General Manager of Fair Work Commission v Australian Nursing and Midwifery Federation
[2017] FCA 195
•3 March 2017
FEDERAL COURT OF AUSTRALIA
General Manager of Fair Work Commission v Australian Nursing and Midwifery Federation [2017] FCA 195
File number: WAD 470 of 2015 Judge: GILMOUR J Date of judgment: 3 March 2017 Catchwords: PRACTICE AND PROCEDURE – liability and penalties – Federal Court Rules 2011 (Cth) r 30.01 – whether the question of penalties for one respondent that has accepted liability should be heard before the determination of liability for another respondent where there is alleged co-contravention by those respondents Legislation: Fair Work (Registered Organisations) Act 2009 (Cth) ss 253, 265, 266, 285
Federal Court Rules 2011 (Cth) rr 1.31, 1.32, 30.01
Date of hearing: Determined on the papers Date of last Submissions: 22 December 2016 Registry: Western Australia Division: General Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 31 Counsel for the Applicant: Mr J Fetter Solicitor for the Applicant: Clayton Utz Counsel for the First Respondent: Mr E White Counsel for the Second Respondent: Ms B Burke ORDERS
WAD 470 of 2015 BETWEEN: GENERAL MANAGER OF FAIR WORK COMMISSION
Applicant
AND: AUSTRALIAN NURSING AND MIDWIFERY FEDERATION
First Respondent
MARK OLSEN
Second Respondent
JUDGE:
GILMOUR J
DATE OF ORDER:
3 MARCH 2017
THE COURT ORDERS THAT:
1.The hearing to determine any penalties which may be imposed upon the first and second respondents respectively be deferred until after the conclusion of the liability hearing in the case concerning the second respondent.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GILMOUR J:
It was ordered by McKerracher J on 8 December 2016 that the timing of the hearings to determine any penalties which might be imposed upon the respondents be determined on the papers.
The parties have each filed written submissions.
The first respondent has admitted liability for the contraventions of the Fair Work (Registered Organisations) Act 2009 (Cth) (the Act) alleged by the applicant.
The applicant contends that the Court should determine the liability of the second respondent before determining what penalties, if any, are to be imposed on each of the respondents. The first respondent makes the same submission.
However, the second respondent seeks an order, under r 30.01 of the Federal Court Rules 2011 (Cth) (the Rules), that the trial as to his liability be deferred until after the disposition of the hearing on penalty in relation to the first respondent.
The Court may make any order that it considers appropriate in the interests of justice (r 1.32 of the Rules) and, in doing so, may have regard to the nature and complexity of the proceeding (r 1.31 of the Rules).
I do not propose to make the order for the following reasons.
The second respondent submits that the contraventions for which liability has been accepted by the first respondent are different to those alleged against him. Whilst that is correct it ignores the reality that the contraventions alleged as against both respondents emerge from broadly the same underlying factual matrix as the following summary of the proceedings makes clear. Having regard to this, I do not consider it appropriate to make the order sought by the second respondent.
The proceedings
The applicant has brought civil penalty proceedings against the first respondent for breaches of sections 253, 265 and 266 of the Act. The breaches alleged are that the first respondent failed to prepare relevant financial reports (s 253); failed to provide relevant financial reports to members (s 265); and failed to present relevant financial reports to a general meeting of members (s 266) in respect of the financial years 2009/10, 2010/11 and 2011/12.
The obligation to prepare, provide and present the relevant financial reports lay with the Western Australian branch (WA Branch) of the first respondent, of which the second respondent is secretary.
Further, by operation of the first respondent’s rules, the second respondent was directly and personally responsible for the preparation of returns required under the Act.
The applicant has brought civil penalty proceedings against the second respondent for alleged breaches of s 285 of the Act. It is alleged that he failed to exercise his powers or discharge his duties with the requisite degree of care and diligence in respect of the preparation of the financial reports for the financial years 2009/10, 2010/11 and 2011/12.
The first respondent has admitted the allegations against it.
The second respondent denies the breaches alleged against the first respondent and the breaches alleged against him.
The second respondent asserts, inter alia, that the failure to prepare, provide and present reports in the required times alleged by the applicant were not by reason of any failure on his part to exercise the requisite degree of care and diligence but by reason of a “devastating problem”.
The first respondent is liable for actions of its WA Branch and, having regard to the allegations and admissions in paragraphs 8 and 13 of the Statement of Claim and respective Defences, for the actions of the second respondent.
The second respondent submits that having accepted liability for the contraventions alleged against it, all that remains so far as concerns the first respondent is the determination of a penalty, if any. He submits that the first respondent has no further role to play with respect to the issue of his liability or any penalty proceeding, and need not involve itself any further in the case against him. Rather, he submits, the first respondent’s matter is concluded other than as to any penalty.
This misconceives the task which the Court confronts or may confront in the event that liability is established against the second respondent and penalty considerations then arise.
As the applicant correctly submits, findings of fact about the circumstances which led to the WA Branch contravening its reporting obligations will be relevant to the Court’s consideration of the quantum of any penalty to be imposed on the first respondent in respect of its admitted contraventions.
Relevant surrounding circumstances which are the subject of the second respondent’s defence assert an explanation for the timing of the preparation, provision and presentation of the financial reports.
The first respondent submits that if the Court finds that the second respondent was negligent in the discharge of his duties, the first respondent may contend that this mitigates any penalty to be imposed on it.
Alternatively, the first respondent submits, and I accept, that it may want to show that it (through the acts of the second respondent) was not a deliberate contravener, but rather an accidental or negligent contravener.
If I were to accede to the second respondent’s submissions, this would involve the first respondent having to establish in its penalty hearing, before the second respondent's liability has been determined, relevant acts and omissions by the second respondent.
This prospect would give rise to a number of fundamental difficulties as the first respondent submits. First, it would be highly inefficient: there would be duplication of evidence as to the second respondent’s conduct, in separate hearings. Second, it would give rise to the potential for making conflicting findings of fact about the same controversies. Third, it would effectively require the first respondent, rather than the applicant, to run a trial examining the conduct of the second respondent. That would, unusually, involve the first respondent calling the second respondent as a witness in its case where, as asserted at least by the second respondent, there is hostility and long standing acrimony between them. Fourth, it would require the first respondent to bear the financial and forensic burden of litigating the case relating to the second respondent, even though it is not the moving party in the litigation.
I am satisfied that these inefficiencies and risks can be avoided by the Court determining the liability of all parties before considering the question of what, if any, penalties are to be imposed on each of them.
Asserted acrimony
As I mentioned, the second respondent submits that there is a long standing acrimony between the first respondent and himself.
These allegations were the subject of affidavit evidence of Michael Clancy sworn 15 December 2016. No leave was given, or sought, to file this material. In any event its assertions are very generalised and, for present purposes are of little assistance.
If the penalty hearing against the first respondent has not been dealt with before the trial in relation to liability for the second respondent, it is the second respondent’s concern that this asserted acrimony will become a time consuming and unnecessary focus of the trial and have the potential to shift the emphasis away from the issues in question but instead to the broader amplification of first respondent’s internal acrimony.
Further, he submits that notwithstanding the first respondent’s admission of liability with respect to the allegations put against it, he anticipates that the attitude of the first respondent to him will be critical and he is concerned that the first respondent will adopt the role of a second prosecutor in the proceedings.
I reject these submissions. First, the risk of acrimony between the respondents affecting the conduct of the proceeding is a risk which arises whether or not the penalty hearing in respect of the first respondent has been dealt with before the trial of the second respondent’s liability. Second, the presence of acrimony involving litigants is hardly novel. The admission of evidence of such will be a matter for the Court as will the conduct of the trial where acrimony might attempt to disrupt it.
Orders
There will be an order that the hearing to determine any penalties which may be imposed upon the first and second respondents respectively will be deferred until after the conclusion of the liability hearing in the case concerning the second respondent.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate:
Dated: 3 March 2017
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