FEDERAL COURT OF AUSTRALIA CFMEU v Able Demolitions & Excavations Pty Ltd [2001] FCA 1748 PRACTICE & PROCEDURE – Application seeking paragraphs in Statement of Claim be struck out – Review of a decision of a Registrar – Purpose of a Statement of Claim – Whether certain paragraphs constitute global pleadings WORDS & PHRASES – "global pleadings" Federal Court of Australia Act 1976 (Cth) Workplace Relations Act 1996 (Cth) Industrial Relations Act 1988 (Cth) Federal Court Rules Martin v Commonwealth Bank of Australia [2001] FCA 87 referred to Banque Commerciale S.A., En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 referred to Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) 18 ATPR 41-522 referred to McKellar v Container Terminal Management Services [1999] FCA 1101, (1999) 165 ALR 409 referred to Warramunda Village Inc v Pryde [2001] FCA 61 at [11], (2000) 105 FCR 437 referred to Murex Diagnostics Australia v Chiron Corporation (1994) 55 FCR 194 at 203 followed Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association of Western Australia (1987) 13 FCR 413 referred to CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v ABLE DEMOLITIONS & EXCAVATIONS PTY LTD V 664 OF 2000 MARSHALL J MELBOURNE 6 DECEMBER 2001 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 664 OF 2000 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPLICANT AND: ABLE DEMOLITIONS & EXCAVATIONS PTY LTD RESPONDENT JUDGE: MARSHALL J DATE OF ORDER: 6 DECEMBER 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The following paragraphs of the Statement of Claim be struck out: 42, 43, 46, 48, 49, 51, 52, 57, 58, 66, 67, 69, 70, 77, 90, 92, 95, 96, 98 and 100. 2. The applicant file and serve an amended Statement of Claim on or before 1 February 2002. 3. The directions hearing be adjourned to 10.15 am on 4 February 2002. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 664 OF 2000 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION APPLICANT AND: ABLE DEMOLITIONS & EXCAVATIONS PTY LTD RESPONDENT JUDGE: MARSHALL J DATE: 6 DECEMBER 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 13 August 2001, the respondent filed a Notice of Motion seeking that a large number of paragraphs of the applicant's statement of claim be struck out. The motion was heard by a Registrar of the Court who delivered his reasons for decision on 22 November 2001. The Registrar struck out the Statement of Claim and gave the applicant leave to re-plead the Statement of Claim. 2 On 3 December 2001, the applicant filed a Notice of Motion seeking that the decision of the registrar be reviewed. The Court heard the review on 6 December 2001. The review was applied for pursuant to s35A(5) of the Federal Court of Australia Act 1976 (Cth) and is undertaken by the Court under s35A(6) of that Act. The later subsection permits the Court to review an exercise of power by a Registrar pursuant to s35A(5) and make "such order or orders as it thinks fit with respect to the matter…". The review is a hearing de novo; see Martin v Commonwealth Bank of Australia [2001] FCA 87 at [6]. 3 The application in the proceeding is brought pursuant to the Workplace Relations Act 1996 (Cth) ("the WR Act"), the WR Act as it stood prior to 31 December 1996 and the Industrial Relations Act 1988 (Cth). It seeks that penalties be imposed on the respondent for breaches of: · the National Building and Construction Industry Award 2000 ("the Award") · the Able Demolitions and Excavations Pty Ltd Enterprise Bargaining Agreement 1994 ("the Agreement") 4 Orders are also sought for the payment of sums owing to certain employees as a consequence of the alleged breaches of the Award and the Agreement. 5 The Statement of Claim filed with the application consists of 105 paragraphs. The Notice of Motion filed on 13 August 2001 sought that the following paragraphs of the Statement of Claim be struck out: 7, 9, 10, 14, 19, 34, 35, 36, 37, 38, 39, 40, 42, 43, 45, 46, 48, 49, 51, 52, 54, 55, 57, 58, 60, 61, 63, 64, 66, 67, 69, 70, 72, 73, 76, 77, 79, 81, 82, 84, 86, 87, 90, 92, 95, 96, 97, 98, 100, 103 and 104. 6 By letter dated 23 August 2001, solicitors for the applicant advised that they would not contest the motion in so far as it dealt with the following paragraphs of the Statement of Claim: 54, 55, 60, 61, 63, 64, 72, 73, 79, 81, 82, 84, 86, 87, 92, 97, 103 and 104. 7 The letter also advised that other paragraphs of the Statement of Claim that were not the subject of the respondent's motion would not be "pursue[d]". These paragraphs are: 53, 59, 62, 71, 78, 80, 83, 85, 91, 101 and 102. 8 The remaining paragraphs the subject of dispute between the parties are: 7, 9, 10, 14, 19, 34, 35, 36, 37, 38, 39, 40, 42, 43, 45, 46, 48, 49, 51, 52, 57, 58, 66, 67, 69, 70, 77, 90, 95, 96, 98 and 100. 9 A Statement of Claim is a pleading made by a moving party. Its purpose is to set out the issues in the proceeding and inform the opposing parties of the case they have to meet thereby affording procedural fairness to those parties: see Banque Commerciale S.A., En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286. As was said by Burchett J in Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) 18 ATPR 41-522 at 42,679: "… a statement of claim must set out clearly, not just the bare claim that is made, but also 'the material facts on which it is based', including facts that, if not specifically pleaded, might take the other party by surprise: Federal Court Rules, O4, r6; O11 rr2, 10." 10 Further as was said by Weinberg J in McKellar v Container Terminal Management Services [1999] FCA 1101, (1999) 165 ALR 409 at [23]: "… a statement of claim must contain material facts, being the facts necessary for the purpose of formulating a complete cause of action, and that it is not sufficient simply to plead a conclusion drawn from unstated facts …". 11 Order 4 r 6 of the Federal Court Rules ("the Rules") requires a Statement of Claim to show the nature of the applicant's claim and the material facts upon which it is based. Order 11 r 2 of the Rules requires that a pleading contain a statement in summary form of the material facts upon which a party relies. 12 For a Statement of Claim to disclose a cause of action in award breach proceedings it must usually plead matters which would ordinarily include the following matters: · the existence of an award · the terms of it alleged to be breached · the persons (if any) in respect of whom a breach of the award has occurred · the dates, times and places (if relevant) upon which the breach occurred 13 The above requirements, whilst self-evident are also seen to be necessary ones in cases which allege award breaches by the observations of a Full Court in Warramunda Village Inc v Pryde [2001] FCA 61, (2001) 105 FCR 437 at [11] ("Pryde"). It is clear from Pryde that it is inappropriate "to plead alleged underpayments in a global sense". More than being inappropriate, a global pleading makes it exceedingly difficult for a trial judge to make any precise orders identifying actual breaches of awards in the event that an interpretation of the award favoured by an applicant is concurred in by the trial judge. In circumstances where it is alleged that a respondent to an award has not made payments to employees which they are entitled to receive the material facts pleaded should ordinarily include: · the identification of the employees in question, and if necessary their classifications · the facts which give rise to the entitlement to the relevant payment · the employer's failure to make the payment · the relevant dates, times and places 14 With the above principles in mind I turn to consider the respondent's complaints about certain paragraphs in the Statement of Claim in the instant matter. 15 Paragraph 7 of the Statement of Claim alleges as follows: "The Respondent employs employees to perform demolition work at the Gallery Site ('the employees')." This paragraph must be read in conjunction with paragraphs 4, 5 and 6, which provide as follows: "4. The Respondent operates a demolition and excavation business. 5. Since in or about June-July 2000, the Respondent has been engaged to provide demolition services ("the demolition services") at the National Gallery of Victoria, located at St Kilda Road Melbourne in the State of Victoria ("the Gallery site"); 6. The demolition services at the Gallery site is a project or are services for the construction or demolition of a building." 16 I see no vice in a pleading in an award breach application that asserts that a respondent is an employer of employees who perform certain work. Those facts may be material to determine whether the employees concerned are members or entitled to be members of the applicant which, in turn, may affect the resolution of the issue whether the applicant has standing to make the application. The pleading also relates to the scope or coverage clause contained in the Award. 17 Paragraphs 9 and 10 of the Statement of Claim are ancillary to paragraph 7 and 8. Paragraph 8 sets out the relevant portion of the eligibility for membership rule of the applicant. Paragraphs 9 and 10 then provide that: "9. The work performed by Employees is within the terms of Rule 2(B) and/or 2(E) of the Rules of the Applicant. 10. By virtue of the matters set out in paragraphs 7 and 8, the Employees are eligible to be members of the Applicant." 18 Paragraph 14 is ancillary to paragraphs 7, 9 and 10 inter alia. It asserts that: "The work performed by the Employees is within the scope of the Award as specified in sub-clauses 6.1.2 and/or 6.1.3 of the Award." 19 Paragraph 19 is a formal and necessary pleading which asserts that: "a) the Award is in force and has applied to the work performed by Employees since the commencement of that work; and b) the Employees are entitled to the benefit of the Award." 20 No good reason has been advanced why paragraphs 7, 9, 10, 14 and 19 should be struck out. At least no clear case to strike those paragraphs out has been established; see Murex Diagnostics v Chiron Corporation (1994) 55 FCR 194 at 203 ("Murex"), per Burchett J. 21 Paragraphs 34, 35, 36, 37 and 39 are pleadings which relate to an assertion that the employees at the Gallery site are not eligible to be members of a competitor union to the applicant, i.e. the Australian Workers Union ("the AWU"). Those paragraphs also seek to impugn the validity of an industrial instrument that purports to bind the respondent and the AWU. Applying the principle set out in Murex, I see no reason to strike out those paragraphs. Paragraph 38 asserts the binding nature of the 1994 Agreement. It is merely introductory to paragraph 39. I see no reason to strike it out. 22 Paragraph 40 of the Statement of Claim alleges that: "At all material times the Respondent: (a) has applied the terms and conditions of the 1998 Agreement to the employment of the Employees; and (b) has not applied the terms and conditions of the Award or the 1994 Agreement to the employment of the Employees." 23 This paragraph is of an introductory nature and precedes other paragraphs that seek to identify various clauses of the Award which are alleged to have been breached by the respondent. I do not consider that paragraph 40 should be struck out. 24 Paragraphs 42 and 43 provide as follows: "42. Employees of the Respondent have, during the course of their employment at the Gallery site, been: a) engaged in classifications contained in clause 18.1.3 of the Award; and b) in-charge of plant within the meaning of clause 18.7.1 and/or 18.7.2 and/or 18.7.3 and/or 18.7.4 of the Award. Particulars Particulars will be provided after discovery and interrogatories. 43. In breach of clause 18.7 of the Award, the Respondent failed to pay the Employees the in charge allowance specified therein." 25 In order for the respondent to meet the case of the applicant it is entitled to be aware of the following material facts: · which employees have been engaged in a classification of the sort alleged · which employees have been in-charge of plant as alleged · when, and in respect of what periods of time, were there underpayments of wages in respect of failure to pay an in charge allowance. Pryde identified the importance of such information being provided. It is not to the point to say that the observations of the Court in that respect were dicta. They were nonetheless important observations made about the requirement for precision in pleadings in award breach matters. Global pleadings leading to global findings, and the making of global declarations, will not assist in the making of final orders requiring precise recording of the actual award breaches found, if any. It is not to the point that some of the details, which should have been specifically pleaded, are now the subject of answers to a request for further and better particulars. Particulars are not appropriate to be used to fill chasms in statements of claim; see Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees Association of Western Australia (1987) 13 FCR 413 at 419, per French J where His Honour said that: "Particulars cannot be used to fill gaps in the statement of claim which ought to have been filled by appropriate statements of the various material facts together constituting the cause of action." 26 Unless a particular employee was engaged in a relevant classification, was in-charge of plant and was not appropriately remunerated in respect of such work, there will have been no breach of the award. A global pleading which fails to employ such specificity cannot be described a material fact which, with other facts, constitutes a cause of action. I consider that paragraphs 42 and 43 of the Statement of Claim should be struck out. 27 Paragraph 45 of the Statement of Claim states that: "The Employees, during the course of their employment at the Gallery Site, being engaged in demolition work are employed in construction work as defined in Clause 4.13 of the Award." I see no reason to strike out this paragraph it asserts that work performed on the site is within the purview of the Award. That is a matter relevant to the construction of the Award. Particulars annexed to paragraph 45 set out the terms of cl.4.13 of the Award which defines "construction work". 28 Paragraph 46 of the Statement of Claim alleges a breach of cl.24.1 of the Award. That clause provides for an industry allowance to be paid to persons engaged in construction work. Paragraph 46 of the Statement of Claim simply alleges that: "In breach of clause 24.1 of the Award, the Respondent failed to pay the Employees the industry allowance prescribed therein." 29 Clause 7 defines "the Employees" as employees who perform demolition work (see above at [15]). The respondent is entitled to be informed as to which of its employees are said by the applicant to be engaged in demolition work. It is also entitled to know the pay periods in respect of which it is alleged that such persons were not paid an industry allowance when they should have received such payment. The pleading in paragraph 46 lacks the necessary specificity and will be struck out. 30 Paragraph 48 of the Statement of Claim alleges that: "The Employees have, during the course of their employment with the Respondent at the Gallery Site, been required to work overtime for at least one and a half hours after working ordinary hours." PARTICULARS Particulars will be provided after discovery and interrogatories." 31 The pleading in paragraph 48 relates to a claim for meal allowance the qualification for which depends on whether an employee has worked overtime "for at least one and one half hours after working ordinary hours" (see cl 24.9.1 of the Award). This again is a global pleading. It lacks the requisite specificity which has been identified as a vice in similar pleadings in the Statement of Claim. Those employees entitled to a meal allowance and not paid it should be identified together with the relevant pay periods and days on which the entitlements arose. Paragraph 48 will be struck out. Paragraph 49 alleges a breach of cl 24.9.1, it is ancillary to paragraph 48 and will also be struck out. 32 Paragraphs 51 and 52 of the Statement of Claim relate to alleged non-payment of a disability allowance with respect to the handling of insulation material. They contain the same defects that have been identified in paragraphs 48 and 49 and will be struck out. 33 Paragraphs 57 and 58 deal with an alleged failure to pay a wet work disability allowance. They suffer from the identical problems that affect paragraphs 48 and 49 and will be struck out. Paragraphs 66 and 67 deal with an alleged failure to pay a disability allowance related to a requirement to wear protective equipment to guard against exposure to asbestos. These paragraphs are akin to paragraphs 48 and 49 and will be struck out. Paragraphs 69 and 70 are like paragraphs to 66 and 67 but instead deal with an alleged failure to pay an asbestos eradication allowance. They will also be struck out. 34 Paragraph 77 alleges that: "the Employees did not take a rostered day off on the fourth Monday in each four week cycle and consequently the respondent is in breach of cl 27.2.2. of the Award". 35 Again this pleading lacks the required specificity. It does not identify the employees concerned and does not identify the relevant days and pay periods in question. Paragraph 77 will be struck out. 36 Paragraph 90 alleges a failure to pay a fares allowance having regard to the location of the site. I consider that the respondent is entitled to know which employees were entitled to the allowance and were not paid in respect of specific pay periods. Paragraph 90 will be struck out. 37 Paragraph 92 alleges a failure to allow a ten-minute mid-morning rest break. No details are provided about which employees were not allowed to take the break on which specific day or days. Paragraph 92 will be struck out. 38 Paragraphs 95, 96 and 98 deal with an alleged failure to provide protective clothing to employees. Although commendable specificity has been provided with respect to the type of protective clothing in question the pleading lacks appropriate detail concerning which employees were not provided with the relevant equipment. Paragraph 98 fails to specify the nature of the agreements it alleges were entered into with employees and/or the AWU by the respondent for cash in lieu of protective clothing. It accordingly lacks appropriate specificity. I consider that paragraphs 95 and 98 should be struck out. Paragraph 96 stands in a slightly different position. It is more specific in that it alleges a failure by the respondent to keep a record of the type of protective clothing issued and the date of its issue. However, it does not provide a time frame for the allegations in question and on that account should also be struck out. 39 Paragraph 100 is a global pleading which alleges a failure to pay a disability allowance. It suffers from the same defects identified in earlier global-style pleadings, and will be struck out. 40 The order of the Court is as follows: 1. The following paragraphs of the Statement of Claim be struck out: 42, 43, 46, 48, 49, 51, 52, 57, 58, 66, 67, 69, 70, 77, 90, 92, 95, 96, 98 and 100. 2. The applicant file and serve an amended Statement of Claim on or before 1 February 2002. 3. The directions hearing be adjourned to 10.15 am on 4 February 2002. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Associate: Dated: 7 December 2001 Counsel for the Applicant: Mr W Friend Solicitor for the Applicant: Slater & Gordon Counsel for the Respondent: Mr S Wood Solicitor for the Respondent: Harmers Workplace Lawyers Date of Hearing: 6 December 2001 Date of Judgment: 6 December 2001