Master Builders Australia Limited v Construction, Forestry, Maritime, Mining and Energy Union
[2019] FWCFB 649
•12 FEBRUARY 2019
| [2019] FWCFB 649 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Australian Mines and Metals Association Inc; Master Builders Australia Limited
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2018/1245)
VICE PRESIDENT HATCHER | SYDNEY, 12 FEBRUARY 2019 |
Costs decision in appeal against decision [2018] FWC 1017 of Deputy President Gostencnik at Melbourne on 6 March 2018 in matter number D2017/5.
[1] On 8 March 2018 the Australian Mines and Metals Association Inc. and Master Builders Australia Limited (appellants) lodged an appeal, for which permission to appeal was required, against a decision issued by Deputy President Gostencnik on 6 March 2018 1 (first decision). The first decision concerned a proposed amalgamation between three registered organisations, namely the Maritime Union of Australia (MUA), the Textile Clothing and Footwear Union of Australia (TCFUA) and the Construction, Forestry, Mining and Energy Union (CFMEU). In the first decision, the Deputy President determined that he would cause a notice to be published fixing 27 March 2018 as the day upon which the amalgamation would take effect so that the MUA and the TCFUA were deregistered and the CFMEU became the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). An application for a stay of the first decision pending the hearing and determination of the appeal was also made by the appellants and denied on 16 March 2018 (stay decision)2. The appeal was heard on 9 April 2018 and in a decision issued on 22 June 20183 (appeal decision) we determined to grant permission to appeal and dismissed the appeal. The Australian Mines and Metals Association Inc. subsequently made an application to the Federal Court of Australia for judicial review of the appeal decision as well as the first decision, but that application was dismissed in a Full Court decision issued on 14 December 20184 (Full Court decision).
[2] After the appeal decision was issued, the CFMMEU on 5 July 2018 made an application for its costs in the appeal. By consent, the determination of that application was deferred pending the determination of the application for judicial review. The Full Court decision having been issued, we are now in a position to determine the costs application. We do so on the basis of written submissions filed by the CFMMEU on 3 August 2018.
[3] The application is made pursuant to s 611(2) of the Fair Work Act 2009 (FW Act). Section 611(1) establishes a general rule that parties in proceedings before the Commission must bear their own costs. Section 611(2) operates as an exception to this general rule and provides:
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause;
or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
[4] The relevant principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 5and may be summarised as follows:
• An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
• An application is not made without reasonable cause simply because the application did not succeed.
• Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether there was no substantial prospect of success.
• If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to characterise the application as having been made without reasonable cause.
• In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
• An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, or manifestly groundless, or discloses a case which the tribunal is satisfied cannot succeed.
[5] In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 6as follows (footnotes omitted):
“[10] The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ have been well traversed:
• ‘should have been reasonably apparent’ must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
• a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”
[6] The CFMMEU relied on both limbs s 611(2), submitting that the appellants appeal had no reasonable prospect of success and that the appeal was made without reasonable cause. Specifically it contended that:
● in light of the High Court decision in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate 7(Cth v FWBII), and the treatment and application of that authority in the first decision, it should have been reasonably apparent to the appellants that the appeal had no reasonable prospect of success and was untenable;
● the appellants made no suitable attempt to reconcile Cth v FWBII with their submission that civil penalty proceedings pending against the CFMEU at the time of the first decision were not to be regarded as civil proceedings for the purpose of s 73(2)(c) of the Fair Work (Registered Organisations) Act 2009 (RO Act), nor did they make any suitable attempt to explain why the treatment of Cth v FWBII in the first decision was erroneous; and
● the appellants were on notice of the comprehensive and detailed reasoning in the first decision but still chose to institute the appeal which on any objective view was “manifestly untenable”, and/or “groundless”, and/or “so lacking in substance as to be not reasonably arguable”.
[7] The issue dealt with in the first decision, the appeal decision and the Full Court decision concerned the proper construction of the expression “other than civil proceedings” in s 73(2)(c) of the RO Act. In respect of a proposed union amalgamation, s 73(2) requires the Commission to fix by notice a day on which the amalgamation takes effect, subject to satisfaction as to four preconditions. The condition in s 73(2)(c) is that “there are no proceedings (other than civil proceedings) pending against any of the existing organisations concerned in the amalgamation” (emphasis added) in relation to a number of specified matters. At the time of the first decision, there were proceedings for the imposition of civil penalties pending against the CFMEU. The appellants contended in the appeal (as well as at first instance and in the judicial review proceedings) that the civil penalty proceedings pending against the CFMEU did not fall within the “carve out” expression “other than civil proceedings” in s 73(2)(c), so that the condition was not satisfied and accordingly that the fixation of an amalgamation day in the first decision was in error.
[8] We do not accept the primary submission of the CFMMEU that the appeal was capable of determination, or was determined, on the basis that the High Court decision in Cth v FWBII necessarily precluded acceptance of the appellants’ contention. In the appeal decision we said (emphasis added):
“[37]The High Court decisions to which we have referred in our view leave no room for the conclusion that the pending proceedings are to be categorised other than as “civil proceedings”, as that expression is ordinarily understood. For the appellants to succeed, it would be necessary for them to demonstrate that this expression when used in the exclusion in s 73(2)(c) is to be assigned a special meaning by reason of its statutory context. In that connection, as earlier outlined, the appellants submitted that the context of the RO Act dictated that the expression “civil proceedings” in s 73(2)(c) was to be assigned a meaning which excluded civil penalty proceedings. However that submission rested primarily on four propositions that we consider to be unsustainable.”
[9] The consideration (and ultimate rejection) of the appellants’ case therefore required a detailed and complex analysis of the statutory purpose and context of s 73(2)(c), including its historical context, and not simply just the application of Cth v FWBII. In this connection it may be noted that a similar approach was taken in the Full Court decision, in that the Full Court said:
“The answer to the problem of statutory construction, in this case, lies in the identification of the relevant informing statutory policy of the relevant provision, divined from an examination of the contextual legislative history of industrial relations laws in Australia.” 8
[10] The arguments advanced by the appellants in that connection, although not accepted, were not unworthy of consideration. We note that in rejecting the appellants’ application for a stay, Vice President Hatcher found that the appeal was arguable with some reasonable prospects of success. 9 We also note that the appellants were successful in obtaining the grant of permission to appeal.
[11] For these reasons we are not satisfied that the appeal had no reasonable prospect of success or that it was made without reasonable cause. The statutory preconditions for the grant of costs in s 611 have not been met, and the CFMMEU’s costs application must accordingly be dismissed.
VICE PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR704538>
1 [2018] FWC 1017
2 [2018] FWC 1500
3 [2018] FWCFB 3710
4 [2018] FCAFC 223
5 [2014] FWCFB 810, 240 IR 377 at [23]-[33]
6 [2011] FWAFB 4014, 211 IR 374
7 [2015] HCA 46, 258 CLR 482
8 [2018] FCAFC 223 at [4]
9 [2018] FWC 1500 at [15]
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