Construction, Forestry, Mining and Energy Union v Radisich

Federal Court of Australia|2010-09-10|Before: McKerracher J

INTRODUCTION 1 The first and second applicants (the Unions) seek leave to appeal from a decision of a single judge to strike out a paragraph in the Unions' pleading. In Radisich v McDonald [2010] FCA 762, the primary judge concluded that matters pleaded in para 28A of the Unions' defence to an alleged industrial contravention raised a false issue. It was held that the true factual contest could not be aided by proof of the matters raised in the amendment to the defence.

THE CONTEST 2 Broadly speaking, the proceeding raises an allegation that the Unions, through the actions of one of their officers, Mr McDonald, were involved in unlawful industrial action in contravention of s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act). In the relevant statutory sense, the complaint is that the involvement was in the form of aiding, abetting, counselling or procuring the commission of the unlawful strike action within the meaning of s 48(2)(a) and (c) of the BCII Act. It is common ground that it is only in the case of 'procuring' that issues of causation may fall for consideration. However, it is in relation to this aspect that the Unions wish to preserve para 28A. 3 The Unions deny the allegation saying, amongst other things, that, regardless of anything done by Mr McDonald on the relevant occasion in November 2009, the workers on the site were already resolved and determined to proceed with unlawful industrial action. This is of particular relevance to the causation element of 'procuring' but is not necessarily relevant to the other forms of involvement. 4 No complaint is made about raising by way of defence the contention that the workers were already so resolved. No complaint is raised as to evidence from workers or others that the workers were so resolved in November/December 2009 and were not influenced by, inter alia, Mr McDonald. Complaint is raised only as to reliance on subsequent events in the manner pleaded in para 28A.

THE PARAGRAPH UNDER CONSIDERATION 5 Paragraph 28A which was struck out read as follows: 28A. The strike action taken on 30 November 2009 by the Project workers referred to in paragraph 28(g) above was part of a series of protests instigated and taken by the Project workers over the issue of Motelling between that date and 30 January 2010. (a) On 22 and 23 of January 2010, almost all of the Project took strike action in protest of the introduction of Motelling; (b) The strike action taken by the Project workers on 22 and 23 January 2010 was organized in the absence of the Respondents; (c) On 25 and 26 January 2010, almost all the Project workers took strike action in protest over the introduction of Motelling; (d) On 27 January 2010, in the absence of the Second Respondent, Project workers held a meeting in the car park of the Project site commencing at 6.30am and resolved to continue taking strike action until at least 30 January 2010; (e) On 27 January 2010 the Federal Court ordered an ex parte interim injunction against various Project workers who were taking the said strike action; (f) A large number of the Project workers continued to take strike action until on or about 30 January 2010. (emphasis added) 6 Broadly speaking, the complaint about this amendment is that relying on subsequent events, taken alone, as pleaded material facts can throw no light at all on whether actions taken in November (assuming they are proven), caused the strike action in November/December or were even relevant to it.

THE PRIMARY JUDGE'S REASONING 7 The primary judge proceeded on the basis that the jurisdiction under O 11 r 16 to strike out a pleading in the defence is to be exercised in accordance with the test articulated in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129: The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'. 8 Further at 130: ... great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. ... the exercise of this jurisdiction should [not] be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. 9 The primary judge accepted that before a pleading, or any of it, can be struck out summarily, it is necessary that there be a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way: John Fairfax Publications Pty Ltd v Hitchcock (2007) 70 NSWLR 484 (at [6]-[7], [29], [106]-[109]). 10 His Honour cited Agar v Hyde (2000) 201 CLR 552, where Gaudron, McHugh, Gummow and Hayne JJ observed (at [57]) that contested issues should not be decided except in the clearest of cases. Their Honours said: Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways (Dey v Victorian Railways Commission (1949) 78 CLR 62 at 91, per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130, per Barwick CJ), but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. 11 The primary judge noted the submissions of the Unions that, as the stoppages in December 2009 and January 2010 are part of the same dispute over the nature of the workers' accommodation, (described as 'Motelling'), a full understanding of how important the issue of Motelling was to the Project workers, and the lengths to which they were prepared, and able, to go to oppose its introduction, is necessary for a proper consideration of the events of November and December 2009. The primary judge noted that as part of such consideration, an aspect of the defence sought to be run was that there was strong and persistent motivation, with no involvement by the Unions, on the part of the Project workers to resist the introduction of Motelling. 12 The Unions also contended that the matters in the defence at para 28A would be relevant to mitigation. However, his Honour correctly noted that relevance as to penalty does not provide a warrant for permitting the allegations to remain as a defence to the substantive liability allegations made against the Unions. 13 Despite the commonality of the features of the December and January strikes, the primary judge noted that senior counsel for the Unions disavowed any suggestion that the words 'part of a series of protests instigated and taken by the Project workers over the issue of Motelling between that date (30 November 2009) and 30 January 2010', as found in para 28A, were intended to convey that there was any agreement, arrangement or understanding already reached in November 2009 by the Project workers that they would take further industrial action in January 2010. The primary judge continued (at [26]): Accordingly the word "series" or "sequence" as was employed in oral argument in relation to para 28A is not used in the sense that the sequence was foreshadowed in November or December 2009. Rather, it is but a reference to the commonality affecting the industrial action in December 2009 and January 2010 to which I have referred. As senior counsel for the applicant put it, it can only be characterised as a sequence looking back from January 2010 but not as at December 2009. 14 The primary judge said (at [32]-[33]): The factual issues are clearly drawn in these paragraphs of the [statement of claim] and the defence of the Unions. Either the first respondent did and said what is alleged against him, and through him, the Unions, or he did not. Failure to establish those allegations at trial will inevitably mean that the application will fail. The evidence called by the applicant will have to be tested and weighed against that in support of the Unions' pleas at paras 24 and 28 of the defence. That factual contest cannot logically or rationally and therefore probatively, be aided by proof of those matters pleaded in para 28A of the Unions' defence. A pleading is a means to the achievement not only of procedural fairness but also the efficient use of judicial resources and those of the parties by the identification of what is truly at issue: Australian Competition and Consumer Commission v Craftmatic Australia Pty Ltd at [14]. Paragraph 28A, in my opinion, raises a false issue and therefore does not disclose reasonable grounds for a defence to the allegations in [statement of claim] at paras 24 and 28. This is the case assuming, for present purposes, the correctness of the particulars under para 28A of the defence. It would additionally cause prejudice to the applicant in having to contest a significant false issue and would inevitably introduce unwarranted delay in the resolution of the real issues. The applicant's case as I have mentioned is based upon what it is that Mr McDonald did and said at the 27 and 30 November 2009 meetings. If para 28A were allowed to stand, on the basis asserted, it would potentially open up evidence as to what occurred between the December Strike and the January industrial action relevant to a full appreciation of why that action was taken, none of which it seems, implicitly, from the particulars to the defence at para 28A, concerned or involved Mr McDonald. Indeed separate proceedings have been brought in this Court (WAD 14 of 2010) by various corporate employers against project workers, but not Mr McDonald or the Unions, in relation to alleged unlawful industrial action taken at the same site on 25, 26 and 27 January 2010. It appears this action again concerned Motelling and indeed is the strike action referred to in the defence at para 28A under particulars (c) and (d).

THE RELEVANT TESTS FOR LEAVE 15 Section 24(1A) of the Federal Court of Australia Act 1976 (Cth) (FCA) and O 52 r 10 of the Federal Court Rules (FCR) provides that leave is required to appeal from an interlocutory decision. 16 In Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, the relevant tests for such leave were set out as: (i) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered; and (ii) whether substantial injustice would result if leave were refused supposing the decision at first instance was wrong (see Johnston v Cameron (2002) 124 FCR 160 at [64]). 17 The tests bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on balancing of considerations. 18 There is a distinction drawn between an interlocutory decision on a point of practice or procedure, and an interlocutory decision determining a substantive right: Décor at 400. A tight rein is kept on appeals from interlocutory decisions involving matters of practice and procedure, however, leave will more readily be granted to appeal from judgements of the latter kind: Ex parte Bucknell (1936)56 CLR 221 at 225. 19 Pleadings' issues may fall into the category of substantive rights. In Bond v Barry (2007) 74 IPR 504, Gilmour J dealt with an application for leave to appeal from a decision of French J to strike out a statement of claim stating: 27 The judgment, whilst interlocutory, is one on points of substance and not merely practice or procedure. A distinction is drawn between these: Yap v Granich & Associates [2001] FCA 1735 at [6]; Dunstan v Orr [2007] FCA 873 at [6]; see also Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission (2007) 161 FCR 122 [2007] FCAFC 147 at [39] per Lander J with Moore J concurring. In a case where judgment has the practical effect of finally determining a party's rights, a prima faciecase exists for granting leave to appeal: Duncan v Secretary, Department of Family and Community Services [2007] FCA 507 at [18]. 28 In this case, the practical effect of the decision prevents the first and second applicants from ever pursuing a claim for damages for breach of s 52 of the Act (and equivalent provisions in the Fair Trading Acts) arising out of the conduct referred to in the applicants' statement of claim. 20 In Australian Competition and Consumer Commission v Emerald Ocean Distributors Pty Ltd [2001] FCA 982, French J dealt with an application for leave to appeal from a decision of RD Nicholson J to refuse leave to file a cross-claim in proceedings. French J stated (at [14]-[15]): 14 The nature of the interlocutory order in respect of which leave is sought will affect the thresholds of doubt and potential injustice that may have to be surmounted to obtain leave. So an order concerned solely with the mechanics of the pre-trial process will have a high threshold. An order which has the practical operation of disposing of the rights of the parties may have a lower threshold. In such a case it has been said: "A prima facie case exists for granting leave to appeal." - Ex parte Bucknell (1936) 56 CLR 221 at 225; Decor Corporation Pty Ltd at 400; Minogue at para [18]. 15 His Honour's decision in this case did not turn upon practical considerations of case management. It turned entirely upon the viability of the relief claimed. It was analogous in character to a strike out decision although it left open the possibility that the respondents could institute separate proceedings.

THE TESTS FOR STRIKING OUT 21 The jurisdiction under O 11 r 16 to strike out a defence is to be exercised in accordance with the test articulated in General Steel at 129. For the test on a strike out to be satisfied, the pleading had to be 'so obviously untenable that it cannot possibly succeed', or 'manifestly groundless'. 22 This reflects the recognition that, ordinarily, a party is not to be denied the opportunity to place his or her case before the Court in the ordinary way. To strike out a defence or a critical aspect of it is to derogate from a substantive right. 23 The Unions also rely on Spencer v Commonwealth of Australia[2010] HCA 28, delivered since the decision of the primary judge. In that decision, the High Court reinforced the high tests required for summary disposal of an action even under the lower threshold of s 31A FCA. Spencer, however, was a case in which a relatively novel and complex legal argument was raised. Although, the s 31A threshold is lower than conventional strike out tests, it has been held that actions should not be struck out on a summary basis simply because they raise novel or untested points of law which cannot be seen to be clearly without merit. 24 In Spencer,French CJ and Gummow J said (at [21] and [24]-[27] with footnotes omitted): 21 In Three Rivers District Council v Governor and Company of the Bank of England (No 3), Lord Hope of Craighead discussed the scope of the inquiry on an application for summary disposition under r 24.2 of the CPR: "The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman,… that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all." … 24 The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said: "The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried". More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following: "Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way." There would seem to be little distinction between those approaches and the requirement of a "real" as distinct from "fanciful" prospect of success contemplated by s 31A. That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions. 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. 26 Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact. 27 The present case was one which involved important questions of public and constitutional law and potentially complex questions of fact. 25 Further, Hayne, Crennan, Kiefel and Bell JJ said (at [48]): 48 The factual question depends upon what evidence is adduced. What evidence is adduced may well be affected by what is revealed by further interlocutory processes in the proceeding. The constitutional question may be affected by, even depend upon, the resolution of the factual question. Even if it is not directly affected by what particular facts are found, it is not a question suitable for determination on a summary judgment application. 26 The Unions' argument is to be considered in light of those principles. Senior counsel for the Unions contends that a 'critical aspect' of the Unions' substantive defence was struck out. The paragraph of the defence, he submits, 'goes to the heart of the issue as to whether the Unions were involved in the contraventions' of the BCII Act. 'The practical effect of the decision prevents the Unions from pursuing their defence, and thereby fetters them in their attempts to withstand serious claims made against them'.

Sufficient doubt? 27 There is nothing preventing the causation defence being run. The Unions will deny and have denied that anything said or done by Mr McDonald caused the industrial action to occur. They will assert that the workers had already decided on their course. They may call workers to establish that. But in the absence of any pleading that there was an existing plan or arrangement to strike at the date when causation is alleged, reliance on events occurring several weeks later can not be relevant to causation in November or December. 28 The passages cited from the reasons of the primary judge at [12] above, make it clear in my view that reliance on the January events as part of a continuum which actually existed in November/December was not being ruled out. Rather his Honour was searching for a way to give the pleaded amendment a meaning which could withstand logical scrutiny. The primary judge in fact explored ways in which those events might stand as part of the substantive defence if there were other material facts supporting them. As there were no other material facts to support the January events it was concluded that they raised a false issue in the way in which the pleading was cast. Reference to a 'series' as at November/December only makes sense if there were a 'series' actually about to commence at that date which is not pleaded. But as I read it, the decision does not necessarily rule out reliance on the January events cast in another way. I can not discern error in this ruling. 29 I could conceive of no possible evidence and senior counsel for the Unions was unable to point to any, even hypothetical evidence, let alone actually foreshadowed evidence, which, taken alone, could show how the subsequent events in January could assist determination of the issues properly falling for consideration in November and December. 30 To take the hypothetical example raised by senior counsel for the respondent, a person charged with being a 'getaway driver' aiding in a bank robbery in November could not rely on the fact that the same people committed a bank robbery in the same location in January without his or her assistance as proof that the person was not involved in the November events. 31 To deal more directly with a causation example, a person alleged to have procured others to attempt to murder X in November could not, by way of defence, rely alone on the fact that the same people of their own volition attempted to murder X in January. 32 Although para 28A of the defence purports to set up a 'series' of events, no reliance is placed in the pleading on a suggestion that some plan already existed in November to pursue both the December and January actions. Nor is there any reliance on 'tendency' evidence. 33 I am unable to discern any error in the process of reasoning by which the paragraph was struck out. If the Unions are capable of calling workers or others who can give evidence that they decided of their own volition in November to proceed with the unlawful industrial action (or if the Unions can adduce other evidence to support this contention) then that evidence would be admissible and would fall within the existing parameters of the defence without para 28A which has been struck out. 34 Complaint was made that the primary judge, (particularly at [32]), overlooked the causation aspect as it applies to the procuring element of 'involved' in a contravention. It was suggested that the primary judge focussed only on the actions of Mr McDonald, not their effect, or as the Unions would put it, lack of effect. This complaint can only be made good by selecting confined passages of the reasons. It is true that in some passages the primary judge referred to the pleaded facts being proven or not and if not proven, the case against the Unions would fail. To the extent the converse would apply, that would also appear to be true for those elements of 'involvement' which do not require proof of causation. It is only 'procuring' that engages causation. However, the process of reasoning of the primary judge did also explore the question of whether the subsequent events had any capacity to prove or disprove involvement in the alleged contravention. The primary judge (at [25] and [26]) said 25. There is a certain commonality affecting both the December Strike and the January 2010 industrial action. The issue of Motelling has been the one issue responsible for the December Strike as well as the industrial action taken January 2010. It involves the same industrial site, the same employers and broadly the same workers. This was accepted, at the outset of the hearing, by senior counsel appearing for the applicant. 26. That this commonality exists is no answer, in my opinion, to the applicant's motion. Senior counsel for the Unions disavowed any suggestion that the words "part of a series of protests instigated and taken by the Project workers over the issue of Motelling between that date (30 November 2009) and 30 January 2010", as found in para 28A, are intended to convey that there was any agreement, arrangement or understanding reached in November 2009 by the Project workers that they would take further industrial action in January 2010. Accordingly the word "series" or "sequence" as was employed in oral argument in relation to para 28A is not used in the sense that the sequence was foreshadowed in November or December 2009. Rather, it is but a reference to the commonality affecting the industrial action in December 2009 and January 2010 to which I have referred. As senior counsel for the applicant put it, it can only be characterised as a sequence looking back from January 2010 but not as at December 2009. (emphasis added) 35 There was a further argument that the equivalent of para 28A of the defence was still standing in related proceedings, which were to be heard at the same time. Therefore it was argued that no saving in time and costs at trial could be guaranteed by the striking out of para 28A. However as to this argument, it was clear that the applicant in the related proceeding had, in lieu of pursuing its own strike out application, foreshadowed by written notice that it would object to the leading of any evidence which would support the facts pleaded in the equivalent of para 28A. Whatever the outcome of that objection, there is no reason why the pleading should stand in this defence against this party who does not wish to be embarrassed by a false issue being raised. 36 Finally, the primary judge's reasoning on the penalty argument (referred to above at [11]) was clearly correct for the reasons stated.

Would there be serious injustice? 37 The matters pleaded in para 28A remain standing in the other proceeding which is to be heard together with this proceeding. Evidence in one is to be evidence in the other subject to relevance. If evidence is permitted in the other proceeding in support of the January matters then it will be on the basis that it may be relevant. If such evidence is permitted then it will presumably be capable of going to causation for both proceedings. 38 In that event, there will be no prejudice or injustice at all. 39 By the time the usual interlocutory processes have unfolded, with the collection of further potential evidence and provision of further particulars, it may be possible to ascertain that there is some way in which the events of January could be probative as to causation in November (such as a an existing workers' plan for rolling strikes regardless of anything said by Mr McDonald). 40 But until that time, on the basis of the present pleading, no such connection is capable of being made. 41 Either way, any injustice would be cured and it remains open for the Unions to call other evidence as to causation as at November/December. 42 For those reasons, I would refuse leave to appeal. The orders will be: 1. Leave to appeal is refused. 2. The applicants do pay the respondent's costs of the application. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Building and Construction Industry Improvement Act 2005(Cth)ss 38, 48(2)(a), 48(2)(c)

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