Hadgkiss v Aldin (No 2)

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FEDERAL COURT OF AUSTRALIA

Hadgkiss v Aldin (No 2) [2007] FCA 2069

INDUSTRIAL LAW – breaches of s 38 Building and Construction Industry Improvement Act 2005 (Cth) by unlawful industrial action – breaches of order made under s 127 (pre-reform) Workplace Relations Act 1996 (Cth) by unlawful industrial action – penalties suspended in part – whether declarations should be made by reference to deemed admissions.

Building and Construction Industry Improvement Act 2005 (Cth), s 38
Workplace Relations Act 1996 (Cth), s 127

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146 discussed
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 applied
Bank of Kuwait and the Middle East v The Ship MV “Mawashi Al Gasseem” (No 2) [2007] FCA 815 applied
British American Tobacco Australasia Limited v The Person Identified by the Australian Customs Service as “Gory Sabar” [2007] FCA 1417 referred to
Hadgkiss v Aldin [2007] FCA 2068 referred to
Macquarie Bank Ltd v Seagle (2005) 146 FCR 400 cited
Wu v Avin Operations Pty Ltd [2006] FCA 36 cited

NIGEL HADGKISS v GORDON WILLIAM ALDIN
WAD 185 OF 2006

GILMOUR J
20 DECEMBER 2007
PERTH


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 185 OF 2006

BETWEEN:

NIGEL HADGKISS
Applicant

AND:

GORDON WILLIAM ALDIN
Respondent

JUDGE:

GILMOUR J

DATE OF ORDER:

20 DECEMBER 2007

WHERE MADE:

PERTH

UPON THE ADMISSIONS WHICH THE 2nd, 3rd, 83rd AND 92nd RESPONDENTS ARE DEEMED TO HAVE MADE CONSEQUENT UPON THEIR NON-COMPLIANCE WITH ORDERS OF THE COURT IT IS DECLARED THAT:

1.Between 24 February 2006 and 3 March 2006 (the Period), the 2nd, 3rd, 83rd and 92nd respondents contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) by engaging in unlawful industrial action (being failure to attend for building work) on 24, 25, 27, 28 February 2006, 1, 2 and 3 March 2006, in relation to the construction of the New Metro Rail City Project – Package F section of the Perth to Mandurah railway project.

2.During the Period, the 2nd and 3rd respondents breached clause 4 of the order made on 6 December 2005 under s 127 of the Workplace Relations Act 1996 (Cth) by Commissioner Gregor of the Australian Industrial Relations Commission (the s 127 order) which required them to immediately stop, and not engage in or threaten to engage in industrial action, when on the 24, 25, 27, 28 February 2006, 1, 2 and 3 March 2006 they engaged in industrial action during the construction of the New Metro Rail City Project – Package F section of the Perth to Mandurah railway project.

AND THE COURT FURTHER ORDERS THAT:

3.Subject to Order 4, a penalty in the amount of $9000 be imposed on each of the 2nd, 3rd, 85th and 95th respondents for contravening s 38 of the Building and Construction Industry Improvement Act 2005

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Details
Case
[2007] FCA 2069
Decision Date

CaseChat Overview and Summary

The case of Hadgkiss v Aldin (No 2) was heard in the Federal Court of Australia and involved a dispute over unlawful industrial actions and subsequent penalties imposed under the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) and the Work Choices (Commonwealth Powers) Act 2005 (WR Act). The applicant, Hadgkiss, sought various orders against four respondents who were alleged to have engaged in unlawful industrial action and breached a specific industrial action order issued by the Australian Industrial Relations Commission. The court was tasked with determining whether these respondents were liable for the penalties and declarations sought by the applicant.

The central legal issues revolved around whether the respondents were indeed in default for failing to file a defence and whether the court had the discretion to enter judgment against them without providing further notice of the hearing, particularly since two of the respondents had not received personal notification of the hearing. The court also had to consider the principles surrounding the waiver of rights by defaulters and the implications of such waivers in proceedings under Order 35A of the Federal Court Rules.

In delivering the judgment, the court acknowledged the general reluctance to permit a party to obtain orders without proper notice. However, it found that the respondents, having been served with the originating process and subsequently defaulting in their obligations, had effectively waived their rights to be notified of the hearing. The court relied on the principle that defaulters who do not take required steps after service of the originating process consent to judgment based on the facts alleged in the statement of claim. This principle was reinforced by the decision in British American Tobacco Australasia Limited v The Person Identified by the Australian Customs Service as “Gory Sabar” where similar circumstances were encountered.

Based on the findings and legal considerations, the court granted the orders sought by the applicant, including declarations, pecuniary penalties, and costs against the respondents. The court concluded that it was just to enter judgment in default against the respondents who had failed to file a defence or appear before the court, despite not having personally notified them of the hearing.

Orders

Orders of the court

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Background

Background to the litigation

I have earlier delivered judgment in relation to all of the other respondents in these proceedings: Hadgkiss v Aldin [2007] FCA 2068. The reasons for judgment here should be read together with those other reasons for judgment, which provide the relevant background, both factually and legally, to the disposition of the two motions before the Court. BACKGROUND AND NATURE OF ORDERS SOUGHT The Notices of Motion seek orders pursuant to Order 35A of the Federal Court Rules. The Notices of Motion are in respect of Robert Peter Alivojvodic, Bruce James Allsopp, Brett Harold Andrews and Alex Ian Cromb, respectively the second, third, eighty-third and ninety-second respondents (“the defaulters”). I have had the benefit of very detailed and helpful written submissions from which I have drawn, in compiling these reasons. Orders of the following kind are sought against the defaulters:(a)a declaration that each of the four defaulters engaged in unlawful industrial action in contravention of s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) during the period 24 February 2006 to 3 March 2006 inclusive (the Period); (b)an order imposing a pecuniary penalty on each of the four defaulters pursuant to s 49(1)(a) of the BCII Act for engaging in unlawful industrial action during the Period; (c)an order suspending part of the pecuniary penalty in each case pursuant to the general power under s49(1)(c) of the BCII Act; (d)an order pursuant to s 49(5) of the BCII Act that the pecuniary penalties imposed be paid to the Commonwealth;and in respect of each of the second and third respondents:(e)a declaration that each of the second and third respondents breached the order made by the Australian Industrial Relations Commission on 6 December 2005 known as the New Metro Rail City Project Leighton Kumagai Joint Venture Industrial Action Order December 2005 (s 127 Order) by engaging in industrial action during the Period(f)an order imposing pecuniary penalties on the second and third respondents under s 178 of the WR Act for breach of the s 127 Order during the Period;(g)an order pursuant to s 356 of the WR Act that the penalty imposed on the second and third respondents be paid to the Commonwealth;and in respect of each of the four defaulters:(h)an order that each of the respondents pay the applicant’s costs in the sum of $5,000, in respect of costs of the Notice of Motion for default judgment against each of them. The applicant relies on the following affidavits:(a) affidavit of Marcus Thomas Clarke sworn 13 November 2007; (b) two affidavits of Joseph Smeets each sworn 9 November 2007; (c) affidavit of Ian Fraser sworn 24 October 2007; (d) affidavit of Joseph Smeets sworn 14 February 2007. (e) affidavit of Mark Williams sworn 28 February 2007; and (f) affidavit of Jason Sparrowhawk sworn 14 February 2007.I have had regard to these in making the following findings of fact in respect of each of the respondents. FINDINGS OF FACT The second respondent:(a)on 5 July 2006 the second respondent was served personally with the Originating Process in the application, including the Statement of Claim. (b)the time for the second respondent to file a defence has expired and the second respondent has failed to file a defence;(c)on 17 February 2007 the second respondent was personally served with the Notice of Motion for orders in default and supporting affidavit; and(d)on 4 October 2007 the second respondent was served with a letter of the applicant’s solicitors informing him that the applicant’s application for default judgment would be heard by the Court on 14 November 2007, by leaving a true copy of that letter with a woman who identified herself to be the grandmother of the second respondent.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GILMOUR J
The Statement of Claim, in the case of each of these respondents, pleads all the material facts sufficient to establish the breaches of s 38 of the BCII Act and breach of the s 127 order under the WR Act and thereby rendering them liable to the imposition of penalties under s 49(1)(a) of the BCII Act and s 178 of the WR Act respectively. The pleaded facts also sustain the making of relevant declarations. WHETHER NEED FOR NOTIFICATION OF HEARING OF DEFAULT JUDGMENT The eighty-third and ninety-second respondents may not have been aware of the hearing on 14 November 2007 (albeit that, in the case of the eighty-second respondent, he has been personally served with the Notice of Motion for orders in default and affidavit in support). Although it is still open to the applicant to move for default judgment in the circumstances (these two defaulters having been served with the initiating process and being relevantly in default) an issue does arise as to whether, in the Court’s discretion, it is just to enter judgment in default. The applicant acknowledges the general reluctance of courts to permit a party to obtain orders in circumstances where notice of the application for those orders had not been given to the other parties affected. However it is submitted by the applicant that the position is different in relation to defaulters. As a matter of principle, where it can be shown that a party has been served with the originating process, and if that party thereafter declines to take any of the steps required as a result of such service (such as entering an appearance, filing a defence or attending at directions hearings), the party may (and often ought) be regarded as having waived his or her rights and as having, in effect, consented to judgment on the basis of the facts alleged in the statement of claim. Indeed, if it is not possible to proceed against a defaulter under O 35A unless notice of the hearing has been given, that would enable a defaulter to avoid judgment if he or she could avoid being personally served with notice of the application for orders under O 35A, notwithstanding the clear default in complying with standard procedural steps or orders of the court. In British American Tobacco Australasia Limited v The Person Identified by the Australian Customs Service as “Gory Sabar” [2007] FCA 1417, an application was made for judgment under Order 35A. It appears that this application may have been made by a notice of motion, which was made returnable instanter, and Stone J made orders ‘pursuant to Order 19 rule 2(2)(d) that service of this Notice of Motion be dispensed with’. These orders were made despite the fact that neither of the respondents had filed a notice of appearance, or had appeared before the Court at any stage. Stone J went on to find that the respondents were in default under O 35A r 2(2)(a) and 2(2)(c), and proceeded to enter judgment against them, notwithstanding that there was no evidence that they were aware of the hearing seeking default judgment. Notice of that hearing had not been personally served, as Order 19, r 4 would have required, if not dispensed with.

Ratio Decidendi

Legal Principle Established

Established by: GILMOUR J

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