Welsh v Allblend Holdings Pty Ltd (No. 2)
[2010] FMCA 377
•4 June 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WELSH v ALLBLEND HOLDINGS PTY LTD (No.2) | [2010] FMCA 377 |
| INDUSTRIAL LAW – Proceedings instituted in Fair Work Division – whether jurisdiction of Court to be exercised in both Fair Work Division and General Division – whether direction necessary from Chief Federal Magistrate allocating matter to Fair Work Division or General Division. COURTS AND TRIBUNALS – Federal Magistrates Court of Australia – jurisdiction – associated jurisdiction – incidental jurisdiction. WORDS AND PHRASES – “associated jurisdiction” – “incidental jurisdiction”. |
| Australian Human Rights Commission Act 1986 (Cth), s.46PO Conciliation and Arbitration Act 1904 (Cth), ss.110, 144(1) Corporations Act 2001 (Cth), s.1317H Fair Work Act 2009 (Cth), s.570 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch.2 Item 11(1); Sch.17 Items 6 and 12 Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 Federal Court of Australia Act 1976 (Cth), ss.13, 32 Federal Court Rules Federal Magistrates Act 1999 (Cth), ss.10A, 14, 18, 76, 77, 79 Federal Magistrates Court Rules 2001 (Cth), r.1.05(2) Trade Practices Act 1974 (Cth), ss.52, 53B Workplace Relations Act 1996 (Cth), ss.232, 661(2), 824 Workplace Relations Amendment (Work Choices) Act 2005 (Cth), Sch.1 |
| Attorney-General v R (1957) 95 CLR 529 Australian Communications and Media Authority v Mobile Gate Ltd a company incorporated in Hong Kong (No. 3) [2009] FCA 1154 Bailey v Krantz & Ors (1984) 55 ALR 345 DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 Henderson v Pioneer Homes Pty Ltd (1979) 38 FLR 460 Henderson v Pioneer Homes Pty Ltd (1979) 142 CLR 294 Jackson v Sterling Industries Ltd (1986) 69 ALR 92 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 Kennedy v Australasian Coal and Shale Employees Federation & Anor (1983) 78 FLR 252 Kennedy v Australasian Coal and Shale Employees Federation & Anor (No. 2) (1983) 74 FLR 241 Maddison v Qualtime Association Inc (2010) 113 ALD 390; [2010] FMCA 25 Meat and Allied Trades Federation of Australia v The Australasian Meat Industry Employees Union (1984) 2 FCR 419 Parsons v Martin (1984) 5 FCR 235 R v Kirby; Ex parte Boilermakers Society of Australia (1956) 94 CLR 254 Re Read (2007) 164 FCR 237; [2007] FCA 1985 Siminton v Australian Prudential Regulation Authority (2008) 249 ALR 413; [2008] HCA 44 Skipworth v State of Western Australia & Ors (No. 2) (2008) 218 FLR 16; [2008] FMCA 544 Stack v Coast Securities (No. 9) Pty Ltd (1983) 57 ALJR 731 VTAG v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 141 FCR 291; [2005] FCAFC 91 Welsh v Allblend Holdings Pty Ltd (No. 1) [2010] FMCA 281 Welsh v Allblend Holdings Pty Ltd (No. 3) [2010] FMCA 378 Zentai v O’Connor & Ors (2009) 263 ALR 511; [2009] FCA 1597 |
| Commonwealth of Australia, Senate, Parliamentary Debates, 16 November 1976 J Trew et al (Eds), Workplace Relations Australia, Vol.1 (Chatswood: LexisNexis Butterworths Australia, 2006) |
| Applicant: | PENELOPE JANE WELSH |
| Respondent: | ALLBLEND HOLDINGS PTY LTD |
| File Number: | PEG 176 of 2009 |
| Judgment of: | Lucev FM |
| Hearing date: | 2 February 2010 |
| Date of Last Submission: | 2 February 2010 |
| Delivered at: | Perth |
| Delivered on: | 4 June 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr M.W. Fatharly |
| Solicitors for the Applicant: | Kott Gunning |
| Counsel for the Respondent: | Mr D. Howlett |
| Solicitors for the Respondent: | Taylor Smart |
DECLARATION AND ORDER
The Court declares that the application:
(a)has been correctly instituted; and
(b)will continue to be heard, and be determined,
in the Fair Work Division of the Court.
The Court orders that there be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 176 of 2009
| PENELOPE JANE WELSH |
Applicant
And
| ALLBLEND HOLDINGS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
In Welsh v Allblend Holdings Pty Ltd[1] this Court granted an interim application by the respondent for leave to amend its response and defence and to institute a cross-claim against the applicant, Ms Welsh, and a new respondent, 2B Wizards Pty Ltd.[2]
[1] [2010] FMCA 281 (“Allblend Holdings (No. 1)”).
[2] “2B Wizards”.
Ms Welsh, made application for monies said to be payable at the time of her termination on account of:
a)annual leave accrued under s.232 of the Workplace Relations Act 1996 (Cth);[3] and
b)notice under s.661(2) of the WR Act,
which she alleged remained unpaid. Those proceedings were instituted in the Fair Work Division of this Court.[4] By the amended response and defence and the institution of the cross-claim the respondent, Allblend Holdings Pty Ltd,[5] seeks payment of sums of money or damages, and an accounting as constructive trustee against Ms Welsh and 2B Wizards, as well as an order for compensation against them under s.1317H of the Corporations Act 2001 (Cth).[6] Each of the claims by Allblend Holdings by way of its defence and cross-claim are claims which would not ordinarily fall directly within the jurisdiction of the Fair Work Division of this Court. They are claims which are within the jurisdiction of the Court by reason of its statutory associated jurisdiction.[7]
[3] “WR Act”.
[4] The WR Act was repealed on 1 July 2009. Pursuant to item 11(1) of schedule 2 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (“FW (Transitional) Act”) the WR Act continues to apply on and after 1 July 2009 in relation to conduct before 1 July 2009.
[5] “Allblend Holdings”.
[6] “Corporations Act”.
[7] Federal Magistrates Act 1999 (Cth), s.18 (“FM Act”); Allblend Holdings (No. 1) at paras.21-29 per Lucev FM.
In Allblend Holdings (No. 1) the Court indicated that it was still considering a discrete issue which had arisen in that matter, namely, whether it was necessary for a direction to be made by the Chief Federal Magistrate allocating this matter to either the Fair Work Division or the General Division of the Court,[8] it having been argued by Ms Welsh that the matters in the associated jurisdiction of the Court were matters within the General Division jurisdiction of the Court, and that therefore such a direction was required.[9] These Reasons for Judgment deal with the question of whether the direction is required.
[8] Allblend Holdings (No. 1) at para.74 per Lucev FM.
[9] FM Act, ss.10A(4) and (5).
Issue
The issue which arises in these proceedings is whether the claims made in the amended defence and cross-claim are:
a)within the Fair Work Division jurisdiction of this Court; or
b)incidental to matters within the Fair Work Division jurisdiction of this Court; or
c)within the General Division jurisdiction of this Court.
Provisions of the FM Act
Section 10A of the FM Act provides as follows:
(1) For the purpose of the organisation and conduct of the business of the Federal Magistrates Court, the Federal Magistrates Court comprises 2 Divisions:
(a) the General Division; and
(b) the Fair Work Division.
(2) Every proceeding in the Federal Magistrates Court must be instituted, heard and determined in a Division.
Fair Work Division
(3) The following jurisdiction of the Federal Magistrates Court is to be exercised in the Fair Work Division:
(a) jurisdiction that is required by any other Act to be exercised in the Fair Work Division;
(b) jurisdiction that is incidental to such jurisdiction.
Note: Under section 566 of the Fair Work Act 2009, jurisdiction is required to be exercised in the Fair Work Division of the Federal Magistrates Court in relation to matters arising under that Act.
General Division
(4) The following jurisdiction of the Federal Magistrates Court is to be exercised in the General Division:
(a) jurisdiction that is not required by any other Act to be exercised in the Fair Work Division;
b) jurisdiction that is incidental to such jurisdiction (including jurisdiction that is required by any other Act to be exercised in the Fair Work Division).
Jurisdiction that is required to be exercised in both Divisions
(5) If the Court's jurisdiction is required to be exercised in both Divisions in relation to particular proceedings or proceedings of a particular kind, the Chief Federal Magistrate may, at any time (whether before or after the proceedings are instituted), give a direction about the allocation to one or other Division of those proceedings or proceedings of that kind.
The second reading speech
The second reading speech dealing with the introduction of s.10A of the FM Act says little:
Institutional framework
....
The bill also amends the Federal Court Act 1976 and Federal Magistrates Court Act 1999 to create the Fair Work Divisions of the Federal Court of Australia and the Federal Magistrates Court of Australia.[10]
[10] Ms Gillard, Commonwealth of Australia, House of Representatives, Parliamentary Debates, 19 March 2009 at 3228.
The Explanatory Memorandum
The Explanatory Memorandum dealing with the introduction of s.10A of the FM Act provides as follows:
Item 12 – New section 10A
588.This item inserts new section 10A, and provides that the Federal Magistrates Court is to comprise two Divisions, a General Division and a Fair Work Division. Proceedings in the Court must be instituted, heard and determined in one of these Divisions.
589.New subsections (3) and (4) set out the jurisdiction of the Divisions.
590.The Fair Work Division will hear and determine matters that are required by another Act to be heard and determined in the Fair Work Division.
·For example, the FW Bill confers jurisdiction on the Federal Magistrates Court in relation to matters arising under the FW Bill, and generally requires this jurisdiction to be exercised in the Fair Work Division of that Court.
·Matters arising under this Bill, the WR Act as continued in operation by this Bill and the proposed Fair Work (Registered Organisations) Act 2009 are also required to be heard in the Fair Work Divisions (see item 21 of this Schedule).
591.The Fair Work Division can also exercise jurisdiction that is incidental to jurisdiction required to be exercised in the Fair Work Division. Conversely, the General Division will hear and determine all matters where jurisdiction is not required by another Act to be exercised in the Fair Work Division, and any jurisdiction that is incidental to that jurisdiction.
592.A single proceeding may give rise to various issues, some of which are required to be dealt with in the Fair Work Division, and some of which are required to be dealt with in the General Division. These issues must be dealt with together in one Division. New subsection 10A(5) gives the Chief Federal Magistrate the discretion to determine in which Division of the Court the proceeding will be instituted, heard and determined. In initially directing matters to a Division, the Chief Federal Magistrate shall have regard to the predominant issue or issues that are apparent at the time the matters are instituted.
593.The Chief Federal Magistrate’s directions under subsection 10A(5) may be specific as to the allocation of a particular proceeding, or general as to the allocation of proceedings of a particular kind.
594.The Chief Federal Magistrate may issue a direction at any time during the proceeding and may transfer proceedings between the Divisions to ensure that they are dealt with in the most appropriate way.[11]
[11] Commonwealth of Australia, House of Representatives, Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009, Explanatory Memorandum at 98-99.
Federal Magistrates Court Rules
Under the Federal Magistrates Court Rules 2001 (Cth)[12] there are no rules relevant to the issue of a direction under s.10A of the FM Act. However, the Court may apply the Federal Court Rules[13] if the FMC Rules “are insufficient or inappropriate”.[14] The question of whether there are any relevant provisions in the FC Rules is dealt with below.[15]
[12] “FMC Rules”.
[13] “FC Rules”.
[14] FMC Rules, r.1.05(2).
[15] See para.19 below.
Judgment of this Court
There are no relevant judgments of this Court in relation to s.10A of the FM Act.
Federal Court Act
The Federal Court of Australia Act 1976 (Cth)[16] contains a provision in similar terms (allowing for the difference between the two federal courts) to s.10A of the FM Act. Those provisions were inserted into the FC Act at the same time as s.10A was inserted into the FM Act.[17]
[16] “FC Act”.
[17] See FW (Transitional) Act, sch.17, items 6 and 12.
This is not the first occasion on which the industrial law jurisdiction of a federal court has been allocated to a single division of a federal court or to a single federal court. It is necessary to briefly sketch some historical background.
Prior to the delivery of the opinion of the Privy Council in Attorney-General v R[18] in 1957 there was a Court of Conciliation and Arbitration exercising both judicial and arbitral powers in relation to federal industrial matters. The Court of Conciliation and Arbitration:
a)determined future rights by arbitrating industrial disputes and making awards; and
b)exercised judicial power by determining breaches of awards and enforcing past rights.
[18] (1957) 95 CLR 529 (“Boilermakers”).
Fundamental structural change to the consideration and determination of federal industrial matters was wrought by Boilermakers in which the Privy Council upheld the High Court’s majority decision that the Court of Conciliation and Arbitration could not exercise both arbitral and judicial power, as it had traditionally done.[19] This was because of the constitutional division between Parliament, executive and the judiciary. Put shortly – judges could not arbitrate because the resulting form of an arbitrated award was a form of legislative instrument determining future rights, and not a judgment enforcing past rights.
[19] R v Kirby & Ors; Ex parte Boilermakers Society of Australia (1956) 94 CLR 254 (“Boilermakers–High Court”).
The effect of Boilermakers has been significant. Industrial arbitration (as it then was) was split into two branches, the judicial and the arbitral, which have endured.[20] The judicial branch deals with breaches of the law, such as breaches of awards, civil penalty provisions and interpretation of awards and other industrial instruments.
[20] The arbitral branch, to resolve disputes and make awards, was vested in the Commonwealth Conciliation and Arbitration Commission, subsequently the Australian Industrial Relations Commission, and now Fair Work Australia.
The Commonwealth Industrial Court was created in 1956 as a consequence of Boilermakers-High Court to deal with the judicial aspect of industrial matters, and became the Australian Industrial Court in 1973. The jurisdiction of the Australian Industrial Court was transferred to the Industrial Division of the Federal Court under the FC Act in 1976, and then to the Industrial Relations Court of Australia in 1993. The jurisdiction of the Industrial Relations Court was transferred to the Federal Court in 1996.[21] More recently, both the Federal Court and Federal Magistrates Court have been given concurrent jurisdiction in matters such as interpretation of awards and certified agreements, unlawful terminations, breaches of federal awards and certified agreements, and breaches of provisions relating to freedom of association, duress under Australian Workplace Agreements and industrial action.[22]
[21] J Trew et al (Eds), Workplace Relations Australia, Vol.1 (Chatswood: LexisNexis Butterworths Australia, 2006), para. 847.5 at 19,002-19,003.
[22] Workplace Relations Amendment (Work Choices) Act 2005 (Cth), Sch.1
The Industrial Division of the Federal Court referred to above was established at the time of the passing of the FC Act in 1976. The Federal Court was established with both a General and an Industrial Division. The purpose of creating the Industrial Division of the Federal Court was to “preserve” the “… special character of the industrial jurisdiction under the Conciliation and Arbitration Act1904”, and to exercise it in the Industrial Division of the Federal Court then established.[23]
[23] Mr Durack, Commonwealth of Australia, Senate, Parliamentary Debates, 16 November 1976 at 1954.
The splitting of the jurisdiction into separate divisions of the Federal Court was noted and explained in Henderson v Pioneer Homes Pty Ltd[24] as follows:
The Federal Court of Australia was created by the Federal Court of Australia Act 1976. It is a superior court of record and is a court of law and equity, s. 5. For the purpose of the organization and conduct of the business of the court, the court comprises two divisions, namely, the industrial division, and the general division. Jurisdiction that is required by any Act to be exercised in the industrial division and jurisdiction incidental to the existence of any such jurisdiction, is exercised in the industrial division and all other jurisdiction of the court is exercised in the general division, s. 13.[25]
[24] (1979) 38 FLR 460 (“Henderson”).
[25] Henderson at 481 per Northrop J. The actual decision in Henderson – a case involving the prosecution of an offence under the Trade Practices Act 1974 (Cth) (“TP Act”) – was reversed on appeal to the High Court: see Henderson v Pioneer Homes Pty Ltd (1979) 142 CLR 294, where the High Court in reversing the judgment of a majority of the Full Court of the Federal Court did not need to deal with the split between the Industrial and General Divisions of the Federal Court.
Section 13 of the FC Act as enacted in 1976 was in the following terms:
13. (1)For the purposes of the organization and conduct of the business of the Court, the Court comprises 2 Divisions, namely, the Industrial Division and the General Division, and every proceeding in the Court shall be instituted, heard and determined in one of those Divisions.
(2)Jurisdiction of the Court that is required by any Act to be exercised in the Industrial Division, and jurisdiction incidental to the exercise of any such jurisdiction, shall be exercised in the Industrial Division, and all other jurisdiction of the Court shall be exercised in the General Division.
(3)A Judge (including the Chief Judge) who is not attached to a Division of the Court may take part in the exercise of the jurisdiction of the Court in either Division but, subject to sub-section (4), a Judge who is attached to a Division of the Court shall take part in the exercise of the jurisdiction of the Court in that Division only.
(4)Where he considers that circumstances make it desirable to do so, the Chief Judge may, with the consent of the Judge concerned, arrange for a Judge who is attached to a Division of the Court to take part in the exercise of the jurisdiction of the Court in the other Division of the Court, and the Judge may take part in the exercise of that jurisdiction accordingly.
FC Rules
There are no FC Rules dealing with this issue.
Judgments of the Federal Court
There are no judgments of the Federal Court dealing with s.13 of the FC Act in its present form.
In relation to the earlier division between the General and Industrial Divisions of the Federal Court (prior to the establishment of the Industrial Relations Court) there again appear to be no cases dealing directly with s.13, or the split of jurisdiction between the two Divisions. There are however some judgments of the Federal Court dealing with the associated and accrued matters jurisdiction of the Federal Court in relation to cases in the Industrial Division, and those cases are examined below.[26]
[26] See paras.36-42 below.
Incidental jurisdiction
Does this Court have incidental jurisdiction?
In Skipworth v State of Western Australia & Ors (No. 2)[27] this Court, having reviewed relevant authorities,[28] concluded that:
The true position is therefore that this Court, like the Federal Court and the Family Court, has no inherent jurisdiction. There is an implied incidental power to make orders necessarily incidental to express powers. As with the Federal Court and the Family Court, this Court has implied incidental powers shaped by the relevant statutory provisions.[29]
[27] (2008) 218 FLR 16; [2008] FMCA 544 (“Skipworth (No. 2)”).
[28] Skipworth (No. 2) FLR at 24-27 per Lucev FM; FMCA at paras.29-33 per Lucev FM, citing DJL v Central Authority (2000) 201 CLR 226; [2000] HCA 17 (“DJL”); Parsons v Martin (1984) 5 FCR 235 (“Parsons”); VTAG v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 141 FCR 291; [2005] FCAFC 91 and Re Read (2007) 164 FCR 237; [2007] FCA 1985.
[29] Skipworth (No. 2) FLR at 27 per Lucev FM; FMCA at para.34 per Lucev FM. In Skipworth (No. 2) the Court went on to find that there was no basis for the operation of any implied incidental power to vary or set aside a costs order particularly where that order was part of final orders finalising the relevant litigation: see Skipworth (No. 2) FLR at 30 per Lucev FM; FMCA at para.52 per Lucev FM.
In Maddison v Qualtime Association Inc[30] this Court, having reviewed relevant authorities,[31] concluded that:
… like the Federal Court, the Federal Magistrates Court has, in addition to its expressly conferred jurisdiction, such implied jurisdiction as is incidental and necessary to the exercise of the jurisdiction otherwise conferred on it.[32]
[30] (2010) 113 ALD 390; [2010] FMCA 25 (“Maddison”).
[31] Maddison ALD at 391-393 per Wilson FM; FMCA at paras.5-11 per Wilson FM.
[32] Maddison ALD at 393 per Wilson FM; FMCA at para.12 per Wilson FM. It is not necessary to deal further with the Court’s rejection in Maddison of a submission that this Court does not have any inherent jurisdiction: Maddison ALD at 393 per Wilson FM; FMCA at para.12 per Wilson FM, other than to observe that it is inconsistent with superior court authority concerning the use of the phrase in connection with federal courts established by statute such as the Federal Court, the Family Court and this Court: see DJL CLR at 241 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; HCA at para.25 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ (“it would be inaccurate to use the term ‘inherent jurisdiction’ here [in relation to the Family Court] and the term should be avoided as an identification of the incidental and necessary power of a statutory court.”); Parsons at 241 per Bowen CJ, Northrop and Toohey JJ (“In view of the way in which the phrase ‘inherent jurisdiction’ is used in many of the cases, it seems advisable generally to avoid the use of it to refer to this incidental and necessary power of a statutory court.”); Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 623-624 per Deane J quoting with approval the statement by Bowen CJ in the judgment of the Full Court of the Federal Court under appeal where Bowen CJ said: “In relation to a statutory court such as the Federal Court it is wise to avoid the use of the words ‘inherent jurisdiction’. Nevertheless, a statutory court which is expressly given certain jurisdiction and powers must exercise that jurisdiction and those powers. In doing so it must be taken to be given by implication whatever jurisdictional powers may be necessary for the exercise of those expressly conferred”: Jackson v Sterling Industries Ltd (1986) 69 ALR 92 at 97 per Bowen CJ.
The Court therefore does have incidental jurisdiction to make orders necessarily incidental to express powers.
The questions which then arise are:
a)what type of orders incidental jurisdiction encompasses; and
b)whether incidental jurisdiction would encompass orders sought relating to the matters in issue in these proceedings.
Incidental jurisdiction – some examples
Incidental jurisdiction enables a federal court to deal with matters such as:
a)an application for the grant of bail as an incident of the exercise of the jurisdiction, in the High Court of Australia, to consider and determine an application for special leave to appeal to the High Court;[33]
b)an application for a stay of execution of orders of a Full Court of the Federal Court pending a special leave application to the High Court;[34]
c)the granting of a Mareva type order;[35]
d)an application to set aside a notice of discontinuance;[36] and
e)the grant of bail in extradition proceedings.[37]
[33] Siminton v Australian Prudential Regulation Authority (2008) 249 ALR 413; [2008] HCA 44 (“Siminton”).
[34] Siminton ALR at 414 per Kirby J; HCA at para.7 per Kirby J.
[35] Australian Communications and Media Authority v Mobile Gate Ltd a company incorporated in Hong Kong (No. 3) [2009] FCA 1154 at para.4 per Logan J.
[36] Maddison ALD at 393-396 per Wilson FM; FMCA at paras.13-30 per Wilson FM.
[37] Zentai v O’Connor & Ors (2009) 263 ALR 511 at 515 per McKerracher J; [2009] FCA 1597 at paras.22-23 per McKerracher J.
What defines or characterises these matters is that the legal issues to be determined are secondary or subordinate to the substantive legal issues to be determined in the same proceedings.
Are the claims made in the amended defence and cross-claim incidental to the matter within the Fair Work Division jurisdiction of the Court?
In Allblend Holdings (No. 1) the Court set out the orders sought in the amended defence and cross-claim as follows:
5.By an interim application filed on 10 December 2009 Allblend Holdings seeks to amend its response and defence, and to institute a cross-claim against the applicant and a second respondent, 2B Wizards Pty Ltd, for orders:
(a)that Ms Welsh and 2B Wizards pay to Allblend Holdings the sum of $4,042.50 being the sum invoiced and paid by MYO Australia in relation to a course run for MYO Australia by Ms Welsh and 2B Wizards;
(b)that Ms Welsh pay to Allblend Holdings the sum of $28,535.20 being payment for 53 days on which Ms Welsh allegedly absented herself from the performance of her duties without the knowledge or consent of Allblend Holdings;
(c)in the alternative to (a) and (b) above, payment of damages by Ms Welsh and 2B Wizards;
(d)for an accounting as constructive trustee as against Ms Welsh and 2B Wizards;
(e)for a compensation order against Ms Welsh and 2B Wizards under s.1317H of the Corporations Act 2001 (Cth);
(f)for payment of interest under s.76 of the Federal Magistrates Act 1999 (Cth) by Ms Welsh and 2B Wizards from 24 May 2008 to the date of payment or judgment; and
(g)for costs.[38]
[38] Allblend Holdings (No. 1) at para.5 per Lucev FM.
It is reasonably clear that the claims for costs and interest are not within the incidental jurisdiction because they are express statutory powers exercisable in both the Fair Work Division and General Division of the Court,[39] subject in the case of the Fair Work Division to s.824 of the WR Act and s.570 of the Fair Work Act 2009 (Cth).[40]
[39] FM Act, ss.76, 77 and 79.
[40] “FW Act”.
The remaining claims, those in sub-paragraphs (a) to (e) as set out above, are not incidental, but rather substantive, legal claims against Ms Welsh and 2B Wizards. Each claim rests upon a recognised legal basis, claiming under statute or at common law, and cannot be said to be part of the Court’s “incidental” jurisdiction.
The claims made in the amended defence and cross-claim are therefore not incidental to this Court’s Fair Work Division jurisdiction.
Are associated matters within the jurisdiction of the Division of the Court in which they are commenced?
The question then arises as to whether the claims made in the amended defence and cross-claim are within the Fair Work Division jurisdiction of this Court by reason of their being associated matters under s.18, and to be dealt with in accordance with s.14, of the FM Act.
Section 18 of the FM Act provides as follows:
To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.
The nature of the statutory associated matter jurisdiction in this Court was set out in Allblend Holdings (No. 1),[41] and need not be repeated here, with the conclusion reached that the matters the subject of the amended defence and cross-claim were within the associated jurisdiction of this Court.[42]
[41] Allblend Holdings (No. 1) at paras.14-20 per Lucev FM.
[42] Allblend Holdings (No. 1) at paras.21-29 per Lucev FM.
The issue of associated and accrued jurisdiction arose in a number of cases heard in the Industrial Division of the Federal Court under the provisions of s.13 of the FC Act as it stood in 1976.[43] In Meat and Allied Trades Federation of Australia v The Australasian Meat Industry Employees Union[44] the Federal Court was dealing with the jurisdiction to interpret an award made under the Conciliation and Arbitration Act 1904 (Cth),[45] s.110 of which provided that:
“(1) The Court is empowered, subject to this section, to give an interpretation of an award.
(2) An application for the interpretation of an award may be made by the Minister or an organisation or person bound by the award.
(3) The decision of the Court upon the application is final and conclusive and is binding on all organisations and persons bound by the award which or who have been given an opportunity of being heard by the Court.”
[43] As set out above at para.18.
[44] (1984) 2 FCR 419 (“Meat and Allied Trades Federation”).
[45] “C & A Act”.
The Federal Court found that it had jurisdiction to deal with the issue of award interpretation as part of its jurisdiction to determine all questions forming part of the matter including questions not federal in nature and which the Federal Court would not have had jurisdiction to determine if they had arisen in separate proceedings.[46] That conclusion was arrived at independent of the provisions of s.32 of the FC Act, which is in the same terms as s.18 of the FM Act.[47] In that case the Federal Court observed that once the jurisdiction of the Federal Court was properly attracted the Court could hear and determine the whole of the issues that arose in the relevant matter.[48] In that case the additional questions said to form an integral part of the matter in dispute were themselves federal in nature, and not, as here, a mix of matters arising under a federal statute (the Corporations Act) and at common law.[49] Furthermore, the federal questions which arose were matters involving the interpretation of an industrial award. The matter remained in the Industrial Division of the Federal Court.
[46] Meat and Allied Trades Federation at 423-424 per Neaves J, citing Stack v Coast Securities (No. 9) Pty Ltd (1983) 57 ALJR 731.
[47] Meat and Allied Trades Federation at 423 per Neaves J.
[48] Meat and Allied Trades Federation at 425 per Neaves J.
[49] Meat and Allied Trades Federation at 424 per Neaves J.
In Kennedy v Australasian Coal and Shale Employees Federation & Anor[50] an employee was offered employment with a company subject to him achieving membership of the relevant union. The employee’s application for membership of the union was unsuccessful on the ground that there was no binding contract of employment between the employee and the company. The company later withdrew its offer of employment. The employee commenced proceedings against the union seeking a declaration he was entitled to be admitted as a member under s.144(1) of the C & A Act and subsequently joined the company as a party seeking relief against it in connection with the alleged contract of employment. The company contended that the Federal Court lacked jurisdiction.
[50] (1983) 78 FLR 252 (“Kennedy”).
The Federal Court held that:
a)the Federal Court had jurisdiction to deal with a non-federal claim and the federal claim where they so depended upon common transactions and facts that they arose out of a common sub-stratum of facts;[51]
b)the issue of the employee’s employment by the company was a central part of the controversy between the employee and the union and accordingly the determination of that issue was within the accrued jurisdiction of the Federal Court, even if the employment contract had its source in a non-federal law;[52] and
c)the fact that the non-federal claim was made against a party other than the party against which the primary or “anchoring” federal claim was made did not deprive the Federal Court of its accrued jurisdiction in the whole matter, notwithstanding that different relief was sought against each party.[53]
[51] Kennedy at 259-260 per Beaumont J.
[52] Kennedy at 261 per Beaumont J.
[53] Kennedy at 262 per Beaumont J.
That matter, which involved a mix of federal statutory jurisdiction under the C & A Act and accrued jurisdiction in relation to an employment contract, remained in the Industrial Division of the Federal Court.[54]
[54] See Kennedy v Australasian Coal and Shale Employees Federation & Anor (No. 2) (1983) 74 FLR 241 (“Kennedy (No. 2)”).
In Kennedy the Federal Court did not express any view as to whether s.32 of the FC Act provided an additional source of jurisdiction, that argument having been relied upon by the Commonwealth in those proceedings.[55]
[55] Kennedy at 263 per Beaumont J. It is unnecessary, for present purposes, to deal with the distinction which has arisen in cases in the Federal Court between “associated” and “accrued” jurisdiction. If this Court has accrued jurisdiction as well as associated jurisdiction, and even if the matters which have been said by the Court to be within the associated jurisdiction in these proceedings are within an accrued jurisdiction, the declaration to be made (see para.48 below) would not alter because the same principles will apply with respect to matters within the accrued jurisdiction as apply to matters within the associated jurisdiction.
In Bailey v Krantz & Ors[56] the Federal Court observed that:
It was not suggested that the Industrial Division of the court is in any different position from the General Division with respect to the accrued jurisdiction. Indeed, the authorities to date clearly give to the Industrial Division accrued jurisdiction similar to that exercised in the General Division: see Kennedy … and Meat and Allied Trades Federation ….[57]
[56] (1984) 55 ALR 345 (“Bailey”).
[57] Bailey at 355 per Gray J.
In this case each of the claims is an associated matter as described in s.18 of the FM Act; associated with a claim made within the Fair Work Division jurisdiction of this Court, and therefore associated with the Court’s jurisdiction under the Fair Work Division. By way of contrast, for example, if a claim of misleading and deceptive conduct in employment had been made under the TP Act,[58] or of discrimination in employment under the Australian Human Rights Commission Act 1986 (Cth),[59] and the matters the subject of the cross-claim in this matter had been raised in proceedings of that kind, the associated matter would be within the jurisdiction of the General Division of the Court.
[58] “TP Act”; TP Act, ss.52 and 53B.
[59] “AHRC Act”; AHRC Act, ss.46PO.
In this matter, which was commenced and is proceeding in the Fair Work Division jurisdiction of the Court, and in respect of which associated matters have been raised by way of cross-claim, the matter remains one within the Fair Work Division of the Court, as the matters the subject of the cross-claim are associated matters within the Fair Work Division jurisdiction of this Court. Therefore, this matter, properly instituted and thus far heard and determined within the Fair Work Division of this Court, remains a matter within the Fair Work Division of this Court.
Consistent with the legislative intention, the Fair Work Division of this Court has been created to deal specifically with industrial law jurisdiction, but that does not impede the ability of this Court to exercise its associated jurisdiction in the Fair Work Division, as it did generally prior to the FW (Transitional) Act amendments, and as the Federal Court did in its former Industrial Division under almost identical statutory provisions, with respect to the full range of associated matters.
It is therefore unnecessary for the Court to seek a direction from the Chief Federal Magistrate under s.10A(5) of the FM Act in respect of this matter.
Conclusions, a declaration and costs
The Court has concluded that this is a case which was properly instituted, and thus far heard and determined, in the Fair Work Division jurisdiction of the Court, and that it is a matter which is within the Fair Work Division jurisdiction of this Court in relation to the cross-claims which have been made by Allblend Holdings, which are associated matters within the Fair Work Division jurisdiction of this Court.
There will therefore be a declaration that the application:
a)has been correctly instituted; and
b)will continue to be heard, and be determined,
in the Fair Work Division jurisdiction of the Court.
There will be no order as to costs. The raising of the matter by Ms Welsh was not an unreasonable act or omission, particularly in circumstances where in the Court’s view the matter was not necessarily free from doubt in the absence of any pre-existing authority.[60]
[60] WR Act, s.824, and see generally Welsh v Allblend Holdings Pty Ltd (No. 3) [2010] FMCA 378 to be delivered immediately following delivery of these Reasons for Judgment.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 4 June 2010
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