BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union

BEAUMONT J: 1 On 19 October 2000, I rejected certain evidence in these proceedings. I indicated then that I would give reasons for the ruling at the time of giving judgment in the principal proceedings. These are the reasons for the ruling. 2 In the principal proceedings, BHP Steel (AIS) Pty Ltd ("BHP") applied under s 178 of the Workplace Relations Act 1996 (Cth) for a penalty order, claiming breaches by the respondent Union of an order made by the Australian Industrial Relations Commission at about 11.45 a.m. on 2 December 1999 to stop industrial action at the Tower Colliery coal mine. 3 In support of its claim, BHP relied upon, inter alia, the affidavit of Peter Newman sworn 20 June 2000. At the material times, Mr Newman was employed by BHP as Mine Manager at the Tower Colliery. Objection was taken by the Union to certain material appearing in par 19 of Mr Newman's affidavit. The objections relate to statements which, according to Mr Newman's affidavit evidence, were made to Mr Newman in the afternoon of 2 December 1999 by Ken Harris, described in Mr Newman's evidence as "District Official of the Union". According to that evidence, Mr Harris made three statements, when telephoned by Mr Newman "to discuss the situation". The statements were as follows: (1) A statement by Mr Harris to the following effect: "The Rules of the Union prevent an immediate return to work and so the workforce has been instructed not to return until 11.00 p.m. on 2 December 1999. They won't be going back at 3.00 p.m." (2) A statement by Mr Harris to the following effect: "The workforce were told, at the mass meeting, not to return to work until they hear from their delegates." (3) A statement by Mr Harris to the following effect: "When any members call the District Office they are being told not to return to work until they hear from the delegates." 4 BHP pressed this material as admissions made with authority which were admissible by virtue of s 87(1) of the Evidence Act 1995 (Cth). Particular reliance is placed upon s 87(1)(b), by which it is provided that, for the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that, when the representation was made, the person "was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment or authority". 5 BHP relied, in this connection, upon the following uncontroverted evidence: · At the material times, Mr Harris was the Secretary, and a full-time official of a District Branch of the Union's Mining and Energy Division ("the Division"). · Under the Division's rules each District Branch had complete control of its own affairs, subject to certain (immaterial) exceptions (R 12(iii)). · Under the District Branch's rules - (a) The District Branch Executive included the Branch Secretary (R 8(i)(a)); and (b) The Branch Secretary must keep Branch accounts and a register of Branch members; attend and keep minutes at Board of Management meetings; attend to correspondence; watch the interests of Branch members; and do all in his power to advance the position of Branch members generally. The Branch Secretary is under the control of the Board of Management. The Branch Secretary is responsible for examining the books and accounts of the Branch from time to time and must keep acquainted with its financial affairs (R 8(ii)(e)). 6 BHP sought to place reliance upon observations made in contempt proceedings by Wilcox J in Concrete Constructions Pty Ltd v Plumbers & Gasfitters Employees Union (1987) 15 FCR 64 (at 78) as follows: "Mr Alan Morris was, until his suspension last December, employed by Nisbet & Durney in connection with its sub-contract with Leighton for work at its project at 127 Walker Street, North Sydney. During February he attended the site in the capacity, to quote the terms of a written authority issued to him by Mr Lane on behalf of the Union, of 'a duly accredited representative of the above mentioned organization for all purposes of this award made under the Conciliation and Arbitration Act'. On 17 March 1987 he came to the North Sydney site. Mr W D J Stinson, the Leighton Project Manager, asked him the purpose of his visit. He replied that he was 'checking to see if any of the bans have been broken'. Counsel for the respondent submit that none of this evidence is admissible against the Union. There is no evidence, they say, that any of these persons had authority to make admissions on behalf of the Union. I agree that there is no express evidence of that authority but it seems to me that the making of the statements attributed to each of them is within the scope of their apparent authority. As is notorious, the function of a job delegate is to act as the link between the Union members on a particular job and management. On the site the job delegate is the voice of the Union. When the job delegate speaks to management about the Union position on an industrial matter prima facie he or she speaks for the Union." (Emphasis added) 7 In my opinion, this reasoning is distinguishable in the present context. The surrounding facts justified the drawing of an inference that Mr Morris had the Union's specific authority to act for it in the particular matter at hand. Here, by contrast, the Branch Rules make provision for the vesting of a general authority (and responsibility) in the Branch Secretary in the area of the performing of the duties of a person charged with a secretarial function. Ordinarily, this would not carry with it the specific authority to negotiate in the area of settlement of an industrial dispute involving the Union. Nor, in my view, does the generally expressed language of the Branch Rules purport to confer any such authority upon the Branch Secretary, at least when acting alone. 8 As has been seen, in his affidavit Mr Newman did no more than identify Mr Harris as the Union's "District Official". That does not, of itself, carry with it the authority to make admissions about a pending industrial dispute. 9 (It is true that, during the hearing of the principal proceedings, BHP applied to adduce further evidence to show an alleged previous course of dealing between BHP and Mr Harris, from which, it was claimed, an inference could be drawn of actual, implied or ostensible authority. The Union opposed the application on the grounds that the case had proceeded upon the footing that any evidence to be adduced in chief by BHP at the final hearing of the proceedings would be in the form of an affidavit directed to be filed and served well before the hearing date; and that the Union, having prepared for the hearing of these penal proceedings upon that assumption, would be substantially prejudiced if BHP were then allowed to re-open and expand its affidavit evidence. I upheld the Union's objection and refused BHP the leave then sought.) 10 The evidence thus being of the limited scope previously described, it is then submitted on behalf of the Union that the present issue is governed by the principles explained by Keely J in GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 25 FCR 296 at 307 - 310, citing High Court authority holding that a "rule must be construed as authorising the Branch to settle local disputes by legal, not illegal, methods". Keely J said (at 307 - 308): "As to the second principle in the Seamen's Union (supra) at 312, Higgins J said: 'There is nothing in all this to suggest that the Branch's action is to be treated as the action of the Union. But even if r 71 is to be treated as making the Branch an agent of the Union, the rule must be construed as authorising the Branch to settle local disputes by legal, not illegal, methods; and no act of the agent can impose on the principal criminal liability for breach of the award unless the Union itself be proved to take part in or authorise the commission of the breach (Chisholm v Doulton (1889) 22 QBD 736; Roberts v Woodward (1890) 25 QBD 412; Emary v Nolloth [1903] 2 KB 264).' In the Seamen's Union, Knox CJ cited Burgess [see below] with approval and Isaacs and Rich JJ (at 307) rejected an argument that the decision of a Branch meeting constituted a breach by the registered organisation, saying: 'It was said that the mere fact of that decision being made at the Branch meeting constituted a breach by the organisation of the term of the award referred to. The way in which that argument was presented was as follows: By the registered rules of the respondent organisation, Branches are established; and it was contended that each Branch so completely represented the whole organisation at its own locality that whatever it did, rightly or wrongly, must be taken to be the act of the whole organisation … The Union is, composed of members as its units. For convenience, Branches are established at large shipping centres, but the government and control of the Union as a corporate or quasi-corporate body is vested in a general meeting of the members, the chief executive authority being committed to a Committee of Management following the instructions of the meeting of members. A Branch has its own business; but its own Branch business is not the business of any other Branch, and still less the business of every other Branch, or of the Union as a whole.' Higgins J said (at 310-311): 'But even if we can fairly treat the resolution of the Victorian Branch as an aiding of job control, it was a resolution of the Branch, not of the Union. Counsel for the Association, however, have examined the rules of the Union, and contend that the action of the Branch is action of the Union. In particular, reliance is placed on r 71: 'In the event of a dispute occurring as to wages or working conditions in any State, the members of the Branch in such State may take such steps as will lead to an immediate settlement of the dispute, but if there should be any likelihood of the dispute extending beyond the limits of the State, the Branch officials shall immediately notify the General President and the General Secretary, and these two officials shall take such steps as the necessity of the case requires.' But, in the first place, if the Branch exercise this power to try to settle a dispute confined to a State, the action which it takes is not necessarily the action of the Union. A Branch cannot usually be treated as an agent of the Union, so as to make the acts of the Branch the acts of the Union (Denaby and Cadeby Main Collieries Ltd v Yorkshire Miners' Association [1906] AC 384; Smithies v National Association of Operative Plasterers [1909] 1 KB 310). Counsel cannot point to any clause in the rules of the Union that prevents these cases from applying to this case.' Lastly, Starke J said (at 315-316): 'The relation of the Union and the Branches under these rules is not very clear, but they do not, in my opinion, constitute the Branches the Union for local purposes, nor give them any power to commit or bind the Union or other members of the Union by their resolutions (Waterside Workers' Federation of Australia v Burgess Brothers Ltd (1916) 21 CLR 129; Denaby and Cadeby Main Collieries Ltd v Yorkshire Miners' Association [1906] AC 384; Smithies v National Association of Operative Plasterers [1909] 1 KB 310). The Branches have, no doubt, some powers of self-government with respect to local affairs, but those powers belong to them as independent units and not as representatives or agents of the whole Union." 11 See also, to similar effect, Hanley v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 1188 at par 74 (per Ryan, Moore and Goldberg JJ). 12 Both Wilcox J and Keely J were dealing with the position at common law. In my opinion, for the reasons given by Keely J, the attempt by BHP to invoke the rules here failed to establish any authority in Mr Harris at common law to make, on behalf of the Union, the admissions claimed. 13 Although BHP also sought to rely independently upon s 87(1)(b), it seems to me that here also, for similar reasons, BHP had failed to show that the settlement of their particular dispute was a "matter" within Mr Harris' authority, so far as the Union was concerned. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.