Laing v Construction, Forestry, Mining and Energy Union

Laing v Construction, Forestry, Mining and Energy Union - [2005] FCA 765 - FCA 2005 case summary — Zoe

[25]

Relevant principles 10 Counsel for the applicant submitted that, pursuant to O 13 r 2 (set out at [5] above), the Court should grant leave to amend the pleadings, unless the proposed amendments are so obviously futile that they should be struck out; see Leotta v Public Transport Commission (1976) 9 ALR 437. 11 It was contended for the applicant that the principles governing the Court's power to strike out a pleading pursuant to O 11 r 16 are relevant in this respect. Counsel for the applicant submitted that the power will be exercised only where the applicant's case is manifestly untenable and cannot possibly succeed; see General Steel Industries Inc. v Cmr for Railways (NSW) (1964) 112 CLR 125 at 130. It was said that, for impugned sections of a statement of claim to be struck out, they must be plainly unarguable and bound to fail; see Murex Diagnostics Australia Pty Ltd v Chiron Corp (1995) 55 FCR 194. Counsel for the applicant submitted that the Court's discretion to strike out a pleading should be exercised sparingly and with caution, as established by Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164. 12 For the applicant it was contended that, if a cause of action raised by a pleading is fairly arguable, it will not be struck out and, in assessing whether a cause of action is arguable it should be assumed that the factual allegations in the statement of claim can be made out at trial; see Empire Shipping Co Inc v Owners of the Ship Shin Kobe Maru (1991) 32 FCR 78. Counsel for the applicant submitted that, where the dispute between the parties depends upon disputed issues of fact, it will never be appropriate for the claim to be struck out; see Unilam Holdings Pty Ltd v Kerin (1992) 107 ALR 709. The well-established principle that a statement of claim will not be struck out unless it is manifestly untenable or defective was said to militate against the resolution of detailed submissions inviting a minute analysis of the impugned statement of claim; see Scottish Pacific Business Finance Pty Ltd v Soundstage Australia Ltd (1993) ATPR 41-273 per French J at 41,677.

[26]

Section 170NC 13 Counsel for the applicant contended that s 170NC of the Act relevantly prohibits a person from taking or threatening to take industrial action or other action, with the intention of coercing another person to agree or not to agree to do one of the things specified in s 170NC(1)(c) and (d). 14 It was submitted that the principles relevant to the operation of s 170NC included the following: (a) the expression "other action" includes conduct of a kind taken by a person which does not fall within the definition of "industrial action" but which is related to the performance of work by employees for an employer; see National Tertiary Education Union v Commonwealth of Australia (2002) 117 FCR 114 at [138]-[139]. (However, in oral submissions Counsel for the applicant conceded that the High Court had observed in Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] 209 ALR 116that this proposition is not settled law). (b) the requisite coercion requires conduct that is compulsive in the sense that the pressure brought to bear, from a practical perspective, negates choice, and is unlawful, illegitimate or unconscionable; see Finance Sector Union v Commonwealth Bank of Australia (2000) 106 FCR 16 at [18]-[38]; National Union of Workers v Quenos (2001) 108 FCR 90 at [128]; Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("CEPU") (2001) 109 FCR 378 at [41]; Anglo Coal Pty Ltd v CFMEU [2003] FCA 1073 at [19]; (c) a respondent must have actual knowledge of the circumstances that make the conduct coercive. Knowledge of the probability of the intended result is not required. A person will not escape liability by establishing a belief that the conduct was lawful. If a person deliberately refrains from making enquiries because the person knows the probable consequences of the enquiries, constructive knowledge equivalent to actual knowledge will be established; see Seven Network v CEPU (supra) at [33]-[37] and Anglo Coal v CFMEU (supra) at [19]; (d) the proscribed intent need not be the sole reason for the conduct, as long as it is a substantial or operative reason; see Hanley v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union ("AFMEPKIU") (2000) 100 FCR 530 at [45]; and (e) in judging whether coercion was intended, the Court may have regard to the characteristics of the parties; see Finance Sector Union v Commonwealth Bank (supra) at [38].

[38]

Identifying the material facts upon which the allegations of "unlawfulness", "unconscionability" and "illegitimacy" are based 35 Counsel for the third respondent and Sheedy advanced two reasons why the material facts upon which the applicant's allegations are based should be pleaded. First, the pleading should be expanded to avoid taking the respondents by surprise (see O11 r 5 and O 11 r 10(b)). Second, it was submitted that the material facts ought to be pleaded as this is a penalty proceeding and "those who allege criminality or other illegal conduct should prove it"; (see Rich at [24], referred to at [27] above; see also par 63 of Mr Wood's memorandum of 17 September 2004). As to the elements of any unlawfulness etc., it was submitted by Counsel for the third respondent and Sheedy that they should not be forced to guess at the unlawfulness relied on; (see par 14 of Mr Wood's memorandum). If the unlawfulness alleged is, for example, a breach of contract, it was submitted that the contract, the term and the breach should each be specifically identified. The applicant should have no difficulty in complying with that requirement because it is clear from par 53 of the new statement of claim it is aware of the terms of the contract with W. M. Loud. 36 It was further submitted for the third respondent and Sheedy that the same goes for unconscionability. No attempt has been made to plead facts establishing "a special disability" and "an absence of a reasonable degree of equality" and "that the disability was sufficiently evident" and so on; (see, for example, Louth v Diprose (1992) 175 CLR 621, at 637). Counsel submitted that the allegation of unconscionability etc. has been added to the pleadings because Seven Network v CEPU refers to those concepts, not because the facts of the present case support those pleas (unless there are additional facts yet to be pleaded). It was contended, for example, that it is highly unlikely that the applicant will be able to establish facts necessary to plead some "special disability", as between the two companies.

[53]

40 Thus, an element of any contravention of the subsection is the taking or threatening to take action, or refraining, or threatening to refrain, from taking action with the proscribed intent directed to one of the matters identified in pars (c) and (d). As I understand it, the "action", which the applicant intends to allege that either or both the third respondent and Sheedy have taken or threatened to take in contravention of s 170NC(1)(a), is either or both: (i) the cancellation of the existing contract between W.M. Loud and the third respondent; (ii) refusing to consider W.M. Loud in the allocation of future sub-contracts which, in the ordinary course, W.M. Loud would be capable of performing. 41 As s 170NC(1) (b) is expressed as an alternative to s 170NC(1)(a), it is open to the applicant, if the allocation of future sub-contracts is regarded as "action" within the sub-section, to plead facts to make out an allegation of refraining, or threatening to refrain from taking that action. 42 Additionally to the elements required by one or other of pars (a) and (b) of s 170NC(1), a contravention requires that the taking or threatening to take action, or the refraining or threatening to refrain from taking action be "with intent to coerce" W.M. Loud to agree to making a certified agreement with the CFMEU or a certified agreement which complied with the VBIA, or to varying its existing agreement with the AWU. 43 I do not understand it to be suggested that the third respondent had any intent to coerce W.M. Loud to agree to terminate, or extend the nominal expiry date of a certified agreement with the CFMEU, or of one complying with the VBIA since, ex hypothesi, no such agreement was in existence at the time of the alleged action. Nor is there any suggestion that any action by the third respondent was directed to W.M. Loud's agreeing to "approve" the making etc of a certified agreement with the CFMEU or one complying with the VBIA. 44 This analysis of the provisions of s 170NC(1) indicates that sub-pars (a) and (b) of par 5 of the prayer for relief in the proposed further amended application are inappropriate to identify "action" in the sense used in s 170NC(1)(a) or (b). The "action" does not consist of "threatening and/or advising" anything. However, proof of a threat to take or refrain from taking "action" is one way of establishing a contravention based on one or other of those paragraphs. I also consider that there is much force in the complaint of the third respondent and Sheedy that it is not clear from the proposed further amended application whether each of them is alleged to have committed more than one contravention of s 170NC(1) or whether it is intended to allege a number of single contraventions, each an alternative to the other. If the latter is the applicant's intention, par 5 of the further amended application could be cast in some such form as the following; "The imposition of a penalty under s 170NF of the Act upon the Third Respondent for its contravention between 22 August 2003 and November 2003 of s 170NC constituted by: (a) refusing to consider W.M. Loud in the allocation of future sub-contracts for work which W.M. Loud was capable of performing with the intent to coerce W.M. Loud to agree:- (i) to make an agreement with the First Respondent under Division 2 or 3 of Part VIB of the Act ("the first proscribed agreement"); or alternatively; (ii) to make an agreement under Division 2 or 3 of Part VIB of the Act that complied with the terms of the industrial instrument described as the Victorian Building Industry Agreement 2000-2005 (VBIA) ("the second proscribed agreement") or alternatively; (iii) to vary the certified agreement between W.M. Loud and the Australian Workers Union entitled "AWU W M Loud Agreement 2003 made under Division 2 of Part VIB of the Act ("2003 Agreement") ("the proscribed variation"). (b) alternatively, threatening to refuse to consider W.M. Loud in the allocation of future sub-contracts for work which W.M. Loud was capable of performing with the intent to coerce W.M. Loud to agree; (i) to make the first proscribed agreement; or alternatively (ii) to make the second proscribed agreement; or alternatively (iii) to make the proscribed variation. (c) alternatively cancelling or purporting to cancel the contract with the intent to coerce W.M. Loud to agree; (i) to make the first proscribed agreement; or alternatively (ii) to make the second proscribed agreement; or alternatively (iii) to make the proscribed variation. (d) alternatively, threatening to cancel the contract with the intent to coerce W.M. Loud to agree; (i) to make the first proscribed agreement; or alternatively (ii) to make the second proscribed agreement; or alternatively (iii) to make the proscribed variation. (e) alternatively refraining from allocating to W.M. Loud future sub-contracts for work which W.M. Loud was capable of performing with the intent to coerce W.M. Loud to agree; (i) to make the first proscribed agreement; or alternatively (ii) to make the second proscribed agreement; or alternatively (iii) to make the proscribed variation. (f) alternatively threatening to refrain from allocating to W.M. Loud future sub-contracts for work which W.M. Loud was capable of performing with the intent to coerce W.M. Loud to agree; (i) to make the first proscribed agreement; or alternatively (ii) to make the second proscribed agreement; or alternatively (iii) to make the proscribed variation." 45 If the applicant intends to allege that the third respondent and Sheedy have committed more than one contravention of s 170NC(1), the structure of the paragraph of the prayer for relief suggested at [44] above will have to be adjusted to indicate clearly which contraventions are additional and which are alleged in the alternative.

[106]

The fact that Harvey gave W.M. Loud the "advice" or "encouragement" referred to in pars 42 and 47 is, for the reasons explained at [53] and [58] above, not material to an allegation that the third respondent took or threatened "other action" within the meaning of s 170NC(1). However, the giving of the advice or encouragement may constitute particulars of matters from which the requisite intent on the part of the third respondent may be inferred with the aid of s 349(3). 68 Similar considerations apply to the allegations in par 50. Insofar as that paragraph alleges a cancellation of the contract by Zahopoulos, that "action" will be taken, by force of s 349(2) to have been engaged in by the third respondent. 69 However, the allegation in par 52 that Zahopoulos sent the letter of 8 September 2003 "at the initiative of and/or on the instructions of Sheedy" is superfluous unless the third respondent puts in issue whether the sending of the letter was within the scope of the actual or apparent authority of Zahopoulos. In that event, any pleading, in addition to the short form suggested at [62] above, directed to the authority of Zahopoulos can be by way of reply. 70 The "conduct" attributed to Sheedy in pars 44, 45, 46, 48 [other than 48(c)] and 52 suffers from the same vice and, for the reasons already explained, par 61(a)(iii) should not be preserved in the new version. 71 The imputation in par 61(b) to the third respondent of the respective "state of mind" of each of Harvey, Zahopoulos and Sheedy is embarrassing and should not be preserved in the revised pleading. The relevant "state of mind" within s 349(3) for the purposes of s 170NC(1) is the intent to coerce W.M. Loud to make one or other of the proscribed agreements or to make the proscribed variation. The knowledge of officers of a corporation may be relevant to whether it, or a particular officer, had the requisite intent but, in that event, reference to that knowledge should be included in particulars of the matters from which it is said the intent should be imputed to the corporation.

[120]

Paragraph 52 78 This paragraph alleges that the third respondent sent the letter referred to in par 50 discussed at [61] above "at the initiative and/or on the instructions of Sheedy." This pleading is open to a number of interpretations and is embarrassing. The use of the convention "and/or" in pleading has been succinctly criticised by Burchett J in Re Moage Ltd (in liquidation); Moage Ltd v Jagelman (1998) 153 ALR 711 where, after reviewing a number of authorities deprecating its use in other contexts, his Honour said, at 717; 'In my opinion, the expression is particularly unhappy when it is used in a statement of claim, which should express precisely the foundation of the proceeding. In the present case, as has been explained, an almost endless series of additional and alternative allegations would be conveyed by an analysis of the claim made in this way.' 79 The allegation that the letter of cancellation was sent "at the initiative" of Sheedy is too vague to enable him to plead to it in a defence. It is capable of meaning that Sheedy instructed Zahopoulos to write the letter. Alternatively, it may mean that Sheedy recommended to the directors of the third respondent that the letter be sent. The uncertainty is compounded by the allegation that the letter was sent "on the instructions of" Sheedy. That allegation is preceded by the objectionable convention "and/or" to which I have already alluded. Accordingly, Sheedy is left to guess at exactly what he is alleged to have done in connection with the letter. 80 Even more significantly, the allegation in par 52 is devoid of any indication of why whatever Sheedy did in connection with the letter was done with the intent personally to coerce W.M. Loud to enter into a proscribed agreement or make the proscribed variation. The contract which the letter of 8 September 2003 cancelled, or purported to cancel, was not Sheedy's contract. The only parties to it were, presumably, the third respondent and W.M. Loud. Accordingly, any action by Sheedy in relation to the contract would, in the ordinary course, have been taken by him in his capacity as an employee of the third respondent and on its behalf. It would follow that any intent which Sheedy had at the time of taking the action would have been the intent, not of Sheedy personally, but of the third respondent. 81 For these reasons par 52 in its present form should not be reproduced in the new version.

[136]

I have already remarked, at [78] above that it is undesirable to use the convention "and/or" in a pleading like the present. I am by no means sure that the word "illegitimate" adds anything to "unlawful" in this context. Merkel J seems to have derived "illegitimate" from the analysis of Gyles J in Finance Sector Union v Commonwealth Bank (2000) 106 FCR 16 at 24 from where it can be traced through Schanka v Employment National (Administration) Pty Ltd (2000) 97 FCR 186 to the statement of McHugh JA in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40 at 46 that: 'Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.' See also Cadbury Schweppes Pty Ltd v Australian Liquor Hospitality and Miscellaneous Workers' Union (2000) 106 FCR 148, where Finkelstein J remarked, at 153 [19]; '… … Pressure will be illegitimate if it involves unlawful action (eg breach of contract or commission of a tort) or the threat of unlawful action. However, as the cases show, there may be duress even if the action, or threatened action, is lawful. … …' 90 Those authorities suggest that "illegitimate" is largely, if not entirely, synonymous with "unlawful" but it may extend to conduct which, although not unlawful, is "unconscionable". However, whatever ultimately be held to be the reach of "illegitimate", it is necessary, I consider, for the applicant to specify separately each action or threat said to be "unlawful", each action or threat said further or alternatively to be "illegitimate" and each action or threat said further or alternatively to be "unconscionable." Particulars should then be given of the acts, circumstances and things said to constitute each unlawfulness, illegitimacy or unconscionability as the case may be. The particulars subjoined to the present par 59 go only to unlawfulness and are essentially circular. If it is to be alleged that the cancellation of the contract was unlawful as a breach of the contract, the particulars should say so with reference to the relevant provisions of the contract. As already explained, that form of unlawfulness could only be alleged against the third respondent as the only other party to the contract with W.M. Loud. However, if the allegation of unlawful action by Sheedy personally is to be persisted in, the relevant particulars should disclose matters amounting to his having procured, or threatened to procure, a breach of the contract by the third respondent.

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