FEDERAL COURT OF AUSTRALIA Construction, Forestry, Mining and Energy Union v Gittany [2014] FCA 405 Citation: Construction, Forestry, Mining and Energy Union v Gittany [2014] FCA 405 Appeal from Construction, Forestry, Mining and Energy Union v Hume Highway Constructions Pty Limited & Anor [2013] FMCA 154 Construction, Forestry, Mining and Energy Union v Hume Highway Constructions Pty Limited & Anor (No 2) [2013] FCCA 215 Parties: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v ANTHONY GITTANY File number(s): NSD 714 of 2013 Judge(s): BUCHANAN J Date of judgment: 30 April 2014 Catchwords: PRACTICE AND PROCEDURE – application for costs – appeal from judgment of the Federal Circuit Court of Australia – whether appeal instituted vexatiously or without reasonable cause – whether a party committed unreasonable act or omission causing other party to incur costs – application for costs dismissed Legislation: Fair Work Act 2009 (Cth), ss 494, 494(2)(a), 494(2)(a)(i), 501, 502, 502(1), 502(3), 570, 570(2)(a), 570(2)(b) Occupational Health and Safety Act 2000 (NSW), s 77 Cases cited: Betfair Pty Ltd v Racing New South Wales and Another (2010) 189 FCR 356 Construction, Forestry, Mining and Energy Union v Gittany [2014] FCA 164 Construction, Forestry, Mining & Energy Union v Hume Highway Constructions Pty Ltd & Anor [2013] FMCA 154 Construction, Forestry, Mining & Energy Union v Hume Highway Constructions Pty Ltd & Anor (No.2) [2013] FCCA 215 R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 Date of hearing: Heard on the papers Place: Sydney Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 31 Counsel for the Appellant: Mr I Latham Solicitor for the Appellant: CFMEU, NSW Branch Counsel for the Respondent: Mr D Ash Solicitor for the Respondent: Joe Weller & Associates IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 714 of 2013 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Appellant AND: ANTHONY GITTANY Respondent JUDGE: BUCHANAN J DATE OF ORDER: 30 APRIL 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The interlocutory application filed 11 March 2014 be dismissed. 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 714 of 2013 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Appellant AND: ANTHONY GITTANY Respondent JUDGE: BUCHANAN J DATE: 30 April 2014 PLACE: SYDNEY REASONS FOR JUDGMENT BUCHANAN J: Background 1 On 3 March 2014 (Construction, Forestry, Mining and Energy Union v Gittany [2014] FCA 164 – corrigendum 12 March 2014) Cowdroy J dismissed an appeal by the appellant against two judgments of the Federal Circuit Court of Australia ("the FCCA") (Construction, Forestry, Mining & Energy Union v Hume Highway Constructions Pty Ltd & Anor [2013] FMCA 154; Construction, Forestry, Mining & Energy Union v Hume Highway Constructions Pty Ltd & Anor (No.2) [2013] FCCA 215). The first judgment dealt with questions of liability and the second with costs. 2 The proceedings at first instance alleged that the respondents to the proceedings (Hume Highway Constructions Pty Limited ("Hume Highway") and Mr Gittany) contravened ss 501 and 502 of the Fair Work Act 2009 (Cth) ("the FW Act") by prohibiting the entry of representatives of the appellant ("the CFMEU") to a construction site controlled by Hume Highway. The claims were dismissed. Some were found to have been made without reasonable cause and the appellant was, at first instance, ordered to pay 50% of the respondents' costs (see s 570 of the FW Act). 3 When the appeal was heard, Hume Highway was in liquidation. The appeal was pursued only against Mr Gittany. When Cowdroy J dismissed the appeal, his Honour also ordered: … 2. Unless an application is made for costs within 14 days of the date of this order, there be no order as to the costs of the appeal. 4 Mr Gittany has now applied for an order for two thirds of his costs of the appeal – i.e. costs referable to two (of three) issues raised by the appeal. Upon Cowdroy J's retirement the application was docketed to me to decide. The statutory provisions 5 Section 570 of the FW Act provides: 570 Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A. Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) the court is satisfied of both of the following: (i) the party unreasonably refused to participate in a matter before the FWC; (ii) the matter arose from the same facts as the proceedings. (Sections 569 and 569A are not here relevant). 6 The application for two-thirds of the costs of the appeal relies on s 570(2)(a) and (b). In particular, it is alleged that the CFMEU instituted the appeal without reasonable cause and that maintaining two of the grounds of appeal was an unreasonable act which caused Mr Gittany to incur costs. 7 The first observation I would make is that the limited nature of the costs order sought does not seem consistent with a contention that the proceedings (i.e. the appeal in its entirety) were instituted without reasonable cause, even if some of the grounds might correctly be characterised as unmeritorious. 8 It seems to follow that the matter for real attention is Mr Gittany's reliance on s 570(2)(b), although ultimately it does not really matter for my decision which limb of s 570(2) is relied upon. 9 The rights of entry asserted by the CFMEU in the proceedings at first instance arose from a combination of the FW Act and s 77 of the Occupational Health and Safety Act 2000 (NSW) (since repealed). The rights given by the latter Act were subject to restrictions stated in s 494 of the FW Act, as follows: 494 Official must be permit holder to exercise State or Territory OHS right Official must be permit holder (1) An official of an organisation must not exercise a State or Territory OHS right unless the official is a permit holder. Note: This subsection is a civil remedy provision (see Part 4-1). Meaning of State or Territory OHS right (2) A right to enter premises, or to inspect or otherwise access an employee record of an employee that is on premises, is a State or Territory OHS right if the right is conferred by a State or Territory OHS law, and: (a) the premises are occupied or otherwise controlled by any of the following: (i) a constitutional corporation; (ii) a body corporate incorporated in a Territory; (iii) the Commonwealth; (iv) a Commonwealth authority; or (b) the premises are located in a Territory; or (c) the premises are, or are located in, a Commonwealth place; or (d) the right relates to requirements to be met, action taken, or activity undertaken or controlled, by any of the following in its capacity as an employer: (i) a constitutional corporation; (ii) a body corporate incorporated in a Territory; (iii) the Commonwealth; (iv) a Commonwealth authority; or (e) the right relates to requirements to be met, action taken, or activity undertaken or controlled, by an employee of, or an independent contractor providing services for, any of the following: (i) a constitutional corporation; (ii) a body corporate incorporated in a Territory; (iii) the Commonwealth; (iv) a Commonwealth authority; or (f) the exercise of the right will have a direct effect on any of the following in its capacity as an employer: (i) a constitutional corporation; (ii) a body corporate incorporated in a Territory; (iii) the Commonwealth; (iv) a Commonwealth authority; or (g) the exercise of the right will have a direct effect on a person who is employed by, or who is an independent contractor providing services for, any of the following: (i) a constitutional corporation; (ii) a body corporate incorporated in a Territory; (iii) the Commonwealth; (iv) a Commonwealth authority. Meaning of State or Territory OHS law (3) A State or Territory OHS law is a law of a State or a Territory prescribed by the regulations. (Emphasis added.) 10 The provisions of the FW Act upon which the CFMEU relied at first instance (ss 501 and 502) provide (so far as here relevant): 501 Person must not refuse or delay entry A person must not refuse or unduly delay entry onto premises by a permit holder who is entitled to enter the premises in accordance with this Part. Note: This section is a civil remedy provision (see Part 4-1). 502 Person must not hinder or obstruct permit holder (1) A person must not intentionally hinder or obstruct a permit holder exercising rights in accordance with this Part. Note: This subsection is a civil remedy provision (see Part 4-1). … (3) Without limiting subsection (1), that subsection extends to hindering or obstructing that occurs after an entry notice is given but before a permit holder enters premises. The present application for costs 11 Although the appeal before Cowdroy J concerned allegations of breach of s 501 of the FW Act, and those claims were rejected on appeal as they had been at first instance, costs of the appeal are not sought in relation to that issue. 12 Costs of the appeal are sought in relation to the part of the appeal concerning the claimed contravention of s 502 of the FW Act and the challenge on appeal to the costs order made at first instance. The facts 13 The facts were summarised by Cowdroy J (at [4]-[6]) as follows: 4 At about 8.00 am on 6 December 2011, whilst Hume Highway was undertaking construction work at a site known as 580 Hume Highway, Yagoona ('the premises'), three state organisers of the NSW State Branch of the CFMEU, namely Brian Miller ('Mr Miller'), Chikmann Koh ('Mr Koh') and Mansour Razaghi ('Mr Razaghi') (collectively referred to as 'the CFMEU representatives'), entered upon the construction site for the purpose of investigating possible breaches of the Occupational Health and Safety Act 2000 (NSW) ('the OHS Act'). 5 There is no dispute that the CFMEU representatives were authorised representatives of the CFMEU, that each held the necessary entry and, by virtue of s 494 of the FW Act, that they were entitled to enter the premises. 6 The CFMEU representatives were met on arrival at the premises by Mr Gittany and were permitted to carry out their inspection of the premises. After inspecting various areas, including an amenities room and a first aid area, the CFMEU representatives moved outside the premises to investigate a scaffold in an adjoining car park. A concrete pump associated with the building work was located in the car park. After at least one of the CFMEU representatives spoke to the operator, the pump was turned off and a proposed concrete pour was interrupted. Such conduct resulted in heated discussions between the CFMEU representatives and other workers on site as well as with Mr Gittany. Some violence followed, in consequence of which the police were notified. The police arrived approximately 15 to 30 minutes later and order was restored. In the intervening period, Mr Miller claimed that the CFMEU representatives were not permitted to re-enter the premises. The police remained for approximately 15 minutes and thereafter the CFMEU officials and a WorkCover inspector entered upon the premises unimpeded. The FCCA judgment 14 At first instance in the FCCA it was held that the CFMEU had confined its claim under s 502 to reliance on s 494(2)(a) of the FW Act (set out above), namely that Hume Highway and Mr Gittany had intentionally obstructed or hindered a right of entry to premises controlled by a "constitutional corporation" – Hume Highway. There were found to be two aspects to the claim. The first aspect concerned a claimed right to inspect the concrete pump located in the car park. The second aspect concerned an asserted right to re-enter the premises controlled by Hume Highway. The FCCA concluded that the first aspect could not succeed because Hume Highway did not occupy or control the car park. The second aspect did not succeed because the CFMEU representatives had left the premises controlled by Hume Highway and had no automatic right to re-enter, in the view of the FCCA. The appeal judgment 15 On appeal, Cowdroy J recorded (at [31]): 31 The CFMEU in essence submitted that the first asserted right met the requisite constitutional criteria to be satisfied in s 494(2) of the FW Act by virtue of the breadth of the criteria contained in ss 494(2)(d)–(g): see [11] above. Mr Gittany argued that regardless of the breadth of the provisions in s 494(2), the primary judge correctly identified that the CFMEU only sought to rely on s 494(2)(a) before the FCCA, that being that the car park was occupied or otherwise controlled by a constitutional corporation. 16 His Honour concluded (at [35]-[36]): 35 As to the first asserted right, the points of claim relied upon by the CFMEU before the FCCA alleged that Hume Highway was a constitutional corporation, that Hume Highway controlled or occupied the premises, and that the hindrance to the CFMEU representatives occurred when they were entitled to enter the premises. Significantly, the particulars assert that the hindrance took place in the car park of the premises. On appeal, the CFMEU did not identify at which point it sought to assert before the FCCA that another constitutional criterion under s 494(2) was satisfied. Instead it obscurely referred in written submissions to s 42 of the Federal Circuit Court of Australia Act 1999 (Cth) ('the FCCA Act'), which provides that the FCCA 'must proceed without undue formality and must endeavour to ensure that the proceedings are not protracted'. 36 The basis of reliance by the CFMEU upon s 42 of the FCCA Act is unclear. If it was to suggest that the primary judge should have considered the relevancy of each of the constitutional criteria under s 494(2), even though the only constitutional criterion relied upon before the FCCA was that Hume Highway controlled or operated the premises, then that submission must be rejected. The primary purpose of s 42 of the FCCA Act is to promote expediency in the resolution of matters before the FCCA: WZASQ v Minister for Immigration and Anor [2013] FCCA 1726 at [33]; Auguste v Nikolyn Pty Ltd and Anor [2013] FCCA 1630 at [16]. It does not impose an obligation on the FCCA to go behind the pleadings of an applicant. It does not diminish the need for an applicant to state the case that is to be relied upon. In these circumstances, the primary judge was correct to find that the constitutional nexus, as pleaded, did not exist so as to enliven a State or Territory OHS right in connection with the inspection of the concrete pump. 17 As to the second aspect of the asserted right under s 502 of the FW Act, Cowdroy J recorded (at [37]): 37 The CFMEU submits that the primary judge erred when he found at [97] that the right of entry being exercised by the CFMEU representatives concluded when they left the premises. It is also submitted that such conclusion was inconsistent with the primary judge's observation at [88] that it was agreed 'in very general terms' that the CFMEU representatives had not completed their inspection before moving to the car park. 18 His Honour found (at [38]): 38 The primary judge was correct in his findings. As a matter of law, once the CFMEU representatives departed the premises, the statutory right of entry ceased. Such consequence resulted from the fact that the right of entry was wholly dependent upon the existence of a requisite constitutional foundation. … 19 Although Cowdroy J rejected the attempt by the CFMEU to broaden its reliance on s 494(2) it does not follow only from the limits imposed at first instance from the CFMEU's points of claim (where s 494(2)(a)(i) was relied on) that it would be necessarily impermissible or unreasonable to argue for a more expanded approach on appeal if the facts supported it and there was no procedural prejudice in doing so (see e.g. Betfair Pty Ltd v Racing New South Wales and Another (2010) 189 FCR 356 at [47]-[53]). 20 Nor does it seem to me, with respect, to have been inherently unarguable that the CFMEU representatives were seeking to exercise rights upon which they had already commenced when they sought to re-enter the premises controlled by Hume Highway. 21 However, I did not hear the appeal. It is apparent that Cowdroy J regarded aspects of the appeal as seriously deficient. I shall return to that issue shortly. 22 On the appeal, the CFMEU also challenged the order made by the FCCA that it should pay 50% of the respondents' costs. That order was based on rejection of the claim under s 502 of the FW Act. That rejection was accompanied by findings which rejected allegations by CFMEU witnesses about Mr Gittany's conduct. 23 Cowdroy J referred to those matters as follows (at [52]-[55]): 52 The primary judge only imposed the costs order against the CFMEU in relation to its claims concerning s 502 of the FW Act. His Honour did so for two reasons. As to the first asserted right, the CFMEU did not adduce any evidence to prove that the car park was occupied or controlled by a constitutional corporation. It was essential that one of the criteria under s 492(2) be established. By making no attempt to satisfy this requirement, the first asserted right had no prospects of success. This was made clear at [13] of the second judgment. The submission of the CFMEU that his Honour mistakenly focused on the conduct of employees of Hume Highway in this regard strains credulity. 53 As to the second asserted right, his Honour considered the evidence of the CFMEU's representatives to be untruthful in relation to their conduct and that of Mr Gittany in the car park. In particular, his Honour found that the allegations made against Mr Gittany that he engaged in threatening conduct were baseless. Such testimony was of pivotal importance as to whether the actions of Mr Gittany in temporarily denying the CFMEU representatives re-entry to the premises constituted undue delay under s 502 of the FW Act. This was made apparent at [17] of the second judgment where his Honour said: In relation to that evidence I found that: Overall, where Mr Gittany's evidence differs from that of Messrs Miller, Koh and Razaghi, I prefer his evidence. (at [107] [of the first judgment]) and … I find that Mr Gittany did not threaten Messrs Miller, Koh and Razaghi or endeavour to keep them from re-entering the Premises in the manner alleged by the CFMEU or for the reason implicitly advanced by the CFMEU as the motivation for such conduct. (at [109] [of the first judgment]) 54 It follows that the dishonesty of the CFMEU representatives in relation to Mr Gittany's conduct was not an extraneous or immaterial matter for the primary judge to consider in determining whether the CFMEU had reasonable cause to allege that s 502 had been contravened by either Hume Highway or Mr Gittany. 55 Finally, the CFMEU's submission that the primary judge should have provided reasons for exercising his discretion to award costs should also be rejected. The mere fact that the second judgment does not refer to the exercise of a discretion by the primary judge does not in itself suggest that his Honour made an award for costs simply because the conditions under s 570 of the FW Act were satisfied. A complete reading of the first and second judgments clearly reflects that his Honour deemed an award of costs to be appropriate in the circumstances. [His Honour's emphasis] 24 The statement in [52] that an aspect of the case presented by the CFMEU at first instance "had no prospects of success" is a strong one. So also are the statements in [53]-[54]. It appears clear to me that Cowdroy J regarded the challenge to the rejection of the case based on s 502 of the FW Act, and the challenge to the award of costs, as unmeritorious in each case. 25 On the other hand, the hearing of the appeal took only one day and no costs have been sought referable to that part of the appeal which challenged the finding at first instance that there had been no breach of s 501 of the FW Act. That allegation also depended on allegations about Mr Gittany's conduct which were not accepted. 26 The fact that aspects of a case are decisively rejected at first instance, perhaps having regard to findings of credit in clear terms, does not mean that it was unreasonable to pursue a challenge about those matters on appeal. The conduct of the appeal must be assessed in its own right. 27 The CFMEU's argument about the operation of s 494(2) dealt with matters about which, often, there is no conclusively right or wrong approach. I am not persuaded that it was unreasonable for the CFMEU to have argued on the appeal that its case based on s 502 of the FW Act rested legitimately on a broader foundation than the findings made at first instance. As Gibbs J said in R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473 (in a passage set out by Cowdroy J at [49]): In my opinion a party cannot be said to have commenced a proceeding "without reasonable cause", within the meaning of that section, simply because his argument proves unsuccessful. 28 Similarly, I would not regard it as unarguable, on the findings made on appeal, that the CFMEU representatives thought they were embarked on a single exercise when they sought re-entry to the premises, or that an appeal based on that premise was unreasonable. 29 If it was necessary to consider s 570(2)(a) I would not conclude that the appeal was instituted vexatiously or without reasonable cause. Similarly, I am not satisfied under s 570(2)(b) that the institution of the appeal, or maintenance of any aspect of it, was unreasonable in all the circumstances. 30 In my view, no order should be made concerning the costs of the appeal, or concerning the costs of the present application. 31 The application for costs will be dismissed. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate: Dated: 30 April 2014