Quirk v Construction, Forestry, Mining and Energy Union

PERRAM J: 1 The Applicants in NSD 1344 of 2017 move on an interlocutory application filed on 4 July 2018 by which they seek the Court's leave to: amend the statements of claim in related proceedings NSD 1027 and 1028 of 2018; correct the identity of a respondent in those proceedings pursuant to r 8.21(c) or (d) of the Federal Court Rules 2011 (Cth) ('FCR') so that the respondents will be the Construction, Forestry, Mining, Maritime and Energy Union ('Federal Union') and Construction, Forestry, Mining and Energy Union (NSW Branch) ('State Registered Union'); alternatively, to join the State Registered Union as a party to those proceedings pursuant to FCR 9.05(1)(a) or (b)(ii); and amend the Rule to Show Cause in NSD 1344 of 2017 to reflect this Court's decision in Quirk v Construction, Forestry, Mining and Energy Union [2017] FCA 1576. 2 In support of the application the Applicants read the affidavit of Mr McArdle of 2 July 2018. The Respondents relied upon the affidavits of Mr McCauley of 26 September 2017 and 31 July 2018. 3 I deal first with the amendment to the pleadings. Until recently, there were three cases pending in two Courts. The first of these cases was brought by Mr Quirk against a federally registered union named by him in his proceeding as the CFMEU (NSW Branch). It was brought in the Federal Circuit Court and given file number SYG 1521 of 2015. In it Mr Quirk alleged that he had been employed by the Federal Union, but had been dismissed from its employment allegedly in breach of the Part 3-1 general protections provisions of the Fair Work Act 2009 (Cth) ('FW Act'). In SYG 1522 of 2015, Mr Miller made similar allegations. Both proceedings were commenced on 4 June 2015 over three years ago. 4 On 17 November 2015 the Federal Union applied to dismiss summarily those two proceedings. Its applications were heard on 6 May 2016. Those applications were dismissed by the Federal Circuit Court on 20 January 2017: Quirk v Construction, Forestry, Mining and Energy Union NSW Branch [2017] FCCA 81. 5 However, the Federal Circuit Court was also of the view that Messrs Quirk and Miller should file statements of claim to address a number of points made by the Federal Union on the summary dismissal claim (at [62] and [63]). In due course, on 12 May 2017 two such statements of claim were filed. 6 At that time it became apparent that there had been a change in emphasis in the way the case was put. As I have said, in the earlier iterations of their cases Messrs Quirk and Miller alleged breaches of the general protections provisions of the FW Act (i.e. Part 3-1). Part of the Federal Union's response to that claim turned on the operation of its rules and the elected positions held by Messrs Quirk and Miller. To understand that response it is necessary to grasp what the cases are about. 7 There is no dispute that Messrs Quirk and Miller appeared on the ABC's 7.30 Report on 16 October 2014 and alleged that the Federal Union was involved with serious criminals and had a corruption problem. At that time they both held elected office as full-time organisers of the Federal Union. Under Rule 49(a) of the registered rules of the CFMEU Construction and General Division and Construction and General Divisional Branches ('the Rules') it was provided that a person elected to a full-time office 'shall be employed full time in the service of the Divisional Branch'. Under Rule 11 a Divisional Branch Officer could be removed from office by a majority decision of the Divisional Executive for, inter alia, 'gross misconduct'. 8 At a meeting of the Federal Union's Divisional Executive held on 17 April 2015, Messrs Quirk and Miller were removed from their elected office pursuant to Rule 11 ostensibly for misconduct relating to their appearance on the 7.30 Report. One view of the operation of Rule 49(a) is that since they ceased to be full-time elected officers because of their removal by the Divisional Executive pursuant to Rule 11, they ceased to be employed by operation of law. Another view is that Rule 49(a) only imposed an obligation on the Federal Union to employ a full-time elected officer and that any employment relationship was created subsequently, not by Rule 49(a), but merely in obedience to it. 9 The Federal Union contends for the former view of Rule 49(a) and says that Messrs Quirk and Miller's claims for contraventions of the general protections provisions in Part 3-1 fail because it never terminated their employment. On this view, they ceased to be employees by operation of law when they ceased to be organisers and not by any act of termination. 10 That suggestion brought forth from Messrs Quirk and Miller the allegation that Rule 11 was invalid under the provisions of the Fair Work (Registered Organisations) Act 2009 (Cth) ('FWRO Act') to the extent that it permitted the removal of an officer, inter alia, contrary to the FW Act including the general protections provisions in Part 3-1. This allegation appeared in the statements of claim filed on 12 May 2017 in the Federal Circuit Court proceedings. 11 The Federal Circuit Court has no jurisdiction to hear a case of that kind. On 16 June 2017 (shortly after the statements of claim were filed) they applied to transfer the proceedings to this Court which does have jurisdiction. That application was heard by the Federal Circuit Court on 19 June 2017 and on 1 August 2017 was refused: Quirk v CFMEU (No 2) [2017] FCCA 1788; 322 FLR 423. The Court concluded that the claim that Rule 11 was invalid was not within the jurisdiction of the Federal Circuit Court and that the only claims which could be transferred to the Federal Court were claims which the Federal Circuit Court already had jurisdiction to hear. The Court also indicated that those parts of the statements of claim raising the allegations about Rule 11 and the FWRO Act should be struck out. 12 The following week, on 8 August 2017, Messrs Quirk and Miller filed a rule to show cause in this Court seeking, inter alia, to have Rule 11 declared invalid to the extent that it permitted the removal of an officer contrary to the general protections provisions of the FW Act. A large number of individuals were named as Respondents including an entity nominated as the 'Construction, Forestry, Mining and Energy Union'. 13 The Respondents took the unusual step of seeking summary dismissal of the rule to show cause. That application was heard on 7 December 2017. On 22 December 2017 I dismissed minor aspects of the proceeding and stood it over for further directions on 7 February 2018: Quirk v Construction, Forestry, Mining and Energy Union [2017] FCA 1576. At the same time, I indicated that whilst it was a matter for the Federal Circuit Court, there did appear to be merit in one Court hearing all aspects of the case. On 8 June 2018, the Federal Circuit Court transferred SYG 1521 and 1522 of 2015 to this Court where they became respectively NSD 1028 and 1027 of 2018. On 19 June 2018, I ordered that all three proceedings be heard together. 14 At that time I also ordered Messrs Quirk and Miller to file an application for leave to file amended pleadings in all three proceedings. The terms of the order were as follows: '3. By 29 June 2018, the Applicants file and serve interlocutory applications, including any affidavit(s) in support, for leave to: a. File an amended statement of claim in each of NSD1027/2018, NSD1028/2018 and NSD1344/2017; and b. Join the Construction, Forestry, Mining and Energy Union (New South Wales Branch), being an entity registered under the Industrial Relations Act 1996 (NSW) pursuant to the law as of NSW, as a party to proceedings NSD1027/2018 and NSD1028/2018. c. Provide that the pleadings that reflect the procedural history and the judgments of the Court in NSD1344/2017 and the judgment of the Federal Circuit Court in SYD1521/2015 and SYG1522/2015.' 15 It was that order that provoked the present application dated 4 July 2018. Attached to the application is a document entitled Amended Statement of Claim which, if it be permitted to be filed, will be filed in each of the three proceedings; that is to say, the same pleading will be filed in each case. 16 That is not what I had in mind when I made Order 3. What I had in mind were three statements of claim which would reflect the allegations and procedural history of each of the three claims, i.e., there would be a general protections pleading in each of Messrs Quirk and Miller's cases and a separate pleading of their joint case on the invalidity of Rule 11; further, each would contain underscoring and interlineation so that what had been added to each case and deleted from it would be clear. Messrs Quirk and Miller submitted that the order does not say that the pleadings have to be different. Resort to the transcript shows that Messrs Quirk and Miller's understanding of the order is untenable. They also submitted that the Federal Court Rules 2011 (Cth) do not require a pleading under the rule to show cause procedure. This is true which is why I ordered that it should be done. Any order of the Court prevails over the Rules: FCR 1.35. 17 I therefore dismiss the application to file the proposed pleadings. Assuming, at some point, that the Applicants can sort that problem out, it is useful to consider the remaining issues.

First issue: were Messrs Quirk and Miller employed by the Federal Union? 18 As I understand it, there is not presently any issue about this although the Federal Union has not yet delivered a defence and, until it does, one cannot be completely clear that this is not in issue. There is a potential side issue, to which I return below, as to whether Messrs Quirk and Miller were also employed by the State Registered Union. However, even assuming they were, this would not appear to detract from the proposition that they were employed by the Federal Union.

Second issue: from where did the employment relation between Messrs Quirk and Miller and the Federal Union derive? 19 In the current pleadings in the former Federal Circuit Court proceedings, the Applicants merely plead there was an employment relationship with the Federal Union without setting out where it came from. Given, as I apprehend it, it is not in dispute that they were employed by the Federal Union this is perhaps unexceptional. However, the Federal Union has indicated that it proposes to argue that the employment relationship arose from Rule 49(a) so that when they were removed from office as organisers under Rule 11 the employment relationship ceased by operation of law with the consequence that it will not have itself terminated the employment relationship. That issue will not crystallise until the Federal Union actually pleads in its defence that the employment relationship arose from Rule 49(a).

Third issue: if the Federal Union pleads Rule 49(a) by way of defence what happens then? 20 There may be issues arising from any contention that Rule 49(a) created the employment relationship. The first of these concerns the proper construction of the rule: does it create the relationship or does it dictate that the Federal Union is to employ elected officials in which case the employment relationship it contemplates arises independently of Rule 49(a)? That turns on the wording of the rule; it may also - I express no concluded view - turn on whether it would be capable as a matter of law of creating an employment relationship when it does not specify any of the essential matters to an employment relationship such as wages or entitlements. 21 Upon the Federal Union pleading Rule 49(a) by way of defence the Applicants may then plead by way of reply that Rule 49(a) does not, on its proper construction, operate to create an employment relationship. If that plea is successful then the employment relationship will be admitted (since as I understand it is not denied) and the case will then proceed to its general protections phase. Alternatively, if the Federal Union is right about the proper construction of Rule 49(a) then the Applicants will plead in their reply that Rule 11 is invalid to the extent that it contravenes the general protections provisions of the FW Act because of the relief they seek in NSD 1344 of 2017 to have Rule 11 declared invalid. In that sense, NSD 1344 of 2017 substantively operates by way of cross-claim. If that defence succeeds the admitted employment relationship will then proceed to the general protections phase. A third matter may be a contention that even if Rule 49(a) operates as the Federal Union says and Rule 11 is therefore valid, nevertheless the actions of the Federal Union in removing the Applicants from office operated substantively as an adverse action within the meaning prescribed in s 342 of the FW Act. That plea will raise all the usual debates about substance and form. If all three of these contentions in the reply fail then the Respondent will be entitled to have the general protections claims dismissed since there will have been no dismissal. This can only occur once the Federal Union files a defence and the Applicants file a reply.

Fourth issue: the significance of the State Registered Union 22 There is a written document apparently signed by Messrs Quirk and Miller which appears to suggest that they were employed by the Federal Union and the State Registered Union. They presently say that they do not recall signing it. The statement of claim filed in the Federal Circuit Court sought an order for reinstatement as well as damages although reinstatement appears no longer to be pursued in the amended statement of claim. Whilst the Federal Union is the only respondent any such order would be limited to it. If the Applicants think that they were employed by the State Registered Union and wish to be reinstated to it, then they will need to join it as a respondent to the general protections proceedings (although the application of the FW Act to a state-registered union may not be without difficulty). If all they seek is damages, it may be wondered why they would bother. In any event, the Applicants do seek to join the State Registered Union as a second respondent pursuant to FCR 9.05(1)(a). They also apply pursuant to FCR 8.21(1)(c) or (d) to amend the name of the Federal Union and add the State Registered Union. I reject that application which is misconceived. However, a joinder application pursuant to FCR 9.05(1)(a) is, in principle, available. 23 In resisting its joinder, the State Registered Union says that there is no such thing as joint employment in Australian law. Plainly that issue is not one which should be determined on an interlocutory application such as the present. It also says that any claim for joint employment needs to be adequately particularised. About this they are correct. The current proposed pleading merely says that on a particular date the State Registered Union became a joint employer with the Federal Union. Presumably this allegation is based upon the written agreements to which I have referred (and which both Messrs Quirk and Miller presently deny signing). Nevertheless, the State Registered Union is entitled to know why the Applicants allege it is a joint employer. If it is the written agreement, so be it. However, this matter does not prevent the grant of leave at this stage.

Fifth issue: other pleading complaints 24 The Federal Union raised a number of other complaints about the pleading. I do not propose to entertain those. The Federal Union has already had one bite at the cherry about the pleading in the Federal Circuit Court. Although as a matter of formality it is entitled to another because the Applicants are seeking to put forward fresh pleadings, that has to be seen in the context where the general protections pleadings are, apart from the joinder of the State Registered Union, the same. Given it is represented by the same lawyers I do not think it would be consistent with good management to allow those issues to be reopened. If the Respondents (as they will be if the Applicants elect to join the State Registered Union) wish to pursue a strike out application subsequently I cannot stop them filing it but I will most likely list it for hearing at the same time as the trial and certainly not before the pleadings are closed.

Sixth issue: the statement of claim in NSD 1344 of 2017 25 Although commenced by an application for a rule to show cause, this proceeding will go forward by means of a statement of claim. That the Rules do not provide for a pleading in such a proceeding is, as I have said, beside the point. The statement of claim is to set out the allegations in the accompanying affidavit of Mr McArdle without the bias allegations. Henceforth, the application for the rule to show cause will stand as an originating application.

The Path Forward 26 Many of the difficulties in this case from the Applicants' habit of pleading allegations in anticipation of defensive postures not yet taken by the Federal Union, i.e., the invalidity of Rule 11 which does not arise until the Federal Union files a defence relying upon Rule 49(a). So far as I can see this case has a simple structure if basic pleading rules are observed. The Applicants plead they were dismissed from their employment as organisers by the Federal Union. The Federal Union responds that they were not dismissed but rather that the employment merely ended by operation of law. It may also say that the position of organiser is an elected office, reinstatement is not possible (if the Applicants press for reinstatement) or that damages may be limited. The Applicants then plead that Rule 49(a) does not mean what the Federal Union says it means and/or Rule 11 is invalid and/or that the actions in removing them from the elected office still operated as an adverse action in substance. They may also plead in reply that the fact that the position was an elected one does not matter in view of the remedies available under the FW Act. There may be other allegations and the above is not meant to be an exhaustive statement but rather merely an indication of how a properly conducted case is pleaded. 27 Finally, there are a large number of personal respondents to NSD 1344 of 2017. This appears to be unnecessary. If the Federal Union were to agree that it would abide the outcome of the Court's decision they could easily be removed. I encourage the parties to see if they can sort this out. 28 The way this case has been conducted on both sides heretofore has been unsatisfactory. From here on I will manage this case closely at monthly case management hearings. Each step will be closely supervised. The Court has various powers to ensure that proceedings before it are sensibly conducted, i.e., costs orders against parties, disallowance of various costs in any taxation and, if necessary, prohibiting solicitors for charging for misconceived work. I expect the Applicants to adhere to basic standards of pleading and procedure and for the Respondents to abandon much of their interlocutory complaint most of which has little substance. For both sides it means cessation from discursive and unhelpful legal submissions. 29 I anticipate that unless a most powerful case to the contrary is made at the next case management hearing I will be fixing the matter for trial at the first available date. Discovery is foreshadowed. I am sceptical. In any event, any application for discovery should be properly prepared and focussed. I make no order as to costs. I make the following orders:

1. The Applicants have leave to correct the name of the respondent in NSD 1027 of 2018 and NSD 1028 of 2018 to 'Construction, Forestry, Mining, Maritime and Energy Union'.
2. That the Applicants have leave to join the Construction, Forestry, Mining and Energy Union (NSW Branch) ('State Registered Union') as a second respondent in NSD 1027 of 2018 and NSD 1028 of 2018.
3. Within 21 days Mr Quirk and Mr Miller are to file (in NSD 1344 of 2017) a statement of claim setting out in properly pleaded form the allegations underlying the claims for relief in the application for the rule to show cause (other than paragraph 3(b)).
4. Within 21 days Mr Quirk (in NSD 1028 of 2018) is to file a statement of claim which: (a) is consistent with the allegations made on his behalf in the draft pleading attached to the interlocutory application filed on 4 July 2018 ('Draft') but which does not include the allegations which are only relevant to Mr Miller or the allegations made in NSD 1344 of 2017; (b) joins (if Mr Quirk wishes) the State Registered Union as a second respondent and includes allegations that it was his employer (consistent with the Draft); (c) provides proper particulars for that allegation.
5. Within 21 days Mr Miller (in NSD 1027 of 2018) is to file a statement of claim which: (a) is consistent with the allegations made on his behalf in the Draft but which does not include the allegations which are only relevant to Mr Quirk or the allegations made in NSD 1344 of 2017; (b) joins (if Mr Miller wishes) the State Registered Union as a second respondent and includes allegations that it was his employer (consistent with the Draft); (c) provides proper particulars for that allegation.
6. Stand over to 26 February 2019 at 9.30 am for a further case management hearing.
7. At that case management hearing the Respondents be able to outline to the Court: (a) whether employment is admitted and if not why not; (b) whether the rule 49(a) defence is to be raised and if so how (especially from where the terms of employment such as wages and entitlement are said to derive); (c) other defences; (d) the number of witnesses they would intend to call and who they are; (e) whether, if it has not already occurred by consent between the parties, the individual respondents need to be kept in as parties; and for the Applicants to be able to outline: (f) how many witnesses they expect to call in their case and who they are.
8. The parties' counsel are to confer before 26 February 2019 and work out how long the trial is to take and provide a letter to my chambers signed by both counsel certifying that they have so met and the agreement they have reached.
9. No order as to costs. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

SCHEDULE OF PARTIES NSD 1344 of 2017

Respondents Fourth Respondent: JOHN SETKA Fifth Respondent: JOSEPH MCDONALD Sixth Respondent: ELIAS SPERNOVASILIS Seventh Respondent: SHAUN REARDON Eighth Respondent: DEAN HALL Ninth Respondent: JADE INGHAM Tenth Respondent: AARON CARTLEDGE Eleventh Respondent: MICK BUCHAN Twelfth Respondent: MICHAEL RAVBAR Thirteenth Respondent: BRAD PARKER