FEDERAL COURT OF AUSTRALIA CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (No 2) [2001] FCA 479 PRACTICE AND PROCEDURE – appeal – proceeding remitted to trial judge – nature of remitted proceeding – whether new trial – right of party to adduce additional evidence in remitted proceeding Federal Court of Australia Act 1976 (Cth) ss 28(1)(c), 28(1)(f) Attorney-General v Sillem (1864) 10 HLC 704 cited Australian Iron and Steel Ltd v Greenwood (1962) 107 CLR 308 cited Bernasconi v Farebrother (1832) 110 ER 140; 3 B & Ad 372 cited Blair v Curran (1939) 62 CLR 464 cited Bobolas v Economist Newspaper Ltd [1987] 1 WLR 1101 applied Browne v Dunn (1894) 6 R 67 discussed Bulstrode v Trimble [1970] VR 840 cited Ceravole v Giglio 587 NYS 2d 741 (NY App Div,1989) applied Commonwealth v Verwayen (1990) 170 CLR 394 cited Holford v The Melbourne Tramway and Omnibus Co Ltd [1909] VLR 497 cited Horton v Horton [1960] 1 WLR 987 applied Hutchinson v Piper (1812) 128 ER 447; 4 Taunt 555 cited Lynch v Howard (1980) 44 FLR 71 followed Macclesfield, Earl of v Bradley (1841) 151 ER 893; 7 M&W 570 cited Marks v GIO [1999] FCA 1010 not followed Murray v Murray 856 P2d 463 (Alaska, 1993) applied Parker v Elam 829 P2d 677 (Okla, 1992) applied Pateman v Higgin (1957) 97 CLR 521 cited Quinn v Rockla Concrete Pipes Ltd (1986) 6 NSWLR 586 cited Roe v Naylor (1918) 87 LJKB 958 applied South Eastern Railway Co v Smitherman (1883) 47 JP 773 cited Venn v Tedesco [1926] 2 KB 227 applied CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION, ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA, COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA and PROFESSIONAL OFFICERS' ASSOCIATION (VICTORIA) v TELSTRA CORPORATION LIMITED V 194 of 2000 FINKELSTEIN J MELBOURNE 1 MAY 2001 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 194 of 2000 BETWEEN: CPSU, THE COMMUNITY AND PUBLIC SECTOR UNION, ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA, COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA and PROFESSIONAL OFFICERS' ASSOCIATION (VICTORIA) Applicants AND: TELSTRA CORPORATION LIMITED Respondent JUDGE: FINKELSTEIN J DATE: 1 MAY 2001 PLACE: MELBOURNE RULING 1 This application raises a short but difficult question of procedure. The applicant unions, many of whose members are employed by the respondent, Telstra Corporation Ltd, had applied under s 298U of the Workplace Relations Act 1996 (Cth) for the imposition of penalties against Telstra, alleging that the corporation had contravened s 298K. The trial was conducted before me. I dismissed the application: CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (2000) 99 IR 238. Being dissatisfied with the result, the unions appealed to the Full Court. The Full Court allowed the appeal, set aside the order made at trial and "remitted [the matter] to the primary judge to be determined in accordance with [the Full Court's] reasons for judgment": Community & Public Sector Union v Telstra Corporation Ltd [2001] FCA 267. The question that now arises is how the "remitted" application should be conducted. 2 There are competing contentions. The unions say that, aside from any estoppel that arises from the determination of the Full Court (Blair v Curran (1939) 62 CLR 464, 531), the hearing is to begin afresh as if there were never a trial. Telstra's submission is to the opposite effect. It argues that since each side closed its case at trial, the remitted application must be determined on the evidence led at trial, which neither party can supplement. 3 It is necessary to give a brief description of how this dispute arises. Since June 1996 Telstra has been reducing its staff by redundancy and natural attrition. It has an Employee Relations group that is responsible, among other things, for staff reductions. Mr Cartwright, then the group's managing director, sent an e-mail to managers and team leaders in the group that would be understood by many as an instruction to discriminate against employees if they were entitled to the benefit of an award or a certified agreement. The unions alleged that by sending the e-mail Telstra (through Mr Cartwright) altered the position of its employees to their prejudice for a prohibited reason, and thereby contravened s 298K(1). The prejudice was that the employees' position was made less secure. The prohibited reason was that the employees were "entitled to the benefit of an industrial instrument": s 298L(1)(h). 4 At trial I rejected the unions' claim, holding that the e-mail did not prejudicially alter the position of the employees who were employed under an industrial instrument. I felt that until some specific action had been taken against particular employees there was no more than a potential for prejudice. It was not necessary for me to decide whether the e-mail had been sent for a "prohibited reason", and I made no determination in that regard. 5 The Full Court was of a different opinion on the question of prejudice. It decided that the position of employees on awards or certified agreements had become less secure by reason of the e-mail. Therefore the employees' position had been altered to their prejudice within the meaning of s 298K(1). 6 This left for determination the question whether Telstra had acted for a prohibited reason. The Full Court considered whether it could resolve that issue. It referred to the evidence of Mr Cartwright given at trial. This was to the effect that he did not intend the e-mail to be an instruction to accord favouritism in the redundancy process to employees retained under individual employment contracts. By agreement between the parties Mr Cartwright had not been cross-examined. I was told of the agreement. However, the transcript of the trial was not before the Full Court. This made it difficult for the Full Court to decide the matter. The Full Court explained that it was "not possible to determine why Mr Cartwright was not cross-examined, how the evidence in question was relied upon by Telstra and whether Mr Cartwright was on notice that other material would be relied upon by the unions to contradict his evidence." So the Full Court remitted "the issue of reason … to the trial judge". I note that the order of the Full Court is that "the matter be remitted to the primary judge…". But, it is clear that the Full Court intended to remit only one aspect of the matter. 7 This brings me to the reason for the present dispute. The unions wish to resile from their position at trial and seek to cross-examine Mr Cartwright. They say that they are entitled to take that course. Telstra argues that the unions are bound by their election at trial, and have forfeited their right to cross-examine Mr Cartwright. 8 Historically new trials have their roots in trials by jury. The use of a jury in civil cases in England can be traced back to the 12th century. Initially the character of a jury was as witnesses, but by the 16th century they had become the judges of fact, and trial by jury was the usual method of trying disputed facts. 9 At common law there were two classes of case where it was possible to obtain a new trial of a jury action. Every issue of law was determined by the judge, and he directed the jury as to the law. If there was an error of law, such as a misdirection, or an erroneous reception or rejection of evidence, there could be a new trial. This type of error also founded a writ of error. The second class was where a jury returned a verdict that was clearly wrong. Here a writ of error did not lie, and all that could be done to rectify the position was to order a new trial. See generally Holford v The Melbourne Tramway and Omnibus Co Ltd [1909] VLR 497, 525-526; Australian Iron and Steel Ltd v Greenwood (1962) 107 CLR 308, 315-319. As to the procedure for obtaining a new trial, see South Eastern Railway Co v Smitherman (1883) 47 JP 773, 774. 10 The manner in which the court exercised its jurisdiction to grant a new trial differed, depending upon the nature of the error. In the first class of case (error of law) there would be a new trial of all issues, as of right: Bernasconi v Farebrother (1832) 110 ER 140; 3 B & Ad 372. In the second class (error of fact) the court could limit the new trial to the particular issue in respect of which error was found: Hutchinson v Piper (1812) 128 ER 447; 4 Taunt 555; Earl of Macclesfield v Bradley (1841) 151 ER 893; 7 M&W 570. 11 A new trial is a rehearing "as if [the case] had never been heard before": Blackstone's Commentaries on the Laws of England (1768) vol 3 at 391. See also Murray v Murray 856 P2d 463 (Alaska, 1993) (the judgment, upon reversal, is vacated, and the case is put in the same posture in which it was before the judgment was entered); Ceravole v Giglio 587 NYS 2d 741 (NY App Div,1989) (the parties' rights are left wholly unaffected by any previous determination that was set aside); Parker v Elam 829 P2d 677 (Okla,1992) (a judgment that is set aside and remitted stands as if no trial has yet been held). Thus, for the purpose of a new trial, any finding in the first trial has been got rid of: Roe v Naylor (1918) 87 LJKB 958, 963. The parties are not bound by the manner in which they conducted the original trial. On the rehearing, the parties may improve their case by leading evidence that had not been led at the first trial or by putting forward new arguments: Horton v Horton [1960] 1 WLR 987, 988. See also Venn v Tedesco [1926] 2 KB 227, where counsel, who waived a right to rely on a defence at the first trial, was not precluded from raising the point in the new trial. That is because a new trial is a trial that starts again de novo. In Bobolas v Economist Newspaper Ltd [1987] 1 WLR 1101, 1104, Lloyd LJ explained that: "[A] new trial 'means what it says'. Existing issues can be abandoned and fresh issues can be raised. Where the same issues arise in both trials, the judge at the second trial should not be hampered by any decision at the first trial." 12 Appellate courts, which must be created by statute (Attorney-General v Sillem (1864) 10 HLC 704), are given power to set aside the judgment or verdict appealed against, and order a new trial: in England see Supreme Court Act 1981 (UK), s 17 and Rules of the Supreme Court 1965 (UK), O 59, r 11; in Victoria see Supreme Court Act 1986 (Vic), ss 10(1)(b) and 14(2) and Supreme Court Rules (Vic), O 64, r 23; in New South Wales see Supreme Court Act 1970 (NSW), s 102 and Supreme Court Rules (NSW), Pt 51, r 23. Not only is the appellate court able to grant a new trial, it is usually given power to order a new trial either generally or on some particular point: in England see s 17(1) and O 59 r 11(3); in Victoria see s 14(2) and O 64, r 23(5); in New South Wales see Pt 51, r 23(2). If there is to be a new trial ordinarily it will be of the whole case, unless that will cause injustice: Pateman v Higgin (1957) 97 CLR 521, 527-529. But there are well-known exceptions. For example, where the issues of liability and damages are completely separate, it is common to order a new trial on one issue: Quinn v Rockla Concrete Pipes Ltd (1986) 6 NSWLR 586, 602. 13 The difficulty that presents itself on this application is this. The powers of the Full Court are found in s 28(1) of the Federal Court of Australia Act 1976 (Cth). Those powers relevantly permit the Full Court to "(a) affirm, reverse or vary the judgment appealed from; (c) set aside the judgment appealed from, in whole or in part, and remit the proceeding to the court from which the appeal was brought for further hearing and determination, subject to such directions as to the Court thinks fit; or (f) grant a new trial in any case in which there has been a trial, either with or without a jury, on any ground upon which it is appropriate to grant a new trial". Looking at the words of its order, the Full Court seems to have proceeded under s 28(1)(c). So much is accepted by the parties. The question then is: What is the nature of the "further hearing" that is to be undertaken? Is it a "new trial", with all the attendant consequences? Or does an order under s 28(1)(c) require the remitted case to be conducted as if the first trial had not come to an end? 14 I have not found it easy to resolve these issues. On the one hand, it is open to conclude that an order under s 28(1)(c) results in a new trial. There are two factors that suggest that possibility. The first is that s 28 does not expressly confer power on the Full Court to grant a new trial on a particular point and, as a matter of commonsense, such a power must exist. Section 28(1)(c) does provide for the retrial of part of a case. If there is no other basis for ordering a new trial of part of a case, the power may have to be found in s 28(1)(c). The second factor that suggests that an order under s 28(1)(c) results in a new trial is that unless the case goes back to the original trial judge, it is difficult to describe the remitted case as a continuation of the first trial. And there will be many cases where the trial judge can no longer preside over the remitted case. However, there are powerful factors that tend against the conclusion that an order under s 28(1)(c) produces a new trial. First, such a result ignores the difference in language between s 28(1)(c) ("further hearing") and s 28(1)(f) ("new trial"). Second, it would render unnecessary either s 28(1)(f), or the words "in whole or" in the expression "in whole or in part" in s 28(1)(c) because of the existence of s 28(1)(f). 15 On the other hand, the power to grant a new trial for part of a case may be found in s 28(1)(f); that is, the power to grant a new trial may implicitly carry with it the power to grant a new trial on a particular point. In that event, it is not necessary to read s 28(1)(c) as providing for a new trial. Under this approach, the Full Court could order either a new trial, including a new trial of a particular issue under s 28(1)(f), or a more limited form of rehearing, if appropriate under s 28(1)(c). In this way, a "further hearing" would be just that, namely a continuation of a trial that has already begun, though interrupted by a final order which has been set aside. 16 There are two decisions which bear upon the resolution of the present controversy. In Marks v GIO [1999] FCA 1010, the question was whether the trial judge should receive "fresh evidence" on the hearing of a matter remitted by the Full Court. The trial judge held (at [29]) that, as a result of the order under s 28(1)(c), "the trial was incomplete and unfinished". As to the admissibility of fresh evidence on the "remitted issue", the trial judge said that this was a matter of discretion, and he allowed the fresh evidence. On the other hand, in Lynch v Howard (1980) 44 FLR 71, a decision of the Full Court, Evatt and Keely JJ declined to remit a case under s 28(1)(c) on the ground that if such an order were made, it would enable a party to depart from the manner in which he had conducted the first trial, in that case by leading further evidence: 44 FLR at 86. The unstated assumption was that if the Full Court made an order under s 28(1)(c), the "further hearing" would be a new trial, at which all parties would be at liberty to call further evidence. The point presently under consideration was not squarely raised in Lynch v Howard and it would not be appropriate to regard that case as an authority in point. It seems that the parties themselves adopted the assumption that lies behind the judgment, and Evatt and Keely JJ merely accepted that assumption. 17 The better view appears to me to be that an order under s 28(1)(c) does not result in a new trial. Accordingly, the "further hearing" will be conducted on the basis that it is a continuation of the first trial, where the parties can only mend their hand or change course in accordance with well known rules. 18 This brings me to the question whether the unions should now be permitted to cross-examine Mr Cartwright. The parties conducted the original trial on the basis that the question whether there was an instruction to discriminate would be resolved by considering the terms of the e-mail and whether the e-mail had been sent for a prohibited reason would be determined from any inferences that could be drawn from the text of the e-mail as well as the author's explanation. This approach would not infringe the rule of practice known as the rule in Browne v Dunn (1894) 6 R 67, which imposes, on a party who wishes to impeach a witness, the obligation to give that witness an opportunity of providing an explanation for any matter on which it is proposed to contradict his evidence. The purpose of the rule is to achieve both fairness to witnesses and a fair trial between the parties. One aspect of the rule relates to the weight or cogency that is to be given to evidence. In certain cases it may not be permissible to reject the evidence of a witness upon a matter not the subject of cross-examination: see generally Bulstrode v Trimble [1970] VR 840, 846-849. Sometimes it may be necessary to recall a witness to give him the opportunity of explaining earlier evidence in the light of an attack that has been made, or is proposed to be made, against that witness: Evidence Act 1995 (Cth), s 46. 19 In the present case the rule in Browne v Dunn does not require the unions to cross-examine Mr Cartwright on his explanation for sending the e-mail. The reason is there was nothing unfair about the manner in which the unions conducted their case. Both Telstra and Mr Cartwright knew that the unions would argue the existence of a prohibited reason from the terms of the e-mail. Mr Cartwright's affidavit seeks to answer that case. Whether it is an adequate explanation remains to be seen. But that issue will be determined in the absence of any cross-examination, there being no other reason to permit the unions to reopen their case. 20 For the foregoing reasons, the trial will resume so the remitted issue may be dealt with, but the unions will not be permitted to cross-examine Mr Cartwright. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Ruling herein of the Honourable Justice Finkelstein. Associate: Dated: 1 May 2001 Counsel for the Applicant: Mr H Borenstein Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the Respondent: Mr R Buchanan QC Mr F Parry Solicitor for the Respondent: Freehills Date of Hearing: 20 April 2001 Date of Judgment: 1 May 2001