Finance Sector Union of Australia v Commonwealth Bank of Australia [1999] FCA 59

FEDERAL COURT OF AUSTRALIA

Finance Sector Union of Australia v Commonwealth Bank of Australia [1999] FCA 59

PRACTICE AND PROCEDURE – preliminary issue – representative action – whether the Court has jurisdiction to make an order under Part IVA of the Federal Court of Australia Act 1976 (Cth) allowing the commencement of a representative proceeding Workplace Relations Act 1996 (Cth), s 178 Federal Court of Australia Act 1976 (Cth), ss 22, 23, 33A, 33C Emanuele v Australian Securities Commission [1996-1997] 188 CLR 114, cited Wong v Silkfields Pty Ltd (unreported, Federal Court, Spender J, 16 January 1998), cited FINANCE SECTOR UNION OF AUSTRALIA & ANOR v COMMONWEALH BANK OF AUSTRALIA NG 823 of 1998 O'CONNOR J SYDNEY 4 FEBRUARY 1999

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 823 of 1998

BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA

First Applicant

KENNETH MACEY

Second Applicant

AND: COMMONWEALTH BANK OF AUSTRALIA

Respondent

JUDGE: O'CONNOR J

DATE OF ORDER: 4 FEBRUARY 1999

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 823 of 1998

BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA

First Applicant

KENNETH MACEY

Second Applicant

AND: COMMONWEALTH BANK OF AUSTRALIA

Respondent

JUDGE: O'CONNOR J

DATE: 4 FEBRUARY 1999

PLACE: SYDNEY

REASONS FOR INTERLOCUTORY JUDGMENT 1 The applicants in this matter have claimed relief under s 178 of the Workplace Relations Act 1996 (Cth) and s 23 of the Federal Court of Australia Act 1976 (Cth) ("the Act"). This claim was filed on 12 August 1998. 1. On 9 October 1998 the applicants filed a notice of motion in these proceedings seeking an order that an application under Part IVA of the Act be granted to allow them to commence a representative proceeding in matter No. NG 823 of 1998. They also sought consequential orders not relevant to this decision. 2. On 19 November 1998 the applicants filed a further notice of motion seeking orders that the decision on the question of the application of and the alleged breach of clause 42 of the Commonwealth Bank of Australia Officers Award 1990 be tried separately from any other question arising in the proceedings. 2 The respondent firstly opposes the making of the order sought in (1) above on the ground that the Court has no jurisdiction to do so. 3 Part IVA relevantly provides: "33A In this Part, unless the contrary appears: … "representative proceeding" means a proceeding commenced under section 33C; … 33C(1)Subject to this Part, where: (a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact; a proceeding may be commenced by one or more of those persons as representing some or all of them." 4 The respondent's challenge to jurisdiction to make the orders sought depend on regarding the provisions of Part IVA as a code for the conduct of representative proceedings under the Act. If it is a code then all representative proceedings must commence under Part IVA. If it were otherwise, the respondent argues that any proceeding under the Act (which is defined widely) could be converted, by way of amendment, as sought here, and become a representative proceeding. The respondent argues this possible outcome could not have been intended. As Part IVA is one of the few parts of the Act dealing with procedural matters (being provided for generally in the rules of the Court) it should be construed as providing exclusively for conduct of representative actions including the means of commencement of such actions. 5 The respondent submits that the "procedures, the conventions and assumptions" about representative proceedings are quite different from those in relation to normal proceedings inter partes and because of this, the framers of this part made no provision to allow the amendment of proceedings already commenced to become representative proceedings. 6 The respondent does not however submit that there is any jurisdictional impediment to applicants who have commenced proceedings in the ordinary way to discontinue proceedings and seek afresh to commence representative proceedings or even begin representative proceedings and seek to have the joined with proceedings already commenced, merely that no specific power to commence a representative action by amendment of existing proceedings is provided for in Part IVA. 7 The issue turns on the construction of these provisions of the Act in particular s 33C. 8 The task of the Court in construing such provisions is to give effect to the purpose of Parliament as expressed in the language of its enactment, or, put another way, to give meaning to the legislation. In carrying out this task the Court must look for the purpose to which the provision is directed. It seems that, in this case, Part IVA was intended to create a particular regime for the conduct of representative proceedings which would assist the parties to such proceedings and those affected by them. It was not, in my view, however designed to make it difficult to commence proceedings or put procedural barriers in the way of so doing. It merely provides that, if one wishes to pursue representative proceedings then this must be done pursuant to the provisions of Part IVA. 9 The applicant argues that s 22 of the Act makes it mandatory for the Court to avoid multiplicity of proceedings and s 23 gives the Court wide powers to that end. These general provisions are not expressly excluded by Part IVA and thus apply to it. 10 Therefore, s 33C should be construed, not as inhibiting the general power to direct the issue of writs given under the Act (s 23) but as merely requiring compliance with the requirements in Part IVA for the conduct of representative proceedings, once commenced. 11 The applicant also argues that to construe the application as outside the provisions of Part IVA because it operates to amend an existing proceeding and transform it into a representative proceeding, would be allowing "form to override practicality" and give an unnecessarily restrictive meaning to the word "commence" in s 33C. 12 The applicant also says that the existing power to join a representative proceeding once commenced, to another proceeding exposes the absurdity of the construction pressed by the respondent and there is no express legislative provisions precluding the course sought by the applicants. It merely turns on the interpretation of the word "commence" in the context of Part IVA. It would follow that the granting of the motion and the consequential order is sufficient to comply with s 33. At that point a representative proceeding is on foot or has commenced and Part IVA applies. 13 This construction is supported by the flexibility found in the other provisions of Part IVA which allow representative proceedings, once commenced, to be amended, discontinued and reconverted to an individual proceeding. If one can begin representative proceedings and, if necessary, convert it later into individual proceedings, it would require very clear words to lead to the conclusion that the reverse process is precluded. When Part IVA was introduced into the Act, the second reading speech emphasised the legislative intent of creating an efficient and effective procedure to deal with multiple claims. 14 In Wong v Silkfields Pty Ltd (unreported, Federal Court, 16 January 1998), Spender J discussed the objective of Part IVA. His Honour stated that during the second reading speech of the Federal Court of Australia Amendment Bill 1991, the then Attorney-General, Mr Michael Duffy said in Parliament on 14 November 1991 at 3174 of Hansard: The Bill gives the Federal Court an efficient and effective procedure to deal with multiple claims. Such a procedure is needed for two purposes. The first is to provide a real remedy where, although many people are affected and the total amount at issue is significant, each person's loss is small and not economically viable to recover in individual actions. It will thus give access to the courts to those in the community who have been effectively denied justice because of the high cost of taking action. The second purpose of the Bill is to deal efficiently with the situation where the damages sought by each claimant are large enough to justify individual actions and a large number of persons wish to sue the respondent. The new procedure will mean that groups of persons, whether they be shareholders or investors, or people pursuing consumer claims, will be able to obtain redress and to do so more cheaply and efficiently than would be the case within individual actions. 15 In construing these provisions I have had regard to what was said by Kirby J in his reasons for judgment in Emanuele v Australian Securities Commission [1996-1997] 188 CLR 114. In that matter His Honour was considering the construction of a leave provision, but the principles enunciated are relevant here. At 146-7, His Honour relevantly said: "A number of general propositions may be stated which assist in the construction of a provision such as s 59P: 1. The fundamental task of the Court is to give effect to the purpose of Parliament as expressed in the language of its enactment. This is sometimes explained in terms of finding the will of Parliament, although other authorities reject this formulation as a misleading fiction. The point to be made is that the task is basically the familiar one of giving meaning to ambiguous legislation. The clearer the words and the fewer the ambiguities, the simpler is the task of the court whose fidelity is always to the legislative text, properly understood. 2. In performing the task of construction, a court will seek to ascertain the purpose to which the provision was directed. It will endeavour, so far as the language of the enactment permits it, to avoid a construction which would result in such inconvenient outcomes that the legislation would miss its apparent target and fail to achieve its obvious objectives. It is for this reason that a court will not examine the words of the provision in isolation. Instead, an attempt is made to understand the words in the context of the enactment as a whole, the legislative history of the provision in question, the terms of similar or different provisions elsewhere in the Act and in any available documentation which throws light upon the suggested ambiguities. It is both permissible, and often helpful, to look to the consequences which would flow if one construction were favoured rather than another. If the result would be such inconvenience as to produce a "total failure" of the legislation and substantial injustice, it will more readily be inferred that the alternative construction should be adopted upon the hypothesis of Parliamentary rationality and good sense. 3. A feature of the administration of justice in more recent times has been a general disfavour towards procedural rigidities and a preference for a somewhat more flexible approach to statutory preconditions where these are of a procedural character." 16 His Honour concluded that the focus of the Court should always be on the statutory language, but understood in the context and having regard to its proper purposes. 17 His Honour also considered (at 150-151) the circumstances where construction should be more strict. These included cases where: (a) The language is unusually emphatic; (b) Where the purpose of the enactment is to prevent mischievous and damaging applications; (c) Where the consequences of a less strict approach (or directory approach) has severe consequences (eg. penal) (d) Where it would render the purpose of the provision illusory. 18 In my view none of these considerations would apply in this case. As the second reading speech reveals representative proceedings are seen to be of benefit to parties. The narrower construction of the provisions, as argued by the respondent here, would cause additional expense and delay. To come to such a conclusion would in my view require express exclusion of what is sought here by the applicants. 19 There is in my opinion no jurisdictional impediment to making the order sought. 20 The matter is now listed or further directions. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Connor