FEDERAL COURT OF AUSTRALIA Ashby v Commonwealth of Australia (No 3) [2012] FCA 788 Citation: Ashby v Commonwealth of Australia (No 3) [2012] FCA 788 Parties: JAMES HUNTER ASHBY v COMMONWEALTH OF AUSTRALIA and PETER SLIPPER File number: NSD 580 of 2012 Judge: RARES J Date of judgment: 20 July 2012 Legislation: Evidence Act 1995 (Cth) s 75, 140 Federal Court of Australia Act 1976 (Cth) Pt VB, ss 24(1A), 24(1D)(b), 31(A), 37N(1) Federal Court Rules 2011 (Cth) rr 5.22, 5.23(2), 26.01(1)(a), (b) and (e), Cases cited: Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd [No 3] (1996) 64 FCR 55 distinguished Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 considered Collex Waste Management Pty Ltd v Waste Recycling & Processing Service New South Wales [1999] FCA 787 referred to Re Luck 203 ALR 1 applied Date of hearing: 20 July 2012 Place: Sydney Division: FAIR WORK DIVISION Category: No catchwords Number of paragraphs: 12 Counsel for the Applicant: Mr MBJ Lee SC with Ms R Francois and Ms J McDonald Solicitor for the Applicant: Harmers Workplace Lawyers Counsel for the First Respondent: Mr JWK Burnside QC with Ms M Richards Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: Mr I Neil SC with Mr D Chin Solicitor for the Second Respondent: Maruice Blackburn Lawyers Counsel for the Subpoenaed Party: Mr A Leopold SC Solicitor for the Subpoenaed Party: Ashurst Australia IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 580 of 2012 BETWEEN: JAMES HUNTER ASHBY Applicant AND: COMMONWEALTH OF AUSTRALIA First Respondent PETER SLIPPER Second Respondent JUDGE: RARES J DATE OF ORDER: 20 JULY 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The interlocutory applications be adjourned to 23 July 2012 at 9:30 am. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 580 of 2012 BETWEEN: JAMES HUNTER ASHBY Applicant AND: COMMONWEALTH OF AUSTRALIA First Respondent PETER SLIPPER Second Respondent JUDGE: RARES J DATE: 20 JULY 2012 PLACE: SYDNEY REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) 1 The Commonwealth and Peter Slipper, who are the respondents in these proceedings, filed interlocutory applications last month seeking orders pursuant to r 26.01 of the Federal Court Rules 2011 (Cth) that judgment be given against James Ashby, the applicant, because the proceeding against each of them, relevantly, was an abuse of the process of the Court and or vexatious or alternatively that the proceedings be permanently stayed on that footing. Relevantly, rr 26.01(1) and (2) provide: "26.01 Summary judgment (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. (2) The application must be accompanied by an affidavit stating: (a) the grounds of the application; and (b) the facts and circumstances relied on to support those grounds." 2 Following directions that I gave, a large number of objections have been made to the admissibility of evidence proposed to be led at the hearing of the interlocutory applications fixed for 23 July 2012. Many of those objections are based on Mr Ashby's assertion that the evidence is hearsay and thus, not admissible under s 75 of the Evidence Act 1995 (Cth). As a result, if the objection is upheld, Mr Slipper has sought the issue of subpoenas to give evidence to a number of the persons so that they could give evidence directly of the previous representations now given by evidence on information and belief. Relevantly, the Evidence Act provides: "4(1) This Act applies to all proceedings in a federal court …, including proceedings that: … (b) are interlocutory proceedings or proceedings of a similar kind; … 9(1) For the avoidance of doubt, this Act does not affect an Australian law so far as the law relates to a court's power to dispense with the operation of a rule of evidence or procedure in an interlocutory proceeding. … 75 In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source." Mr Ashby's submissions 3 Mr Ashby accepted that, ordinarily, an application for summary dismissal or for a stay is interlocutory. But, he contended, the circumstances of the present interlocutory applications are distinguishable from that situation. He submitted that an order for judgment under r 26.01(1)(b) or (d) is distinct from an order for summary judgment or summary dismissal pursuant to s 31(A) of the Federal Court of Australia Act 1976 (Cth). He argued that the authorities characterising an order for summary dismissal or a stay as an interlocutory, not a final, order were distinguishable because r 26.01 allowed the Court to give "judgment" to bring such proceedings to an end. He argued that the words "final" and "interlocutory" can mean different things in different contexts and relied on what Lindgren J observed in Collex Waste Management Pty Ltd v Waste Recycling & Processing Service New South Wales [1999] FCA 787 at [27] where his Honour said: "27 It has been recognised that the terms "final" and "interlocutory" may mean different things in different contexts; see Salter Rex & Co v Ghosh [1971] 2 QB 597 (CA) at 600-601; Tampion v Anderson,[(1973) 48 ALJR 11], at 12-13; Malouf v Malouf [1999] FCA 284 [86 FCR 134] at para 33 (Beaumont, Lee and Dowsett JJ). On the basis that the present motions could give rise only to an order for dismissal that was interlocutory, that is, an order that would not finally determine the rights of the parties and would therefore, at least theoretically, leave it open to Collex to bring a fresh proceeding based on the very same facts, it might be thought odd if the "proceeding" on and "hearing" of the motions were not also to be classified as interlocutory for the purpose of the admissibility of hearsay evidence. On the other hand, it is to be noted that an order for summary dismissal will finally dispose of the "proceeding", and that the "hearing" is at least final in that respect. Moreover, the seriousness and "finality" of a summary dismissal is assumed in the cases referred to below which caution against a too ready summary dismissal of proceedings. Another matter to note is that even if the "proceeding" and the "hearing" are interlocutory for hearsay purposes, the Court would have the discretion granted by s 135 of the Evidence Act 1995 (Cth) to refuse to admit evidence if its probative value was substantially outweighed by one or more of the considerations mentioned in the section. The provision might have particular relevance to hearsay evidence on a motion for summary dismissal." 4 Mr Ashby referred to the explanation of the undefined term "interlocutory proceedings" by the Australian Law Reform Commission in its Report 38 on Evidence (ALRC 38) at [143] fn 33, as used in the Bill that became the Evidence Act, namely: "proceedings that are not final, usually dealing with procedural problems that arise in preparing a case for trial, but including proceedings for injunctions pending the trial of an action." He argued that this explanation was an aide to construction of the meaning of the word "interlocutory" in s 75. Justice Lindgren treated that explanation in ALRC 38 as indicating that, in contrast, a proceeding for a permanent injunction was not an interlocutory proceeding in Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd [No 3] (1996) 64 FCR 55 at 60B-C. Mr Ashby relied on his Honour's further observation there that: "Summary dismissal may be ordered only with exceptional caution and where it is clear that there is no real question to be tried (it is unnecessary to cite authorities for this commonplace proposition). It suffices to say that in my view, in this context, I cannot conceive of a case in which contested hearsay evidence could establish the ground referred to in O 22, r 2(1)(c), that is to say, make it appear to the Court that the proceeding is an abuse of the process of the Court." (emphasis added) Consideration 5 Rules 26.01(1) (a) and (e) reflect the provisions of s 31A of the Federal Court of Australia Act. The Dictionary in Sch 1 to the Rules provides that the word "judgment" has the meaning given in s 4(1) of the Federal Court of Australia Act namely, for present purposes, (see Schedule 1 to the Rules): "judgment means: (a) a judgment, decree or order, whether final or interlocutory …" 6 The power to make r 26.01 was conferred by s 59(2)(l) of the Federal Court of Australia Act. That gave the judges of the Court the power to make rules providing for, or in relation to, the prevention or termination of vexatious proceedings. In addition, as Gleeson CJ, Gummow, Hayne and Crennan JJ observed in Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at 263-265 [5]-[8] the Court, as a superior court of record, has an inherent power to terminate proceedings summarily that are an abuse of its process or vexatious or oppressive. And their Honours said that the categories of abuse of process are not closed: Batistatos 226 CLR at 265[9]. 7 I am of opinion that the word "judgment" in r 26.01, is used in the sense of an interlocutory judgment, decree or order. A "judgment" given under r 26.01 will be interlocutory because, for over 100 years, judgments or orders dismissing proceedings as an abuse of the process of the Court or as oppressive and vexatious have been considered as interlocutory in whatever form they have been expressed. In Re Luck 203 ALR 1 at 4 [9] McHugh ACJ, Gummow and Heydon JJ, said: "An order is an interlocutory order, therefore, when it stays or dismisses an action or refuses leave to commence or proceed with an action because the action is frivolous, vexatious, an abuse of the process of the court or does not disclose a reasonable cause of action." 8 The expression "interlocutory proceeding" in s 75 of the Evidence Act ordinarily will take the character of the proceeding in the Court in which it is conducted as determinative. Accordingly, each of the present interlocutory applications would necessarily be interlocutory since the order that would be made determining it will either permit the proceedings to continue to a final hearing or will terminate the proceedings with an order that is interlocutory: Re Luck 203 ALR at 4 [9]. First, if the order dismissed the interlocutory application, the proceeding would continue and the unsuccessful party would require leave to appeal from such an order under s 24(1A) of the Federal Court of Australia Act. Secondly, if an order were made as sought in the interlocutory applications, then Mr Ashby would need to seek leave to appeal either under s 24(1A) or, if the order were made under r 26.01(1)(a) or (e), under s 24(1D)(b). 9 It is a commonplace now that Courts proceed to give default or summary judgment on hearsay evidence. Often it would be inconvenient and unnecessary to require primary evidence to be adduced: e.g. in applications under r 5.23(2). That rule deals with a variety of circumstances in which judgment may be given when a party is in default as defined in r 5.22. This includes when a party has not complied with an order or a requirement in the Rules or a party is not prosecuting the proceedings with due diligence. In one sense, a failure to prosecute proceedings with due diligence can be seen as an abuse of the process of the Court because of the defaulting party's failure to conduct the proceedings in a way consistent with the overarching purpose of the civil practice and procedure provisions now applicable by force of Pt VB of the Federal Court of Australia Act: see s 37N(1). 10 In my opinion, Lindgren J's observations in Allstate 64 FCR at 60 were not directed to the question of admissibility under s 75. Rather, what he said was directed to the question of whether evidence on information and belief would be sufficient to satisfy the Court under s 140 of the Evidence Act that a proceeding should be dismissed as an abuse of the process of the Court. 11 There is a variety of situations in which s 75 operates that can give rise to the debate as to whether judgments are final or interlocutory. But, ultimately, whether the character of the present proceedings is interlocutory or final, must be determined by the nature of the order that results from their determination. Much will depend on the nature of the issues in the interlocutory proceedings. The fact that proceedings are interlocutory, so that s 75 applies to the admissibility of evidence in them, does not dispense with the necessity for the judge hearing them to assess the evidence adduced having regard to, and in accordance with, s 140 of the Act. Thus, the judge must consider the quality of the evidence, including, if it is hearsay, whether it is sufficient in all the circumstances to discharge or negate the civil standard of proof on the balance of probabilities. Conclusion 12 For these reasons I am satisfied that the hearing of the two interlocutory applications fixed for 23 July 2012, will be an "interlocutory proceeding" in which the hearsay rule will not apply by force of s 75 of the Evidence Act. That is not to say that any hearsay evidence will or will not be sufficient to discharge the moving parties' onus of proof to the standard requisite under s 140 of the Act so as to justify the grant of the relief sought. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 26 July 2012