CFMEU v Commonwealth of Australia

REASONS FOR JUDGMENT 1 By a motion, notice of which was filed on 3 September 1999, the first, second and third respondents seek, inter alia, an order that this proceeding against them be stayed as an abuse of process. 2 By a motion, notice of which was filed on 20 October 1999, the fourth respondent seeks, inter alia, an order that this proceeding against him be stayed as an abuse of process. 3 The application in the present proceeding was filed on 27 July 1999. An earlier application V 259 of 1999 (the Federation Square proceeding) was filed on 21 May 1999 by the Construction, Forestry, Mining and Energy Union (the Union), the applicant in the present proceeding, against Jonathan Hamberger (in his capacity as Employment Advocate), the fourth respondent in the present proceeding. 4 At the centre of the respondents' arguments in support of the stay applications is the contention that the continuance of both the Federation Square proceeding and the present proceeding is an abuse of process because the subject matter of both proceedings is essentially the same. In order to assess this argument it is necessary to examine the nature of each of the proceedings and the developments in the Federation Square proceeding to date. THE PRESENT PROCEEDING 5 The applicant is the Union, which has members in the building and construction industry, including members who work on construction projects undertaken pursuant to contracts with the Commonwealth of Australia. The first respondent is the Commonwealth of Australia. The second respondent is the Commonwealth Minister for Employment, Workplace Relations and Small Business. The third respondent is the Commonwealth Minister for Finance and Administration. The fourth respondent is the Employment Advocate appointed under s 83BI of the Workplace Relations Act 1996 (Cth) (the Act). 6 The proceeding is concerned with construction work undertaken by the Commonwealth. It is alleged that the second and third respondents prepared a National Code of Practice for the Construction Industry (the Code) in 1997 which was aimed at reducing the involvement of the Union in the construction industry. It is also alleged that in about February 1998 the second and third respondents prepared and issued the Commonwealth Implementation Guidelines (the Guidelines) for the implementation of the Code. It is alleged in paragraph 14 of the amended statement of claim filed on 12 October 1999 that the Code and Guidelines provided, inter alia: "... (c) subject to the condition in subparagraph (e) below, construction projects shall be governed by project or site specific agreements and not be general or pattern agreements; (d) no employer shall agree or be permitted to pay or accord terms and conditions of employment or engagement more favourable to employees or contractors than those provided for by legislation; (e) project agreements cannot override the workplace arrangements of individual contractors, sub-contractors, consultants and suppliers, and cannot provide terms and conditions which by their nature have effect beyond the duration of the project such as for example redundancy pay and superannuation contributions; (f) no person may require a contractor, sub-contractor, consultant or supplier to pay or accord terms and conditions of employment or engagement more favourable to employees or contractors than those provided for by legislation or awards; (g) employers may not provide to the Applicant the names of new employees, contractors, sub-contractors or applicants for employment or contracts; (h) employers may not allow on site any sign, notice, sticker, poster or other written communication which asserts or implies that union membership is a requirement or encouraged by the employer or the Applicant; (i) employers may not allow any "show card" or similar meeting to take place; (j) employers may not allow the Applicant to specify or assert which employees are to be employed on a particular project or site; (k) employers may not require sub-contractors to join an employer association; (l) employers may not allow officers or delegates of the Applicant to conduct site induction meetings; (m) employers may not agree to allow entry onto a project site by officers of the Applicant except in accordance with the provisions of the WRA; (n) employers may not allow the use of induction forms which require an employee to specify their union membership." 7 It is then alleged that some construction companies have agreements with the Union which provide more favourable conditions than the conditions contained in legislation, which provide for some matters prohibited by the Code and Guidelines, or which provide for some matters which do not comply with the Code and the Guidelines. Other construction companies are, it is alleged, party to industrial instruments as defined in s 298B of the Act. 8 Paragraphs 20-23 of the amended statement of claim then allege: "20. Each of the First, Second, Third and Fourth Respondents has adopted, applied and/or enforced the Code and the Guidelines. 21. In adopting, applying and enforcing the Code and the Guidelines, the Respondents have taken action and threatened to take action with intent to coerce the construction companies not to agree to make or approve certified agreements to which the construction companies and the Applicant are or are proposed to be parties. 22. The Respondents have threatened the construction companies that unless the construction companies comply with the Code and Guidelines, the First Respondent will: (a) terminate contracts with the construction companies; and/or (b) refuse to allow the construction companies the right to tender for contracts for the performance of governmental work, and/or (c) refuse to grant further contracts for the performance of government work to the construction companies. ... 23. The Respondents made the threats set out in paragraph 22 with the intent to coerce the constructions [sic] companies not to make or approve certified agreements to which the construction companies and the Applicant are parties." 9 The reference to certified agreements in para 23 presumably includes a reference to certified agreements dealt with in Divisions 2 and 3 of Part VIB of the Act. 10 These allegations are relevant to a cause of action under s 170NC(1) of the Act which provides: "A person must not: (a) take or threaten to take any industrial action or other action; or (b) refrain or threaten to refrain from taking any action; with intent to coerce another person to agree, or not to agree, to: (c) making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; or (d) approving any of the things mentioned in paragraph (c)." 11 Paragraph 25 of the amended statement of claim then alleges that the Code and the Guidelines and the agreement by the respondents to adopt, apply and enforce the Code and Guidelines are void by reason of the operation of s 298Y of the Act. That section provides: "A provision of an industrial instrument, or an agreement or arrangement (whether written or unwritten), is void to the extent that it requires or permits, or has the effect of requiring or permitting, any conduct that would contravene this Part." 12 Then the amended statement of claim alleges that the Code and Guidelines require or permit or have the effect of requiring or permitting the construction companies to contravene s 298K1(b), (c), (d) and (e) of the Act which provide: "An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following: ... (b) injure an employee in his or her employment; (c) alter the position of an employee to the employee's prejudice; (d) refuse to employ another person; (e) discriminate against another person in the terms or conditions on which the employer offers to employ the other person." 13 The prohibited reasons relied upon are the reasons set out in s 298L(1)(a), (h), (l) and (n) of the Act which provide: "Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned: (a) is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or ... (h) is entitled to the benefit of an industrial instrument or an order of an industrial body; or ... (l) in the case of an employee, or an independent contractor, who is a member of an industrial association that is seeking better industrial conditions - is dissatisfied with his or her conditions; or ... (n) as an officer or member of an industrial association, has done, or proposes to do, an act or thing for the purpose of furthering or protecting the industrial interests of the industrial association, being an act or thing that is: (i) lawful; and (ii) within the limits of an authority expressly conferred on the employee, independent contractor or other person by the industrial association under its rules." [emphasis in original] 14 Finally, the Union alleges that the respondents have engaged in a conspiracy to cause injury and/or and conspiracy by unlawful means. 15 By an amended application filed on 12 October 1999 the Union seeks the following relief: "1. A declaration that the Respondents and each of them have engaged in conduct in contravention of section 170NC of the Workplace Relations Act 1996 ("WRA") in taking action or threatening to take action with intent to coerce employers in the building and/or construction industry to agree or not to agree to making, varying or terminating a certified agreement. 2. Penalties against each of the Respondents pursuant to section 170NF of the WRA. 3. An injunction against each of the Respondents pursuant to s.170NG restraining said Respondent from taking or threatening any action, including the refusal to award contracts or the termination of any contracts, with the intent to force any employer of members of the Applicant herein, or of any person eligible for membership of the Applicant herein, to make any certified agreement or to vary or terminate any certified agreement already operating to which the Applicant is a party. 4. A declaration that the National Code of Practice for the Construction Industry ("the Code") and the Commonwealth Implementation Guidelines therefor ("the Guidelines"), being an agreement or arrangement between the First, Second and Third Respondents, are void by reason of the operation of s298Y of the WRA. 5. A declaration that the agreement or arrangement entered into between the Respondents to adopt, apply and enforce the Code and the Guidelines is void by reason of the operation of s298Y of the WRA. 6. A declaration that the Fourth Respondent, insofar as he engages in conduct which threatens to enforce or which enforces the Code and the Guidelines, is acting ultra vires and beyond power. 7. An injunction restraining the Fourth Respondent from enforcing and threatening to enforce the Code and the Guidelines. 8. A declaration that the Respondents and each of them have conspired to injure the Applicant. 9. A declaration that the Respondents and each of them conspired and agreed with each other to injure the Applicant by unlawful means. 10. Damages for the conspiracy as alleged." THE FEDERATION SQUARE PROCEEDING 16 In the Federation Square proceeding the Union is the applicant and Mr Hamberger is the sole respondent. The proceeding concerns the construction of the Federation Square project in Flinders Street, Melbourne by the State of Victoria. The Commonwealth had committed $50,000,000.00 to the project and the construction contract was let to Multiplex Constructions Pty Ltd (Multiplex). Multiplex, the Union, and several other unions entered into an agreement in respect of the construction of the project, which agreement was to be submitted to the Australian Industrial Relations Commission for certification under Division 4 of Part VIB of the Act. 17 It is alleged that the respondent threatened the State of Victoria and Multiplex that if the agreement was submitted for certification, or if it was not varied as demanded by him, the Commonwealth would withdraw the promised funding. This conduct of the respondent, it is alleged, was in breach of s 170NC of the Act. 18 The applicant seeks, inter alia, the imposition of a penalty on the respondent for conduct allegedly in breach of s 170NC of the Act and: "An injunction under section 170NG of the Act restraining the Respondent, by himself, his servants and agents, from contravening section 170NC of the Act by taking or threatening to take any action with intent to coerce the parties to the Agreement: (a) not to agree to making; or (b) not to seek to certify; or (c) not to vary, the Agreement." 19 In the course of discovery the respondent disclosed an undated letter from Mr Reith, the Minister for Employment, Workplace Relations and Small Business (the second respondent in the present proceeding) to the Prime Minister. The Commonwealth made a claim for public interest immunity privilege in relation to the letter. Marshall J heard argument on that claim and rejected it. The rejection is currently subject to an application for leave to appeal to the Full Court. Further, the applicant caused a subpoena to produce documents to issue to Mr Reith. That subpoena may be called on at any time. The solicitor for Mr Reith has sworn an affidavit in this application for a stay which states "a number of the documents identified in respect of the subpoena are or may be the subject of claims for public interest immunity privilege and/or legal professional privilege" and "a number of the documents the subject of the Subpoena in Proceeding 259 may be within the scope of the second respondent's discovery in the present proceeding. Any such documents which were the subject of a privilege claim under the Subpoena in Proceeding 259 would also be, or be likely to be, the subject of a privilege claim in the present proceeding." RESPONDENTS' ARGUMENTS 20 Dr Griffith QC, who appeared with Mr Batt of counsel for the first to third respondents, submitted that the two proceedings dealt in substance with the same matter, and that it was an abuse of process to allow both to continue separately. Both proceedings, it was contended, ultimately concern the implementation of government policy in relation to industrial relations. Both proceedings in reality concern implementation of the Code. Although the Code is not expressly raised in the Federation Square proceeding, it can be assumed for the purposes of this application that the conduct of Mr Hamberger is alleged by the applicant to be based on the policy of the Code and the Guidelines. Dr Griffith indicated that the first to third respondents would not oppose the consolidation of the two proceedings. The applicant had been invited by the first to third respondents to apply for consolidation but the applicant had not done so. 21 Dr Griffith drew attention to some of the consequences of the continuance of parallel proceedings. He argued that the Court would need to deal twice with essentially the same facts. In so doing there would be a danger of inconsistent findings of fact and decisions of law. It was contended that it would also involve a waste of resources both by the Court and the parties. 22 It was further contended that in respect of matters argued in one proceeding, the parties would be estopped from contesting the same matter in the other proceeding. Thus, if the letter from Mr Reith to the Prime Minister was relevant in the present proceeding, the Commonwealth and Mr Hamberger would be bound by the decision on the public interest immunity privilege argument made in the Federation Square proceeding. 23 Further, there will be difficulties caused for the representation of the applicant. At present the same solicitors act for the applicant in both proceedings. The applicant's solicitors could not continue to act in both proceedings because they could not fulfil their obligation to use documents disclosed on discovery in one proceeding only for the purpose of that proceeding. 24 Dr Griffith emphasised that there was no reason for the applicant to continue the two proceedings separately and challenged the applicant to reveal if there was any such reason. 25 Mr McDonald, who appeared as counsel for the fourth respondent, adopted the arguments put by Dr Griffith. APPLICANT'S ARGUMENTS 26 Mr Rothman SC, who appeared with Ms Doyle as counsel for the Union, principally submitted that the two proceedings did not deal with the same subject matter. In particular, while the present proceeding was concerned with the Code and the Guidelines, the Federation Square proceeding was not concerned with the Code and Guidelines. The present proceeding deals with construction projects of the Commonwealth, and the Federation Square proceeding deals with a construction project undertaken by the State of Victoria. The relief sought in the present proceeding includes a declaration that the Code and Guidelines are void. No such relief is sought in the Federation Square proceeding. The present proceeding includes a concern with the actions of the first to third respondents, and those respondents are not parties to the Federation Square proceeding at all. As a result of these differences, the scope and subject matter of the cases is, it was contended, quite different. 27 Mr Rothman argued that even if the applicant had no particular reason to continue the two proceedings separately, the continuance of both proceedings did not amount to an abuse of process justifying a permanent stay of the present proceeding. In answer to the respondents' particular arguments he contended that the rules concerning issue estoppel would prevent the truly common issues being relitigated, and that there was no problem for his instructing solicitors to comply with their obligations in relation to discovery. 28 Very much as a second string to his bow, Mr Rothman suggested that there may be good reason for the two actions to proceed separately. He said "We don't deny that there is some overlap and we don't deny that there is some sense in the matters being heard by the same judge of the court and ultimately, when it comes to hearing, assuming there isn't a significant delay in one or other of the matters, if there was optimum situation the matters might be heard consecutively." But he observed that at present the Federation Square proceeding was more advanced than the present proceeding, and that the present proceeding may take several weeks of trial while the Federation Square proceeding would probably only take a few days. CONSIDERATION 29 The only applications which are to be determined at present are the respondents' applications for a permanent stay of this proceeding. Needless to say a permanent stay of proceedings is a drastic remedy. Consequently, the discretion to grant such a stay is to be exercised with caution: Moore v Inglis (1976) 9 ALR 509 at 516. 30 The power to stay proceedings as an abuse of process is characteristically exercised where the same proceedings are brought against the same parties in two different courts: Moore v Inglis supra; Yooralla Sponsors Club v JABI Nominees Pty Ltd (1980) 49 FLR 86; Australian Consolidated Industries Ltd v Scholle Industries Pty Ltd (1982) 62 FLR 289. 31 In this case the abuse is said to lie in the pursuit of two proceedings in the same court. There is less force in such an application because the same court has control over both proceedings and can make orders for consolidation, or joint or consecutive trials of the two proceedings, and thereby mitigate the main detriments said to constitute the abuse of process. In my view, even if the subject matter of the two proceedings was the same, a matter to which I will return, it would not be appropriate to stay this proceeding unless the question had been argued and determined that any detriment to the respondents from the continuation of both proceedings could not be addressed by some less drastic orders such as consolidation or joint or consecutive hearing. This consideration applies to the claims against all of the respondents. 32 In respect of the first to third respondents there are further reasons to reject the stay application at this stage. The nature of the claims must be viewed at this stage solely from the formulation in the pleadings. The first to third respondents are not parties to the Federation Square proceeding. No allegations are made against them in that proceeding. The second respondent has been involved in what appears to be a limited way as an applicant for public interest immunity privilege in respect of one letter from him to the Prime Minister. It is not clear whether the letter has any relevance to the present proceeding. It will be a rare case where a stay is justified in respect of one of two proceedings where a party in one is not a party in the other, but rather a player in the latter proceeding. It will only be possible to determine whether this is one of the rare cases when both actions are further advanced and interlocutory stages and trial preparation expose the scope of both actions. 33 In respect of the fourth respondent the further considerations which mitigate against a stay are different because he is a party in both proceedings. On the pleadings, however, the case against the fourth respondent in the present proceeding does not include his conduct in respect of the Federation Square proceeding. It cannot therefore be said that the applicant is claiming against him in respect of the same facts. The claim against the fourth respondent in the Federation Square proceeding was described by counsel as a subset of the overall case that the fourth respondent acted unlawfully in implementing government policy in industrial relations in the construction industry. Put that way the situation is comparable to, for example, the situation where an action in one court is brought by a purchaser of goods against the seller alleging that the goods delivered on a particular date were defective, and a later action in the same court is brought between the same parties alleging that a later delivery of goods of the same type and from the same batch was defective in the same way. It would not be appropriate to stay the later action, but it would probably be appropriate to consolidate both actions, or at least make orders that they be heard together or consecutively. Again, given the present state of the pleadings it is premature to conclude that the Federation Square action is a subset of the present action. 34 It should be emphasised that no application other than the stay application has been argued. Dr Griffith indicated that the form of the application was not particularly significant to the respondents. They were quite prepared to meet all the allegations made by the applicant in both proceedings. The critical result, which the respondents seek to achieve, is to meet those allegations together once and not twice. As the respondents' arguments were developed, Dr Griffith made it clear that he was content to seek alternative orders short of a permanent stay to achieve the combination of the two proceedings. Mr Rothman responded that the only application of which the applicant had notice was the stay application, and the applicant was not in a position to respond to any other application. 35 It is unfortunate that the applicant was not prepared to argue whether some order short of a stay was appropriate. It may be too early in the actions to determine that question. Irrespective of the particular positions of the parties, I am concerned that the time of the Court is properly utilised. Even if the respondents do not renew their stay applications when the cases are more developed, in the course of future directions hearings it will be necessary to consider whether there is sufficient connection between the cases that it is more efficient, without sacrificing the requirement of a just disposal of the cases, to make orders for consolidation or like orders. The parties must be prepared at future directions hearings to address that issue. 36 The notices of motion that seek a stay of this proceeding also seek orders that the statement of claim be struck out. Insofar as those motions are not disposed of by this decision, they will be adjourned for directions until 15 December 1999, that date may be vacated by consent if the parties agree beforehand on directions in respect of the remaining issues. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North.