Murdoch University v National Tertiary Education Industry Union

Murdoch University v National Tertiary Education Industry Union - [2017] FCA 1507 - FCA 2017 case summary — Zoe

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The applicable principles 5 Rule 8.21 of the Federal Court Rules 2011 (Cth) (Rules) governs leave to amend the originating application and r 16.53 governs leave to amend the SOC. 6 As recently observed by the Full Court in Tamaya Resources (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199, concerning the power to refuse or grant an amendment under these rules, at [122]-[123]: The discretion is not at large…the objectives in s 37M of the Federal Court Act 1976 (Cth) are to be sought in the exercise of the powers given by r 8.21(1) to amend the originating applications and by r 16.53 to further amend the statements of claim. Section 37M(1) provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37M(2), without limiting the generality of subs (1), provides, relevantly, that the overarching purpose includes, as objectives, the efficient use of the judicial and administrative resources of the Court; the efficient disposal of the Court's overall caseload; and the disposal of proceedings in a timely manner. 7 Tamaya was an unsuccessful appeal from a decision of Gleeson J in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (a firm) [2015] FCA 1098, where her Honour summarised the principles governing the exercise of the discretion to allow an amendment: (a) the Court must exercise its discretion in accordance with the overarching purpose set out in s 37M(1) of the Federal Court Act of Australia 1976 (Cth) (FCA Act) (at [125]); (b) an applicant bears the onus of persuading the Court that leave should be granted (at [126]); (c) relevant matters include (at [127]): (i) the nature and importance of the amendment to the party applying for it; (ii) the extent of delay and the costs associated with the amendment; and (iii) the explanation for any delay in applying for leave to amend; (d) a party has a duty to prosecute a proceeding diligently (at [129]); (e) the Court will not grant leave to allow an amendment if it would be liable to struck out: (at 142]-[143]). The court will consider whether the proposed amendments disclose a reasonable cause of action, or whether they have a tendency to cause prejudice, embarrassment or delay in the proceeding (at [142]-[143]).

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First ground: no reasonable prospects 10 The respondents submit that the Coercion Claim has no reasonable prospects of success. Specifically, they contend that Murdoch has no reasonable prospect of establishing that the impugned acts, as a whole, were 'legitimate'. On this basis, they contend that leave to amend the SOC to add these allegations ought not be granted. 11 Section 343 of the FW Act provides: Coercion (1) A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or third person, to: (a) exercise or not exercise, or propose to exercise or not exercise, a workplace right; or (b) exercise, or propose to exercise, a workplace right in a particular way. (2) Subsection (1) does not apply to protected industrial action. 12 In Esso Australia Pty Ltd v The Australian Workers' Union (2016) 245 FCR 39, Buchanan J (Siopis J agreeing and Bromberg J not deciding) held that for the purposes of s 343(1) of the Act, an intention to negate choice will suffice, if the conduct is unlawful, illegitimate or unconscionable and, further, it is not necessary for an applicant to establish an intention to act unlawfully: Esso at [1], [176], [180], [194] and [200]. The High Court of Australia has granted special leave in this case, including on the construction of s 343(1) of the FW Act. 13 In the present case, Murdoch relies on the conduct being 'illegitimate'. It does not plead that the conduct was unlawful or unconscionable. 14 The general principles concerning what constitutes 'illegitimate conduct' have been recently set out by Reeves J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCA 157 at [128]-[152]. Reeves J at [145] posed the following question: The critical question then is to identify the legal standard that is to be applied in the field of industrial relations to determine when the threat, or application, of lawful pressure is illegitimate. 15 Reeves J then reviewed a number of authorities, and a learned text, and answered this question at [152]: So, having regard to all these matters, I consider the disproportionality principle identified in Verve Energy and discussed in Unjust Enrichment provides an answer to the question I have posed above. That is, disproportionality between a lawful threat of action, or the lawful action itself, and the legitimate interest in the demand the threat, or action, supports is the appropriate legal standard to be applied to determine whether the threat of action, or actual action, is illegitimate. 16 In determining the standard to be applied to determine when the threat or application of lawful pressure is illegitimate, Reeves J, at [148], had recourse to McLure P's observation in Electricity Generation T/As Verve Energy v Woodside Energy Ltd [2013] WASCA 36 at [25] that a lawful act may be 'illegitimate' if there was 'no reasonable or justifiable connection between the pressure being applied and the demand which the pressure supports'. 17 At [149], Reeves J considered J Edelman and E Bant's summation in Unjust Enrichment (2nd ed, Hart Publishing, 2016) that the principle arising from McLure P's judgment was the: disproportionality between: (i) the lawful threat and (ii) the defendant's legitimate interest in the demand it supports. 18 In the present case, Murdoch seeks to allege that the first respondent (with the second respondent as an accessory) coerced Murdoch in relation to its application to terminate the 2014 Agreement. 19 The coercive acts are alleged at [119] of the ASOC. They consist of activities such as Facebook posts, tweets, emails, posters, website posts and two protests. 20 Murdoch states in the particulars to [119] that: [t]he action taken was illegitimate in that it was disproportionate to any legitimate interest the NTEIU had in seeking to dissuade Murdoch from participating in or pursuing its application to terminate the 2014 Agreement. 21 The respondents submit that none of the conduct is alleged to constitute the type of conduct identified by Reeves J in ABCC v CFMEU as being illegitimate, as a consequence of being 'disproportionate', namely: (a) threats, blackmail and abuse of process; and (b) the absence of any reasonable or justifiable connection between the pressure being applied and the demand which the pressure supports. 22 They further submit that upon Murdoch's own case, it has no reasonable prospect of establishing that the impugned acts were 'illegitimate'. They submit that the alleged conduct does not come within the meaning of s 343 of the FW Act. 23 In the premises, the respondents submit that the Coercion Claim has no reasonable prospects of success and the Court should not grant leave to amend.

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Second ground: defective pleading 28 The respondents submit that, if the Coercion Claim does have reasonable prospects of success, the Coercion Claim is defective as it fails to adequately set out the elements of a cause of action pursuant to s 343 of the FW Act and is liable to be struck out. As a result, if leave were given, the respondents claim that the Coercion Claim would cause prejudice, embarrassment and delay in the proceeding. 29 First, the respondents submit that the Coercion Claim fails to adequately identify the matters relied upon to plead that the allegedly coercive action was done with an intent to negate Murdoch's choice to continue with its application to terminate the Agreement. 30 Murdoch states in the particulars to [119] of the ASOC that, with respect to intention, it relies upon the 'whole of the surrounding circumstances'. Murdoch then states that it will rely, among other things, upon the number, frequency, content and nature of the various actions. The respondents submit that this pleading is inadequate; the Coercion Claim is too vague. They submit that the first and second respondents are entitled to know with precision the case that is sought to be made against them at trial, including the following: (a) the precise circumstances relied upon - the respondents allege that the reference to the 'whole of the circumstances' adds nothing; (b) the content of the impugned publications relied upon; and (c) the 'nature' of the impugned publications relied upon. The first and second respondents are entitled to know what Murdoch will contend at trial. For example, they are entitled to know if the Murdoch will contend that the conduct was harassing or oppressive or something else. 31 Second, the respondents submit that the Coercion Claim does not adequately identify why the impugned conduct is alleged to be 'illegitimate'. As stated above, Murdoch states in particulars that it was 'illegitimate' as it was 'disproportionate to any legitimate interest the first respondent had in seeking to dissuade Murdoch from participating in or pursuing its application to terminate the Murdoch Agreement.' 32 The allegation that it was 'illegitimate' is made in particulars. As a result, the respondents submit, it is itself not particularised and that it is a material fact and a substantive allegation that should be pleaded and then particularised. 33 Further, the respondents submit that Murdoch has not adequately identified why it was 'disproportionate' to 'any' interest of the first respondent. This they submit is especially important in this case given that Murdoch relies upon 71 separate impugned acts; Murdoch does not identify the interest of the first respondent; and Murdoch also does not identify any substantive issue or complaint with the alleged conduct. 34 The first and second respondents submit that they are entitled to know the matters upon which Murdoch relies to allege that the conduct was disproportionate and thereby 'illegitimate'. They do not know what case they will have to meet at trial. 35 Finally, Murdoch seeks to plead accessorial liability on the part of the second respondent and that she thereby also contravened s 343(1) of the FW Act but she submits that Murdoch has failed to adequately identify the matters that the second respondent was 'aware of and approved or endorsed' as alleged at [126]. Murdoch simply states that this is to be 'inferred from the whole of the matters alleged herein' and then states that this includes the very general matters at [3] and the second respondent's: extensive involvement in the whole of the enterprise bargaining process with Murdoch and Gooding's [the second respondent] involvement in the making of or specific authorisation of a number of publications and/or related statements/publications associated with the enterprise bargaining process. 36 This, the respondents submit, is manifestly inadequate as: (a) Murdoch has not provided any adequate particulars of any awareness of, or approval and endorsement by, the second respondent; (b) the seriousness of the allegation against the second respondent demands that Murdoch do more than just rely upon all of the matters alleged in the ASOC; and (c) Murdoch does not even identify that the second respondent was involved in any of the matters the subject of the Coercion Claim. 37 The second respondent submits that she does not know what case she must meet at trial.

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The impugned representations 69 The respondents impugn: (1) all of the representations alleged in the SOC concerning what Murdoch 'want to or can' achieve under its proposed enterprise agreement; and (2) the representations alleged in paragraphs 31(d), 71(a) and 71(b) and 75 of the SOC. 70 It is helpful to set out the representations in category (2): Paragraph 31(d) which pleads a representation '…that during the enterprise bargaining process, Murdoch has not made any concession or agreed to any claim, demand or request of the NTEIU about the wording or content of any proposed clauses to be included in the proposed EA'; Paragraph 71(a) which pleads a representation '…that all of their previous representations about Murdoch's enterprise bargaining position were entirely accurate'; Paragraph 71(b) which pleads a representation '…that there was no logical or reasonable basis or foundation for any of the allegations made by Murdoch in these proceedings'; and Paragraph 75 which pleads a representation to the effect that in seeking interlocutory relief in this Court, Murdoch was 'seeking or attempting' to stop the first respondent communicating with its members. 71 The respondents' concerns about the specific representations in (2) overlap with the concerns in relation to the representations generally in (1). I will therefore deal with them together. 72 The representations, insofar as they concern what Murdoch 'want to or can' achieve, are asserted to be about two workplace rights, namely: Murdoch's exercise of a 'workplace right' to 'develop' and 'present' various 'bargaining positions': s 341(2)(k) of the FW Act; and the effect of the exercise of Murdoch's 'workplace right to make an enterprise agreement with its workforce': s 341(2)(e) of the FW Act. 73 The respondents submit that none of the alleged representations fall within s 345 of the FW Act, because none of the alleged representations are about a workplace right or about the exercise, or the effect of the exercise, of a workplace right. Rather, they submit, the representations in (1) above are about Murdoch's state of mind.

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The bargaining position or process 74 The respondents first submit that the representations alleged in the SOC are not, in terms, 'about' Murdoch's current 'bargaining position' at all, but are 'about' what might happen should an enterprise agreement be made in future. They submit that there is no link to the first 'workplace right' pleaded, which is the exercise of a 'workplace right' to 'develop' and 'present' various 'bargaining positions': s 341(2)(k) of the FW Act. 75 Paragraph 31(d) of the SOC is said to be a representation 'about' the 'exercise' of the Murdoch's workplace right to 'participate' in enterprise bargaining: see SOC [10(a)], via [20], [29] and [35]. Regarding this paragraph, the respondents submit that there is no workplace right to 'participate' in enterprise bargaining per se. The relevant employer right protected by s 341(2)(e) is the right to 'make' an enterprise agreement. Given the legislative scheme, the respondents submit that can only sensibly refer to the employer's right to propose an agreement, under s 181. It cannot extend to everything an employer does in the course of negotiations. 76 Second, they submit that even if (contrary to the above submission) there were a workplace right to 'participate' in bargaining in a general way, a misrepresentation would only be caught by s 345 if it is 'about' the 'exercise' of that right, specifically. They claim that, here, the representation is about the quality of Murdoch's participation, not whether it exercised its claimed right to 'participate' in bargaining. 77 I consider this ground lacks cogency. It also proceeds on a particular statutory construction of the provisions extracted above which, for the following reasons, is incorrect. 78 There is a 'process' recognised under the FW Act which can be described as 'enterprise bargaining'. It is a phrase used in industrial law since the early 1990s, in relation to the process of negotiating and making enterprise-based agreements to regulate terms and conditions of employment (instead of awards): R Naughton, The Shaping of Labour Law Legislation: Underlying Elements of Australia's Workplace Relations System (LexisNexis Butterworths, 2017) at [3.68]. It is now fully regulated by the FW Act as to its commencement, participation in and cessation. 79 This is the process or proceeding under a workplace law, within the meaning of s 341(2)(k) of the FW Act, about which Murdoch alleges the respondents made representations. 80 In April 2016, Murdoch has participated in the enterprise bargaining process. I accept that, in doing so, Murdoch has exercised a workplace right. 81 The alleged participation amounts to developing and presenting bargaining positions on particular subject matter to the respondents and its employees, as well as making concessions/agreeing to certain claims. 82 As to the word 'about', the various impugned representations are 'about' Murdoch's bargaining positions, and hence, 'about' Murdoch's participation in the bargaining process. Contrary to what the respondents submit, Murdoch exercises the relevant workplace right by 'participating' in the process of enterprise bargaining. The representation needs to be 'about' Murdoch's participation in the process of enterprise bargaining. That process will include any concessions Murdoch has made in that process. 83 The respondents' attempt to distinguish the quality of participation from the act of participating itself is not apt to inform what is the workplace right found in the legislation. 84 The respondents submit in the alternative that, even if the representations are 'about' the bargaining positions, there is no mandatory statutory obligation to 'develop' or 'present' bargaining positions under Part 2-4 of the Act. Therefore, they submit, there is no protected statutory 'process' and no 'workplace right' under s 341(2)(k) of the FW Act. 85 I do not accept this ground. 86 As I have outlined above, the process of enterprise bargaining falls within the meaning of 'process under' the FW Act, and by developing and responding to bargaining positions in that process, a party is participating in that process. In light of that, this alternative submission cannot stand. 87 The respondents submit that, even if the development of 'bargaining positions' is a 'process' under the FW Act, the only 'workplace right' protected by s 341(1)(b) is, relevantly, the 'ability' to 'initiate' that process. They contend that the representations are not 'about' the Murdoch's ability (legally or practically) to develop bargaining proposals or whether the proposals were, or were not, made. Instead, the respondents claim that the representations are about the content of the bargaining proposals which would take them beyond the purview of s 345. They submit that this is also the case in relation to [71(b)] which they claim is 'about' the manner of Murdoch's exercise of the right pertaining to the 'ability' to bargain. 88 The respondents also make this submission in relation to [75], which they claim is not 'about' the exercise of that workplace right but is 'about' the state of mind of Murdoch, and the objects it was pursuing or, alternatively, was an expression of opinion. 89 I do not accept this submission. The respondents again adopt, without foundation, a very narrow construction of the word 'about'. 90 It is accepted by Murdoch, correctly in my opinion, that, by initiating the proceedings in this Court, Murdoch exercised its workplace right to initiate court proceedings under the FW Act. In response to initiating those proceedings, the second respondent pleaded, in the representation set out at [71(b)], that Murdoch's claims in those proceedings were 'totally baseless', thereby representing that Murdoch had no reasonable foundation for its claims. 91 The respondents now submit that a representation about the strength or weakness of claims made in proceedings initiated cannot even arguably be a representation about the initiation of those proceedings. This contention also assumes a particular view of the evidence which might ultimately be led. I accept Murdoch's submission that until the second respondent gives evidence and is cross-examined, the Court cannot properly assess the extent to which this was an opinion, nor on what basis it was offered. 92 I also accept the submission that the fact that the Fair Work Commission can by way of bargaining order, require bargaining representatives (such as Murdoch) to: (a) attend and participate in meetings; (b) respond to proposals made by other bargaining representatives; and (c) give genuine consideration to the proposals of other bargaining representatives and provide reasons for responses to those proposals, provides ample support for the proposition that putting forward bargaining proposals (and responding to those of others) is participation in the bargaining process: ss 228(1) and 231. 93 Finally, the respondents submit that, even if the representations did fall within s 345, the effect of the FW Act would be to allow the courts to enforce 'truth in bargaining', with the 'truth' as to bargaining claims (usually highly contestable) to be resolved by the courts after protracted and expensive litigation. The respondents also make this submission in respect of the representation in [71(b)], which they contend is an expression of opinion, not one of fact to which s 345 applies. 94 They submit that inquiring into the falsity of such representations would be a radical departure from the history of enterprise bargaining, in which the courts have played no such role: the Workplace Relations Act 1996 (Cth) (WR Act) contained no equivalent to s 345. 95 This submission involves significant overreach. 96 None of the cases which have considered s 345 of the FW Act, have raised this specific contention. 97 Further, the respondents are incorrect in claiming that the predecessor legislation did not contain an equivalent provision to s 345 of the FW Act. There have been earlier equivalents, each of which directly related to 'truth in bargaining' and each of which have involved the Courts 'policing truth in bargaining'. 98 A telling example is s 401 of the post-WorkChoices WR Act. The distinction between s 401 of the WR Act and s 345 of the FW Act is that, under s 401 of the WR Act, the false or misleading statements had to cause the employees to make or approve the agreement. The causal element has now been removed: Explanatory Memorandum, Fair Work Bill 2008 at [1398]. As with the s 345 FW Act cases, several s 401 WR Act cases concerned what may be described as 'truth in bargaining' cases. 99 In conclusion, I accept that the workplace right is to participate in the enterprise bargaining process and, further, the impugned representations are about that process.

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Making an enterprise agreement with its workforce 100 The main alternative manner in which Murdoch alleges contraventions of s 345 of the FW Act is that the impugned representations are about the effect of the exercise, by Murdoch, of a workplace right. Murdoch alleges that numerous of the representations are about what Murdoch wants to or can do, under its proposed enterprise agreement, if it were made and approved. For example, by proposing these clauses, it is alleged by the respondents that Murdoch wants to be able in its new agreement to forcibly transfer employees or eliminate salary maintenance. 101 Murdoch alleges that it has a workplace right to make an enterprise agreement under the FW Act and that the representations are about the effect of the exercise of that workplace right. Accordingly, if Murdoch made an enterprise agreement in these terms, the effect of that would be that Murdoch could then one thing or another. This, Murdoch alleges is a representation 'about' the effect of Murdoch making an agreement in those terms. 102 The respondents submit that: (1) First, an employer does not have a unilateral right to 'make' an enterprise agreement. Its right is limited to proposing particular text to the workforce and requesting that they vote upon it: FW Act s 181. It is only if the vote is successful that the enterprise agreement is 'made' (s 182(1)), and it is only if the document is approved by the Fair Work Commission (ss 186 and 187) that it can 'apply' (FW Act s 52(1)) in the sense of creating binding rights and obligations (FW Act ss 50 and 51). Accordingly, commentary on the terms of a future agreement cannot be understood as a representation about the 'effect' of the employer's right to call a vote under s 181, as the exercise of that right does not, without more, lead to a binding enterprise agreement. (2) Second, in the present case, Murdoch has not made a request under s 181. That being the case, then these representations cannot sensibly be said to be 'about' the 'effect' of Murdoch doing so. In that connection, the case can be distinguished from Iluka Resources Ltd v Construction, Forestry, Mining and Energy Union [2011] FCA 1447 (Iluka), where a vote had been called: at [4]. (3) Third, since no text has been put to the employees for a vote, the first respondent's alleged representations cannot be seen as misrepresentations of fact (i.e. misrepresentations about what a specific proposal contains) to which s 345 might attach. Rather, the comments merely represent speculation about what terms might be proposed under s 181, and what the effect of those terms would be if they were both agreed to by the employees and then approved by the Fair Work Commission. As such, the comments are entirely speculative and hypothetical; they are not representations of fact, of the sort which s 345 might regulate. 103 These submissions involve a particular construction as to what 'making' an enterprise agreement means. It is, on one view a narrow construction. 104 The representations, as I have said, are about the effect of Murdoch making an agreement on certain terms. I agree that the mechanics of and manner in which Murdoch might go about making that agreement, are not relevant to the representation, nor in accord with the statutory language in s 345 of the FW Act. 105 Further, as Murdoch submits, a representation as to the effect of the exercise of a workplace right is necessarily hypothetical. The exercise in question is unlikely to have occurred yet, in order for the representation to be about the effect of that exercise. There is no warrant for reading s 345 of the FW Act as though the words 'of fact' came after the word 'representation'. Such a construction is not consonant with the way, for example, that s 401 of the WR Act operated, for example see Shop, Distributive and Allied Employees' Association v Karellas Investments Pty Ltd (No 2) (2007) 166 IR 51; [2007] FCA 1080 at [43]-[55]. 106 Moreover, such a construction does not reflect the purpose envisioned for s 345 in the legislative materials accompanying its introduction. One of the 'illustrative examples' to the operation of s 345(1) of the FW Act, at [1398] of the Explanatory Memorandum to the Fair Work Bill 2008, is as follows: Moon Enterprises Pty Ltd (Moon Enterprises) would like to enter into a new enterprise agreement with its employees. The manager of Moon Enterprises provides the employees with a document that contains false and misleading statements relating to the terms and effect of the proposed new agreement. In particular, the document contains false statements in relation to pay increases, casual loadings and penalty rates. The misrepresentation made by the manager is in relation to the effect of approving the enterprise agreement and is prohibited under paragraph 345(1)(b). (emphasis added) 107 The impugned representations in the present case accord with that example very well, other than the fact the alleged representations in the present were alleged to have been made by a Union, and the representations in the example were made by an employer. This distinction is not material.

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Summary judgment - the applicable principles 108 The respondents make their application on the basis of r 26.01 of the Rules, which provides that: Summary judgment (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. 109 The central question is whether Murdoch has a reasonable prospect of successfully prosecuting the impugned claim. 110 The meaning of 'reasonable prospect' in this sense was considered by Flick J in Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462, where his Honour noted at [30]-[31] that: The counter-part provision to the current r 26.01 was formerly to be found in O 20 of the now-repealed Federal Court Rules 1979 (Cth). Rule 26.01(1) replicates s 31A of the Federal Court of Australia Act 1976 (Cth): Manday Investments Pty Ltd v Commonwealth Bank of Australia (No 3) [2012] FCA 751 at [8] per McKerracher J. The 'authorities on s 31A are useful in considering r 26.01': Leica Geosystems Pty Ltd v Koudstaal [2012] FCA 1337 at [16] per Collier J. [31] Section 31A(1)(b) employs the same language as r 26.01(e), namely 'no reasonable prospect of successfully defending the proceeding or part of the proceeding'. Section 31A(3) goes on to provide as follows: For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. The effect of s 31A is to 'soften the test for a successful application for summary judgment': Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117 at [25]; (2009) 178 FCR 401 at 408. Spender, Graham and Gilmour JJ there went on to cite with approval the observations of Lindgren J in White Industries Australia Ltd v FCT(2007) 160 FCR 298 at [50] that s 31A 'is concerned with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form': [2009] FCAFC 117 at [30], (2009) 178 FCR 401 at 409. But the exercise of the power to strike-out an application remains a powers to be exercised with caution: Spencer v Commonwealth [2010] HCA 28 at [24] ; (2010) 241 CLR 118 at 131. 111 Here, I am not satisfied that Murdoch's proceeding whether in whole or part has no reasonable prospect of success and should have summary judgment against it.

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