Finding an arrangement or understanding
127 This category of the appeal grounds (explicitly for the Hutchinson appeal and adopted for the CFMEU appeal) can be divided into:
(a) grounds accepting the correctness of the substratum of facts from which the inference of an agreement or understanding was drawn; and
(b) grounds challenging some of the substratum facts.
The latter is overtly only relied upon if the former does not succeed.
128 A central issue at the trial, and maintained on appeal, was whether the evidence that the ACCC relied upon was sufficient to support the inference that, on the balance of probabilities, a proscribed arrangement had been arrived at, or a proscribed understanding reached, having regard to the quality of evidence required by s 140(2) of the Evidence Act 1995 (Cth) to reach as serious a conclusion as that. The key issue in dispute concerns the sufficiency of the evidence to establish the necessary state of mind for there to be such an unlawful arrangement or understanding. That state of mind, as referred to in the authorities discussed above, can be generically described as a meeting of the minds. That term embraces other ways in which this concept may be expressed, such as a consensus or a common purpose, or, especially in this case, assent to a course of action as a relevant kind of commitment to that taking place.
129 The first aspect of the appeals by which the factual findings by the primary judge are not challenged does not turn on any evidentiary evaluation for which her Honour enjoyed any advantage. Hutchinson's primary case, upon which CFMEU also relies, is that the factual findings did not rise any higher than proving parallel conduct. That parallel conduct being demands by the CFMEU that Hutchinson not use WPI, accompanied by threats of industrial action if those demands were not met on the one hand, and Hutchinson deciding not to use WPI, culminating in the termination of the subcontract between Hutchinson and WPI on the other. Hutchinson's secondary case, again also relied upon by the CFMEU, is that a number of key factual findings should not stand, with the effect that an inference of the existence of an agreement or understanding is not able to be drawn on what is left.
130 The ACCC's case on appeal, while principally contending that there was sufficient evidence on the facts as found by the primary judge to support the finding of an arrangement or understanding, has two additional limbs:
(a) seeking an additional factual finding based upon identical notices of contention in the two appeals to the effect that the primary judge erred in concluding that Mr Meland was not aware of the arrangement or understanding so as to be an alternative means of fixing Hutchinson with the necessary state of mind (which does not address the CFMEU's state of mind and the appellants' case for that not being able to be established on the evidence); and
(b) defending the findings that are challenged by the alternative appeal case, if that is reached.
131 At the outset, it is worth recording several important points of common ground.
132 First, it is accepted that the individuals representing or acting on behalf of the two parties as relevant to the existence of the arrangement or understanding found by the primary judge, were four men. On the Hutchinson side, it was senior officers Mr Meland and Mr Berlese; and on the CFMEU side, the union delegate, Mr Clarke, and the union organiser, Mr Steele. On appeal, the ACCC principally relies upon the findings the primary judge made about Mr Berlese on the Hutchinson side in light of the findings made by her Honour about Mr Meland not knowing about the arrangement or understanding. However, as noted above, the ACCC challenges this conclusion by its notices of contention. Importantly, the primary judge did not believe the denials of these four men of there being any arrangement or understanding between Hutchinson and the CFMEU, noting that such a denial is not of itself evidence from which an inference of its existence can be based.
133 Secondly, there was no direct evidence of the proscribed arrangement or understanding alleged by the ACCC. Its existence was denied by all four men. The case for the existence of the arrangement or understanding was at all times circumstantial, which is not of itself unusual for cases involving allegations of illegality. It is uncontroversial to observe that in litigation, a necessary state of mind is frequently sought to be established by circumstantial evidence, including by drawing inferences from what is proven to have been said and done; and that in civil cases, no matter how serious, that must only be the most probable conclusion to reach, albeit by evidence of sufficient quality for the seriousness of what is being alleged. The dispute in this case was and is largely evaluative rather than reflecting any real dispute as to the applicable principles, with some nuanced differences as to how those principles should be applied in all the circumstances.
134 Thirdly, the primary judge found that that the arrangement or understanding had been reached on or about 11 June 2016, being the date from which WPI was excluded from the site and did not return, with the termination of the subcontract between Hutchinson and WPI taking place over six weeks later by a letter signed by Mr Meland dated 26 July 2016 and handed by him to Mr Ray Hadfield at a meeting. This termination was a week or so after the conversation between Mr Meland and Mr Berlese on or about 19 July 2016, during which the two men discussed terminating the subcontract between Hutchinson and WPI, and Mr Berlese told Mr Meland to "deal with it". The timing of the existence of the arrangement or understanding is not challenged by the ACCC. It is only challenged by the appellants in relation to the existence of the arrangement or understanding, rather than as to the timing of the exclusion by which time the arrangement or understanding was found to have come into existence. That timing is embraced by the appellants so as to limit the last date of conduct from which an inference of an arrangement or understanding could be drawn to the period prior to that date. Of course, later conduct by words or acts may still be relied upon in a more limited way to support an inference that the arrangement or understanding already existed.
135 Fourthly, it is not in doubt that all of the ultimate factual findings upon which the inference of the existence of the arrangement or understanding was drawn, including in particular as to the necessary state of mind element of assent, are contained in the 33 subparagraphs of LJ[340], informed by the earlier paragraphs in which the evidence giving rise to those findings is considered and evaluated. Most of those findings are not challenged. The relatively few that are challenged only arise for consideration if the appeals do not succeed on the facts as found, in conjunction with any positive conclusion reached on the ACCC's notices of contention contesting the conclusion as to absence of knowledge of the arrangement or understanding on the part of Mr Meland, because of the primary judge's finding at LJ[340(33)] that Mr Meland was "not himself aware of the arrangement or understanding between Hutchinson and the CFMEU and was attempting to assist WPI to return to the site".
136 It is clear that the primary judge conducted a careful examination of the evidence. While aspects of this are challenged by the appellants, and an aspect is challenged by the ACCC's notices of contention, the primary case advanced in each appeal is that even with that analysis left intact, there simply was not enough evidence to enable it to be concluded that the most probable inference to draw was that the arrangement or understanding did exist. In this sense, the core dispute turns on what her Honour made of the evidence, and whether the limits of what could be found by inference based upon that evidence were exceeded.
137 The essence of Hutchinson's primary argument, directed to its side of the arrangement or understanding as found by the primary judge, was that, on the ACCC's case, it was only Mr Berlese and/or Mr Meland who were the relevant representatives of the company for the purposes of the contravention alleged. It follows, on that argument, that Hutchinson could not have made its side of any arrangement or reached its side of any understanding via Mr Meland, because the requisite state of mind on his part to constitute a meeting of minds was absent. That left only Mr Berlese, but her Honour made no finding that he was aware of any boycott provision, and no other factual finding that was made was capable of supporting such a conclusion. Nor did her Honour make any finding that Mr Berlese directed Mr Meland to terminate the subcontract with WPI, although some weight was placed on the more ambiguous direction that he gave to Mr Meland to "deal with it", after Mr Meland spoke to Mr Berlese about terminating that subcontract: LJ[240(33)]. Rather, her Honour found there was no resistance by Mr Berlese to terminating the WPI subcontract, and her Honour inferred, from those words in the context in which they were uttered, that this was what he intended that Mr Meland should do, which was then found by her Honour to be conduct manifesting mutual consent to carry out the common purpose to that effect. Of course, there could not be any giving of effect to the arrangement or understanding unless the finding of its existence was free of vitiating error.
138 Hutchinson similarly argues that, on the CFMEU side, there was no finding that either Mr Steele or Mr Clarke urged Mr Meland to terminate the subcontract by reference to any alleged arrangement or understanding, albeit that this was effectively the conclusion reached by the primary judge at LJ[340], subparagraphs (18) and (24).
139 Hutchinson (and thus also the CFMEU) also rely upon the lack of any finding by the primary judge as to any occasion or opportunity for these four men to have reached the alleged arrangement or understanding on the two sides, with all four having given evidence, and none of them being asked any question on the topic of regarding themselves as being under any duty or like concept, whether moral or legal, to conduct himself in any particular way in relation to WPI.
140 The dominant reason why Hutchinson (and thus also the CFMEU) argue on appeal that there was insufficient evidence to support as the better inference that there had been an arrangement or understanding was the mental element of a meeting of the minds. This was also referred to in the authorities discussed above as a common mind or consensus, involving a commitment to act in a particular way, which required, at a minimum, a proper and sufficient basis for a finding of some express communication taking place between the parties so as to take the conduct beyond merely the parallel of the CFMEU wanting the subcontract with WPI to continue, and Hutchinson unilaterally succumbing to that outcome.
141 Condensed to its essence, the appellants ran a case at trial, and a case on appeal, of at best intractable neutrality on the inferences available to be drawn, upon the basis that an at least equally available sound inference was that of no more than parallel conduct by the demands of the CFMEU accompanied by threats and Hutchinson doing no more than succumbing to that industrial pressure being applied by the CFMEU. That is, it was not enough that an inference of the alleged proscribed arrangement or understanding was among the conclusions that could be drawn, but that it had to be an inference that was stronger than the relevantly benign inference of mere parallel conduct. The balance had to tip in favour of the ACCC's case.
142 The ACCC stance is starkly different in defending the conclusions reached by the primary judge. It characterises Hutchinson's case on appeal as being little more than a complaint about insufficient precision as to the formation of the arrangement or understanding as alleged and found to have been established, and describing the primary judge's fact finding as orthodox. The ACCC's response to the appeals on this issue of there being a sufficient basis for the inference being drawn by her Honour of the existence of an arrangement or understanding at its core relies upon:
(a) the legally unremarkable proposition that just as contractual assent may be inferred, so too may the adoption of an arrangement or understanding, pointing to the proximity in time between the CFMEU's threat to "sit the job down" and the exclusion of WPI from the site, characterising that conduct and the reason for it as being apparent to the CFMEU as confirmed by Mr Clarke's subsequent statement to Mr Thone that WPI was not allowed back on site because it did not have an EBA;
(b) the finding that Mr Meland was not aware of the arrangement or understanding, and that this finding did not involve any error in the inferential reasoning process was not fatal, while still relying on the notices of contention challenging this conclusion;
(c) the challenge to the finding that Mr Clarke's conduct being able to manifest Hutchinson's consent to a common purpose because he was a delegate of the union was misplaced because the primary judge relied upon the company's conduct as being indirect through Mr Clarke, but even if that was erroneous it is inconsequential;
(d) the submission about the ACCC not asking particular questions of the four men in cross-examination (Mr Meland, Mr Berlese, Mr Clarke and Mr Steele) not being able to assist the appellants because Mr Meland gave evidence of the CFMEU's threats in relation to the engagement of WPI, the termination of WPI's subcontract, and the fact that he felt that he had no choice but to terminate that contract, such that putting formulaic questions (implicitly of the Browne v Dunn variety) as suggested by Hutchinson was not necessary; and no adverse inference should be drawn for not putting to them that they agreed with propositions that were contrary to the thrust of their evidence;
(e) it not being necessary for the ACCC to prove that any party considered themselves under any duty to act in any particular way in order to establish the existence of an arrangement or understanding, with Hutchinson being free to cross-examine on this topic if it wished to do so, given that an arrangement or understanding is, by its very nature, unenforceable and may be withdrawn or departed from;
(f) the facts found by the primary judge at LJ[340] being sufficient to support the finding of an unlawful arrangement or understanding.
143 Hutchinson contends that knowledge (or an equivalent state of mind) is an essential element of making a proscribed contract, arrangement or understanding under s 45E of the CCA, and the primary judge's findings did not disclose that requisite knowledge. The thrust of Hutchinson's argument is that the existence of an arrangement or understanding proscribed by the CCA as alleged by the ACCC is conditional upon a meeting of minds by parties to an arrangement where each is understood as assuming at least a moral duty to conduct themselves in a particular way. These principles apply equally to s 45E, as acknowledged in the primary judge's reasons at LJ[281] as to consistency of meaning being given to the same concept in different provisions. That is, each party must be subjectively aware of what that person is doing, and must understand that they are reaching an understanding. That is conveyed through the very notion of consensus, which may be manifested by assent. There must be awareness of assuming an obligation, a proposition that holds true across the various proscribed commitments, be it a contract, arrangement or understanding.
144 Put another way, Hutchinson submits that the parties need to know what they are doing for their minds to meet, as made clear by Leahy Petroleum at [29], cited by the primary judge at LJ[331]. While the primary judge found at LJ[339] that a consensus was reached pursuant to which the CFMEU and Hutchinson committed to a particular course of action, a party simply cannot commit to do something without being aware of it being done, and this must be so under s 45E(3) in particular, which is confirmed by the distinctive state of the authorities concerning the subjective purpose of a provision under s 45E(3), such as CEPU v ACCC cited and quoted by the primary judge at LJ[342]. Hutchinson relies upon CEPU v ACCC, and refers particularly to [182], reproduced above at [120].
145 Hutchinson submits that s 45E(3) requires each party to the contract, arrangement or understanding to have had the subjective purpose which the section prescribes. That can be distinguished from the position under s 45, where it may suffice, under the current state of authorities following Sackville J's decision in Seven Network Ltd v News Ltd [2007] FCA 1489; 244 ALR 374, for only one party to include the provision for a prescribed purpose. However, Hutchinson points out that matters are different under s 45E(3). One cannot have that relevant subjective purpose if one is unaware of the arrangement or understanding, and the extract from CEPU v ACCC at [182] reproduced at LJ[342] confirms that the other party must appreciate the end that will be achieved by doing so. A critical consequence of this contention is that it is not possible to infer from objective evidence that a person reached an understanding while also finding that the person was not aware of that fact, and hence, was not aware of the content of that provision.
146 Hutchinson cites R v Associated Northern Collieries (1911) 14 CLR 387 at 400, reproduced at LJ[320] as quoted in Norcast S.ár.L v Bradken Ltd (No 2) [2013] FCA 235; 219 FCR 14 at [263(4)]: see [104] above. Hutchinson submits that this extract from Associated Northern Collieries speaks of objective acts being a manifestation of mutual consent to carry out a common purpose, and that all of the notions described by Isaacs J predicate a subjective awareness of what is being undertaken. Hutchinson submits in reply that the correctness of this position can be seen in contrast with other distinguishable propositions:
(a) First, it can be distinguished from the authorities that the ACCC cites in its written submissions, such as that of the Full Court in CEPU v ACCC, which is to the effect that conduct which s 45E captures often involves a person succumbing to an abuse of power and including a prescribed provision in an arrangement or understanding. That legal proposition is correct, but the circumstances it describes are predicated on the person whose will is overborne knowing that he or she is including a proscribed provision in an arrangement or understanding.
(b) Secondly, it can be distinguished from the proposition that arrangements or understandings may be tacit or implicit, a notion relied upon by the ACCC in its written submissions. An understanding can be tacit, and it may arise without communication, but only so long as there is a meeting of the minds.
(c) Thirdly, it can be distinguished from the requisite legal standard for giving effect to an arrangement or understanding under s 45 of the CCA: see Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at [77], where the Full Court found that "knowledge is not an essential element of the legal standard of 'give effect to' for the purposes of section 45(2)(b)". Hutchinson submits that, stepping back from the analysis in Yazaki, it is clear that one corporate or individual person could make a contract and later direct another person, corporate or individual, who does not know about the making of that contract, to carry it out in accordance with or pursuant to its provisions and that such a person would give to effect to it within the meaning of s 45(2)(b). But that is not so with respect to making an arrangement or reaching an understanding in the first place. That, Hutchinson submits, basally requires minds to be mutually directed at a common object and, hence, to be aware of it.
147 The thrust of Hutchinson's submission above must be accepted. It is not in doubt that knowledge or awareness, or an equivalent state of mind, on the part of a party making an arrangement or understanding is an essential element, and for a corporation that must come via a natural person having that state of mind on its behalf. The issue is whether, on the facts as found, an arrangement or understanding was capable of being found to exist on the available evidence.
148 The ACCC argue that there is no meaningful legal issue about "arrangement or understanding"; and that the fundamental factual question for the primary judge was why the contract with WPI was terminated. Because Hutchinson succumbed to threats from CFMEU, the ACCC submits, it follows that it can be inferred that there is an arrangement or understanding. The ACCC further submits that Hutchinson did not make a unilateral decision to terminate following the threat but rather there was still an arrangement or understanding because it acted under compulsion. Once Hutchinson succumbs to pressure, and assents to what is proposed by the CFMEU, there is an understanding between the two of them. That is, the CFMEU understands why it is that Hutchinson is doing this thing, and they understand what it is that the CFMEU wants Hutchinson to do. The ACCC assert that at this point it is an arrangement or understanding in taking a step for a particular reason, and there is a meeting of minds that this reason is why the step will occur. Then the step occurs. That is the arrangement or understanding.
149 In response to the proposition that more is needed than just "succumbing" to a demand in order to form a meeting of the minds, the ACCC contends that the meeting of the minds is a way of saying that there is an arrangement or understanding. The ACCC's argument is that there is a spectrum of consensual dealings, with the most formal being a contract and the most informal being an understanding. The latter can be arrived at tacitly, and without any direct communication. On this argument, if the CFMEU says, "terminate or we engage in industrial action", and Hutchinson terminates, at the point that they do so, they are doing it because that is the thing that they have been asked to do by the CFMEU for a specific reason, and they have come to an understanding about what their conduct is to be. Regarding when the understanding is formed, the ACCC argue that it happens either when there is a verbal consensus (i.e. Hutchinson say "okay we'll do that") or at the point when the conduct gives effect to the understanding. The ACCC submits that there is mutuality in this case, because the mutuality is the CFMEU putting forward a proposition, which is to not engage in industrial action if the termination occurs, with the flipside being that the CFMEU will engage in industrial action if the termination does not occur. In that sense, even if it were necessary to have mutuality for there to be an arrangement or an understanding, there is mutuality in this case, and that is why it is the same as the situation where one supplier says to another supplier, "If you do this, then I will do that".
150 During the course of argument on the appeal, the ACCC cited CEPU v ACCC at [194], reproduced above at [120], with an emphasis on the last sentence: "The behaviour at which s 45E(3) typically strikes will be where the 'first person' succumbs to an abuse of power by an organisation of employees and includes a proscribed provision not wanting to bring about the result, but appreciating that that is the end that will be achieved by doing so". In response to a proposition put by the Court to the effect that if someone does not know of the existence of an arrangement or understanding, they cannot be a person who brought that understanding into existence, the ACCC sought to distinguish between the act that might indicate the existence of the arrangement or understanding, and whether or not the arrangement or understanding exists. The ACCC's case as alleged in the concise statement was that there was an arrangement or understanding between Hutchinson and the CFMEU, not one based upon the particular state of knowledge of an individual working at either Hutchinson or the CFMEU, and in that way, it is modelled on the five ways in which this Court in CEPU v ACCC went about finding or making its findings about an arrangement or understanding. The ACCC submits that it can succeed in three different ways:
(a) First, based on CEPU v ACCC at [146], by a reasoning process of inferring circumstantially that there is an arrangement or understanding between two organisations, and not premised on identifying the specific people within either of those organisations who had the relevant minds that met;
(b) Secondly, specifically by reference to Mr Berlese, who had the necessary state of mind on behalf of Hutchinson, because the primary judge found that Mr Berlese knew about the threats, and directed termination by Mr Meland by saying "deal with it" (it should be noted that this submission was necessarily confined to the "giving effect" aspect of the ACCC's case, because this was said by Mr Berlese on or about 19 July 2016, some five weeks after the arrangement or understanding was found to have been brought into existence by 11 June 2016, following which WPI was excluded from the site);
(c) Thirdly, by success on the notice of contention, allowing for reliance upon Mr Meland's knowledge of the arrangement or understanding, contrary to the finding by the primary judge that he did not know.
151 The ACCC distinguished Wigney J's observations in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) [2017] FCA 1450; 353 ALR 460 at [430]-[431], to the effect that the ACCC's case then was specifically that there was an arrangement or understanding arising from the intention of particular people, because its case in this matter was simply that the arrangement or understanding was one that arose by virtue of the threat being made by the CFMEU to engage in industrial action unless there was termination of the WPI subcontract.
152 The immediate problem with the ACCC's argument is that even if the CFMEU expected that Hutchinson would ultimately succumb and give in, that was simply an expectation, not a meeting of the minds between the two organisations. That is, even when the act or omission sought to be achieved, being the subject matter of the putative arrangement or understanding, is arrived at by a unilateral demand and the party to whom it is directed succumbs, that capitulation can be with or without the indispensable meeting of the minds by the communication of assent. If either is equally likely, no arrangement or understanding is established.
153 The ACCC cite BlueScope Steel at [102(c), (e), (f)], [105], [107], [108] and [145]‐[148], emphasising [146], and arguing that typically where there is an issue of whether an expectation arises, it is in cases where there is parallel pricing. The question is then whether there is an attempt to induce an arrangement or understanding, or is it just providing information and expecting that they will act on information, but not thinking that the parties will do something on the basis of consensus. In this case, if the CFMEU had just made a threat, and never asked about it again, and then Hutchinson later decided to stop using WPI, the ACCC could have real issues about whether there was an understanding. However, the ACCC contends that the expectation arises from consensus reached by the parties, the consensus being that if Hutchinson cease engaging WPI, CFMEU will not engage in industrial disputation; and if Hutchinson keeps using WPI, CFMEU will engage in disputation. This is said to amount to a consensus that Hutchinson will terminate because of the threat. The substance of this argument is that there has to be an inference drawn from conduct that there was a consensus that Hutchinson would act in that way, a proposition put to senior counsel for the ACCC, who agreed. On this argument, once it was apparent to CFMEU that Hutchinson would act in accordance with its threat, there was a consensus arising from communications that passed between them.
154 In reply, Hutchinson notes that the ACCC had accepted in argument that to have an understanding, what is necessary is that the parties each understand or reach a consensus that conduct will occur as a result of the consensus that they have reached; and developing this reasoning further, submit that the person who makes a contract (and thus makes an arrangement or reaches an understanding) needs to know they are doing so or they cannot make it (or arrive at it), and if they do not make it, they cannot give effect to it.
155 Hutchinson also agrees with the statement by the ACCC in argument that the fundamental factual question for the primary judge was why the subcontract with WPI was terminated, but say that the answer to that question must be that the conduct was pursuant to, or in fulfilment of, an arrangement or understanding, or else s 45E(3) is not engaged. Hutchinson contend that the burden of the ACCC's submissions was either in truth to deny the need for an understanding, or to assume its existence in this case. The ACCC had argued that if it is the case that the CFMEU were to say explicitly to Hutchinson, "terminate this contract or we will engage in industrial action", at the point in time at which Hutchinson terminates the contract, they are only doing so because that is the thing that they have been asked to do by the CFMEU for a specific reason, and they have come to an understanding about what their conduct is to be. Hutchinson contests the soundness of that reasoning by pointing out that a person can do something that someone demands for reasons wholly unrelated to that demand. The bare fact of a demand having been made, and action occurring that is consistent with the demand, is not enough to support an inference that the demand is the most likely reason that the person has acted in that way. Their actions could be the product of many things, such as being accidental, coincidental, unilateral, or something else. Similarly, the CFMEU may expect someone to do something, but that is not enough. Hutchinson submits that the law is clear that to engage s 45E, there must at least be an understanding. That understanding does not need to "map perfectly onto the statutory language", but the persons making it must know that there is an understanding which in fact has a provision which has a character of being proscribed.
156 Hutchinson submits that the ACCC assumed the existence of an understanding and asserted that it had come to an understanding with the CFMEU about what its conduct was to be. But it was necessary to ask how, when and through whom. Corporate persons act through individual persons who have minds. These things can be identified, and they should be when penalty provisions are involved.
157 Hutchinson submits that, contrary to the substance of the ACCC's argument, a unilateral act flowing from a threat is not, without more, an arrangement or understanding and cannot contravene s 45E; and that CEPU v ACCC does not stand for that proposition, and the submission to that effect is characterised by Hutchinson as both wrong and revealing. In that case, the CEPU made a demand. Meetings were then held within Edison (the energy company) to discuss whether to accede to that demand. The primary judge in CEPU v ACCC found that the discussion was to the effect that Edison would agree with the CEPU's demand that it would only engage electrical contractors. There was then a written communication by which Edison agreed to comply with that demand, and they wrote "we agree to the following position … Please indicate your acceptance of this position on behalf of the CEPU." The parties then entered into a memorandum of understanding (MOU). The trial judge in CEPU v ACCC (at [8]) found that the MOU gave effect to the arrangement previously reached in writing; and the Full Court records that Edison told DGN, a company that had long worked for them, that it would not be allowed to continue. Having regard to all of the facts, the precise date of the alleged arrangement there was known, unlike in this case.
158 Hutchinson submits that, following the reasoning in CEPU v ACCC at [141], there is a need to establish the existence of the arrangement or understanding, before turning to the nature and extent of participation (that is, giving effect). And following [194] in CEPU v ACCC, reproduced above at [120], succumbing to a threat is not enough; succumbing to such pressure in a manner which involves inclusion of a provision in an arrangement is what was required in this case to engage s 45E(3). That is, following [195], also reproduced above at [120], the necessary hinge is a provision in an understanding, which must exist.
159 Hutchinson submits that this Court should find that the termination of the WPI contract was not proven to be the outcome of any bilateral understanding between the CFMEU and Hutchinson. Rather, it was a result of a unilateral misunderstanding on the part of Mr Meland that WPI needed an EBA, and a result of his inability to resolve difficulties arising from WPI's non-payment of entitlements. Hutchinson submits that the ACCC's case that the CFMEU unconditionally knew that WPI would not come back onsite, if accepted, does not assist, but instead tells against the existence of any arrangement or understanding. As Hutchinson put it, the utility of an arrangement or understanding of the kind alleged in circumstances where the CFMEU and Hutchinson already knew that WPI would not return to the site would be greatly reduced, if not non-existent. Hutchinson submits that the CFMEU in saying WPI are not coming back on site is asserting a conclusion as to what should happen, not seeking an assurance. Hutchinson therefore submits that the evidence establishes no more than that the CFMEU made a threat and, in due course, Hutchinson terminated the WPI's subcontract in light of an expectation of industrial disputes. There was no established meeting of the minds in Hutchinson acting in light of the threat, even if the CFMEU expected this would occur.
160 Hutchinson relies upon BlueScope Steel at [146]‐[147], reproduced at [110] above, which states that conduct must be engaged in to give rise to an inference of assent, submitting that in this case there are no dealings from which assent or assurance can be concluded, contrary to the conclusion reached by the primary judge. Mr Berlese spoke to Mr Steele once, and never spoke to anyone from the CFMEU again. Thus, Hutchinson submits, he cannot have given assent through words or conduct. Mr Meland never communicated assent to anyone at the CFMEU.
161 Hutchinson takes issue with the primary judge at LJ[340(24)] referring to Mr Steele saying to Mr Meland "WPI won't be doing your waterproofing", and to other things that Mr Steele could have said but did not, such as tying this outcome to the non-payment of entitlements or to WPI's failure to register with industry superannuation funds, with her Honour treating this as a strong indication that there was already an arrangement or understanding. Hutchinson characterises this as no more than a statement of fact on the part of Mr Steele (perhaps better described as a statement of the demanded outcome), and not constituting seeking an assurance. Hutchinson submits that there is no other evidence identified by the primary judge capable of supporting any inference of any assurance or assent being given. Hutchinson submits that this is why the ACCC endeavoured to claim that the arrangement or understanding and its execution occurred at the same time. It should be noted that this is not what her Honour found had taken place, instead finding a five-week gap between the arrangement or understanding being reached and it being given effect to (the five weeks being measured up to the time between the "deal with it" direction Mr Berlese gave to Mr Meland on or about 19 July 2016 and the termination of the WPI subcontract on 26 July 2016).
162 The ACCC submits that Hutchinson says "mutuality" is not required for an arrangement or understanding, but Hutchinson submits that is not the point it makes. Hutchinson argues that there need not be mutuality in the sense of reciprocity of obligation. That is, there need not be a quid pro quo, although, as Perram J observed in Australian Competition and Consumer Commission v Air New Zealand Ltd [2014] FCA 1157; 319 ALR 388 at [463(2)], it is difficult to imagine such a case in practice (his Honour citing observations to that effect by Lockhart J in Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 at 230-1). However, Hutchinson submits, there is a different question as to whether an arrangement requires mutuality in the sense of a meeting of minds, or two minds directed at the same topic, with the authorities being unequivocal that this is necessary.
163 Hutchinson refers to the cross-examination of Mr Meland and the fact that he was not re‐examined about any other discussions he may have had with Mr Berlese. Indeed, Mr Meland gave evidence about difficulty of getting in contact with Mr Berlese. Hutchinson noted the following important facts about the state of the evidence that was before the primary judge:
(a) there was no express undertaking given by anyone by word or deed;
(b) the existence of an express undertaking was not put to any witness, and hence there was no finding that any individual knew they were making an arrangement or reaching an understanding;
(c) no assurances were tacitly or explicitly given by Hutchinson to the CFMEU;
(d) there is nothing that can be construed as the giving of assent by the CFMEU as to what Hutchinson proposed to do;
(e) instead, Mr Meland acted contrary to the alleged boycott provision (that is, the arrangement or understanding found to exist by 11 June 2016 for more than a month by trying to get WPI a CFMEU EBA);
(f) the CFMEU never followed up with Mr Meland to see if he had terminated WPI;
(g) Mr Berlese did not chase up Mr Meland to see if he had terminated WPI; and
(h) Mr Meland did not confirm to Mr Berlese that he had terminated WPI, and instead irregularly signed the termination letter himself.
164 By way of additional argument on top of adopting Hutchinson's submissions, the CFMEU notes that the ACCC had accepted that a threat and acquiescence is not enough to establish an arrangement and understanding, effectively adopting Hutchinson's argument that the evidence established that no more than this was shown to have taken place. The CFMEU rely upon the reasoning and outcome in Keith Russell Simplicity Funerals Pty Ltd v Cremation Society of Australia (ACT) Ltd (1982) 40 ALR 125, an early secondary boycott injunction application case, in which Franki J said in refusing the injunctive relief:
(a) at 127-8:
The president of the union advised the manager of the applicant that the union had placed a ban on the applicant preventing it from using crematoria which he said was due to a breach of a union rule arising out of the use of non-union labour in removing a body from a nursing home.
(b) at 128:
It was argued for the respondents that all they had done was to make a commercial decision, not by way of making an arrangement or arriving at an understanding but by accepting the consequences they regarded as inevitable … At all times, the fourth and fifth respondents wished to continue to supply services to the applicant but, because of the ban, this became commercially impossible.
(c) at 129:
In my opinion, the respondents have simply responded in a commercial way to a union ban, and I do not consider that there is evidence of either the fourth or fifth respondent having made an arrangement or arrived at an understanding which contained a provision which was included for a prohibited purpose.
165 The CFMEU, supporting Hutchinson, submits that this is an acute example of the result for which it contends, and that this should be read together with CEPU v ACCC, which Hutchinson took the Court to in detail in reply as summarised above at [157]-[158] in demonstrating the distinction with the facts and circumstances that are presented here. That case involved a finding on the evidence that the CEPU was aware that Edison was agreeing to their demands. That is not what happened in this case.
166 CFMEU also submits that it was not proven that it had the requisite knowledge or state of mind in this matter. The ACCC relied upon the following evidence from Mr Steele to demonstrate his knowledge and, consequently, the knowledge of the union:
You would have found out and been made aware of or directly inquired yourself as to whether or not WPI was staying on the site?---Yes, eventually.
167 But the CFMEU submits that it was not clear whether Mr Steele was answering the question as to whether he had found out, or whether he had been made aware, or whether he had directly inquired himself. The answer was not only "Yes", but, "Yes, eventually", with nothing to indicate whether that was in terms of days, weeks, months or even later. That statement does not demonstrate any knowledge of why WPI were not onsite or that Hutchinson had acceded to their demand.
168 The CFMEU also point out that the ACCC relied upon the evidence in cross-examination of Mr Clarke, where he said "There is plenty of ways to know who has been there and who has not", to say Mr Clarke understood that WPI were not there. This suffers from the same vice. It is not evidence that he knew why WPI was not there or evidence that he knew that Hutchinson had acceded to the demand alleged of the union.
169 The CFMEU outline the following chronology:
(a) on 11 June 2016, Mr Clarke made the threat to sit the job down if WPI came on site;
(b) Mr Steele said to Mr Meland on some unspecified date: "Ray is a dog, he won't be doing your waterproofing. Why don't you use someone else like Spanos?";
(c) after 21 June 2016, well after the primary judge found the arrangement or understanding came into existence, Mr Clarke spoke to Mr Thone;
(d) on 26 July 2016, the WPI subcontract was terminated without reference to the CFMEU, with there being no evidence that the CFMEU was told at all.
170 On the concession that threat and acquiescence is not enough, the CFMEU submit that this chronology is fatal, and the evidence establishes no more than threat and acquiescence.