Rowe v National Union of Workers

[1998] FCA 1806

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - pleadings - leave to rely on amended application and statement of clainl - prejudice to respondents on the basis that the amendment made after the filing of the respondents' evidence - application for separate hearing to take evidence notwithstanding outstanding constitutional challenge to statutory provision on which case penalty based

INDUSTRIAL LAW - proceedings for a civil penalty - appropriateness of requirement to file defence and evidence

Workplace Relations Act 1996 (Cth) ss 298B, D, H, K, L, P, T, U and V

Federal Court Rules 0 l1 r 15((1), 0 13 r 2(1), 3(1)

Sorby v Commonwealth [l9831 152 CLR 281

Pyneboard Pty Ltd v Trade Practices Commission [l9831 152 CLR 328

Reid v Howard [l9951 184 CLR 1

Bridal Fashions Pty Ltd v Comptroller-General ofCustoms [l9961 135 FLR 100

ALAN ROWE, THE EMPLOYMENT ADVOCATE v THE NATIONAL UNION OF

WORKERS & ANOR

NG 867 of 1997

EINFELD J

SYDNEY

18 SEPTEMBER 1998

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 867 of 1997

BETWEEN:

ALAN ROWE, THE EMPLOYMENT ADVOCATE

APPLICANT

AND:

THE NATIONAL UNION OF WORKERS

FIRST RESPONDENT

PETER ANDREW HEARNE

SECOND RESPONDENT

JUDGE:	EINPELD J
DATE OF ORDER:	18 SEPTEMBER 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS:

1. that while reserving the right of the respondents to argue at or after the hearing of the applicant's evidence that they are irrevocably prejudiced by such reliance, the respondents' motion of 13 August 1998 that the applicant be refused leave to file and rely on his proposed amended application and statement of claim be refused

2. that the first respondent's application to amend its motion of 13 August 1998 to seek rescission of the order that it file a defence to the applicant's claim be dismissed

3. that the first respondent file an amended defence to the applicant's amended statement of claim within 7 days of today without prejudice to its right to resurrect and reagitate its opposition to the amended application and statement of claim as preserved in order 1

4. that the second respondent's application to amend his motion of 13 August 1998 to seek rescission of the order of 22 July 1998 that he file a defence be granted

5 . that the order of 22 July 1998 that the second respondent file a defence to the amended statement of claim be rescinded

6 . that the applicant's application for a separate hearing of the evidence in the case be refused

7. that the substantive proceedings be stood over for further directions on 17 December 1998 to await the decision of Justice Cooper on the constitutionality of section 298B(2)

8. that each party pay his and its own costs

Note:

Settlement and entry of orders is dealt with in Order 36 of the Federal Court

Rules.

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 867 of 1997

BETWEEN:

ALAN ROWE, THE EMPLOYMENT ADVOCATE

APPLICANT

AND:

THE NATIONAL UNION OF WORKERS

FIRST RESPONDENT

PETER ANDREW HEARNE

SECOND RESPONDENT

JUDGE:	EINFELD J
DATE:	18 SEPTEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

These proceedings were commenced by the Employment Advocate (the Advocate) by application and statement of claim filed on 20 October 1997 seeking orders that the first respondent (the Union) and its officer, the second respondent (Hearne), pay a civil penalty pursuant to section 298U(a) of the Workplace Relations Act 1996 (Cth) (the Act). The application was stated to be brought under sections 298B, D, H, K, L, P, T and U of the Act. The claim is said to arise from what was said in a short telephone conversation between Hearne and the manager of an employer company at about 8.30 am on 31 January 1997, some nine months before the application was filed. It is alleged that in the course of the conversation Hearne advised, encouraged or incited the company "to carry out conduct that would, if taken, have contravened section 298K of the Act in that it would have injured [an employee of the company] in his employment and would have been taken for a prohibited reason within the meaning of section 298L(2)(b) of the Act".

At the first directions hearing on 6 November 1997, the Advocate stated that the five affidavits already filed represented his evidence in the case and sought an early hearing. The

matter was stood over to allow the respondents to consider the issues. At a later directions

hearing on l l December 1997, the respondents were directed to file their evidence by 23

December and the case was fixed for hearing on 31 March 1998. Written submissions were ordered, the Advocate to file his by 27 February, and the respondents to file theirs by 13 March. No order was sought for the filing of any defences. In the event, the respondents' evidence was not filed until February 1998 although it was made available in unsworn form somewhat earlier.

Around 13 March 1998, the Advocate filed and served an amended application and statement of claim, together with additional affidavits. No consent or orders to be permitted to do so were sought or given but, as the Advocate now explains, leave to amend was to be sought at the hearing on 31 March. However, that hearing was vacated when the respondents notified the Court of their intention to launch a challenge to the constitutionality of section 298B(2) and 298V of the Act. As a consequence, the Advocate now says, no leave to amend was sought or given. On 22 July, after argument pressed by the Advocate with no mention of or reference to any application for leave to amend, the respondents were ordered to file a defence to the original statement of claim. Then, by motion filed in Court on 13 August 1998, opposed by the Advocate, the respondents sought that leave be refused to the Advocate to rely upon the amended pleadings. On the same day, the Union filed a defence to the original statement of claim pursuant to the order given on 22 July. Heame has not complied with the direction. For a reason that will emerge, the Union seeks to amend its motion to add a request that so much of that order as was directed towards it be rescinded.

Order 13 rule 2(1) of the Federal Court Rules permits the Court to give leave to amend any document filed in proceedings. If the document is a pleading and the amendment is within any time limits and apparently raises justiciable matters within the Court's jurisdiction, leave to amend will normally be granted, albeit sometimes on conditions including as to costs, unless irreparable prejudice will be caused to the other party. Rule 3(1) allows a party one amendment before the close of pleadings without consent or leave and one more amendment before the close of pleadings without leave but by consent. By Order 11 rule 15(1), pleadings will without any Court order to the contrary ordinarily close upon the expiry of the time fixed for the last pleading in the case. The Union's desire to amend its motion to seek rescission of the order for the filing of its defence is designed to deny to the Advocate a possible argument that leave to amend is not necessary because the pleadings had not closed. However, while saying that this matter is arguable, the Advocate in substance -accepts the need for leave and says that an order to that effect is "clearly appropriate". Thus although this matter comes to

the Court in the odd way of a motion that leave be refused when leave has not, at least formally, previously been sought, I propose to consider the arguments on the substantive question as to whether leave to amend should be granted.

Although the respondents grumble about the Advocate's motives in originally and thereafter trying to rush the case on for hearing, I think it is common ground that there is no mala fides by the Advocate in his desire to amend. The Advocate argues, apparently correctly, that he could withdraw the present application and commence a new proceeding on the proposed amended pleading. He claims that no prejudice has been alleged or proved. He contends that the amended pleadings were available to the respondents for months before their motion to refuse leave was filed, and do not allege a different cause of action but merely expand on or more fully particularise the original cause of action and provide more detail of one aspect of the case to "relate it more clearly to the language of the legislation".

The respondents complain that although neither edition of the application mentions section 298V of the Act, and the original statement of claim does not mention it, the new statement of claim now "effectively pleads" it. This change, the respondents say, "poses quite fundamental prejudice" to them. As I understand it, the prejudice alleged is that this proposed amendment, viz to rely on section 298V, was determined only after the Advocate had received the respondents' evidence, and comprised a new cause of action fashioned to take account of that evidence. The respondents argued that had this amendment been sought on 3 1 March 1998 when the matter was to be heard, it would have been opposed because the Advocate had, by seeking and obtaining an order that the respondents file their evidence, lured the respondents into a course of action which they would otherwise have strenuously resisted. The respondents argue that this situation creates a fundamental unfairness if the amendment is permitted. No particularisation of the suggested prejudice was put forward.

The same opprobrium is excited by another of the Advocate's proposed changes from a claim that the allegedly offending telephone call contravened subsection (2)@) of section 298L to one that now seeks to rely on subsection (I)@) of that section. The Advocate says that this was a typographical error as appears from paragraphs 8 and 9 of the original statement of claim and the particulars provided of them but the respondents say that whether typographical or not, it bespeaks a major change to the allegation originally made.

I have carefully considered the original and the proposed pleadings and the arguments advanced on the issues raised under the rubric of the respondents' motion. At this stage of the case when final decisions on the facts, and therefore of the irrevocability of any prejudice to the respondents, cannot possibly be made, I am unable to see any reason for refusing the amendments proposed. That is not to say that at a later stage when evidence is being or has been taken which particularises it, something will arise to support or require the acceptance of the respondents' statement that reliance on the original statement of claim as representing the Advocate's intended position "induced the respondents to alter their position and to take a legal position which in all likelihood would have been very different" if the respondents had known of an intention to amend. I therefore propose to fashion an order that will permit later review if the circumstances so require.

Hearne also seeks to amend his motion of 13 August 1998 to claim rescission of the order made on 22 July 1998 for the filing of his defence. The reasoning for the rescission is that persons facing a civil penalty should be protected against exposure to the penalty by being required to, as it was variously put, disclose information, file evidence or produce documents. There is significant authority, which it is not now necessary to comprehensively review, that parties in the position of Heame should not be compelled to provide material to the other party on which liability for the penalty might in some way be based or proved. One rationale for this viewpoint was synthesised by the High Court in Reid v Howard [l 9951 184 CLR 1 at 14:

. . . . it would be anomalous to allow that a person could r e f s e to answer

questions in criminal proceedings or before investigative bodies where the privilege has not been abrogated if that person could be compelled to answer interrogatories or otherwise make disclosure with respect to the same matter in civilproceedings.

This argument, said elsewhere by three Justices of the High Court to be "deeply ingrained in the common law" (Sorby v Commonwealth [l9831 152 CLR 281 at 309) and a ''fundamental bulwark of liberty" (Pyneboard Pty Ltd v Trade Practices Commission [l9831 152 CLR 328 at 340), is obviously strong, although none of these authorities or others which I have read relate to defences in a civil penalty case. The one exception is Bridal Fashions Pty Ltd v Comptroller-General of Customs [l9961 135 FLR 100, involving section 255 of the Customs Act 1901 (Cth) which is quite similar to section 298V of the Workplace Relations Act 1996, where a Full Court of the Supreme Court of Western Australia upheld an order that a natural

person file a defence in a civil penalty case.

The matter obviously raises important issues of principle. In this case, however, the Union's defence reveals very little about its case in reply to the Advocate's assertions such that if this case were a commercial one, I would order a new particularised defence stating what the defence case is actually intended to be. In the light of the authorities, this case does not represent a suitable vehicle for such an order although I do not propose to accede to the Union's request to allow it to be withdrawn. In fact the Union will have to file an amended defence to the amended statement of claim. Without an order for particularisation, it can be anticipated that insisting on a defence by Hearne would produce no more helpful a definition of the issues to be contested in the litigation than the Union's defence. In general, I cannot see how the filing of an unverified defence could provide evidence on which a civil penalty might be based, but in case the full particularisation of the actual defence might do so in this case, there is no point in making the initial order. I will permit the amendment to the respondents' motion sought by Hearne and rescind the order of 22 July 1998 that he file a defence.

There is one more question to be considered in these initial skirmishes. ABer the adjournment of this matter on 3 1 March 1998 for the purpose of permitting a constitutional challenge to two sections of the Act of which at the time reliance was to be placed upon only one, it was discovered that a challenge to one of those sections (s298B(2)) had also been launched in a case in the Queensland Registry of the Court and was about to be heard by Justice Cooper. After some efforts to try to bring about a joint hearing of the two cases or a reference of both to a Full Court, neither of which initiatives was successful, the respondents withdrew their challenge to the constitutionality of the other provision (s298V). Presumably, at least in part, this step was taken to permit resistance to the proposed amended pleading where this section was first raised. I then decided that a second single Judge decision on the constitutionality of section 298B(2) was an inappropriate and inefficient use of scarce Court resources but that if Justice Cooper's decision was appealed, as could be anticipated, I would refer the constitutional challenge in this case to the same Full Court. I raised with the parties whether the case could be progressed in the meantime by hearing the evidence and invited submissions.

The Advocate has asked that the matter be set down for the hearing of the evidence. He says

that the proceedings against Heame are not, and that the proceedings against the Union may not be, dependent on the validity of section 298B(2). He argues that the memories of key witnesses will be adversely affected by delay, including delay caused by appeals to a Full Court of this Court and the High Court, such as possibly to prejudice his case.

The respondents oppose the separate hearing of evidence. They say that their evidence will be affected by the Advocate's case which will in turn be affected by the constitutional validity of section 298B(2). They argue that this proceeding is one matter with two respondents and that depending on what evidence is brought, they may need to be separately represented.

It is difficult for me to judge these submissions. These statutory provisions have not previously been authoritatively examined by an Australian court so their scope and extent have yet to be defined. There are some practical problems to an early hearing in that the Court is unable to provide early dates for the taking of evidence due to its hearing workload. In that respect, a case commenced nine months after the essentially simple facts on which it is based is not able to be given any particular consideration in terms of priority or expedition. In addition, two hearings in one case will generally be a luxury the Court cannot indulge any longer. Moreover, the Court's experience is that hiving off aspects of a case for separate hearing rarely results in a saving of time and expense and tends to do the opposite. Even if a hearing could be given late in 1998, the memories of witnesses will already be virtually 2 years old and are hardly likely to be fresh. With the possible delay between any such hearing and the judgment, the chances are that any appeal from Justice Cooper's judgment will overlap with the progress of this case such that a reference to the same Full Court of the constitutional point will become an artificial step clashing with any appeal from the other aspects of the case. It is not appropriate that I cause such a situation to occur.

The orders I make in this case are:

1. that while reserving the right of the respondents to argue at or after the hearing of the applicant's evidence that they are irrevocably prejudiced by such reliance, the respondents' motion of 13 August 1998 that the applicant be refused leave to file and rely on his proposed amended application and statement of claim be refused

2. that the first respondent's application to amend its motion of 13 August 1998 to seek

rescission of the order that it file a defence to the applicant's claim be dismissed

3. that the first respondent file an amended defence to the applicant's amended statement of claim within 7 days of today without prejudice to its right to resurrect and reagitate its opposition to the amended application and statement of claim as preserved in order 1

4. that the second respondent's application to amend his motion of 13 August 1998 to seek rescission of the order of 22 July 1998 that he file a defence be granted

5. that the order of 22 July 1998 that the second respondent file a defence to the amended statement of claim be rescinded

6 . that the applicant's application for a separate hearing of the evidence in the case be refused

7. that the substantive proceedings be stood over for further directions on 17 December 1998 to await the decision of Justice Cooper on the constitutionality of section 298B(2)

8. that each party pay his and its own costs

I certify that this and the preceding

six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Einfeld

Associate: ,hkzL-

Dated: 18 September 1998

Counsel for the Applicant:	Mr J. Trew QC and Mr S. Lloyd
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Mr W. Haylen QC
Solicitor for the Respondent:	Ryan Carlisle Thomas
Written submissions completed:	31 August 1998
Date of Judgment:	18 September 1998