FEDERAL COURT OF AUSTRALIA

Radisich v McDonald [2010] FCA 762  

THE COURT ORDERS THAT:

1.                  Paragraph 28A of the defence of the second and third respondents be struck out.

2.                  The second and third respondents pay the costs of the applicant on the motion dated 14 May 2010 to be taxed if not agreed.    

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                     The applicant, an Australian Building and Construction inspector appointed under s 57 of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act), by motion dated 14 May 2010 seeks an order pursuant to Order 11 rule 16 of the Federal Court Rules (FCR) that para 28A of the defence filed on behalf of the second and third respondents, Construction, Forestry, Mining and Energy Union and the Construction, Forestry, Mining and Energy Union of Workers (Unions), be struck out on the ground that it has a tendency to cause prejudice, embarrassment or delay in the proceeding.  

2                     At the hearing there was also argument as to whether para 28A disclosed a reasonable cause of defence for the purposes of Order 11 r 16 of the FCR.

3                     In the statement of claim (soc), the applicant alleges that the Unions engaged in unlawful industrial action in contravention of s 38 of the BCII Act at the Pluto LNG Development Project (Project) on 1 and 2 December 2009 (the December Strike).  That allegation rests on the basis that the first respondent was involved in the contravention of s 38 of the BCII Act within the meaning of that expression in s 48(2) of the BCII Act, and that by operation of s 69 of the BCII Act, his conduct is taken to be the Unions' conduct.  It is evident from the soc at para 37 that the alleged involvement is referrable to s 48(2)(a) and/or (c).

4                     Section 48(2)(a) and (c) of the BCII Act provide:

(2)        For the purposes of this Part, a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision. For this purpose, a person is involved in a contravention of a civil penalty provision if, and only if, the person:

            (a)        has aided, abetted, counselled or procured the contravention; or

            (b)        …

            (c)        has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

            (d)        …

5                     The applicant supports his allegation that the first respondent, Mr Joseph McDonald, was involved in the conduct in contravention of s 38 of the BCII Act by allegations pertaining to his conduct leading up to but not after the December Strike.  

6                     The Project includes the construction of a single gas processing train and ancillary facilities (Construction Project) to process gas from the Pluto and Xena gas fields.

7                     The Construction Project is located in the Pilbara region of Western Australia between Onslow and the Burrup Peninsula.  Around late November 2009 the ‘Major Contractors’ as defined in the soc at para 10 informed their ‘Construction Employees’ as defined in the soc at para 12 that, with effect from 4 January 2010, new accommodation arrangements would operate for employees residing at Gap Ridge Village whereby employees would no longer have use of the same accommodation unit (donga) for the duration of their employment on the Project (Motelling).  The Unions employ the description “Project workers” in their defence.  This is, it seems, intended to be synonymous with the phrase in the soc “Construction Employees”. 

8                     The relevant allegations in the soc as to what led to the December Strike are as follows:

Friday 27 November 2009

24.       On 27 November 2009, the first respondent:

            (a)        arranged to hold a meeting of Construction Employees outside the front gate to the Gap Ridge Village on the afternoon;

            (b)        at or about 4.30 pm, attended outside the front gate to the Gap Ridge Village where a large flag bearing the letters "CFMEU" and a large blue "Eureka Stockade flag" had been placed;

            (c)        at or about 5.45 pm, conducted a meeting attended by a large number of Construction Employees by addressing those present using a megaphone or public address system;

            (d)        encouraged those attending the meeting to go on strike if Woodside did not reverse the decision to introduce Motelling.

Particulars of encouragement

                        (i)         The first respondent informed the meeting that those attending the meeting should meet on the following Monday morning and then commence strike action if Woodside did not reverse the decision to introduce Motelling.

                        (ii)        Advised those attending the meeting to “sit on the grass”, by which heintended to convey and did convey that the Construction Employees should go on strike, if the decision by Woodside to introduce Motelling was not reversed

            (e)        called for a motion, from those attending to reconvene a meeting at 8.00 am on the following Monday 30 November 2009, if the decision by Woodside to introduce Motelling was not reversed;

            (f)        called for a second motion from those attending to reconvene a meeting at 7.00 am on the following Monday 30 November 2009;

            (g)        in the absence of a motion forthcoming from those attending in relation to the first and second motions, put forward a third motion from those attending to reconvene the meeting at 5.00 pm the following Monday 30 November 2009 to assess what Woodside representatives had to say about Motelling.

Monday 30 November 2009

25.       On 30 November 2009, Graham Pallot, another Assistance Secretary of the second respondent’s Construction and General Division, Western Australia Divisional Branch (Pallot), acting in that capacity, met in Perth with Colin Gibson, an industrial relations consultant for FWW on the Project (Gibson), to discuss the Motelling issue (Perth meeting).

26.       FWW is and at all material times was responsible for assisting with and managing the implementation of Motelling on behalf of Woodside.

27.       At the Perth meeting:

            (a)        Pallot asked that Woodside defer the implementation of Motelling to allow discussions to occur after Christmas; and

            (b)        Gibson, speaking on behalf of FWW and Woodside, informed Pallot that Woodside would not agree to defer the implementation of Motelling.

28.       On the afternoon of 30 November 2009, after the Perth meeting, the first respondent:

            (a)        attended the vacant land immediately outside the Gap Ridge Village where numerous CFMEU flags were displayed;

            (b)        conducted a meeting on that vacant land of approximately 1200 to 1300 employees including Construction Employees (Meeting);

            (c)        informed those present at the Meeting that:

                        (i)         he had a meeting earlier that day to discuss the issues in relation to motelling;

                        (ii)        an option advanced by Woodside was Sea Ripple accommodation camp was going to take some people;

                        (iii)       the Construction Employees “must do something” to advance their complaint about Motelling;

                        (iv)       “… nothing ever happens without a fight”; and

                        (v)        it was illegal for the Construction Employees to go out on strike and they could get fined;

            (d)        informed the Meeting that they needed two people to speak “for” the motion to go out on strike and two people to speak “against” it;

            (e)        asked the Meeting for a “show of hands to go out on strike”;

            (f)        informed the Meeting that the employees present needed to decide whether they would prefer to go on strike for 24 hours, 48 hours or 72 hours;

            (f)        towards the end of the Meeting called for a vote to go out on strike;

            (g)        following a show of hands from those present at the Meeting, the first respondent explained to those present that they would go back to work on “Thursday”, by which he meant Thursday, 3 December 2009.

9                     The Unions’ defence to these paragraphs is set out under paras 24-28A as follows:

Friday 27 November 2009

24.       The respondents do not admit the allegations in paragraph 24 and say further that:

            (a)        Project workers arranged for a meeting to take place outside the front gate to the Gap Ridge Village after working hours to be attended by the Project workers and inter alios representatives of employee organisations including the second respondent, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing Allied Services Union (CEPU);

            (b)        at or about 5.30pm representatives of the AMWU, CEPU and the second respondent, including inter alios the first respondent, attended a meeting of a large number of Project workers;

            (c)        various of the Project workers proposed motions to take action in protest of FWW's decision to introduce Motelling including inter alia striking for an indefinite period;

            (d)        representatives of the CEPU, AMWU and the second respondent addressed the meeting from time to time in order to discourage the motions proposing strike action.

Particulars

                        The representatives of the CEPU, AMWU and the second respondent informed the meeting inter alia that:

                        (i)         those organisations would attempt to meet with representatives of FWW in order to attempt to negotiate an agreed outcome; and

                        (ii)        taking unlawful strike action may result in serious repercussions, including penalties.

            (e)        It was decided amongst those present that the meeting would reconvene on the evening of Monday 30 November 2009 in order to report back to the Project workers on the progress of the organisations' negations with FWW.

Monday 30 November 2009

25.       The respondents admit the allegations in paragraph 25 thereof and say further that the meeting was also attended by inter alios Mr Steve McCartney, Secretary of the AMWU, and Mr Les McLaughlin, Secretary of the CEPU.

26.       The respondents admit the allegations in paragraph 26 thereof.

27.       The respondents admit the allegations in paragraph 27 thereof.

28.       The respondents do not admit the allegations in paragraph 28 and say further that:

            (a)        On the afternoon of 30 November 2009, representatives of the CEPU, AMWU and the second respondent including inter alios the first respondent, attended a meeting of a large number of Project workers outside Gap Ridge Village;

            (b)        the representatives of the CEPU, AMWU and the second respondent informed the Project workers of FWW's decision not to defer the implementation of Motelling referred to in paragraph 25 of the amended Statement of Claim;

            (c)        upon being informed of FWW's decision not defer the implementation of Motelling, large numbers of the Project workers present variously called for protest action in the form of strike action to occur immediately;

            (d)        the representatives of the CEPU, AMWU and the second respondent informed the Project workers present at the meeting to the effect that if the workers at the meeting went on strike they could be fined, and otherwise discouraged the Project workers present from taking strike action.

Particulars

                        Further particulars will be provided before trial.

            (e)        A motion was put forward from the Project workers to take strike action for a period of 48 hours;

            (f)        the representatives of the CEPU, AMWU and the second respondent, in an attempt to prevent the strike action, called for inter alia people to speak against the proposed motion;

            (g)        the Project workers thereafter voted overwhelmingly in favour of the motion to take strike action for a period of 48 hours.

28A.     The strike action taken on 30 November 2009 by the Project workers referred to in paragraph 28(g) above was part of a series of protests instigated and taken by the Project workers over the issue of Motelling between that date and 30 January 2010.

            (a)        On 22 and 23 of January 2010, almost all of the Project took strike action in protest of the introduction of Motelling;

            (b)        The strike action taken by the Project workers on 22 and 23 January 2010 was organized in the absence of the Respondents;

            (c)        On 25 and 26 January 2010, almost all the Project workers took strike action in protest over the introduction of Motelling;

            (d)        On 27 January 2010, in the absence of the second respondent, Project workers held a meeting in the car park of the Project site commencing at 6.30am and resolved to continue taking strike action until at least 30 January 2010;

            (e)        On 27 January 2010 the Federal Court ordered an ex parte interim injunction against various Project workers who were taking the said strike action;

            (f)        A large number of the Project workers continued to take strike action until on or about 30 January 2010.

10                  Broadly, there is, on these pleadings, a central issue as to who, at the meetings on 27 and 30 November 2009, called for the December Strike action to occur.  The applicant says that it was Mr McDonald and through him the Unions.  The Unions say that it was the result of a motion put forward from “the Project workers”.  More than that, the Unions allege that representatives of other unions as well as of the second respondent called for attendees at the meeting to speak against the proposed motion. 

11                  Mr McDonald’s pleading does not admit the allegations made against him in this respect and his counsel declined to make submissions on the application.  I take it that this is merely to reflect the position, set out in the preface to his defence, that he claims ‘penalty privilege’ in these proceedings. 

12                  The Unions expressly disavowed, in argument, that their defence at para 28A constituted purported notice under ss 97 or 98 of the Evidence Act 1995 (Cth) concerning tendency evidence or coincidence evidence, respectively.

Legal principles

13                  The following legal propositions below contained for the most part in the Unions written submissions are not controversial.

14                  In Banque Commerciale SA (In Liq) v Akhil Holdings Limited (1990) 169 CLR 279 at 286, Mason CJ and Gaudron J said:

The function of pleadings is to state with sufficient clarity the case that must be met ... In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.

(citation omitted)

15                  Before a pleading, or part thereof, can be struck out summarily, it is necessary that there be a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way: John Fairfax Publications Pty Ltd v Hitchcock (2007) 70 NSWLR 484 at [6]-[7], [29], [106]-[109].

16                  In Agar v Hyde (2000) 201 CLR 552, Gaudron, McHugh, Gummow and Hayne JJ observed at [57] that contested issues should not be decided except in the clearest of cases.  Their Honours said:

Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways (Dey v Victorian Railways Commission (1949) 78 CLR 62 at 91, per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130, per Barwick CJ), but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.

see also Batistatos v Roads and Traffic Authority (NSW) (2006) 226 CLR 256 at [46].

17                  The jurisdiction under Order 11 rule 16 to strike out a pleading in the defence is therefore to be exercised in accordance with the test articulated in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129.

The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.

Further at p 130:

... great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. ... the exercise of this jurisdiction should [not] be reserved for those cases where argument is unnecessary to revoke the futility of the plaintiff's claim:

18                  In Webster v Lampard (1993) 177 CLR 598 at 603 Mason CJ, Deane and Dawson JJ observed:

            Nowhere is that need for exceptional caution more important than in a case where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact.

19                  In Australian Competition and Consumer Commission v Craftmatic Australia Pty Ltd [2009] FCA 972, Logan J warned against a pedantic approach (at [14]):

            In Australian Competition and Consumer Commission v Pauls Ltd [1999] FCA 1750 at [10], with reference to sentiments to that effect then recently expressed by Wilcox J in Coshott v Kam Tou Mak [1998] FCA 147, O’Loughlin J observed that there was a contemporary tendency against the taking of a pedantic approach to a pleading. A decade later that remains the case. Further, a pleading must be read as a whole. The countervailing consideration is whether, accepting it must be so read, the pleading fairly puts the other party on notice as to the case to be met. A pleading is but a means to the achievement of procedural fairness and of the efficient use of judicial resources and those of the parties by the identification of what is truly at issue.

20                  The power to strike out pleadings or portions of pleadings is discretionary and should be employed sparingly and only in a clear case: Australian Competition and Consumer Commission v Pauls Ltd [1999] FCA 1750 at [10] O’Loughlin J citing Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 at 193.  Where such a case is made out the Court should not shrink from exercising its discretion to strike out the relevant pleading. 

21                  The Unions’ pleading at para 28A of the defence refers to “strike action taken on 30 November 2009”.  I take that to mean that on this date the vote was taken to take strike action.  It may of course be a mistake as to the date of the strike action.  In any event it is common ground that the strike action occurred on 1 and 2 December 2009.  As particularised the Unions allege that the Project workers instigated and took this strike action, as part of a series of protests over the issue of Motelling between 30 November 2009 and 30 January 2010.   

22                  The Unions submit that, as the stoppages in December 2009 and January 2010 are part of the same dispute over Motelling, a full understanding of how important the issue of Motelling was to the Project workers, and the lengths to which they were prepared, and able, to go to oppose its introduction, is necessary for a proper consideration of the events of November and December 2009 pleaded in the soc.  To that end, an aspect of the defence sought to be run is that there was strong and persistent motivation, with no involvement by the Unions, on the part of the Project workers to resist the introduction of Motelling.  It is evidence of this kind which the Unions contend is capable of undermining an assertion that it was the respondents who organised or aided the December Strike.  

23                  The Unions contend that such evidence would obviously be relevant citing Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87 from [21]-[30].  That case was a decision on appeal concerning, amongst other things, a review of evidence as to whether representatives of a union had counselled workers against taking strike action.  The result turned on the facts in issue at trial and the findings made in respect of them.  It is of no assistance to the resolution of this motion.

24                  The Unions contend that the matters in the defence at para 28A would be relevant to mitigation.  Accepting for present purposes only that this is the case, it does not provide a warrant for permitting these allegations to remain as a defence to the substantive allegations made against the Unions. 

25                  There is a certain commonality affecting both the December Strike and the January 2010 industrial action.  The issue of Motelling has been the one issue responsible for the December Strike as well as the industrial action taken January 2010.  It involves the same industrial site, the same employers and broadly the same workers.  This was accepted, at the outset of the hearing, by senior counsel appearing for the applicant.  

26                  That this commonality exists is no answer, in my opinion, to the applicant’s motion.  Senior counsel for the Unions disavowed any suggestion that the words “part of a series of protests instigated and taken by the Project workers over the issue of Motelling between that date (30 November 2009) and 30 January 2010”, as found in para 28A, are intended to convey that there was any agreement, arrangement or understanding reached in November 2009 by the Project workers that they would take further industrial action in January 2010.  Accordingly the word “series” or “sequence” as was employed in oral argument in relation to para 28A is not used in the sense that the sequence was foreshadowed in November or December 2009.  Rather, it is but a reference to the commonality affecting the industrial action in December 2009 and January 2010 to which I have referred.  As senior counsel for the applicant put it, it can only be characterised as a sequence looking back from January 2010 but not as at December 2009.

27                  Accordingly, as a matter of pleaded facts, the allegations in the soc concerning the December Strike at paras 24-28, responded to in the defence of the Unions at paras 24-28 are logically separate and distinct from the matters alleged at para 28A of the Unions’ defence.  This is the case whichever alternative under s 48(2)(a) or (c) of the BCII Act is relied upon to establish that the defendants were involved in the alleged contravention of s 38 of that Act relating to the December Strike.  It is also the case in respect of the injunctive relief sought in the application.

28                  The pleading in the soc at para 24 is to the effect that on 27 November 2009 the first respondent arranged a meeting of Construction Employees outside the front gate to the Gap Ridge Village, then attended and conducted that meeting at which he spoke, encouraging those employees to go on strike if the Motelling decision was not reversed.  Thereafter he is alleged to have called for various motions, then himself put forward a motion for the meeting to be reconvened on 30 November 2009.

29                  The Unions’ defence at para 24 does not admit the allegations in soc at para 24 and then pleads a positive case, in effect, that the meeting was arranged by Project workers, that various Project workers proposed motions to take action in protest at the Motelling decision and that representatives of other unions present as well as the second respondent addressed the meeting to discourage the motions proposing strike action.  The plea then is that the decision to reconvene the meeting on 30 November 2009 was made “amongst those present”. 

30                  Then it is alleged at para 28 of the soc, broadly speaking, that the first respondent again attended at Gap Ridge Village and conducted a meeting of a large number of Construction Employees, at which he spoke, informing the meeting of various matters concerned with the issue of Motelling, asked for a show of hands to go on strike and later called for a vote to go out on strike.

31                  The Unions’ defence at para 28 does not admit the allegations in the soc at para 28 and again pleads a positive case to the effect that, amongst others, the first respondent, as a representative of the second respondent, attended the 30 November meeting and that large numbers of the Project workers called for strike action to occur immediately but the representatives of various unions, including the second respondent, advised the Project workers that they could be fined if they took strike action and otherwise discouraged the Project workers from taking strike action. 

32                  The factual issues are clearly drawn in these paragraphs of the soc and the defence of the Unions.  Either the first respondent did and said what is alleged against him, and through him, the Unions, or he did not.  Failure to establish those allegations at trial will inevitably mean that the application will fail.  The evidence called by the applicant will have to be tested and weighed against that in support of the Unions’ pleas at paras 24 and 28 of the defence. 

33                  That factual contest cannot logically or rationally and therefore probatively, be aided by proof of those matters pleaded in para 28A of the Unions’ defence.  A pleading is a means to the achievement not only of procedural fairness but also the efficient use of judicial resources and those of the parties by the identification of what is truly at issue: Australian Competition and Consumer Commission v Craftmatic Australia Pty Ltd at [14].  Paragraph 28A, in my opinion, raises a false issue and therefore does not disclose reasonable grounds for a defence to the allegations in soc at paras 24 and 28.  This is the case assuming, for present purposes, the correctness of the particulars under para 28A of the defence.  It would additionally cause prejudice to the applicant in having to contest a significant false issue and would inevitably introduce unwarranted delay in the resolution of the real issues.  The applicant’s case as I have mentioned is based upon what it is that Mr McDonald did and said at the 27 and 30 November 2009 meetings.  If para 28A were allowed to stand, on the basis asserted, it would potentially open up evidence as to what occurred between the December Strike and the January industrial action relevant to a full appreciation of why that action was taken, none of which it seems, implicitly, from the particulars to the defence at para 28A, concerned or involved Mr McDonald.  Indeed separate proceedings have been brought in this Court (WAD 14 of 2010) by various corporate employers against project workers, but not Mr McDonald or the Unions, in relation to alleged unlawful industrial action taken at the same site on 25, 26 and 27 January 2010.  It appears this action again concerned Motelling and indeed is the strike action referred to in the defence at para 28A under particulars (c) and (d).

34                  It might be thought preferable not to strike out the defence at para 28A and to leave the tender of evidence under that paragraph to be dealt with by objection on grounds of relevance or probative value at the trial.  However, the consequence of that approach will mean the potential for a significant increase in costs, for both parties, in preparation for trial. 

35                  There is a related proceeding (WAD 16 of 2010) by Woodside Burrup Pty Ltd against the second respondent in this case as well as Mr McDonald.  It seeks relief including the imposition of pecuniary penalties under s 49(1) of the BCII Act in respect of the December Strike.  The second respondent’s defence in that case contains para 30A which is in the same terms as that in the Unions’ defence at para 28A in this proceeding.  The applicant in that case had filed a motion seeking to have para 30A struck out.  It was, in effect, the same as the present motion.

36                  On 21 June 2010, the Court made orders that the applicant’s notice of motion in WAD 16 of 2010 dated 14 May 2010 be discontinued with no order as to costs.  No reason for this occurring is presently known.  Accordingly the allegations in para 28A of the Unions defence in this case and which are sought to be challenged by the applicant remain unchallenged in the WAD 16 of 2010 defence (para 30A).  The Unions then submit that the present application must be considered in light of the orders 1 and 2 made on 17 February 2010, namely that this case and that in WAD 16 of 2010 are to be heard together and evidence in one proceeding is taken to be evidence in the other. 

37                  I do not regard those circumstances as any barrier to granting the relief sought by the applicant.  The applicant is entitled to seek relief as it does.  The action or inaction if another litigant in related proceedings should not stand in the way of that entitlement nor should relief be refused because of that fact.  It will be open to the applicant to object to the admission of evidence going to the matters alleged in 28A (if that para is struck out) on the grounds of relevance as indeed might also the applicant in WAD 16 of 2010.  Furthermore, if necessary the Court may vary the terms of the orders made on 17 February 2010. 

38                  For the above reasons I am satisfied that I should exercise my discretion by striking out para 28A.  It is unnecessary in these circumstances to consider other grounds advanced by the applicant as to why this paragraph should be struck out.  There will be an order accordingly.  The Unions should pay the applicant’s costs of the motion.

Associate:

Dated:         21 July 2010