LCR Group Pty Ltd

[2016] FWC 7298

[2016] FWC 7298

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

LCR Group Pty Ltd
(AG2016/4316)

LCR GROUP PTY LTD MOBILE CRANE ENTERPRISE AGREEMENT 2011 (ACN: 095 626 798)

Building, metal and civil construction industries
COMMISSIONER HUNT	BRISBANE, 25 OCTOBER 2016

Application for termination of the LCR Group Pty Ltd Mobile Crane Enterprise Agreement 2011 –where applicant discontinued application of same or similar nature after decision reserved - s.587 application to dismiss made – whether further application is an abuse of process and/or vexatious.

[1] On 19 August 2016, LCR Group Pty Ltd (LCR) applied, pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the LCR Group Pty Ltd Mobile Crane Enterprise Agreement 2011 (the Agreement). The Agreement has passed its nominal expiry date.

[2] The Construction, Forestry, Mining and Energy Union (CFMEU) is an employee organisation that is covered by the Agreement.

[3] On 22 August 2016, the CFMEU filed an application pursuant to s.587 of the Act to dismiss the application. In the alternative, the CFMEU seeks orders pursuant to ss.589 or 590 of the Act to limit the evidence in the matter.

[4] Both parties filed material in relation to the CFMEU’s application and agreed that the matter should be dealt with on the papers. This decision deals only with the CFMEU’s application(s).

Background

[5] On 18 May 2016, LCR made an application pursuant to s.225 of the Act to terminate the Agreement in matter AG2016/3212 (Original Application). The proceedings were subject to a contested hearing before me on 30 June 2016.

[6] LCR was represented by a paid agent, Ms Theresa Moltoni of IRIQ. The CFMEU was represented by Mr Ashley Borg, Senior Industrial Officer of the CFMEU.

[7] During the proceedings relating to the Original Application, the CFMEU objected to the application to terminate the Agreement. Witness statements were tendered by both LCR and the CFMEU. Cross-examination of witnesses occurred and oral submissions were made on the day of the hearing.

[8] At the conclusion of the proceedings, the parties were advised that the decision in the Original Application was reserved.

[9] On 18 August 2016, prior to any decision in the matter being handed down, LCR filed a Form F50 – Notice of Discontinuance in relation to the Original Application. In the accompanying covering letter, LCR stated:

‘Please find attached Notice of Discontinuance in respect of this application. It is our intention to file a separate application and statutory declaration in respect of this same agreement shortly.

The reasoning behind the decision to discontinue this application and to a file a separate application is as follows:

1. The Applicant is of the view that it was greatly prejudiced by the CFMEU serving a substantial affidavit (that of Mr Sean Desmond) on the Applicant immediately prior to the hearing of this application on 30 June 2016. Accordingly, the Applicant was unable to properly consider Mr Desmond’s affidavit and make appropriate submissions and call relevant evidence in respect of the matters contained in it.

2. Since the date of the hearing, the decision of Project Coordination (Australia) Pty Ltd [2016] FWCA 5465 (5 August 2016) has been handed down. This case, and the matters therein, are very relevant to the Applicant in this present matter and therefore this decision has the potential to substantially change the initial submissions made by the Applicant in this application. The Applicant wishes to make submissions and call evidence in relation to relevant points raised in this decision.

We sincerely apologise to the Commission for any inconvenience caused and/or time wasted but we believe this course of action to be in the best interests of our client having regard to all of the circumstances of this matter. We have served a copy of this document and this email on the CFMEU.’

[10] On 19 August 2016, LCR made another application pursuant to s.225 of the Act to terminate the Agreement in AG2016/4316 (Current Application).

The CFMEU’s Application

[11] The CFMEU, in its s.587 application to dismiss the Current Application, contended that the grounds of the Current Application are not materially different from those LCR asserted in the Original Application, and that nothing significant arises from the decision in Project Coordination. 1

[12] In its application, the CFMEU stated:

‘The [Current Application] involves an improper use of the Commission’s processes. It is antithetical to the administration of justice by the Commission for a party to be able to run its case and then decide, many weeks after the Commission’s decision is reserved, to discontinue its application for some perceived forensic advantage and start again. Such conduct involves wastage of the Commission’s time, resources at the expense of other litigants and, significantly, vexation and unfairness to the opposing party who will have to respond to the same application and run the same hearing again.’

[13] The CFMEU contend that the Current Application is vexatious and/or an abuse of process. It involves the improper use of the processes of the Commission, is manifestly unfair to the CFMEU and will bring the administration of justice into disrepute should it be allowed to continue.

[14] The CFMEU seeks in the alternative that LCR ought not to be allowed to run a different case to that it did run in the Original Application. To that effect, the CFMEU seeks, should the Commission decline to dismiss the CFMEU application:

1. An order pursuant to section ss.589 and/or 590 of the Act that LCR be limited to leading the evidence it led in proceedings in the Original Application.

2. Further, or in the alternate, an order pursuant to ss.589 and/or 590 of the Act that the evidence in these proceedings be limited to the evidence adduced in the Original Application.

Summary of LCR’s Submissions

[15] LCR submitted that the Act does not prohibit the filing of one or more subsequent applications for termination of the same enterprise agreement.

[16] LCR further submitted if the Original Application had proceeded to full determination by the Commission, and if the Commission had determined not to terminate the Agreement, it would have been open to LCR to make one or more subsequent applications for termination of the Agreement to the Commission in circumstances where:

(i) There had been a significant development at law – namely, the delivery of the decision in the matter of Project Coordination (Australia) Pty Ltd [2016] FWCA 5465; and

(ii) There had been a significant development in relation to a relevant deeming provision that has been rescinded by the Minister for Employment, Senator Michaela Cash requiring that the Fair Work Building and Construction (FWBC) assess all Agreements made on or from 18 May 2016 against the Building Code 2013.

[17] LCR contended that in the period between the hearing of the Original Application (30 June 2016), and the date of withdrawal of it (18 August 2016), LCR formed the view that the most appropriate course was for the Original Application to be withdrawn, and for the Current Application to be filed.

[18] LCR argued it expeditiously withdrew the Original Application once it became apparent that further relevant matters ought to be agitated before the Commission. It so acted to avoid the Commission spending further time on the writing of a decision, which would likely be subject to appeal or further Application, given the material change in circumstances in the period between the hearing and the withdrawal of the Original Application.

[19] In relation to the witness statement of Mr Desmond, LCR conceded that Ms Moltoni did not formally object to the tendering of the witness statement but did evidence reservations about the impact of the late notice of such substantial evidence on LCR. 2

[20] LCR stated that the Current Application ismaterially different to the Original Application as it contains further arguments concerning:

(i) Productivity issues;
(ii) Issues relating to Building Code 2013 compliance; and
(iii) Matters arising out of the Project Coordination (Australia) Pty Ltd [2016] FWCA 5465 decision (a decision of Commissioner Johns made on 5 August 2016).

[21] LCR stated that the decision to file the Current Application is not an abuse of process and that a course of conduct is specifically contemplated by the Form 50 Notice of Discontinuance in an application which provides that a matter can be discontinued on the basis of filing a separate application. There is nothing in the Act which states that the separate application cannot contemplate matters also covered in the previous discontinued application. As has been submitted above, there is no restriction, on the face of the Act, or otherwise, upon an applicant for termination of an enterprise agreement under s.225 of the Act making one or more subsequent applications for termination of an agreement.

[22] With respect to s.587 of the Act, LCR submitted that the Current Application cannot be said to be vexatious and/or frivolous or to have no reasonable prospects of success and therefore ought not be dismissed. Instead, it should proceed to hearing and determination.

Summary of the CFMEU’s Submissions

Abuse of process

[23] The CFMEU submitted that s.587 of the Act reposes a broad discretionary power in the Commission to dismiss an application. The power is not limited to the circumstances set out in s.587(1)(a)-(c). 3 It extends to circumstances where an applicant's conduct of proceedings amounts to an abuse of process.4 The concept of abuse of process is a broad one that has been said to be insusceptible of precise definition.5 It was elucidated by Gaudron J in Ridgeway v R (1995) 184 CLR 19 at 74-75 as follows:

‘The powers to prevent an abuse of process have traditionally been seen as including a power to stay proceedings instituted for an improper purpose, as well as proceedings that are "frivolous, vexatious or oppressive". This notwithstanding, there is no very precise notion of what is vexatious or oppressive or what otherwise constitutes an abuse of process. Indeed, the courts have resisted, and even warned against, laying down hard and fast definitions in that regard. That is necessarily so. Abuse of process cannot be restricted to "defined and closed categories" because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account process" is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose and it is clear that it extends to proceedings that are "seriously and unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble and harassment.’

[24] The CFMEU further submitted that The High Court also observed in Batistatos v Roads and Traffic Authority of New South Wales that:

‘... in Rogers v R, McHugh J observed:

Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute.

His Honour added:

Many, perhaps the majority of: cases of abuse of procedure arise from the institution of proceedings. But any procedural step in the course of proceedings that have been properly instituted is capable of being an abuse of the court's process.

To that it should be added that the power to deal with procedural abuse extends to the exclusion of particular issues which are frivolous and vexatious. Further, the failure to take, as well as the taking of, procedural steps and other delay in the conduct of proceedings are capable of constituting an abuse of the process of the court.’  6

[25] The CFMEU contended that that an applicant who takes the procedural step of discontinuing a matter after judgment is reserved and then recommences the same matter may, in the circumstances, commit an abuse of process. The re-instigated matter will likely unjustifiably oppress, prejudice and burden the CFMEU because the CFMEU will be compelled to defend the same case again. In short, LCR’s conduct will be productive of injustice to the CFMEU.

[26] The CFMEU furthered its submission that the re-instigated proceedings will bring the administration of justice into disrepute as LCR will waste the Commission's resources and time, which could be devoted to dealing with the innumerable other matters currently before the Commission brought by other litigants (and that have not already been run to hearing). Importantly, such conduct is intrinsically improper as it involves the inappropriate use of the Commission's processes to secure litigious advantages for LCR, by LCR attempting to redress deficiencies in the conduct of its case by avoiding judgment being delivered and running its case again. Such conduct necessarily diminishes public confidence in the administration of justice. There is a public interest in the efficient use of court's and the Commission's resources. 7 An applicant, who runs a case, discontinues it after judgment is reserved, and then attempts to rerun it by using the device of a notice of discontinuance acts antithetically to this public interest.

[27] It is argued that the assertion of prejudice caused by evidence led by the CFMEU in the Original Application is specious given LCR was represented by Ms Moltoni, an experienced advocate, and who made no mention of any such prejudice when the CFMEU led its evidence at the 30 June 2016 hearing. Ms Moltoni did not object to any of the CFMEU's evidence, and in fact cross-examined the CFMEU's witness. It was incumbent on Ms Moltoni to inform the Commission if LCR was actually prejudiced and to seek an adjournment to either prepare her cross-examination or lead evidence in response.

[28] The CFMEU submitted that it is also specious for LCR to assert that a decision of the Commission issued after the hearing of 30 June 2016 provides a sound basis for discontinuing an application and then re-commencing the same application. If LCR thought that the decision in Project Coordination was of salience to its case, it ought to have contacted Commissioner Hunt's chambers and either drawn the Commission's attention to the decision, or requested the Commission relist the matter for further argument on a convenient date (after first notifying the CFMEU of this). This is what is mandated by Solicitor's and Barrister's professional conduct rules. It is what ordinarily happens when an authority has (by oversight or otherwise) not been referred to by a party during submissions and comes to light after judgment is reserved.

The alleged changed circumstances

[29] The CFMEU submitted that LCR has not set out why the decision in Project Coordination constituted a ‘significant development in the law’ or what, if any, submissions it would have raised had the decision been handed down before the 30 June 2016 hearing and that LCR’s assertion in this regard is baseless.

[30] The CFMEU submitted that LCR disingenuously relies on what it says was a significant development in respect of the Building Code 2013 whereby the relevant Federal Minister directed that effective 18 May 2016, all agreements were to be assessed by the Office of the Fair Work Building Industry Inspectorate (FWBC). The hearing of the Original Application occurred on 30 June 2016 and the Minister’s edict had been in operation for over a month when the matter was run.

[31] The CFMEU submitted that LCR has also failed to lead any evidence about any of the matters said to constitute changed circumstances and the prejudice it supposedly suffered at the Original Hearing and its submissions in these respects should be rejected.

Vexatious proceeding

[32] The CFMEU argue in the alternate that the Current Application is vexatious for the purposes of s.587(1)(b) of the Act and that whether an application is vexatious turns on the predominant motive of an applicant in instituting the application being to harass or embarrass the other party, or gain a collateral advantage. 8 An applicant's motive can be inferred from the surrounding circumstances, including the applicant's conduct.9

[33] The CFMEU argued that the inevitable result of LCR’s actions in the present matter, which it must have been aware of when it discontinued the Original Application and commenced the current proceedings, would be to compel the CFMEU to deal with and run the same case again. It is therefore an irresistible inference that LCR’s motive in reinstituting the proceedings was to harass or vex the CFMEU. In the circumstances, the application is vexatious for the purposes of s 587(1)(b) and the Commission ought dismiss it.

Alternate application

[34] In the event the Commission is not moved to dismiss the application, it is submitted by the CFMEU that the Commission ought make a procedural ruling under s.589 of the Act and/or exercise its power under s.590(1) to inform itself in such a manner it considers appropriate by limiting LCR to the evidence that was led in the Original Application. It is submitted that this will deal (to some extent) with the irregular and improper conduct of LCR in discontinuing its case after judgment was reserved and then re-starting it. It will also mean that public confidence in the administration of justice by the Commission will not be diminished as significantly and will result in less prejudice and injustice being occasioned to the CFMEU.

Consideration

[35] Section 587 of the Act, under which the CFMEU applies, provides as follows:

‘587 Dismissing applications

(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:

(a) the application is not made in accordance with this Act; or

(b) the application is frivolous or vexatious; or

(c) the application has no reasonable prospects of success.

Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.

(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:

(a) is frivolous or vexatious; or

(b) has no reasonable prospects of success.

(3) The FWC may dismiss an application:

(a) on its own initiative; or

(b) on application.’

[36] Having reserved a decision in relation to the Original Application, if LCR had contacted my Chambers with concerns relevant to the decision of Johns C in Project Coordination, I would have sought the views of the CFMEU and, if necessary, directed the parties to address the Commission on the impact of that decision on the Original Application.

[37] It is customary and appropriate that if a party to proceedings forms the view that a subsequent decision of the Commission or an authoritative court might assist a party and the Commission in its determination, it should contact the Commission and any other parties to the proceedings, and seek the views of the Commission on being heard on this issue.

[38] For representatives who are legal practitioners, the onus is even greater. That is, if an authoritative decision comes to a legal practitioner’s attention that is adverse to the party it is representing, there is an obligation to bring this to the Commission’s attention.

[39] I note that Ms Moltoni on behalf of LCR is not a solicitor. She is, however, an experienced industrial relations advocate, and should have corresponded with my Chambers on the issue, copying in the CFMEU, and awaiting my views on the issue.

[40] Instead, the Original Application was withdrawn, and the Current Application made.

[41] During the hearing of the Original Application, Ms Moltoni did protest to some degree the very late evidence of Mr Desmond. The following was said:

‘MS MOLTONI: I understand from very brief conversation here with my friend earlier, that Mr Borg intends to put on - from what I could see - quite a significant witness statement, of which I've not been made aware of.  He also intends to bring forward a witness for cross-examination.  My client would not be in a position to be able to deal with that and further, it may be necessary that given that my client has sworn the statutory declaration of evidence in the application for termination that I may need to also call her as a witness.  She will obviously be unable to cross-examine herself.’ 10

‘I understand that I can't lead evidence from the bar, but I do say the statement that was provided to us this afternoon was a surprise.  It wasn't something that we had time to prepare for and, in particular, the issues in regard to claims about how the south-west agreement was made.  If it's necessary to seek an adjournment to bring further evidence on that matter, if this is a matter that is going to affect the outcome of the decision, then I would ask that to be the case.’ 11

[42] I am satisfied that during the hearing of the Original Application, LCR was somewhat disadvantaged by not being appraised of Mr Desmond’s evidence earlier than the hearing, but did not press for an adjournment. As a skilled practitioner, Ms Moltoni cross-examined Mr Desmond.

[43] Following the evidentiary case for LCR, Ms Moltoni sought to include in oral submissions statements relevant to the impact that the Building Code 2013 might have on LCR, and the impact it might have if the Commission did not terminate the Agreement. The following exchange occurred:

THE COMMISSIONER:  I've been satisfied up until that last sentence that everything was in reply.  I'm not sure where you're going with that, Ms Moltoni.

MS MOLTONI:  Commissioner, the statutory declaration was made - I think it was 12 May, by Ms Micairain.  On 18 May, a decision was released by the Minister for Workplace Relations.  That absolutely has an impact on the effect on the employer if this agreement is not terminated.

MR BORG:  I object to those submissions.  Firstly, they were not part of the content of Ms Micairain's statement.  What has occurred subsequently to the application and the statutory declaration being made is obviously irrelevant to today's proceedings.  In any event, I don't think there is anything before you, Commissioner, which would satisfy you that this agreement falls foul of any code or otherwise.

THE COMMISSIONER:  Ms Moltoni, you should have put it to me in your submissions in the first instance.  I don't think it's in reply.

MR BORG:  If I may also just make a further comment whilst I'm on my feet, just in relation to the comment from Ms Moltoni about any correspondence from LCR to any representative of the CFMEU.  Ms Moltoni had an opportunity to make objections in relation to the statement.  She did not.  That opportunity is foregone and all that you, Commissioner, can decide upon is the evidence that is before you and there is nothing in relation to that.

THE COMMISSIONER:  All right.

MS MOLTONI: The enterprise agreement is made between the employee and the employer. To suggest that there is a harm on a third party by terminating that agreement when the Fair Work Act in itself has provisions that provide for unions to access workplaces, for unions to represent employees, I believe - I would submit to you that it results in there not being a detriment suffered by the CFMEU because it has those rights under the Fair Work Act. They will continue to operate.

To suggest that undertakings should be given to the employer, those undertakings themselves would be in breach of the Building Code. I know that you have raised those issues, but you're asking for something for the future - - -

…

MR BORG:  The objection is that it is a misrepresentation of my submission to suggest that we were seeking from the employer undertakings.  Rather, what is relevant is that no undertakings have been provided and therefore there is nothing to allay your concerns about the detriment the termination will have on the union.  That was the extent of my submission, not that we seek undertakings whatsoever.

THE COMMISSIONER: All right. Continue on. In relation to the Building Code, I won't hear anything on that. You had an opportunity to introduce that into evidence. 12

[44] I am satisfied that LCR’s decision to withdraw the Original Application and subsequently lodge the Current Application was inappropriate in the circumstances. This is particularly so where there were other, more appropriate, options available to it. LCR failed to raise its desire to be heard on Project Coordination prior to its decision to discontinue the application. LCR’s failure in this regard was unreasonable, and in my view an irrational course of action.

[45] While there is criticism of LCR for the way it has conducted itself in these proceedings, it does not follow, and I am not satisfied that the appropriate response of the Commission is to dismiss the Current Application.

[46] I do not agree that LCR’s conduct in withdrawing the Original Application and commencing the current application is an abuse of process, or is vexatious. It is, more properly, an irrational course of action that I conclude has been followed out of naivety. I expect that as a result of the findings in this decision, LCR will be unlikely to follow the course of action it has in future applications.

[47] For the above reasons I will allow the Current Application to proceed on the following basis:

1. The evidence lead in the Original Application is to be admitted as evidence in the Current Application;

2. LCR may not address the Commission on any impact the Building Code 2013 might have on the Current Application as the evidence was not educed in the Original Application, where:

(a) LCR had opportunity to do so; and
(b) Minister Cash’s determination of 18 May 2016 pre-dated the Original Application hearing date of 30 June 2016.

3. New evidence in the Current Application is limited to the impact on LCR and the CFMEU, and any third parties relevant to the Project Coordination decision.

[48] I have made this determination in the interests of limiting to LCR what could have been addressed before me had LCR made communications to my Chambers when the decision of the Original Application was reserved and it became aware of the Project Coordination decision.

[49] In the interests of public confidence in the administration of justice, it would not be suitable to allow LCR in the Current Application to lead new evidence without limitation, and for which (with respect to the Building Code 2013), the Commission has already determined should not be re-run when LCR had in the Original Application an opportunity to put evidence before the Commission and did not do so.

[50] The CFMEU’s application to dismiss the Current Application is dismissed. The CFMEU’s alternative application to limit the material in the Current Application is granted.

[51] To give effect to my decision to exercise my discretion to limit the material in the Current Application, LCR is directed to file and serve the following material, within one week of the date of this decision:

(A) each document that was an exhibit or written submission in the proceedings of the Original Application;
(B) the transcript of the evidence and argument in the proceedings of the Original Application; and
(C) evidence and submissions in relation to Project Coordination and its application to the Current Application.

[52] The CFMEU is at liberty to assess the veracity of the material filed by LCR above and raise any concerns it has with the material within one week of the service of the material. The CFMEU may also provide evidence and submissions in reply on Project Coordination within one week of service from LCR.

COMMISSIONER

 1   [2016] FWCA 5465

 2   See PN15 and PN400 of the Original Application.

 3   Tomas v Symbion Health[2011] FWA 5458 at [57] and [59] (Gooley C); Steadman vThe South Australian Potato Company Pty Ltd[2011] FWA 1300 at [32]-[33] (Hampton C) (Steadman).

 4   Steadman at [33].

 5   Batistatos v Roads and Traffic Authority of New South Wales (2006) 227 ALR 425 at [9] (Gleeson CJ, Gummow, Hayne and Crennan JJ).

 6 [2006] HCA 27 at [15].

 7   Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [27] and [34] (French CJ) (Aon). See also Coco v Thuringowa Enterprise Centre Incorporated[2014] FWCFB 5648 at [43] where the Full Bench noted that the principles espoused in Aon were effectively incorporated into s 577 of the Act.

 8   Holland v Nude Pty Ltd (2012) 224 IR 16 at [7].

 9   E. Church v Eastern Health[2014] FWCFB 810 at [41).

 10   PN15 of the Original Application.

 11   PN400 of the Original Application.

 12   PN404 - PN416 of the Original Application.

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