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

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS

Industrial law - Building and Construction Industry Improvement Act 2005 (Cth) - Application for further interim injunction - Serious question to be tried - Balance of convenience - Imposition of interim pecuniary penalties - Proper construction of s 49 of Act - Question of contravention of civil penalty provision yet to be tried

Industrial law - Building and Construction Industry Improvement Act 2005 (Cth) - Application to discharge injunction - Whether previous order made per incurium - serious question to be tried - Meaning of "knowingly concerned in"

Building and Construction Industry Improvement Act 2005 (Cth), s 38, s 39, s 48, s 49

Application to vacate orders made on 24 February 2006 dismissed

Applications for further injunction and pecuniary penalties dismissed

Australian Building and Construction Commissioner : Mr R L Hooker

Australian Building and Construction Commissioner : Phillips Fox

Ashbury v Reid [1961] WAR 49

Australian Securities and Investments Commission v Doyle & Anor [2001] WASC 187

Bell v Australasian Recyclers (WA) Pty Ltd (1986) ATPR 40-644

Goulding v Waylen Enterprises Pty Ltd (1997) 140 FLR 309

R v Tannous (1987) 10 NSWLR 303

R v Wall [2002] NSWCCA 42

Sent v Jet Corporation of Australia Pty Ltd [1984] FCA 178; (1984) 2 FCR 201

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

1 LE MIERE J: The Court was convened on short notice to hear a chamber summons filed by the plaintiffs. The chamber summons sought a number of orders which may be summarised as follows. First, that the defendants be punished for contempt pursuant to the Rules of the Supreme Court or alternatively pursuant to s 49(1)(a) and (c) of the Building and Construction Industry Improvement Act 2005 which I will hereafter refer to as the Act; secondly, an order pursuant to s 49(1)(b) and/or s 49(1)(c) of the Act, that each defendant pay to the plaintiffs compensation for damage suffered by the plaintiffs as a result of contraventions of the Act; thirdly, an order that a pecuniary penalty be imposed on each of the defendants pursuant to s 49(1)(a) of the Act and that the defendants be directed to pay that pecuniary penalty to the plaintiffs; fourthly, an order pursuant to s 49(1)(c) of the Act that unless the Employees cease the unlawful industrial action and return to work on 6.30 am on Wednesday, 8 March 2006, a pecuniary penalty be imposed on each of the defendants pursuant to s 49(1)(a) of the Act and the defendants be directed to pay that penalty to the plaintiffs; fifth, an order pursuant to s 49(1)(c) of the Act that whilst the unlawful industrial action of the Employees continue, the defendants by themselves, officers, agents or otherwise, be restrained from organising, attending, running, addressing or directing any meeting of the Employees or any meeting of the members of the first and/or second defendants who are Employees. There were other more formal parts to the application.

2 During the course of the hearing of that summons the defendants sought orders under a chamber summons dated 3 March 2006 that had not been filed. Counsel for the defendants gave an undertaking to file the summons and I am advised by counsel that the summons has now been filed. That summons seeks an order that paragraph 1 of the orders that I made on 24 February 2006, upon the plaintiff's application for interim injunctions, be vacated.

3 On 24 February 2006, I made orders on the application of the plaintiff by summons of that same day, 24 February 2006, after hearing the application of the plaintiffs on an urgent basis. The orders that I made consisted of par 1 which was the substantive order and then some procedural consequential orders. It is par 1 of that order which the defendants seek by their summons to vacate.

4 That order provided that until 5 pm on 16 March 2006, or further order, an injunction be granted pursuant to ss 39 and 49(1)(c) of the Act against the defendants restraining them by their officers, officials, agents or otherwise howsoever 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 New MetroRail City Project.

5 The order provided that the defendants were restrained from interfering directly or indirectly with the due performance of those contacts by any of the means set out in three subparagraphs which included, in effect, taking any industrial action or inducing, aiding, abetting, encouraging, directing, procuring, authorising or advising any person not to perform their employment with the Leighton Kumagai Joint Venture or any subcontractor, or to perform their employment otherwise in accordance with the terms of their employment or in a manner with which their work is customarily performed.

Defendants' application to discharge injunctions

6 It is convenient to deal first with the defendants' application to vacate that order. The application was brought on the basis that the order 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 subsection 48(2) of the Act. Counsel submitted that if the proper approach to the construction of that subsection was applied to the evidence that was then before the court the order made on 24 February ought not to have been made.

7 It is necessary to refer to the context in which subsection 48(2) falls to be considered. Section 38 of the Act provides that a person must not engage in unlawful industrial action. It was common ground on 24 February that the persons described as the Employees in the order that I then made and who in essence are Employees of the plaintiffs, of the Leighton Kumagai Joint Venture and of subcontractors were engaging in unlawful industrial action.

8 The defendants themselves have not engaged in the unlawful industrial action. However, s 49 of the Act empowers the court to make certain orders in relation to a person who has contravened a civil penalty provision. Subsection 48(2) of the Act provides that for the purposes of that part a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision and that for that purpose 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.

9 Section 49 is in Pt 1 of ch 7 which is the part to which subsection 48(2) refers. The essential issue that was before the Court on 24 February to which this issue relates is whether or not there was a serious question to be tried that the defendants were persons involved in a contravention of a civil penalty provision by reason of them falling within the criteria set out in subsection 48(2).

10 I then 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 that contravention and therefore persons involved in a contravention.

"Knowingly concerned in or party to the contravention"

11 Counsel for the defendants today has taken me to a number of authorities that go to the meaning of, or proper construction of, the words "knowingly concerned in or party to the contravention". In general the authorities are to the effect that to be involved in a contravention it is necessary that the person concerned should know that the principal offender proposed to engage in a contravention and he should in some positive way be associated with that contravention.

12 To be knowingly concerned the person must have knowledge of each of the elements of the contravention. In this case the third defendant and by him the first and second defendants knew that the Employees intended to engage in unlawful industrial action in contravention of s 38 of the Act. However, in order to be knowingly concerned in a contravention the person must have had more to do with the subject matter of the complaint than merely having knowledge of the matter. The person must have in some positive way associated himself with the contravention.

13 In the Law Book publication "Trade Practices Law" the learned author says at par 18.300 in vol 2 that apart from the usual general defences to a criminal charge there are only two limitations on a defendants' liability to conviction when referring to the accessorial liability provisions of the Trade Practices Act 1974 (Cth). The learned author says that the defendant is not guilty of complicity if he does not manifest his assent to the principal offender's actions in a manner which promotes their performance or if his assent does not include at least recklessness to the possibility that they will occur; so something more than knowledge is required.

14 What is required is that in some way the defendant should have associated himself with or assented to the contravention. None of that is at odds with the construction of subsection 48(2) of the Act which I adopted and applied on 24 February. On that basis there is no foundation for me to vacate the order that I made on 24 February.

15 I confirm, for the reasons that I expressed on 24 February, that there is a serious question to be tried that the defendants were knowingly concerned in or party to the unlawful industrial action in contravention of s 38 of the Act on the grounds that through Mr McDonald they had knowledge of each of the essential elements of the contravention and there is a serious question to be tried that the conduct of Mr McDonald established, or that it might be inferred from that conduct, that he associated himself with or assented to the intended unlawful industrial action. For those reasons I will not vacate the order made on 24 February 2006.

16 I turn now to the plaintiffs' chamber summons. Counsel for the plaintiffs at the outset stated that the plaintiffs did not move for orders in terms of pars 1 or 2 of the chamber summons; that is, they do not seek today that the defendants be punished for contempt nor do they seek an order that the defendants pay compensation pursuant to subsections 49(1)(b) and (c) of the Act. Those matters will have to be dealt with in due course.

17 As the argument developed it became apparent that the orders sought by the plaintiffs 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 is in any way concerned with the performance of their obligations under their contracts of employment; that is, more colloquially, concerned with continuing industrial action.

18 I found on 24 February that there is a serious question to be tried that the defendants are persons involved in a contravention of s 38 and that remains the position today. So far as the balance of convenience is concerned I found on 24 February that the balance of convenience favoured granting interim injunctions to restrain the defendants from engaging in unlawful industrial action or in taking any action which induced, aided, abetted, encouraged, directed, procured, authorised or advised any person to engage in or continue to engage in unlawful industrial action by not performing their employment in a manner in which their work is customarily performed.

19 I find the balance of convenience favours the continuation of injunctions to restrain such conduct. However, today the plaintiffs seek a further order. In the course of argument the order which is sought has been refined and is now in the present form:

"An order pursuant to subsections 49(1)(c) and (3) of the Act that whilst the employees of the plaintiffs, of the Leighton Kumagai joint venture and the subcontractors previously named on the previous order are engaged on the construction of the New Metro City Rail Project known as Package F which employees, hereafter referred to as the Employees, continue to not perform their obligations under the terms of their employment with the plaintiff the Leighton Kumagai joint venture and the subcontractors, including by withdrawing their labour, the defendants shall not, whether by themselves, their officers, officials, shop stewards, delegates, employees, agents or otherwise howsoever organise, attend, run, address, direct or in any way participate in any meeting of the employees or any meeting of the members of the first and/or second defendants who are Employees which is in any way concerned with the performance of their obligations under the terms of their employment in respect of Package F and an injunction is hereby granted restraining the defendants whether by themselves, their officers, officials, shop stewards, delegates, employees, agents or otherwise howsoever from taking any such steps or actions."

20 The circumstances in which that further order is sought and the basis for seeking the order is set out in an affidavit of Robert John Wallwork sworn on 2 March 2006 in which Mr Wallwork deposes to events which have occurred since the order made on 24 February. Those events include two further meetings of or including the Employees.

21 The first of these meetings occurred on 28 February 2006. The evidence in relation to that meeting given by Mr Wallwork is that at 6.50 am he was standing in the eastern side of The Esplanade site compound when he observed the work force leaving the site and gathering at the podium on The Esplanade reserve. It was clear to him that the majority of the joint venture and subcontractor employees were at the meeting. He could see Mr McDonald, the third defendant, and Mr Buchan, an industrial officer of the first and second defendants in attendance. He could see Mr McDonald talking to members of the work force. The work force and Mr McDonald and Mr Buchan then moved from the podium to the far north-eastern side of The Esplanade reserve. The meeting commenced at approximately 7 am. Mr Wallwork could not see who addressed the meeting or what was being said. At approximately 7.15 am the meeting broke up and the work force left the reserve. The work force did not return to work.

22 The second meeting was on 2 March; that is yesterday. Mr Wallwork gives the following evidence in relation to that meeting. Around 6.45 am he observed the work force leaving the site compound and walking over to the podium. He observed Mr Buchan, Mr McDonald, another union organiser Mr Heath and Mr Ballard the union delegate, whose employment was previously terminated and which event is central to the unlawful industrial action, at the podium on The Esplanade reserve.

23 Mr Wallwork could see Mr McDonald speaking to members of the workforce and speaking to other people. At around 6.55 am Mr McDonald waved his arm in the air, pointing towards the north-eastern side of The Esplanade reserve. He was signalling to the workforce to move to the north-eastern side of the reserve. Mr McDonald and the others who were congregating at the podium then moved to the north-eastern side of The Esplanade reserve.

24 Mr Wallwork observed Mr McDonald addressing the meeting with a loudhailer but he could not hear what Mr McDonald was saying. The meeting concluded at 7.45 am and the workforce returned to the car park and left the site. Mr Wallwork was subsequently informed the workforce had withdrawn its labour until Wednesday, 8 March 2006.

25 Mr Wallwork also exhibits a transcript of a radio interview in which Mr McDonald participated. In that interview at about 8.45 am, Mr McDonald referred to the meeting which had occurred earlier that morning. Mr McDonald said that the meeting was a meeting for union members. He said that all union meetings are for union members. Mr McDonald said:

"There was a resolution put up from the union that the workers should return to work, but the resolution put forward from the union that workers should return to work and let the Industrial Relations Commission settle this, that was voted down unanimously."

Evidence opposing the making of further orders

26 The defendants have filed and read an affidavit of Timothy Robert Kucera, a legal officer employed by the second defendant, which affidavit was sworn today, 3 March. Mr Kucera deposes by way of hearsay as to what occurred at the meetings to which I have referred, having been informed by Mr McDonald and Mr Buchan in relation to those matters.

27 In relation to the meeting on 28 February, Mr Kucera says that Mr McDonald addressed the meeting and then gives first-hand evidence of what was said, he, Mr Kucera, having been present. Mr Kucera deposes that Mr McDonald told the workers that the first and second defendants, that is the unions, and he had been ordered not to interfere with the performance of work by the workers.

28 Mr McDonald said that the reason the injunction had been made was because he had chaired the meeting on the morning of 24 February and that he had reported the outcome of that meeting to the Leighton Kumagai joint venture site management. Mr McDonald told the workers or members, that the union defendants wanted them to resume work immediately. Mr McDonald told the workers that the situation was very serious for the first and second defendants and for themselves. Mr McDonald told the workers that they were exposed to very serious penalties for taking unlawful industrial action. Mr McDonald said a number of times that the first and second defendants' position was that they should return to work. Mr McDonald said that having made that recommendation, he was going to leave the meeting and Mr McDonald then withdrew from the meeting and left the area.

29 Mr Kucera also refers to the meeting on 2 March, incorrectly described in his affidavit as having occurred on 2 February. Mr Kucera says that Mr McDonald was present at the meeting and addressed the meeting. Mr McDonald repeated the same things that he had told the workers on 28 February. He made a forceful recommendation that the workers should return to work. A vote was taken on McDonald's recommendation to return to work and was overwhelmingly defeated. Mr Kucera then left the area and he has been informed by Mr McDonald that Mr McDonald withdrew from the area.

30 I must of course on the hearing of an interim injunction take account of the evidence both from the plaintiffs and from the defendants but if there is any conflict between that evidence not seek to resolve it but rather to see whether or not the plaintiffs have made out either a serious question to be tried or a basis upon which an injunction should be made or upon which a further order should be made even without having regard to the evidence of Mr Kucera.

31 The evidence of Mr Wallwork goes no further than that Mr McDonald attended both of the meetings on 28 February and 2 March, that Mr McDonald addressed those meetings and that subsequent to the meetings the Employees continued on strike, did not return to work. I have regard to the radio interview transcript in which Mr McDonald refers to the meeting as a union meeting and a meeting for union members. I also have regard to the fact that in that interview Mr McDonald again said that he had recommended that the workers should return to work.

32 In short there is no direct evidence that any of the defendants have at the meeting on 28 February or 2 March or otherwise expressly directed, encouraged or advised the workers to continue industrial action and not return to work. Indeed such evidence as there is of what occurred at the meetings is to the effect that Mr McDonald recommended to the workers that they should return to work.

33 The plaintiffs submit to me in effect that an inference should be drawn that the conduct of the defendants in relation to the meetings of 28 February and 2 March is likely to have had the effect of making it more likely that the unlawful industrial action would continue.

34 It is further put to me by the plaintiffs in effect that if the defendants or officials of the union defendants attend or participate in the meeting on 8 March it is more likely that the unlawful industrial action will continue than if they do not attend. I am asked to take judicial notice of a number of matters; in particular the plaintiffs submit in par 5 of their outline of submissions that the purpose of holding a union meeting and of taking a vote thereat is to authorise the first and second defendants in accordance with the unions' rules to enforce compliance by all of the union members who are employed on the site of a ban on labour in support of the first and second defendants' demand for Ballard's reinstatement.

35 The plaintiffs further submit in par 6 of their written submissions that it is through union membership that the first and second defendants effectively direct whether work is carried out on site by their members.

36 In my view I am not entitled to take judicial notice of the fact, if it be a fact, that the two unions, the state and federal union, effectively direct whether work is carried out on site by their members, nor am I able to draw from the evidence before the Court an inference to that effect.

37 Similarly, I am not entitled to take judicial notice that the purpose of holding a union meeting and of taking a vote thereat is to authorise the unions in accordance with their rules to enforce compliance by all of the union members who are employed on the site of a ban on labour and support of the defendants' demand for Ballard's reinstatement. Nor does the evidence presently before the court entitle me to draw that inference.

38 The evidence before the Court is that the unlawful industrial action is continuing and the Court is asked to exercise its discretion to make the further order to which I have referred. The defendants refer to a number of matters said to be relevant to the exercise of that discretion.

39 One is that the plaintiffs could have but have elected not to join as defendants in these proceedings any of the Employees who are engaging in the unlawful industrial action and to seek to have the Court exercise powers under s 49 of the Act against them for the purpose of stopping the unlawful industrial action.

40 A second matter that is put forward by counsel for the defendants is that the defendants have sought to have the dispute or disputes which are involved or associated with the unlawful industrial action conciliated or otherwise dealt with in the Australian Industrial Relations Commission, but that the plaintiffs have resisted that course.

41 In my view, it is a matter for the plaintiffs to determine against whom they seek relief in these proceedings. If relief should properly be granted against the defendants they have joined, then that relief should be granted notwithstanding that they have not sought relief against others.

42 So far as the reference to the Australian Industrial Relations Commission is concerned, I repeat what I said on 24 February. That is, the availability of industrial tribunals to deal with disputes between the parties is not a reason to refuse relief to a party that has made out a case that it is otherwise entitled to relief.

43 However, I must now turn to the form of relief which is sought. The relief does not in terms seek to restrain the defendants from any unlawful activity. What is sought is an order which restrains the defendants from organising, attending, running, addressing, directing or in any way participating in the meeting of the Employees which is to take place on 8 October or any subsequent meeting which is in any way concerned with the performance of their obligations under the terms of their employment in respect of Package F.

44 In my view, it is inappropriate to make such an order. The order would have the effect of preventing the defendant unions from informing their members that they, the unions, wish the members to return to work; that they recommend and urge the workers return to work. It may well be that the defendants have a real interest in the workers returning to work because the continued unlawful industrial action may, or the defendants may apprehend that it may, expose the defendants to the risk of penalties under the Act and to compensation for damages suffered by the plaintiffs.

45 In my view, it would be inappropriate by order of this Court to prevent the defendants from putting to their members and to the Employees both a recommendation that they return to work and that it is in the interests of the defendants that they should return to work.

46 The defendants are already precluded by the orders of 24 February from directly or indirectly directing, procuring, encouraging, authorising or advising any of the Employees to continue the unlawful industrial action. In my view, that is the appropriate order which should be made on an interim basis and the unions ought not to be precluded from putting to their members the matters to which I have referred.

47 The remaining orders which are sought by the plaintiffs are orders for the imposition of penalties. Subsection 49(1) of the Act provides that:

"(1) An appropriate court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil penalty provision:

(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."

48 The orders that may be made under par 1(c) are further dealt with in subsection 49(3) which 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."

49 The plaintiffs submit that the court has power under subsection 49(1) or subsection 49(3) to make an order imposing pecuniary penalties on a person on an interim basis if there is a serious question to be tried that the person has been involved in a contravention of a civil penalty provision without the court finding that the person has contravened the civil penalty provision.

50 That submission is supported by the intervener. In my view the court does not have such power under subsection 49(1) or (3) of the Act.

51 A textual analysis of the sections is against that proposition. Subsection 49(1) provides that the court may make orders against a person who has contravened a civil penalty provision and specifies those orders. The primary or first stated order is an order imposing a pecuniary penalty on the defendant. There is then reference to an order for compensation and then par (c) refers to any other orders that the court considers appropriate. In specifying the orders that may be made under par 1(c), subsection (3) provides that those orders include injunctions including interim injunctions.

52 In my view, on a proper construction of those provisions, the effect of subsection 49(3)(a) is to confer on the court a power to make an interim injunction. However, whilst a pecuniary penalty is specified as the primary form of relief under subsection 49(1) there is no reference in subsection (3) or elsewhere to pecuniary penalties being made on an interim basis.

53 Secondly, adopting a purposive approach to the legislation I have regard to the main object of the Act set out in s 3. In my view, there is nothing in that object or objects of the Act which favours or suggests that the court should have the power to impose pecuniary penalties without making a finding that the person has contravened a civil penalty provision.

54 In my view, it would be contrary to fundamental principles observed by this court and fundamental to the rule of law that the court should not impose a penalty on a person without finding that the person has contravened a civil penalty provision unless the legislature has clearly, expressly and unequivocally provided that power.

55 It would be surprising for the legislature to intend that the Court should impose a penalty on a person on the same principles that apply to the grant of interim injunctions; that is, that having found that there is a serious question to be tried, the Court should have the power to impose a penalty on a person.

56 It would be surprising and lead to the situation that the Court might impose a penalty, having found that there was a serious question to be tried that a defendant had contravened a civil penalty provision, and then subsequently find at the trial of the matter that the defendant had not contravened a civil penalty provision and hence that no penalty should ever have been imposed.

57 In any event, in my view the form of the order which is sought in par 2 of the plaintiffs' minute is inappropriate even if the Court did have power to impose penalties for contravention of a civil penalty provision. The order that is sought is an order that unless the Employees return to work at a specified time, the application be adjourned for the purposes of determining whether a pecuniary penalty ought to be imposed.

58 There is no evidence before this Court that the defendants have the power or the right to direct the Employees to return to work. It does not follow merely from the fact that the Employees do not return to work at 6.30 am on Wednesday, 8 March 2006 that the defendants have contravened a civil penalty provision of the Act or otherwise acted unlawfully.

59 Whether or not the defendants have contravened a civil penalty provision is a matter that will have to be determined in the usual way after trial of the action on the basis of admissible evidence and after the defendants have had a proper opportunity to put forward any evidence that they see fit.

60 For those reasons I will not make either of the orders that are now sought by the plaintiffs.