FEDERAL COURT OF AUSTRALIA BP Refinery (Kwinana) Pty Ltd v Construction Forestry Mining and Energy Union [2001] FCA 928 PRACTICE AND PROCEDURE – whether applicant should be granted leave to discontinue – respondent had been seeking to represent some of its members in negotiations with applicant for proposed new agreement to be certified by Australian Industrial Relations Commission – applicant's employees represented by another union in negotiations – applicant refused to negotiate with respondent – respondent co-ordinated work stoppages – applicant sought injunctions against respondent in respect of industrial action and declarations that relevant employees ineligible for membership of respondent – matter listed for hearing – on eve of trial applicant successfully negotiated agreement with employees and proposed to ask Commission to certify it – applicant considered that its original problems had thus been resolved and no longer sought any relief from Court – applicant applied at start of hearing for leave to discontinue application – respondent opposed the grant of leave to discontinue and sought leave to bring cross-claim seeking declarations generally the converse of those originally sought by applicant – leave to discontinue granted – leave to bring cross-claim refused. Workplace Relations Act 1996 (Cth), ss 170LJ, 170LT, 170LS, 170LY, 170M(1), (7), 170MN(1), 170NG, 187A, 261(7), 347 Dorrough & Ors v Bank of Melbourne Ltd & Ors (unreported Federal Court of Australia, Judgment No 816 of 1996, 1 August 1996) applied Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 applied SCI Operations Pty Ltd & Anor v Trade Practices Commission & Ors (1984) 53 ALR 283 referred to Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 referred to Slattery v Public Service Board [1983] 3 NSWLR 41 referred to Noosa Shire Council v T.M. Burke Estates Pty Ltd [2000] 1 Qd R 398 referred to BP REFINERY (KWINANA) PTY LTD v CONSTRUCTION FORESTRY MINING AND ENERGY UNION W 166 of 2000 CARR J 19 JULY 2001 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 166 OF 2000 BETWEEN: BP REFINERY (KWINANA) PTY LTD Applicant AND: CONSTRUCTION FORESTRY MINING AND ENERGY UNION Respondent JUDGE: CARR J DATE OF ORDER: 19 JULY 2001 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicant have leave to discontinue its application. 2. The respondent's motion, filed on 12 July 2001, be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 166 OF 2000 BETWEEN: BP REFINERY (KWINANA) PTY LTD Applicant AND: CONSTRUCTION FORESTRY MINING AND ENERGY UNION Respondent JUDGE: CARR J DATE: 19 JULY 2001 PLACE: PERTH REASONS FOR JUDGMENT introduction 1 When the trial of this matter started on 13 July 2001, counsel for the applicant sought leave to discontinue the application. The respondent opposed the grant of such leave. 2 In fact, literally on the eve of the trial, the respondent had filed a notice of motion seeking leave to file a cross-claim seeking declarations which are largely the converse of the declarations sought by the applicant in its application, but which the applicant is now no longer interested in obtaining. The respondent also seeks to cross-claim for a further declaration. I now turn to the circumstances which led to this situation. factual and procedural background 3 I must emphasise that in reciting factual matters I should not be taken to be making findings of fact. The summary is taken from assertions made in the application and in some of the affidavits filed. 4 The applicant is a company which operates an oil refinery in Kwinana, Western Australia. The refinery is divided into three areas of operation, known as "North", "South" and "Offsites". 5 A number of the applicant's employees who work as process technicians in the Offsite areas claim to be members of the respondent. 6 Between 10 October 1997 and 28 February 2001 the employment of the applicant's employees was subject to a duly certified agreement under Part VIB of the Act. The nominal expiry date of that agreement was 30 March 2000. 7 In May 1999 negotiations for a new agreement commenced. Employee representatives from each of the three operational areas, as well as a site delegate from the Australian Workers' Union ("the AWU") participated in the negotiations. These participants formed what was called a "Negotiating Committee". The applicant invited the respondent's site representative to attend the negotiations as a guest of the Negotiating Committee. 8 The respondent is not a party to any relevant award of the Australian Industrial Relations Commission ("the Commission") or certified agreement to which the applicant is a party. The Australian Workers' Union has been a party to all of the applicant's relevant previous certified agreements registered in the Commission. 9 In September 1999 the respondent requested the applicant to agree formally to the respondent forming part of the Negotiating Committee. The applicant refused to agree to this, taking the view that the respondent could not validly enter into an agreement with it because the technicians to whom the intended agreement was supposed to apply, were not eligible to be members of the respondent under the respondent's Constitution. The background to the question of eligibility is, in short, that the applicant contends that although the respondent was previously eligible to represent boiler attendants in its Offsites area, it no longer employs boiler attendants. 10 On 8 November 1999, the respondent sent to the applicant a Notice of Initiation of a Bargaining Period. There then followed a conference in the Commission, but the Commission took no action. 11 On 1 June 2000 the respondent faxed to the applicant a new Notice of Initiation of Bargaining Period. On 1 September 2000, the respondent faxed to the applicant a notification of intended industrial action. Fourteen members of the respondent, being employees of the applicant, undertook industrial action between 5.00pm and 9.00pm on 6 September 2000. 12 On 6 September 2000, at a meeting between the respondent and a number of the applicant's employees, the respondent resolved to continue an industrial campaign against the applicant and take all necessary protected action until the applicant recognised its right to represent the applicant's employees. 13 Further industrial action took place on 19 September 2000 following notification of that intended industrial action. 14 On 29 September 2000, the applicant filed its application. The application is for injunctions and declarations. The injunctions are sought [under s 170NG of the Workplace Relations Act 1996 (Cth) ("the Act") and at common law] to restrain the respondent, its servants and agents from engaging in strikes, bans or limitations or delays in the performance by employees of the applicant of normal work, and from aiding, abetting, counselling or procuring such employees to engage in such conduct. The declarations sought [under s 261(7) of the Act] are, first, that certain 29 named employees of the applicant are not eligible to be members of the respondent under s 261 of the Act and, secondly, that the respondent is not entitled to make an agreement with the applicant pursuant to s 170LJ of the Act. 15 Directions were made for the filing of affidavits and on 11 April 2001 the application was set down for hearing on 10 and 11 July 2001. On 9 July 2001 the applicant filed a notice of motion seeking orders that the hearing of the application be adjourned and re-listed on a date to be fixed. It filed two affidavits in support of that application. 16 In summary, the basis of the applicant's motion for an adjournment was that there had been no further industrial action since September 2000, and that a proposed certified agreement was to be voted upon by the applicant's employees on 12 July 2001. The proposed certified agreement was to cover approximately 150 technicians employed by the applicant, including those 29 persons in respect of whom the applicant had sought declarations in its application. The applicant envisaged that if a valid majority (a term defined in the Act) of employees voted in favour of the proposed certified agreement then the Commission would certify the agreement under s 170LT of the Act. Such certification, so the applicant submitted, would resolve the issue which was the subject of the industrial action in September last year and thus render its original reasons for the application redundant, because the certified agreement had been negotiated with the AWU and there ought to be no further relevant industrial action during the period of the certified agreement – see s 170MN(1) of the Act. 17 The motion was opposed by the respondent. 18 On 9 July 2001 I made orders within the motion that the hearing dates be vacated and that the hearing commence on 13 July 2001 (i.e. three days later than originally scheduled) by which time it was anticipated that the result of the employees' vote would be known. 19 The next development was that on 12 July 2001 the respondent filed its notice of motion seeking leave to make a cross-claim. As I have mentioned above, the respondent seeks leave to cross-claim for declarations which are largely the converse of those sought by the applicant. The respondent also seeks to cross-claim for a further declaration to the effect that it is entitled to be bound by any relevant agreement between the applicant and its employees pursuant to s 170M of the Act. I think that it is a fair inference (which I make) that the respondent filed that notice of motion in anticipation that the applicant would seek leave to discontinue the principal application. 20 On 13 July 2001, When the hearing started, Mr A D Lucev, counsel for the applicant, passed up an affidavit sworn by Ms Katherine Hirschfeld, Restructuring Manager of the applicant. Ms Hirschfeld gave evidence that a "good majority" (by which was meant one well in excess of a valid majority) had voted in favour of the proposed certified agreement and that the agreement covered all of the applicant's process technician employees at the refinery, including the 29 employees referred to in the application. Ms Hirschfeld expressed her belief that the prerequisites for certification of the agreement by the Commission had been complied with and that the applicant would now apply to the Commission to certify the agreement. It had instructed its solicitors to prepare and file that application forthwith. Applicant's contentions 21 Counsel for the applicant submitted that the relief originally sought by it would no longer be of any benefit to it. The application had been brought in circumstances where the respondent's actions, including industrial action, were hampering the reaching of an agreement with the applicant's employees. The applicant had now been able to reach such an agreement with its employees, unhindered by any action on the respondent's part. So far as the applicant was concerned, there was no longer a dispute concerning the respondent's rights to represent the industrial interests of employees in negotiations in respect of the proposed certified agreement. The applicant no longer wished to litigate what, for it, was now a pointless issue. The applicant contended that it ought not be compelled to litigate against its will and that the Court should grant it leave to discontinue unless in doing so an injustice would be occasioned to the respondent. The respondent, so the applicant submitted, would not suffer any injustice if the proceedings were discontinued. The respondent apparently wished to be bound by the proposed certified agreement on the basis that it was entitled to represent the industrial interests of the applicant's employees. The applicant submitted that the respondent would have to argue that matter before the Commission in any event. Any preparation of the case on its part would not be lost and, if the respondent were successful, its interests would be protected. 22 The applicant further submitted that the Commission was the proper forum to deal with the issue, under s 170M(3) of the Act, of whether the respondent should be bound by the agreement as an organisation entitled to represent at least one member of the applicant's workforce. The applicant submitted that the Commission was a specialist tribunal, appointed by statute, with power to deal with this issue. The special procedures with respect to certification should, so it was put, be allowed to take their course and not be replaced by the making of declaratory orders. 23 Finally, the applicant submitted that the Court should first consider the application for leave to discontinue rather than the respondent's motion for leave to raise a cross-claim. Respondent's contentions 24 The respondent submitted that the interests of justice required the Court to consider its motion and supporting affidavit first. The respondent's position was (as its solicitor deposed to in an affidavit in support of its motion for leave to cross-claim) that the controversy about the eligibility of the relevant employees to be members of it still existed. The applicant still refused to deal with or recognise the respondent as representative of the employees in their industrial interests. 25 The respondent saw the two issues of whether the 29 named employees of the applicant were eligible for membership of the respondent and whether it was entitled to make an agreement with the applicant pursuant to s 170LJ of the Act, as still being live issues between the parties. Furthermore, as I have mentioned, the respondent sought to cross-claim for a third declaration that it was entitled, subject to the Act, to be bound by any relevant agreement between the applicant and its employees. 26 Counsel for the respondent conceded (quite properly in my opinion) that the Commission was a relevant tribunal. However, so it was submitted, the Court was a specialist industrial court given power under s 261 of the Act to make declarations concerning the eligibility of the applicant's employees to be members of the respondent. This application was a suitable vehicle for deciding that and the related issues. The case was ready for trial and could be listed within a few weeks. Declaratory relief from the Court would, so the respondent submitted, be of considerable assistance to it in the course of the proceedings foreshadowed in the Commission. my reasoning 27 In my view, the appropriate course for me to adopt is to consider the applicant's motion for leave to discontinue at the same time as taking into account the respondent's motion for leave to bring a cross-claim and the circumstances set out in the affidavit filed by the respondent in support of that motion. The applicant relied upon the decision of Cooper J in Dorrough & Ors v Bank of Melbourne Ltd & Ors (unreported Federal Court of Australia, Judgment No 816 of 1996, 1 August 1996) for the proposition that the Court should first consider the application for leave to discontinue. I think that the course which I have just outlined is consistent with the manner in which Cooper J approached a similar issue in Dorrough. I should say that I agree, respectfully, with the views expressed by his Honour in that case. In particular the view that there would be no power under Order 5 rule 1, rule 8 or rule 9 of the Federal Court Rules to grant leave to a party to cross-claim in the absence of a principal claim. Counsel for the respondent conceded that particular point. 28 The principles which underlie the exercise of the discretion to grant or withhold leave to discontinue a proceeding are well-settled. The authorities show that an applicant generally ought not to be compelled to litigate against its will and that, again generally, leave to discontinue should be granted unless to do so would occasion an injustice to the respondent: Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879, approved and followed by a Full Court of this Court in SCI Operations Pty Ltd & Anor v Trade Practices Commission & Ors (1984) 53 ALR 283. I note also that, on the present state of the authorities, the Court need not completely protect a respondent's rights – see SCI Operations Pty Ltd at 311, 331-332. 29 Part of the respondent's argument was that it should have leave to cross-claim (and the applicant should not have leave to discontinue) because it would be open to the respondent to issue a fresh application in this Court seeking the relief which it would seek in its cross-claim. It would, so the respondent submitted, make better sense to keep these proceedings on foot so that its "grievance" could be aired and the interlocutory processes, that had gone so far, could be put to "good use". 30 My first impression was that that was quite a cogent argument. However, if the respondent were minded to issue a fresh application, there exist procedures in this Court whereby it could obtain leave to uplift its affidavits as filed in this application for use in the proposed fresh application. The work would not have to be done twice. 31 Furthermore, given the lack of interest on the applicant's part in litigating the above-mentioned issues, consideration would have to be given to the matter of a proper contradictor. In those circumstances, the contradictor which springs most readily to mind is, in my provisional view, the AWU. 32 I turn next to the relevant provisions of Part VIB. Division 3 of that Part provides for the making of agreements about industrial disputes, the approval of such agreement by a valid majority of the relevant employees and the making of an application to the Commission to certify the agreement. Such an application must be made no later than 21 days after the day on which it is approved by the valid majority of persons employed (s 170LS). Division 4 provides for the circumstances in which the Commission must or must not certify such an agreement. Division 5 provides for the time at which the certified agreement comes into operation and for the period during which it remains in operation. It also contains s 170LY which relevantly provides that while a certified agreement is in operation it prevails over an award or order of the Commission to the extent of any inconsistency with such award or order. Division 6 of Part VIB is concerned with the persons who are bound by certified agreements. If (as s 170LS requires) the application for certification states that the application is made under Division 3, the certified agreement binds the employer and all persons whose employment is, at any time when the agreement is in operation, subject to the agreement – see s 170M(1). If one or more organisations of employees made the agreement with the employer, the agreement also binds such one or more organisations – see s 170M(2). 33 Section 170M(3) provides as follows: "(3) If: (a) the application for certification states that the application is made under Division 2; and (b) in accordance with section 170LK, a valid majority of persons made the agreement with the employer; and (c) before the agreement is certified, an organisation of employees notifies the Commission and the employer in writing that it wants to be bound by the agreement; and (d) the organisation satisfies the Commission that it has at least one member: (i) whose employment will be subject to the agreement; and (ii) whose industrial interests the organisation is entitled to represent in relation to work that will be subject to the agreement; and (iii) who requested the organisation to give the notification; the Commission must, by order, determine that the agreement binds the organisation." 34 Part IX of the Act is concerned with registered organisations. Section 187A states that the objects of that Part are (as well as the objects set out in s 3 of the Act): · to encourage the democratic control of organisations; and · to encourage members of organisations to participate in the organisations' affairs; and · to encourage the efficient management of organisations. 35 Division 9 of Part IX deals with membership of organisations. Section 261(1) relevantly provides that subject to any award or order of the Commission, a person who is eligible to become a member of an organisation of employees under the eligibility rules of the organisation that relate to the occupations in which, or the industry in relation to which, members are to be employed is, unless of general bad character, entitled, subject to payment of any amount properly payable in relation to the membership, to be admitted as a member of the organisation and to remain a member so long as he or she complies with the rules of the organisation. 36 Sub-sections 261(7), (8) and (9) provide as follows: "(7) Where a question arises as to the entitlement under this section of a person: (a) to be admitted as a member of an organisation (whether for the first time or after having resigned, or been removed, as a member of the organisation); or (b) to remain a member of an organisation; application may be made to the Court for a declaration as to the entitlement of the person under this section by any of the following: (c) the person; (d) where the person is an employee – a person who is or wants to become the employer of the person; (e) where the person is an independent contractor – a person who is or wants to be a contractor for the services of the person; (f) the organisation concerned. (8) On the hearing of an application under subsection (7), the Court may, in spite of anything in the rules of the organisation concerned, make such order to give effect to its declaration as it considers appropriate. (9) The orders which the Court may make under subsection (8) include: (a) an order requiring the organisation concerned to treat a person to whom subsection (1) or (3) applies as being a member of the organisation; and (b) in the case of a question as to the entitlement under this section of a person to be admitted as a member of an organisation, where the person has previously been removed (whether before or after the commencement of this section) from membership of the organisation – an order that the person be taken to have been a member of the organisation in the period between the removal of the person from membership and the making of the order." 37 Mr R L Hooker, counsel for the respondent, acknowledged that the issues which the respondent sought to raise in its proposed cross-claim were almost identical to the issues which it would have to deal with if, as it foreshadowed it would, it applied to the Commission under s 170M(3) when the applicant seeks certification of the proposed agreement. The respondent's solicitor has sworn that he has received instructions in those circumstances to make application to the Commission pursuant to s 170M for an order binding the respondent to the agreement should it be certified. 38 I do not think that it is helpful, in the present context, to consider whether this Court or the Commission would be the more appropriate forum in which to consider the issues which the respondent wishes to raise in its cross-claim. Whether the Court should, in the exercise of its discretion, make declarations of the type now sought by the respondent would be a matter for consideration at or after the trial of the matter, in accordance with the principles discussed in cases such as Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, Slattery v Public Service Board [1983] 3 NSWLR 41 and Noosa Shire Council v T.M. Burke Estates Pty Ltd [2000] 1 Qd R 398. But, in my view, the provisions of Part VIB, when read with s 150 of the Act make it fairly clear that, for example, it is the Commission's satisfaction about the various matters referred to in s 170M(3)(d) which is to govern the determination of whether an agreement binds the applicant organisation. 39 In my opinion, the applicant has established, to the extent appropriate in an application for the leave which it seeks, that there has been a very significant change from the circumstances which gave rise to the making of its application to this Court, such as to warrant it being given unconditional leave to discontinue its application. That is, the applicant made its application in circumstances where industrial action by the respondent posed difficulties for it in obtaining a new agreement with its employees. It has now obtained such an agreement. There was no submission from the respondent that it had abstained from what it considered to be protected action pending the hearing and determination of this application and that, in those circumstances, giving the applicant leave to discontinue might work a relevant injustice upon it. 40 The respondent did not submit that the applicant should be required to give any undertaking as a condition of being granted leave to discontinue. Nor do I consider such an undertaking is required. 41 I have also considered the question of costs. Normally, a discontinuance in circumstances such as these would result in a costs order being made in favour of the respondent. But I have approached the present application for leave on the basis that s 347 of the Act would preclude such an order. I do not think that that circumstance amounts to a relevant injustice flowing from the discontinuance; the same consequence would result if the application had been dismissed after a trial, assuming that the applicant had not instituted the proceeding vexatiously or without reasonable cause. But I will hear counsel on the question of costs. 42 I do not think that the respondent has identified any relevant injustice to it which would flow from the grant of leave to the applicant to discontinue the application. 43 In my view, the applicant should have leave to discontinue the application. It follows that, in those circumstances, the respondent should not have leave to bring its proposed cross-claim. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Justice Carr. A/g Associate: Dated: 19 July 2001 Counsel for the Applicant: Mr A D Lucev Solicitor for the Applicant: Messrs Freehill Hollingdale & Page Counsel for the Respondent: Mr R L Hooker Solicitor for the Respondent: Mr Derek Schapper Date of Hearing: 13 July 2001 Date of Judgment: 19 July 2001