BETWEEN : LEIGHTON CONTRACTORS PTY LTD (ABN 98 000 893 667)

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS

Industrial law - Building & Construction Industry Improvement Act 2005 (Cth) - Application for interlocutory injunction to restrain the taking of unlawful industrial action - Whether serious question to be tried that defendants were knowingly concerned in or party to unlawful industrial action - Balance of convenience - Terms of injunction

Building & Construction Industry Improvement Act 2005 (Cth), s 4, s 37, s 38, s 39, s 48, s 49

Intervener: Australian Building and Construction Industry Commissioner : Mr R L Hooker

Intervener: Australian Building and Construction Industry Commissioner : Phillips Fox

Ashbury v Reid [1961] WAR 49

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380

R v Tannous (1987) 10 NSWLR 303

Transfield Pty Ltd v Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia [2002] FCA 870

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Barlow v Neville Jeffress Advertising Pty Ltd [1994] TASSC 181; (1994) 4 Tas R 391

Bullock v Federated Furnishing Trades Society of Australasia [1985] FCA 19; (1985) 5 FCR 464

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148

CGM Investments Pty Ltd v Chelliah (No 2) [2003] FCA 305

Connorville Estates Pty Ltd v Hydro-Electric Commission [1967] Tas SR 26

Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2002] FCA 61

Hooper v Rogers [1975] Ch 43

John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] WASC 146

Kilpatrick Green [1998] FCA 559

Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union [2006] WASC 47

Patrick Stevedores Operations No 2 v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1

R v Federal Court of Australia; ex parte WA National Football League [1979] HCA 6; (1979) 143 CLR 190

Redland Bricks Ltd v Morris [1970] AC 652

The Commonwealth of Australia v Tasmania [1983] HCA 21; (1983) 158 CLR 1

The Commonwealth v The Progress Advertising and Press Agency Co Pty Ltd [1910] HCA 28; (1910) 10 CLR 457

United Group Infrastructure Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2005] FCA 1926

1 LE MIERE J: The plaintiffs apply for an interlocutory injunction to restrain the defendants from undertaking unlawful industrial action or participating in unlawful industrial action taken by employees of the plaintiffs and of the plaintiffs' subcontractors engaged in the construction of the Metro City Rail Project.

2 The project is to extend the Perth railway system and includes building a new rail link from Perth to Mandurah. The Metro City Rail Project is divided up into a series of packages, one of which was formerly known as Project F and is now known as the New Metro Rail City Project ("the Project"). The first plaintiff and the Public Transport Authority have made a contract entitled "New Metro Rail City Project Design, Construction & Maintain Project Deed Contract No 27/03" ("the Project Contract") by which the first plaintiff agreed to design, construct and maintain the specified project works. The first plaintiff has subcontracted the design, construction and maintenance of the works to a joint venture comprising the first plaintiff and the second plaintiff ("the Joint Venture"). The Joint Venture has, in turn, subcontracted various aspects of the works to subcontractors ("the Subcontractors").

3 There is evidence of a long history of industrial action in relation to the Project since work commenced in about July 2004. On 6 December 2005 Commissioner Gregor of the Australian Industrial Relations Commission issued an order under s 127 of the Workplace Relations Act (Cth) against the first defendant and the members of the first and second defendants. The stop order, described by the parties as the Project life time ban order, ordered the first defendant and the members of the first and second defendants to stop industrial action and not engage in industrial action on the Project for the term of the project. Notwithstanding that order the plaintiffs allege that the defendants and their members continued to engage in unlawful industrial action.

4 On 13 February 2006 the plaintiffs commenced this action. By their statement of claim the plaintiffs allege that the defendants or members of the first and second defendants have engaged in 31 episodes of unlawful industrial action on or in relation to the Project between July 2004 and March 2006.

5 On 13 February 2006 the plaintiffs applied by chamber summons for an injunction under s 39 and s 49(1)(c) of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act") or under the general law against each of the defendants restraining them from interfering with the due performance of the Project Contract, the Joint Venture Contract, the sub-contracts between the plaintiffs and specified Subcontractors and the contracts of employment between those Subcontractors and the Subcontractors' employees employed to work on the Project. That is the application presently before the Court. The plaintiffs also sought an injunction restraining the defendants from interfering with the business of the plaintiffs. In the meantime there have been two other interlocutory hearings to which I will shortly refer. However, I will first make some reference to the BCII Act.

BCII Act

6 The BCII Act was described by the Minister for Employment and Workplace Relations in his Second Reading Speech as a specifically targeted legislative measure to address the unlawful conduct of unions in the building and construction industry. The Act creates a new statutory norm that provides that industrial action of the sort captured by the Act is unlawful unless it is protected industrial action within the meaning of the Workplace Relations Act. If unions or other parties take unlawful industrial action they are subject to civil penalties. Parties who take unlawful action may be ordered by a court to pay substantial uncapped compensation to any person affected by the unlawful industrial action.

7 Section 38 of the BCII Act provides that a person must not engage in unlawful industrial action. Unlawful industrial action is defined in s 37. Subsection 49(1) provides that an appropriate court, on application by an eligible person, may make one or more of the specified orders in relation to a person who has contravened a civil penalty provision. Subsection 48(1) defines an appropriate court to include this Court. Subsection 49(6) defines an eligible person to include a person affected by the contravention. The plaintiffs are persons affected by the alleged contraventions. Section 38 is a civil penalty provision as defined in s 4. Thus, s 49(1) empowers this Court on the present application, to make one of the orders specified in subs 49(1) in relation to a person (the defendant) who has contravened s 38.

8 The orders specified in s 49(1) are:

(a) an order imposing a pecuniary penalty on the defendant;

(b) an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;

(c) any other order that the court considers appropriate.

Subsection 49(3) provides that the orders that may be made under par (1)(c) include:

(a) injunctions (including interim injunctions); and

(b) any other orders that the court considers necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets.

9 There is evidence of a series of unlawful industrial actions by employees of the plaintiffs or the Subcontractors ("the Employees"). That history is set out in the affidavit of Robert John Wallwork, the first defendant's project director, sworn 10 February 2006. The plaintiffs place particular reliance upon the industrial action taken by Employees between 24 February and 13 March 2006. That action, which I will discuss in further detail later, followed the termination of the employment of Peter Ballard, a Joint Venture employee and delegate of the first defendant.

10 On 8 December 2005, Wallwork issued Ballard with a written warning regarding his failure to comply with the terms of his employment. Wallwork has sworn that on 14 February 2006 Ballard directed or informed employees of the Joint Venture to stop work and go home by reason of hot weather and on 15 February 2006 Ballard directed or informed employees of the Joint Venture to stop work and go home by reason of rain.

11 On 17 February 2006 Wallwork and Doug Bevan, the first plaintiff's employee relations manager, met with Kevin Reynolds, the state secretary of the first defendant and the secretary of the second defendant, the third defendant (McDonald), who is the assistant secretary of the second defendant and assistant state secretary of the first defendant, and Ballard to discuss Ballard's conduct on the Project and to table a warning letter to Ballard regarding his conduct and requesting an undertaking in writing from Ballard to comply with the requirements of the project agreement known as the Structural Agreement as an employee of the Joint Venture. Wallwork told Ballard that failure to sign the undertaking might result in the termination of Ballard's employment. Reynolds said that he would give the undertaking as secretary of the second defendant and that Ballard did not have to do so. Wallwork said that was not sufficient. Reynolds replied that he would take legal advice on whether Ballard should sign the undertaking.

12 On 22 February at 7.45 am Bevan and Wallwork went to Ballard's office at the Esplanade site compound and asked him if he would give the Joint Venture the undertaking requested. Ballard replied that he would not and that he did not have to sign anything. Wallwork said that he would write to Ballard informing him that his employment had been terminated.

13 At another meeting at 9.30 am that day attended by, amongst others, Ballard and Mick Buchan, an industrial officer with the first defendant, Ballard again informed Wallwork that he would not give an undertaking. Later that day, 22 February, Wallwork wrote to Ballard advising him that his employment was terminated.

14 There was a further meeting at 2 pm attended by McDonald, Buchan, Tim Kucera, an industrial officer of the first and second defendants, Wallwork, Bevan and Erica Hartley, a partner with the plaintiffs' solicitors, Freehills. McDonald stated that Ballard had gone home sick and that the first defendant had received legal advice on the undertaking required of Ballard and was yet to advise Ballard on its contents. Kucera asked that a meeting be held by the first defendant with the Joint Venture's employees on Friday morning to discuss progress on the RDO/PDO calendar discussions. The certified agreement covering work on the Project allows for certain rostered days off ("RDO") and paid days off ("PDO"). In January 2006 McDonald had informed Wallwork of demands concerning the RDO/PDO calendar for 2006 that was drawn up in accordance with the certified agreement. The issue over the RDO/PDO calendar had been the subject of discussions in a conference at the Australian Industrial Relations Commission on 20 February 2006. Later on 22 February 2006 Bevan, on instructions from Wallwork, wrote to Kucera informing him that the Joint Venture would agree to the meeting occurring between 6 am and 7 am on 24 February.

15 On the morning of 24 February 2006 there were discussions between Wallwork, Ballard and McDonald about the termination of Ballard's employment. Employees began gathering at the Esplanade Reserve at 6 am. The meeting commenced at approximately 6.20 am. There were discussions and a break in the meeting that I will refer to in further detail later. At approximately 8.15 am the Employees began leaving the site. They did not return to work until 9 March. The plaintiffs submit that the strike was in protest at the dismissal of Ballard and was unlawful industrial action.

16 Section 49 of the BCII Act, which empowers the Court to make specified orders in relation to a person who has contravened a civil penalty provision such as s 38, is in the same part of the Act as s 48. Subsection 48(2) provides that for the purposes of that part of the Act, a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision. The subsection further provides that a person is involved in a contravention of a civil penalty provision if, and only if, the person:

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced the contravention, whether by threats or promises or otherwise; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d) has conspired with others to effect the contravention.

17 The plaintiffs' case is that the defendants were knowingly concerned in or party to the contravention of s 38 of the Act by the unlawful industrial action of the Employees in striking from 24 February to 9 March 2006. It is common ground that the Employees have engaged in unlawful industrial action in relation to the Project, including the strike from 24 February to 9 March 2006, or at least that there is serious question to be tried that they have. The issue between the parties is whether or not there is a serious question to be tried that the defendants were involved in that contravention of s 38.

18 The strike commenced on 24 February 2006 after the plaintiffs had filed their application for an interlocutory injunction but before it had been heard. On 24 February the plaintiffs brought on an urgent application for an interim injunction to restrain the defendants from carrying out actions which interfere with the performance of the Project Contract, the Joint Venture Contract and the contracts between the plaintiffs and the Subcontractors. I found that there was a serious question to be tried that the defendants had been by act or omission, directly or indirectly, knowingly concerned in or party to the unlawful industrial action commenced by the Employees on that day. I found that the balance of convenience favoured the grant of interim relief. I granted an interim injunction until 5 pm on 16 March 2006 or further order pursuant to s 39 and s 49(1)(c) of the BCII Act restraining the defendants from interfering directly or indirectly with the due performance of certain specified contracts which are contracts pursuant to which the plaintiffs carry out work on the Project. The order provided that the defendants were restrained from interfering directly or indirectly with the due performance of those contracts by any of the means set out in three subparagraphs which included, in effect, taking industrial action or inducing, aiding, abetting, encouraging, directing, procuring, authorising or advising any person not to perform their employment with the Joint Venture or any Subcontractor, or to perform their employment otherwise than in accordance with the terms of their employment or in a manner with which their work is customarily performed.

19 On 3 March 2006 the plaintiffs applied for further interim injunctions. The circumstances in which the further orders were sought and the basis for seeking the orders is set out in the affidavit of Wallwork sworn on 2 March 2006 in which Wallwork deposes to events which occurred since the order made on 24 February. Those events include two further meetings of, or including, the Employees.

20 The first of these meetings occurred on 28 February 2006. Wallwork swore that at 6.50 am he observed the Employees gathering at the podium on the Esplanade Reserve. He could see McDonald and Buchan. He could see McDonald talking to Employees. At approximately 7.15 am the meeting broke up and the Employees left the reserve. They did not return to work.

21 The second meeting was on 2 March. Wallwork swore that at about 6.45 am he observed Employees leaving the site compound and walking over to the podium. He observed Buchan, McDonald, another union organiser, Mr Heath, and Ballard at the podium on the Esplanade Reserve. Wallwork saw McDonald speaking to the Employees. The meeting concluded at 7.45 am and the Employees returned to the car park and left the site. In his affidavit of 2 March 2006 Wallwork exhibited a transcript of a radio interview on 2 March in which McDonald referred to the meeting which had occurred earlier that day. McDonald said that the meeting was a meeting for union members. He said that a resolution had been put from the union that the workers should return to work and let the Industrial Relations Commission settle the matter but that that resolution was voted down unanimously.

22 On the hearing of the plaintiffs' application on 2 March 2006 the defendants applied for an order that the order that I made on 24 February 2006 be vacated. That application was brought on the basis that the order I made on 24 February 2006 was made per incuriam, that is by mistake of the Court. Counsel sought to put before the Court authorities which were not put before the Court on 24 February to establish that on 24 February I had not had regard to the proper construction of s 48(2) of the BCII Act. Counsel submitted that if the proper approach to the construction of that subsection was applied to the evidence that was before the Court the order made on 24 February would not have been made. Having reviewed s 48(2) of the BCII Act and the relevant evidence I declined to vacate the order that I had made on 24 February 2006 and dismissed the defendants' application.

23 The orders sought by the plaintiffs on 3 March 2006 fell into two categories; the first being the imposition of pecuniary penalties, the second being the imposition of a further interim order by way of injunction restraining the defendants from organising, attending, running, addressing or directing any meeting of the Employees or any meeting of the members of the first or second defendants who are Employees which meeting was in any way concerned with the performance of their obligations under their contracts of employment. I refused to impose any penalties on the ground that the Court does not have power under BCII Act, s 49(1) or (3) to make an order imposing pecuniary penalties on a person on an interim basis where there is a serious question to be tried that the person has been involved in a contravention of a civil penalty provision but the Court has not found that the person has contravened the civil penalty provision. I declined to make the further injunctions sought by the plaintiffs on the ground that it would be inappropriate for the Court to prevent the defendants from putting to their members and to the Employees a recommendation that they return to work.

24 It is common ground that in engaging in the strike from 24 February to 9 March 2006 and other industrial action, the Employees have engaged in unlawful industrial action in relation to the Project or at least that there is a serious question to be tried that they have done so. The question on this application is whether or not there is a serious question to be tried that the defendants were involved in that unlawful industrial action. As I have said the plaintiffs submit that there is a serious question to be tried that each of the defendants has been knowingly concerned in or party to the unlawful industrial action engaged in by the Employees, particularly the strike between 24 February and 9 March 2006.

Knowingly Concerned and Party to the Contravention

25 A person is directly or indirectly knowingly concerned in or party to a contravention if he or she has full knowledge of the essential facts or matters constituting the contravention and is an intentional participant by virtue of some act or conduct on his or her part which contributes to the commission of the offence. The person must engage in some act or conduct, including an intentional omission, which implicates or involves him or her in the contravention.

26 In Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 670 the High Court held that to be knowingly concerned in a contravention of the Trade Practices Act 1974 (Cth), required a party to be an intentional participant, the necessary intent being based on knowledge of the essential elements of the contravention. In this case, the issue is not whether or not McDonald, and through him the other defendants, knew of the essential elements of the contravention by the Employees but whether he was an intentional participant in that conduct.

27 In addition to actual knowledge, the actions of the person must have contributed to the commission of the contravention. In Ashbury v Reid [1961] WAR 49 the Full Court said that the court should determine (at 51):

"... whether on the facts it can reasonably be said that the act or omission shown to have been done or neglected to be done by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connexion between him and the offence."

28 In the course of argument a number of authorities concerning the meaning and application of provisions similar to s 48(2) of the BCII Act were cited. In Transfield Pty Ltd v Communications Electrical Electronic Energy Information Postal Plumbing & Allied Services Union of Australia [2002] FCA 870 a number of employees stopped work after a meeting attended by union representatives, including Mr Lee. Mr Lee had told the employees what had happened in the Australian Industrial Relations Commission the previous day in relation to a claim by the union in relation to a site allowance. Mr Lee put forward a recommendation that members of the unions return to work as soon as possible and spoke in favour of a return to work. The members rejected the recommendation and went on strike. On that evidence Heerey J was not satisfied that there was a triable issue either that the unions had engaged in conduct directing, inducing, encouraging or procuring the Employees to stop work or that they were likely to do so in the future.

29 A person is not involved in a contravention unless he assents to or concurs in the conduct which constitutes the contravention. To be involved in a contravention requires that the person have a practical connection with the contravention. However, it is not necessary that the person physically do anything to further the contravention. It is sufficient if the person, by what he said and agreed to do, in fact became associated with and thus involved, in the relevant sense, in the conduct constituting the contravention: see R v Tannous (1987) 10 NSWLR 303 at 308.

30 A person might vote against a course of conduct and subsequently assent to and associate himself with it. The principle of cabinet solidarity is an example.

Were the Defendants involved in the Contravention?

31 In his affidavit of 24 February 2006 Mr Wallwork gave evidence of the meeting on 24 February 2006 as follows. At about 5.50 am Wallwork told Ballard that his termination payment had been deposited to his bank account. Several minutes later Ballard returned with McDonald. Wallwork said that the letter of dismissal had been sent to Ballard's address as recorded on his file. Ballard said that he did not live there any longer. McDonald asked that a copy of the letter be given to Ballard and himself. Wallwork agreed to cause a copy of the letter to be obtained from head office and be sent to Ballard and McDonald.

32 At about 6 am Employees began gathering at the Esplanade Reserve. The meeting commenced at approximately 6.20 am. McDonald addressed the meeting. Shortly after commencing, McDonald moved the meeting from the podium area across to the far eastern side of the Reserve. It was more difficult for Wallwork to observe proceedings in that location.

33 At approximately 7.30 am Employees walked back to the podium. A group including McDonald approached Wallwork. McDonald asked if the Joint Venture would reinstate Ballard if he signed the undertaking. Wallwork then consulted other representatives of the Joint Venture. Wallwork informed McDonald that the Joint Venture would reinstate Ballard subject to several conditions, firstly, that Ballard sign the undertaking, secondly, that the union accept the RDO/PDO calendar as set by the Joint Venture in accordance with the certified agreement, and thirdly that it be understood that the tunnelling would proceed as one of the "special contract needs" during the no-work weekends and emergency works also proceed through the no-work weekends as required.

34 At approximately 7.45 am Wallwork's meeting with McDonald ended so that McDonald could put the offer to the Employees assembled on the Reserve. At approximately 8.15 am the meeting between Wallwork and McDonald reconvened. McDonald stated that he had put the terms to the men and had personally recommended that the men return to work. McDonald said the Employees would not agree to the conditions offered by the Joint Venture and that they wanted Ballard reinstated without conditions, and that they would be out until Tuesday. McDonald stated that the unions would agree to the RDO and tunnelling issues being referred to the Australian Industrial Relations Commission for further discussion. Wallwork said that the Joint Venture would not agree to that response to its offer. The Employees were progressively leaving the site as McDonald and Wallwork had that conversation. The Employees did not return to work following the meeting on the Esplanade Reserve.

35 As I have set out above, McDonald later participated in a radio interview concerning what had occurred.

36 On that evidence, McDonald did more than merely attend a meeting and recommend to the Employees that they return to work. It is open to the tribunal of fact to infer that McDonald convened the meeting and presided over it. McDonald acted as the spokesman for the striking Employees in presenting its response to the Joint Venture representative and in speaking about the matter on the radio. It is open to infer that McDonald associated himself with the unlawful industrial action.

37 I am not required to decide whether or not the defendants were knowingly concerned in or participated in the contravention constituted by the unlawful industrial action engaged in by the Employees. I am required only to decide whether or not there is a serious question to be tried that they did so. I find that there is a serious question to be tried.

38 Under the Project Contract the first plaintiff is obliged to ensure that the project works are completed by the date specified for practical completion and its obligations are carried out with all due expedition. If the first plaintiff does not complete the works by the date specified for practical completion it must pay liquidated damages of $52,000.00 per day capped at $16,686,380.45. In addition to the liquidated damages to which the plaintiffs are exposed, there is evidence that a lost working day also incurs additional losses such as overhead salary costs and other overhead costs. There is evidence that the loss incurred by the first plaintiff, by reason of a lost working day, is approximately $175,000.00 - $185,000.00 per day. The evidence establishes that if the Employees engage in unlawful industrial action the plaintiffs will be exposed to substantial financial loss.

39 A further significant factor in considering the balance of convenience is that the Project works relate to a major public project, namely the extension of the rail system, and that the delay of those works is not in the public interest.

40 Counsel for the defendants submitted that in considering the balance of convenience the Court should have regard to the fact that the interim injunction granted after 24 February and continued on through March 2006 was granted in circumstances where a strike was continuing, but that the strike has now finished. Counsel submitted that there was no impending or probable or threatened prospect of industrial action. Furthermore, Commissioner Gregor had made the s 127 order on 6 December 2005 which effectively prohibits industrial action on the Project.

41 Subsection 49(3) provides that the court may grant an interim injunction in relation to a person (the defendant) who has contravened a civil penalty provision. Subsection 49(4) provides that if the contravention is a contravention of s 38, then the power of the court to grant an injunction restraining the defendant from engaging in conduct may be exercised whether or not it appears to the court that the defendant intends to engage again, or to continue to engage, in conduct of that kind.

42 Furthermore, the fact that the Employees have not engaged in unlawful industrial action since 9 March 2006, if that be a fact, must be viewed in light of the fact that the interim injunction granted on 24 February 2006 has continued to operate since then. Importantly, there is evidence that the Employees have engaged in extensive unlawful industrial action on the project since July 2004. Even after the s 127 order made by Gregor C on 6 December 2005 there has been industrial action - two unauthorised meetings of an hour each, a two day strike on 25 January 2006 and then the 13 day strike from 24 February 2006. That course of conduct shows that the existence of the s 127 order is not of itself sufficient to ensure that no unlawful industrial action will take place.

43 I find that the balance of convenience favours the granting or continuation of an injunction to restrain the defendants from participating as a principal in, or an accessory to, unlawful industrial action. On the one hand, there is evidence of a history of unlawful industrial action on the Project and such action has caused, or exposed the plaintiffs to the risk of, substantial financial loss and has interfered with, or has the potential to interfere with, the expeditious carrying out of an important public project. On the other hand, the injunctions which are sought do no more than restrain the defendants from engaging in unlawful conduct.

44 In granting interlocutory relief, the Court should generally grant the minimum relief necessary to do justice between the parties: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 409. I am not satisfied that it is necessary or appropriate to grant any injunction in wider terms than the interim injunction granted on 24 February 2006. Accordingly, I will grant an injunction until trial or further order in the same terms as the interim injunction granted on 24 February 2006.