FEDERAL COURT OF AUSTRALIA Patti v Haritou [2001] FCA 1795 INDUSTRIAL LAW – Union Rules – holding of referendum – expedited hearing – interlocutory injunction Workplace Relations Act 1996 (Cth) Pt IX, Div 4, s 209(4) R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194 - considered JOE PATTI v MICHAEL HARITOU, ALEX FINDLAY, RICK FOWLER, GREGORY WILLIAMS, EDWARD HARRIS, BRADLEY PARKER, MICHAEL MITTEN, STEPHEN ROWE, DAVID KIRNER No. V 636 of 2001 JUDGE: MERKEL J DATE: 21 NOVEMBER 2001 PLACE: MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY 636 OF 2001 BETWEEN: JOE PATTI APPLICANT AND: MICHAEL HARITOU FIRST RESPONDENT ALEX FINDLAY SECOND RESPONDENT RICK FOWLER THIRD RESPONDENT GREGORY WILLIAMS FOURTH RESPONDENT EDWARD HARRIS FIFTH RESPONDENT BRADLEY PARKER SIXTH RESPONDENT MICHAEL MITTEN SEVENTH RESPONDENT STEPHEN ROWE EIGHTH RESPONDENT DAVID KIRNER NINTH RESPONDENT JUDGE: MERKEL J DATE OF ORDER: 21 NOVEMBER 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Stephen Rowe and David Kirner be added as respondents and service upon them of court documents filed to date be dispensed with. 2. The proceeding be fixed for hearing on 10 December, 2001 at Melbourne on an estimate of 1-2 days. 3. Until the hearing and determination of the proceeding or further order of the Court, the respondents be restrained from exercising any power under Rule 42 of the Rules of the Construction, Forestry, Mining and Energy Union, and in particular Rule 42(xii)(a), to agree to shorten the period therein referred to a date prior to 26 March 2005, without first giving to the applicant, through his solicitors, seven days prior written notice of the Divisional Executive's intention to agree to shorten that period. 4. Liberty be reserved to the respondents to apply, on seven days prior written notice, for the applicant to provide an undertaking as to damages in respect of the injunction granted in Order 3 above. 5. The applicant file and serve Points of Claim in respect of the claims made in the proceeding by 5.00pm on 26 November, 2001. 6. The respondents file and serve Points of Defence in response, particularising their defences to the claims made, by 5.00pm on 3 December, 2001. 7. The respondents file and serve any further affidavits upon which they seek to rely by 5.00pm on 3 December, 2001. 8. The applicant file and serve any affidavits in reply by 5.00pm on 6 December, 2001. 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 636 OF 2001 BETWEEN: JOE PATTI APPLICANT AND: MICHAEL HARITOU FIRST RESPONDENT ALEX FINDLAY SECOND RESPONDENT RICK FOWLER THIRD RESPONDENT GREGORY WILLIAMS FOURTH RESPONDENT EDWARD HARRIS FIFTH RESPONDENT BRADLEY PARKER SIXTH RESPONDENT MICHAEL MITTEN SEVENTH RESPONDENT STEPHEN ROWE EIGHTH RESPONDENT DAVID KIRNER NINTH RESPONDENT JUDGE: MERKEL J DATE: 21 NOVEMBER 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 A petition to conduct a referendum in respect of certain matters, purportedly in compliance with Rule 15 of the Rules of the Construction, Forestry, Mining and Energy Union ("CFMEU"), FFTS Union Division and FFTS Union Divisional Branches, has been presented to the FFTS Divisional Executive of the CFMEU. After the Executive failed to conduct the referendum the applicant commenced a proceeding under Div 4 of Pt IX of the Workplace Relations Act 1996 (Cth) ("the Act") seeking orders requiring the Executive to conduct a referendum with all of the financial members of the FFTS Division in accordance with Rule 15. 2 The applicant has applied for an expedited hearing of the proceeding. The matter is in the docket of Gray J who is available to hear the proceeding on 10, 11 and 12 (if need be), of December 2001. It seems appropriate that this matter be brought to a final resolution without further delay. I am prepared to accede to the application of the applicant, which is not opposed by any of the respondents. Accordingly, I fix 10 December 2001 as the date for the hearing of this matter. 3 I also have before me an application by the applicant, seeking an interim order under s 209(4) of the Act restraining the Divisional Executive from acting under the Rules of the CFMEU to merge the FFTS Division, thereby amalgamating the FFTS and the CFMEU. 4 Under the transitional rules of the CFMEU, but in particular Rules 42(xii)(a) and (xiii), the Divisional Executive of the FFTS Union Division can agree to shorten the period by which the FFTS Division maintains its separate existence, to a period prior to 26 March 2005. The applicant, with some justification, is concerned that there is a serious risk of the Divisional Executive agreeing to shorten that period to the present time, which may have the effect of rendering the rule changes sought by the referendum nugatory. The reason for that is that the rule changes sought will only have operative effect if the FFTS Division continues to maintain its separate status. 5 Surprisingly, none of the respondents (who were all represented before me) were able to explain why the Divisional Executive has not conducted a referendum in accordance with the requirements of Rule 15. Also, none of the respondents have been able to point to any prejudice that might be suffered by any of them if they were restrained from exercising the power to shorten the period during which the FFTS Union Division has its separate existence. Further, although the material before me suggests there is a real risk of the period being shortened, the respondents did not proffer any undertaking that they would not take any steps to shorten that period. 6 It seems to me, and it is not disputed by any of the respondents, that the situation with which I am confronted is that there is a real risk that the applicant may have the fruits of the referendum petitioned for, rendered nugatory if the shortening of the period occurs. Further, on the material before me, there is a serious issue as to whether the failure to conduct the referendum is a result of wrongful conduct by the Divisional Executive in delaying the referendum for an ulterior purpose, which is linked to shortening the period to which I have referred. I have no concluded view on any of these issues but I am satisfied that there is a real risk of the relief sought in the proceeding being rendered nugatory as a result of what, prima facie, appears to be wrongful conduct of the respondents. If that occurred it would be unjust and unfair to the applicant. 7 The power of the court to make interim orders under section 209(4) is a very broad one; see R v Joske; Ex parte Shop Distributive and Allied Employees' Association (1976) 135 CLR 194 at 213. I accept that there is an issue as to the right of the applicant to enjoin the Divisional Executive from exercising the power to shorten the period under Rule 42 but, in all the circumstances, there is a serious issue as to whether that could be lawfully achieved if it has only been able to come about by reason of the conduct of the Executive in preventing the applicant from having the referendum he seeks. 8 I have decided that it is appropriate to grant an injunction which would have the effect of restraining the Divisional Executive from taking steps to agree to shorten the period to which I have referred, without having given seven days prior written notice to the applicant of the Executive's intention to do so. If that notice is given the court could then consider whether there is any tension in the present case between the referendum power in Rule 15 and the power to shorten the period of the FFTS's existence under Rule 42. 9 I have raised with the parties whether the usual undertaking as to damages is appropriate. No party has suggested that there is any likelihood of loss nor have they referred to any instance under section 209(4) or its predecessors where such an undertaking has been required. There is no doubt that what I am ordering has the effect of an interlocutory injunction, and will operate as such. Thus, there may be a question of whether an undertaking as to damages is required to be given. Rather than decide whether such an undertaking is required at this stage I propose to reserve liberty to any of the respondents to apply for an undertaking as to damages if they wish to contend that it is appropriate that it be given. 10 As the matter will come before Gray J for final hearing on 10 December 2001, the injunction should run until the hearing and determination of the proceeding or until further order. If any of the parties wish to raise the issue of the injunction before his Honour they are free to do so. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Personal Assistant: Dated: 24 December 2001 Counsel for the Applicant: Mr H Borenstein SC with Mr W Friend Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the First, Fourth and Sixth Respondents: Mr SJ Howells Solicitor for the First, Fourth and Sixth Respondents: Gill Kane & Brophy For the Second Respondent: Appeared in person Solicitor for the Third Respondent: RL Whyburn & Associates For the Fifth Respondent: No appearance Solicitor for the Seventh Respondent: Holding Redlich Counsel for the Eighth and Ninth Respondents: Mr D Langmead Solicitors for the Eighth and Ninth Respondents Duncan Basheer Hannon Date of Hearing: 21 November 2001 Date of Judgment: 21 November 2001