Broad Construction Services (WA) Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers

Background 5 The applicant filed the substantive application on 9 May 2005. The details of claim set out in the application state: 'On the grounds stated in the accompanying Affidavit, the Applicant seeks the following relief: 1. An injunction pursuant to section 80 of the Trade Practices Act 1974 (Cth) ("the Act") restraining the Respondent, its officers, employees, members or agents or otherwise howsoever, from engaging in secondary boycott action pursuant to section 45D of the Act by: (a) engaging in industrial action [as that term is defined in the Workplace Relations Act 1996 (Cth)] with employees working on the Swanview Redevelopment Site in Como ("the Site"); and/or (b) directing and/or causing, constructing, demanding or requesting that the employees working on the Site engage in such industrial action. 2. A declaration that the notice of giving of authorisation to engage in industrial action dated 5 May 2005 ("the Notice") is invalid in that: (a) it is not genuinely for the purpose of supporting or advancing claims made in respect of the proposed certified agreement as required by section 170ML of the Workplace Relations Act 1996 (Cth); (b) Broad Construction Services (WA) Pty Ltd has no employees; (c) the Notice provides for a complete cessation of work by all employees irrespective of their employer during 24 hour periods, commencing at 6.30 am Tuesday, 10 May 2005 and continuing thereafter; (d) the Notice does not provide 3 working days' written notice as required by section 170M0(2) of the Workplace Relations Act 1996 (Cth). 3. Damages pursuant to section 82 of the Act for contravention of section 45D of the Act. 4. Interest on such damages as may be awarded from the date such damage was incurred to judgment pursuant to section 51A(1) of the Federal Court of Australia Act 1976 (Cth). 5. Costs.' (original emphasis) 6 As part of the application the applicant also sought an interim injunction restraining the respondent, its officers, employees, members or agents from engaging in industrial action with employees working at the site of the Swanview Redevelopment Site at Como where the applicant was carrying out building works for the proprietor of that site. 7 The interim application was heard on 9 May 2005 on an urgent basis because the respondent by the notice it issued on 5 May 2005, and which is referred to in the applicant's details of claim set out above, threatened to procure that its members engage in industrial action at the Como site on the following morning, 10 May 2005, commencing at 6.30 am. 8 At the hearing of the application for the interim injunction, the applicant relied upon the affidavit of Mr K Rummukainen sworn 9 May 2005. There was no realistic opportunity for the respondent to file any answering affidavit prior to the hearing of the interim injunction application. However, the respondent was represented at the hearing by counsel who made submissions opposing the grant of the interim injunction. 9 At the conclusion of the hearing on 9 May 2005, I granted an interim injunction until 5.00 pm on 16 May 2005 essentially, in the terms sought by the applicant. I also ordered that by 5.00 pm on 10 May 2005 the applicant apply for the matter to be listed before the Australian Industrial Relations Commission ('AIRC'), that the respondent file and serve any affidavits in opposition to the extension of the injunction by Friday, 13 May 2005, and that the matter be adjourned for further hearing to 10.00 am on 16 May 2005. I also ordered that the costs of the application for an interim injunction should be costs in the cause. My reasons are set out in Broad Construction Services (WA) Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers [2005] FCA 613. 10 The hearing listed to take place on 16 May 2005 did not proceed because prior to the hearing on that day the respondent advised the applicant that the notice of intended industrial action which had precipitated the application for the interim injunction had been withdrawn, and the foreshadowed industrial action notice was cancelled. 11 Thereafter, neither party took any further steps to progress the substantive application, and on 20 June 2005 the applicant filed a notice of motion for leave to discontinue with an order that the respondent pay its costs. 12 At the hearing of the application for the interim injunction, and consistent with its claim in the substantive application for the declaration in par 2 of its details of claim, the applicant adduced evidence and addressed submissions to the effect that the industrial action threatened by the respondent did not qualify as 'protected action' within the meaning of s 170ML of the Workplace Relations Act 1996 (Cth) ('the Act'); and that, therefore, the respondent was not immune from suit under s 170MT of the Act in respect of that action. The applicant thereby took up the burden of persuading the Court that there was a serious question to be tried both in relation to its claim that the proposed industrial action would if implemented, constitute a breach of s 45D of the Trade Practices Act 1974 (Cth) ('the TP Act'), and also in relation to the anticipated defence of the respondent that it was immune from suit on the basis that the proposed action was 'protected action' within the meaning of the Act. The gravamen of the applicant's case in this latter regard was that the notices to initiate a bargaining period which had been issued by the respondent to the applicant and other employers engaged on work at the Como site by reference to s 170MI of the Act, were not issued for the genuine purpose of negotiating a certified agreement. Parties' submissions 13 There were two issues which were debated in relation to whether there should be an order for costs. The first issue was whether the application was one to which s 347 of the Act applied. The second issue was whether, if s 347 of the Act did not apply, whether the Court in the exercise of its discretion should make an order that the respondent pay the applicant's costs. I will deal with the s 347 issue first. 14 Section 347 of the Act provides: 'Costs only where proceedings instituted vexatiously etc. (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first‑mentioned party instituted the proceeding vexatiously or without reasonable cause.

(2) In subsection (1): costs includes all legal and professional costs and disbursements and expenses of witnesses.' 15 It was not contended that the proceeding was commenced vexatiously or without reasonable cause. The question, therefore, is whether the applicant's substantive application answered the description of a proceeding in a matter arising under the Act. Counsel for the applicant submitted that s 347 of the Act did not apply to the application and that accordingly, s 347 of the Act did not constitute an obstacle to the applicant's claim that the respondent pay the costs of the application. 16 Counsel for the applicant relied specifically upon the following observation by the High Court in Re McJannet; Ex parte The Australian Workers' Union of Employees, Queensland (No 2) (1997) 189 CLR 654 at 656 ('McJannet'): 'The test for determining whether a proceeding is in a matter arising under the Act for the purposes of s 347(1) is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act...' 17 The applicant submitted that in this case, the right which it sought to enforce by bringing the application was a right, not under the Act, but a right under the TP Act in respect of a threatened breach of s 45D of that Act. The applicant submitted further that it did not matter that in order to succeed in vindicating its claim for relief under the TP Act that it would need to overcome a defence founded upon a statutory immunity to be found in s 170MT and s 170ML of the Act. The applicant argued that in determining whether s 347 of the Act had application, the inquiry was limited to whether the right sought to be vindicated by the applicant arose under the Act. The applicant submitted that 'if a defence raises issues arising under the Workplace Relations Act that is not a matter arising under the Act for the purposes of s 347'. 18 The respondent submitted the scope of 'the matter' in question was to be identified by reference to the scope of the 'justiciable controversy' to be determined in this application. The applicant argued that the determination of the justiciable controversy required the determination of both the applicant's claim and its defence, namely, that the impugned conduct was 'protected action' under the Act and afforded the respondent immunity from the suit brought by the applicant under the TP Act in respect of an alleged breach of s 45D of that Act. The respondent argued that this was a sufficient basis upon which the Court could conclude that the respondent was a party to a proceeding in a matter arising under the Act for the purposes of s 347 of the Act. In support of this submission, the respondent relied upon the following observations of the High Court in the case of L.N.C. Industries Limited v B.M.W. (Australia) Limited (1983) 151 CLR 575 at 581 ('L.N.C.'): 'It is true to say that a matter does not arise under a law made by the Parliament merely because the interpretation of the law is involved: Felton v Mulligan ((1971) 124 CLR 376, at pp. 374, 382, 396, 408, 416). On the other hand, a matter may arise under a law of the Parliament although the interpretation or validity of the law is not involved; R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett ((1945) 70 CLR 141, at p. 154). The conclusion reached by Latham C.J. in that case, and stated in a passage that has often been cited with approval is, "that a matter may properly be said to arise under a federal law if the right or duty in question in the matter owes its existence to federal law or depends upon federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law." Equally, there is a matter arising under a federal law if the source of a defence which asserts that the defendant is immune from the liability or obligation alleged against him is a law of the Commonwealth: Felton v Mulligan ((1971) 124 CLR [367], at p. 408).' 19 As to the second issue, the applicant submitted that the Court should exercise its discretion to award costs against the respondent because this was one of the rare instances where it was not necessary for the Court hypothetically to try the application in order to make a decision as to whether costs should be awarded. This was so because the Court during the hearing of the interlocutory injunction, had been sufficiently exposed to the issues arising in the substantive application to form views as to the likely outcome of the case. 20 The applicant also relied upon the decision of Hill J in Australian Securities Commission v Aust‑Home Investments Limited (1993) 44 FCR 194 ('Aust‑Home Investments'), in support of its submission that the Court could have regard to the question of whether the respondent had acted unreasonably in relation to the threatened industrial action, and whether the applicant had acted reasonably in commencing the substantive application and seeking the interim injunction. In support of his submission that the respondent had acted unreasonably prior to the commencement of the applications, counsel for the applicant referred to the fact that in my reasons for granting the interim injunction, at [21], I had referred to inferences available on the evidence as it then stood, that in relation to at least one employer, the respondent did not genuinely try and negotiate for a collective agreement, before threatening industrial action. Counsel also referred to the fact that the respondent had not filed affidavits opposing the injunctions. Further, it was submitted that in the circumstances the applicant had no choice but to issue the application. 21 Counsel for the applicant also referred to the cases of Homestyle Pty Ltd v The Western Australian Builders Labourers, Painters and Plasterers Union of Workers [2002] WASC 57 ('Homestyle') and Metropolitan Properties Pty Limited v Caltex Petroleum Pty Limited [1999] WASC 153 ('Metropolitan Properties') as instances where a court had awarded a discontinuing plaintiff costs in respect of an interlocutory injunction where the requirement for the injunction has fallen away due to no fault on the part of the plaintiff. 22 Counsel for the respondent submitted that this was a case where the Court should follow the general rule and not speculate on what would have happened had the matter gone to trial. Counsel for the respondent disputed that the respondent had acted unreasonably and submitted that any trial of the issues raised in the application would have required the Court to make credibility findings and findings as to the bona fides of officers of the respondent. Further, counsel also identified several legal arguments which were available to be raised at the trial in support of the respondent's case. Counsel referred to the following observations by Hill J in the Aust‑Home Investments at 201: 'It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.' 23 Counsel for the respondent also disputed that the applicant had no choice but to commence the application because it could have proceeded in the AIRC. Counsel further submitted that the respondent and its members had decided to cancel the proposed industrial action after the parties had attended a conciliation conference convened in accordance with my order that the parties refer this matter to the AIRC. 24 Counsel for the respondent said that there were several similarities between this case and the case of J T Stratford & Son Ltd v Lindley (No 2) [1969] 1 WLR 1547 where an interlocutory injunction had been obtained restraining the defendants who were trade union officials from enforcing an embargo on the plaintiff's barges as part of an industrial dispute. As in this case, the 'costs order' made in respect of the interlocutory injunction was that 'costs be in the cause'. Thereafter, the substantive action was not pursued and the action never came to trial. Eventually the defendants brought a summons to dismiss the action for want of prosecution and the plaintiff countered with a summons for leave to discontinue on the basis that the defendants pay the costs of the action including the costs of the interlocutory injunction. The Court of Appeal rejected the plaintiff's arguments that it should have the costs because they would very probably have won the action had it been tried on the merits. The Court of Appeal however upheld the decision that leave to discontinue should be given on the basis that there be no order for costs. 25 Counsel for the respondent also submitted that the Homestyle and Metropolitan Properties cases, were distinguishable in that in each of those cases, there had been a contested hearing in relation to the interlocutory injunctions and costs had been reserved in respect of each of those injunctions whereas in this case, there had been no contested interlocutory hearing and the costs of the injunction application were 'costs in the cause'. Reasoning 26 I deal firstly with the issue as to whether the provisions of s 347 of the Act apply to this case so as to preclude the making of any order that the respondent pay the costs of the application. This gives rise to the question as to whether the proceeding is a matter arising under the Act. 27 It is accepted that the word 'matter' in s 347 of the Act is to be construed by reference to the way that the term was construed in Fencott v Mueller (1983) 152 CLR 570 at 603, namely, as a 'justiciable controversy identifiable independently of all the proceedings which are brought for its determination and encompassing all claims made in the scope of the controversy' (see, for example, Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439 at 445‑446). 28 Further, it is also accepted that the question of whether a 'matter' in a 'matter arising under the Act' is to be determined by a reference to a test similar to that applied in deciding whether a matter is one 'arising under' a law of the Commonwealth for the purposes of s 76(ii) of the Constitution of the Commonwealth (see, for example, BGC Contracting Pty Ltd v The Construction Forestry Mining & Energy Union of Workers (No 2) [2005] FCA 908). 29 In Felton v Mulligan (1971) 124 CLR 367 ('Felton') Walsh J said at 408: 'A comparison between the terms of s. 76(i.) and those of s 76(ii.) of the Constitution indicates that a distinction is to be drawn between a matter "arising under" a law of the Parliament and a matter which involves the interpretation of such a law. The fact that the interpretation of a law is involved does not necessarily mean that there is a matter arising under the law. But, in my opinion, there is a matter arising under the law if the source of the right claimed by the plaintiff or applicant or the source of a defence which asserts that the defendant or respondent is immune from the liability or obligation alleged against him is a law of the Parliament. I think that that view of what constitutes a matter arising under a law of the Parliament is in conformity with the statements made in R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 by Latham C.J. and by McTiernan J. (1945) 70 CLR, at p 173. There Latham C.J. said: "If a right claimed is conferred by or under a federal statute, the claim arises under the statute" (1945) 70 CLR, at p 154. Likewise, in my opinion, if the answer made to a claim is that the defendant is free from the obligation asserted against him and that this freedom is conferred by an Act of the Parliament, the defence arises under that Act and the result is that there is before the Court a "matter" which arises under that Act.' 30 In my view, the determination of the justiciable controversy, which includes the applicant's claim that the impugned conduct comprised a threatened breach of s 45D of the TP Act, would also require determination of the respondent's defence that the impugned conduct was protected action within the meaning of the Act. Both the claim and the defence are in my view part of the same matter. Applying the observations of the High Court in the Felton and LNC cases referred to above, the proceeding is to be regarded as being in a matter arising under the Act because the source of the defence which asserts that the respondent is immune from liability or obligation, is founded on s 170ML and s 170MT of the Act. 31 In my view, the observations of the High Court in the McJannet case which were relied upon by the applicant and which refer only to the source of the claim which is made and not the source of any defence to such claim, were not intended to derogate the pre‑existing law which is articulated in the observations in each of the LNC and the Felton cases referred to above. The observations that the High Court made in the McJannet case which are relied upon by the applicant, are to be read subject to the context in which those observations were made. In McJannet, the prosecutors sought in the High Court a writ of prohibition against the judges of the Federal Court. The proceeding before the High Court was one where the prosecutor asserted that there was an absence of jurisdiction in the Federal Court to consider the proceeding which was before the Federal Court. The High Court was not therefore required to consider the characterisation of the 'matter' other than by reference to the characterisation of the claim by way of a writ of prohibition, which had been made in the High Court. There was in the proceeding before the High Court no attempt to enforce a duty arising under the Act, and, therefore, there was no need for the High Court to address the question of whether a claim arising under the Industrial Relations Act 1988 (Cth) (as the Act was then named), or a defence of immunity under that Act, would be included within the scope of 'a matter arising under the Act'. 32 It follows, therefore, that, in my view, the application is a proceeding in a matter arising under the Act with the consequence that s 347 of the Act is applicable. Accordingly, there can be no award of costs in respect of the application. 33 As a consequence of the finding that I have made in relation to s 347 of the Act, it is not necessary for me to determine whether the circumstances of this case were so exceptional as to warrant a Court exercising its discretion to award costs to the applicant, notwithstanding that there had not been a trial on the merits. However, had it been necessary for me to decide the issue, I would have found that this case did not fall into that category. I say this because the claim that was made by the applicant impugned the motive and purposes for which the officers of the respondent acted and it would have required the trial Court to have made findings on credit. I would not have been satisfied that, in awarding costs in the absence of a hearing, I would not have engaged in an impermissible exercise in speculation as to the outcome of the trial. I certify that the preceding thirty‑three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

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