer prejudice of that serious kind if the application were to be allowed. As I have already observed, other aspects of prejudice or disadvantage must also be considered.Consideration It is convenient to first consider the broad position of the two individual respondents who elected not to give evidence in their case, Mr McDermott and Mr Gava. I do not consider their elections to be irrevocable. It will of course be necessary to consider the inconvenience and expense that might be occasioned by a re-opening of the trial but, for present purposes, I proceed on the basis that if the amendments were allowed, the respondents will be granted leave to re-open their case on the evidence and any one of them may give evidence (or additional evidence), call additional witnesses and tender additional documents. Mr Ats’ letter to Ms O’Keefe demonstrates (and I accept) that the respondents made forensic decisions concerning the conduct of their case in reliance on the Commissioner having closed his case and by reference to the pleadings as they stood at that time. However, the letter does not demonstrate whether any one of the respondents’ decisions concerning the presentation of their case would have been any different had the amendments to the Commissioner’s pleading been made at an earlier time. The uncertainty in relation to that question was not resolved in the course of the respondents’ submissions. By way of example, when asked what inference the Court might draw as to how the respondents might have run their case had the Gava amendment been made prior to the Commissioner closing his case on the evidence, Counsel said:… I would like your Honour to draw the inference that it would have been a matter as counsel for me to weigh up and give advice to my clients as to the pros and cons of the situation. I can’t say and I won’t say that this meant, if they had made the amendment they now seek to make, that Mr Gava must have given evidence. I can’t say that and I don’t say that.… But what I do say is that we have lost the opportunity to consider whether or not Mr Gava could or should have given evidence based on the way in which the trial proceeded. Similarly, in relation to the “organise” amendment, when asked whether Mr McDermott would seek to give evidence should that amendment be made, Counsel for the respondents said:Well, I haven’t discussed it with him. I have not discussed this with Mr McDermott, because, it seems to me, we don’t even get to first base as to what Mr McDermott might or might not do if the amendment is made. What we have here is a clear case where there was one allegation, and one allegation only, which Mr McDermott denied, and having denied it, your Honour can’t, with respect, speculate that if you changed the goal posts, they may or may not be able to kick a goal because of anything Mr McDermott has or hasn’t done or might not do.And even if your Honour came to the view, well, Mr McDermott wouldn’t have said anything different had he given evidence – which, I submit, with respect, your Honour couldn’t or shouldn’t come to that position – the fact is Mr McDermott hasn’t given evidence. The fact is it’s too late to call Mr McDermott. The fact is that it has been and gone. The case is closed. …