[1991] FCA 87; 99 ALR 735

[1991] FCA 87; 29 FCR 104

[1991] FCA 87; (1991) 37 IR 380

Trade Practices - secondary boycott - whether evidence of concerted conduct hindering the acquisition of services - whether conduct engaged in for purpose of causing substantial loss or change - whether unions directly or vicariously liable for conduct of officers - whether injunctions should be granted.

Employer and Employee - nature of contract between labour hire company and workers - whether any contract between workers and companies using their labour - whether contracts of service or for services.

Trade Practices Act 1974 ss.45D, 45E

Counsel for First, Second, Third Mr D.J. Ashley, QC and

and Sixth Appellants: Mr A.M. North, QC and Mr S. Rothman

Solicitors for First, Second, Messrs Ryan Carlisle Needham Thomas

Councel for Fourth and Mr D.J. Ashley, QC and Mr A.M. North, QC

Solicitors for Fourth and Messrs Maurice Blackburn and Co

Counsel for Respondent: Dr C.N. Jessup, QC with

Mr P.H. Costello and Mr S.E. Marks

Solicitors for Respondent: O'Haire and O'Haire

That the appellants pay to the respondent its costs of the appeal .

That the cross-appellant pay to the cross-respondent its costs of the appeal.

NOTE: Settlement and entry of orders is dealt with in O.36 of the Federal Court Rules.

The respondent, Odco Pty Ltd, has carried on in Victoria, under the name "Trouble Shooters Available", a business of supplying labour to builders, construction managers and contractors in the building industry. Judging by the language of the witnesses, both the respondent and its business are frequently referred to simply as "Troubleshooters". The learned trial judge, Woodward J, followed that practice. We will do the same.

2. In conducting its business, Troubleshooters has encountered hostility from within the trade union movement, especially amongst officials of building unions. Those officials have been concerned that the provision of labour by the respondent at an "all-in" daily rate might undermine adherence to award conditions. Incidents have arisen at some building sites upon which Troubleshooters' men have been working. These incidents have led to the present case.

3. By its statement of claim (in its final amended form) Troubleshooters alleged that the first-named appellant, the Building Workers' Industrial Union of Australia, ("the BWIU"), by demands accompanied by threats of "black bans" and by other industrial action by members of the BWIU employed by builders who were clients of Troubleshooters, induced those clients to refrain from acquiring labour through Troubleshooters. It was alleged that the demands and threats had been made by one or more of the individual appellants who were officers or employees of the BWIU acting in concert with other appellants and with other persons or entities connected with the Building Industry Group within the Victorian Trades Hall Council. That conduct was said to have been engaged in to implement a BWIU policy that the use by builders of tradesmen and labourers obtained through a labour agency business, such as that of Troubleshooters which engaged men who claimed to be sub-contractors and not employees, should not be permitted in the building industry in Victoria. It was further alleged that the appellants had, by demands and by threats, induced breaches of contract between Troubleshooters and certain of its builder clients, and would seek further to implement the policy ascribed to the BWIU by engaging in similar conduct in the future. Accordingly, by its application to this Court Troubleshooters sought injunctions restraining the appellants from:

(i) engaging in conduct that hinders or prevents building contractors from

acquiring labour agency services from Troubleshooters;

(ii) from making any arrangement or arriving at any understanding in

contravention of s.45E of the Trade Practices Act 1974; or

(iii) from inducing any breach of contract between Troubleshooters and

any of its client builders.

4. A declaration was also sought that, in its final form, was substantially to the effect granted by the trial judge. As well, Troubleshooters sought damages, pursuant to the Trade Practices Act and for inducement of breach of contract and interference with the performance of contracts.

5. Before the substantive hearing of the matter, two interlocutory injunctions were granted. On 4 May 1988, Sweeney J granted an interlocutory injunction restraining the BWIU, the appellant Victorian State Building Trades Union ("the VSBTU") and the first three individual appellants, William Oliver, John McPartlin and Hugh Harkins, from taking any action to implement or give effect to a decision of an arbitral body known as the Disputes Board under the Victorian Building Industry Agreement ("the VBIA") in respect of a dispute at 82 John Street, Brunswick, by procuring the principal building contractor at that site to discontinue on account of that dispute the use of Troubleshooters' labour agency services at that site.

6. Secondly, on 8 September 1988, a wider interlocutory injunction was granted by Jenkinson J restraining each of the first three individual appellants from advising or attempting to persuade, or in any manner coercing, any worker to abstain from taking, or to withdraw from, or to suspend the performance of his employment by a builder or building sub-contractor part of whose building work was being or had been performed or was proposed by his employer to be performed in pursuance of an arrangement between the builder or sub-contractor and Troubleshooters, or on a site on which building work was being performed pursuant to an arrangement between Troubleshooters and some person other than the employer. Similar restraints were also imposed on each of the BWIU and the VSBTU. Each injunction granted by his Honour was subject to an exception in respect of conduct the reason for which was wholly unrelated to the circumstance that Troubleshooters was contractually involved in the performance of work for the employer or on the site concerned.

7. Another significant interlocutory direction was that made by Woodward J on 28 July 1988 to the effect that all questions of damages be left for separate consideration after the determination of liability.

8. The hearing on issues of liability was protracted. One of the main questions agitated at that hearing was whether Troubleshooters' men who were sent to work at building sites were employees of either the builder or Troubleshooters. This issue was regarded as important, at least by the appellants, because of its bearing upon the application to those men of award provisions. In the result, Woodward J determined that the men were not employees, but rather independent contractors to Troubleshooters. His Honour also held adversely to the appellants in relation to some (but not all) of the allegations of breaches of ss. 45D and 45E of the Trade Practices Act. But he decided not to grant any permanent injunction at that stage. On 24 August 1989 Woodward J made the following declarations and orders:

"1. It be declared that a person who performed work in 1988 on a

building or construction site in pursuance of -

(i) an agreement between himself and the applicant for the

performance by him of that work and for his remuneration

therefor by the applicant, and

(ii) an agreement between the applicant and the builder or

building contractor or subcontractor for whom or on whose

site the work was performed for the provision by the

applicant of a person to perform the work and for the

payment therefor to the applicant by the builder or building

contractor or sub-contractor,

was not, in relation to that work, an employee of the applicant or

the builder or building contractor or sub-contractor.

2. The applicant have, until final judgment in these

proceedings, liberty to apply to the Court for injunctions to

restrain the respondents from breaches of ss 45D or 45E of the

Trade Practices Act 1974 or of the common law of inducement to

breach of contract.

3. The interlocutory injunctions presently in force in this

matter be discharged."

9. These orders were interlocutory orders. Accordingly, the appellant required leave to appeal against them. But leave was granted and, at the hearing of the appeal, the appellants put in issue all of the matters determined against them at first instance.

10. At the time when the appeal was argued there was pending in the High Court of Australia an appeal, in a matter called Accident Compensation Commission v Odco Pty Ltd, now reported at [1990] HCA 43; (1990) 95 ALR 641. This appeal concerned the question whether Troubleshooters was liable to pay a levy, as an employer, under the Accident Compensation Act 1985 (Vic). That Act contained some deeming provisions. So it was obvious that the company's liability under the Act would not necessarily resolve the issues as to common law relationship argued before us. Nonetheless, it seemed likely that the High Court's analysis of the material contractual documents would be relevant to these issues. Accordingly, we asked counsel to keep us apprised of this appeal. When the High Court delivered its judgment, on 22 October 1990, counsel were kind enough to send us copies; they indicated that they did not wish to make any additional submissions concerning its application. As will appear, we have, in fact, found the reasoning in this decision to be helpful in analysing the contractual position created by the standard Troubleshooters' documents.

11. The essential facts found by Woodward J can be summarized comparatively shortly. However, it will be necessary later to refer to some of the detail contained in the comprehensive findings made by the learned trial judge.

12. The workers, to use a neutral term, whom Troubleshooters makes available to its builder clients, are first screened at interviews conducted by Troubleshooters in which enquiry is made of their reasons for wanting to be self-employed, whether they have been self-employed before, whether they are members of a relevant union and of the Building Unions Superannuation Scheme ("BUSS"), and whether they have Construction Industry Long Service Leave registration ("LSL"). If satisfactory answers are given to these and other questions, a worker is invited to sign a contract in the following form:

"AGREEMENT TO CONTRACT

CONDITIONS OF CONTRACT

Hereunder let Troubleshooters Available be read as:

TROUBLESHOOTERS AVAILABLE AND/OR ASSOCIATED CLIENTS.

1. I (the undersigned) acknowledge and agree that there is no

relationship of Employer-Employee with TROUBLESHOOTERS

AVAILABLE and that TROUBLESHOOTERS AVAILABLE does not guarantee

me any work. I (the undersigned) am self-employed and, as such,

I am not bound to accept any work through TROUBLESHOOTERS AVAILABLE.

2. I (the undersigned) hereby agree to work for ..... per hour for

actual on-site hours or job price to be agreed.

3. I (the undersigned) hereby acknowledge and agree that

TROUBLESHOOTERS AVAILABLE does not cover me in respect of

Workcare, the onus of responsibility and liability in respect

of insurance is mine only. Further, I have no claim on

TROUBLESHOOTERS AVAILABLE in respect of Workcare.

4. I (the undersigned) expressly forbid TROUBLESHOOTERS AVAILABLE

to make deductions in respect of P.A.Y.E. Taxation.

5. I (the undersigned) hereby agree that I have no claims on

TROUBLESHOOTERS AVAILABLE in respect of Holiday Pay, Long

Service Leave, Sick Pay or any similar payment.

6. I (the undersigned) hereby agree that TROUBLESHOOTERS AVAILABLE

has no responsibility or liability to me except that I am

guaranteed to be paid agreed hourly rate for actual on-site

hours or agreed job price for work done.

7. It is agreed that I (the undersigned) must carry out all work

that I agree to do through the Agency of TROUBLESHOOTERS

AVAILABLE in a workmanlike manner and TROUBLESHOOTERS AVAILABLE

is hereby guaranteed against faulty workmanship. All work must

be made good. Further, I agree to cover the work (where

necessary), for Public Liability, Accident Insurance, Long

Service Leave, Holiday Pay, Sick Pay and superannuation, and

have no claims on TROUBLESHOOTERS AVAILABLE in respect of the above.

the Trade Union covering my trade.

9. I (the undersigned) hereby agree to supply my own plant and

equipment, safety gear, boots, gloves or any necessary

ancillary equipment required and that I (the undersigned) have

no claim on TROUBLESHOOTERS AVAILABLE in respect of the above.

SIGNED.........................................................

WITNESSED......................................................

DATED........................................................."

13. In addition to signing that form of contract, the worker is required to sign a form authorizing deductions under the Prescribed Payments Scheme ("PPS") administered by the Taxation Office, and an application for BUSS membership if that is not already held. The worker is told to obtain "worker's" or employee's LSL and to state to the Construction Industry Long Service Leave Board when applying for it that he is unemployed.

14. Upon signing the form of contract and complying with Troubleshooters' other requirements, the worker is placed "on the books" of Troubleshooters. The result is to make him eligible to be offered work, from time to time, on some particular site for some particular builder-client of Troubleshooters.

15. Troubleshooters' relations with its clients are defined by general and special conditions of hire which Woodward J found to be imported into the contracts between Troubleshooters and its clients. As set out in Troubleshooters' promotional material, the general conditions include the following statements:

"HOW CAN OUR SERVICE HELP YOU

WE CAN:

. Increase productivity

. Reduce time and effort finding personnel

. Reduce advertising costs and time interviewing personnel

. Reduce dead weight in anticipation of busy times ahead

. Reduce tedious payroll and accounting procedures -

You no longer need to budget for sick pay, holiday pay,

superannuation, long-service leave or WorkCare deductions

. Reduce administration costs of your work force

PAYMENT TERMS AND CONDITIONS

You are invoiced per site per week for all the personnel on that site.

We pay the personnel and your liability is to pay us according to

our terms and conditions, (as per accompanying rates and

conditions sheets.)

Our terms are strictly 14 days nett from the date of invoice

We hope you will appreciate that it is our policy to pay the

sub-contractors weekly in order to attract their services. It is

therefore vital to our service that our terms and conditions are

strictly abided by.

All personnel carry current union, superannuation and LSL tickets."

16. Then follows a Schedule of Rates which sets out rates per hour for a variety of classifications from $28.00 for a site supervisor down to $19.50 for a labourer. "Conditions of Hire" comprised in the same document are as follows:

"CONDITIONS OF HIRE

(i) Minimum Hire: six hours per man per day.

(ii) Inclement weather minimum: four hours per man per day.

(iii) Site Allowance: extra nett charge according to each site.

(iv) Travelling Time: extra charge for sites outside 40

kilometre radius from the GPO as follows:

40-50 kilometres + 30 minutes per day per man.

50-60 kilometres + 1 hour per day per man.

Over 60 kilometres negotiable.

(v) Parking: car parking in Melbourne Central Business

District to be supplied by client or charged at cost so

that sub-contract carpenters' tools are accessible and secure.

(vi) Tools: basic tools of trade are included in the above rates.

Special equipment such as large bench drop saws, nail

guns, heavy-duty hammer drills attract an extra charge

when provided by the sub-contractor.

(vii) Overtime:

WEEKDAYS

First 8 hours - normal time.

Next 6 hours - Time and a half.

Thereafter to Midnight - Double time.

SATURDAYS

First 8 hours - Time and half.

Thereafter to Midnight - Double time.

SUNDAYS

First 12 hours - Double time.

Thereafter - Double time plus negotiated allowance.

PUBLIC HOLIDAYS . Negotiable

AFTERNOON AND NIGHTSHIFT RATES

Time and a half or double time plus negotiated shift allowance.

COUNTRY JOBS

All the above rates apply plus allowances negotiated, ie:

accommodation, living-away, travel, etc."

17. The Special Conditions of Hire are in these terms:

"These Special Conditions of Business are between TROUBLESHOOTERS

AVAILABLE and the client employer (hereinafter called `the

client'). In the event of TROUBLESHOOTERS AVAILABLE introducing

to a client any member of TROUBLESHOOTERS AVAILABLE'S workforce,

either through actual hire or information supplied on request by

the client or any agent of the client or by information made

known to the client of the availability of a particular person

and the client engages the services of that member of

TROUBLESHOOTERS AVAILABLE'S workforce, regardless of the

circumstances or conditions under which the engagement occurs,

the client agrees to:

(a) Immediately notify TROUBLESHOOTERS AVAILABLE of the emgagement.

(b) Pay a fee to TROUBLESHOOTERS AVAILABLE within fourteen (14)

days of confirmation of the engagement.

The client acknowledges that introductions are confidential.

The fee payable to TROUBLESHOOTERS AVAILABLE is our assessment of

the loss of the resource to TROUBLESHOOTERS AVAILABLE as a result

of the direct engagement and varies according to the individual's

classification as detailed hereunder:

ALL CLASSIFICATIONS, including ) FEE PAYABLE is

Labourer, Skilled Labourer, ) 160 hours per

(Scaffolder, Steelfixer, etc.), ) man at normal

Tradesman (Carpenter, Painter, ) charge out etc.,

Site Foreman, Site ) rate."

Supervisor, Project Manager )

18. The learned trial judge found that Troubleshooters paid BUSS and Workcare contributions in respect of each worker to whom it allocated work for the period during which that work was performed. His Honour's findings on those matters were:

"The next point made is that, contrary to the wording of the

document, Troubleshooters pays for both Workcare and BUSS. I do

not see any significance in this. Workcare has been paid under

protest at least until the recent decision of the Full Court of

the Victorian Supreme Court in Odco Pty Ltd v Accident

Compensation Commission (16 June 1989, unreported) dealt with in

section 8, below. In the case of BUSS, an artificial

`availability' payment, equalling the required BUSS payment, is

credited each week to each worker, and the BUSS payment is then

deducted and paid on the worker's behalf. It is true that this

looks like a direct payment of BUSS moneys by Troubleshooters, but

the worker has to pay tax on the availability allowance and, to

this extent, has a hand in the payments. The arrangement is

explained to him when he signs with Troubleshooters, though not

all workers who gave evidence seemed to understand the position fully."

19. His Honour also found that the rates of pay offered to its workers were adjusted unilaterally each year by Troubleshooters without consultation with the workers who were nevertheless advised of each adjustment shortly before or immediately after it occurred. He noted as well that the written contract between Troubleshooters and its workers set out above did not include the whole of the terms of engagement because it contained no reference to the wet weather allowance, the six hours minimum payment or overtime provisions.

The existence of a contract between worker and builder

20. Counsel for the appellants contended that Woodward J erred in finding that there was no contract, however characterized, between the worker and the builder to whom his labour was supplied.

21. In putting that submission, counsel acknowledged the evidence of Mr Groves, the managing director of the respondent, that, when interviewing a prospective worker, Troubleshooters emphasised the need for communication between the worker and itself as to what the worker was doing from day to day. That emphasis was confirmed by the "job interview check list" which customarily provided the structure for such interviews. However, counsel contended that it was not inconsistent with the existence of a contract between the worker and the builder for Troubleshooters to lay stress on that matter. It reflected, so it was said, Troubleshooters' need to know for what hours to charge, and to whom, in respect of each worker's labour, and what workers it had available from day to day to refer to other builder clients. We agree that Troubleshooters would need this information. Troubleshooters and the worker shared a mutual interest in ensuring that full remuneration was received for hours worked, and in maximising opportunities for future engagements. Maintenance of communication between the worker and Troubleshooters does not negate the existence of a contractual relationship between the worker and the builder.

22. In the course of his evidence, Mr Groves acknowledged that the period to be spent by a worker on a particular job was left to arrangements to be made between him and the builder concerned. Counsel argued that this acknowledgment indicated an acceptance by Troubleshooters of the existence of a contract between the worker and the builder. However, it seems to us that the likelihood that such arrangements will be made does not, without more, suggest the existence of a contract between the persons expected to make them. The suggestion might have some force if the envisaged arrangements were only to be made after any other contract defining the rights and liabilities of the builder and the worker had come to an end. However, it is clear from the evidence that it was always intended that the builder should remain liable to pay Troubleshooters for all work performed by the worker, whenever it might be done, and that Troubleshooters would be liable to pay the worker for all such work, at the rate which it had agreed with him, whether or not it received payment therefor from the builder. As counsel for the appellants conceded, the builder was not always aware of that rate, as distinct from the total amount per hour which he was liable to pay to Troubleshooters.

23. The element of consideration which is essential to a contract of employment is the promise by the presumptive employer to pay for service as and when the service is rendered. Thus Dixon J observed in Automatic Fire Sprinklers Pty Ltd and Another v Watson [1946] HCA 25; (1946) 72 CLR 435 at 465:

"A contract for the establishment of the relation of master and

servant falls into the same general category of agreements to pay

in respect of the consideration when and so often as it is

executed, and is, therefore, commonly understood as involving no

liability for wages or salary unless earned by service, even

though the failure to serve is a consequence of the master's

wrongful act.

It is, of course, possible for the parties to make a contract for

the payment of periodical sums by the master to the servant

independently of his service. Indeed that is, in effect, what the

Duke of Westminster persuaded the majority of the House of Lords

he had done in Inland Revenue Commissioners v. Duke of Westminster

(1936) AC 1. But, to say the least, it is not usual. The common

understanding of a contract of employment at wages or salary

periodically payable is that it is the service that earns the

remuneration and even a wrongful discharge from the service means

that wages or salary cannot be earned however ready and willing

the employee may be to serve and however much he stand by his

contract and decline to treat it as discharged by breach."

In this case, on the evidence, there was no promise of payment of periodical sums by the builder to the worker, and no agreement between the builder and the worker as to what those sums should be. The builder's only obligation was to pay Troubleshooters. The worker's only entitlement was against Troubleshooters, and in accordance with a different measure.

24. One matter relied on, as tending in favour of the conclusion that a contract came into existence between the builder and the worker, is Troubleshooters' description of itself as an "introducing agency". In a circular letter to prospective clients under a letterhead which described Troubleshooters' business as "Labour Consultants, Labour Agency", it was recited:

"We are a service company that has been established for over 12

years supplying subcontract personnel to commerce and industry on

a casual basis. We supply a high standard of worker/tradesperson

and deal in volume which means you save time, money and effort for

a better result.

The personnel we supply to you are yours to direct and the onus of

inspection and satisfaction is yours. If, for any reason, you are

unhappy with our sub-contractor, simply send the person off site

and inform us of your dissatisfaction. Our service MUST supply

good personnel to ensure your continued usage. We therefore ask

for feedback from you as to the worker's performance.

We urge you to read the Conditions of Hire enclosed and the

Special Conditions of Hire overleaf."

25. To support their analysis of the contract which they contended came into existence between Troubleshooters and each builder, counsel for the appellants submitted that Troubleshooters undertook to supply a worker of a given description to report to a particular builder on a specified day; that worker then being available to enter into a contract with the builder. But that submission overlooks the fact that Troubleshooters was entitled to be paid for the whole number of hours actually worked. Also, if there was a contract between the builder and the worker, it would have been open to those two parties to vary the hourly rate; but this would have been quite inconsistent with the agreements actually signed.

26. The learned trial judge found that the arrangements which he discussed brought into existence two separate contracts, one between Troubleshooters and its builder client, and the other between Troubleshooters and the worker. Of those contracts, his Honour observed:

"The contract between Troubleshooters and its workers is, I

believe, similar to that between Troubleshooters and its builder

clients. That is to say, each contract is for a specific day's

work to be undertaken for a specified builder. That period can, of

course, be extended if the builder so requests and the worker

expressly or tacitly consents.

The agreement is, in each case, concluded when the offer of work

is made, usually over the telephone, by the applicant, and the

worker indicates his willingness to take the position. He thereby

agrees to attend at the time and place indicated, to report to the

person nominated, and to work as required for up to 8 hours on

that day. 8 hours is the standard working day in the industry. If

the builder indicates a continuing requirement for his work, the

man may accept or reject each subsequent day's work as he pleases.

Troubleshooters, for its part, undertakes to pay the worker for

any work which he performs and then reports to Troubleshooters.

The detailed conditions of the contract between Troubleshooters

and the worker are made up of the contents of the `agreement to

contract' which was signed at the time that Troubleshooters

registered him as a person willing, from time to time, to accept

work from the company. Also included in the contract would be any

relevant discussions which took place over the telephone at the

time the particular engagement was offered and accepted. Matters

discussed at the time of the original interview between the worker

and a representative of Troubleshooters could also be relevant."

27. Those conclusions were criticized on behalf of the appellants as being inconsistent with Troubleshooters' perception of itself as an "introducing agency". That phrase was not used by Troubleshooters itself in the promotional circular quoted above. However, Troubleshooters did refer to itself as an "agency" in a document detailing its rates and conditions effective from 4 May 1988. That document described the benefits to be obtained by a builder obtaining sub-contractors through Troubleshooters as follows:

"When you, as an end user, enter directly into an agreement,

(whether at an hourly rate or at an agreed price) with a

sub-contractor for basically labour only, there is a prima facie case

that he or she is technically and legally an employee and as such

you can be liable for all costs of an employer. That is: Holiday

Pay, Termination Pay, Long-Service Leave, Superannuation, Work

Care, etc. Private agreements cannot set aside statutory

obligations and although you may believe that person to be a bona

fide sub-contractor, you may only be leaving the door open for

later costs and litigation. By dealing through our agency you save

yourself from future problems and costs that have caught many

unprepared in the past.

If you have any queries or wish to discuss your labour

requirements with us, please don't hesitate to give us a call. We

have the answers to your labour needs and we will continue to

offer high-quality service at the most cost effective rates possible."

28. Likewise, cl.7 of each worker's contract with Troubleshooters, which is reproduced above, contains a covenant by the worker that "I must carry out all work that I agree to do through the Agency of Troubleshooters Available in a workmanlike manner".

29. We can understand the emphasis laid by counsel on the use of the word "agency". However, we are not persuaded that it should affect our analysis of the legal situation. Lay usage of expressions like "agency" is not conclusive of the nature of a legal relationship: see, for example, Ex parte White, re Neville (1871) LR 6 Ch App 397 at 399 and Weiner v Harris (1910) 1 KB 285 at 290.

30. The analysis suggested by counsel for the appellants was that, when a man (sent by Troubleshooters) reports to a site, sees the foreman and is allocated particular work, he contracts with the builder to do that work. However, in our view, the correct analysis is that the agreement to perform work is concluded earlier when the worker accedes to Troubleshooters' request to attend at a particular site on a given day. At that time, the worker assumes an obligation to attend the site and perform such work, within the scope of his trade or occupation, as may be allocated to him. Correspondingly, Troubleshooters assumes an obligation to pay him for his time.

31. It was also contended on behalf of the appellants that the learned trial judge erred in concluding that a particular builder did not have the right to the exclusive service of a man sent by Troubleshooters, at least for the day on which he was sent. But this contention does not accurately reflect his Honour's findings. Of the use which could be made of the right to exclusive services, his Honour said:

"They (the builders) are entitled to expect (as against

Troubleshooters) that any worker allocated to them will complete

his day's work. They have no entitlement to his particular

services on the next or any later day. Naturally, a worker may

indicate a willingness to continue a job for a given period of

time, and thereby create a moral obligation to do so. But if he

fails to attend, Troubleshooters may substitute another qualified

worker and, if that does not happen, the only recourse of the

builder would be against Troubleshooters.

Thus it is only on any given day that it could be said that there

is a right to the exclusive services of the worker. And even this

relates only to normal working hours; there is no provision for

compulsory overtime. The right to exclusive services during normal

hours resides in the builder as against Troubleshooters and in

Troubleshooters as against the worker. The obvious sanction in

each case for a refusal to work normal hours would be a reduction

in payment."

32. The appellants also pointed to a statement by Mr Groves that his position as managing director of Troubleshooters did not necessarily require experience in the building industry because "our agency is an administrative service". However, that language is consistent with a perception by Troubleshooters of itself as an entity providing a service to builders by supplying them with labour in a way which relieved them of the administrative burdens ordinarily assumed by employers, but without diluting the builders' control over the performance of work and without Troubleshooters undertaking any responsibility for the supervision of that performance. As we have already pointed out, lay use of the word "agency" does not necessarily connote a legal relationship of principal and agent.

33. Other factors relied on by the appellants, as tending to confirm the existence of a contract between builder and worker, were that the right of termination lay with the builder, and that Troubleshooters only became aware of the exercise of that right when notified by the worker of the hours which should be charged to the builder. In our view, reliance on those factors begs the question of whether it is a contractual relationship with the worker which the builder terminates. Clearly enough, the builder brings to an end his requirement for the performance of work by that particular worker. It is therefore to be expected that, if he has indicated to the worker the duration of that requirement from time to time, it would be the worker, in the first instance, who would be notified when that requirement came to an end.

34. Similar reliance was placed on evidence of arrangements made between builders and workers supplied by Troubleshooters under which the worker was allowed to absent himself from a given site for a number of hours or days and then resume work at the same site. Troubleshooters only became aware of these arrangements if the builder required another worker to cover the absence, or when advised by the first worker of the hours for which the client builder should be charged. Again, we consider that these circumstances indicate no more than that the times during which the labour of a particular worker is to be supplied can be defined by arrangement between worker and builder. It does not follow that, in making those arrangements, the worker contractually binds himself to the builder to be available for work during a given period.

35. A related argument arose from evidence that builders, from time to time, with the consent of workers supplied by Troubleshooters, sent them to work at sites other than those to which Troubleshooters had been requested to send them or promoted them to work in higher classifications, such as leading hand, than the classification in relation to which Troubleshooters had initially been requested to supply labour, or the individual workers had initially agreed to work. Again, so it was said, Troubleshooters' knowledge of these arrangements was fortuitous. Troubleshooters was concerned only to know the number of hours for which a worker had worked in a particular classification for a given builder. We can see the force of this submission. It is perhaps the strongest argument in favour of the contention that there is a contractual relationship between the worker and the builder. But we do not think that it can overbear all the difficulties to which that contention gives rise. We think that the better view is that in accepting such arrangements the worker acts on behalf of Troubleshooters to vary its agreement to make a particular classification of worker available at a particular site.

36. Similar considerations apply to special arrangements between builders and workers in respect of the provision by workers of special tools or equipment and the performance of work at weekends or on public holidays or otherwise at overtime rates. Indeed, the conditions of hire reproduced above expressly contemplate that the charges for those incidents of work on a building site should be negotiable. The appellants also pointed to arrangements made by a worker directly with the builders to have "days off" or to work for intermittent periods after the first day on which Troubleshooters sent the worker to the site. However, as we have already pointed out, that evidence does not compel the conclusion that there was a contractual relationship between the worker and the builder when it is remembered that hours worked were invariably reported to Troubleshooters which continued to charge the builder for those hours and received payment of those charges directly from the builder.

37. We were referred to Willett v Boote (1860) 6 H and N 26 : [1860] EngR 922; 158 ER 11. In that case, two foremen were hired by the respondent potters under a piece work system pursuant to which the foremen were to be paid one shilling per dozen score of items of earthenware put into a biscuit oven. Out of that money the foremen agreed to pay four shillings a day to each of the appellant, a journeyman ovenman, and several other workers who all entered into written contracts of employment with the respondents. Bramwell B, in giving the judgment of the Court, concluded, at 36, that in truth the arrangement:

"meant that a sum, arrived at by taking one shilling for every

dozen score of the total quantity put into the oven, was to be

given to these latter men, but that out of the sum so given to

them they were to pay the other men their daily wages. The

appellant and the other men who signed the first mentioned

agreement were no parties to this, but in fact they were paid

their wages by the hands of the two men named in the second

agreement. It was said this established the relation of master and

servant between the men in the second and those in the first

agreement, and destroyed it between the respondents and the

appellant. But this is not so. It is to suppose that the appellant

and the respondents entered into an agreement for no purpose but

at once to cast it aside. The matter is very intelligible. The

appellant desires to have, and the respondents desire to pay,

fixed daily wages for the appellant's labour. But the respondents

desire to have that benefit which is got from careful supervision

and the partial application of the principle of piece work. They

therefore hire the appellant at daily wages, and they agree with

the two men in the second agreement that the appellant shall work

under them as under a foreman, and that they the foremen shall be

paid thus:-An account shall be taken, at one shilling for every

dozen score, of all articles put in the oven; that so much of that

sum as exceeds the wages of the men employed, shall be paid to

them, the foremen, to keep for their own benefit; and that for the

convenience of all parties the residue of that sum shall be given

to them, for them to be the hands who pay the men. It is clear

that if the foremen had not paid the men, either because their

earnings would not allow them, or for any other reason, the

defendants would be liable. It was asked whose would the loss be

if one of the workmen did not work. But the question is not

intelligible. Nobody's but his own. If he did not work he would

not be paid. If the question means if he worked idly or ill, why

the loss would be the foremen's; but so it would be if the

respondents had agreed in terms with the foremen (as we say they

have in substance with this difference) that they themselves would

pay the men and deduct their wages from the sum arrived at by

taking one shilling for every dozen score. The very object of the

arrangement is to give the foremen an interest in getting the

greatest possible quantity of work out of the appellant and his

fellows."

38. Accordingly, it was held that the relation of employer and employee subsisted between the respondent potters and the appellant notwithstanding that his wages were paid by one of the foremen.

39. That case makes it clear that payment of wages by a third party, or what Woodward J called an "intermediary", is not fatal to the existence of a contract of employment between a worker and a putative employer. The essential inquiry, as Bramwell B. indicated in the extract which we have reproduced, is whether the presumptive employer remains liable to pay the worker if, for any reason, the intermediary fails to do so. We can discern no term of any contract between the builder and the worker in the present case which imposes any such liability on the builder in the event of Troubleshooters' failing to make an appropriate payment to the worker. We agree with Woodward J that Howard v Wilson [1832] EngR 153; (1832) 4 Hagg. Ecc. 107, in which a coachman whose wages were paid by a job-man who provided harness and horses was held to be the servant of the lady for whom he drove, is similarly distinguishable on its facts from the present case.

40. An alternative analysis for which the appellants contended was that Troubleshooters was the agent of the builder in engaging the services of the worker and brought about a contract of employment between its presumptive principal and the worker. The chief objection to this analysis arises from the evidence that it was Troubleshooters which fixed, and adjusted from time to time, the remuneration to which each worker was entitled. That was apparently done without reference to the builder who was only concerned to know the gross amount which he was obliged to pay Troubleshooters in respect of workers made available by it.

41. To accommodate this alternative analysis to the fact that Troubleshooters itself made payments of wages to each worker after it had, as presumptive agent of the builder, brought into existence a contract of employment, counsel for the appellants postulated a further relationship of agent and principal between Troubleshooters and each worker whom it made available to a builder. As it was put, "in administratively securing the moneys from the builder and deducting its commission it acts as agent for the man". However, this contention cannot be reconciled with the clear expression of intention that Troubleshooters is liable to pay remuneration at the agreed rate to the worker, whether or not it is itself paid by the builder. Another cogent objection to this subsidiary contention was expressed by Woodward J as follows:

"In the first place, when the builder's order is accepted -

subject only to later notification of inability to supply - the

particular worker to be allocated is not known. Some worker will

later ring in and will be offered the job - he will accept or

reject it as he sees fit. It would be highly artificial to suggest

that the contract with the builder had already been made on his

behalf. Indeed he may not have been on (Troubleshooters') books at

the time the order was placed - he might only have completed his

enrolment procedures during that day. An example of this was given

in evidence."

As well, the appellant's contention involves the awkward concept of Troubleshooters owing at one moment a fiduciary duty as agent to the builder, and then at some later undefined point, assuming a similar obligation to the worker.

42. During the course of the argument reference was made to Construction Industry Training Board v Labour Force Ltd (1970) 3 All ER 220. In that case the arrangements between the labour hire agency (the respondent Labour Force Ltd), the building contractors and the workmen whom Labour Force Ltd. supplied were remarkably similar to those between Troubleshooters, the builders and the workers in the present case. Cooke J, with whom Lord Parker C.J. and Fisher J agreed, concluded that no contract at all had been concluded between the building contractor and the workman, and that the contract between the workman and Labour Force Ltd was not one of principal and agent. His Lordship said, at 223:

"The tribunal dealt first with the question whether the contractor

was the employer of the workman or had any contract with the

workman. It came to the conclusion that there was no contract of

any kind between the contractor and the workman. It is sufficient

to say that in my judgment that conclusion was right. The tribunal

next considered whether in its relations with the workman, the

respondents were an employment agency. As to that, the tribunal said:

`There is similarity with the employment agency in that (the

respondents) found work for persons wishing to work and

found workmen for those with work to be done. But other than

that there is not similarity. The contractor and the workman

were not brought into contractual relationship for reasons

already set out. When the workman agreed to work he entered

into a contract with someone to do work and be paid for it.

That person we think was Labour Force Ltd (ie the

respondents). After agreeing to accept work at the place and

for the hours and for the pay suggested, a contract came

about between the workman and (the respondents), that if he

did the work (the respondents) would pay him. The full terms

and nature of this contract will later be dealt with, but

when it is found that the so-called agent is itself the

principal in the contractual relationship, argument that

there is only agency is we think wrong.'

In my judgment it is plain that when the workman agreed to work on

a particular site at a particular rate of pay, he was agreeing so

to do with the respondents as principals. That in my judgment is

sufficient to dispose of the view that the respondents were merely

acting for the workman as an employment agency. They were

contracting with the workman as principals."

43. It was strongly contended by counsel for the appellants, both at first instance and before us, that the absence of any detailed analysis of the factual circumstances in which work was done at the behest of Labour Force Ltd and the brevity of the reasoning of their Lordships rendered that case of no real assistance in resolving any of the issues raised by this appeal. We agree that the reasoning is brief but Cooke J is a recognised authority in this area of the law: see the comments made by the Judicial Committee of the Privy Council in Lee Ting Sang v Chung Chi-Keung (1990) 2 AC 374 at p 382. Even so, we would not put Labour Force at the forefront of our own reasoning. However, we have no difficulty in agreeing with the comment of Woodward J on the case:

"In the final analysis - because of the other points made by

counsel and because each case does depend, in my view, at least in

part, on the industrial and economic realities behind the

contractual facade, I have taken some comfort from the Labour

Force decision, where Cooke J's views coincide with my own, but

have not relied upon it as authoritative in the present case."

44. Of much more significance for present purposes is the judgment of the High Court in Accident Compensation Commission v Odco Pty Ltd earlier referred to. As we have indicated, that case raised the question of whether Troubleshooters was liable to pay, as an employer of certain tradesmen, a levy imposed by the Victorian Accident Compensation Act. The concept of "employer" was extended in that Act, in the first place by s.8, which so far as relevant, provided:

"(1) Notwithstanding anything in this Act or any other law,

where any person (in this section referred to as `the principal')

in the course of and for the purposes of a trade or business

carried on by the person enters into a contract with any natural

person or natural persons (in this section referred to as `the

(a) under or by which the contractor agrees to perform any

work not being work incidental to a trade or business

regularly carried on by the contractor in the name of the

contractor or under a firm or business name; and

(b) in the performance of which the contractor does not

either sublet the contract or employ workers or although

employing workers actually performs some part of the work

personally-

then for the purposes of this Act the contractor shall be deemed

to be working under a contract of service with an employer and the

principal shall be deemed to be that employer and the amount

payable by the principal to the contractor in respect of the

performance of work under the first-mentioned contract shall be

deemed to be remuneration.

...

(3) If the contractor is a partnership, the contractor is

deemed for the purposes of sub-section (1)(b) to have performed a

part of the work personally if one or more members of the

partnership actually performs any part of the work personally."

45. In a joint judgment, Mason C.J., Brennan, Dawson, Toohey and McHugh JJ concluded that the effect of the relevant documents was that the worker agreed to perform work for Troubleshooters to which they referred as "TSA". They said at 646:

"Moreover, on the view which we take of the contractual

arrangements with TSA, the tradesman agrees to perform work for

TSA, even though the builder is the ultimate beneficiary of that

work. TSA submits that no contract between TSA and a tradesman

comes into existence until the tradesman goes to a building site

nominated by TSA and commences work for the builder at that site.

Indeed, the submission is that the tradesman, having commenced

work at a site, is free to leave at any time of his own choosing."

46. After making some findings in the light of some undisputed evidence of Mr Groves, their Honours continued, again at 646:

"The conclusion to be drawn from this material is that the

tradesman enters into a contract with TSA by accepting the offer

of work made by telephone. The fact that the tradesman is

evidently free to withdraw from the site at any time because he

objects to work or to work further on the ground of safety or for

some other reason is by no means inconsistent with entry into a

contract with TSA on acceptance of the offer of work communicated

by telephone. It may well be that the tradesman has a right to

withdraw his services. The nature and scope of that right were not

explored in argument and it would therefore be unwise to speculate

upon the topic now, except to say that there was no suggestion

that it rendered the contract between TSA and the tradesman illusory.

When the tradesman accepts the offer of work, a contract comes

into existence on the terms set out in the document headed

`AGREEMENT TO CONTRACT' which the tradesman has previously signed.

That document contains the terms which are to govern the

contractual relationship which arises between him and TSA once he

accepts an offer of work communicated to him by TSA. It is

significant that, apart from cl 2, cl 7 of the document contains a

promise by the tradesman to TSA to: `carry out all work that I

agree to do through the agency of (Troubleshooters) in a

workmanlike manner.'

The clause also contains a `guarantee' against faulty workmanship.

In this context the words `work that I agree to do' contemplate

the reaching of an agreement between the tradesman and TSA with

respect to the work to be carried out. So far as the builder is

concerned, it enters into a contract with TSA whereby it agrees to

pay TSA an amount which will enable TSA to pay remuneration to the

tradesman. In the circumstances outlined by the affidavit, on the

oral acceptance by the tradesman of the communicated offer by TSA

of work, an agreement arises between TSA and the tradesman

constituted by that offer and acceptance and the terms set out in

the document entitled `AGREEMENT TO CONTRACT'. That agreement is

one whereby the tradesman agrees with TSA to perform work for the

benefit of TSA in the sense that the work is done for the purposes

of TSA's business and enables TSA to derive remuneration from the

relevant builder which will enable TSA to pay the tradesman for

his services."

47. The High Court then turned to consider whether Troubleshooters should be deemed to be an employer pursuant to s.9(2)(a)(ii) of the Accident Compensation Act as "a person to whom during a financial year, under a relevant contract the services of persons are supplied for or in relation to the performance of work". A "relevant contract" was defined, so far as is necessary to reproduce, as follows by s.9(1):

"(1) For the purposes of this section, a reference to a

relevant contract in relation to a financial year is a reference

to a contract under which a person during that financial year, in

the course of a business carried on by that person-

(a) supplies to another person services for or in relation to

the performance of work;

(b) has supplied to that person the services of persons for

or in relation to the performance of work."

48. The Court concluded that s.9(1)(a) and (b) applied to contracts between Troubleshooters and a partnership consisting of one Paterson and his wife, and between Troubleshooters and a family trust carrying on business as a building contractor. Their Honours observed at 652:

"The language of s9(1) in its application to these contracts

raises several problems for consideration. First, there is the

question whether the tradesman supplies services to TSA. There is

no definition of `services' except in so far as s9(6)(d) provides

that a reference to services includes a reference to `results

(whether goods or services) of work performed'. Once it is

accepted that there was (1) an agreement between TSA and the

builder for the supply of a tradesman to the builder to do certain

work on terms that the builder was to remunerate TSA for supplying

the tradesman and for the work which he did, and (2) an agreement

between TSA and the tradesman whereby the tradesman agreed to

perform work at the site at the builder's direction for

remuneration to be paid by TSA, it follows as a matter of plain

language that the tradesman supplies services to TSA by attending

at the site and doing work there. By attending there and doing

work, he supplies services to TSA for the purposes of its

business, notwithstanding he also at the same time supplies the

same services to the builder for the purposes of its business."

49. That analysis does not contradict the conclusion reached by Woodward J, which we uphold, that there was no contract of employment between the tradesman or the worker, on the one hand, and the builder on the other. However, it does make it necessary to consider whether the contractual relationship between Troubleshooters and the worker was one of employer and employee.

The nature of the contract between Troubleshooters and the worker

50. The argument that the relationship should be characterized as one of employer and employee was summarized and rejected as follows by Woodward J:

The way in which the argument is put for the respondents is that

Troubleshooters men `exhibit decisively the features of employees'

and the combination of control and payment by Troubleshooters

point to that company as the employer. It is said that

Troubleshooters operates in a way analogous to building employers

who charge out labour to another builder, or to labour hire

companies which hire out their employees.

However it is clear that the arrangements which Troubleshooters

makes with its workers are very different from those made by other

labour hire agencies. It makes it clear that it does not intend

its workers to be its employees. They are not paid a weekly wage

nor do they receive any of the normal benefits of a wages

employee, particularly annual leave and sick leave. There is no

obligation upon any man registered with Troubleshooters to work at

any particular time. Equally there is no obligation on

Troubleshooters to find work for the man on any particular day.

So far as payment is concerned, what Troubleshooters does, in

practice, is to pay to the worker his share of the amount which

will in due course be received from the builder; Troubleshooters'

share represents its outgoings, including its superannuation and

public liability insurance payments on behalf of the worker, and

its profits. It is true that Troubleshooters normally pays the

worker before it has received anything from the builder and,

furthermore, it makes the payment even though it may never receive

payment from the particular builder. But Troubleshooters only pays

its men for work which they claim actually to have done for a

builder, and it does so in the confident expectation that it will

soon be reimbursed.

So far as control is concerned, the workers are free to work when

they please. The only requirement is that they keep

Troubleshooters informed of their availability if they want work,

or if they are ceasing to work at a site where Troubleshooters

labour is still required. The elements of stability and

continuity, which are such a central part of every contract of

service extending over a period of time, are not present.

Troubleshooters exercises absolutely no control over the way in

which work is carried out. It merely passes on to the worker the

time and place at which a builder wishes him to report. If the

worker does not like the sound of the particular job - perhaps

because of its location - he is under no obligation to accept that

engagement.

I have no doubt that, in acting as an agency finding work for

persons in the building trade, Troubleshooters creates a

relationship, between it and the men who use its services, of

principal contracting parties and not of employer and employee."

51. His Honour then went on to refer to the finding of the Full Court of the Supreme Court of Victoria which was overruled by the High Court in Accident Compensation Commission v Odco Pty Ltd (supra) and continued:

"However, as counsel for the respondents point out, the common law

question concerning a contract of service was not argued by the

Commission before the trial judge, and the evidence of the nature

of work done by Troubleshooters men was much more limited than the

evidence before me. Accordingly, I treat the Full Court's words as

tending to confirm the view I have otherwise reached, rather than

as authority for that view."

52. It was acknowledged by Mason J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 24 that:

"A prominent factor in determining the nature of the relationship

between a person who engages another to perform work and the

person so engaged is the degree of control which the former can

exercise over the latter. It has been held, however, that the

importance of control lies not so much in its actual exercise,

although clearly that is relevant, as in the right of the employer

to exercise it: Zuijs v. Wirth Bros. Pty. Ltd. (1955) 93 CLR

561, at p 571; Federal Commissioner of Taxation v. Barrett (1973)

[1973] HCA 49; 129 CLR 395, at p 402; Humberstone v. Northern Timber Mills

[1949] HCA 49; (1949) 79 CLR 389, at p 404. In the last-mentioned case Dixon J. said:

`The question is not whether in practice the work was in fact

done subject to a direction and control exercised by an actual

supervision or whether an actual supervision was possible but

whether ultimate authority over the man in the performance of

his work resided in the employer so that he was subject to the

latter's order and directions.'"

53. As we understand the facts found by Woodward J, it could not truly be said that, even after acceptance of an offer from Troubleshooters of work at a particular site on a given day, the worker was subject to Troubleshooters' control or directions. It seems to have been accepted by counsel for the appellants in the course of argument that Troubleshooters had no power to direct or require one of its workers to rectify allegedly defective work. Rather, it was indicated, Troubleshooters confined itself to a role of mediating between the builder and the worker when allegations of that kind were made.

54. It is easier to impute the requisite degree of control, in the sense of the right to exercise it, to a putative employer who maintains a body of workers paid by the week, whom he lends or "charges out" by the day or part of a day to contractors or others requiring particular work to be done. The evidence in this case revealed that other participants in the Victorian building industry, including the firms known as Skilled Engineering and Kirbys, operated in precisely this way. It has been accepted on all sides that the relationship between these labour hire firms and the workers whom they make available is one of employer and employee. These firms occupy the position of the "general employer" discussed by the House of Lords in Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1946] UKHL 1; (1947) AC 1. Counsel for the appellants acknowledged before us that employees of firms like Skilled Engineering "have all the same characteristics of the Troubleshooters men in the organization and performance of their work" but contended as part of their primary submission that skilled Engineering men not become employees of the client "because of the way that particular relationship is structured". In our view there was no reservation of a power in Troubleshooters to require one of its workers to move from one site to another, or to work beyond the initial agreed day, sufficient to permit the imputation of a right to control that worker which would satisfy the test enunciated by Mason J in Stevens v Brodribb (supra).

55. Mason J also pointed out in Stevens v Brodribb at 24:

"But the existence of control, whilst significant, is not the sole

criterion by which to gauge whether a relationship is one of

employment. The approach of this Court has been to regard it

merely as one of a number of indicia which must be considered in

the determination of that question: Queensland Stations Pty. Ltd.

v. Federal Commissioner of Taxation [1945] HCA 13; (1945) 70 CLR 539, at

p 552; Zuijs' Case; Federal Commissioner of Taxation v. Barrett

(1973) 129 CLR, at p 401; Marshall v. Whittaker's Building

Supply Co. [1963] HCA 26; (1963) 109 CLR 210, at p 218. Other relevant matters

include, but are not limited to, the mode of remuneration, the

provision and maintenance of equipment, the obligation to work,

the hours of work and provision for holidays, the deduction of

income tax and the delegation of work by the putative employee."

56. To similar effect, Wilson and Dawson JJ in the same case observed, at 35:

"The classic test for determining whether the relationship of

master and servant exists has been one of control, the answer

depending upon whether the engagement subjects the person engaged

to the command of the person engaging him, not only as to what he

shall do in the course of his employment but as to how he shall do

it: Performing Right Society Ltd. v. Mitchell and Booker (Palais

de Danse) Ltd. (1924) 1 KB 762. The modern approach is, however,

to have regard to a variety of criteria. This approach is not

without its difficulties because not all of the accepted criteria

provide a relevant test in all circumstances and none is

conclusive. Moreover, the relationship itself remains largely

undefined as a legal concept except in terms of the various

criteria, the relevance of which may vary according to the circumstances."

57. The application of the other criteria to the features of the relationship between Troubleshooters and its workers is, we consider, inconclusive except in respect of those criteria which reflect the intention of the parties to the relationship. Standing alone, the mode of remuneration being payment at an agreed hourly rate is equally applicable, on the evidence, to persons who are concededly sub-contractors as to casual employees picked up for a day or part of a day. However, the agreement that Troubleshooters workers are not to receive annual leave or sick leave or any payment referable to those entitlements and that no deduction of income tax is to be made from their remuneration signifies a mutual intention that they are not to be regarded as employees. That intention is consistent with the acknowledgement by the worker in the standard form "Conditions of Contract" with Troubleshooters that "there is no relationship of Employer-Employee with Troubleshooters ... I ... am self-employed and, as such, I am not bound to accept any work through Troubleshooters". As to such a provision the Privy Council in Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 said, at 389:

"Clearly cl 3, which, if it stood alone, would be conclusive in

favour of the Society, cannot receive effect according to its

terms if they contradict the effect of the agreement as a whole.

Nevertheless, their Lordships attach importance to cl 3, and they

consider that the following statement by Lord Denning MR in Massey

v Crown Life Insurance Co (4 November 1977, unreported) correctly

states the way in which it can properly be used: `The law, as I

see it, is this: if the true relationship of the parties is that

of master and servant under a contract of service, the parties

cannot alter the truth of that relationship by putting a different

label upon it ... On the other hand, if their relationship is

ambiguous and is capable of being one or the other (ie either

service or agency), then the parties can remove that ambiguity, by

the very agreement itself which they make with one another. The

agreement itself then becomes the best material from which to

gather the true legal relationship between them.'

In the present case, where there is no reason to think that the

clause is a sham, or that it is not a genuine statement of the

parties' intentions, it must be given its proper weight in

relation to other clauses in the agreement."

That passage was cited with approval by Lord Brandon in delivering the judgment of the Board in Narich v Commissioner of Pay-Roll Tax (1983) 50 ALR 417.

58. Likewise, Wilson and Dawson JJ in Stevens v Brodribb after listing some of the indicia of the nature of the relationship suggesting a contract of service rather than a contract for services, and some of those on the other hand which indicate a contract for services, concluded, at 37:

"None of these leads to any necessary inference, however, and the

actual terms and terminology of the contract will always be of

considerable importance."

59. It was also pointed out in Ferguson v John Dawson and Partners (Contractors) Ltd [1976] EWCA Civ 7; (1976) 3 All ER 817 at 822 that the label attached by the parties to their relationship is not conclusive. However, we consider, in the light of the authorities cited above, that Woodward J accorded no more than an appropriate degree of importance to the actual terms of the agreement with Troubleshooters into which workers entered at arms length.

60. We accept that, as counsel for the appellants submitted, a desire by a worker for independence is not to be equated with the status of an independent contractor. However that acceptance does not lead us, after a careful application to the facts of the principles discussed above, to ascribe any error to Woodward J's conclusion that the relationship between Troubleshooters and the workers who use its services is not that of employer and employee.

Trade Practices Act, ss.45D and 45E

61. We turn to the second main area of challenge to his Honour's judgment: his findings that certain of the appellants, their identity varying in each instance, contravened ss.45D and 45E of the Trade Practices Act in connection with three building jobs. The three jobs were: the renovation of the London Tavern Hotel in Hawthorn Road, South Caulfield; extensions and alterations to premises at 82 John Street, Brunswick and construction works at 181 and 233 Chapel Street, Prahran.

62. The appellants did not challenge any of the primary facts found by Woodward J. Their case before us was that his Honour erred in relation to the inferences which he drew from those facts, especially regarding the involvement of particular individuals and the purpose for which acts were done. We will come to those questions. In the meantime, it is convenient to summarise the trial judge's findings in relation to each of the jobs.

63. The London Tavern Hotel was owned by Carlton United Breweries ("CUB"). Leonard Constructions Pty Ltd acted as construction manager for its renovation and provided site management and supervision and one labourer. There were several sub-contractors on the site. In addition, Leonard Constructions arranged for Troubleshooters to supply two bricklayers and a labourer named Kellick.

64. On 11 March 1988, the appellants Oliver and Harkins, who were organisers representing BWIU and VSBTU respectively, visited the site to check union tickets. When asked for whom he was working, each of the Troubleshooters men replied "Leonard Constructions". But it became apparent to Harkins that the bricklayers were supplied by Troubleshooters. He told Kevin Byrne, the site foreman, that the bricklayers could not work at the site because they were being paid an hourly rate. He said that he did not want Troubleshooters on site. Shortly after this conversation, work ceased on the site for the day; primarily because of heavy rain. But, before Oliver and Harkins left the site, a meeting was arranged at which CUB would be represented.

65. This meeting was held on 16 March, the next working day at the site. It was attended by two Troubleshooters directors, Groves and Bosa. But, before the meeting began, Oliver and Harkins held a further ticket check during which they learned that Kellick was supplied by Troubleshooters. Oliver told Kellick and the bricklayers that they had been declared "black" for 24 hours and that they should immediately leave the site. The reason given by Oliver was that a demarcation dispute had arisen because Kellick was acting as a bricklayer's assistant. But the trial judge disbelieved this reason. He pointed out that Oliver's evidence was that he and Harkins gave the builder and CUB the option of either employing the Troubleshooters men directly on wages or sending them from the site. The CUB project manager, Jim Black, directed that, for the sake of peace on the job, Troubleshooters should not be used. He said that the two union officials then asked Byrne to tell the three Troubleshooters men to leave the job and he did so.

66. There is a conflict of evidence as to whether it was Oliver or Byrne who actually told the three Troubleshooters men to leave the site. Perhaps both men did so. But it does not matter which of them actually spoke to the three men. It is clear enough, as his Honour found, that Oliver and Harkins were directly instrumental in their departure. It is also clear, as his Honour further found, that the two union officials succeeded in obtaining an assurance that no further Troubleshooters men would be employed on the London Tavern job. In making that finding, Woodward J said:

"Harkins and Oliver directly and deliberately interfered with the

performance of the contract between Troubleshooters and Leonard

Constructions. The same action amounted to conduct to prevent or

hinder the acquisition of services by Leonard Constructions from

Troubleshooters. Further, Harkins and Oliver induced Leonard

Constructions to arrive at an understanding between themselves and

the unions they represented on the one hand and Leonard

Constructions on the other, which contained a provision that

Leonard Constructions would not continue to acquire services from

the applicant."

67. At the trial there was a major issue as to whether the actions of Oliver and Harkins, in connection with the London Tavern site, had been authorised by either of their employers, the BWIU and VSBTU. We shall return to that question but, in the meantime, we set out a further finding of Woodward J pertinent to it:

"So far as the direct involvement of the unions is concerned,

there was evidence that Oliver reported to Mr Henderson on 15

March about Troubleshooters workers on the London Tavern site.

There was no evidence as to the form of those discussions. Harkins

similarly reported to Mr Giles and told him there was to be a

meeting with CUB representatives on the subject. Mr Giles says he

may then have been told that bricklayers had been sent from the

site. Certain it is that no words of Henderson or Giles to their

respective organisers prevented the termination by Leonard

Constructions of its hiring contracts with Troubleshooters."

Mr Henderson was the Victorian Branch Secretary of BWIU and Mr Giles the General Secretary of VSBTU.

68. We pass now to the findings made by his Honour in respect of 82 John Street, Brunswick. The builder at this site was Tilley Constructions Pty Ltd which, in the course of the job, was taken over by J.P. Cordukes Pty Ltd. Cordukes supplied a project manager, Paul Howard, but day to day work was supervised by Vince Luicci, a site foreman employed by Tilley Constructions and later by Cordukes.

69. Work started in December 1987 with large scale demolition using some 30 to 40 labouring personnel supplied by Troubleshooters. After Christmas, the balance changed, and between 30 and 34 carpenters, and 6 to 8 labourers, were supplied by Troubleshooters.

70. On 14 April 1988, Oliver and McPartlin, a BWIU official, who is also an appellant, visited the site. They checked some safety matters and carried out a union ticket check. Kellick was on the site and Oliver recognised him from the London Tavern job. Oliver spoke to Howard, asking him how many Troubleshooters men there were on the site. Howard said that he did not know. Oliver asked him to find out. In the meantime, he conducted a safety site walk. A number of safety problems were noted but they were fixed that same day.

71. A site meeting was held on the following day. It was attended by Oliver and McPartlin as well as David Allen from Cordukes and Bruce Tilley of Tilley Constructions. Mr Groves may also have been present. There were some inconsistencies in the accounts of this meeting which were given at the trial, but Woodward J accepted that the union officials told Tilley that there were too many Troubleshooters men on the site:

"and that we had to either get all the Troubleshooters guys on the

salary or get rid of them off the site otherwise the safety issues

and the other issues on a day-to-day basis would be inspected

closely by the union and they would have a continuing presence on

the site, and just the normal form of harassment that is in the industry."

His Honour also accepted Mr Allen's evidence that the union organisers "said there were safety issues and they had stopped the job, but the real issue was Troubleshooters. They wanted those men off the site". At some stage, according to his Honour's findings, Oliver showed him a list of other Cordukes sites and said:

"... we have been around the other jobs, these are the jobs you

have got going, and, you know, we will be back visiting the jobs

and the issue of safety and the old - the normal position saying

that you have got to help us fix this Trouble Shooters thing or we

are just going to be giving you a tough time on those jobs ..."

72. In fact the Troubleshooters men did not leave this job. It was eventually agreed that the matter go to a Disputes Board, established pursuant to the VBIA. The Disputes Board held that the Troubleshooters men were employees of Cordukes, a holding which seems to us to be wrong in law, for the reasons we have given. But Woodward J pointed out that "in furtherance of it, Troubleshooters' contract would have been broken and its men put off site if an injunction had not been granted by the Court".

73. Finally, we summarise his Honour's findings regarding the jobs at Chapel Street, Prahran. The builder was D. Pomeroy Industries Pty Ltd, to whom Troubleshooters supplied seven workers.

74. On 8 August 1988, Martin Bingham, an elected BWIU organiser and one of the appellants, visited 181 Chapel Street. During the course of that visit, he recognised one of the Troubleshooters men, David Joyce. Bingham had previously worked with Joyce and knew that he worked through Troubleshooters. That evening Bingham telephoned Doug Pomeroy, the managing director of Pomeroys. He told him that he had recognised some faces on the site and that it was obvious that Pomeroys was using Troubleshooters. Bingham told Pomeroy that he should not be using Troubleshooters and that his attitude would ruin the union movement. He added: "You will not have any sites to work on if you continue with this attitude". Woodward J found that Bingham's threats "amounted ... to a direct interference in the performance of the contract between the applicant and Pomeroys. It also constituted an attempt to prevent or hinder Pomeroys from acquiring services from the applicant and an attempt to induce Pomeroys to enter into an understanding with Bingham that the applicant's services would no longer be required".

75. On 12 August the assistant director in charge of construction for Pomeroys, one Varrall, met the appellant Harkins to discuss several matters. One of these matters was a demand by Harkins that all people on the site pay PAYE tax. Varrall said that he could not control this matter as there were subcontractors on site.

76. At a further meeting, four days later, Varrall confirmed his response about PAYE taxation. Bingham was present on that occasion, along with Harkins and another union official, and he asked who the "peggy" was, and for whom he worked. The "peggy" was Joyce and Varrall told Bingham that he was employed by Troubleshooters. The three union officials became agitated. Harkins and Bingham abused Varrall and Bingham said that Troubleshooters were parasites on the industry. The union officials then went on a site walk, their second of the day. After this second walk, the three officials claimed to have found several safety items. They declared the job "black", telling Varrall that no further production work was to proceed. The trial judge found that three matters about which complaint was made on the second safety walk were all legitimate matters of criticism. However, he added:

"...but I think it is more likely than not that the timing of the

union officials' action on these matters was directly related to

their concern at having found Troubleshooters men on the site.

This view tends to be confirmed by the fact that Mr Varrall's

later request to keep some workers on site to attend to the safety

items was ignored by the union officials."

77. The union officials then went to 233 Chapel Street. A number of matters attracted their attention on safety grounds. They closed the job. The officials then returned to 181 Chapel Street where Varrall requested that they allow remedial safety work to be carried out. But Bingham said that the site was "black" and everyone should go home. The safety requirements were attended to on subsequent days and the ban was lifted on 19 August.

78. When Pomeroy returned home on the evening of 16 August he was told that Bingham had called. His Honour set out what then ensued:

"He returned the call and was informed, in graphic language, that

he was in a lot of trouble. He asked,

`Is that because of Troubleshooters?'

and Bingham replied

`You said that, not me'.

Bingham added,

`But you can fix it'.

Pomeroy said,

`You mean get rid of Troubleshooters off the job?'

Bingham again said,

`You said that, not me'.

Bingham went on to say,

`You won't have a problem in the world if you fix it.'"

79. Upon the following day, Pomeroy told Torpey, another BWIU organiser, that "Troubleshooters would be removed from the job". Two days later, at a meeting attended by Raffa, the assistant secretary of the BWIU, as well as Pomeroy, Varrall and Bingham, it was agreed that Troubleshooters would not be used again on the Chapel Street jobs. In return, the union officials agreed that 181 Chapel Street could reopen. The trial judge summarised the Chapel Street position in these words:

"In my view, the dealings of Bingham and Harkins with Pomeroys, in

concert with each other and with other union officials,

constituted interference in the performance of the contract

between the applicant and Pomeroys. It also amounted to conduct

which hindered Pomeroys acquiring the services of the applicant.

By a series of statements and actions the officials concerned made

it clear to Pomeroys that, if it continued to use Troubleshooters

men, it would have industrial problems on its hands. If it ceased

to use them, the troubles would also cease.

On 19 August the BWIU, through its officers, arrived at an

understanding with Pomeroys that it would not acquire further

services from the applicant. This understanding was induced by

Bingham, among others, who was a fully informed party to it. The

pleadings made no allegation against Mr Harkins in relation to

these sites, but his participation provides relevant background to

the course of conduct alleged against him at other sites."

80. At a later stage in his reasons, Woodward J dealt with the involvement of the two unions in the conduct which he found to have occurred. Counsel for the appellants contended that the evidence does not support a finding that the unions, or either of them, were involved in, or responsible for, the actions of their officials in respect of the three jobs. Accordingly, although the passage is lengthy, it is desirable to set out the whole of his Honour's findings on this matter:

"I am satisfied, in the light of all the evidence, that the two

respondent unions, along with others in the building industry,

have adopted a policy of trying to prevent the applicant from

operating in the industry as it presently does. I think there are

several reasons behind this attitude of the unions.

First, unions are concerned that if too many people work in the

building industry on pay and conditions which are not the same as

those provided for in awards, those award provisions will be

eroded. In their eyes it is little to the point that the workers

(who are all union members) prefer to work that way and cannot, on

an objective view, be said to be exploited. `All-in payments' are

anathema to the unions and, they say, should not be offered by any

builder or accepted by any worker.

Secondly, the evil practice of `cash-in-hand' payments is seen to

have left a legacy in the form of the PPS system, which permits

deductions at the rather lower rate of 15% (soon to be 20%) than

normal PAYE payments. Of course, at the end of the financial year,

the appropriate level of tax is assessed and paid. But an

independent contractor may reduce his tax payments by entering

into a partnership with his wife or into a trust arrangement. He

may also be able to claim higher business expenses than an

employed worker. These facts are resented by the unions and their

officials, who tend to exaggerate both the extent and the alleged

moral fault of the practice.

Finally, and perhaps most importantly - though the precise motives

of the unions are not directly relevant to this decision, I think

it likely that the unions are concerned about a loss of support

for the closed shop, and thus for the numerical and financial

strength of the unions in the industry, if the applicant's method

of supplying (sic; sc. labour is) copied by others and more and

more workers come to regard themselves as contractors rather than

employees.

This attitude of stern opposition to the applicant, for what were

seen to be good reasons, was reflected in the Trades Hall Council

broadsheet and the minutes of the Building Industry Group, the

State Conference of the BWIU, and the special inter-union meeting

of 5 July 1988, which are set out above.

I do not believe that the advent of the VBIA changed union

attitudes in any way. Policy remained unaltered but, as the

minutes of the meeting of 5 July 1988 recorded, the VBIA could now

be used 'as a means of making life difficult' for the applicant.

However the VBIA did provide a channel for possible resolution of

any disputes which arose over the use by builders of labour

obtained through the applicant. This occurred in relation to the

John Street site.

So far as the management of the two unions is concerned, the BWIU

has as its supreme governing body its biennial national

conference. A national executive, of which Mr Henderson is a

member, meets six or seven times a year. At the state level, the

governing body is the state conference, which meets annually. Day

to day control is exercised by the state management committee,

which consists of the secretary, Mr Henderson, two assistant

secretaries, the president, 8 carpenter representatives, 6

labourer representatives and at least two representatives of

smaller trades. The union employs a total of about 26 elected

organisers and appointed field advisers.

Little oral evidence was given of the power structure of the

VSBTU, but its rules were tendered. It is clear that it is divided

into three divisions, replicating the three unions which merged to

form the new organization, and Mr Giles, as well as being general

secretary of the union, is secretary/treasurer of the bricklayers'

division.

I am satisfied that Mr Henderson and Mr Giles exercise

considerable authority in their respective union branch and

division, and in their unions as a whole, and for present purposes

they represent the relevant controlling minds and wills of their

unions. I am also satisfied that, over the period in question in

these proceedings, they instructed their respective organisers and

other officials to report to them before taking any action against

the applicant on behalf of the union. Generally speaking, those

instructions were carried out.

I was impressed by both witnesses. I think they are both trying to

do what they see as being in the best interests of their members,

while at the same time observing the interlocutory injunctions

granted by the Court. Mr Henderson, in particular, was at pains to

instruct his organisers and field officers to keep him informed

and not to take any action which might result in legal liability

for the union. Mr Giles was, I believe, more inclined to trust the

judgment of his officials.

The result was that, in each case, the field advisers and

organisers kept their senior officers informed but, of the four

cases where I have found breaches of the law to have occurred,

only at the John Street site did Mr Henderson's intervention help

to prevent unlawful conduct reaching its intended result in

breaches of contract between builders and the applicant, and

unlawful actions and understandings that would hinder builders in

engaging the applicant's workers in future.

In view of the policy they had adopted, the authority given to

organisers and field advisers, and the broad knowledge of the

union secretaries about the events that had occurred and were

occurring, particularly at the London Tavern and the 181 Chapel

Street sites, I am satisfied that the respondent unions were

directly and knowingly concerned in the unlawful conduct of their

officials at the London Tavern site, and the BWIU was so concerned

at 181 Chapel Street. In each case the unions acted in concert

with their officials. There was concurrence in the rightness of

the cause and in the desired result. Only the precise methods used

may have been criticised by the union secretaries because of their

vulnerability to legal action. But no direct steps were taken to

prevent the use of those methods on those occasions or to undo

their consequences.

In any event, I think it is clear that the two unions were both

vicariously liable for their officials' actions at the London

Tavern site and the BWIU was vicariously liable for the seventh

respondent's actions at 181 Chapel Street.

In each case the officials were designated and authorised to deal

with industrial matters at the sites to which they were sent or

which fell within their region of work. Instructions to be careful

in dealing with Troubleshooters, and to keep notes and report

their actions, were administrative requirements rather than formal

limitations on their authority to act in what they saw as being

the interest of their members.

In my view the unions are vicariously liable for the wrongdoing of

their officials at common law - so far as the actions for

inducement to breach of contract are concerned. And pursuant to

sub-s 84(2) of the Trade Practices Act they are liable, together

with their officials, for contraventions of the Act, since the

conduct of the officials was clearly within their apparent

authority and, in my view, within their actual authority, even

allowing for Mr Henderson's strictures about keeping within the

law. For the reasons I have given, the element of intent,

necessary to establish liability of the unions under s.45D, was

also present."

81. Sections 45D and 45E each provide for a variety of situations. The relevant parts of those sections, according to the case made by Troubleshooters at the trial and before us, are as follows:

"45D (1) Subject to this section, a person shall not, in concert

with a second person, engage in conduct that hinders or

prevents .... the acquisition of goods or services by a

third person from a fourth person (not being an employer

of the first-mentioned person), where -

(a) ....

(b) the fourth person is a corporation and the conduct

is engaged in for the purpose, and would have or be

likely to have the effect, of causing -

(i) substantial loss or damage to the business of

the fourth person or of a body corporate that

is related to that person;

or

(ii) ...

(2) ... a person shall be deemed to engage in conduct for a

purpose mentioned in (sub-section 1) if he engages in

that conduct for purposes that include that purpose."

82. In the way that the matter is put by Troubleshooters, as against each appellant, the "first person" is each of the appellants, the "second person" is each of the remaining appellants, other union officials and other union members, the "third person" is Troubleshooters' client builder in the case in question and the "fourth person" is Troubleshooters.

"45E (1) Subject to this section, a person who has been

accustomed, or is under an obligation, .... to acquire

goods or services from, a second person shall not make a

contract or arrangement, or arrive at an understanding,

with a third person (being an organization of employees,

an officer of such an organization, or another person

acting for or on behalf of such an organization or

officer) if the proposed contract, arrangement or

understanding contains a provision that -

(a) has the purpose of preventing or hindering the

first-mentioned person ... from acquiring or

continuing to acquire any such goods or services

from the second person;

(b) ...

(3) In a case where the person first mentioned in

sub-section (1) is not a corporation, that sub-section

applies only if the second person mentioned in that

sub-section is a corporation."

83. For the purposes of this section, Troubleshooters contends that the "first person" is its client builder, the "second person" is Troubleshooters and the "third person" is each of the remaining appellants.

84. Before us, counsel for the appellants did not dispute the conceptual framework underpinning Troubleshooters' cases based on ss.45D and 45E. But they submitted that his Honour erred in finding that the organisations, or either of them, were involved in, or responsible for, the conduct of their officials. They also put submissions regarding the trial judge's findings as to the effects of that conduct.

85. It will be recalled that Woodward J held the organisations to be involved in the conduct of their officials in several different ways. First, his Honour found as a fact that Henderson and Giles, the secretaries of the two unions, had been kept informed by their subordinates of the progress of these disputes but that only at the John Street site had there been any intervention to prevent unlawful action. His Honour added to this finding the policy of the two unions and the authority given to their organisers, leading to a finding that the unions themselves had been directly and knowingly concerned in the unlawful conduct of their officials at the London Tavern site and that the BWIU had been similarly concerned at 181 Chapel Street. He further held that the unions were vicariously liable for the wrongdoings of their officials at common law and also pursuant to s.84(2) of the Trade Practices Act. The appellants challenge his Honour's findings in respect of all these bases of liability.

86. During the course of their submissions counsel for the appellants referred to several portions of the evidence of Henderson and Giles. In answer to a question whether there was opposition in his union to the way in which Troubleshooters operates, Henderson replied: "Yes, there certainly is". When asked the basis of the opposition, he responded: "The way the union sees it, the way our people within the union see the way they are operating is that the people are employees, they should be paid award conditions". That this attitude was a long-standing one is demonstrated by a series of documents tendered in evidence. The earliest of them, in point of time, was a series of minutes of meetings of the Building Industry Group ("BIG") representing eight unions involved in the building industry including the BWIU. The first minute is that of the meeting of 3 March 1986. Item 5 of the minute reads:

"5. Troubleshooters - B.I.I.I.C. to be asked to look at this company.

M. Butcher moved and M. Greenbury seconded

That ban be placed on this company providing any labour in the

industry and that where discovered colluding with builders

contractors etc, a 48 hour ban be placed on the particular site"

87. The minute of the BIG meeting of 11 March 1986 includes this item:

"TROUBLESHOOTERS:

Matter has been placed in hands of B.I.I.I.C. - need to warn

builders that body hire from unscrupulous companies. Raise matter

with Secretaries.

B. Boyd moved and M. Butcher seconded

'That this meeting of B.I.G. calls for a leaflet to be drawn up

highlighting the area of body hire. Unions to be asked to submit

material for next meeting of B.I.G.'

CARRIED"

88. At the following meeting, a week later, it was noted, under the heading "Troubleshooters", "that a meeting should be convened".

89. The minute of the 24 March 1986 meeting of BIG recorded the following resolution, under the heading "Troubleshooters Etc":

"That M.B.A. be informed that arrangements between builders and

troubleshooters and/or subsidiary companies in respect of body

hire on a basis contrary to agreements will lead to indefinite

stoppage on those projects being undertaken by that builder"

The abbreviation "MBA" refers to the Master Builders' Association.

90. On 7 April, under the heading "Troubleshooters" it was noted "MBA have been informed of BIG ban on this organisation".

91. The final minute in this series was that of the meeting of 15 April 1986. The relevant item reads:

"Standing orders be suspended to permit matter of Troubleshooters

to be dealt with.

Brian Groves explained operation of Troubleshooters and stated

that they were working within the rules.

B. Boyd stated that nothing has changed in twenty years.

Matter to be raised with Secretaries."

92. The evidence includes some other BIG minutes referring to Troubleshooters, but none of them indicates any change in attitude towards that organisation. We need not refer to these minutes in detail. However, as the relevant meeting coincided with the Chapel Street dispute, we should refer to the minute of 15 August 1988:

"BODY HIRE (H Harkins)

Industrial Officer Parkinson reported BIG Secretaries meeting to

consider 17th August 1988.

H Harkins suggested site agreements should include requirement for

PAYE and Work Care.

M Papan reported on Kaylow (labour hire) on job at Church Street,

Richmond (Wingard and Webb) - no work care etc.

Meeting discussed need for education campaign via mass meetings of

workers on sites - Industrial Officer Parkinson to raise with BIG

Secretaries."

The VSBTU, as well as the BWIU, was represented at this meeting.

93. Even more illuminating are two other documents of mid-1988. The first of them is a minute of a special inter-union meeting of 5 July 1988, specifically concerning Troubleshooters, which was attended by representatives of the Australian Council of Trade Unions and the Victorian Trades Hall Council as well as representatives of BWIU, VSBTU and two other building unions. The minute includes a reference to a report by two of the BWIU representatives in which they:

"... outlined the nature of Troubleshooters operations in Victoria

and Queensland and the threat they pose to the future of trade

union activity in the construction industry. Among the issues

raised were:

. the legal difficulties involved in outright refusal to work on

sites where labour provided through Troubleshooters was being

utilised;

. the possible use of the Victorian Building Industry Agreement as

a means of making life difficult for TA;

. the negotiations which had taken place in order to try to reach

some accommodation with TA, possibly based on the NSW 'body

hire' agreements of some years ago. TA repeatedly 'backed off'

on each occasion that agreement seemed imminent;

. there was evidence of links between TA (in particular Groves)

and the 'New Right';

. the fact that for some reason TA had 'gone quiet' over recent

weeks;

. the desirability of involving the Victorian Government in

discussions about the issue, and

. the desirability of ensuring that the MBAV maintained its

present position of opposition to the activities of TA."

94. The second document is a broadsheet distributed by the Victorian Trades Hall Council with the knowledge and consent of BWIU and VSBTU. His Honour found that it was unclear what role BWIU had in the production of this document but that the union helped to distribute it. The document read:

"HIRE A BODY -

GET A TAX BLUDGER

BODY HIRE UNDERMINES

BUILDING WORKERS'

WAGES AND CONDITIONS

They call them Labour Hire Agencies, but their business is to sell

bodies. They don't make anything. They just recirculate workers from

one boss to another and take a handsome fee for the workers' efforts.

Most of them are just body hire Agencies.

Some of these Agencies are alright, but many are not. They make

"all in" payments to building workers who in effect become

subcontractors.

These hired bodies are not paid proper award wages and conditions.

They do not get holiday or sick pay and they do not get

superannuation or long service leave pay.

BREAK AWARDS

This sort of subcontract body hire is clearly contrary to the

Victorian Building Industry Agreement 1987/89 and all other

relevant awards.

Body hire undermines the wages and conditions of all other

building workers. The hired bodies frequently ignore proper awards

and conditions and they are used to divide workers between themselves.

PAY MORE TAX

Subcontract body hire encourages tax bludgers. Those in the scheme

pay as little as 10% income tax, while most workers pay over 30%

income tax under the pay as you earn (PAYE) method.

THEY PAY LESS

Most of these hired bodies are tax bludgers. Genuine labour hire

has a limited role in industry and we are not criticising those

Agencies and workers who do the right thing.

`FREE MARKET?'

On the other hand this subcontracting body hire is in line with

the conservative political policies of the so-called New Right and

the Victorian Liberal Party who want to smash unions and undermine

hard won awards and conditions.

These people talk about `free market' deals between workers and

employers.

FREE FOR THE BOSS

What they really mean is that employers should be 'free' to decide

how long and when workers work and what sort of conditions they

should work under.

All this masquerades under the guise of 'flexible working coniditions'.

Some of the major employer organisations, including the

Confederation of Australian Industry, have often stated their

greedy desire to dismantle awards and encourage the making of

contracts between individual workers and employers.

Just imagine how much resistance one worker, on his or her own,

can put up to a boss who wants to change working hours, working

conditions and wages.

AT FIRST GLANCE

Many of these 'flexible' ideas seem alright at first glance, or

when the building industry is in 'boom'. But when the inevitable

'bust' comes along the deregulated 'free market' gives the boss

total control over workers.

* Make sure that the people you work with are not undermining your

wages and conditions.

* Demand, from your boss, that he/she only employs people working

on award/agreement conditions.

* Act now to protect your wages and conditions for now and the future.

Authorised by John Halfpenny, Secretary Victorian Trades Hall

Council, 54 Victoria Street, Carlton South

June 1988

Victorian TRADES HALL Council"

95. Counsel for the appellants made the point that all of the BIG meetings of which minutes were tendered, except the meeting of 15 August 1988, antedated any interim injunction. They submitted that it should not be assumed that the unions retained the same attitude after the injunctions, especially in relation to the imposition of bans. We accept that submission, but the minutes do attest the long-standing hostility of the BWIU to Troubleshooters. The oral evidence amply demonstrates that the injunctions did not eliminate that hostility, nor its underlying causes; although - as his Honour found - they did affect the way in which the appellants conducted themselves.

96. In aid of their submission that Henderson should not be supposed to have supported the conduct of the BWIU organisers at the London Tavern, John Street and Chapel Street sites, counsel referred to evidence concerning his intervention in a dispute involving a site at Frankston. It appears that, during the progress of the trial before Woodward J, a union official named Burleigh was involved in some incident at this site which also involved Troubleshooters. During the course of his evidence, Henderson said that he became aware of the matter and that he had issued an instruction to Burleigh through someone else. The nature of the instruction was not disclosed but Henderson said that he had intended "to have his hide" at the organisers meeting that morning but that Burleigh did not attend. He added: "but anyway I will talk to Mr Burleigh".

97. The details of the Frankston incident were not spelt out in the evidence, but we accept that Henderson's evidence should be understood as indicating his displeasure about the action taken by Burleigh, whatever it was, and his determination to take the matter up with him. But we do not think that it should be inferred from this evidence that Henderson felt the same way about the incidents we have recounted at the London Tavern, John Street and Chapel Street. The Frankston incident came during the progress of the trial. It is not surprising that Henderson might have been displeased that Burleigh should take controversial action at that time, even if only for tactical reasons. We do not think it safe to infer from his reaction to the Frankston incident a similar reaction to the incidents at the London Tavern, John Street and Chapel Street. We say this the more especially because there was no evidence that any of the organisers who were involved in these incidents was ever disciplined for his actions. In each case, the incident extended over several days. There was evidence that Henderson was kept informed of the position by the relevant BWIU organisers in relation to all three incidents. There was similar evidence as to Giles' knowledge of the London Tavern and Chapel Street incidents. Yet, apart from Henderson's initiative to refer the John Street matter to the Disputes Board, neither secretary took any step to countermand the actions of his organisers. We think that the only available inference is that - with that one exception - the actions of the organisers were actions which had the approval of the union secretaries. They were undertaken by the organisers on behalf of the unions. At the least, we are satisfied that it would be wrong for us, who have not observed the witnesses in the witness box, to overrule his Honour's conclusion on this matter: see Abalos v Australian Postal Commission [1990] HCA 47; (1990) 65 ALJR 11 at p 16.

98. It follows that, in our opinion, Woodward J's finding that the two unions were involved in some activities made unlawful by s.45D and s.45E, provided the other conditions of those sections were fulfilled, was justified upon the first of the bases considered by him. In the circumstances, it is not necessary for us to consider whether his finding could also be sustained upon one or more of the other bases.

99. We turn now to the submissions of counsel as to the effects of the appellants' conduct.

100. In the first place, it is said that the respondent did not show that the appellants had the purpose referred to in either s.45D or s.45E. Section 45D makes unlawful the conduct described by it only where that conduct is engaged in for one of the purposes stated in the section - in this case, the purpose of causing substantial loss or damage to the business of the fourth person. As Troubleshooters puts its case, it is the "fourth person", so the question is whether the appellants intended to inflict upon it substantial loss or damage. In relation to s.45E the question is whether the appellants had the purpose of preventing the relevant client-builder from continuing to acquire services from Troubleshooters.

101. As to s.45E, it seems to us that the appellants' submission is unarguable. Upon his Honour's findings of primary fact - which, we repeat, were unchallenged - the clear purpose of those involved in the three incidents on the union side was to terminate the Troubleshooters presence at the relevant site or sites. The purpose, in other words, was to terminate the supply of services by Troubleshooters to the relevant builder; and incidentally, to deter that builder from acquiring Troubleshooters' services in the future.

102. The appellants' case in relation to s.45D is more arguable. That case, in essence, is that the purpose of the relevant conduct was the safeguarding of working conditions on building sites. It is argued that, rightly or wrongly, the relevant union officials genuinely believed that the practice of "body hire" was inimical to the interests of building workers because it might lead to the undermining of award conditions and that they were actuated by that belief in taking the action which they did. We accept that this was so. But we do not think that it follows that the officials lacked the purpose of causing substantial loss or damage to the respondent. There is often a perception that the most effective method of obtaining a particular industrial objective is to subject somebody to the pressure of actual or threatened loss or damage. In such a situation, the party applying the pressure may have the purpose proscribed by s.45D(1) notwithstanding that this purpose is a means to a greater end. The matter was discussed at some length in the decision of the Full Court in Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc [1989] FCA 479; (1989) 91 ALR 397 in which case the Full Court followed earlier decisions including, notably, Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union [1979] FCA 85; (1979) 42 FLR 331. Jewel Food Stores is under appeal to the High Court of Australia. But, in the meantime, it is appropriate for us to follow that decision, a course which must lead to the rejection of the appellants' submissions on this aspect of the case.

103. Next, the appellants submit that liability under s.45D was not made out in connection with the John Street site because no loss or damage was sustained. In this case the matter was referred to the Disputes Board without interruption to the work of the Troubleshooters men who were on the site.

104. The event stipulated by s.45D is not the incurring of actual loss or damage but the likelihood that the relevant conduct would have that effect; so it is really no answer to say that, in the event, no loss or damage was sustained.

105. Woodward J did not make a finding regarding the likely effect of the conduct at John Street, presumably because he had decided not to grant injunctive relief under s.45D. Although the respondent makes a general claim for damages, its counsel concede that no damage was in fact sustained by the respondent in connection with John Street. Accordingly, in the absence of an injunction, the question whether the overall conduct of the appellants - taking the disruptive actions of Oliver and McPartlin together with the remedial action of Henderson - was likely to cause loss or damage is a matter of no practical consequence. In the circumstances, as counsel for the appellants agreed, there is no need to deal with this point.

106. The next matter raised by the appellant concerns the London Tavern site. It is said by counsel that the loss sustained by Troubleshooters as a result of the conduct of the union officials at this site cannot properly be regarded as "substantial" since it was minor in relation to the company's overall activities. Counsel point out that only three Troubleshooters men were engaged on the London Tavern job, as compared with about 300 Troubleshooters men working on building jobs at any one time.

107. No doubt the word "substantial" does import into the text an element of relativity. Bowen C.J. said as much in Tillmanns Butcheries (supra) at p 339. But it is not necessary for a corporation complaining of a contravention of s.45D to show that the loss or damage would be a major blow to its business. It is sufficient that the loss would be, in the circumstances, "real or of substance and not insubstantial or nominal": see per Deane J in Tillmanns Butcheries at p 348.

108. The financial loss directly sustained by Troubleshooters as a result of the London Tavern incident does not appear to have been quantified in the evidence. But it appears that the job still had some distance to go and that the three men would have been likely to continue on the job for some time. So it is likely that the direct loss sustained by Troubleshooters was not insignificant. Even if there were nothing more, we would not feel able to uphold this argument of the appellants.

109. But, of course, there was much more. As is readily apparent from the evidence, the Melbourne building industry is relatively close-knit, on both the union and the employer sides. Given the attitude of the building unions to Troubleshooters, a successful ban on Troubleshooters men at the London Tavern site would have been likely to encourage the imposition of bans at other sites. A successful ban at London Tavern would also have been likely to deter other clients, and potential clients, from maintaining or commencing a relationship with Troubleshooters; possibly leading to the ultimate collapse of Troubleshooters' business.

110. The respondent's case under ss.45D and 45E was made out.

The findings of wrongful interference with contractual relations and the defence of justification

111. The learned trial judge made findings (which, in the light of what we have already said, must stand) of intentional and direct interference, by individual appellants acting on behalf of the appellant unions, with the contractual relations previously entered into between Troubleshooters and the respective builders at the sites referred to as the London Tavern site, the Chapel Street sites and the College of the Bible site. His Honour's reasons for judgment make it plain that each of the elements of the tort of interference with contractual relations, as elaborated by Lord Denning MR in Torquay Hotel Co Ltd v Cousins (1969) 2 Ch 106 at 138-139 (see also Emerald Construction Co Ltd v Lowthian (1966) 1 WLR 691 at 700-701, 703-704) was established against the appellants. For the purposes of the principle, as Lord Denning made clear in the first passage cited, there is a distinction to be made between direct and indirect interference in the execution of a contract. Indirect interference will only suffice for the establishing of the tort if the means used can be described as unlawful. But for this purpose the procuring of breaches of contract would constitute unlawful means (Torquay Hotel at 139; J.T. Stratford and Son Ltd v Lindley (1965) AC 269 at 325 per Lord Reid, 328 per Viscount Radcliffe, and 338 per Lord Upjohn; Merkur Island Shipping Corporation v Laughton (1983) 2 AC 570 at 607, 609-610; Davies v Nyland (1975) 10 SASR 76 at 100; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 at 246; McKernan v Fraser [1931] HCA 54; (1931) 46 CLR 343 at 378, per Evatt J). As the builders were induced to break their contracts with Troubleshooters by threats of disruption of work at the building sites which would have constituted breaches of the contracts of employment of the members of the unions working there, it is really immaterial whether the interference with the contract between the respondent and the builder was direct or indirect. However, on his Honour's findings it was plainly direct.

112. In Quinn v Leathem [1901] UKHL 2; (1901) AC 495, Lord Macnaghten (at 510) stated the principle:

"(I)t is a violation of legal right to interfere with contractual

relations recognised by law if there be no sufficient

justification for the interference."

The question that arises is whether there has been shown "sufficient justification" for the appellants' acts. The onus of proving justification is upon the party who has interfered in the contractual relations of another: Camden Nominees, Limited v Forcey (1940) Ch 352 at 365; Edwin Hill and Partners v First National Finance Corporation Plc (1989) 1 WLR 225 at 228; Greig v Insole (1978) 1 WLR 302 at 340, 341; Mark Fishing Co Ltd v United Fishermen and Allied Workers' Union (1972) 24 DLR (3d) 585 at 609 (affirmed by the Supreme Court of Canada (1973) 38 DLR (3d) 316). In this case, the appellants relied at the trial, as his Honour said, on a defence "that they were justified because the `alleged agreement' between (Troubleshooters) and the builder in each case `was unlawful, or attended by unlawful conduct' of (Troubleshooters)." So framed, the defence depended upon the allegation that the agreements between Troubleshooters and the builders were agreements to carry out work by means involving the engagement of employees upon terms which were in breach of applicable industrial awards and agreements. Since his Honour rightly found that this element of illegality in respect of the agreements between Troubleshooters and the builders did not exist, the defence of justification, as pleaded, necessarily failed.

113. However, at the hearing of the appeal, the appellants attempted to place the matter of justification on a wider footing. In written submissions, they repeated the proposition the trial judge had rejected, but added to it contentions that absence of malice was sufficient to render the appellants' actions lawful, and that they were justified "because they believed that it was necessary in order to protect award wages and conditions and the operation of the Victorian building industry agreement." In oral submissions, this was elaborated as a contention that a bona fide and reasonable belief would in each case be sufficient to justify the proved interference with contractual relations, even if the belief turned out to be wrong. Counsel for Troubleshooters countered this contention with a diametrically opposite one; they submitted that even a correct perception of some illegality in Troubleshooters' contracts with the builders could not be held to justify intentional interference with contractual relations, there being suitable legal remedies readily available for the clarification and resolution of the question. There is authority to support this point of view, and his Honour expressed the opinion (which was obiter, having regard to his finding that no illegality affected the respondent's agreements with the builders) that justification would not have been shown, even had the appellants' view of the contracts been correct.

114. These conflicting arguments call for some examination of the nature and requirements of the defence of justification. It should be pointed out, at the outset, that the appellants conceded the defence is relevant, in the present case, only to the tort of interference with contractual relations. No such defence is available in respect of the claims based on ss.45D and 45E of the Trade Practices Act.

115. "What constitutes a lawful justification," Dixon J said in James v The Commonwealth [1939] HCA 9; (1939) 62 CLR 339 at 370, "is a matter of some difficulty ... ." It is not made any less difficult by the fact that the tort of intentional interference with contractual relations may be established either by the proof of conduct, the only unlawful element in which is the intentional procurement of a breach of contract, or by conduct which has the additional quality of being independently unlawful. Assuming that justification is a defence in both cases (it has been questioned whether justification is a defence to a claim for interference with contractual relations by unlawful means: Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (supra, at 255)) it does not seem right that circumstances capable of justifying an interference with contractual relations which is not otherwise unlawful should necessarily justify also an interference by means that are independently unlawful. If regard be had, on the one hand, to the widely differing types of conduct which may constitute the tort, and on the other, to the great variety of circumstances which may conceivably be put forward as constituting justification, it would not be surprising to find that the courts have, during the whole course of this century, studiously refrained from attempting to limit in advance what might amount to a justification. The method adopted has been to consider, case by case as they have arisen, matters claimed to be sufficient. The authorities show that, upon examination, few circumstances have been seen to warrant a finding of justification. As Gale J of the Ontario High Court noted in Posluns v Toronto Stock Exchange (1964) 46 DLR (2d.) 210 at 270:

116. The one statement of principle, broad though it is, to which courts have kept recurring is the statement of Romer L.J. in Glamorgan Coal Company, Limited v South Wales Miners' Federation (1903) 2 KB 545 at 573-575. After referring to Lord Macnaghten's dictum which has been quoted above, and to the statement of Bowen L.J. in Mogul Steamship Co v McGregor, Gow and Co (1889) 23 QBD 598 at 614 condemning "the intentional procurement of a violation of individual rights, contractual or other, assuming always that there is no just cause for it," Romer L.J. said:

"But although, in my judgment there is no doubt as to the law, yet

I fully recognise that considerable difficulties may arise in

applying it to the circumstances of any particular case. When a

person has knowingly procured another to break his contract, it

may be difficult under the circumstances to say whether or not

there was `sufficient justification or just cause' for his act. I

think it would be extremely difficult, even if it were possible,

to give a complete and satisfactory definition of what is

`sufficient justification,' and most attempts to do so would

probably be mischievous. I certainly shall not make the attempt.

In particular I do not think it necessary or useful to discuss the

point as to how far the question of justification can be

assimilated to the question of malice in cases of libel and

slander. ... I respectfully agree with what Bowen L.J. said in the

Mogul Case, when considering the difficulty that might arise

whether there was sufficient justification or not: `The good sense

of the tribunal which had to decide would have to analyze the

circumstances and to discover on which side of the line each case

fell.' I will only add that, in analyzing or considering the

circumstances, I think that regard might be had to the nature of

the contract broken; the position of the parties to the contract;

the grounds for the breach; the means employed to procure the

breach; the relation of the person procuring the breach to the

person who breaks the contract; and I think also to the object of

the person in procuring the breach."

When the case went to the House of Lords (South Wales Miners' Federation v Glamorgan Coal Company, Limited (1905) AC 239), no more precise principle was stated. The care with which the House abstained from declaring that this or that conduct might justify a defendant was noted by Simonds J (as he then was) in Camden Nominees (supra, at 363), and his Lordship concluded (at 365):

"The result which plainly emerges is that it is for the defendant

to justify, and that his task is a difficult one." Weight is

added to this conclusion by the way Viscount Simon L.C. put the

matter in Crofter Hand Woven Harris Tweed Company, Limited v

Veitch [1941] UKHL 2; (1942) AC 435 at 442-443:

"If C has an existing contract with A and B is aware of it, and if

B persuades or induces C to break the contract with resulting

damage to A, this is, generally speaking, a tortious act for which

B will be liable to A for the injury he has done him. In some

cases, however, B may be able to justify his procuring of the

breach of contract, e.g., a father may persuade his daughter to

break her engagement to marry a scoundrel. (This is not, of

course, to say that the scoundrel would not have an action against

the daughter for breach.) The father's justification arises from a

moral duty to urge C that the contract should be repudiated."

(Emphasis added. Note the strength of the sole example given of a

case of justification.)

See also Fokuhl v Raymond (1948) 3 DLR 11 at 24.

117. A catalogue of instances where justification has actually been held to exist would be a short one. In Posluns (supra, at 270-271), reference was again made to the right of a father to induce his daughter to break a contract to marry a scoundrel (an example originally proposed by Stirling L.J. in Glamorgan Coal Company (supra, at 577)), and it was suggested a medical practitioner might properly advise a patient to withdraw from a contract in the interests of his health, though Gale J suggested heed should be paid to the distinction between mere advice and actual inducement. (But the language chosen by Lord Wright in Crofter Hand Woven Harris Tweed (at 465) does not encourage reliance on this distinction.) Gale J also referred to Stott v Gamble (1916) 2 KB 504, where a licensing body banned an objectionable film. However, the facts of that case suggest it involved nothing more than a proper exercise of lawful authority, and it may perhaps be compared with James v The Commonwealth (supra) where Dixon J (at 373) held that the executive government's "bona fide assertion as to the state of the law and an intention to resort to the courts made known to (a party contracting with the plaintiff)" could not be considered a wrongful inducement or procurement of any resulting breach. Two further examples were given by Gale J in Posluns. One was the case Brimelow v Casson (1924) 1 Ch 302, where a protective committee was held justified in procuring breaches of contracts of employment under which chorus girls had been so grossly underpaid that the court considered they had been forced into prostitution. That case was plainly an extreme one, and it has always been treated as exceptional - see the comments of Simonds J in Camden Nominees (supra, at 366). The final example given by Gale J is where "a person may be justified in encroaching upon another's civil rights because of some statutory or contractual privilege, in which case he can be said to be acting in accordance with a right conferred by contract or a duty imposed upon him by competent authority as distinct from the mere protection of his own interest." But in such a case, as Gale J also pointed out, it may be that there is no unlawful act, rather than that there is a defence of justification.

118. There is good reason for the rarity of cases where justification has been shown. In a society which values the rule of law, occasions when a legal right may be violated with impunity ought not to be frequent.

119. The particular matters put forward on behalf of the appellants have been rejected by an overwhelming weight of authority. In South Wales Miners' Federation v Glamorgan Coal Company (at 246) Lord Macnaghten emphatically dismissed an argument that the executive of the federation

"had a duty cast upon them to protect the interests of the members

of the union, and that they could not be made legally responsible

for the consequences of their action if they acted honestly in

good faith and without any sinister or indirect motive."

120. This was no basis, he considered, upon which it could be justified "to counsel and procure a breach of duty". In Read v The Friendly Society of Operative Stonemasons of England, Ireland and Wales (1902) 2 KB 88, Darling J (with whom Channell J agreed) said (at 96-97):

"(I)t is not a justification that `they acted bona fide in the

best interests of the society of masons,' i.e., in their own

interests. Nor is it enough that `they were not actuated by

improper motives.' I think their sufficient justification for

interference with plaintiff's right must be an equal or superior

right in themselves, and that no one can legally excuse himself to

a man, of whose contract he has procured the breach, on the ground

that he acted on a wrong understanding of his own rights, or

without malice, or bona fide, or in the best interests of himself,

nor even that he acted as an altruist, seeking only the good of

another and careless of his own advantage."

Read was cited as an "important case" by Stuart-Smith L.J. in Edwin Hill and Partners v First National Finance Corporation Plc (supra, at 231). Stuart-Smith L.J. (at 233) said: "Justification for interference with the plaintiff's contractual right based upon an equal or superior right in the defendant must clearly be a legal right." Nourse L.J. and Sir Nicolas Browne-Wilkinson V-C both agreed. In Trident Construction Pty Ltd v The Australian Builders' Labourers' Federated Union of Workers - Western Australian Branch (1984) WAR 245 at 251, Kennedy J said:

"As to justification, it does not appear to me that any authority

supports the view that the fact that it is an industrial dispute

justifies, in the technical sense, action such as was taken in

this case. The authorities, indeed, seem to be to the contrary -

see, for example, Davies v Nyland (supra)."

"One point, however, requires to be emphasised. ... (I)t is quite

irrelevant that he may have acted in good faith and without malice

or under a mistaken understanding as to his legal rights; good

faith, as such, provides no defence whatever to a claim based on

this tort ... ."

Slade J returned to this topic at 341, where he said:

"In his closing speech on behalf of the defendants, Mr Kempster

emphasised the impersonal and disinterested motives of the

(International Cricket Conference) in doing what it did ... . In

my judgment, however, motives of this nature do not, as such, give

rise to a defence of justification either generally under English

law or on the particular facts of this case."

In Camden Nominees (supra, at 364), Simonds J referred to authority for the proposition "that malice in the sense of spite or ill-will was not an ingredient of the action; and, secondly, that no justification exists by reason of the fact that the defendants acted either for the advancement of their own trade interests or for the advancement of the interests of those with whom they were associated." In Ansett v Australian Federation of Air Pilots (supra, at 254), Brooking J referred to a number of authorities, including some of those discussed in these reasons, for the proposition:

"Authorities I should follow establish that a trade union and its

officials cannot set up as a defence of justification in an action

for interference with contractual relations the suggestion that

what they did was by way of performance of a duty to advise

members of the union and protect their interests in relation to an

industrial dispute ... ."

He noted that a different view had been taken in two decisions at first instance: Pete's Towing Services Limited v Northern Industrial Union of Workers (1970) NZLR 32 and Latham v Singleton (1981) 2 NSWLR 843. But in Latham v Singleton Nagle CJ at CL (at 857) made it clear his discussion of the defence of justification was "limited to the causes of action founded on the tort of intimidation". Pete's Towing Services was referred to in the New Zealan d Court of Appeal in Northern (except Gisborne) Road Transport Motor and Horse Drivers and their Assistants Industrial Union of Workers v Kawau Island Ferries Ltd (1974) 2 NZLR 617, yet the joint judgment of McCarthy P, Richmond and Haslam JJ (at 623) treated the "moral duty resting on an industrial union to protect the interests of its members" as raising no more than a "possibility" that it might be "permissible" to take that moral duty into account in considering the question of justification at a final hearing of a suit for injunctions.

121. In the circumstances of the present case, and in the light of the authorities, it would be impossible to regard the appellants as justified upon any of the bases suggested. The matter was quite susceptible of determination by other means involving no unlawfulness, and the evidence shows a solution was in fact obtained through arbitration in one particular instance. The court is not required, in the circumstances, to consider what the position might have been at common law had the contracts between the respondent and the builders in truth involved the carrying out of the building work in question by employees working under conditions which breached industrial awards.

122. It should perhaps be added that the appellants appeared to place some reliance on the second of the four propositions stated by Evatt J in McKernan v Fraser [1931] HCA 54; (1931) 46 CLR 343 at 380-381. But the statement of that proposition in the Commonwealth Law Reports volume cited seems to involve a printing error. The opening words of the proposition should be: "An otherwise lawful act ... ", as will at once appear if the judgment of Atkin L.J., upon which Evatt J relies, is consulted. McKernan v Fraser itself was not, of course, concerned with the problems discussed in these reasons.

123. The respondent cross-appealed in respect of the trial judge's refusal to grant, at the stage when he made his interlocutory findings, a permanent injunction. However, if his Honour had faith in the good sense of the respondents and their willingness to keep within the bounds of their legal obligations, once these had been declared by the Court, it was within his discretion to refrain from making a further order of the kind sought. The interlocutory nature of his judgment ensured that the matter was not beyond recall.

124. In the result, we are of the opinion that all of the challenges made to the decision of Woodward J must fail. The appeal and cross-appeal should each be dismissed with costs.