John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] FCA 1032 | Case summary

Should the CFMEU's defence be struck out? 3 The originating application and statement of claim seek orders imposing pecuniary penalties pursuant to the Fair Work Act 2009 (Cth) (FW Act) on 12 respondents, the first of whom is the CFMEU. 4 The statement of claim seeks relief against the CFMEU on the basis that it is vicariously liable for the conduct of the other, individual respondents, who it is alleged have contravened various provisions of the FW Act and engaged in the torts of unlawful interference with contractual relations and nuisance. 5 The general structure of the statement of claim is that on various dates, various individuals engaged in conduct at the Perth Children's Hospital site, formally known as the New Children's Hospital Site, for example procuring strike action or engaging and organising a picket. 6 It is alleged that this conduct relevantly breached the provisions of the FW Act and constituted the commission of the alleged torts. 7 It is alleged the CFMEU is vicariously liable either at common law or under the FW Act for the individual respondents' conduct. 8 John Holland does not object to the amended defence of the second to tenth individual respondents and the defence of the eleventh respondent where "non-admissions" are pleaded, accepting that the individuals are entitled to claim a "penalty privilege". 9 John Holland objects, however, to the approach taken by the CFMEU in its defence where it is stated, as part of an introductory note, that: As the officers and employees of the CFMEU named in the ASOC each claim penalty privilege in relation to the matters against them, this further amended defence has been prepared based on instructions given by a senior employee of the Western Australian branch of the CFMEU who is authorised to provide those instructions. 10 John Holland says that the vast majority of the defence contains non-admissions using the formula that the CFMEU "does not know and therefore cannot admit" certain things. 11 John Holland submits that in conjunction with the introductory note it appears that the CFMEU is relying on the penalty privilege available to the individual respondents, and potentially to other CFMEU employees, to plead in the way that it has. 12 In short, John Holland submits that the CFMEU cannot rely on the penalty privilege of others in this way and must plead its defence in accordance with the Rules. 13 In this regard, John Holland notes that R 16.21 of the Rules empowers the Court to make an order striking out a pleading on the grounds that the pleading: (a) is evasive or ambiguous; (b) is likely to cause prejudice, embarrassment or delay in the proceeding; (c) fails to disclose a reasonable defence; and/or (d) by reason of the matters above, is an abuse of the process of the Court. 14 John Holland relies on the affidavit of Melanie Anne Mallot affirmed on 28 March 2014. 15 John Holland also emphasises that: Rule 16.02(1)(c) and (d) provide that a pleading must identify the issues that the party wants the Court to resolve and state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved. Rule 16.02(2) provides that a pleading must not be evasive or ambiguous, not cause prejudice, embarrassment or delay in the proceeding, not fail to disclose a reasonable defence or other case appropriate to the nature of the pleading; or otherwise be an abuse of the process of the Court. Rule 16.03(1)(b) provides that a party must plead a fact if failure to plead the fact may take another party by surprise. Rule 16.07(1) provides that a party pleading to an allegation of fact in another party's pleading must specifically admit or deny every allegation or fact in the pleading and allegations that are not specifically denied are taken to be admitted. However, a party may state that the party does not know and therefore cannot admit a fact. If a party so states, the Rules provide that the particular fact is taken to be denied. See R 16.07(2), (3) and (4). Rule 16.08 also provides that in a pleading subsequent to a statement of claim, such as a defence, a party must expressly plead a matter of fact or point of law that: (a) raises an issue not arising out of the earlier pleading; or (b) if not expressly pleaded, might take another party by surprise if later pleaded; or (c) the party alleges makes another party's claim or defence not maintainable. 16 John Holland complains that the CFMEU's defence does not comply with R 16.02, 16.03 and 16.08 to the extent that the CFMEU is going to deny the allegations made against it in the statement of claim or deny the allegations and run a positive defence to the allegations against it. John Holland says it has no way to identify which legal or factual issues are going to be in dispute at the hearing and that this is particularly prejudicial given the number of days over which the alleged industrial action and picketing activity occurred and the vast number of CFMEU officials allegedly involved in the alleged industrial action and picketing activity. 17 It submits the CFMEU cannot rely on the penalty privilege of others to avoid pleading in the defence in accordance with these Rules. 18 So far as the penalty privilege is concerned, John Holland observes it is well established that an individual respondent who is subject to proceedings seeking the imposition of a civil penalty on him or her may claim the privilege against self-exposure to a civil penalty. See Trade Practices Commission v Abbco Iceworks Pty Limited (1994) 52 FCR 96 at 100 (Sheppard J). 19 John Holland also refers to what was said by Mason P in MacDonald v Australian Securities and Investments Commission [2007] NSWCA 304; (2007) 73 NSWLR 612 to the effect that a person is entitled to be protected against both direct and indirect self-incrimination. At [66], Mason P added that the privilege also protects against the compelled discovery of information that may set in train a process which may lead to incrimination or may lead to the discovery of real evidence of an incriminating character. 20 John Holland also submits that the privilege against self-exposure to penalty owes its existence not to the law of historic protection of human dignity but to the limitation on the Court's powers to compel a respondent to furnish evidence against himself or herself. 21 Thus, it emphasises that the penalty privilege does not enable a person to refrain from producing information or documents that would incriminate another person. 22 John Holland also notes that the penalty privilege is not available to a corporation. 23 In light of these principles, John Holland submits that the CFMEU itself cannot rely on the penalty privilege, although it appears to rely on the fact that officers and employees of the CFMEU are claiming penalty privilege in order to avoid seeking instructions from them to properly plead to the statement of claim. 24 John Holland in this regard notes that it is well established that the fact that a corporation cannot claim the penalty privilege does not indirectly diminish the value of the penalty privilege for individuals who can claim it and that the privilege has never been nor should it be a shield against the use of incriminating evidence - only a right to decline to be themselves the authors of their own destruction by producing the evidence. See Abbco Iceworks at 116 (Burchett J with whom Black and Davies JJ agreed); Bridal Fashions Pty Ltd v Comptroller General of Customs (1996) 135 FLR 100 at 112; Construction, Forestry, Mining and Energy Union v Alfred [2004] FCAFC 36; (2004) 135 FCR 459 at [35]-[36]; Pascoe v Divisional Security Group Pty Ltd [2007] NSWSC 211; (2007) 209 FLR 197 at [42]. 25 John Holland refers to two decisions which may appear to provide contrary authority to that principle: Australian Securities and Investments Commission v Mining Projects Group Ltd [2007] FCA 1620; (2007) 164 FCR 32 and Re Australian Property Custodian Holdings Limited (No 2) [2012] VSC 576; (2012) 93 ACSR 130, but says they should not be followed. 26 John Holland submits that in Mining Projects Group, Finkelstein J considered that in circumstances in which an individual respondent entitled to a penalty privilege is also the director (sole director) of a company, this may entitle the company to remain silent. John Holland submits that in reaching that conclusion his Honour did not deal with the authorities cited above and that his Honour's decision is inconsistent with three Full Court of the Federal Court decisions and should not be considered correct. 27 In relation to Australian Property Custodian Holdings, John Holland submits that Robson J accepted that a corporation cannot ordinarily claim the penalty privilege, however, following the reasoning of Finkelstein J in Mining Projects Group, concluded the corporation was entitled to the benefit of an order not to be required to file a defence in the same way as individual directors. 28 Again, John Holland submits that to the extent that the decision in Australian Property Custodian Holdings represents the law in Victoria, this Court is bound to follow the law as set out in the Full Court decisions of this Court. 29 In the course of making oral submissions, counsel for John Holland sought to develop the submission that under modern pleading requirements, such as those found in the Rules of this Court, a party is obliged to state its factual response to allegations made, at least where it is possessed of relevant information that enables it to do so. In a case such as the present, counsel submitted that it was open to the CFMEU to make appropriate inquiries of persons who are possessed of the facts so that it can properly inform itself for the purpose of pleading its defence. Counsel said that if a person of whom such an inquiry is made, who is entitled to claim the penalty privilege, were to claim the penalty privilege then that might be the end of the issue. But at the very least, counsel submitted, the CFMEU should be obliged to make the relevant inquiries in order to inform itself and, if challenged on a strike out application such as the present, be able to put on some evidence to indicate it has done what it could to provide a more constructive pleading than "do not know therefore cannot admit". 30 Counsel sought to develop his submissions by reference to [32]-[35] of the statement of claim where it is pleaded that various industrial action and conduct amounted to industrial action under the FW Act. He noted that by the defence, the CFMEU does not admit that the pleaded conduct constituted industrial action under the FW Act. He contended that the Rules do not allow that approach to be taken and that the CFMEU should either deny or admit the allegation made. 31 Counsel for the CFMEU rejected the more general proposition put on behalf of John Holland that the defence constituted little more than a bare denial defence and submitted there were admissions to be found on every page of the pleading. 32 Counsel submitted that specific instructions had been sought in relation to the allegations in the pleading and every effort had been made to prepare a defence in accordance with the obligations under the Rules. 33 As to the pleading to [32]-[35] of the statement of claim, counsel made the point (which I accept) that the CFMEU was not in a position to deny the allegation made in [32] because it depended on the matters pleaded at [29] to [31]. Counsel submitted that in the circumstances it probably would not be proper to deny [32] of the statement of claim. 34 Counsel also submitted that there is no obligation to make a reasonable inquiry as suggested by John Holland in oral submissions. 35 Counsel submitted there is a distinction between the party's obligation in respect of the preparation of the pleading, on the one hand, and its obligations in respect of discovery and, where it is relevant, interrogatories. 36 Counsel also rejected the suggestion made that no questions had been asked in any event. He referred to the affidavit of Simon Alexander Millman, on which the CFMEU relied, as making it apparent that the CFMEU had asked each of the individual respondents their position in relation to the allegations contained in the statement of claim and that each had indicated they wished to maintain their claim to the penalty privilege. 37 In such circumstances, counsel submitted admissions are not able to be made. 38 Counsel emphasised that it remains for John Holland in the proceeding to prove the allegations made against the CFMEU. 39 As to matters of principle, counsel accepted the general propositions identified above. As to Mining Projects Group and Australian Property Custodian Holdings, counsel submitted that the clash of authorities suggested on behalf of John Holland did not exist and there is no necessary inconsistency between the authorities. Counsel submitted that Abbco Iceworks concerned the provision of documents by way of a notice to produce and it was accepted that the CFMEU, as a corporate respondent, could not claim privilege in relation to the production of documents because they were the documents of the union. 40 Counsel submitted that the fundamental distinction in the present case is that, what John Holland is asking the CFMEU to do, is act as its agent, in effect, to uncover the factual information that John Holland requires. 41 Counsel submitted that a consistent theme running through a number of authorities is that where a corporate entity is required to take a step which can be achieved without impinging upon the penalty privilege, then it is obliged to take that step, but where it is required to take a step which would impinge upon that privilege then it is not obliged to do so. Australian Property Custodian Holdings was identified as a decision falling into that category. 42 In the result, counsel submits that an individual ought not to be required to provide information where the provision of that information might impact or impinge upon a privilege enjoyed by that individual. What the CFMEU says here, is that the suggestion by John Holland that the individual respondents who claim the privilege must provide instructions for the purpose of preparing the union's defence, necessarily impinges upon the privilege which is enjoyed by each of them. 43 Counsel submits that if there is an allegation in terms of whether a particular person did something on a particular day, or whether when he or she did something they had a particular intention, and where that information can only come from that particular individual who claims the penalty privilege, the union cannot be required to do more. 44 In this regard, the CFMEU also points to the affidavit of Christopher Prast, a senior employee of the CFMEU, as disclosing that appropriate inquiries have been made, although not by requiring any individual to breach the penalty privilege they claim. 45 In the result, I broadly accept the submissions made on behalf of the CFMEU. 46 I consider the defence filed by the CFMEU does not contravene the Rules. 47 Instructions have been received by solicitors from Mr Prast, who has been authorised to give them. 48 In my view, the challenged paragraphs of the defence are unexceptional. There is no reason suggested that non-admissions have been made in circumstances where the truth or falsity of a particular allegation is otherwise known to the CFMEU. 49 I reject the broad submission made that a party, such as the CFMEU in this instance, is obliged in relation to factual allegations made against it, of which it does not know the truth or falsity, to undertake positive inquiries in order to make a plea admitting or denying an allegation. 50 In any case where a party fails or neglects to plead a positive case, they may well be prevented from doing so subsequently in the proceeding. The pleading frames matters in issue and if a party, such as the CFMEU, says it does not know and cannot admit certain matters then it may subsequently be bound by that pleading. 51 The present proceeding of course is not, in that regard, an entirely usual civil proceeding, because the other respondents claim a penalty privilege. It may be, depending on how the case develops, that factual matters may become known to the CFMEU which might then cause it to alter its current non-admission pleadings. But that possible future circumstance only goes to emphasise the fact that, as presently informed, the CFMEU is not able to plead a positive case (if it ever will be) and thus provide the sort of information that John Holland wants disclosed. This is because, on the face of the information before the Court, the only way in which the CFMEU could obtain relevant information to make a more positive pleading, would be by quizzing individual respondents. 52 I do not accept a suggestion made on behalf of John Holland that any information that were to be provided by individual respondents could be used to develop the pleaded defence of the CFMEU without prejudice to the continuing entitlement of the individual respondents to the penalty privilege they claim. I accept the submission made on behalf of the CFMEU that in such circumstances, once the information had been provided, the individual's penalty privilege would be of no practical utility. Thus, any order requiring, in effect, the union to obtain instructions about factual matters from individual respondents would have the effect of undermining the penalty privilege of the individual respondents and achieve indirectly what cannot be achieved directly. In that regard, I do not consider that there is any necessary inconsistency between what was said in authorities such as Mining Projects Group and Australian Property Custodian Holdings, on the one hand, and those of Abbco Iceworks, Alfred and Bridal Fashions, on the other. 53 Following the hearing of the strike out application, the parties brought to the attention of the Court the decision of Mansfield J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 652 in relation to which the parties were given leave to provide short written submissions. 54 John Holland notes that the decision concerned allegations by the Director of the Fair Work Building Industry Inspectorate that the union and two of its officials contravened s 500 of the FW Act by reason of the conduct of two officials on a site on various dates in June 2013. The defence of the respondents including the union denied the facts alleged. The CFMEU said it had pleaded in that way because the two officials had claimed the penalty privilege. 55 At [6]-[7] Mansfield J said: 6 In my view, the CFMEU Defence is not adequate. It is not entitled to use the privilege of Mr Pearson and Mr Olsen so it does not otherwise have to comply with the pleading rules: Federal Court Rules 2011 (Cth), rr 16.02(1)(d), 16.03, 16.04, 16.07 and 16.08. See also Rule 16.41 and Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [31]. 7 It is not for the Court to direct how its case should have been pleaded. The "do not know and cannot admit" plea is, of course, available: see r 16.07(3), but the form of the CFMEU pleading at present seems to exclude that option, especially as the three respondents are represented by the same solicitors. I note also that there are alleged to be other persons than Mr Pearson and Mr Olsen who were variously present when the asserted conduct was engaged in, and as persons acting for the CFMEU they may have provided the CFMEU or the solicitors with information about the allegations of the Director. I note also that the pleading by the CFMEU is not able to be used as an admission against either Mr Pearson or Mr Olsen. I note further that it is not claimed by the CFMEU that it has any privilege against a proper pleading on its behalf because it may be exposed to a monetary penalty. 56 John Holland accepts there are distinguishing features about the decision to the facts in this proceeding. First, the aspect of the pleading at issue in this proceeding is the "do not admit" pleading, whereas Mansfield J was concerned with what appeared to be bare denials. Secondly, it does not appear that the applicant had applied to the Court for the defence to be struck out. 57 John Holland nonetheless submits the observations of his Honour are relevant because a corporate respondent seeks to rely on the penalty privilege of individuals who either refused to disclose or refused to seek instructions in order to disclose in pleading a defence. 58 The CFMEU submits that no part of his Honour's ruling detracts from or undermines the foundation of its submissions and the decision is in any event plainly distinguishable. 59 The CFMEU submits that the observation at [6] of his Honour's ruling is apposite in this case, as the CFMEU's pleading is entirely consistent with the Rules. It submits that John Holland remains unable to point to any specific instance of non-compliance. 60 The CFMEU submits that by contrast with the matter before Mansfield J, the central thrust of John Holland's attack on its defence here is that by pleading "do not know and do not admit" to a number of the factual allegations raised by John Holland, the CFMEU seeks improperly to rely on the individual respondents' admittedly legitimate claims for penalty privilege. Yet, it is submitted, Mansfield J expressly accepted at [7] that the "do not know and cannot admit" pleading permitted by R 16.07(3) was available to the CFMEU. 61 The CFMEU also notes that his Honour concluded that it was not for the Court to direct the CFMEU as to how its case should have been pleaded. His Honour's observation, at [7], that others were present and thus may have provided the CFMEU or its solicitors with information about the allegations made, is not to the point in this case, as it is submitted that had such information been available here and had the CFMEU provided instructions that it ought be relied upon as the basis for the making of admissions, then of course such admissions would have been made. 62 By way of response, John Holland submits it is disingenuous for the CFMEU to rely on the fact that the truth of an allegation is not known and therefore the CFMEU has pleaded consistently with R 16.07, when on its own admission it has not made inquiries with anyone who would have knowledge of any allegation. In those circumstances it has adopted a self-imposed "blindness" to the allegations against it. 63 John Holland submits that the "do not admit" defence, if open, would be available to any corporation which elected not to make any inquiries of relevant officers or employees about allegations made against it in a statement of claim and that such an approach would leave the operation of many of the Rules redundant and would increase the length and complexity of litigation as every factual and legal issue would remain in dispute in the proceedings. 64 Generally speaking, I accept the observations made on behalf of the CFMEU concerning the relevance of the statements of Mansfield J. This case is materially different and the observations I have made about it are not, in my view, to be modified by reason of his Honour's findings. 65 In those circumstances, the interlocutory application of John Holland should be dismissed.

Are the respondents entitled to access to certain documents? 66 The CFMEU and the other respondents have applied to strike out certain paragraphs of the statement of claim, alternatively to receive further particulars. 67 As a result of communications between the parties, the real dispute concerns certain particulars and access to certain documents pertaining to those matters. 68 Counsel for the CFMEU indicated that the application as it stood at the time of the hearing was in two parts. While it started off life as an application to strike out parts of the statement of claim or in the alternative for particulars, it also comprises an application for production of the contract pleaded in [15] of the statement of claim and the subcontracts there referred to. 69 As to the particulars sought, counsel indicated they fell into two categories. They were particulars of alleged delay and disruption and particulars of alleged loss and damage. 70 It transpires that John Holland has provided particulars of delay and disruption with which the respondents are content. 71 John Holland has also provided some particulars of loss and damage, although from the respondents' point of view, only in general terms and they maintain their objection to the particularisation of loss and damage. 72 At this point I am content that further particulars of loss and damage need not be ordered. Counsel for John Holland accepted that at a certain point it will be necessary for those particulars to be provided. I accept, as a matter of judgement, that the time has not yet arrived for such an order to be made. The Court would expect that the parties would continue to discuss and cooperate, in accordance with the duties imposed on the parties to this proceeding and their lawyers, under the Federal Court of Australia Act 1976 (Cth), in this regard. 73 In relation to the contract and the subcontracts, John Holland has provided the respondents with redacted copies of the various subcontracts. A very few number of the redactions only have not been accepted by the respondents. 74 The result is there are a small number of redactions in relation to the subcontracts that remain in dispute. In that regard, the respondents and counsel for the respondents have not seen the unmasked material in respect of which the redactions have been made. 75 The position taken by John Holland, however, in relation to the contracts is that, as to what are called the State construction contracts, they are entirely confidential and if provided, should be provided in a wholly redacted form. 76 The respondents say the State construction contracts are central to the allegations made against them and, having been referred to in the statement of claim, are plainly relevant and ought to be produced in their entirety and without any confidentiality regime in place. 77 Counsel for the respondents directed the Court's attention to the letter of 11 June 2014 on behalf of the respondents which sets out their concessions in relation to the subcontracts together with some submissions as to why certain documents or certain provisions of the subcontracts ought to be provided. 78 In substance the thrust of the submissions is, first, that the provisions of the subcontracts are relevant to the allegations of delay and disruption which are made against the respondents and, secondly, in so far as reference is made to specific provisions of the subcontracts, John Holland alleges the respondents had actual knowledge of those provisions which adds, in the respondents' submission, a second level of relevance. 79 Counsel points out that the paragraphs of the statement of claim that are the subject of the request for further and better particulars are set out at [5] of their written submissions and it is only those in respect of [5(b)] that are pressed now before the Court; that is to say in relation to loss and damage. 80 Counsel for the respondents prefaces his submissions by accepting that there is a precondition which must be met before particulars will be ordered and that is the requirement that the particulars sought are necessary to enable a party to prepare for trial. 81 Counsel submits the issue here is not in relation to what principles exist but how they ought to be applied in this case. 82 Counsel refers to Robinson v Adshead (1994) 12 WAR 574 to the effect that, where a document is referred to in a pleading, the Rules provide in effect that it is as if the document itself was set out in terms in the pleading and there is a presumption that it is material and the opposing party is entitled to production of the document. Counsel notes, to similar effect, Day v William Hill (Park Lane) Ltd [1949] 1 KB 632. 83 Counsel refers to the well-known implied undertaking that prevents a document which is supplied in the course of proceedings such as these from being used for any other purpose. 84 Counsel notes that here John Holland alleges that each of the individual respondents had actual knowledge of specific provisions of the contract and when a notice to produce was served on John Holland asking for production of it, the confidentiality response was received. 85 Counsel draws attention to [15] of the statement of claim which follows the heading, "The John Holland contracts" and pleads that by reason of the preceding pleading, in its capacity as managing contractor of the project, John Holland was a party to commercial contracts: (a) the State construction contracts and (b) with each of the subcontractors (subcontractor contracts). 86 Particulars were then sought from John Holland by the respondents as to what it said constituted the State construction contracts and particulars were provided that it was in a particular form until 3 December 2012 and then in a subsequent form from 4 December 2012. 87 The respondents say that in order to make good the allegation at [15], the applicant will need to produce the contract both in its original form and in its revised form. Counsel submits the applicant must also establish in terms of its allegation of interference with the performance of contract or inducing its breach, that there was an existing, valid and enforceable contract. In this regard, counsel refers to McKernan v Fraser (1931) 46 CLR 343 at 358-359; and News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 516E. 88 Counsel then draws attention to [16] of the statement of claim which pleads that: At all relevant times, John Holland was required by the terms of the State Construction Contract to: (a) Achieve certain milestones for completing the building works on various parts of the Project; and (b) Complete the construction of the Project by 30 June 2015 at the Site. 89 Counsel says that what John Holland pleads here is the effect of each of the two written contracts. Counsel submits that it ought to be so obvious as to go without saying that the contract is to be construed as a whole in that regard. See Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109. So John Holland needs to put the contract into evidence. 90 Counsel points out that a request for particulars was made as to which of the terms of the construction contract John Holland relied upon and it was advised that the terms which are said to have the effect contended for are set out in cll 1, 4, 6, 7 and 22 and also Sch 1 of each of the two contracts. 91 Counsel submits that in order properly to plead to those clauses the respondents need to understand whether the contract had the effect contended for by John Holland. 92 Counsel submits that the consequence of the position taken to the production of the contract by John Holland is that, although the contract is relevant, the terms of the contract are not. 93 Counsel then draws attention to [38] of the statement of claim where the allegation is made that each of the individual respondents knew or ought to have known that John Holland was a party to the contracts. Then, at [39], it pleads that: At all material times, each of [four individual respondents] knew, or ought to have known, about the State construction contract terms and/or the sub-contractor contracts terms. 94 Counsel submits, again, that in order to prove its case, John Holland must establish that each of those individuals had the requisite knowledge of the relevant terms; that each person had at least some appreciation of the general nature of the rights and of the fact that the course of action which he was advocating would constitute a breach of them: see Sanders v Snell (1997) 73 FCR 569. 95 Counsel also makes reference to what Isaacs J said in Short v The City Bank of Sydney [1912] HCA 54; (1912) 15 CLR 148 to the effect that a respondent must know of the contract in sufficient of its terms to know that what the respondent induced or procured the party to the contract to do would be in breach of the contract. If they knew of the existence of the contract but believed reasonably that what they induced or procured the party to do was not a breach, or reasonably believed that the contract had been rescinded or its performance waived, the respondent would not have knowingly induced or procured a breach. 96 Counsel for the respondents thus submits that there is an obligation on the part of John Holland to establish not only that the respondents induced or intended that a particular course of action happened, but they did so knowing that the course of action would constitute a breach of the contract. 97 Counsel for the respondents accepts that the respondents do not need to know the specific provisions of the contract right down to the letter, but nonetheless submits there has to be a term which is established. 98 Counsel submits one cannot prove that a breach has occurred if the other side is not told what the term is. In order to establish that the relevant conduct constitutes a breach of the term, it is necessary to know not only what the conduct is, but also what the term is that is said to have been breached, and how it is that that conduct is said to have constituted a breach of that term. 99 Thus the respondents submit that it is necessary for John Holland to adduce evidence, in support of its pleaded case, that there was a contract which had specific terms and which had specific effect; and that is the case that the applicant needs to make at a fundamental level before it moves into the specifics of what is required to establish knowledge of the specific terms of the contract. 100 The respondents submit that if the applicant is not prepared to produce the contract and it is never to be produced, then the entirety of the common law case against it ought to be struck out as there will be no factual or evidentiary basis for the allegations concerning inducing breach of the contract. 101 John Holland say it has clearly pleaded each of the elements required to establish the tort of interference with contractual relations. Specifically, (using the alleged conduct on 18 September 2012 as an example) it has pleaded: (1) The existence of the contract said to have been interfered with. See [15]-[17] of the statement of claim. (2) The conduct alleged to have caused the interference with the contracts. See [29]-[31] of the statement of claim. (3) Knowledge by the respondents of the relevant contracts. See [38]-[40] of the statement of claim. (4) That the respondents had the necessary intention to cause the interference with the relevant contracts. See [41] of the statement of claim. (5) The actual interference with the contracts and the loss and damage suffered by John Holland as the result of the interference. See [42]-[43] of the statement of claim. 102 When it comes to production of the State construction contracts and the subcontractor contracts, John Holland accepts that their existence is relevant in the proceeding but says the actual terms are not. It submits that it is not necessary for it to establish that the respondents had actual knowledge of the precise terms of the relevant contract. It says the knowledge that the putative tortfeasor is required to have of the contract and/or its terms in the tort of interference with contractual relations was dealt with in Sidameneo (No 456) Pty Ltd v Alexander [2011] NSWSCA 418 where Young JA, with whom Beazley JA and Basten JA agreed said, at [139], relying on Carlton & United Breweries Ltd v Tooth & Co Ltd (1986) 7 IPR 581 at 625-6, that so long as the defendant has actual knowledge that there is a contract and the defendant acts in such a way as to induce a breach of it "he is liable even though he does not know the actual terms of the contract" unless he has reasonable grounds for believing that the contract did not contain the term which is relied upon and this is a fortiori the position where (a) the term is a very common one in contracts of that type; or (b) he deliberately closes his eyes and refrains from inquiring whether the term existed or not. 103 John Holland also relies on AllState Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26 where Lindgren J (with whom Lockhart and Tamberlin JJ agreed) said, at 37, that it is "undisputed that the alleged tortfeasor must have 'knowledge of the contract'". His Honour added, at 43, that although an alleged tortfeasor must have a "fairly good idea" that the contract benefits another in the relevant respect, knowledge of the contract may be sufficient for the purpose of grounding the necessary intention to interfere with the contractual rights although the precise term breached is not known. John Holland also relies on Emerald Construction Co Ltd v Lowthian [1966] 1 WLR 691 to similar effect. 104 John Holland submits that the authorities support the proposition that it is enough in this case if the respondents knew about the State construction contracts and the subcontractor contracts, without having knowledge of any of the precise terms. Indeed, this is how the respondents' knowledge of the contracts is put by John Holland in its most recent further and better particulars dated 12 May 2014 at [10]. 105 John Holland notes that it is not claiming any loss and damage arising out of the contracts themselves, such as liquidated damages or lost opportunities to claim a bonus, rather it claims only the loss and damage incurred in respect of wasted costs and expenses by reason of non-performance on the days in which industrial action and picketing is alleged to have occurred (as to which see [9] of the further and better particulars dated 12 May 2014). 106 In these circumstances, John Holland submits the relevance of the actual terms of the contracts, as distinct from their existence, is minimal. 107 In relation to its request for confidentiality orders in respect of the contracts, John Holland relies upon the affidavit of Luke Brown made on 12 May 2014, as follows: (1) In relation to the State construction contracts, the basis for the confidentiality of the entirety of those contracts and particular clauses is set out in [8]-[31]. (2) In relation to the subcontractor contracts, the basis for confidentiality of various clauses is set out in [32]-[62]. 108 On this basis, Mr Brown says that the entirety of the State construction contracts and the relevant clauses of the subcontractor contracts are highly confidential and their disclosure would cause prejudice to John Holland as well as the State and subcontractors themselves if disclosed. 109 It is submitted that the contracts relate to a significant public project in Western Australia, the building of a public hospital, and that confidentiality of the contracts relating to the construction of the project is current. Mr Brown says there is a risk that disclosure of some of the contents would give the CFMEU knowledge and therefore an industrial advantage over John Holland. It is further submitted that in circumstances where these proceedings allege that the CFMEU has organised and engaged in multiple instances of unlawful industrial action and picketing activity from September 2012 until July 2013, the conferral of industrial advantage would constitute a significant prejudice to John Holland. 110 John Holland thus submits that weighing these various policy considerations, the Court ought to order a confidentiality regime over the contracts as follows: (1) In relation to the State construction contracts, an order that the entirety of the contracts be wholly redacted or instead withheld from inspection by the respondents; and (2) In relation to the subcontractor contracts, an order that the clauses of these contracts in issue be redacted and provided to the respondents in accordance with the undertakings offered. 111 While it is well before a trial in this proceeding, I would presently be guided by the statements of principle from Sidameneo and AllState Life Insurance referred to above, to the effect that an alleged tortfeasor may attract liability in circumstances where they have a fairly good idea that a contract benefits another in a relevant respect. 112 But even so, at trial it would be necessary, in respect of the particular pleadings identified by the respondents above, for John Holland to prove that there had been actual interference. The Court must be in a position ultimately itself to be able to determine whether or not actual interference with contractual relations has occurred. 113 That point having been made, it is simply a question of natural justice, in my view, as to the extent to which a party in the position of the respondents in this case can be prevented from seeing documents that the Court must ultimately see in order to make its decision. In that regard, the propositions put forward on behalf of the respondents in regard to their right to access and need for access to the relevant documents may be accepted. 114 However, so too, in my view, may be the contentions put on behalf of John Holland. The individual respondents, and the CFMEU, so far as the facts are concerned, may be found liable, depending on what transpires at a trial, by reason of what they knew or believed without actual knowledge of the terms of the contracts in question. Thus, in my view, the respondents personally at this point do not need to have access to the State construction contracts and the subcontractor contracts to plead to the primary allegations. 115 However, I would be prepared to order that the relevant terms of those contracts that relate to the pleadings identified by the respondents above, be made available to the solicitors and counsel for the respondents at this point. 116 I understand from the respondents' submission that they would say that the usual implied undertaking not to misuse the documents provided for the purposes of the proceeding should be considered enough and no further confidentiality regime is required. However, I broadly accept the submissions made on behalf of John Holland that the documents in question have considerable significance and have the potential to aggravate long standing industrial enmities to which this particular proceeding relates. 117 In those particular circumstances, as a matter of judgement, I consider it premature at this point, to consider ordering any wider production of the relevant contracts than I have just indicated. In saying that, it may be that circumstances change including at trial or before trial and the matter might be raised again for further consideration. 118 I would therefore order that the State construction contracts and the subcontractor contracts, referred to in the statement of claim, be disclosed on a confidential basis to the solicitors and counsel for the respondents but only in respect of those terms to which the statement of claim relates. 119 The parties should attempt to agree and bring forward a minute of orders to achieve this determination, failing which they should submit competing minutes and the Court will hear further from the parties as to the appropriate terms of the orders to be made. I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union

At a glance

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Before

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Judgment (13 paragraphs)

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Legislation Cited (3)

Cases Cited (24)

Cited By (2)