FEDERAL COURT OF AUSTRALIA Laing v Construction, Forestry, Mining and Energy Union [2003] FCA 1018 INDUSTRIAL LAW – application for interlocutory injunctions - union threats in relation to a contractor employing a particular sub-contractor – whether a serious issue to be tried as to whether the threats constitute "industrial or other action" by a person "with intent to coerce another person to agree" to making an enterprise bargaining agreement – whether balance of convenience favours the grant of interlocutory injunctions Workplace Relations Act 1996 (Cth) s 170NC(1) Seven Networks (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378 - applied National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114 - considered Epitoma Pty Ltd v Australasian Meat Industry Employees' Union (1984) 54 ALR 730 – cited GTS Freight Management Pty Limited v Transport Workers Union of Australia (1990) 95 ALR 195 – cited WILLIAM LAING (An inspector appointed pursuant to section 84(2)(a) of the Workplace Relations Act 1996) v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION AND JOHN CUMMINS V895 OF 2003 MERKEL J 24 SEPTEMBER 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 895 OF 2003 BETWEEN: WILLIAM LAING (An inspector appointed pursuant to section 84(2)(a) of the Workplace Relations Act 1996) APPLICANT AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FIRST RESPONDENT JOHN CUMMINS SECOND RESPONDENT JUDGE: MERKEL J DATE OF ORDER: 24 SEPTEMBER 2003 WHERE MADE: MELBOURNE UPON THE APPLICANT (on the instructions of the Department of Employment and Workplace Relations, which has authorised him to give the following undertaking on behalf of the Commonwealth) by his counsel undertaking to the Court: (a) to submit to such other order (if any) as the Court may consider to be just for the payment of compensation to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory orders or any continuation (with or without variation) thereof; and (b) to pay the compensation referred to in (a) to the person there referred to. THE COURT ORDERS THAT: 1. Until the hearing and determination of the proceeding or further order, the First Respondent be restrained (whether by its officers, employees, agents or howsoever otherwise) from encouraging, advising, inciting and/or inducing SJ Higgins Pty Ltd ("SJ Higgins"), or any other actual or potential customer of WM Loud (Aust) Pty Ltd ("WM Loud"), to cease or refrain from engaging the services of WM Loud with the intention of coercing WM Loud to agree to make an agreement with the First Respondent under Division 2 or 3 of Part VIB of the Workplace Relations Act 1996 (Cth) ("the Act"). 2. Until the hearing and determination of the proceeding or further order, the Second Respondent be restrained from encouraging, advising, inciting and/or inducing SJ Higgins, or any other actual or potential customer of WM Loud, to cease or refrain from engaging the services of WM Loud with the intention of coercing WM Loud to agree to make an agreement with the First Respondent under Division 2 or 3 of Part VIB of the Act. 3. Costs be reserved. 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 895 OF 2003 BETWEEN: WILLIAM LAING (An inspector appointed pursuant to section 84(2)(a) of the Workplace Relations Act 1996) APPLICANT AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FIRST RESPONDENT JOHN CUMMINS SECOND RESPONDENT JUDGE: MERKEL J DATE: 24 SEPTEMBER 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicant, an inspector appointed pursuant to s 84(2)(a) of the Workplace Relations Act 1996 (Cth) ("the Act"), has applied for an interlocutory injunction restraining the respondents from contravening s 170NC(1) of the Act which, relevantly, provides: "A person must not: (a) take or threaten to take any industrial action or other action; … (b) … with intent to coerce another person to agree, … to: (c) making, varying or terminating, or extending the nominal expiry date of, an agreement under Division 2 or 3; …" 2 The applicant has standing to apply for an order that relates to a contravention of s 170NC(1): see ss 84(4) and 170NF(7)(e) of the Act. 3 The applicant claims that the first respondent ("the CFMEU"), acting through the second respondent ("Cummins") who is a senior official of the CFMEU, made demands and threats to employees of William Loud (Aust) Pty Ltd ("WM Loud") and SJ Higgins Pty Ltd ("SJ Higgins") to the effect that SJ Higgins was not to engage the services of WM Loud unless and until WM Loud had entered into an enterprise bargaining agreement (which is an agreement under "Division 2 or 3" for the purposes of s 170NC(1)) with the CFMEU. It is claimed that, as a result of the demands and threats by the respondents, SJ Higgins cancelled an existing contract it had granted to WM Loud in respect of work at Roxburgh Park Secondary College ("the Roxburgh Park contract"). 4 The respondents have denied making the demands or threats alleged against them. Their case is that the CFMEU has been party to an agreement with SJ Higgins, and also an arrangement with WM Loud, in relation to the conditions of employment of workers at their respective work sites and that the Roxburgh Park contract breached the terms and conditions of the agreement and the arrangement. Thus, so it is contended, any action taken by the respondents was not taken with intent to coerce WM Loud to enter into an enterprise bargaining agreement but, rather, was taken with intent to require SJ Higgins and WM Loud to adhere to the terms of the agreement and the arrangement made by them. 5 In order to obtain the interlocutory relief sought the applicant must satisfy the Court that there is a serious question to be tried in respect of the alleged contravention of s 170NC(1), that the balance of convenience favours the grant of the interlocutory orders sought and that there are no discretionary reasons for the Court to refuse to make those orders. 6 There is a conflict between the affidavit evidence adduced by the applicant and by the respondents. Plainly, on an interlocutory application in which the deponents have not been cross-examined I am not able to resolve that conflict and it is unnecessary for me to endeavour to do so. The findings I make are necessarily on a prima facie case basis. 7 In the applicant's written contentions his counsel helpfully outlined the "action" relied upon as contravening s 170NC(1) and the evidence from which the Court could be satisfied that the requisite "intention to coerce" has been established in relation to that action. The contentions (and the references to the affidavit evidence upon which the applicant relied) were as follows: "5. The conduct on the part of the respondents consists of the following: (a) a demand or requirement by Mr Cummins, senior official on behalf of the CFMEU, in April 2003 that WM Loud enter into a certified agreement with the CFMEU (Keogh at [24]); (b) a threat by Mr Cummins on behalf of the CFMEU on 22 August 2003 that: (i) he would tell SJ Higgins that they could not use WM Loud as a contractor (Keogh at [31]); and (ii) that WM Loud could not work on the Roxburgh Park Secondary College Stage 2 site because WM Loud did not have an agreement with the CFMEU (Keogh at [32]); (c) a threat by Mr Cummins on behalf of the CFMEU on 26 August 2003 that Mr Cummins was going to tell builders not to use WM Loud because it was doing CFMEU work and that the CFMEU would tell SJ Higgins and other builders not to use WM Loud (Keogh at [38] and Williamson [13]-[15]); (d) Mr Cummins on behalf of the CFMEU on 26 August 2003 advised SJ Higgins that it could use WM Loud on current contracts but were not to use WM Loud again or it would experience trouble (Keogh at [40]) (see also: Williamson at [17]-[19] Martinis at [10]). 6. The conduct relates directly to the performance of work and/or the prevention of performance of work by employees of WM Loud whose employment is, at any time when the Certified Agreement, made with the AWU, is in operation, subject to the agreement (s170M). Conduct of this kind is within the scope of 'other action' in s170NC: see National Tertiary Education Fiduciary Union v Commonwealth of Australia (2002) 117 FCR 114 at [94]-[96]: see, also, s4(c) definition of 'demarcation dispute'. 7. Cummins as an official and organiser of the CFMEU was acting, at the very least, with apparent authority of the CFMEU, wanted an agreement with the CFMEU and held a meeting on the very subject matter at the offices of the CFMEU in Melbourne. See, also, s349 of the Act. 8. The intention to coerce is established by, inter alia, the following: (a) there is an existing certified agreement between WM Loud and the AWU certified by the AIRC which is to remain in force until 10 January 2005; (b) the demands by the CFMEU that notwithstanding that certified agreement it wished to enter into a certified agreement with WM Loud; (c) the conduct referred to in paragraph 5(b), (c) and (d) above. (d) WM Loud had existing contracts with SJ Higgins and was awarded a new contract by it on 14 August 2003 in respect of work at Roxburgh Park Secondary College to the value of $118,250; (e) the CFMEU was aware of this contract and other contracts between SJ Higgins and WM Loud; (f) the contracts with SJ Higgins are an important part of WM Loud's business constituting a significant part of its annual turnover; (g) WM Loud is, however, not a large corporation; (h) the threats to WM Loud and SJ Higgins by the CFMEU as to WM Loud's ability to continue performing work or the threat of losing contracts or not being awarded further contracts involve the exertion of illegitimate economic pressure on WM Loud and it is prevented from obtaining contractual benefits it is otherwise entitled to; (i) the conduct is compulsive in the sense that the pressure brought to bear, in a practical sense, negates choice; (j) the conduct is unlawful, illegitimate or unconscionable; (k) there is no valid basis for interfering with the contractual relationship between WM Loud and SJ Higgins on the part of the CFMEU and/or its organisers." 8 The outline is a fair summary of the evidence adduced by the applicant and of the inferences that may reasonably be drawn from that evidence. Although the legal officer who appeared on behalf of the respondents claimed that the applicant's evidence fell short of establishing that Cummins had made any threats or demands that the CFMEU would take action against WM Loud unless it entered into an Enterprise Bargaining Agreement, I do not accept that that is the proper inference to be drawn from the totality of the evidence. The applicant's evidence establishes, for the purposes of the present interlocutory application, that such demands or threats were made. While I accept that Cummins' evidence disputes that allegation I am satisfied that there is a serious issue to be tried in respect of it. 9 In Seven Networks (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378 at 386-388 I considered what was required to be established in respect of the requisite "intent to coerce" for the purposes of s 170NC(1) and concluded at 388 [43] that an applicant must establish that the action was taken with intent to negate a party's choice by the exertion of pressure that was, in the circumstances, unlawful, illegitimate or unconscionable, and that the respondents had actual knowledge of the circumstances that made their conduct coercive in that sense. 10 I am satisfied that there is a serious issue to be tried that "the action" taken by Cummins on behalf of the CFMEU was made with the requisite intent and that Cummins had actual knowledge of the circumstances that made that conduct coercive. On the applicant's case the pressure brought to bear on SJ Higgins was tortious, and therefore unlawful, in that it was for the purpose of procuring SJ Higgins to breach its contractual obligations with WM Loud in relation to the Roxburgh Secondary College. I would add that the evidence also establishes, on a prima facie case basis, that Cummins made a threat to take similar action in respect of other builders, who were actual or potential customers for WM Loud's services. Any such threats, would in my view also satisfy the requirement, on a prima facie case basis, of action that is "unlawful, illegitimate or unconscionable". The case presented by the applicant also establishes that Cummins, and therefore the CFMEU, had actual knowledge of the circumstances that made the conduct in question "coercive". 11 The respondents claimed that the evidence established that the SJ Higgins/WM Loud contract had been terminated by mutual agreement, rather than by unilateral termination on the part of SJ Higgins. While there is some evidence to that effect that evidence is disputed by the evidence given by employees of WM Loud. The inference that is reasonably open on the evidence before me is that SJ Higgins terminated its contract with WM Loud as a result of the demands and threats alleged against the respondents. 12 The respondents also contended that the action relied upon by the applicant did not meet the requirement of "industrial action or other action" in s 170NC(1). That requirement was considered by Weinberg J in National Tertiary Education Industry Union v Commonwealth of Australia (2002) 117 FCR 114 at 138-139. His Honour concluded that the composite expression "industrial action or other action" must be read and construed in context and also, because the section was penal in character, the expression "other action" should not be accorded "any undue width". Weinberg J stated at 138 [95]: "The expression 'other action' in s 170NC(1)(a) can be given a sensible interpretation if one reads it as including conduct of a kind taken by an employer, or employee, or an organisation registered under the Act, which related to the performance of work but is not included within the definition of 'industrial action'. Picketing is one example of such conduct." 13 While there might be some dispute about the width of the composite expression "industrial action or other action", for the purposes of the present interlocutory application I am satisfied that it can be taken to include the conduct relied upon in the present case. That conduct "related to the performance of work" in that it was for the purpose of preventing the performance of work by WM Loud for SJ Higgins. However, I need not determine that matter on any final basis as, whatever view one might take of the width of the composite expression, there is plainly a serious issue to be tried in respect of that issue. 14 It follows from the foregoing that I am satisfied that the applicant has established that there is a serious issue to be tried of a contravention of s 170NC(1) by the respondents. 15 The balance of convenience is strongly in favour of the grant of appropriate injunctive relief. It is clear that the CFMEU has the capacity to influence actual and potential customers of WM Loud not to engage its services. That capacity was established in the present case in respect of SJ Higgins' cancellation of its contract with WM Loud. If that conduct continues it will cause substantial loss to WM Loud and to its employees. 16 The respondents were not able to point to any countervailing inconvenience that might be suffered by them by reason of the interlocutory injunctions sought. That is not surprising as both injunctions, in terms, seek to restrain the respondents from contravening s 170NC(1) or, put another way, seek to restrain the respondents from engaging in conduct in which they have no lawful right to engage. 17 There were, however, two matters in relation to the injunctive relief sought that gave me some concern. The first was that a mandatory order was sought that the CFMEU deliver to SJ Higgins a letter informing it that the respondents: · have ceased to induce SJ Higgins to refrain from engaging the services of WM Loud; · will not henceforth induce SJ Higgins to cease or refrain from engaging the services of WM Loud in contravention of s 170NC(1). 18 The difficulty with the first part of the mandatory relief is that it would require the CFMEU to state that it has ceased to engage in conduct that is not, in itself, unlawful. The problem with the second part of the relief is that it requires the CFMEU to do no more than inform SJ Higgins that it will not breach s 170NC(1) or, put another way, will not breach the injunctions granted against the CFMEU. When those difficulties were pointed out to senior counsel for the applicant he accepted that the mandatory relief his client was seeking may not be appropriate in the circumstances. 19 The second matter of concern was that the relief sought enjoined the respondents from contravening s 170NC(1) with the consequence that, in determining whether the orders have not been complied with, the Court would, in substance, be determining the substantive matters raised in the Application itself. There is also the related concern that, in general, it is undesirable to frame interlocutory injunctions in terms which reflect the general language of a particular statutory provision: see Epitoma Pty Ltd v Australasian Meat Industry Employees' Union (1984) 54 ALR 730 ("Epitoma") at 741 and GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 95 ALR 195 at 205. Thus, as was said by the Full Court in Epitoma at 741: "[I]t is desirable that an interlocutory injunction restrain, in explicit terms, a particular activity so that the parties can be under no misapprehension as to what is intended, rather than be framed in terms to reflect the general language of the statute…" 20 The interlocutory relief, which sought to prohibit any further contravention of s 170NC(1), was as follows: 1. Until the hearing and determination of the proceeding or further order, the First Respondent be restrained (whether by its officers, employees, agents or howsoever otherwise) from encouraging, advising, inciting and/or inducing SJ Higgins Pty Ltd ("SJ Higgins"), or any other actual or potential customer of WM Loud (Aust) Pty Ltd ("WM Loud"), to cease or refrain from engaging the services of WM Loud with the intention of coercing WM Loud to agree to make an agreement with the First Respondent under Division 2 or 3 of Part VIB of the Workplace Relations Act 1996 (Cth) ("the Act"). 2. Until the hearing and determination of the proceeding or further order, the Second Respondent be restrained from encouraging, advising, inciting and/or inducing SJ Higgins, or any other actual or potential customer of WM Loud, to cease or refrain from engaging the services of WM Loud with the intention of coercing WM Loud to agree to make an agreement with the First Respondent under Division 2 or 3 of Part VIB of the Act. 21 It was not contended on behalf of the respondents that interlocutory injunctions in the above terms would leave them under any misapprehension as to what is restrained. In my view the injunctions sought relate to the particular activities sought to be impugned, albeit that to some extent the terms of relief reflect the general language of the statute. However, as was pointed out by senior counsel for the applicant, that was necessary to ensure that the injunctions did not restrain conduct that was lawful. Accordingly, I am not satisfied that interlocutory relief in the terms set out above is inappropriate in the circumstances of the present case. 22 For the above reasons, I am satisfied that it is appropriate to grant the interlocutory relief sought by the applicant as set out in [20] upon him giving the usual undertaking as to damages. It is appropriate to reserve costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Associate: Dated: 25 September 2003 Counsel for the Applicant: Mr H Dixon SC with Mr T Jacobs Solicitor for the Applicant: Blake Dawson Waldron The First and Second Respondent appeared by its legal officer: Mr J Maddison Date of Hearing: 24 September 2003 Date of Judgment: 24 September 2003