Van Efferen v CMA Corporation Limited
[2008] FMCA 875
•19 June 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| VAN EFFEREN v CMA CORPORATION LIMITED | [2008] FMCA 875 |
| INDUSTRIAL LAW – Breach of disputes procedure – penalty proceedings – interpretation of workplace agreement. PRACTICE & PROCEDURE – Transfer proceedings to Federal Court. |
| Workplace Relations Act 1996 (Cth) ss.824 Federal Magistrates Act 1999 (Cth) ss.39(1), 39(2), 39(3)(a)-(d) Federal Magistrates Court Rules 2001 (Cth) r.8.02(4)(a)-(f) |
| Genovese v BGC Construction Pty Ltd [2006] FMCA 1507 United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board [2006] FCAFC 84 BHP Billiton Ltd v Schultz (2004) 221 CLR 400 Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879 Paras v Public Service Body Head of the Department of Infrastructure (No.3) [2006] FCA 745 |
| Applicant: | PETER VAN EFFEREN |
| Respondent: | CMA CORPORATION LIMITED |
| File number: | MLG 1514 of 2007 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 19 June 2008 |
| Date of last submission: | 19 June 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 19 June 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr M. Felman |
| Solicitor for the Applicant: | Petersons Lawyers |
| Counsel for the Respondent: | Mr J.B. Saunders |
| Solicitor for the Respondent: | Sparke Helmore Lawyers |
ORDERS
Pursuant to section 39 of the Federal Magistrates Act 1999 and Rule 8.02 of the Federal Magistrates Court Rules 2001 proceedings number MLG 1514 of 2007 be transferred to the Federal Court of Australia.
There be no order as to the costs thrown away as a result of the transfer.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1514 of 2007
| PETER VAN EFFEREN |
Applicant
And
| CMA CORPORATION LIMITED |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
These reasons for decision are delivered orally. If written reasons are required the transcript will be ordered and amendments made to render these orally‑delivered reasons more amenable to being read.
These proceedings concern an application brought by Peter Van Efferen (“the applicant”) against CMA Corporation Ltd (“the respondent”) alleging breaches of the Workplace Relations Act 1996 (“the WR Act”) and claims in the accrued jurisdiction of the Court.
The application filed 7 November 2007 sought the following orders:
“1.Damages pursuant to section 719(5) and/or 721 of the WR Act (further particulars to be provided closer to trial.
2.Damages pursuant to breach of contract (further particulars to be provided closer to the trial).
3.Interests.
4.Any other order the Court sees fit.
Grounds of application
1.Breach of clause 2.10 of the CMA Corporation Limited Maintenance Supervisor Workplace Agreement 2006-2009 between the Applicant and the Respondent.
2.Breach by the Respondent of the contract of employment between the Applicant and the Respondent, specifically, the implied duty to accord the Applicant with procedural fairness and/or the implied duty of the Respondent to act fairly in relation to the Applicant.
3.See also the affidavit of the Applicant accompanying this Application.”
The proceedings were the subject of a directions hearing on
21 December 2007. There was a response filed on 29 January 2008 which sought that the application be dismissed.
The parties took it upon themselves to alter the directions for trial, which was due to begin today, 19 June 2008, without consulting the Court.
The parties have appeared today, the applicant was represented by
Mr Felman and Mr Saunders appeared for the respondent. The parties have handed to the Court a document which was marked as an aide memoire and purports to identify the ‘agreed issues’ which arise for determination in these proceedings. Those issues were:
“Breach of AWA
Issue 1 – Was clause 2.10 of the AWA breached?
Sub issues
(a)Was it mandatory for CMA to follow the steps in the grievance procedure if it had any concerns in relation to the Applicant’s behaviour?
(b)Did CMA have concerns in relation to the Applicant’s behaviour?
(c)Did CMA comply with the steps in the grievance procedure?
(d)Did the Applicant suffer any loss or damage as a consequence of CMA’s alleged breach of clause 2.10 of the AWA?
(e)Did the applicant mitigate any loss suffered by him?
Breach of Contract
Issue 2 – Did CMA breach the Applicant’s contract of employment?
Sub issues
(a)What is the relationship between the AWA and the Applicant’s alleged contract of employment?
(b)Do the asserted implied terms exist?
(c)If so, should the terms be implied into the Applicants contract?
(d)Have any of the alleged implied terms been breached?
(e)Did the applicant suffer any loss or damage as a consequence of CMA’s alleged breach of the implied terms?
(f)Did the applicant mitigate any loss suffered by him?”
Counsel for both parties agreed that many of the issues raised in these proceedings had not been the subject of a judicial determination before. In light of the assessment of Counsel that there were ‘novel’ issues of law raised in these proceedings, and having read the material that had been filed by the parties, the Court raised with Counsel whether the matter ought be transferred to the Federal Court.
Section 39 of the Federal Magistrates Act 1999 (“the FM Act”) provides that a proceeding may be transferred, either on the application of a party or on the initiative of the Court.
Transfer to Federal Court
The making of an order to transfer proceedings from this Court to the Federal Court is discretionary: s.39(1) and (2) of the FM Act. There are, however, factors which it is mandatory for the Court to take into account under s.39(3)(a)-(d) of the FM Act, which provide as follows:
(a)any Rules of Court made for the purposes of subsection 40(2); and
(b)whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c)whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.
Rule 8.02(4)(a)-(f) of the Federal Magistrates Court Rules 2001 (“the Rules”) provides for other factors to be considered as follows:
(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceedings is not transferred;
(c)whether the proceeding will be heard earlier in the Federal Magistrates Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e) the wishes of the parties;
(f)for family law or child support proceedings, whether the hearing of the proceeding is likely to take longer than
2 days.
Turning then to a consideration of those factors in the context of these proceedings.
Pending proceedings in an associated matter in the Federal Court
The Court was not advised and it is not suggested that there are pending proceedings in any associated matter in the Federal Court.
Sufficiency of resources of the Federal Magistrates Court to hear and determine the proceeding
Neither party suggested this Court did not have sufficient resources to hear and determine this matter however it had only been allocated 2 days.
Question of general importance
Given the issues identified above this is a significant factor in this matter. In Genovese v BGC Construction Pty Ltd [2006] FMCA 1507 at [13] Lucev FM said a question of general importance might arise where:
“(a)the issue to be determined is of general importance to the public at large or a significant class of persons or type or series of cases: MZXJR v The Minister for Immigration [2006] FMCA 652 at par [38] per McInnis FM;
(b)the case relates to the revenues of a Commonwealth or State: Noble v Cotton in Dowling, Proceedings of the Supreme Court, Vol 34 1 at p.10 per Dowling and Stephen JJ (and in that case relating to revenues of the then colony of New South Wales);
(c)significant human rights issues are at stake such as in Karner v Austria (2003) ECHR 395, where the European Court of Human Rights had to deal with differential treatment of homosexuals in succession to tenants under Austrian law as involving a question of general importance not just for Austria but for other state parties to the relevant convention;
(d)an issue as to the proper construction of legislation arises: Baumer v R (1988) 166 CLR 51;
(e)some important or exceptional point of principle arises: Veen v R (1979) 143 CLR 458 at p.461 per Stephen J, p.468 per Mason J and pp.497-498 per Aickin J;
(f)the particular area of law or the case law concerning that area is, "an area of some complexity": Spencer & Rutherford v Horizon Holidays & Ors [2006] FMCA 386 at par [7] per Connolly FM, or is a “substantial commercial dispute which involves a number of complex issues”: Spencer & Rutherford at par [10] per Connolly FM.”
The application as filed alleged breaches of the WR Act and sought penalties and other relief as a result. As such proceedings of that nature are for want of a better description part of the bread and butter of this Court's work.
The proceedings which have been brought seek to impose civil penalties upon the respondent arising out of the alleged breach of a workplace agreement.
Whilst at first blush penalty proceedings of this nature and claims brought in the accrued jurisdiction of the Court might not seem matters of general importance or sufficient complexity to warrant transfer to the Federal Court, the list of agreed issues that have been handed to the Court make clear that there are questions of general importance that in my view make it desirable that there be a decision of the Federal Court on one or more of the points in issue. These issues include:
a)whether a dispute settlement procedure in an Australian Workplace Agreement can be enforced;
b)whether damages for a breach of that dispute settlement procedure flow and if so how they would be calculated if there is found to be a breach;
c)how Australian Workplace Agreements containing such dispute settlement procedures interact with contracts of employment (at least insofar as there are said to be implied duties in the common law contract of employment).
The parties also told the Court that the principles set out by the Full Court of the Federal Court in United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board [2006] FCAFC 84 as to the construction of industrial instruments were not applicable to this workplace agreement and there was no authority on that point.
In my view given the above there are questions of general importance such as to make it desirable that there be a decision of the Federal Court on one or more of the issues that arise for determination in this matter and warrant its transfer to the Federal Court.
Costs and convenience of hearing a determination
I note that in support of his client's opposition to the transfer of the proceedings Mr Saunders submitted the respondent will be put to considerable cost and inconvenience but did not quantify that cost.
He relies on that submission such as it is in relation to a foreshadowed application for costs to which I will return. I note that there were no submissions made in relation to this particular factor by Mr Felman on behalf of the applicant. However, I think it is self evident that if the matter was heard here it would be heard at less cost to his client.
With the hearing of the matter due to start today I do not consider that a transfer to the Federal Court will be less costly and more convenient to the parties.
Earlier hearing of proceedings
The issue of transfer was raised as Mr Saunders said in submissions, on the first day that the matter was listed for trial. However, the preparation of this matter for trial was as the Court raised with Counsel less than ideal. There are of course reasons which may go towards explaining that but, as I made clear earlier, today was the first occasion that the Court had to raise with Counsel the issue of the questions that arise for determination in this matter formally. The parties had as
I mentioned earlier taken it upon themselves to push back and change the timetable for trial. No doubt this was with the view, amongst other things, to try and resolve the matter as is part and parcel of preparation for any litigation but they have not it appears turned their minds to identifying the agreed issues set out above before today.
The matter is listed for trial today in this Court and there is no prospect of this matter being heard earlier in the Federal Court.
Availability of particular procedures appropriate for the class of proceedings
Given the largely concurrent jurisdiction of the Federal Court of Australia and the Federal Magistrates of Australia in relation to matters under the WR Act this point does not have any force in relation to whether the proceedings ought be transferred save for the absence of authority on the issues set out above.
Wishes of the parties
The applicant has indicated to the Court that it wishes the proceedings to be transferred. The respondent opposes the matter being transferred.
The interests of the administration of justice
In BHP Billiton Ltd v Schultz (2004) 221 CLR 400 (“Schultz”) the High Court considered the nature of the “interests of justice”: Gleeson CJ, McHugh and Heydon JJ CLR at [421] said:
The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so, the interests of the respective parties, which might in some respects be common (as, for example, cost and efficiency), and in other respects conflicting, will arise for consideration. The justice referred to in s.5 is not disembodied, or divorced from practical reality.
Some of the factors ordinarily considered when assessing the interests of justice are factors which the Court would take into account under the FM Act and the Rules and involve management by the Court of the proceedings that are pending. I have had regard to the factors cited in Schultz.
It is obviously in the interests of the administration of justice that applications be heard as soon as possible. That could be achieved by these proceedings remaining in this Court. I also note that the matter has been listed for some time and that save for the factors identified above there would be no good reason for it to be transferred.
Finally, in respect of the interests of the administration of justice I note that the issue of transfer was raised at the Court’s initiative in light of the issues that the parties agreed arose for determination, the absence of any authority on those issues and that the applicant waited some time after his employment ended to commence the proceedings.
There appears to be no urgency to this matter and the applicant did not suggest otherwise.
Conclusion
As was acknowledged by the parties many of the questions in this case involve determination for the first time of issues in the WR Act which is said to be of considerable complexity. The parties identified in the aide-memoire that has been provided to the Court today the ‘novel’ issues that will arise for determination. In my view there are a number of those issues that make it desirable there be a decision of the Federal Court on those issues. I am cognisant that the factors the Court is required to consider under the Rules in relation to this issue are not all one-way but a significant factor, indeed the determinative factor in my view in relation to this matter, is that there are questions of general importance such as to warrant the matter being transferred.
I interpolate here and note that if the view of the Federal Court is different the matter may well be transferred back.
However, I conclude having considered all of the factors that the Court should order a transfer of these proceedings to the Federal Court.
Costs
The respondent seeks its costs thrown away as a result of the transfer and relies on section 824(2) of the WR Act. I note for completeness the Court was not told what the costs were.
In civil proceedings, costs usually follow the event. Costs in proceedings (other than proceedings in relation to termination of employment) under the WR Act are governed by section 824 which provides:
“(1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceeding unless the first‑mentioned party instituted the proceeding vexatiously or without reasonable cause.
(2) Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first‑mentioned party to pay some or all of those costs.
(3) In subsections (1) and (2):
"costs" includes all legal and professional costs and disbursements and expenses of witnesses.”
Whilst this provision could be described as, a provision that precludes costs as will be seen from the above, section 824 of the WR Act does give the Court power to award costs in certain circumstances.
The respondent contends that there were acts or omissions by the applicant that were unreasonable within the meaning of section 824(2) of the WR Act. The respondent’s position was the applicant knew the proceedings would raise difficult issues which had not previously been determined and should have commenced these proceedings in the Federal Court. Mr Saunders in support of that application submitted that although the applicant did not ask that the proceedings be transferred he ought to bear some blame for the costs Mr Saunders said his client would incur as a result of the matter being transferred.
The applicant’s position was there was no unreasonable act or omission on his part and there should be no order as to costs. The applicant noted he did not seek the transfer to the Federal Court but when asked, at the Court’s request on the first day of the trial, what were his wishes indicated the matter should be transferred.
In Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879 Tracey J said in relation to the section of the WR Act presently under consideration:
“28.Section 824(2) is cast more widely. It applies if a party "has, by an unreasonable act or omission, caused another party to the proceeding to incur costs ...". A party may potentially be liable to pay costs under this sub-section even if it did not institute the proceeding in which the relevant conduct occurred. That conduct may be an act or an omission. The liability may arise, as Young J noted in Paras (at 538 [16]), "irrespective of the outcome of the particular application in question and of the proceeding as a whole.”
In Paras v Public Service Body Head of the Department of Infrastructure (No.3) [2006] FCA 745 Young J considered the application of these provisions in the context of an application for costs including costs of interlocutory proceedings. In doing so His Honour reviewed the background to section 824(2) of the WR Act and said:
“5.Subsection (1) of s 824 was based upon an earlier provision in s 347(1) of the WRA: see the Explanatory Memorandum to the Workplace Relations Amendment (Work Choices) Bill 2005 (Cth). It appears that subs (2) of s 824 was based upon the provision now found in s 666(1) of the WRA.
…
7.As to the scope of s 824(1), the respondents submitted that the exception it makes for proceedings instituted vexatiously or without reasonable cause only has application to the originating application, and not to interlocutory applications made by the respondents in the course of the principal action.
8. The respondents also contended that s 824(2) does not apply to the costs of a particular aspect of the proceedings, such as an unsuccessful motion to discharge or stay an earlier interlocutory order. They submitted that subs (2) is only concerned with acts or omissions in the practical sense of things done or omitted to be done which do not accord with reasonable notions of the conduct of proceedings, such as failing to turn up at a hearing, failing to meet deadlines laid down in court directions and not giving timely notice.
This submission was said to be supported by an illustrative example given in the Explanatory Memorandum.
9. In my opinion, these submissions do not accord with the authorities.”
His Honour then went on to consider the provisions of section 824(1) in the light of the authorities and said of the provisions in section 824(2) that:
“17. The illustrative example given in the Explanatory Memorandum concerns costs incurred as a result of a party’s non-compliance with Court directions. The example is consistent with the construction I have placed on s 842(2). But I do not accept that the illustrative example was intended to be exhaustive of the type of circumstances in which s 824(2) would apply.
…”
I am satisfied it is possible for the Court to award costs as a result of an unreasonable act or omission by another party at a stage in the proceedings.
However, the Court’s power to award costs is discretionary and the use of the word ‘may’ in the provision of section 824(2) makes that much clear. The omission or act relied on here by the respondent in support of its application for costs was that the applicant should have commenced proceedings in the Federal Court. In weighing that submission I have considered that proceedings might be commenced in a Court which, by reason of its simplicity of procedures, speed and the reasonableness of its costs, would be considered the most appropriate but that at a later stage, when the issues are properly joined it becomes clear that the decision was incorrect.
On what is before me and given the issue of the transfer of these proceedings was raised at the Court’s initiative, the parties agree the proceedings raise ‘novel’ issues and having regard to the policy behind the cost exclusionary provision in s.824 I am not satisfied it is appropriate to award costs in the particular circumstances of this matter.
It follows that here should be no order as to costs.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Associate: Rachelle Lombardo
Date: 19 June 2008
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