Australian Workers' Union, The v Groundhog Civil (Vic) Pty Ltd
[2020] FWC 2557
•19 MAY 2020
| [2020] FWC 2557 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Workers' Union, The
v
Groundhog Civil (Vic) Pty Ltd
(C2019/1064)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 19 MAY 2020 |
Application to deal with a dispute arising under an agreement in accordance with a dispute settlement term – evidentiary issue – admission of judgments into evidence – judgments not admitted.
[1] This decision deals with the objections raised by Groundhog Civil (Vic) Pty Ltd (Respondent) to the admission into evidence of the judgments in Eastern Pearl Corporation v Groundhog Sales and Rentals Pty Ltd1 (Eastern Pearl No 1)and in Groundhog Sales and Rentals Pty Ltd v Eastern Pearl Corporation2 (Eastern Pearl No 2). The principal proceeding during which the objection was made concerns an application by the Australian Workers' Union (Applicant) under s.739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute about the proper construction of clause 52.2 of the Ground Hog Civil (Vic) & Australian Workers' Union Agreement 2018 (Agreement). An application made pursuant to s.217 of the Act by the Respondent to vary the Agreement to remove an ambiguity or uncertainty is being heard concurrently.
[2] The circumstances leading to the objection arose during the Applicant’s cross-examination of Mr Glenn Mackay. Mr Mackay was being asked questions about litigation involving Groundhog Sales and Rentals Pty Ltd of which he was director.3
[3] During the cross-examination Mr Mackay accepted certain propositions put to him by Counsel for the Applicant including that:
• Groundhog Sales and Rentals Pty Ltd was sued in the Federal Court by Eastern Pearl Corporation; 4
• the claim related to a joint venture between Groundhog Sales and Rentals Pty Ltdand Eastern Pearl Corporation for the purchase and sale of an item of earthmoving equipment; 5 and
• Groundhog Sales and Rentals Pty Ltd sold the equipment in late October 2008 for $1.2M plus GST. 6
[4] Mr Mackay also gave evidence that he had given instructions to his solicitors to appeal from the judgment of the primary judge. 7
[5] Counsel for the Applicant also suggested to Mr Mackay that:
• he had sent false emails to Eastern Pearl Corporation; 8
• Eastern Pearl Corporation served a statutory demand on Groundhog Sales and Rentals Pty Ltd; 9
• Groundhog Sales and Rentals Pty Ltd applied to set it aside; 10 and
• in support of the application to set aside the statutory demand Mr Mackay had made an affidavit containing false statements. 11
[6] Mr Mackay’s evidence was in essence that he did not recall those matters. 12 Counsel for the Applicant showed Mr Mackay a document and Mr Mackay was asked whether he stood by his evidence that he did not recall.13 He said that he did.14
[7] Thereafter the Applicant sought to tender the judgment in Eastern Pearl No 1. The Respondent objects to receipt thereof. The Applicant also seeks to tender the appeal judgment Eastern Pearl No 2, and by its submissions assumes the Respondent also objects to receipt thereof. 15
[8] The Applicant identifies four issues it says arise from the Respondent’s objection.
[9] The first, whether it should be permitted to question Mr Mackay about his own previous representations contained in emails or in affidavits. As to this issue the Respondent does not take objection to the questioning of Mr Mackay about his previous representations in either emails or an affidavit, insofar as those representations are set out in Eastern Pearl No 1. There is therefore no need to deal further with this issue.
[10] The second issue concerns the types of questions that are permitted about representations of others, assuming the judgments are not admitted into evidence. The Respondent contends that to the extent any objection was taken to questions about the "findings" in Eastern Pearl No 1, those matters were resolved and questioning proceeded to its conclusion. It says that no remaining or residual objection is maintained about those questions. It says correctly that it is the answers given which is the evidence in this proceeding, not the questions asked. Mr Mackay’s answers were that given the passage of time he did not recall. There is no real probative value in further pursuing a line of questioning on a subject about which Mr Mackay has said on several occasions under oath that he does not recall.
[11] Thirdly, whether the judgments should be admitted into evidence? I will return to this issue as it is the substance of the objection.
[12] Fourth, if the judgments are admitted, what questions are permitted in relation thereto? As to this issue the Respondent says that it is not clear to what extent any further questioning would be sought or allowed about Eastern Pearl No 1, even if the judgment is admitted. It says that Mr Mackay has already given evidence that he did not recall the pertinent facts, even after being taken to certain findings by the judge in Eastern Pearl No 1. It says that neither the admission into evidence of the judgment nor its exclusion is likely to change Mr Mackay’s earlier answers about his recollection.
[13] Returning to the third issue, namely whether the judgments should be admitted into evidence. The Applicant seeks to tender the judgments for the purposes of establishing the judgments’ existence, date, and legal effect, the parties, the issues arising in the proceedings, and for the purpose of understanding the issues which were before the Court and the evidence by which those issues were addressed. The Applicant also seeks to show the outcome of the proceedings, the course the proceedings had taken, and to record the person’s conduct of those proceedings for the purposes of characterising those proceedings. It also seeks to demonstrate facts that were not in issue in a proceeding, because they were uncontroversial or agreed. It says that each of these matters may be established by admission of the judgements notwithstanding s.91 of the Evidence Act 1995 (Cth) (Evidence Act) which provides that evidence of a decision or a finding of fact is not admissible to prove the existence of a fact that was in issue in that proceeding.
[14] Specifically, the Applicant seeks to rely on the judgments to prove the following matters:
• that Mr Mackay sent a false email to his joint venture partner about the sale status of the excavator (Eastern Pearl No 1 at [12], noting that this was “not in dispute” (Eastern Pearl No 1 at [6]), and so was not a “fact in issue”);
• that Mr Mackay dishonestly claimed to his joint venture partner that the sale of the excavator had not been finalised (Eastern Pearl No 1 at [13], likewise not in dispute (Eastern Pearl No 1 at [6]));
• that Mr Mackay sent a further false email concerning the terms on which the purchaser of the excavator would pay (Eastern Pearl No 1 at [15], not in dispute (Eastern Pearl No 1 at [6])); and
• Eastern Pearl Corporation served a statutory demand on Groundhog Sales and Rentals Pty Ltd which thenapplied to set it aside, and in support of that application Mr Mackay made an affidavit containing false assertions (Eastern Pearl No 1 at [27], not in dispute (Eastern Pearl No 1 at [6])).
[15] The Applicant also contends that I am able to receive the judgments in relation to the following matters, which go to demonstrating the reliability of any credit findings made in Eastern Pearl No 1. Specifically that:
• in 2010 Groundhog Sales and Rentals Pty Ltd was sued for breach of contract and misleading or deceptive conduct by Eastern Pearl Corporation (issues arising therein), and Mr Mackay was also a respondent;
• Groundhog Sales and Rentals Pty Ltd counterclaimed on the basis that goods supplied to it by Eastern Pearl Corporation were not of merchantable quality;
• Groundhog Sales and Rentals Pty Ltd sought to establish its counterclaim including on the basis of the evidence of Mr Mackay (Eastern Pearl No 1 at [47]);
• Groundhog Sales and Rentals Pty Ltd’s counterclaim was unsuccessful, which the Applicant says was basically because Mr Mackay’s evidence was rejected as unreliable (Eastern Pearl No 1 at [63]-[64]); and
• there was no appeal either from the findings set out in the previous paragraph of this decision, or from the credit finding in Eastern Pearl No 1 at [47] (Eastern Pearl No 2 at [24]).
[16] The Applicant also initially contended that if the findings are caught by s.91 of the Evidence Act, I am able to admit the judgments by making an order under s.190(3)(a) or (b) of that Act, that s.91 does not apply to those findings. It now accepts that such a course is not available to me - first because the Evidence Act does not bind the Commission in relation to a matter before it,16 and secondly because the Commission is not a court within the meaning of that Act. Instead the Applicant contends that how the provisions would apply, if the Evidence Act were binding, would guide the Commission’s approach to the subject evidence. I accept that submission. Consequently, if the Applicant’s submissions on s.91 of the Evidence Act are accepted, then that would guide the Commission on whether to admit the judgments. In other words, it would be a material matter in deciding whether the judgments should be admitted as a matter of discretion.
[17] Although, strictly speaking the rules of evidence and procedure do not bind the Commission in relation to a matter before it, there are sound reasons for general adherence to these rules, not least because they will generally guide the conduct of a matter in a manner that is fair and will also ensure that the Commission follows consistently sound and appropriate procedures.
[18] In assessing whether the judgments should be admitted into evidence, the starting point must be whether they are relevant to an issue in the proceeding. The judgments are sought to be admitted for the purpose of assessing the credibility of Mr Mackay as a witness, and specifically of proving that Mr Mackay knowingly or recklessly made a false representation when he was a witness in the proceedings in Eastern Pearl No 1 and was under an obligation to tell the truth. It appears the Applicant will contend that Mr Mackay's account of the conversation with Mr Hayden on 17 April 2018 should not be accepted or at least should be treated with caution, because he is not a credible witness. If admitted for the purpose of proving the matters said to have been found in Eastern Pearl No 1 the Applicant will seek to submit that Mr Mackay was not a credible witness in Eastern Pearl No 1, and the same conclusion should be reached by me in this proceeding.
[19] Given the scope of relevance outlined above, the judgments and specifically Eastern Pearl No 1 are thus sought to be admitted principally as evidence of the truth of the facts as set out in [14] above. The matters in [15] do not seem to me to be relevant independently of the matters set out in [14].
[20] It is common ground that s.91 of the Evidence Act itself does not preclude the admission into evidence of the judgments to prove the existence of facts not in issue in those proceedings. However, the facts which the Applicant seeks to prove are said by the Respondent to be the very facts that were in issue in those proceedings and about which the Court made findings. If the Respondent is correct, the findings on which the Applicant would rely to impugn Mr Mackay’s credit would seem to fall squarely within the prohibition in s.91 of the Evidence Act.
[21] For its part, the Applicant characterises these facts as not in issue in Eastern Pearl No 1. For this it relies on [6] of Eastern Pearl No 1 in which it is said that the “essential facts concerning the claim are not in dispute”. It is not at all clear to me that the matters set out in [14] can with any certainty be said to fall within that which the Court described as “essential facts concerning the claim” the subject of the proceeding. The claim to which the essential facts relate is described by the Court as “Eastern Pearl’s claim that it is entitled to damages as a result of Groundhog’s breach” of the joint venture agreement to which Eastern Pearl Corporation and Groundhog Sales and Rentals Pty Ltd were parties. I consider the Court is there referring to the facts necessary to establish a breach of the joint venture agreement. The claim for breach was essentially one for monies owed by Groundhog Sales and Rentals Pty Ltd to Eastern Pearl Corporation. The facts essential to establishing the breach of the joint venture agreement are discussed by the Court as follows:
“28. Eastern Pearl submits that the true situation is that Groundhog owes Eastern Pearl $540,210.15 in respect of its share of the proceeding of the sale of the 992G under the JVA. The net sale price was $1,200,000. The relevant expenses (as will be explained below) were $119,579.77. This left a profit of $1,080,420.30 to be shared by the partners, according to Eastern Pearl.
29. There is evidence which Eastern Pearl accepts, which shows that Groundhog incurred expenses totalling $119,579.77 on the 992G prior to its sale. There is a dispute about whether other expenses were incurred by Groundhog. Groundhog contends that a $30,000 “finders fee” was paid to Mr Shane Bennett, in respect of the sale, and a payment of $51,130.35 to EDI must be deducted.
(i) The finders fee
30. To help effect the sale of the 992G, Groundhog engaged the services of Mr Bennett. Mr Bennett was paid a commission of $30,000 in accordance with the usual practice in the heavy machinery sales industry. I see no reason why this expense should not be deducted from the profit amount for the sale of the 992G.
(ii) The EDI payment
31. Mr Shane Chestnut is a director of a company called Equipment Direct International Pty Ltd (“EDI”). Groundhog made a payment $51,138.35 to EDI, which it says is a cost associated with the 992G. The claim by Groundhog relates to a tax invoice from EDI to Groundhog dated 4 March 2009 for $51,138.35 plus GST for the preparation of the 992G for sale. There is an undated document in evidence from Mr Chestnut headed “To Whom it may concern”. The body of the document says:
This letter is to confirm that Ground Hog Sales & Rentals was invoiced a total of $51,138.35 plus GST for works performed on a CATERPILLAR 992G Wheel loader on the 4th March 2009.
These funds were not paid to EDI directly as we completed a CONTRA accounting arrangement for funds that EDI owed GHSR for other non-related transactions.
Should you wish to discuss this matter any further please do not hesitate to contact our Office Manager, Helena Stibbard on 07 5666 9100 during business hours.
Kind Regards
Shane Chestnut
Director
Equipment Direct International
32. In his oral evidence, Mr Chestnut described the nature of the work covered by the invoice. He said:
That was work in preparation for sale, which entails a refurbishment, repainting, site-specific requirements for the client, including mine specification work, fire suppression, auto lube, and a number of other service-related oil filters, lube – that side of work preparation for sale. The MEM Rockhampton site assembly was for the assembly of the machine when it arrived to sell it.
33. Mr Chestnut also referred to assembly of the machine and commissioning it for the client. He also gave evidence about re-painting, fire suppression work and bringing the machine up to mine specifications. He was not challenged on any aspect of his evidence of the work preferred by EDI to prepare the 992G for sale. The claim by Groundhog for the deduction from the joint venture profit for the amount paid to EDI is accepted.
(iii) Calculation of profit
34. The 992G was sold for $1.2 million plus GST. From the $1.2 million the following must be deducted:
• $119,579.00 repair costs
• $ 51,138.35 EDI payments
• $ 30,000.00 finders fee
Total: $200,717.35
35. That leaves a net profit figure for the joint venture of $999,282.65. Half of that figure is $499,641.33. Under the JVA, Groundhog owes $499,641.33 to Eastern Pearl.
36. Groundhog acknowledges that it owes Eastern Pearl a sum in approximately that amount. However, it says that the joint venture was made conditional by a term that past debts to Groundhog would be paid by Eastern Pearl. That claim is not supported by the evidence. It is rejected.
37. Eastern Pearl is entitled to damages in the sum of $499,641.33 for breach of the JVA.” 17 [Emphasis added]
[22] The matters in [14] above which appear earlier in the Eastern Pearl No 1 judgment are not in my view essential facts relating to the claim for damages for breach of the joint venture agreement.
[23] Rather I consider, consistent with the Respondent’s submissions, that the matters in [14] above were findings made by the Court based on the evidence given in the proceeding. It is not at all clear from the judgment in Eastern Pearl No 1 that the matters in [14] above were admitted or agreed facts. It seems to be unlikely they were agreed or admitted facts. One would expect if that were the case, an express reference about that state of affairs to appear in the judgment. There is no such reference at all and that which appears at [6] of Eastern Pearl No 1 is not such a reference. In my view the matters set out at [14] above where in issue in the Eastern Pearl No 1 proceeding and consequently s.91 of the Evidence Act would preclude the admission into evidence of the judgment to prove the existence of those facts.
[24] I am not persuaded that I should admit into evidence the judgments to prove the facts in [14] as a matter of discretion. Given my conclusion that the matters were in issue in Eastern Pearl No 1 the probative value of the findings in Eastern Pearl No 1 are outweighed by the prejudice to the Respondent, particularly given that Mr Mackay cannot recall the specifics of the matters the subject of the findings. There is no other cogent reason why I would depart from the result that s.91 of the Evidence Act would otherwise yield. I also see no cogent reason why the judgments would be admitted for any other purpose. They are not relevant for any other purpose. The matters set out in [15] above, detached from the principal purpose for admission, are not relevant to any issue in theses proceedings. If the judgment in Eastern Pearl No 1 is not admitted for the purpose of proving the matters in [14], there seems no relevant purpose served in admitting the judgments. Certainly it is not relevant for the purposes of the matters before me to know the judgments’ existence, their date, and legal effect, the parties, the issues arising in the proceedings, or to understanding the issues which were before the Court or the evidence by which those issues were addressed. Nor do I need to know the outcome of the proceedings or the course the proceedings had taken.
[25] Absent relevant and admissible material about the specific facts and circumstances about the matters in [14] above, it is not possible for me to assess the reliability or cogency of the Court’s opinion and thus not possible to assign a weighting to its probative value. Thus, I accept the Respondent’s contention that in the circumstances the probative value of the judgments must be outweighed by the prejudicial effect attaching to their admission.
[26] The judgments are not admitted.
[27] The Applicant may continue to cross examine Mr Mackay about his representations the subject of findings in Eastern Pearl No 1 (and to which the Respondent does not object) but as already observed, Mr Mackay’s evidence thus far has been that he does not recall.
[28] The Respondent’s objection to the admission of the judgments is upheld.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR719401>
1 [2012] FCA 406
2 [2012] FCAFC 113
3 The relevant aspects to which the objection relates commences at Transcript PN1178
4 Transcript PN1182
5 Transcript PN1183-1184
6 Transcript PN1186-1187
7 Transcript PN1204-1205
8 Transcript PN1208-PN1213
9 Transcript PN1196
10 Transcript PN1197
11 Transcript PN1201-1202
12 Transcript PN1190, PN1195-PN1202, PN1210,
13 Transcript PN1211, PN1314-PN1329
14 Transcript PN1314-PN1329
15 See Transcript PN1330
16 Fair Work Act 2009, s.591
17 [2012] FCA 406 at [28]-[37]
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