FEDERAL COURT OF AUSTRALIA Elliott v Health Services Union [2014] FCA 296 Citation: Elliott v Health Services Union [2014] FCA 296 Parties: ROBERT ELLIOTT v HEALTH SERVICES UNION; HEALTH SERVICES UNION v ROBERT ELLIOTT, MICHAEL WILLIAMSON and KATHY JACKSON File number: NSD 1501 of 2013 Judge: KATZMANN J Date of judgment: 24 March 2014 Catchwords: PRACTICE AND PROCEDURE – whether proceedings should be consolidated – whether common issues of law or fact Legislation: Bankruptcy Act 1966 (Cth) s 60(1) Fair Work (Registered Organisations) Act 2009 (Cth) s 329 Federal Court of Australia Act 1976 (Cth) s 37M Federal Court Rules 2011 (Cth) r 30.11 Date of hearing: 24 March 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 9 Counsel for the Applicant/First Cross-Respondent: No appearance for the applicant Counsel for the Respondent/Cross-Claimant: Mr M A Irving Solicitor for the Respondent/Cross-Claimant: Holding Redlich Counsel for the Second Cross-Respondent: No appearance for the second cross-respondent Counsel for the Third Cross-Respondent: The third cross-respondent appeared in person IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1501 of 2013 BETWEEN: ROBERT ELLIOTT Applicant HEALTH SERVICES UNION Cross-Claimant AND: HEALTH SERVICES UNION Respondent ROBERT ELLIOTT First Cross-Respondent MICHAEL WILLIAMSON Second Cross-Respondent KATHY JACKSON Third Cross-Respondent JUDGE: KATZMANN J DATE OF ORDER: 24 MARCH 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave be granted to the applicant/first cross respondent and the respondent/cross claimant to discontinue the claim and cross-claim respectively brought against each other. 2. Pursuant to s 60(1)(b) of the Bankruptcy Act 1966 (Cth), the action brought by the respondent/cross claimant against the second cross respondent be stayed until further order. 3. Order 7 made on 19 November 2013 be vacated. 4. The proceeding be transferred to the docket of Tracey J and stood over until 2.15 pm today before his Honour for further directions. 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 GENERAL DIVISION NSD 1501 of 2013 BETWEEN: ROBERT ELLIOTT Applicant HEALTH SERVICES UNION Cross-Claimant AND: HEALTH SERVICES UNION Respondent ROBERT ELLIOTT First Cross-Respondent MICHAEL WILLIAMSON Second Cross-Respondent KATHY JACKSON Third Cross-Respondent JUDGE: KATZMANN J DATE: 24 MARCH 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Robert Elliott sued the Health Services Union alleging that, as his employer, it had contravened the Fair Work Act 2009 (Cth) and the Long Service Act 1992 (Vic) by failing or refusing to pay him accrued annual leave and long service leave entitlements when his employment was terminated. The union denied that it was liable to make the payments. It also filed a cross-claim against him, as well as the national president (Michael Williamson) and national secretary of the union (Kathy Jackson), who had apparently negotiated the contract with Mr Elliott, alleging that they had no authority to enter into the contract, that they misused their positions and that they behaved negligently and for improper purposes. 2 The union seeks various orders for damages or compensation and civil penalties. The principal action and the cross-claim against Mr Elliott settled when Mr Elliott accepted an offer of compromise. That leaves the cross-claim against Mr Williamson and Ms Jackson, which was listed for hearing in late June. Mr Williamson is now bankrupt. For this reason, I made an order staying the action against him, pursuant to s 60(1) of the Bankruptcy Act 1966 (Cth). 3 In the meantime the union brought separate proceedings in the Victorian registry against Ms Jackson alleging that she had incurred legal expenses on the union's behalf without the prior authorisation of the national executive for her own advantage and contrary to her obligations as national secretary. Those proceedings were assigned to the docket of Tracey J and have not yet been given a hearing date but have been listed for directions this afternoon. 4 The union applied for the two proceedings to be consolidated. The basis of the application was that there are common issues of fact and law and that consolidation would save both time and costs. The nature of those common issues is set out in some detail in written submissions filed on the union's behalf. The application was supported by Ms Jackson. 5 Rule 30.11 of the Federal Court Rules 2011 (Cth) (the Rules) relevantly provides that, if several proceedings are pending in the Court, and those proceedings involve some common issues of law or fact, any party to any of the proceedings may apply to the Court for an order that the proceedings be consolidated, heard together or immediately after one another, or that they be stayed until after any of the other proceedings has been determined. 6 I am satisfied that there are common issues of both fact and law which arise in the two proceedings in question. They include the proper construction of the union rules and the contractual, equitable and statutory duties owed by Ms Jackson as national secretary. I was informed that the financial governance policies affecting the transactions in question in each proceeding are substantially the same. In both proceedings, the union alleges that the execution of the agreements was kept secret from the relevant decision-making bodies and without their consent. In addition, there will be a significant overlap of witnesses. 7 There is no doubt that it would be inefficient for the proceedings to continue to be conducted before two different judges in two different parts of the country. That is reinforced by the fact that, to the extent that the proceedings arise under the Fair Work (Registered Organisations) Act 2009 (Cth), no costs order can be made, unless the proceedings were instituted vexatiously or without reasonable cause (see s 329). There is also a possibility that, if the proceedings continue to be heard separately, different findings of fact or law could be made. There is plainly no sense in that. 8 All these matters bear upon the considerations that underlie the power of the Court to make orders of the kind the parties seek. Moreover, an order of this kind would best promote the overarching purpose of the civil procedure provisions of the Federal Court of Australia Act 1976 (Cth) and the Rules, described in s 37M of the Act. 9 It follows that I am well satisfied that the proceedings should either be heard together or consolidated. It is not presently clear which is the more cost effective option. The question then arises as to who should hear them. The parties desire an early hearing and determination – earlier than I am able to give them. In those circumstances, the Elliott proceeding should be transferred to Tracey J's docket and the question of whether the proceedings should be heard together or consolidated and what consequential orders should be made should be left to his Honour. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann. Associate: Dated: 24 March 2014