Federal Court of Australia 85 Degrees Coffee Australia Pty Ltd v Fair Work Inspector Rodwell [2020] FCA 1190 File number: NSD 101 of 2020 Judgment of: KATZMANN J Date of judgment: 18 August 2020 Catchwords: INDUSTRIAL LAW — validity of notice issued under s 712(1) of the Fair Work Act 2009 (Cth) for production of records and documents — whether notice issued for an ulterior purpose — to the extent that the purpose of the notice related to the determination of whether applicant had contravened s 558B of the Act and insofar as it sought records or documents that could only have come into existence before the section commenced, whether notice void and of no effect — whether certain descriptions of categories of records and documents too broad to enable applicant to determine with reasonable clarity which documents are required to be produced and the relationship between those documents and the stated purpose Legislation: Acts Interpretation Act 1901 (Cth), ss 2B, 46(2) Fair Work Act 2009 (Cth) ss 706, 712(1), 558, 793, Sch 1 Pt 4 cl 19 Judiciary Act 1903 (Cth) s 39B Cases cited: Allen v Feather Products Pty Ltd (2008) 72 NSWLR 597 Australian Communications and Media Authority v Mobilegate Ltd (a company incorporated in Hong Kong) (No 8) [2010] FCA 1197; 275 ALR 293 Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Inspector Lam [2018] FCA 1379 Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 Donnelly v O'Donnell [2005] FCA 1412; 140 IR 434 Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034; 152 ALD 209 Fair Work Ombudsman v United Petroleum Pty Ltd [2020] FCA 590 Maxwell v Murphy (1957) 96 CLR 261 Nicholas v Commissioner for Corporate Affairs [1988] VR 289 Seven Network v Australian Competition and Consumer Commission (2004) 140 FCR 170 Thorson v Pine (2004) 139 FCR 527 Transport Workers Union v Lee (1998) 84 FCR 60 WA Pines Pty Ltd v Bannerman (1980) 30 ALR 559; ATPR ¶40–163; 41 FLR 175 Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 86 Date of hearing: 21 July 2020 Counsel for the Applicant: Mr M Heath Solicitor for the Applicant: Maxwell & Co (Sydney) Counsel for the Respondent: Mr D Fuller Solicitor for the Respondent: Australian Government Solicitor ORDERS NSD 101 of 2020 BETWEEN: 85 DEGREES COFFEE AUSTRALIA PTY LTD Applicant AND: FAIR WORK INSPECTOR EMMA RODWELL Respondent order made by: KATZMANN J DATE OF ORDER: 18 AUGUST 2020 THE COURT ORDERS THAT: 1. Within seven (7) days the parties bring in short minutes of order giving effect to these reasons. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KATZMANN J: Introduction 1 The Fair Work Act 2009 (Cth) (FW Act or Act) establishes a Fair Work Ombudsman, whose functions include monitoring compliance with the Act and inquiring into, and investigating, acts or practices that may be contrary to it. By s 701 the Ombudsman is a Fair Work Inspector. The Ombudsman may also appoint others as Fair Work Inspectors pursuant to s 700. The Act gives a Fair Work Inspector a range of compliance powers. They include the power to require a person, by notice in writing, to produce to an inspector records or documents. That power is conferred by s 712. Absent a reasonable excuse, a person who is served with such a notice must comply with it and non-compliance will attract a civil penalty. But compliance powers may only be exercised for certain purposes. Unless the notice is directed to one of those purposes it will be invalid. 2 By an originating application filed on 3 February 2020, the applicant challenged the validity of two such notices, issued in December 2019 and January 2020. The challenge to the second notice has fallen away. All that remains is the challenge to the validity of the first notice, which from this point onwards I shall call the Notice. The applicant seeks a declaration that the Notice is void and of no effect and that the applicant is not required to comply with it. It also seeks any other order the Court considers appropriate. The application is supported by an affidavit of Hao (David) Fan, a solicitor, affirmed on 3 February 2020. Jurisdiction 3 Although the application was made under s 39B of the Judiciary Act 1903 (Cth), the Court's jurisdiction was said to be founded on s 562 of the FW Act. In truth, jurisdiction is conferred by both Acts. Section 39B(1A) relevantly confers original jurisdiction on the Court in any matter arising under any laws made by the Parliament (see para (c)). Section 562 of the FW Act confers jurisdiction on the Court in relation to any matter arising under that Act. Since the dispute is concerned with whether a notice was validly issued under s 712 of the FW Act, this is plainly a matter arising under the FW Act: see Transport Workers Union v Lee (1998) 84 FCR 60 at 66 (Black CJ, Ryan and Goldberg JJ). The Notice 4 The Notice was served on the applicant on 9 December 2019. It began with a reference to s 712 and an explanation of the respondent's authority to require the production of records or documents. It advised that the Ombudsman had begun "a compliance activity" in relation to 10 entities operating outlets of the applicant and had received requests for assistance from two former employees of one of those entities. It explained that this led to investigations into four entities "to determine their compliance with the Act and any relevant fair work instruments (Commonwealth Workplace Laws) in the period 9 January 2019 to 28 June 2019". It informed the applicant that the Ombudsman had identified that contraventions of ss 44, 45, 535 and 536 of the FW Act had or may have occurred during "the stated contravention periods" and that those contraventions (Identified Contraventions) were set out in the following table: Entity Identified Contraventions Contravention Period CPJ Group Pty Ltd section 45: compliance with a Modern Award, by failing to comply with clauses 13.2, 29.4(b)(i), 29.2(c), 29.2(e), 29.4(d)(i), 29.4(e)(ii), 31.1, 20.2(b) and 22.2 of the Retail Industry Award 2010 (Retail Award) by failing to comply with the following clauses: 9 January 2019 to 28 June 2019 section 535: compliance with employer obligations in relation to employee records; section 536: compliance with employer obligations in relation to pay slips; T.G.L Cake Pty Ltd section 45: compliance with a Modern Award, by failing to comply with clauses 13.2, 29.4(d)(i), 29.2(c), 29.2(e), 29.4(d)(i), 29.4(e)(ii) and 20.2(b) of the Retail Award by failing to comply with the following clauses: 1 May 2019 to 20 November 2019 section 535: compliance with employer obligations in relation to employee records; section 536: compliance with employer obligations in relation to pay slips; Yi Xuan Pty Ltd section 45: compliance with a Modern Award, by failing to comply with clauses 13.2, 18.1, 29.4(d)(i), 29.4(e)(ii) and 29.4(f)(i) of the Retail Award by failing to comply with the following clauses: 19 January 2019 to 22 February 2019 section 535: compliance with employer obligations in relation to employee records; section 536: compliance with employer obligations in relation to pay slips; Crowd Group Go Pty Ltd section 45: compliance with a Modern Award, by failing to comply with clauses 13.2, 18.1, 29.4(d)(i), 29.4(e)(ii) and 29.4(f)(i) of the Retail Award by failing to comply with the following clauses: 12 January 2019 to 28 February 2019 section 535: compliance with employer obligations in relation to employee records; section 536: compliance with employer obligations in relation to pay slips 5 Each of the sections of the Act mentioned in the table is a civil remedy provision. 6 The Notice described the purpose or purposes for which the records and/or documents were sought in the following way: RATIONALE FOR THE RECORDS OR DOCUMENTS SOUGHT For the purposes of determining whether the Act is being complied with, I now seek that 85 Degrees produce the records and/or documents listed below. These records and/or documents are required to determine whether 85 Degrees: (a) is a responsible franchisor entity within the meaning of section 558A(2) of the Act in respect of some or all of the Entities; and (b) has contravened section 558B of the Act in respect of some or all of the Identified Contraventions. The documents listed below are also required to determine whether 85 Degrees has contravened section 550 of the Act in respect of any of the Identified Contraventions. 7 The Notice went on to list by categories the documents and/or records required for production for those purposes. Those categories were: 1. Any records or documents setting out the name, contact details, position, appointment date and cessation date for each director and member of the management team of 85 Degrees from 1 January 2016 to the date of this Notice (Relevant Period). 2. All records or documents detailing the business structure of 85 Degrees, including any organisational charts during the Relevant Period. 3. All records or documents detailing or prescribing the person(s) with responsibility within 85 Degrees for the management of the relationship between 85 Degrees and each of the Entities, during the Relevant Period. 4. Any franchise agreement, contract or other written agreement between 85 Degrees and each of the Entities which records the terms on which each of the Entities operates or operated an 85 Degrees outlet, including: (a) the sale of products for retail, however described; (b) licensing arrangements; (c) the use of intellectual property; and (d) royalties, rent and fees payable in respect of retail sales. 5. All records or documents (including correspondence) between 85 Degrees and each of the Entities in relation to the negotiation of the agreements referred to in paragraph 4. 6. Any franchise or operational manual issued by 85 Degrees to any of the Entities. 7. Any records or documents which document audits or reviews conducted by 85 Degrees in respect of each of the Entities during the period of any franchise agreement. 8. All written advice received by 85 Degrees, including advice provided by an accountant, industry association and/or government agency, that relates: (a) to any of the Entities' compliance with Commonwealth Workplace Laws; or (b) 85 Degrees' compliance with Commonwealth Workplace Laws in respect of its franchise network. 9. All records or documents created by or sent to officers or employees of 85 Degrees, including board minutes, meeting minutes, emails and internal memorandum, which relate to: (a) any of the Entities' compliance or suspected non-compliance with Commonwealth Workplace Laws; or (b) 85 Degrees' compliance with Commonwealth Workplace Laws in respect of its franchise network. 10. All records or documents relating to any recommendations, instructions, policies, protocols and standards (however described) provided by 85 Degrees to each of the Entities in relation to: (a) the engagement of workers including staffing levels, rostering, duties, hours of work, employment entitlements, type of employment, terms of engagement, rates of pay, record keeping and the creation and issuing of pay slips; (b) any legal obligations which arise under Commonwealth Workplace Laws; and (c) the record keeping and reporting requirements of any of the Entities to 85 Degrees in relation to compliance with any applicable recommendations, instructions, policies, protocols and standards referred to in subparagraph 10(a) and 10(b). 11. All records or documents (including correspondence and emails) between 85 Degrees, or representatives of 85 Degrees, and each of the Entities, in relation to: (a) any complaints or concerns raised by any employees of the Entities as to their wages, employee entitlements and workplace conditions; (b) any questions, complaints or concerns raised by any of the Entities regarding their obligations in relation to wages, employee entitlements and workplace conditions, under any Modern Award, contractual agreement, the Act or the Fair Work Regulations; (c) requests made by 85 Degrees to any of the Entities for information as to that entity's compliance with Commonwealth Workplace Laws; (d) any findings of non-compliance, warning letters or breach notices issued by 85 Australia (sic) which related to employee conditions or payroll functions (including but not limited to rostering, payment to employees, hours worked by employees, payslips and employee records maintained by the Entities); (e) audits conducted by 85 Degrees on the Entities in relation to compliance with Commonwealth Workplace Laws; and (f) training undertaken or training required to be undertaken by the Entities at the request of 85 Degrees in relation to compliance with Commonwealth Workplace Laws. 12. All records or documents that relate to any steps taken by 85 Degrees to prevent contraventions by the Entities from the commencement of any franchise agreement; 13. All records or documents in the possession of 85 Degrees as at date of this Notice that record the operations, human resources or payroll activities of each of the Entities from 30 June 2018 to the date of this Notice, including: (a) records that identify all workers (including independent contractors) who performed work for the Entities (Workers), including names, contact details, employee details forms, duty statements, position descriptions, visa information, occupational health and safety or other workplace incident reports; (b) records detailing the hours worked by all Workers including timesheets, rosters, clock cards, diary entries, cash register or computer system logins and logouts, and electronic time entries; and (c) records detailing the payments made (including gross and net amounts), entitlements accrued and deductions made in respect of all Workers, including pay slips, payroll summaries, spreadsheets, store logs and EFT receipts. 14. All records or documents in the possession of 85 Degrees as at date of this Notice that record the operations and financial performance or profitability of the Entities from 30 June 2018 to the date of this Notice, including any: (a) sales records and sales reports (however described); (b) fees and amounts incurred or paid by the Identified Entities to 85 Degrees, including but not limited to fees paid under any franchise agreement(s); (c) any reviews, reports, audits or analysis undertaken or commissioned by 85 Degrees in respect of the profitability of the Identified Entities in their conduct of an 85 Degrees outlet; (d) any written correspondence in relation to the profitability of any of the Identified Entities in their conduct of an 85 Degrees outlet. (e) financial statements, including income statements (including that show revenues, expenses and profit and loss), balance sheets (including that show assets, liabilities and equity), statements of cash flows and statements of changes in equity. 8 The Notice contained definitions of "document" and "record" and "includes" or "including" to which it is unnecessary to refer. 9 The Notice also included a warning about the potential consequences of giving false or misleading information or producing false or misleading documents and of failing to comply with the Notice without a reasonable excuse. The legislative framework The powers of an inspector to require production of records or documents 10 The powers conferred on an inspector by the FW Act are referred to in the Act as "compliance powers": see s 703(1). Section 712, to which I will come shortly, is such a power. 11 Section 706 relevantly provides: (1) An inspector may exercise compliance powers (other than a power under section 715 or 716) for one or more of the following purposes (compliance purposes): (a) determining whether this Act or a fair work instrument is being, or has been, complied with[.] … (2) An inspector may exercise compliance powers for the purpose referred to in paragraph (1)(b) only if the inspector reasonably believes that the person has contravened one or more of the following: (a) a provision of the National Employment Standards; (b) a term of a modern award[.] … "Inspector" is defined in s 12 as "Fair Work Inspector". 12 Section 712 provides: Power to require persons to produce records or documents (1) An inspector may require a person, by notice, to produce a record or document to the inspector. (2) The notice must: (a) be in writing; and (b) be served on the person; and (c) require the person to produce the record or document at a specified place within a specified period of at least 14 days. The notice may be served by sending the notice to the person's fax number. (3) A person who is served with a notice to produce must not fail to comply with the notice. Note: This subsection is a civil remedy provision (see Part 4-1). (4) Subsection (3) does not apply if the person has a reasonable excuse. "Document" means any record of information and includes, amongst other things, anything on which there is writing, marks, figures, or symbols, and anything from which sounds, images or writings can be reproduced with or without the aid of anything else. "Record" includes information stored or recorded by means of a computer. See Acts Interpretation Act 1901 (Cth), s 2B. 13 A person is not excused from producing a record or document on the ground that to do so might tend to incriminate the person or otherwise expose the person to a penalty or liability: s 713(1). But nothing in Pt 5-2 requires a person to produce a document that would disclose information that is subject to legal professional privilege: s 713AA. Involvement in a contravention 14 Omitting the note to subs(1), which is immaterial for present purposes, s 550 of the FW Act provides as follows: Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. (2) A person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. The liability of "responsible franchisor entities" 15 Sections 558A and 558B were part of a suite of provisions inserted into the FW Act by the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth), which commenced on 15 September 2017. They appear in Div 4A of the FW Act, which relevantly imposes obligations on "responsible franchisor entities" in relation to certain contraventions of civil remedy provisions by "franchisee entities" in relation to contraventions by their subsidiaries of the same provisions. 16 Section 558A defines "franchisee entity" and "responsible franchisor entity": Meaning of franchisee entity and responsible franchisor entity (1) A person is a franchisee entity of a franchise if: (a) the person is a franchisee (including a subfranchisee) in relation to the franchise; and (b) the business conducted by the person under the franchise is substantially or materially associated with intellectual property relating to the franchise. (2) A person is a responsible franchisor entity for a franchisee entity of a franchise if: (a) the person is a franchisor (including a subfranchisor) in relation to the franchise; and (b) the person has a significant degree of influence or control over the franchisee entity's affairs. 17 Section 558B relevantly provides: Responsibility of responsible franchisor entities and holding companies for certain contraventions Responsible franchisor entities (1) A person contravenes this subsection if: (a) an employer who is a franchisee entity of a franchise contravenes a civil remedy provision referred to in subsection (7); and (b) the person is a responsible franchisor entity for the franchisee entity; and (c) the contravention by the franchisee entity occurs in the franchisee entity's capacity as a franchisee entity; and (d) either: (i) the responsible franchisor entity or an officer (within the meaning of the Corporations Act 2001) of the responsible franchisor entity knew or could reasonably be expected to have known that the contravention by the franchisee entity would occur; or (ii) at the time of the contravention by the franchisee entity, the responsible franchisor entity or an officer (within the meaning of the Corporations Act 2001) of the responsible franchisor entity knew or could reasonably be expected to have known that a contravention by the franchisee entity of the same or a similar character was likely to occur. Note: This subsection is a civil remedy provision (see this Part). Holding companies (2) … Reasonable steps to prevent a contravention of the same or a similar character (1) A person does not contravene subsection (1) or (2) if, as at the time of the contravention referred to in paragraph (1)(a) or (2)(b), the person had taken reasonable steps to prevent a contravention by the franchisee entity or subsidiary of the same or a similar character. (2) For the purposes of subsection (3), in determining whether a person took reasonable steps to prevent a contravention by a franchisee entity … (the contravening employer) of the same or a similar character, a court may have regard to all relevant matters, including the following: (a) the size and resources of the franchise or body corporate (as the case may be); (b) the extent to which the person had the ability to influence or control the contravening employer's conduct in relation to the contravention referred to in paragraph (1)(a) or (2)(b) or a contravention of the same or a similar character; (c) any action the person took directed towards ensuring that the contravening employer had a reasonable knowledge and understanding of the requirements under the applicable provisions referred to in subsection (7); (d) the person's arrangements (if any) for assessing the contravening employer's compliance with the applicable provisions referred to in subsection (7); (e) the person's arrangements (if any) for receiving and addressing possible complaints about alleged underpayments or other alleged contraventions of this Act within: (i) the franchise; or (ii) the body corporate or any subsidiary (within the meaning of the Corporations Act 2001) of the body corporate; as the case may be; (f) the extent to which the person's arrangements (whether legal or otherwise) with the contravening employer encourage or require the contravening employer to comply with this Act or any other workplace law. (3) Subsection (4) does not limit subsection (3). … Relevant civil remedy provisions (7) The civil remedy provisions are the following: (a) subsection 44(1) (which deals with contraventions of the National Employment Standards); (b) section 45 (which deals with contraventions of modern awards); … (n) subsection 535(1), (2) or (4) (which deal with employer obligations in relation to employee records); (o) subsection 536(1), (2) or (3) (which deal with employer obligations in relation to pay slips). (Emphasis added.) The liability of bodies corporate 18 Section 793 of the Act is also relevant. It deals with the circumstances in which a body corporate is liable for the conduct of individuals. It relevantly provides: Liability of bodies corporate Conduct of a body corporate (1) Any conduct engaged in on behalf of a body corporate: (a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official; is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body. State of mind of a body corporate (2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show: (a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and (b) that the person had that state of mind. Meaning of state of mind (3) The state of mind of a person includes: (a) the knowledge, intention, opinion, belief or purpose of the person; and (b) the person's reasons for the intention, opinion, belief or purpose. The relevant principles 19 The relevant principles governing the validity of a notice to produce issued under s 712 were not in dispute. 20 First, the power to issue such a notice is constrained by the requirement in s 706 for inspectors to exercise their powers for a compliance purpose as defined in that section. 21 Second, the notice must show on its face that it is a proper exercise of the power in furtherance of the particular purpose: Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Inspector Lam [2018] FCA 1379 at [26] (Bromberg J). In other words the notice must specify that it has been issued pursuant to s 712: Fair Work Ombudsman v United Petroleum Pty Ltd [2020] FCA 590 at [35] (Anderson J). 22 Third, the reference in para 706(1)(a) to compliance with the Act is to be understood as a reference to compliance with a particular provision (or provisions) of the Act and that provision (or those provisions) should ordinarily be identified in the notice: Lam at [29]. 23 Fourth, in order for a notice under s 712 to be valid, it must not only disclose that it is an exercise of the power conferred on an inspector by that section, but it must also, "on a non-technical and fair reading of its terms": (i) specify with reasonable clarity the records or documents that the recipient is required to provide; and (ii) disclose the relationship between the records or documents being required and the matter (the particular inquiry as to non-compliance) which is the subject of the exercise of the power, so as to enable its recipient to determine whether the inspector is exercising the power for a "compliance purpose" (s 706(1)). See Lam at [27]. The applicant's contentions 24 The applicant contended that the Notice is void and of no effect for any or all of the following reasons: (1) it was not issued in the exercise of a statutory power because it referred to s 558A(2) of the FW Act "as a relevant purpose"; (2) in so far as one of its purposes was to determine whether the applicant had contravened s 558B of the Act, it sought records and documents that could only have come into existence before the enactment of that section; and/or (3) some of the categories of records and documents sought in the Notice are so broad that, on their face, they fail to enable the applicant to determine "with reasonable clarity" the records and documents it is required to produce and "the inspector's inquiry as to non-compliance". The issues 25 It follows that the issues for determination are whether the Notice is invalid because: (1) the Notice referred to s 558A(2); (2) the request for records and documents includes documents that came into existence before the commencement of s 558B; and/or (3) some of the categories are too broad to enable the applicant to determine with reasonable clarity the records and documents it is required to produce or the inspector's "inquiry as to non-compliance". Did the reference in the Notice to s 558A(2) invalidate the Notice? 26 The short answer to this question is "no". 27 It is true that s 558A(2) is not a civil remedy provision; it merely defines the meaning of "responsible franchisor entity". But that does not mean that determining whether the applicant is a responsible franchisor entity within the meaning of the section "vitiates the notice", as the applicant contended. A person can only contravene s 558B if the person is "a responsible franchisor entity for the franchisee entity": see para 558(1)(b). Thus, it is plainly a compliance purpose to seek the production of records and documents in order to determine whether a person falls within the definition in s 558A(2). Does the request for records and documents that came into existence before the commencement of s 558B invalidate the Notice? 28 The applicant's contention that it does is founded on the transitional provisions of the FW Act. Schedule 1 Pt 4 cl 19 of the Act provides: 19 Application of amendments—responsibility of responsible franchisor entities and holding companies (1) Section 558B of the amended Act applies in relation to contraventions of civil remedy provisions by franchisee entities or subsidiaries that occur after the end of the period of 6 weeks beginning on the day this Part commences. (2) To avoid doubt, in determining for the purposes of paragraph 558B(1)(d) or (2)(c) of the amended Act whether a person could reasonably be expected to have had knowledge as referred to in that paragraph, a court may have regard to conduct that occurred, or circumstances existing, before the end of the period referred to in subclause (1). (Emphasis added.) 29 The effect of cl 19(1) is that s 558B applies in relation to contraventions by franchisee entities occurring on and from 26 October 2017. It will be recalled that para 558B(1)(d) is that element of a contravention relating to the actual or putative knowledge of the responsible franchisor entity: that the entity or an officer of the entity "knew or could reasonably be expected to have known that the contravention by the franchisee entity would occur" or that "a contravention by the franchisee entity of the same or a similar character was likely to occur". Paragraph (2)(c) is the equivalent element relating to holding companies. 30 The applicant's argument is that the clause is only concerned with information to which a court may have regard. That is, it does not authorise the issue of a notice under s 712 which requires the production of documents or records that came into existence before 26 October 2017. The argument was based on the words in cl 19(2) emphasised in the extract in [28] above. 31 The applicant submitted that for these reasons "it is not open" to an inspector to issue a notice in reliance on s 558B(1)(d) or 2(c) of the Act to obtain records or documents relevant to the knowledge with which the section is concerned that came into existence before 26 October 2017. The applicant pointed to categories 1, 2, and 3 which seek documents and/or records "from 1 January 2016" and categories 7,8,9,10,11, and 12, and complained that, "if they are said to go to knowledge for the purposes of 558B", they are open-ended and include documents that were created before 26 October 2017. Consequently, the applicant contended, "a condition or authorising purpose for the issue of the [Notice] could not be s 558A(2)". In other words, the documents and records sought by the Notice are irrelevant to the identified compliance purpose and, at least to the extent that the Notice requires their production, it is invalid. 32 I reject the argument. 33 First, while it is true, as the applicant submitted, that cl 19(2) does not give an inspector the power to obtain documents or material that came into existence before 26 October 2017, the inspector's power does not derive from s 558B. The source of the inspector's power is s 712, read with s 706. 34 Second, if a court may have regard to such documents or records it must follow that the legislature contemplated that such documents or records might be relevant to determining whether a person had contravened para 558B(1)(d) or (2)(c). In these circumstances there is no reason to think that the legislature intended to prevent an inspector from requiring their production before deciding whether or not to institute court proceedings. 35 Third, neither expressly nor by implication does cl 19(2) preclude an inspector from seeking documents or records that came into existence before the end of the relevant period. The fact that the clause did not make this clear is of no moment. The applicant's argument proceeds on the assumption that, absent cl 19(2), there would have been doubt about whether a court could have regard to past conduct or existing circumstances and that the failure to make it clear in cl 19(2) that an inspector could issue a notice under s 712 for documents or records relating to that conduct or those circumstances means that an inspector is precluded from issuing such a notice. I do not accept the assumption. 36 As Barrett J remarked with respect to a provision of this nature in Allen v Feather Products Pty Ltd (2008) 72 NSWLR 597 at [25]: Precisely what the words "to avoid doubt" or "for the avoidance of doubt" add to the meaning of a statutory provision may itself be a matter of doubt. The operative enacted words should have the same effect whether or not the introductory or explanatory words are included. Perhaps the indication is that one has resort to the provision only if some doubt arises, or that the provision deals only with cases of doubt. 37 In Allen at [26]–[27] Barrett J also referred to an observation by a senior draftsperson in the Office of Parliamentary Counsel that commonly such provisions were inserted "to clarify ambiguities that do not really exist". 38 I take the view that cl 19(2) adds nothing to the meaning of s 558B (cf. Allen at [29]). 39 Even without cl 19(2), it is readily apparent that events that took place before 26 October 2017 or circumstances existing at that time would be relevant and admissible to the determination of whether a contravention occurred on or after that date. 40 For a start, to meet the definition in s 558A(2) of a "responsible franchisor entity", the applicant must be a franchisor in relation to the franchisee with "a significant degree of influence or control over the franchisee entity's affairs". Such a degree of influence or control may well be established over time or, as the respondent put it in her submissions, it may be the product of events or circumstances occurring in the past or building over a period of time, including before 26 October 2017. It is logical that documents or records that came into existence before that date could reveal, or tend to reveal, the nature and/or extent of the necessary influence or control after that date. 41 Further, s 558B(3) provides that a person does not contravene s 558B(1) or (2) if, at the time of the contravention, the person has taken reasonable steps to prevent a contravention by the franchisee entity of the same or a similar character. In determining whether such steps have been taken, s 558B(4) provides that a court may have regard to "all relevant matters", including: (b) the extent to which the person had the ability to influence or control the contravening employer's conduct in relation to the contravention … or a contravention of the same or a similar character; … (d) the person's arrangements (if any) for assessing the contravening employer's compliance with the applicable provisions referred to in subsection (7) [the relevant civil remedy provisions]; (e) the person's arrangements (if any) for receiving and addressing possible complaints about alleged underpayments or other alleged contraventions of this Act within: (i) the franchise[.] … (f) the extent to which the person's arrangements (whether legal or otherwise) with the contravening employer encourage or require the contravening employer to comply with this Act or any other workplace law. 42 As the respondent submitted, in order to evaluate each of these matters it will generally be necessary to have regard to events or circumstances that predate the contravention. It is self-evident, for example, that compliance arrangements will need to be in place before any contravention. Longstanding arrangements, particularly those which are enforced, will have greater weight than recent ones. 43 Consequently, for contraventions by a franchisee entity that were committed on or after 26 October 2017, any documents or records touching upon the ability of the applicant to control the contravening employer's conduct in relation to a relevant contravention or relating to the existence or otherwise of the relevant arrangements are likely to have been created some time before 26 October 2017. 44 The applicant also overlooks the fact that the inspector is not seeking the documents and records exclusively for the purpose of determining whether the applicant is a responsible franchisor entity and has contravened s 558B but also to determine whether the applicant has contravened s 550 of the Act. The latter inquiry is directed to the involvement of the applicant in one or more of the Identified Contraventions. Events and circumstances predating the primary contraventions may shed light on whether the applicant knew at the time of the contraventions of the essential elements constituting them so as to make it knowingly concerned in the contraventions of the franchisee entities. That is because, for the purposes of s 550, knowledge of a system producing outcomes which constitute contraventions by a principal can be sufficient to implicate an accessory in those contraventions: see, for example, Australian Communications and Media Authority v Mobilegate Ltd (a company incorporated in Hong Kong) (No 8) [2010] FCA 1197; 275 ALR 293 at [172] (Logan J); Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034; 152 ALD 209 at [955]–[957] (Katzmann J). 45 The extrinsic material supports this interpretation of the legislation. The Explanatory Memorandum notes that "[d]etermining whether a responsible franchisor entity could reasonably be expected to have known of a contravention (or contraventions of the same or a similar character) … takes into account the responsible franchisor entity's knowledge, experience and acumen". In his second reading speech the Hon Peter Dutton MHR, said that: What is appropriate in any particular case will depend on the size, resources and control exercised by a particular business and what steps they are already taking to encourage compliance with the law within their corporate networks. In many cases, existing measures will be sufficient and there will be no need to take any further action. (Emphasis added.) 46 The applicant accepted that cl 19(2) indicates that the legislature recognised that there would be material that came into existence before the operative date which would be relevant to a prosecution. But it argued that the clause did not authorise the use of the power conferred by s 712 to obtain that material. Rather, it claimed that the only way an inspector could secure access was by the use of the coercive powers of the Court after commencing proceedings against an entity, such as through discovery or notices to produce. The applicant submitted that s 558B was a penal provision so it should not be construed beneficially and if an inspector were able to require the production of such documents this would involve "a retrospective element". If Parliament intended to give an inspector this power, the applicant added, it would have said so. 47 I do not accept the argument. 48 As I have already observed, the power to issue a notice is not conferred by s 558B but by s 712. Still, s 712 is also a civil remedy provision. Absent a reasonable excuse, non-compliance exposes the applicant to a pecuniary penalty. Provisions imposing civil penalties should be "certain and its reach ascertainable by those who are subject to it": Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at [48]. It is for this reason that the operation of s 712 must be strictly confined by the purpose for which the power to issue a notice may be exercised. It is for this reason, too, that the notice will only be valid if it discloses that it is an exercise of the power conferred on an inspector by s 712, specifies with reasonable clarity the records or documents the recipient must produce, and identifies the relationship between those records or documents and the matter which is the subject of the exercise of the power. The proper interpretation of s 712, however, is not determined or affected by cl 19(2). 49 In Maxwell v Murphy (1957) 96 CLR 261 at 267 Dixon CJ observed: The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. (Emphasis added.) 50 This is commonly referred to as the presumption against retrospectivity. But the presumption against retrospectivity has nothing to do with this case. 51 As Kaye J explained in Nicholas v Commissioner for Corporate Affairs [1988] VR 289 at 296, citing Halsbury, 4th ed., vol.44, "Statutes", para [921]: The common law rule of construction concerning retrospectivity is subject to a qualification that "a statute is not retrospective merely because it affects existing rights; nor is it retrospective because a part of the requisites for its action is drawn from a time antecedent to its passing". 52 The Notice issued by the inspector does not involve the imposition or incorporation of some impermissible "retrospective element". Its evident purpose is to enable the inspector to investigate the extent of influence or control exercised by the applicant over the affairs of the franchisee entities at the time of the alleged contraventions, what the applicant knew or should have known during the Contravention Periods, and whether reasonable precautions were in place during those periods to prevent a contravention — to the extent that documents and records that were created before that time or those periods might shed light on those questions. 53 In my opinion, subject to the resolution of the final question, this was a valid notice. Are the descriptions of the categories too broad? 54 The applicant submitted that a number of the categories are so broadly described that, on their face, they "fail to enable [the] recipient to determine with reasonable clarity, the documents required and the relationship between those documents and the inspector's inquiry as to non-compliance". The submission was confined to categories 1, 7, 8, 9, 11, and 12. Category 1 55 The applicant's objection to category 1, which seeks documents or records setting out certain identification details of "each director and member of the management team", is that the expression "management team" is too "loose" or too vague. The applicant pointed out that it does not appear in the Corporations Act 2001 (Cth) and is not defined in the Notice. The applicant likened the expression to "Port of Melbourne precinct" which Bromberg J held in Lam was too loose to enable a judgment to be made by the recipient of a notice as to whether a specific workplace or business was within its bounds. His Honour held at [42] that the use of the expression created "significant ambiguity", sufficient to invalidate the notice. His Honour explained: In a context where the receiver of the notice is liable for civil penalties for non-compliance with the notice, the uncertainty of the locational qualifier given in the description of the documents being sought enables a conclusion that the notice fails to specify with reasonable clarity the records or documents that the recipient is required to provide. 56 The respondent submitted that "member of the management team" has a sufficiently clear ordinary meaning, namely, a member of a group of individuals responsible for managing (that is, controlling or being in charge of) the organisation's operations. Given the variety of possible management structures, she argued, it is difficult to see how she could be more specific. If, however, the Court were to consider that the expression is ambiguous on its face, she urged the Court to have regard to the fact that the applicant had used the very same expression in correspondence with the respondents during the investigation. 57 The correspondence to which the respondent was referring was a letter from the applicant's solicitors to the Ombudsman dated 3 May 2019. The reference appears in the following passage: [A]s you may have been aware, 85 Degrees underwent corporate restructuring recently. The previous chief executive officer has stepped down from his position and the company is still in the process of retaining a permanent replacement. At page 2 of the Bundle is a copy of his resignation notice for your records. We are also instructed that he has initiated legal proceedings against 85 Degrees. The management team is being reformed at the moment and is determined to ensure compliance with regulatory requirements. 58 It is at least doubtful whether it is open to the Court to take this evidence into account. In Thorson v Pine (2004) 139 FCR 527 at [32] Marshall J said that, since a notice given under s 86(1A)(c) of the Workplace Relations Act 1996 (Cth) has "a coercive and invasive character" and the privilege against self-incrimination is abrogated by s 86(4B), in order for the notice to be valid, it must be valid "on its face", without reference to extrinsic material. Similarly, in United Petroleum at [42], in which Anderson J held that it is insufficient for a notice to "obliquely rely on the existence of extraneous information to establish its own validity". The respondent submitted that "any such restriction" should not be applied to determine the meaning of language used in a notice that is said to be ambiguous, or language that can be referenced to a prior course of dealing between the parties. She noted that there are circumstances in which extrinsic material can be admitted to determine the meaning of contractual terms and, by analogy, submitted that the reference in the letter could be taken into account in the present case. 59 I reject the respondent's submissions on this point. The penal consequences attaching to non-compliance with a s 712 notice mean that the contractual analogy is flawed. In any event, the applicant would not necessarily think that by "management team" the inspector was referring to the management team to which the applicant's solicitors had referred in the letter. Not only was there no reference to the letter in the Notice, but the letter itself indicated that the management team was being "reformed". 60 "Management team" is a colloquial expression. It has no fixed meaning. There is room for argument as to who might constitute its members. Arguably a person might be involved in the management of a company but not be a member of its designated management team. Some companies may not have a management team, as such. Absent a definition in the Notice or even a reference to the respondent's use of the expression, such as "each member of the management team to which your solicitors were referring in their letter of 3 May 2019 and any replacements", the expression is open to different interpretations. The applicant might not consider a person a member of its management team but, by reason of that person's responsibilities, the Ombudsman might have a different opinion. Instead of "each director and member of the management team", the respondent could have written "each director and officer". "Officer" is defined in s 9 of the Corporations Act 2001 (Cth). If that is what the respondent meant, then any risk of ambiguity could be avoided by the addition of the words, "as defined in the Corporations Act". If not, because the respondent intended to cast the net wider than that, then it cannot be beyond the imagination of the respondent and her legal advisors to come up with a suitably clear form of words. 61 Nevertheless, the use of the expression "member of the management team" is insufficient to invalidate the Notice in its entirety. To the extent that it is not in excess of the power conferred by s 712, the Notice is to be taken to be a valid instrument: see Acts Interpretation Act, s 46(2). It was common ground that, if any of the categories was too broad, those parts could be severed. In United Petroleum at [66] Anderson J observed that it is possible in certain circumstances to sever invalid aspects of a notice, referring to the position taken with respect to analogous statutory provisions. His Honour considered that was not possible in the case before him because the defect in the notice, which was not adequately specifying the purpose of the requests for production, went to the heart of its validity. The defect in the present case is not of that order. I can think of no reason why the words "and member of the management team" could not be severed. Category 7 62 Category 7, which seeks "records or documents which document audits or reviews conducted by [the applicant] in respect of each of the Entities during the period of any franchise agreement", is impugned on the following bases: it is not confined to the Contravention Periods referred to in the Notice; it calls for the production of records and documents falling outside the Contravention Periods and therefore could not be sought for the compliance purpose identified in the Notice, which is determining whether the Act has been complied with during that period; and its ambit is unclear, as it is not apparent whether it covers breaches of a franchise agreement, contraventions of the FW Act generally or the Identified Contraventions. 63 The respondent contended that these records or documents are relevant to determining the extent of the applicant's knowledge of the operations of its franchisees and the steps it took to prevent contraventions of the same or a similar character, presumably referring to the Identified Contraventions, and including matters specifically identified in s 558B(4). This was said to be the purpose of categories 6 to 14 inclusive. 64 It does not follow from the fact that the time span in this category is wider than the Contravention Periods that the records and documents with which it is concerned could not be required for the compliance purpose. Nevertheless, this category is impermissibly broad because it requires the production of documents or records of "all or any audits or reviews" without any apparent connection to the compliance purpose. Audits or reviews of what, I ask rhetorically. The respondent submitted that it relates to para 558B(4)(d): "the person's arrangements (if any) for assessing the contravening employer's compliance with the applicable provisions referred to in subsection (7)". But this is not self-evident. Indeed, it is anything but clear. Categories 8 and 9 65 Category 8 covers "all written advice received by [the applicant]" that relates to the compliance by any of the Entities with "Commonwealth Workplace Laws" or the compliance by the applicant with "Commonwealth Workplace Laws in respect of its franchise network". 66 Category 9 consists of "all records or documents created by or sent to officers or employees of [the applicant], including board minutes, meeting minutes, emails and internal memorandum (sic)" relating to the same matters. 67 The applicant's complaint about these categories is twofold. First, the applicant submitted that, since they cover documents and records that may have come into existence outside the Contravention Periods, the request could not have been made for a compliance purpose. Secondly, the applicant submitted that it is difficult to discern from the face of the Notice which particular workplace laws the respondent had in mind. 68 The first submission is a non sequitur and must be rejected. It does not follow from the fact that the categories cover documents and records that do not fall within the Contravention Periods that the request is beyond the compliance purpose. Documents and records of this nature would be relevant to what the applicant knew or could reasonably be expected to have known about the prospect of a contravention by one or more of the Entities of the same or a similar character as the Identified Contraventions (s 558B(1)(d)). 69 The second submission should also be rejected. "Commonwealth Workplace Laws" is defined in the Notice to mean the FW Act and "any relevant fair work instruments". "Fair work instrument" is defined in s 12 of the Act to mean a modern award; an enterprise agreement; a workplace determination or an order of the Fair Work Commission. Of course, "Commonwealth Workplace Laws" is much broader than the provisions with which the Identified Contraventions is concerned. But that is neither here nor there. The manifest purpose of these requests was to enable the respondent to investigate what the applicant knew or could reasonably be expected to have known about the likelihood of a contravention by any of the Entities of the same or a similar character as the Identified Contraventions (s 558B(1)(d)) and about any steps the applicant may have taken to prevent a contravention of the same or a similar character (s 558B(3)). As long as the power in s 712 has not been exceeded and the request to produce the documents is reasonably capable of relating to one of the purposes listed in s 706, the fact that a notice is expressed in broad terms does not affect its validity: Donnelly v O'Donnell [2005] FCA 1412; 140 IR 434 at [22]–[24] (Marshall J). For the same reason I also reject the applicant's suggestion that the validity of categories 8, 9, 11 and 12 is affected by the use of the "broad" expressions "relates", "relates to" or "in relation to"— expressions also used in categories 5 and 10, to which no objection was taken. Categories 11 and 12 70 It is convenient to deal with these two categories together. 71 The respondent submitted that, like categories 8 and 9, as well as 6, 7, 10, 13 and 14 (about which no complaint was made), these categories seek documents relevant to determining the extent of the applicant's reasonable knowledge of its franchisees' operations and the steps it took to prevent contraventions of the same or similar character, including those matters mentioned in s 558B(4). 72 The only complaint about category 11 is that the documents and records falling within it do not relate to, or cover, the Contravention Periods and so, it was said, could not have been sought for a compliance purpose. The complaint was not supported by reasoned argument. 73 As I said earlier, the mere fact that documents and records do not relate to, or cover, the Contravention Periods does not mean that the request was not made for a compliance purpose. It is apparent that category 11 is concerned with determining whether the applicant knew or could reasonably be expected to have known that the alleged contraventions by the entities listed in the Notice (Entities) would occur (s 558A(2)) and whether reasonable steps had been taken to prevent a contravention of the same or a similar character (s 558B(3)). Paragraphs (a)–(c) are obviously directed to the former and (d)–(f) to the latter. 74 Category 12 consists of "[a]ll records or documents that relate to any steps taken by [the applicant] to prevent contraventions by the Entities from the commencement of any franchise agreement". 75 The applicant submitted that category 12 is defective for three reasons: first, because it does not identify the contraventions with which it is concerned; second, because the request for the production of the documents and records to which it relates could not be in furtherance of the stated purpose, and therefore, a compliance purpose, since it does not relate to, cover or fall within the Contravention Periods; and third, its terms were too broad and ambiguous to enable the applicant to determine whether a particular document or record falls within the description. 76 The respondent, on the other hand, argued that the word "contraventions" should be read in the context of the preceding requests and that it means contraventions of Commonwealth Workplace Laws. She pointed out that the category picks up the language of s 558B(3) and is evidently directed to giving the applicant an opportunity to provide any additional material that might exclude the applicant from liability. 77 In reply, the applicant contended, in effect, that this was not within the compliance purpose, as s 558B(3) creates a defence, which only arises for consideration if proceedings are instituted and the franchisor were to rely on it. 78 I accept the respondent's arguments. 79 Category 12 must be read in context. When read in context and in a fair, non-technical manner, the request is not ambiguous or too broad to enable the applicant to determine whether a particular document or record is captured by it. Any franchisor entity receiving such a notice would be expected to familiarise itself with the provisions of s 558B. Consequently, a franchisor entity would recognise that the relevant contraventions are those mentioned in s 558B(3), namely contraventions by the franchisee entity "of the same or a similar character" to the Identified Contraventions. 80 It is well within the compliance purpose for the Notice to seek the production of documents and records capable of disclosing whether a responsible franchisor entity has a defence to an action under s 558B(1). Subsection (3) describes the circumstances in which such a person "does not contravene subsection (1)". Documents and records that may show that the applicant has not contravened subsection (1) would obviously be relevant to determining whether the applicant has contravened subsection (1) and therefore the section. This is the approach the Court has taken with respect to notices issued by the Australian Competition and Consumer Commission (ACCC) under s 155 of the Trade Practices Act 1974 (Cth) requiring information to be produced to the ACCC "relating to a matter that constitutes, or may constitute, a contravention of [that] Act": see, for example, WA Pines Pty Ltd v Bannerman (1980) 30 ALR 559; ATPR ¶40–163; 41 FLR 175 and Seven Network v Australian Competition and Consumer Commission (2004) 140 FCR 170 at [1] (Tamberlin J), [49] (Sackville and Emmett JJ). 81 In WA Pines Pty Ltd v Bannerman at 565 Brennan J, with whom Bowen CJ agreed at 562, said: Information documents and evidence which tend to negative a suspected contravention or liability to conviction or which tend to exculpate a person suspected to be a party to a contravention or offence are as much within the ambit of s 155(1) as information documents or evidence which tend in the other direction. Thus, an inquiry under s 155 may relate to a defence or possible defence under s 85. This is because "the Commission is concerned with contraventions or possible contraventions of the Act and must consider them not only from the point of view of possible civil proceedings, but also from the point of view whether a prosecution should be brought", as Bowen CJ said in Riley McKay v Bannerman (1977) 15 ALR 561 at 566. The power conferred by s 155 is clearly in aid of the performance of the Commission's functions, and, "Because it is part of the Commission's function to be concerned with investigation of contraventions or possible contraventions and to be concerned with determining whether any proceedings, civil or criminal, should be brought in respect of a contravention, the Commission will, quite properly, be interested to know whether there is a possible defence under s 85(1)" (15 ALR at 566). There is a simple symmetry between the condition of the power and the result of its exercise. See also Lockhart J at 570–571. 82 These principles apply with equal force to a notice issued under s 712 of the FW Act for the purpose of determining whether a responsible franchisor entity contravened s 558B of the Act. 83 The fact that the designated period does not fall within or relate to the Contravention Periods is immaterial. The focus of s 558B(3) is on preventing a contravention. One would expect that at least some, if not most, of the documents or records that relate to the steps to which it refers would have been created before, and bear no relation to, the time a contravention occurred. Conclusion 84 I am not persuaded that the Notice is invalid for any of the reasons advanced by the applicant. I am, however, persuaded that there are deficiencies in two of the categories: categories 1 and 7. The application should therefore be upheld to that limited extent and otherwise dismissed. 85 Within seven days the parties should bring in short minutes of order to reflect these reasons. 86 The power to award costs in any matter arising under the FW Act is severely constrained by s 570(2) and, on the face of things, the conditions for the exercise of the power have not been satisfied. Neither party applied for, or foreshadowed, an application for costs. Accordingly, there will be no order as to costs. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Katzmann. Associate: Dated: 18 August 2020