FEDERAL COURT OF AUSTRALIA
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2016] FCA 987
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Paragraphs 28B, 29, 30, 31, 32, 33, 33A, 34, 35, 38, 39, 40, 40A, 41, 42, 43, 44 and 45 of the amended statement of claim filed by the applicant on 28 January 2016 be struck out.
2. The applicant has leave to file a further amended statement of claim by 4 pm on 30 September 2016.
3. The matter return for further directions at 9.30 am on 10 October 2016.
4. There be liberty to apply on three (3) days’ written notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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3. DISPOSITIVE ORDERS – APPLICATION FOR SUMMARY JUDGMENT, LEAVE TO REPLEAD AND COSTS | [100] |
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COLLIER J:
1 In these interlocutory proceedings the respondents seek rulings on lengthy and detailed objections to the amended statement of claim (the ASOC) filed by the applicant (the CFMEU) on 28 January 2016.
2 The ASOC was filed in conjunction with an amended application filed by the CFMEU on 2 February 2016. Pursuant to that amended originating application the CFMEU claims:
1. Declarations that the Respondents have contravened the Fair Work Act 2009 (Cth) in the manner set out in the Amended Statement of Claim.
2. Orders pursuant to s. 546(1) of the Fair Work Act 2009 (Cth) imposing pecuniary penalties upon each of the Respondents in respect of their respective contraventions of the Fair Work Act 2009 (Cth) set out in the Amended Statement of Claim.
3. An order pursuant to s 546(3) that the penalties be paid to the Applicant.
4. An order pursuant to s 545(1) that the Respondents jointly and severally pay Compensation for losses suffered by the Employees because of the above contraventions of the Respondents.
4A. A declaration pursuant to s 545(1) declaring that the BMA-Downer Agreement as defined in the Amended Statement of Claim (the BMA-Downer Agreement) is null and void for illegality.
4B. An order that Respondents, by themselves, their servants or agents, be enjoined from implementing or further implementing the BMA-Downer Agreement.
4C. An order pursuant to s 545(1) requiring the Second Respondent to forthwith reinstate the labour supply agreement with the First Respondent referred to in paragraph 12 of the Amended Statement of Claim on the same terms as contained in that agreement immediately before the making of the BMA-Downer Agreement.
4D. An order pursuant to s 545(1) requiring the First Respondent to offer those Employees who have been dismissed, transferred or redeployed from the Mine as a result of the implementation of the BMA-Downer Agreement, employment or re-employment with the First Respondent in the positions that they held immediately before the making of the BMA-Downer Agreement.
5. Interest.
6. Such further or other orders as the Court thinks appropriate.
3 From the CFMEU’s pleadings, and both its written and oral submissions, I am given to understand that the CFMEU intends its substantial case against the respondents to be – summarised very broadly and simply – as follows:
CFMEU members are employed by the first respondent (BHP);
BHP employees performed work for the second respondent (BMA) pursuant to contractual arrangements between BHP and BMA;
the third and fourth respondents (collectively, Downer) are contractors in the mining business. Downer employees are paid less than BHP employees for similar work;
BMA and Downer agreed that Downer would undertake work performed by employees of BHP for BMA;
the agreement between BMA and Downer is unlawful;
BHP is prejudiced by the agreement between BMA and Downer;
adverse action was taken by BMA against the BHP workers who had performed work for BMA;
Downer was an accessory to that prejudice and adverse action.
4 BHP and BMA are related corporations. Together they filed an interlocutory application on 22 February 2016 against the CFMEU, and are jointly represented.
5 Similarly, the Downer entities are related corporations. They together filed their interlocutory application on 22 February 2016 against the CFMEU, and are jointly represented.
6 Both interlocutory applications are before me.
7 BHP and BMA clearly took the lead in these interlocutory proceedings in seeking both strike out of particular paragraphs of the ASOC and summary dismissal of the principal proceedings against it. This was in circumstances where the primary liability alleged by the CFMEU is said to be that of BHP and BMA, and the alleged liability of Downer is accessory to that of BHP and BMA.
8 In their interlocutory application BHP and BMA seek the following orders:
1. Paragraphs 30, 31, 32, 33, 38, 39, 40, 40A, 41, 44 and 45 of the Amended Statement of Claim filed by the Applicant on 28 January 2016 be struck out pursuant to:
(a) Rule 16.21(e) of the Federal Court Rules 2011 (“the Rules”);
(b) further or alternatively, Rule 16.21(d) of the Rules;
(c) further or alternatively, Rule 16.21(c) of the Rules;
(d) further or alternatively, Rule 16.2 (f) of the Rules;
2. Judgment be given for the First and Second Respondents pursuant to section 31A of the Federal Court of Australia Act 1976 and Rule 26.01(a) of the Rules;
3. Such consequential orders and directions as may be appropriate;
4. The Applicant pay the First and Second Respondents’ costs of and incidental to the proceeding including this application.
9 In their interlocutory application the Downer entities seek the following orders:
1. Paragraphs 28B, 29, 33A, 34, 35, 42 and 43 of the Amended Statement of Claim dated 28 January 2016 be struck out under sub-rules 16.21(1)(c), 16.21(1)(d) and 16.21(1)(e) of the Federal Court Rules 2011 on grounds that the pleading:
a. is evasive or ambiguous;
b. is likely to cause prejudice, embarrassment or delay in the proceeding; and
c. fails to disclose a reasonable cause of action.
2. The Applicant pay the Third and Fourth Respondents’ costs of and incidental to this application.
3. Such further or other orders as the Court considers appropriate.
10 It is appropriate to first consider these interlocutory applications so far as concerns whether particular paragraphs in the ASOC should be struck out.
2. APPLICATIONS TO STRIKE OUT PLEADINGS
2.1 Relevant legislation and general principles
11 All respondents rely on r 16.21(1)(c)-(e) of the Federal Court Rules 2011 (Cth) (the Rules). This rule provides as follows:
(1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:
(a) …
(b) …
(c) is evasive or ambiguous; or
(d) is likely to cause prejudice, embarrassment or delay in the proceeding; or
(e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
12 The third and fourth respondents also rely on r 16.21(1)(f) which provides:
(f) is otherwise an abuse of the process of the Court.
13 It is well-established that the main purposes of pleadings are to give notice to the other party of the case it has to meet, to avoid surprise to that party, and to define the issues at trial, thereby allowing only relevant evidence to be admitted at trial and the trial to be conducted efficiently within permissible bounds: Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], see also Water Board v Moustakas (1988) 180 CLR 491 at 497; Dare v Pulham (1982) 148 CLR 658 at 664-665; Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293; JR Consulting & Drafting Pty Limited v Cummings [2016] FCAFC 20 at [411]; Granitigard Pty Ltd v Termicide Pest Control Pty Ltd [2011] FCAFC 81 at [105]. These principles are consistent with r 16.02 of the Rules which sets out general requirements of pleadings in the following terms:
(1) A pleading must:
(a) be divided into consecutively numbered paragraphs, each, as far as practicable, dealing with a separate matter; and
(b) be as brief as the nature of the case permits; and
(c) identify the issues that the party wants the Court to resolve; and
(d) state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved; and
(e) state the provisions of any statute relied on; and
(f) state the specific relief sought or claimed.
(2) A pleading must not:
(a) contain any scandalous material; or
(b) contain any frivolous or vexatious material; or
(c) be evasive or ambiguous; or
(d) be likely to cause prejudice, embarrassment or delay in the proceeding; or
(e) fail to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f) otherwise be an abuse of the process of the Court.
(3) A pleading may raise a point of law.
(4) A party is not entitled to seek any additional relief to the relief that is claimed in the originating application.
(5) A party may plead a fact or matter that has occurred or arisen since the proceeding started.
14 Rule 16.21 of the Rules empowers the Court to exercise its discretion to strike out pleadings which do not meet the standards set by paras (a)-(e) of r 16.21(1), which are referable to the general rules of pleading set out in r 16.02. In doing so however the Court is further guided by principles including that:
The power to strike out is to be employed sparingly and only in a clear case: Polar Aviation Pty Ltd v Civil Aviation Safety Authority (2012) 203 FCR 325 at [43]; and
In considering the adequacy of pleaded facts, the Court should adopt a sensible and robust approach. If the object of pleadings is sufficiently met, the striking out of the pleading will be unnecessary: Guglielman v Trescowthick [2004] FCA 326 at [8]; Forty Two International Pty Limited v Barnes [2010] FCA 397 at [110].
15 I note these principles in light of the particular nature of the proceedings before me, namely an application for alleged contraventions of the Fair Work Act 2009 (Cth) (the FW Act). Two additional, and counterbalancing, factors are at play before the Court in such cases, namely:
The fact that the Fair Work jurisdiction is a protective jurisdiction, as is evident from the object of the FW Act as set out in s 3; and
The fact that, while the civil penalty regime imposed by the FW Act upon transgressors is primarily if not wholly protective in promoting the public interest in compliance with the law (as distinct from the accusatorial nature of criminal proceedings: cf Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at 59, [102]-[103]), the imposition of a civil penalty is a serious matter and not to be undertaken lightly: cf for example comments in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449 at 449-50; Adler v Australian Securities and Investments Commission [2003] NSWCA 131 at [146]-[148]; Australian Securities and Investments Commission v Healey [2011] FCA 717 at [101]-[102]. A case seeking such imposition must be clearly and strictly pleaded.
2.2 BHP and BMA interlocutory application
16 To properly understand paragraph 30 of the ASOC it should be read with paragraph 29, which provides as follows:
In or about August 2015, BMA agreed with Downer for the supply of labour to carry out the Work being performed by the Employees in replacement of BHP Coal and the Employees (BMA-Downer Agreement).
Particulars
Frans Knox informed the Employees of the BMA-Downer Agreement in a letter dated 20 August 2015. An announcement of the BMA-Downer Agreement was also made by Rag Udd on 20 August 2015. The BMA-Downer Agreement was also confirmed in a letter dated 31 August 2015 from Hilton Hurst of Downer Mining to Stephen Smyth of the CFMEU. The Applicant will refer to the full terms of these documents at trial. These documents may be inspected by appointment at the office of the Applicant’s solicitors.
17 Paragraph 30 provides as follows:
By making the BMA-Downer Agreement, BMA has or threatened to:
(a) terminate the labour supply agreement with BHP Coal in relation to the performance of the Work;
(b) alter the position of BHP Coal to its prejudice in relation to the supply of labour for the performance of the Work; and
(c) refuse to make use of the services of BHP Coal in relation to the supply of labour for the performance of the Work.
Particulars
A. On 20 August 2015, Udd (writing as Asset President, BMA) circulated an announcement to all email addresses on the BMA system. The announcement stated that BMA “has awarded” the Work to Downer, and that the contractual arrangements “contain performance guarantees that will enable us to achieve productivity targets and cost reductions”.
B. On the same day, Knox wrote a letter (on BMA letterhead) to each Employee, advising them of the BMA-Downer Agreement, informing them the Work would be “outsourced” and that approximately 306 roles would be affected.
C. At the 21 August consultation, Knox and McKenzie displayed a series of powerpoint slides bearing the BMA logo. The slides stated that in consequence of the BMA-Downer Agreement there was a “surplus” of 210 Employees and a “possible need for redundanc[ies]”.
D. On 26 August 2015, McKenzie wrote a letter to the CFMEU (on BMA letterhead) confirming that the surplus of Employees ‘cannot be addressed by natural attrition’.
E. Further consultation meetings between McKenzie and CFMEU representatives were held on 24 and 27 August, 2 and 22 September, and 14 October 2015, during which meetings it was explained that the surplus Employees would either be redeployed within the Mine, transferred to another Mine, or else offered a “voluntary redundancy”. During each meeting, slides featuring the BMA logo were displayed. After each meeting the minutes were circulated, on BMA letterhead.
F. On or about 30 October 2015, BMA produced a document entitled “Blackwater Restructure Summary Data” which stated that BMA had completed its “decisions” about the surplus Employees, and had decided that BHP Coal would dismiss 43 of the Employees by way of “voluntary redundancy”, transfer 67 of them to other Mines, and redeploy 99 of them to other roles within the Mine.
G. These decisions were implemented by BHP Coal in November and December 2015.
H. The effect of the BMA-Downer Agreement is that BHP Coal is no longer required to perform the Work and it will instead be performed by Downer. The date upon which the labour supply agreement with BHP Coal was terminated, or will be terminated, is not presently known. Further particulars will be provided after discovery.
I. The effect of the BMA-Downer Agreement is to prejudice BHP Coal in relation to its supply of labour for the performance of the Work by reducing its operations at the Mine and any revenue earned therefrom. Further particulars will be provided after discovery.
J. The effect of the BMA-Downer Agreement is that BMA will no longer use the services of BHP Coal to supply labour for the performance of the Work and the labour will instead be supplied by Downer.
18 In summary, BHP and BMA submit that paragraph 30 should be struck out because:
It pleads a series of conclusions, not material facts from which matters asserted about BMA’s conduct could be drawn.
Pleaded particulars do not cure this defect.
None of the particulars given in paragraph 30 are capable of establishing the pleaded conclusions that “by making the BMA-Downer Agreement” BMA has or has threatened to terminate the agreement with BHP, alter the position of BMA to its prejudice, or to refuse to make use of the services of BHP.
The terms of the formal contracts apparently constituting the “BMA-Downer Agreement” contain no threat whatsoever to anyone.
Neither paragraph 30 nor any of the particulars provided in respect of it plead any facts that would ordinarily be crucial to make out a case of actual or threatened termination.
The agreement between BMA and BHP includes that BHP is remunerated for provision of labour to BMA on a cost recovery basis, and accordingly BHP would suffer no loss if there was a reduction in the amount of labour provided to BMA.
19 In summary the CFMEU submits that:
by making the BMA-Downer Agreement, BMA has (or has threatened to) prejudice BHP, refuse to use its services, and/or terminate its service contract, which conduct constitutes “adverse action” under item 3 in the table in s 342(1) of the FW Act.
BMA did this because (or for reasons including that) the BHP employees were entitled to the benefit of the BHP enterprise agreement (being a workplace right).
alternatively by making and implementing the BMA-Downer Agreement, BMA advised, encouraged, incited or coerced BHP to take adverse action against its employees (namely by dismissing, transferring or redeploying them) because those employees had a workplace right (namely the benefit of the BHP enterprise agreement).
the argument of the first and second respondents proceeds from the fundamental misconception that the reference to the “BMA-Downer Agreement” in the ASOC is a reference to the three written contracts giving effect to that agreement. This is not correct – it is a reference to an “agreement” between BMA and Downer that Downer would “replace” BHP in doing the relevant work.
at the time the ASOC was filed, the CFMEU did not know precisely how the “replacement” would occur. accordingly the replacement is pleaded in different ways by reference to the different heads of “adverse action”, that is:
○ BHP might have its contract formally terminated;
○ the contract might be kept on foot but further services might be “refused”;
○ some other action might be taken to exclude BHP from the work thereby altering its commercial position to its detriment.
20 In my view paragraph 30 should be struck out as contravening r 16.21(1)(c)-(e) of the Rules. The position in respect of paragraph 30 was exacerbated by the apparent shift in ground as to its meaning by the CFMEU in written and oral submissions.
21 The CFMEU referred me to observations of Weinberg J in McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 and of Drummond J in State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499. The CFMEU also relied on the principle that it is acceptable in appropriate cases to plead at a level of generality rather than to every fact material to the cause of action sued upon. In this context the CFMEU referred to comments of Mansfield J in BWK Elders Australia Pty Ltd v Westgate Wool Company Pty Ltd (No 2) [2002] FCA 87 where his Honour said:
The tendency in pleadings in recent years has been to address matters of substance rather than matters of form. … The Court’s focus has been upon ensuring the case is identified with clarity, so that the opposing party knows the case to be met and the issues for trial are identified …
22 I am not satisfied that the legal principles relied on by the CFMEU in relation to paragraph 30 assists it in this case. I say so in the following circumstances.
23 First, there appears to be confusion in the CFMEU’s case as to the precise nature of the BMA-Downer Agreement.
24 Paragraph 29 of the ASOC refers to the fact that in or about August 2015 BMA agreed with Downer for the supply of labour to carry out the work being performed by employees. Evidence currently before the Court in the affidavit of Ms Tamara Lutvey sworn on 22 February 2016 was to the effect that two formal agreements between BMA and the Downer entities were entered in August 2015, namely:
a Production and Maintenance Services Contract dated 19 August 2015; and
a Services Contract – Drill and Blast dated 19 August 2015.
25 These agreements together potentially could appear to be “the BMA-Downer Agreement” in paragraph 29.
26 However, paragraph 29 specifically pleads the BMA-Downer Agreement by reference to three other documents identified in the particulars, namely:
a letter dated 20 August 2015 from Frans Knox, the General Manager – Blackwater Mine to employees of BMA;
an announcement made by Rag Udd on 20 August 2015; and
a letter dated 31 August 2015 from Hilton Hurst of the third respondent to Stephen Smyth of the CFMEU.
27 Notwithstanding this, in a further variation of the definition of the agreement, in written submissions to the Court the CFMEU then contended that “the BMA-Downer Agreement” was not “the three written contracts giving effect to the agreement”. Rather the CFMEU submits:
That is wrong. The ASOC uses the term “BMA-Downer Agreement” to refer to an “agreement” between BMA and Downer; “agreement is used in its ordinary sense of a mutual arrangement or understanding. The content of the alleged agreement is set out in paragraph 29; it was an agreement that Downer would “replace” BHP Coal in doing the work.
28 Notwithstanding this submission, an allegation to this effect is not pleaded in the ASOC.
29 Insofar as paragraph 30 refers to “the BMA-Downer Agreement” there is apparent confusion in the CFMEU’s case as to the nature of the agreement. This state of confusion is deepened by the failure of the CFMEU in either paragraph 29 or paragraph 30 to particularise the terms of the BMA-Downer Agreement, other than by reference to the services contracts of 19 August 2015 (which make no reference to the adverse action alleged). (I will return to paragraph 29 later in this judgment.)
30 Second, I am unable to identify material facts pleaded to support the conclusion pleaded in paragraph 30 that “by making” the BMA-Downer Agreement, BMA has or threatened to do the acts pleaded in paragraph 30(a), (b) and (c).
31 Mr Neil SC for the first and second respondents submitted that, in fact, paragraph 30 refers to a bilateral act and not a unilateral act, namely the entry into the BMA-Downer Agreement by BMA and Downer. Paragraph 29 pleads that the BMA-Downer Agreement came into being by the agreement between BMA and Downer (a bilateral act) whereas paragraph 30 then purports to plead that it was “made” by BMA (a unilateral act) which clearly cannot be the case. It may well be that what the applicant actually claims is that by agreeing in (unidentified) terms to an agreement with Downer, BMA was threatening to do, or actually doing, harm to BHP, including terminating the labour supply agreement with BHP. The jump from the facts pleaded in the particulars to paragraph 30(c), to the claims in paragraph 30(a), (b) and (c) is, however, not clear. The CFMEU does not point to any aspect of either the formal service contracts or the three documents whereby BMA either threatened to, or did, terminate labour supply agreements with BHP. It is also unclear how BHP has or would suffer prejudice, even if the entry of BMA and Downer into the BMA-Downer Agreement of itself effected a termination or reduction in services to be provided by BHP to BMA.
32 Third, it is unclear to me how the particularised allegation of the CFMEU in paragraph 30(c)F that BHP would “dismiss” 43 employees by way of “voluntary redundancy” constitutes a refusal by BMA to, or a threat to refuse to, make use of the services of BHP. This is particularly confusing in light of the following comments of RD Nicholson J in Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at [244]:
(1) An offer of voluntary redundancy is not a threat to injure an employee in his or her employment. It is an offer the employee may accept or reject.
(2) Acceptance by an employee of payment of redundancy, a fortiori payment at an enhanced rate, is evidence of absence of injury in the employment to which the redundancy relates.
(3) Once accepted by the employee, the redundancy takes effect and the employment ceases. There is therefore no relevant employment against which to measure any alleged injury arising from the redundancy.
(4) Consequently, allegations of worse terms and conditions being inevitable on engagement in new employment are not relevant to alleged injury in the former employment …
33 I respectfully adopt these comments as statements of general principle referable to the concept of adverse action in s 342 of the FW Act, and voluntary redundancy.
34 In this case, the CFMEU does not plead any facts supporting the proposition that voluntary redundancies offered by BHP (and apparently accepted by workers) were, in fact, not voluntary, and/or that workers (or BHP) were in this respect the subject of adverse action. In this respect the proceedings before the Court can be contrasted with those before the Full Court in Community & Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93 where the Full Court observed that implementation of “downsizing” by the employer exposed its employees to a prospect of redundancy that was not truly voluntary.
35 Fourth, the terms of particulars 30(c)H, I and J are conclusory, and in the case of particulars 30(c)H and I, are clearly inconclusive in their apparent dependence on the provision of further particulars by the first and second respondents at an indeterminate date.
36 Paragraph 31 reads:
The actions and conduct of BMA referred to in the two preceding paragraphs constitute adverse action by BMA against the Employees within the meaning in item 3 of the table in s.342(1) of the FW Act.
37 Relevantly, item 3 of the table in s 342(1) of the FW Act provides:
Meaning of adverse action
(1) The following table sets out circumstances in which a person takes adverse action against another person.
Meaning of adverse action | ||
Item | Column 1 Adverse action is taken by ... | Column 2 if ... |
… | ||
… | ||
3 | a person (the principal ) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor | the principal: (a) terminates the contract; or (b) injures the independent contractor in relation to the terms and conditions of the contract; or (c) alters the position of the independent contractor to the independent contractor’s prejudice; or (d) refuses to make use of, or agree to make use of, services offered by the independent contractor; or (e) refuses to supply, or agree to supply, goods or services to the independent contractor. |
38 Paragraph 31 suffers from two immediately obvious defects – namely:
1. Its validity rests on that of paragraph 30, which for reasons I have already given should be struck out; and
2. I consider that it is a rolled-up conclusory allegation which makes no attempt to link specific conduct alleged in either paragraphs 29 or 30 to any of paragraphs (a)-(e) in Item 3 of the table in s 342(1).
39 The second defect is of particular concern, as the first and second respondents do not face a clearly defined case. As Counsel for BMA and BHP submitted, there are very many possibilities resulting from reading paragraphs 29, 30 and 31 together, and none of them are identified.
40 BMA and BHP submit that paragraph 31 of the ASOC should be struck out on the basis that it is ambiguous, evasive and likely to cause prejudice, embarrassment or delay in the proceeding. I agree.
41 Paragraph 32 states:
The adverse action referred to in the preceding paragraph was taken by BMA for the reason, or for reasons that include the reason, that the Employees were entitled to the benefit of the BMA Agreement.
Particulars
A. The CFMEU relies on the matters set out in paragraphs 11 to 30 above.
B. The CFMEU also relies on the following matters:
(i) BMA was seeking to save costs at the Mine, as pleaded at paragraph 28A.
(ii) BMA knew the wages and conditions applicable under the BMA Agreement, the Downer Mining Agreement and the Downer Blasting Agreement;
(iii) the main reason, alternatively a substantial reason, why Downer could perform the Work more cheaply than BHP Coal was that the remuneration payable to the Employees by reason of their entitlements under the BMA Agreement for performing the Work is greater than that which would be payable for the performance of the Work under the Downer Mining Agreement and the Downer Blasting Agreement.
(iv) it is to be inferred from its dealing with BHP Coal and Downer at the Mine that BMA knew of the matters particularised immediately above.
C. The CFMEU also relies on sections 360 and 361 of the FW Act.
42 Section 360 provides:
Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
43 Section 361 provides:
Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.
44 The first and second respondents submitted that if paragraph 31 was struck out, paragraph 32 should also be struck out.
45 I accept this submission. The reference in paragraph 32 to s 360 and s 361 of the FW Act does not validate this paragraph in the face of the invalidity of paragraph 31 upon which paragraph 32 depends.
46 Paragraph 33 states:
By reason of the matters referred to in paragraphs 28A to 32 above, BMA has contravened s.340(1)(a)(i) of the FW Act.
47 Section 340(1)(a)(i) provides that a person must not take adverse action against another person because the other person has a workplace right.
48 The first and second respondents submit that paragraph 33 cannot stand if paragraphs 30-32 are struck out; further that it is defective in that it additionally relies on paragraphs 28A and 28B of the ASOC. These paragraphs provide:
28A. In the period prior to August 2015, BMA was examining ways to reduce costs at the Mine.
28B. In the period prior to August 2015, Downer Mining and Downer Blasting (together, Downer) approached BMA and proposed that they be given all of the Work being performed by the Employees, instead of BHP Coal and that they would do it at a lower costs to BMA than BHP Coal.
Particulars
On 21 August 2015, at a consultation meeting with representatives of the Employees (the 21 August consultation), Knox stated that “Downers came to us and said they can make a step change in productivity performance for us, in pre-strip and the package that goes with that in maintenance as well as the drilling and blasting, that will guarantee – are guaranteeing us a performance outcome and a low cost”.
49 The first and second respondents submit that neither of these paragraphs constitute the taking of adverse action in that:
paragraph 28A merely alleges that at a point in time BMA was examining ways to reduce costs; and
paragraph 28B alleges conduct by someone other than BM Alliance.
50 The CFMEU submits that there is nothing improper in paragraph 33 calling up the background facts set out in paragraphs 28A and 28B in aid of the central allegations that adverse action was taken or threatened for a prohibited reason.
51 While paragraphs 28A and 28B of themselves do not plead matters whereby BMA has contravened s 340(1)(a)(i), I accept the proposition that, referable to those paragraphs alone, paragraph 33 is not defective on the basis that those paragraphs plead background facts. However in light of my finding that paragraphs 30-32 of the ASOC should be struck out, it is clear that paragraph 33 cannot stand, and should be struck out.
52 The parties in submissions addressed paragraphs 38 and 39 together. These paragraphs plead as follows:
38. Further or in the alternative to paragraph 33, in November and December 2015 BHP Coal:
(a) redeployed some of the Employees to perform duties other than the Work;
(b) transferred some of the Employees to work at other mines in Queensland;
(c) proposed that the Employees or some of them accept voluntary redundancy; and
(d) dismissed some of the Employees.
Particulars
The CFMEU repeats the particulars to paragraph 30 above.
39. The actions in the preceding paragraph constitute adverse action against the Employees within the meaning in paragraphs (a), (b) or (c) or item 1 of the table in s. 342 (1) of the FW Act.
53 The first and second respondents submit that these paragraphs should be struck out because, in summary:
Other than an allegation that “some” employees were dismissed by BHP, there is no allegation in paragraph 38 or in the particulars to paragraph 30 that BHP injured any employee or altered the position of any employee to that employee’s prejudice.
It is unclear how proposing that employees accept a voluntary redundancy could constitute adverse action within the meaning of Item 1 of the table to s 342(1). No material facts are pleaded to support this conclusion.
It is possible (although not certain) that the “dismissal” to which paragraph 38(d) refers is that identified in particular 30(c)F, namely the allegation that BMA decided that BHP would dismiss 43 employees by way of voluntary redundancy. An offer of voluntary redundancy is not “dismissal” within the meaning of Item 1 of the table to s 342(1) of the FW Act, or injury or alteration in position within the meaning of Item 1.
Submissions of the CFMEU
54 In response the CFMEU submits, in summary:
Paragraph 38(d) alleges that some employees were dismissed, and the particulars state how many suffered that fate.
In relation to the employees who were offered voluntary redundancies, the CFMEU now understands that those employees who were accepted voluntary redundancies were then dismissed.
In relation to the employees who were transferred to other mines, it is at least arguable that a transfer can constitute a prejudicial alteration in employment, as the clear implication is that having to travel each day to a different worksite would be an adverse affection of or deterioration in the advantages enjoyed by the employee in a practical sense within the meaning explained in Patrick Stevedores v Maritime Union of Australia (1998) 195 CLR 1 at [4] and Byrne v Australian Ophthalmic Supplies (2008) 169 IR 236.
In relation to the employees who were redeployed within the mine the particulars set out numbers affected. Transfer to a different role can constitute a prejudicial alteration to one’s position if, for example, the new position has less congenial shifts or less opportunity to work overtime: Maritime Union of Australia v Geraldton Port Authority at [265].
Consideration
55 I consider that the submissions of the CFMEU in respect of paragraphs 38 and 39 are not persuasive. In my view:
To the extent that paragraph 38 relies on the particulars to paragraph 30(c) it is afflicted by the same defects as paragraph 30, which I outlined earlier. So – in the absence of facts pleaded to support an allegation that an offer of voluntary redundancy constituted adverse action within the meaning of s 342, I am not persuaded that it does. I give no weight to the unsubstantiated submission of the CFMEU as to the alleged “fate” of unidentified employees who it claims accepted a voluntary redundancy (and in any event I find somewhat confusing the submission that those employees who accepted a voluntary redundancy were then “dismissed” when, presumably, their employment was terminated as part of their voluntary redundancy).
The allegations in paragraph 38 as to actions concerning “some” employees is vague and imprecise. I do not consider that the complaints of the first and second respondents as to the vagueness of this description are technical or semantic. I take the same view in relation to paragraph 39 and its unacceptably broad-brush approach to alleged instances of adverse action within the meaning in paragraphs (a), (b) or (c) or item 1 of the table in s 342(1) of the FW Act.
The examples of adverse action in respect of transfer and redeployment of employees by reference to other authorities is of little relevance or assistance in circumstances where the CFMEU has not pleaded the type of adverse action to which it refers in its submissions. As RD Nicholson J observed in MUA v Geraldton Port Authority at [265], redeployment cannot in itself constitute a threat to injure or a threat to alter the position of an employee to the prejudice of that employee, in circumstances where it could take place either without injury or indeed with enhancement.
56 Paragraphs 38 and 39 should be struck out.
Paragraphs 40, 40A and 41 ASOC
57 In submissions the parties addressed these paragraphs together. The paragraphs read:
40. By making and implementing the BMA-Downer Agreement, BMA did, within the meaning of s.362 of the FW Act:
(a) advise, encourage or incite BHP Coal to engage in the adverse action referred to in paragraph 38 above; or
(b) take action with the intent to coerce BHP Coal to engage in the adverse action referred to in paragraph 38 above.
Particulars
In relation to (a), CFMEU relies on the matters pleaded at paragraphs 3 to 6 above and the particulars to paragraph 30 above.
In relation to (b), the intent to coerce is to be inferred from the fact that the BMA-Downer Agreement was unlawful, on the basis that:
(i) its making constituted a conspiracy, as set out in the particulars to paragraph 34; and/or
(ii) its implementation involved a contravention of the FW Act, as pleaded at paragraph 33 above.
40A. BMA engaged in the conduct referred to in the preceding paragraph for the reason, or the reasons that include the reason, that the Employees were entitled to the benefit of the BMA Agreement.
Particulars
The CFMEU repeats paragraph 32 above and the particulars thereto.
41. By reason of the matters referred to in paragraphs 38 to 40A above, BMA has contravened s. 340(1)(a)(i) of the FW Act.
Submissions of BHP and BMA
58 In summary the first and second respondents submit:
If paragraphs 38 and 39 are struck out, paragraph 40 cannot stand. Similarly as paragraphs 40A relies entirely upon the validity of paragraph 40, it should be struck out if paragraph 40 falls. Paragraph 41 relies entirely upon paragraphs 38 to 40A and should be struck out for the same reason.
Even were paragraphs 38 and 39 not defective, paragraph 40 is defective because:
○ it pleads no material facts from which the conclusions pleaded in paragraph 40(a) and (b) can be drawn;
○ no particulars of merit are given;
○ paragraphs 3 to 6 of the ASOC to which paragraph 40 refers merely plead constitutional matters and the particulars to paragraph 30;
○ the premise of paragraph 38 is that the BMA-Downer Agreement was unlawful because its “making” constituted a conspiracy;
○ the pleading of the alleged conspiracy is deficient;
○ the alleged state of mind of the second respondent is not pleaded. No individual or individuals with the requisite state of mind that is said to constitute the state of mind of the second respondent are identified. Such matters must be expressly pleaded pursuant to r 16.43;
○ if paragraph 33 is struck out paragraph 39 (upon which paragraph 41 relies) is defective;
○ in any event paragraph 33 does not allege that the implementation of the BMA-Downer Agreement constituted a contravention.
Submissions of the CFMEU
59 The CFMEU submits that paragraphs 40, 40A and 41 are properly pleaded because, in summary:
Paragraph 40(b) pleads that, by making the BMA-Downer Agreement as defined, BMA advised, encouraged, or incited BHP to take adverse action against its employees.
It is clear from the particulars that the “advice” to BHP from BMA can be inferred from the common ownership and control of the two companies, and that the relevant BMA representatives were acting as agents for both BMA and BHP.
If the evidence reveals that BHP was an unwilling participant in the pleaded conspiracy, a second allegation is that BMA intended to coerce BHP into acting as it ultimately did. The existing particulars make clear that the coercive intent was to be inferred from the unlawful nature of the BMA-Downer Agreement.
Criticisms that overt acts are not pleaded are misplaced – the acts causing damage to BHP employees are pleaded at paragraph 38.
The acts manifesting the BMA-Downer Agreement are pleaded at paragraphs 28B and 29.
Given that the CFMEU does not know the precise details of the clandestine agreement between BMA and Downer, it is sufficient to give particulars of known acts which justify the inference that the relevant arrangement or understanding was made.
Consideration
60 I agree with the first and second respondents that paragraphs 40, 40A and 41 are defective. I have formed this view for the following reasons.
61 First, the CFMEU relies on the making of “the BMA-Downer Agreement as defined”. I have already observed that there are serious problems relating to the definition of the BMA Downer Agreement in the pleadings. Indeed, at this stage the nature of the BMA-Downer Agreement is unclear.
62 Second, in respect of the CFMEU’s pleading in paragraph 40(a) that BMA “advised, encouraged or incited BHP Coal” to engage in the adverse action referred to in paragraph 38, the CFMEU relies on matters pleaded at paragraphs 3 to 6 of the ASOC. These paragraphs state:
3. The First Respondent (BHP Coal) is and was at all material times:
(a) a body corporate and capable of being sued as such;
(b) a constitutional corporation and a constitutionally-covered entity within the meaning in s.338 of the Fair Work Act 2009 (FW Act);
(c) a national system employer, within the meaning of the FW Act; and
(d) a majority-owned subsidiary of BHP Billiton Metcoal Holdings Pty Ltd (Metcoal).
Particulars
Metcoal holds 99.99% of the shares in BHP Coal.
4. At all material times:
(a) the ultimate holding company of BHP Coal was BHP Billiton Limited (BHP)
(b) Gideon Oberholzer and Jill Margaret Buckle were the two directors of BHP Coal;
(c) David Lyle Riddell was an alternative director of BHP Coal; and
(d) Jill Margaret Buckle and Toni Angela Wiltshire were the two secretaries of BHP Coal.
5. The Second Respondent (BMA) is and was at all material times:
(a) a body corporate and capable of being sued as such;
(b) a constitutional corporation and a constitutionally-covered entity within the meaning in s. 338 of the FW Act; and
(c) 50% owned by Metcoal.
6. At all material times:
(a) Gideon Oberholzer was one of the two directors of BMA;
(b) David Lyle Riddell and Jill Margaret Buckle were alternate directors of BMA; and
(c) Jill Margaret Buckle and Toni Angela Wiltshire were the two secretaries of BMA.
63 A difficulty with paragraph 40(a), in relying on paragraphs 3, 4, 5 and 6, is that material facts which support a claim of advising, encouraging and inciting of BHP by BMA are simply not pleaded. The CFMEU submits, in effect, that the facts pleaded in paragraphs 3-6 obviously support such a claim because of the common ownership and corporate officers of the first and second respondents. In my view no such obvious position is manifested. I agree with the submission of Mr Neil that the mere fact of common ownership and the existence of common directors cannot constitute material facts supporting advising, encouraging and inciting within the meaning of s 362 of the FW Act, and that the mere commonality of those personnel does not of itself constitute such material facts. The pleaded case is inadequate to support the allegation in paragraph 40(a).
64 Third, insofar as the particulars to paragraph 40(a) refer in turn to the particulars to paragraph 30 in support of allegations that BMA advised, encouraged or incited BHP Coal to engage in the adverse action referred to in paragraph 38, I am unable to identify how the particulars to paragraph 30 support those allegations. The particulars to paragraph 30 relate to alleged conduct of BMA in the “making” of the BMA-Downer Agreement.
65 Fourth, insofar as paragraph 40(a) relies on paragraph 38 of the ASOC, that reliance is defective for reasons I have already given in respect of paragraph 38.
66 Fifth, insofar as the particulars to paragraph 40(b) state that the BMA-Downer Agreement was unlawful on the basis that its making constituted a conspiracy and/or its implementation involved a contravention of the FW Act as pleaded at paragraph 33, I consider paragraph 40(b) to be defective because:
In an allegation of conspiracy it is important that the applicant plead the overt acts which were carried out pursuant to the alleged combination with the intention of injuring the claimant (cf Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [68]; Fair Work Ombudsman v Devine Marine Group Pty Ltd [2013] FCA 1135 at [35]). In my view relevant overt acts are not set out in the ASOC. As I have already noted, I consider that paragraph 38 upon which paragraph 40 relies is defective and should be struck out.
I have difficulty following the jump in pleading from the claim in paragraph 40(b) (that, in making the BMA-Downer Agreement, BMA took action with the intent to coerce BHP to engage in adverse action) to particular (i) to paragraph 40 (that the making of the BMA-Downer Agreement constituted a conspiracy).
Particular (i) to paragraph 40 relies on paragraph 34, which however pleads (inter alia) that the making of the BMA-Downer Agreement constituted a conspiracy referable to paragraph 33 (which paragraph, as I have already explained, is defective and should be struck out).
67 Sixth, r 16.43 of the Rules provides that:
(1) A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies.
(2) If a party pleads that another party ought to have known something, the party must give particulars of the facts and circumstances from which the other party ought to have acquired the knowledge.
(3) In this rule:
“condition of mind” means:
(a) knowledge; and
(b) any disorder or disability of the party’s mind; and
(c) any fraudulent intention of the party.
68 Paragraph 40(b) clearly refers to the “condition of mind” of BMA, in turn referable to the alleged “intent” to coerce BHP to engage in the relevant actions. However the ASOC does not explicitly plead how that “condition of mind” was formed. As Bright J observed in Brambles Holdings v Carey (1976) 15 SASR 270 at 279:
Always, when beliefs of opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company. This process is often necessary in cases in which companies charged with offences such as conspiracy to defraud.
(cf Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd [1997] FCA 469).
69 Similar principles apply in respect of the claim of intention to coerce and conspiracy within the framework of the FW Act.
70 While it may be possible for the Court to make findings of conspiracy between corporate entities on the basis of circumstantial evidence (Ahern v The Queen (1988) 165 CLR 87 at [93]; MUA v Geraldton Port Authority at [422]) this general principle does not relieve the CFMEU in this case from the responsibility of identifying relevant persons whose intentions can properly be said to be those of the Downer entities. Nomination in paragraphs 4 and 6 of the ASOC of common officers of BMA and BHP does not in my view satisfy this requirement, or the more specific requirements of r 16.43.
71 These defects in paragraph 40 in my view justify an order striking it out without further examination. As paragraphs 40A relies entirely on the allegations in paragraph 40 it should also be struck out. Paragraph 41 relies on paragraphs 38-40A, and it follows that it should similarly be struck out.
72 Paragraph 44 appears under the heading “Accessory liability of BHP Coal”, and reads as follows:
By reason of the matters pleaded at paragraphs 3-6, 11-17 and 28A-29 above, BHP Coal was, within the meaning in s 550 of the FW Act, involved in the contravention by BMA referred to in paragraph 41 above, in that it:
(a) Aided or abetted the contravention;
(b) Was directly or indirectly, knowingly concerned in the contravention; and/or
(c) Conspired with BMA to effect the contravention.
Particulars
As to paragraph (c) above:
(c) [sic] the making and implementation of the BMA-Downer Agreement constituted conspiracy by unlawful means, in that its making and implementation contravened the FW Act, as pleaded at paragraph 33 above, alternatively
(d) [sic] the making and implementation of the BMA-Downer Agreement constituted a conspiracy to injure the Employees in their employment.
73 Paragraph 45 reads:
By reason of the matters referred to in the preceding [sic] and the operation of s.550 of the FW Act, BHP Coal has contravened s. 340(1)(a)(i) of the FW Act.
74 Paragraph 45 clearly relies on paragraph 44, and should be struck out if paragraph 44 fails.
75 BMA and BHP submit that paragraph 44 should be struck out because, in summary, the CFMEU does not plead material facts in support of the allegation, and further the paragraph is conclusory.
76 The CFMEU pleads that paragraph 44 should not be struck out because:
It pleads the conduct of BMA in making the BMA-Downer Agreement, the common ownership and control of BMA and BHP, and the fact that Mr Knox and Mr Udd were acting for both BMA and BHP. Accordingly, BHP was “involved” in the making of the BMA-Downer Agreement within the meaning of s 550 of the FW Act.
Paragraph 44 specifies the modes of involvement relied upon.
As to the allegation of conspiracy, BHP implemented the BMA-Downer Agreement without protest and in the knowledge of BMA’s unlawful purposes.
In relation to the submissions of the first and second respondents concerning r 16.43 of the Rules, it is not necessary that the CFMEU plead and prove which individuals had the requisite intent, as the intent to be proved is that of BHP.
In any event s 361 of the FW Act applies, and it provides that where it is alleged that a person acted for a particular reason or with a particular intent that state of mind is presumed unless proven otherwise.
77 In my view paragraph 44 cannot stand for the following reasons.
78 First, in light of the view I have formed the view that paragraphs 33 and 41, on which paragraph 44 relies, should be struck out.
79 Second, “knowing involvement” within the meaning of s 550 of the FW Act requires an applicant to show that the relevant party intentionally participated in the contravening conduct, with actual knowledge of the essential facts which constituted the contravention, even if he or she does not know that those facts constituted a contravention: Yorke v Lucas (1985) 158 CLR 661 at 667; Fair Work Ombudsman v Al Hilfi [2015] FCA 313 at [34]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) [2013] FCA 525 at [237]. In an allegation of accessorial liability against a corporate entity, knowledge must be established through the officers, employees or agents: cf comments of Gilmour J in Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 2) [2013] FCA 943 at [154]). It follows that before the Court can examine whether BHP was “knowingly concerned” in a contravention of the FW Act by BMA, it is necessary in its statement of claim that the CFMEU identify relevant corporate officers in the first and second respondents who had the necessary actual knowledge. Nowhere does the CFMEU do this in the ASOC. I am not persuaded that the constitutional matters identified in paragraphs 3-6 of the ASOC – and in particular the reference to common corporate officers – are adequate to satisfy this requirement.
80 Third, contrary to the submission of the CFMEU, the ASOC is required to satisfy the requirements of r 16.43 of the Rules.
81 Finally, paragraph 44(c) does not identify (either in the subparagraph or the particulars thereto) the individuals who allegedly engaged in conspiratorial conduct or the manner in which their conduct is attributable to BHP.
82 It follows that paragraph 45 should also be struck out.
2.3 Downer interlocutory application
83 Paragraph 28B states as follows:
In the period prior to August 2015, Downer Mining and Downer Blasting (together, Downer) approached BMA and proposed that they be given all of the Work being performed by the Employees, instead of BHP Coal and that they would do it at a lower cost to BMA than BHP Coal.
Particulars
On 21 August 2015, at a consultation meeting with representatives of the Employees (the 21 August consultation), Knox stated that ‘Downers came to us and said they can make a step change in productivity performance for us, in pre-strip and the package that goes with that in maintenance as well as the drilling and blasting, that will guarantee – are guaranteeing us a performance outcome and a low cost’.
84 Downer submits that paragraph 28B is defective because the terms in which it is pleaded are so general that Downer does not know the case it is required to meet. In particular, paragraph 28B:
does not specify who from Downer is alleged to have approached BMA; and how
does not specify who from BMA was approached.
85 Further, Downer submits that the particulars do not support paragraph 28B, even if the alleged statement by Mr Knox is true.
86 The CFMEU’s response to these complaints is that it has pleaded this allegation as best it can, because it does not know which Downer representatives approached which BMA representatives. To that extent, it contends the pleading cannot be said to be evasive or embarrassing. In particular the CFMEU relies on the following comment of Gallop J in Turner trading as Classic Gourmet Sausages v Leda Commercial Properties Pty Ltd (2000) 97 FCR 313 at [39]:
By launching the application to strike out, the respondent undertook the burden of establishing that there was no triable issue. On such an application the respondent bears the onus of proof and where the facts are peculiarly within the respondent’s knowledge the appellants’ statutory cause of action should not have been dismissed because of gaps in the appellants’ case if the necessary evidence might be obtained as a result of discovery, interrogatories or evidence from reluctant witnesses …
87 It may be that, at this point in time, the CFMEU does not have knowledge of material facts to plead in support of this aspect of the claim, those facts being peculiarly within the knowledge of the respondents. However I am not satisfied that this explanation constitutes an adequate defence to an application for strike out of paragraph 28B, in circumstances where it is patently clear that paragraph 28B does not plead material facts.
88 Ultimately, in its present state, paragraph 28B does not clearly posit a case which can be answered by Downer. While currently the CFMEU may not have material facts at its disposal to properly plead paragraph 28B, there are possible avenues available to the CFMEU to seek out those facts, including the prospect of seeking preliminary discovery pursuant to r 7.23 of the Rules.
89 Further, I am not satisfied that the comments of Gallop J in Classic Gourmet Sausages assist the CFMEU in this case. In Classic Gourmet Sausages the Full Court considered an appeal from a Judge who had dismissed an appeal from the ACT Tenancy Tribunal. The Tribunal had dismissed a notice of dispute by a lessee on the basis that it disclosed no reasonable cause of action and was without merit. The primary Judge upheld the decision of the Tribunal, finding that the case raised no issue capable of supporting an appeal in terms of the relevant legislation. It was in this context that Gallop J referred to “the dismissal of the appellant’s statutory cause of action” at [39]. Indeed it is revealing to examine his Honour’s reasons [39] in their entirety:
In my opinion, his Honour failed to apply appropriately the test laid down in General Steel Industries Inc v Commissioner for Railways (NSW) (supra) and other cases for the reasons expressed by Hill J. Admittedly the appellants failed to adduce the evidence to establish harsh, oppressive or unconscionable conduct and admittedly the foreshadowed evidence may not have carried the day for the appellants. But it was necessary to consider all the evidence including evidence foreshadowed but not then adduced before dismissing summarily the appellants’ notice of dispute. By launching the application to strike out, the respondent undertook the burden of establishing that there was no triable issue. On such an application the respondent bears the onus of proof and where the facts are peculiarly within the respondent’s knowledge the appellants’ statutory cause of action should not have been dismissed because of gaps in the appellants’ case if the necessary evidence might be obtained as a result of discovery, interrogatories or evidence from reluctant witnesses (see Wickstead v Browne (1992) 30 NSWLR 1 per Handley and Cripps JJ at p 11).
90 In General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Barwick CJ considered an application for strike out, in its entirety, a statement of claim. Clearly the comments of Gallop J were directed at circumstances of strike out of a statement of claim in its entirety, rather than application for strike out of specific paragraphs in a statement of claim, as is the present case.
91 Paragraph 28B should be struck out.
92 Paragraph 29 states:
In or about August 2015, BMA agreed with Downer for the supply of labour to carry out the Work being performed by the Employees in replacement of BHP Coal and the Employees (BMA-Downer Agreement).
Particulars
Frans Knox informed the Employees of the BMA-Downer Agreement in a letter dated 20 August 2015. An announcement of the BMA-Downer Agreement was also made by Rag Udd on 20 August 2015. The BMA-Downer Agreement was also confirmed in a letter dated 31 August 2015 from Hilton Hurst of Downer Mining to Stephen Smyth of the CFMEU. The Applicant will refer to the full terms of these documents at trial. These documents may be inspected by appointment at the office of the Applicant’s solicitors.
93 Earlier in this judgment I referred to the apparent confusion in the CFMEU’s case as to the nature of the BMA-Downer Agreement. In their submissions BHP and BMA drew the Court’s attention to the fact that written agreements entered between BMA and Downer in August 2015 do not, in fact, contain provisions referable to the CFMEU’s current complaint in these proceedings. Further, in its submissions the CFMEU claims that the BMA-Downer Agreement is a more general agreement which is not specifically contained in the three documents identified in the particulars to paragraph 29. To that extent it appears that the particulars to paragraph 29 do not actually support the paragraph itself.
94 While the CFMEU claims that it has given the best detail that it can in relation to an agreement to which it was not privy, this explanation does not in my view rebut the claim of the Downer entities that they are faced with a case they are unable to meet. Indeed, the nature of the applicant’s submissions in this respect appears to require the Downer entities to rely on both assumptions and guesswork to answer the CFMEU’s case. This level of general uncertainty is not, however, required of a respondent – rather it is for the applicant to plead a case which can be met.
95 Paragraph 29 should be struck out.
Paragraphs 33A, 34, 35, 42 and 43 ASOC
96 These paragraphs were substantially dealt with together in submissions by the parties. They state as follows:
33A. In making the approach to BMA, as pleaded at paragraph 28A above, and in making the BMA-Downer Agreement, Downer knew that:
(a) the main reason, alternatively a substantial reason, why BHP Coal performed the Work at a higher cost than Downer could was because it was bound to pay the Employees remuneration under the BMA Agreement; and
Particulars
This knowledge is to be inferred from:
(i) discussions between Downer and BMA about the cost of performing the Work, referred to by BMA representatives at the 21 August consultation; and
(ii) the fact that the BMA Agreement is a public document.
(b) once the BMA-Agreement [sic] was made, BMA would withdraw the Work from BHP Coal, and BHP Coal would consequently need to redeploy, transfer or dismiss some or all of the Employees
Particulars
This knowledge is to be inferred from the nature of Downer’s proposal and the content of the BMA-Agreement [sic].
34. By reason of the matters pleaded at paragraphs 28A, 28B, 29 and 33A above, Downer Mining and Downer Blasting were, within the meaning in s. 550 of the FW Act, jointly or severally involved in the contravention by BMA referred to in paragraph 33 above, in that they jointly or severally:
(a) aided, abetted, counselled or procured the contravention;
(b) induced the contravention by promises or otherwise;
(c) were directly or indirectly, knowingly concerned in the contravention; and/or
(d) conspired with BMA to effect the contravention.
Particulars
As to paragraph 34(d)
(a) the making and implementation of the BMA-Downer Agreement constituted conspiracy by unlawful means, in that its making and implementation contravened the FW Act as pleaded at paragraph 33 above; alternatively
(b) the making and implementation of the BMA-Downer Agreement constituted a conspiracy to injure BHP Coal in its business and/or the Employees in their employment.
35. By reason of the matters referred to in the preceding paragraph and the operation of s.550 of the FW Act, Downer Mining and Downer Blasting have each contravened s. 340(1)(a)(i) of the FW Act.
…
…
42. By reason of the matters pleaded at paragraphs 28A, 28B, 29 and 33A, Downer Mining and Downer Blasting were, within the meaning in s.550 of the FW Act, jointly or severally involved in the contravention by BMA referred to in the preceding paragraph, in that they jointly or severally:
(a) aided, abetted, counselled or procured the contravention;
(b) induced the contravention by promises or otherwise;
(c) were directly or indirectly, knowingly concerned in the contravention; and/or
(d) conspired with BMA to effect the contravention.
Particulars
As to paragraph 42(d), the CFMEU repeats the particulars to paragraph 34 above.
43. By reason of the matters referred to in paragraph 42 above and the operation of s.550 of the FW Act, Downer Mining and Downer Blasting have each contravened s. 340(1)(a)(i) of the FW Act.
97 Downer submits, in summary:
Paragraph 33A should be struck out in light of the defects in paragraphs 28B and 29 of the ASOC.
Paragraph 33A should also be struck out because it purports to plead the knowledge of Downer required for accessorial liability under s 550 of the FW Act where no material facts are pleaded to indicate the Downer entities knew of the specific adverse action alleged to have been taken by BMA, the specific adverse action BMA is alleged to have advised, encouraged, incited or coerced BHP to take, and how it did so, and the substantial and operative reasons of BMA for allegedly engaging in that conduct.
Paragraphs 34, 35, 42 and 43 of the ASOC should be struck out because they are conclusory and do not plead material facts.
98 The CFMEU submits, in summary:
it suffices to establish accessorial liability that the accessory knew the general, but not specific, nature of the contraventions committed by the principal; and
paragraphs 33A and 34 plead Downer’s knowledge with sufficient specificity.
99 In my view paragraphs 33A, 34, 35, 42 and 43 are defective and should be struck out, because:
They are reliant on paragraphs 28B and 29, which are themselves defective for reasons set out earlier in this judgment.
They do not plead specific persons within Downer with alleged knowledge such that Downer could be imputed with that knowledge.
I agree with Downer’s submissions that these paragraphs are conclusory and do not properly plead material facts.
3. DISPOSITIVE ORDERS – APPLICATION FOR SUMMARY JUDGMENT, LEAVE TO REPLEAD AND COSTS
100 The effect of the foregoing reasons is that a significant portion of the ASOC will be struck out. I now turn to consideration of appropriate dispositive orders.
3.1 Application for summary judgment
101 The first and second respondents submit that, if those parts of the ASOC they submit are defective are struck out, the proceeding against them should be dismissed pursuant to s 31A of the Federal Court Act of Australia Act 1976 (Cth) (the Federal Court Act) and r 26.01(a) of the Rules.
102 Relevantly s 31A of the Federal Court Act provides as follows:
(1) …
(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
103 Rule 26.01(a) of the Rules provides:
(1) A party may apply to the Court for an order that judgment be given against another party because:
(a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or
(b) the proceeding is frivolous or vexatious; or
(c) no reasonable cause of action is disclosed; or
(d) the proceeding is an abuse of the process of the Court; or
(e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.
104 As Reeves J observed in Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 at 261 [13]:
The terms of [section 31A] are reflected in r 26.01 of the Federal Court Rules 2011 (Cth). Save that s 31A(3) is not contained in r 26.01(1), the section and the rule otherwise contain identical tests: see Zippo Manufacturing Company v Jaxlawn Pty Ltd [2011] FCA 1125 at [20] per Gordon J.
105 Section 31A was examined by the High Court in Spencer v Commonwealth of Australia (2010) 241 CLR 118. As French CJ and Gummow J said:
25. Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s. 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
106 The term “no reasonable prospect of success” in s 31A was also considered by the majority in Spencer, who observed:
60. … [F]ull weight must be given to the expression as a whole. The Federal Court may exercise power under s. 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
107 The first and second respondents submit that the proceedings should be dismissed because, in summary:
no reasonable cause of action is disclosed despite opportunity being given to the CFMEU to do so;
the CFMEU has no reasonable prospect of successfully prosecuting the proceeding; and
giving the CFMEU leave to replead would be futile.
108 I also note the position adopted by the third and fourth respondents, namely that if the proceedings are dismissed against the first and second respondents they should similarly be dismissed against the third and fourth respondents.
109 The CFMEU submits, in summary, that there is clearly a triable issue before the Court in respect of an approach by one entity to another, and the real complaints of the first and second respondents relate to particularisation of those issues. Accordingly it should be given leave to replead.
110 As I noted earlier in these reasons, it is well-recognised that a Court should approach the issue of summary dismissal of proceedings with great caution, and that such an order should be made sparingly and in only the clearest of circumstances.
111 Despite at least two attempts, the CFMEU has not formulated a case which can be met by the respondents. However I consider it equally clear that there are triable issues before the Court.
112 Further, while a key point made by the CFMEU to date has been that it has pleaded the case the best it can, I am not prepared at this stage to find that it would be futile to give the CFMEU leave to replead. I do not consider that the success of the respondents’ applications for strike out of particular paragraphs of the ASOC means that the CFMEU has no underlying case or that it has no reasonable prospect of properly repleading and successfully prosecuting this proceeding.
113 In the circumstances I am not prepared to make an order for summary dismissal pursuant to s 31A of the Federal Court Act or r 26.01(a) of the Rules.
114 Mr Murdoch for Downer submitted that in the event that the respondents were successful in their applications for strike out, the Court ought not automatically grant the CFMEU leave to replead, but rather should give the CFMEU leave to seek to, or to apply to, replead. This would give the respondents the opportunity, if what was produced by the CFMEU was still deficient, to make appropriate submissions as to why leave should not be given to the CFMEU to replead.
115 I have already observed that the CFMEU has, to date, formally made two unsuccessful attempts to plead a statement of claim which can be met by the respondents. The ASOC currently before the Court has to a large extent been struck out. However as I have also noted, there are triable issues, the merits of which, if properly formulated, could be examined by the Court: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536. Further, this is the first time that the Court has considered applications for strike out of paragraphs in the ASOC. The usual course in these circumstances is to grant the applicant leave to replead (cf comments in such cases as Tang v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1494 at [26]; Coffey v Secretary, Department of Social Security [1998] FCA 1202; Dunstan v Human Rights & Equal Opportunity Commission [1999] FCA 1608 at [31]). As Lindgren J said in White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 at 309 [47]:
… evidence may disclose that a person has or may have a “reasonable cause of action” or “reasonable prospects of success”, yet the person’s pleading does not disclose this. In such a case O 11 r 16 empowers the Court to strike out the pleading but O 20 r 2(1)(a) would not empower the Court to order a stay or dismissal, and s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts.
(I note that this passage was cited with approval by French CJ and Gummow J in Spencer at [23].)
116 In my view the proper approach is to grant the CFMEU leave to replead a fresh further amended statement of claim by 30 September 2016. In light of the history of this matter I will also grant liberty to apply. I do so however against the background of the apparent difficulties the CFMEU has experienced in pleading its case to date, and the prospect that, should the CFMEU be unable to plead a proper case in a further amended statement of claim, the very real question will arise as to the whether it is able to do so.
117 The respondents have been successful in their interlocutory applications and submit that they should be awarded costs against the CFMEU.
118 The CFMEU however relies on s 570 of the FW Act which provides:
Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
119 As has been pointed out in a number of authorities, the premise of s 570 is that in proceedings in relation to a matter arising under the FW Act, the Court will only order a party to pay costs incurred by another party if the Court is satisfied of the conditions prescribed in s 570(2) (see, for example, Shamir v Commonwealth of Australia (Australian Taxation Office) [2015] FCA 1463 at [4]).
120 Mortimer J explained this premise in Ryan v Primesafe Pty Ltd [2015] FCA 8 at [64] in the following terms:
The policy behind s 570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision.
(cf Tsilibakis v Transfield Services (Australia) Pty Ltd (No 2) [2015] FCA 1048 at [7]).
121 That the interlocutory applications have been brought by the respondents pursuant to the Federal Court Act and the Federal Court Rules does not mean that they do not arise under the FW Act for the purposes of s 570 in circumstances where the principal proceedings were commenced pursuant to the FW Act. In this context I respectfully note the comments of White J in Stanley v Service to Youth Council Incorporated (No 3) (2014) 225 FCR 357 at [26]-[38].
122 In my view I am satisfied that none of the criteria set out in s 570(2) have been satisfied. It follows that no costs order will be made.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. |
Associate:
