FEDERAL COURT OF AUSTRALIA

United Motor Search Pty Ltd v Hanson Construction Materials Pty Ltd [2013] FCA 1104

UPON THE PROVISION OF THE USUAL UNDERTAKINGS AS TO DAMAGES BY THE APPLICANTS, THE COURT ORDERS THAT:

1.    Until hearing and determination of this proceeding, or further order, the First Respondent will provide to the First Applicant casual cartage in accordance with its usual cyclical rostering arrangements for the First Applicant’s 7.0m3 Freightliner Columbia CL112 Prime Mover, VIN number 1FVMF0CY4CLBM3934 to carry out casual cartage for the First Respondent as if the First Applicant and the First Respondent were performing their respective obligations under the Hanson Construction Materials SEQ 7.0m3 Concrete Carriers Agreement annexed and marked MM8 to the Affidavit of Michael Meredith filed 10 September 2013.

2.    The parties have liberty to apply on three (3) days’ notice.

3.    The costs of the interlocutory application be reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1        This is an urgent interlocutory application brought by the applicants in the substantive proceedings (transcript 24 October 2013 p 2 ll 19-34).

2        In an originating application filed on 6 September 2013 the applicants claimed injunctive relief pursuant to the general law or s 545 of the Fair Work Act 2009 (Cth) (“FWA”) or s 232 of Sch 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) (“ACL”). The injunctive relief sought was that:

(a)    The first respondent cease withholding its approval of the first respondent’s 7.0m3 Freightliner Columbia CL112 Prime Mover, VIN Number 1FVMF0CY4CLBM3934 (“upgrade truck”) pursuant to the terms of the agreement between the first respondent and the first applicant

(b)    The first respondent provide its approval of the first respondent’s upgrade truck pursuant to the terms of the 6.0m3 contract;

(c)    The first and second respondents be restrained from preventing the first applicant from using its replacement truck to perform its contractual obligations or directing that such truck not be loaded at the First Respondent’s plants;

(d)    The first and second respondents be restrained from treating the applicants less favourably than other contracted owner drivers with respect to loads provided for cartage; and

(e)    The first respondent be required to honour its promise of the extension of the contract with the first applicant until 30 September 2020.

3        Various other substantive relief is also sought, including a review of the agreement between the parties pursuant to s 12 of the Independent Contractors Act 2006 (Cth), damages for breach of contract, equitable damages, damages pursuant to s 236 of the ACL, compensation and pecuniary penalties pursuant to s 545 of the FWA.

4        The applicants also sought interlocutory relief in that originating application. The interlocutory relief sought, however, appeared to be superseded by an interlocutory application filed by the applicants on 19 September 2013.

5        On 25 September 2013 Reeves J made the following order in this proceeding:

UPON the undertaking of the first respondent that it will provide to the first applicant casual cartage in accordance with its usual cyclical rostering arrangements for the first applicant’s 6m3 Mack Metroliner truck Queensland registration 638 SSC from 1 October 2013 until 22 December 2013, or until such further date as agreed between the parties or further order of the Court:

1.    The interlocutory application filed 19 September 2013 is set down for hearing on a date to be fixed upon the question of whether under s 545(2)(a) of the Fair Work Act 2009 (Cth) the first respondent should be compelled to permit the first applicant to use the first applicant’s 7.0m3 Freightliner Columbia CL112 truck to carry out casual cartage for the first respondent until further order (the hearing).

6        In Court today the parties agreed that the issues for the Court to decide at this interlocutory level were framed by Order 1 of his Honour’s Orders of 25 September 2013 (transcript 24 October 2013 p 30 ll 1-19). To that extent, it appeared to be common ground that the primary question before me is whether there is a serious question to be tried in respect of whether, for reasons proscribed by the FWA, the respondents have taken adverse action against the applicants in that:

    the first respondent has refused to allow the applicants to use their 7.0m3 truck in delivering pre-mixed concrete for the first respondent’s business; and

    the first respondent has repudiated a contract with the first applicant in relation to cartage involving the 7.0m3 truck, which contract was due to expire on 30 September 2020.

7        Section 545(2)(a) of the FWA empowers the Federal Court to make an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention of the Act.

8        In particular, the applicants rely on the definition of adverse action in s 342(1) Items 3 and 4 which state:

(1)    The following table sets out circumstances in which a person takes adverse action against another person.

9        In my view the applicants have substantiated their case for the grant of interlocutory relief.

10        Before turning to relevant principles it is useful to outline the background facts to this proceeding.

Background facts

11        The first respondent supplies heavy building materials to the construction industry in Australia, including delivery of pre-mixed concrete. Mr Blank is the Regional Logistics Manager, Northern Region of the respondent. The first respondent contracts with owner-drivers to deliver pre-mixed concrete from its plants to its customers’ job sites. The owner-drivers own the trucks but the first respondent owns the concrete mixing bowls/agitators which are fitted to the back of the trucks. Mr Blank deposed that concrete mixers are valued at approximately $45,000 each. The trucks are required to be painted in the fleet colours of the first respondent, and have logos of the first respondent.

12        Trucks used by the first respondent include single-steer 6 wheeler trucks fitted with 6.0m3 capacity barrels (“6.0m3 trucks”), and twin-steer 8 wheeler trucks fitted with 7.0m3 capacity barrels (“7.0m3 trucks”).

13        The first respondent engages approximately 168 owner-drivers in Queensland. All owner-drivers are incorporated entities with the director and major shareholder being the principal driver of the truck. Mr Blank deposed that an owner-driver will have only one truck in operation with the first respondent at one time.

14        Mr Meredith is an owner-driver in that business, conducting his own business affairs through the first applicant. He delivers pre-mixed concrete for the first respondent using a 6.0m3 truck which he purchased in or about 2011 in order to get a delivery contract with the first respondent.

15        The dispute between the parties can be summarised in the following terms:

    Mr Meredith has purchased a 7.0m3 truck for use in association with the first respondent’s business. He currently uses a 6.0m3 truck, which he also owns.

    The first respondent informed Mr Meredith that it did not intend to continue its association with him beyond 30 September 2013, and that it no longer requires his services.

    Mr Meredith claims that he purchased the 7.0m3 truck on the understanding, induced by the first respondent and in particular Mr Blank, that the first applicant would have a contract for cartage supplies with the first respondent until 30 September 2020. In refusing to use his services the first respondent has repudiated that contract.

    Mr Meredith also claims that the first respondent has repudiated its contract with the first applicant and has refused to continue an association with Mr Meredith for reasons which contravene the FWA. In particular, Mr Meredith claims that the first respondent has so acted because Mr Meredith has been actively engaged in industrial activity within the meaning of s 346 of the FWA in that he has engaged in recruitment activities for the Transport Workers Union (TWU) among other drivers, and further has exercised a workplace right by being involved in actions in Fair Work Australia concerning the first respondent.

    The respondent denies breach of any contractual obligations, or that it has acted for any reason prohibited by the FWA.

    Finally, while the parties are in substantial agreement concerning the relevant principles to be applied in respect of interlocutory applications – namely, the principles explained by the High Court in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 – the parties are not in agreement concerning whether the Court is entitled to a high degree of assurance of the success of the substantive application when a mandatory interlocutory injunction is sought, as compared with interlocutory applications seeking to restrain conduct.

16        The primary evidence relied upon by the parties in this proceeding was that of Mr Meredith and Mr Blank. By way of background it is also useful to summarise key aspects of their evidence.

Evidence of Mr Meredith

17        Mr Meredith deposed that he purchased the 6.0m3 truck from Milton Meller Pty Ltd (referred to by Mr Meredith as “the Outgoing Carrier”) knowing he would have to upgrade to a larger and new truck. Mr Meredith deposed that the second respondent was requiring owner-drivers to upgrade to 7.0m3 trucks. At paragraph 4 of his affidavit affirmed 6 September 2013 Mr Meredith deposed:

Before I bought the truck, I secured commitments on behalf of Hanson that:

(a)    The remaining term of the Outgoing Carrier’s 6.0m3 Carriers Agreement with Hanson would be extended to 30 September 2013; and

(b)    The contract term would be extended to 30 September 2020 on condition that I upgraded the truck to an [sic] 7.0m3 truck by 30 September 2013 at which point I would be put on the 7.0m3 Carriers Agreement.

18        In particular, Mr Meredith said he relied on a letter from the first respondent, signed by Mr Blank, to Milton Meller Pty Ltd dated 28 March 2011 in relation to the agreement between the first respondent and that company concerning use of the 7.0m3 truck, in which Mr Blank wrote as follows:

The above mentioned Agreement expires on 30th September 2011. If the prospective purchaser upgrades to an 8 wheeler prior to this date they will be awarded a SEQ 7.0m3 Concrete Carters Agreement 2010 with an expiry date of the 30th September 2020.

This will only be granted if the carrier has displayed behaviours required by Hanson of their carriers and they have met all obligations of the current Agreement.

Any prospective purchaser must be made aware of and agree to this condition, prior to acceptance by Hanson as a carrier.

19        Mr Meredith also relied on a deed of agreement made on 29 July 2011 between the first applicant, the first respondent and Milton Meller Pty Ltd. Clause 2 of the annexure to that agreement states:

2.    TERM OF AGREEMENT

2.1    The term of the Agreement is dependant [sic] on the truck carrying capacity.

2.2    The expiry date of the Agreement is 30th September 2013 upon which you will be required to upgrade to at [sic] twin steer truck and a contract will then be extended to 30th September 2020.

20        Mr Meredith informed the respondent that he was proposing to upgrade from a 6.0m3 truck to a 7.0m3 truck. He received a letter from Mr Blank on 21 March 2013 asking him to advise in writing of his intention beyond the expiration of his current contract on 30 September 2013. On 2 April 2013 Mr Meredith responded in an email to Ms Kelly O’Sullivan in the following terms:

Hi Kelly

In relation to Shane Blanks letter I am awaiting the following documentation from David Drew:

# Copy of current SEQ 7mtr Cartage Contract.

#Application for Vehicle upgrade.

Subject to viewing the Contract my intention is to upgrade.

Regards

Michael Meredith

21        On 19 June 2013 Mr Meredith agreed to buy a 7.0m3 truck for $150,000. This truck had been in operation by another owner-driver in New South Wales who was also contracted to the first respondent.

22        Mr Meredith deposed that on 15 July 2013 he was asked to attend a meeting with Mr Blank, who told Mr Meredith that the first respondent would not be renewing its agreement with him after 30 September 2013 for a number of reasons including the age of his truck and current market conditions in Queensland.

23        Mr Meredith deposed that he told Mr Blank that he had just purchased a 7.0m3 truck but Mr Blank did not believe him.

24        Mr Meredith subsequently received a letter from the first respondent dated 15 July 2013 confirming that its contract with the first applicant would not be continued. In response he emailed the first respondent a form entitled “Upgraded 7.0m3 Truck Details”. He also discussed his commitment to purchase the 7.0m3 truck with the Queensland State Manager of the first respondent, Mr Danny Cooper. Mr Meredith said that Mr Cooper noted that the truck Mr Meredith was purchasing already had a barrel belonging to the first respondent, and that it would be convenient to leave the barrel on the truck rather than the first respondent removing it in New South Wales and replacing it in Queensland.

25        The first respondent has indicated it would not approve Mr Meredith’s new 7.0m3 truck, and demands that he return it to have the barrel removed.

26        At [18] of his affidavit affirmed 6 September 2013 Mr Meredith deposes:

As to “current market conditions”, the Queensland State Manager of Hanson, Danny Cooper, met with a meeting of the owner-drivers’ committee on 24 June 2013 when he said words to the effect that Hanson had booked in 30,000 cubic metres of concrete cartage in the near future and that Hanson couldn’t afford to lose a single owner driver. In fact he said Hanson needed more owner drivers. At that meeting, Mr Cooper also said that any vehicle under 10 years of age would receive a contact [sic] extension and barrels would be found for all drivers in the process of upgrading even though there was a current shortage of barrels in Queensland. Mr Cooper also said that in terms of owner driver numbers they in fact needed more than they currently had.

27        In relation to Mr Meredith’s allegation that his contract with the first respondent would be extended if he acquired a 7.0m3 truck, materially Mr Meredith deposes at [36]-[55]:

[36]    The Queensland contract with Hanson was purchased from the Outgoing Carrier through a business broker, Ian Salter. It was advertised on the internet. I contacted Mr Salter and advised that I was interested in buying but I made it clear that I was interested in investing for the long-term, and the contract the owner had with Hanson expired on 30 September 2011.

[37]    It was a 6.0m3 truck that was nine years old. I knew that it would need upgrading in the near future.

[38]    I needed the contract I was hoping to take over from the current owner, Milton Meller Pty Ltd, to be extended to enable me to get established before I could invest in upgrading the truck. I was also not prepared to enter into a new contract unless there was confirmation that I could extend the contract for a much longer term period.

[39]    I told the broker that I needed a commitment to a longer-term contract before I would invest.

[40]    After this discussion I was provided with a letter from Shane Blank of Hanson Queensland addressed to the Outgoing Carrier confirming that if the truck was upgraded to an eight wheeler truck, meaning a 7.0 metre cubic metre [sic] truck, by a particular date, then the contract would be extended until 2020. Annexed and marked “MM13” is a copy of the correspondence to Milton Meller Pty Ltd from Shane Blank dated 28 March 2011.

[41]    Soon after this occurred, I obtained Shane Blank’s telephone number from Mr Charlie Stoneman, the Logistics Manager at Hanson in New South Wales.

[42]    I rang Charlie Stoneman and he told me that Shane Blank had said there were opportunities to get a contract for nothing if I bought a truck and moved to the Sunshine Coast.

[43]    I wanted to move to the Gold Coast to be near my son, but the comments made by Charlie about his conversation with Shane Blank, encouraged me to make contact with Shane.

[44]    I spoke to Shane Blank on the phone in early June 2011. Through our discussion it became obvious that Shane was interested in engaging new owner drivers. He wanted someone to invest in a truck that was prepared to commit long-term and would eventually upgrade from a six wheeler truck, or a 6.0 cubic metre truck to an eight wheeler or 7.0 cubic metre truck.

[45]    I told him that I needed an extension on the current contract due to expire on 30 September 2011 because I could not upgrade the truck until I had become more established.

[46]    Shane Blank offered me a contract with Hanson that would allow me to use the truck I wanted to buy and that would extend the life of the contract from 30 September 2011 to 30 September 2013.

[47]    The condition placed on the extension by Hanson was that by the end of the contract extension I would upgrade my truck from a six wheeler to an eight wheeler or a 6.0 cubic metre truck to a 7.0 cubic metre truck.

[48]    Requiring the purchase of larger trucks places the owner-drivers in greater debt.

[49]    The initial investment in the truck when I moved to Queensland was approximately one hundred thousand dollars plus interest.

[50]    As I wanted to enter into a long-term contract, I agreed to upgrade the truck by the agreed date on the basis I received confirmation that if I upgraded the truck and invested substantial money that the contract would be extended until 2020.

[51]    In my telephone conversation with Shane Blank I also discussed the location of the yard where I would be based. I told him I would only purchase the truck and enter into the contract if I could work from the Labrador Plant because I was going to live in the Gold Coast.

[52]    I relied on the representations made by Shane Blank in making the decision to invest in the purchase of the truck and move to Queensland.

[53]    The following day after this conversation with Shane blank, 8 July 2013 [sic], I placed the deposit on the truck I was purchasing from Milton Meller Pty Ltd. I paid the deposit of $10,000 to the Business Broker, Ian Salter from Benchmark….

[54]    On 25 July 2011 I arranged a bank cheque for the balance of the amount owing of $90,000.00….

[55]    I agreed to pay $100,000 for the truck and the Hanson contract. I took the view that the truck I purchased had a value of $50,000 and the contract I accepted was worth $50,000 because I would have cartage work until 2020.

28        Mr Meredith claims in his affidavit that he may have been targeted by Mr Blank because, in summary:

    He has been an active member of the TWU since commencing with the first respondent.

    He had been actively involved in early 2012 to recruit other drivers to join owner-drivers to the TWU, in order for the TWU to be in a position to collectively bargain owner-driver contracts with the first respondent.

    In August 2012 there was an incident which ended in the first respondent standing down Mr Meredith because he insisted on the attendance of a TWU representative. The TWU filed a general protections complaint with Fair Work Australia, and the matter was the subject of a confidential settlement at a conference in Fair Work Australia on 26 September 2012.

    He understands that after the Fair Work Australia settlement, Mr Blank had told managers of the first respondent to “get” Mr Meredith “at all costs”.

    He has been the subject of ongoing harassment and unfair treatment including being given low paying loads.

    In about June 2013 he officially became the TWU Hanson Owner-Driver Delegate.

    In June 2013 Mr Meredith was wearing a baseball cap with a TWU logo on it and had an argument with a line manager of the first respondent as a result.

Evidence of Mr Blank

29        Responding to Mr Meredith’s affidavit, Mr Blank in his affidavit sworn 23 September 2013 deposed in summary as follows:

    He agreed to extend the SEQ 6m3 agreement (that is, in relation to the 6.0m3 truck purchased by Mr Meredith) to 30 September 2013 because it had an expiry of 30 September 2011 and the first respondent wanted to help Mr Meredith as a new owner-driver.

    He denied that the first respondent had provided commitments to either applicant that the SEQ 6m3 agreement would be extended to 30 September 2020 on condition that the first applicant upgrade its truck to a 7m3 truck by 30 September 2013, at which point the first applicant would be put on a SEQ 7.0m3 agreement. Mr Blank deposed at [37]:

I would never guarantee 7 years’ worth of work to a LOD as alleged by Michael and UMS, as I cannot personally control market fluctuations, concrete plant upgrades or the amount of capital provided to Northern Region of Hanson from our parent company, among other things. Hanson would need to complete their own due diligence and appraisal of the viability and risks associated with the business they were purchasing.

    In relation to Mr Meredith’s claim concerning Mr Blank’s disbelief of his purchasing a 7.0m3 truck, Mr Blank deposed at [44]:

Michael also stated words to the effect that ‘he had purchased a truck’. I responded words to the effect ‘I do not believe you have purchased a truck as you have been chasing me to respond to your upgrade application and I give you more credit than to complete a purchase without Hanson agreeing to it.’ Michael then proceeded to debate points with me and my reply was to state words to the effect ‘are we now having a meeting? If not all these points can be addressed once you have the representation you requested’.

    In relation to the vendor of the 7.0m3 truck allegedly leaving the barrel belonging to the first respondent on that truck when it was sold to the applicants to save the first respondent money in respect of removing and then reinstalling the barrel, Mr Blank said that he told Mr Meredith words to the effect of “Charlie does not take directions from LODs and any decision to transfer an asset [i.e. the mixer] would be in consultation between Charlie and me” (at [46] of the affidavit).

    It is very common knowledge that all owner-drivers who intend to upgrade are to seek approval from the first respondent, particularly before they go out and buy a new truck, if they want to put that truck in service with the first respondent in south east Queensland and obtain a mixer from the first respondent (at [56(e)]).

    He determined the owner-drivers who would be offered extensions to the SEQ6m3 agreement and those who would not (at [84]). His decision was based on:

o    maintaining a fleet size of 105 trucks in south east Queensland;

o    the return of 18 company trucks from north Queensland;

o    the requirement to have 6.0m3 trucks at Caboolture and Coopers Plains;

o    responses given by the 31 affected owner-drivers to his letter of 21 March 2013; and

o    truck age.

    His decision not to extend the SEQ 6m3 agreement had nothing to do with the applicants’ union affiliation, industrial activities or participation at any hearing before Fair Work Australia ([71]). He deposes:

[81]    There are many employees and LODs who I manage that have TWU representation and/or who the TWU represent. I am always happy to discuss issues with the TWU when requested by a LOD or an employee.

[82]    The fact that a LOD or employee may or may not be a member of the TWU or may or may not engage in union type activities in the workplace, is not a consideration for me when I am making a decision or bringing forward a course of action about that employee or LOD.

    He strenuously denied that he told managers in the first respondent to “get Michael at all costs” ([93]).

    He denied that Mr Meredith had regularly been given low paying loads by the first respondent ([95]). It is extremely difficult to single out a particular truck to ensure a truck got low paying loads, because the first respondent operates on a roster and “first in first out allocation” ([96]-[97]).

    He instructed the first respondent’s solicitors to write to the solicitors for the first applicant requesting the return of the first respondent’s 7m3 mixer at various times between 2 August 2013 and 13 September 2013 because neither applicant had approval to take that asset, worth approximately $45,000. Mr Meredith would not even confirm where the mixer was, save to say that it was “in Queensland” ([72]).

    The first applicant did not obtain approval from the first respondent in terms of its upgrade to the 7m3 truck – rather Mr Meredith simply took it upon himself for the first applicant to upgrade to the 7m3 truck, with the commercial risks that are involved in doing that, without first meeting the approval of the first respondent.

    In relation to Mr Meredith wearing the cap with the TWU logo – such hats are not part of the corporate branding of the first respondent [138]).

    There had been a downturn in the Sunshine Coast market in the first respondent’s business ([154]). The first respondent was, however, eager to appoint new owner-drivers to regional centres in Queensland.

Submissions of the parties

30        In summary, the applicants submit as follows:

    On an interlocutory basis the case is not only about keeping the first applicant company in business until trial – it is about keeping Mr Meredith in work until trial.

    The balance of convenience favours the applicants. This is particularly so given that the applicants gave an undertaking at today’s hearing that, if they were unsuccessful in obtaining the interlocutory relief they sought, they would arrange to have the 7.0m3 truck taken to a yard to remove the barrel which belongs to the first respondent and to have the barrel given back to the first respondent (transcript 24 October 2013 p 6 ll 31-32). In the event that interlocutory relief is refused, the utility in proceeding to final relief would to a large extent be nugatory because the applicants would be financially obliged to sell the 7.0m3 truck as they would be unable to afford to keep it without the barrel and the associated work from the first respondent. An important aspect of the balance of convenience is the protection of the jurisdiction to make final orders which the applicants have invoked in the proceedings.

    This is not simply a commercial dispute between parties, because it concerns the relationships by which Mr Meredith earns his livelihood and participates in the workforce.

    Mr Meredith has been an active member and delegate of the TWU. Since the Fair Work Australia conference he has been the subject of ongoing harassment and unfair treatment, as can be seen if all relevant incidents of treatment are considered together.

    The first respondent has a motive for removing union activists from amongst the ranks of its owner-drivers and employees. There has been a significant increase in union membership since Mr Meredith’s arrival in 2011.

    The respondents’ denial of a “contract extension” from 30 September 2013 to 30 September 2020 if an upgrade truck was purchased flies in the teeth of the documentary evidence before the Court.

    Although seven owner-drivers other than Mr Meredith were also advised on 15 July 2013 that their contracts would not be renewed, five did not wish to upgrade their trucks and (according to Mr Meredith’s evidence) one of the others was targeted for wearing a TWU cap. It is clear that Mr Meredith was particularly selected to be “culled” from the group of owner drivers engaged by the first respondent.

    The reason given by the respondents for refusing to renew Mr Meredith’s contract relevant to “truck age” does not withstand scrutiny because there is clear evidence that, prior to 12 July 2013, managers employed by the first respondent (including Mr Blank) knew that Mr Meredith had purchased an upgrade 7.0m3 truck.

    In terms of “current market conditions”, on 24 June 2013 the Queensland State manager of the first respondent, Mr Danny Cooper, made various representations about market conditions in the immediate future requiring more, not less, owner drivers.

    There is no requirement that an owner driver obtain the approval of the first respondent prior to upgrading his or her truck.

    The refusal to accept Mr Meredith’s use of the new 7.0m3 truck amounts to adverse action as defined by s 342 of the FWA.

    Damages would not be an adequate remedy for the applicants if the interlocutory relief is refused, as the Court’s jurisdiction to grant injunctive relief in the nature of specific performance will have been compromised. Confining the applicants to damages for breach of contract would operate to defeat the purposes of Pt 3-1 of the FWA by effectively denying the applicants injunctive remedies.

    Mr Meredith, while an independent contractor through the first applicant, is no different from an employee in that his attendance at work is not only an opportunity to earn income, but the means by which he may derive a sense of dignity, self-worth and social interrelationships.

    By its offer and subsequent undertaking to provide casual work to the applicants until Christmas, the first respondent has already conceded that there is no practical impediment to the parties working together.

    There is no practical difference to the first respondent whether the new truck or the old truck is used – indeed because the new truck can cart more concrete its use may benefit the first respondent.

    No prejudice to the first respondent has been identified in the event of the interlocutory relief being granted.

    Although the Court in Parmalat Australia Pty Ltd v VIP Plastic Packaging Pty Ltd (2013) 210 FCR 1 found that the obligations imposed on a respondent following an order granting mandatory interlocutory relief do necessitate some higher degree of assurance to the Court that final relief will be granted (at [21]), there are other authorities where the Court has taken a different view (for example, Racecourse Totalizators Pty Ltd v Totalisator Administration Board (Qld) (1995) 58 FCR 119 and Instyle Contract Textiles Pty Ltd v Good Environmental Choice Services Pty Ltd (No 2) [2010] FCA 38).

31        The respondents submit, in summary:

    The applicants want the very relief to which they would be entitled should they succeed at the final hearing.

    The interlocutory relief sought by the applicants is in the nature of mandatory relief. The Court requires a high degree of assurance that the applicants will succeed at trial.

    The applicants’ case is, at its highest, weak. For example, the applicants claim that, in filing an originating application in these proceedings, they have exercised a workplace right within the meaning of s 341 of the FWA – a proposition which is absurd.

    It is unclear what the alleged “industrial activity” of Mr Meredith is other than his attendance at a conference before Fair Work Australia.

    The applicants’ pleaded case is that the 6.0m3 agreement would not simply be extended, but that a new 7.0m3 agreement would be entered into.

    There is no dispute that the agreement between the first applicant and first respondent concerning the 6.0m3 truck was not extended on 30 September 2013. The respondents accept, for the purposes of the interlocutory application, that the non-extension of this agreement falls within the meaning of adverse action as defined in item 4 of s 341 of the FWA.

    It is a very long bow to draw to say that because of Mr Meredith’s attendance at a conference before Fair Work Australia in 2012 that the first applicant’s agreement concerning the 6.0m3 truck was not extended almost twelve months later. This is particularly so given that the 6.0m3 agreement contains an early termination provision in clause 14.5.

    The evidence concerning Mr Blank’s alleged instructions to managers to “get” Mr Meredith is hearsay and weak. It is strenuously denied by Mr Blank.

    The respondents have put on early evidence concerning the reasons of the respondents for refusing to extend the agreement with the first applicant.

    Damages are an adequate remedy and readily assessable.

    The applicants seek to do more than preserve their position – rather they seek mandatory interlocutory injunctions to improve their position and put them in the position they would be if they ultimately succeed at hearing.

    The Court should not accept the claims of Mr Meredith that he faces “ruin” should he not get the interlocutory orders he seeks. Further, Mr Meredith has not been completely open and candid to the Court about his financial position.

    The applicants have steadfastly refused to return the first respondent’s barrel, despite demands that they do so.

Considerations

32        In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 the High Court explained principles relevant to the grant of interlocutory relief. In particular,

1.    there must be a serious question to be tried as to the applicant’s entitlement to relief; and

2.    the applicant is likely to suffer injury for which damages will not be an adequate remedy; and

3.    the balance of convenience favours the granting of an interlocutory injunction.

(Gleeson CJ and Crennan J at [19].)

33        As Gummow and Hayne JJ further explained, in order for an applicant for interlocutory relief to demonstrate that there is a “serious question to be tried”:

1.1    It is sufficient that the applicant show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: at [65].

1.2    The applicant need not demonstrate more than a 50% chance of ultimate success: at [68].

1.3    In that light the issue may be understood as whether the applicant has made out a prima facie case for relief: at [65], [70].

1.4    Whether the applicant shows a sufficient likelihood of success depends on the:

1.4.1    nature of the rights asserted; and

1.4.2    practical consequences likely to flow from the interlocutory order sought. Particular considerations arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application: at [72].

34        In Parmalat at [21] I was satisfied that, in the context of a mandatory interlocutory injunction:

    the applicant is obliged to satisfy the Court to some higher degree of assurance that final relief will be granted in order to justify the grant of interlocutory relief; and

    this is so particularly in circumstances where:

o    the mandatory orders lend themselves to a greater likelihood of ongoing Court supervision; and

o    the practical effect of the orders is to finally determine the rights of the parties.

35        Mr Rebetzke for the applicants submitted that there is competing authority to the contrary. In particular, Counsel took me to observations of Yates J in Instyle Contract Textiles, and Kiefel J (as her Honour then was) in Racecourse Totalizators.

36        In Instyle Contract Textiles, Yates J discussed whether different considerations were required for mandatory as distinct from restraining interlocutory injunctions, and also considered comments of Kiefel J in Racecourse Totalizators as follows:

[76]    There is some debate in the authorities concerning the test to be applied when a mandatory injunction is sought at the interlocutory stage. In State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243 at 245 Gibbs CJ, in refusing to grant a mandatory interlocutory injunction, adopted the observations of Megarry J in Shepherd Homes Ltd v Sandham [1971] Ch 340 at 351 that, in the normal case, the court must “feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted” and that “this is a higher standard than is required for a prohibitory injunction”. This approach has been adopted in a number of cases, including in relatively recent times: see, for example, Storm Financial Limited v Commonwealth Bank of Australia [2008] FCA 1991 at [5].

[77]    In Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 at 501-504 Gummow J, in this Court, gave detailed consideration to the principles to be applied when a mandatory injunction is sought at the interlocutory stage. His Honour did not consider himself bound by what Gibbs CJ had said in this regard in State of Queensland v Australian Telecommunications Commission and declined to follow the approach of Megarry J in Shepherd Homes. In this connection his Honour (at 503-504) eschewed any principle which required a higher standard to be applied for the grant of an interlocutory mandatory injunction than for an interlocutory prohibitory injunction. His Honour accepted a number of observations made by Hoffmann J in Films Rover International Ltd v Cannon Film Sales Ltd [1986] 3 All ER 722 concerning the granting of mandatory injunctions in the general equity jurisdiction, including that the court is more reluctant to make such an order against a party who has not had the protection of a full hearing at trial. I should add that his Honour also remarked that statutory grants of particular injunctive powers, such as s 80 TPA, may require special consideration in this regard. It was not necessary, however, for his Honour to pursue that issue.

[78]    In Racecourse Totalizators Pty Ltd v Totalisator Administration Board of Queensland (1995) 58 FCR 119 Kiefel J, in this Court, also gave detailed consideration to the principles to be applied when a mandatory injunction is sought at the interlocutory stage. Her Honour rejected the notion that the technical classification of an order as “mandatory” automatically attracts the requirement that the court have further confidence in the correctness of the order through an examination of the strength of the applicant’s case: at 123C-D. Her Honour saw the issue as one to be dealt with by considering the balance of convenience. Her Honour observed that what is first required in that regard is a consideration of the effect that the order will have. If the order can be seen to have a “profound” effect (such as where the order finally determines the matter so that a defendant, who has raised a triable issue, is denied a right to a full hearing) then “the making of the order cannot be justified without another strong factor being able to be weighed against these effects and that factor may be a strong case being shown for final relief, although the difficulty in assessing it at an interlocutory stage may often have the result that the relief is denied”: at 123D-F.

[79]    Although Kiefel J expressed difficulty with some observations made in Films Rover with which Gummow J had expressed acceptance in Businessworld Computers, it seems to me that, in presently relevant respects, there is no necessary inconsistency between Kiefel J’s observations in Racecourse Totalizators and Gummow J’s observations in Businessworld Computers. Indeed, in the respects which I have noted, I read those cases as saying that no difference in approach is mandated depending on the mere characterisation of the order as “mandatory” or “prohibitory”.

[80]    It is uncontroversial that an important consideration relevant to determining the balance of convenience is whether the order that is sought will, in a practical sense, determine the substance of the matter in issue. This consideration does not become controversial because an order having that effect can be characterised as being “mandatory” as opposed to being “prohibitory”. It is also uncontroversial that the strength of the applicant’s case for final relief is a consideration that is relevant to determining the balance of convenience in granting or refusing a specific order. It is difficult, therefore, to see how the relationship between these two considerations can vary in determining where the balance of convenience lies in a given case simply by reason of a process of characterisation of the order as “mandatory” or “prohibitory” and nothing more.

[81]    With these observations in mind it seems to me that it is appropriate that, in relation to all injunctions sought at the present time, I should take into account (together with all other relevant considerations) the strength of Instyle’s case for final relief, as revealed by the presently available evidence, and the likely effect that each order as presently sought, if made, would have. I will do so, however, without applying any different standard based on whether the order that is sought is “prohibitory” or “mandatory” in character.

37        While I note Counsel’s submissions and the observations of his Honour in Instyle Contract Textiles, as I noted in Parmalat there is a divergence of authority in the Court which has not as yet been resolved at appellate level. Instyle Contract Textiles is a helpful addition to that list, however in my view it does not conclusively resolve the issue as suggested by the applicants. There is considerable authority to the contrary, as I explained in Parmalat. I am not prepared to depart from the views I expressed in Parmalat, in light of the fact that successful application for mandatory injunctive relief requires positive action on a reluctant respondent, as distinct from requiring a respondent to desist from nominated activity.

38        On balance, I am satisfied that the applicants are entitled to the interlocutory relief they have sought.

39        First, in my view the applicants have established a serious question to be tried in relation to the question of whether a contract exists between the first applicant and the first respondent as to the existence of a contract in relation to the 7.0m3 truck. While Mr Blank denies that he was entitled to bind the first respondent to an agreement providing cartage work to the first applicant for the better part of a decade, the deed of agreement signed 29 July 2011 between the vendor of the 6.0m3 truck (Milton Meller Pty Ltd), the first applicant and the first respondent supports a finding to the contrary. Indeed I note clause 2 of the Annexure to that deed of agreement, containing the Terms and Conditions of Contract with Hanson Construction Materials Pty Ltd, which provides as follows:

2    TERM OF AGREEMENT

2.1    The term of the Agreement is dependant [sic] on the truck carrying capacity.

2.2    The expiry date of the Agreement is 30th September 2013 upon which you will be required to upgrade to at [sic] twin steer truck and a contract will then be extended to 30th September 2020.

40        This Agreement, prepared on the letterhead of the first respondent, supports the case of the applicants that there was a contract contemplating that the applicants should acquire a 7.0m3 truck, and that the respondents were aware of this arrangement. In light of this and subsequent correspondence between Mr Meredith and Mr Blank, it is difficult to form any other conclusion at this interlocutory level than that the first respondent had committed to an agreement with the first applicant until 2020, subject to the acquisition of a larger truck.

41        Second, while the respondents contend strongly that the interlocutory relief sought will improve the position of the applicants rather than simply maintain the status quo, this is not the case if the relief sought would simply put the applicants into the position to which they are entitled on the material before the Court. Indeed, on this view, to refuse the applicants the relief they seek would be to disadvantage them from the position which is arguably the status quo.

42        Third, while breach of contract per se is not in itself the basis of the interlocutory application currently before the Court, nonetheless the apparent existence of a contract between the first applicant and the first respondent as contended by the applicants directly relates to the adverse action alleged and the alleged reasons that the adverse action was taken.

43        Fourth, there is strong evidence from Mr Blank, under oath, denying that adverse action was taken against the applicants for reasons prohibited by the FWA. However there is extensive evidence from Mr Meredith supporting a contrary view. The respondents submit that much of Mr Meredith’s evidence is hearsay and, in a sense, trite. However I am persuaded by the applicants that Mr Meredith’s evidence refers to a number of incidents which, while in themselves minor, could in the course of a trial be supported by further evidence adduced, and indeed build to a complete picture supporting the applicants’ case. So, for example, Mr Meredith gives evidence not only about the Fair Work Australia conference and his wearing of a TWU hat, but also his engagement in recruitment activities for the TWU, the increased presence of the TWU at the first respondent’s workplace since Mr Meredith commenced working with the first respondent, and his position as a union delegate. While the respondents claim that there is no causal connection between Mr Meredith’s attendance at a Fair Work Australia conference in 2012 and the refusal to renew his contract in 2013, I am not persuaded that the position is as simple as the respondents portray. Indeed, the mere presence of an early termination clause is not in itself sufficient to overcome the prospect of a serious question to be tried that the actual action taken by the first respondent – namely the refusal to continue the contractual arrangement – was caused by Mr Meredith’s union activities.

44        Fifth, I am persuaded that the balance of convenience supports the grant of interlocutory relief to the applicants. I accept the submissions of the applicants that this is not a “normal” commercial dispute, but a dispute between a large corporation and an owner driver whose livelihood depends on the outcome of the proceedings.

45        Sixth, while the failure of Mr Meredith to return the barrel to the first respondent was improper, I note that the first respondent has not taken action against Mr Meredith, but rather was prepared to give an undertaking to continue to do business with him. On the material before me I am not persuaded that the first respondent has suffered any prejudice from this conduct of Mr Meredith, or that his conduct is such that he has come to the Court without “clean hands” such as to deny him relief in equity.

46        Seventh, I am not persuaded that Mr Meredith has been less than candid with the Court concerning his financial affairs. Although some financial details were blanked out in the material before the Court today, there may be a perfectly reasonable explanation. At this interlocutory level I am not persuaded that any sinister motive should be attributed to the applicants.

47        Eighth, in my view the respondents have not demonstrated any meaningful prejudice they would suffer in the event of interlocutory relief being granted as sought.

48        Finally, in the circumstances I am not satisfied that damages would be an adequate remedy for the applicants should they be successful at trial but the interlocutory relief denied. The disruption to their business affairs should interlocutory relief be denied is such that, in my view, it is dubious whether damages would be suitable compensation. Certainly at this stage of the proceedings I am not persuaded otherwise.

Conclusion

49        In the circumstances of this case I am satisfied that the interlocutory relief sought by the applicants should be granted.

Associate:

Dated:    24 October 2013