FEDERAL COURT OF AUSTRALIA Anderson Formrite Pty Ltd v Baulderstone Pty Ltd (No 6) [2009] FCA 790 ANDERSON FORMRITE PTY LTD (ACN 097 507 652) v BAULDERSTONE PTY LTD (ACN 002 625 130) NSD 1272 of 2007 GRAHAM J 20 JULY 2009 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1272 of 2007 BETWEEN: ANDERSON FORMRITE PTY LTD (ACN 097 507 652) Applicant AND: BAULDERSTONE PTY LTD (ACN 002 625 130) Respondent JUDGE: GRAHAM J DATE OF ORDER: 20 JULY 2009 WHERE MADE: SYDNEY THE COURT GRANTS: 1. Leave to the applicant to file and serve a Further Amended Statement of Claim no later than midday on Tuesday 21 July 2009 incorporating the proposed amendments sought in the draft Further Amended Statement of Claim handed up on 20 July 2009 subject to the exclusion of the words "and that generally the engagement of WorkForce One would cause the subcontract works to run more smoothly" from the proposed amended paragraph 12 and the exclusion of the words "and generally the engagement of Workforce One did not cause the subcontract works to run smoothly" from the proposed amended paragraph 31. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1272 of 2007 BETWEEN: ANDERSON FORMRITE PTY LTD (ACN 097 507 652) Applicant AND: BAULDERSTONE PTY LTD (ACN 002 625 130) Respondent JUDGE: GRAHAM J DATE: 20 JULY 2009 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is the fifth day of the trial in this matter. The matter is fixed for 15 hearing days, but on the basis that if the hearing is not concluded within that period of time, it will continue until it is concluded. The Statement of Claim was filed on 5 July 2007. It was replaced by an Amended Statement of Claim filed 23 August 2007. The initial Defence to the Amended Statement of Claim was filed on 15 November 2007. An Amended Defence was filed in Court on the first day of the hearing, namely 14 July 2009, and leave was granted on 16 July 2009 to the defendant to file a Further Amended Defence in respect of one aspect of the matter. 2 Senior counsel for the applicant indicated that he may wish to be heard on the form of the amendment to the defence. That was the subject of debate earlier today and I decided that there should be no variation to the order made on 16 July 2009 granting leave to the respondent to file the Further Amended Defence which it now proposes to file. After that issue was resolved, the applicant sought leave to file a Further Amended Statement of Claim. 3 The case concerns, in part, representations said to have been made by the respondent to the applicant which induced the applicant to enter into a subcontract for the performance of formwork on a major building site in Perth in Western Australia. Paragraph 11 of the Amended Statement of Claim presently provides: '11. In or about August 2001 the Respondent made it a condition on the award of the tender for the Works to Formrite that Formrite engage Workforce One to supply labour required to perform the Works. Particulars (i) The condition was imposed by Mr Watson [a reference to Mr Paul Watson], in August 2001, directing or requesting that a Mr Benson inform Anderson that for Formrite to win the tender, Formrite had to agree to engage Workforce One to supply the labour it required to complete the Works. Mr Benson so informed Anderson in the course of a telephone conversation between Mr Benson and Anderson in August 2001; and (ii) The condition was again imposed in a telephone conversation between Mr Watson and Anderson in August 2001.' 4 Paragraph 11 was followed by a paragraph 12 in which it was alleged that representations were made by the respondent to the applicant and/or Mr Anderson founded upon the same telephone conversation as that particularised in particular (ii) under paragraph 11 of the Amended Statement of Claim. In its current form paragraph 12 reads: '12. In August 2001 the Respondent represented to the Applicant and/or Anderson that Workforce One would supply labour required for the performance of the Works and that in so doing Workforce One would ensure that the best available workers were supplied. Particulars The representations were made orally, in the course of the same telephone conversation between Mr Watson and Mr Anderson referred to in particular (ii) to paragraph 11.' 5 In paragraph 31 of the Amended Statement of Claim the applicant contended that the labour supplied by WorkForce One to the applicant was inefficient and not competent. Particulars were provided as follows: ' Particulars (i) There was no screening of potential workers by Workforce One or the Respondent with respect to the ability or experience of the potential workers. (ii) The Applicant was required by the Respondent and Workforce One to use labour supplied by Workforce One regardless of the ability or competence of the workers. The criteria applied by Workforce One for the selection of each worker to be supplied to the Applicant was that the worker be a member of the CFMEU and/or CFMEUW irrespective of ability and experience, that his availability for work be governed by a chronological list and that a specific ratio of one labourer per carpenter be maintained. (iii) A policy was adopted by Workforce One that for every carpenter engaged a labourer also be engaged whereas the customary ratio is 3-4 carpenters for each labourer. (iv) The employees of Workforce One failed to meet time limits specified in the contract between the Applicant and the Respondent despite sufficient persons being employed and all necessary equipment being supplied. (v) The employees of Workforce One supplied to the Applicant continually achieved a productivity rate substantially below the industry standard rate. (vi) The Applicant repeats particular (iv) to paragraph 25.' 6 Particular (iv) to paragraph 25 was as follows: '(iv) By reason of the Applicant being required to utilise the unnecessary inefficient, incompetent labour, it was required to pay unnecessary redundancies when it attempted to rid itself of this labour.' 7 With the pleadings in this state the applicant has now sought to amend paragraph 12 of the Amended Statement of Claim by adding at the end thereof the following words: '…, and that the Applicant could move workers on and off the site at its own discretion if not satisfied with those workers, and that the Applicant could control who worked on the site and that generally the engagement of WorkForce One would cause the subcontract works to run more smoothly.' 8 A corresponding amendment was sought to paragraph 31. The amendment sought was the addition of a sentence reading: '… Further, the Applicant could not move workers on and off the site at its own discretion if it were not satisfied with those workers and the Applicant could not control who worked on the site and generally the engagement of Workforce One did not cause the subcontract works to run smoothly.' 9 Under paragraph 31 it was sought to add an additional particular (vii) as follows: '(vii) Roy McIlwaine on behalf of the Respondent controlled who came on and off the site and prevented the applicant from replacing workers that it wanted to remove.' 10 In paragraph 3.3 of the Amended Statement of Claim, it was alleged that at all material times the respondent employed inter alia Mr Paul Watson, to whom reference has been made, and Mr Roy McIlwaine. In its Amended Defence to the Amended Statement of Claim, the respondent asserted that Mr Roy McIlwaine was employed by it from 1 August 2001 to 23 November 2003. In paragraph 5.1 of the Amended Statement of Claim, the applicant alleged that Mr Roy McIlwaine was at all material times an employee of the respondent, a member of the CFMEU and/or CFMEUW and a shop steward for the CFMEU and/or CFMEUW on the construction site known as 240 St Georges Terrace, Perth. The respondent, in its Amended Defence, admitted that Mr Roy McIlwaine was employed by it, from 1 August 2001 to 23 November 2003, and admitted the relationship between Mr Roy McIlwaine, its employee, and the union. 11 Other allegations of fact contained in the Statement of Claim are to be found in paragraph 26 and the particulars thereunder. The relevant allegations included: '26. The Respondent and Workforce One, and diverse others, including the CFMEU and/or CFMEUW, wrongfully agreed or combined to: (a) cause the applicant to be denied the opportunity to engage persons in construction work at the Site, either as its own employees or as independent contractors or as employees of Workforce One or as independent contractors to Workforce One, unless those persons were financial members of the CFMEU and/or CFMEUW; (b) prevent or hinder the employment of persons to work on the Site unless those persons were financial members of the CFMEU and/or CFMEUW; …' 12 The particulars of overt acts, in respect of paragraph 26 included: '(viii) When the Applicant commenced the Works and through to at least January 2002 (with one exception), Mr Roy McIlwaine selected the labourers to be engaged by the Applicant through Workforce One, each of whom was a member of the CFMEU and/or CFMEUW and each of whom was to be used by the Applicant irrespective of ability or experience. Mr McIlwaine also imposed a condition that for each labourer employed a carpenter was also to be employed;' 13 The allegations contained in paragraph 26 of the pleading were denied by the respondent in its Amended Defence. 14 In his evidence-in-chief, Mr Warren Anderson, a director and secretary of the applicant, gave evidence of a conversation with Mr Paul Watson, on the telephone, in which the following words were said to have been spoken, amongst others: Paul Watson: 'Look, we use WorkForce One. You've got a very good chance at winning this tender if you use them.' Anderson: 'Well, what will they supply?' Paul Watson: 'They supply the workforce; good tradesmen; assure you of productivity; you can move men on and off the site at your will, if you weren't satisfied with them, and that - generally, that they'll make your job run smoothly. Use them and I can just about assure you that you'll win the contract.' No objection was taken by senior counsel for the respondent to this evidence as led. 15 In the course of his evidence of 17 July 2009, Mr Anderson gave evidence about a conversation he had with a Mr Kevin Reynolds, the Secretary of the CFMEU, in Western Australia. The evidence included: 'Counsel Q: Did he tell you that he had been told that if he went ahead with his plan, that the union would close the site? A: No, he didn't say that. He had – spoke to Mr McIlwaine and Mr McIlwaine had said that they wouldn't wear men coming on site that weren't endorsed by them. Q: By them, you meant the union? A: Well, McIlwaine and whoever he represented.' 16 Mr Anderson was cross-examined about his use of the expression, 'Well, McIlwaine and whoever he represented', when further cross-examined by senior counsel for the respondent earlier today. When asked what he meant by 'whoever he represented', Mr Anderson gave evidence that Mr McIlwaine worked for Baulderstone Hornibrook Proprietary Limited and he was a site delegate for the union, or words to that effect. 17 Perhaps, somewhat inconsistently with his evidence-in-chief, which has been quoted, Mr Anderson was asked earlier today some questions about whether when he, on behalf of Anderson Formrite Proprietary Limited, signed the relevant formwork sub-contract, he relied upon assurances given to him by Mr Paul Watson, concerning the quality of men provided by WorkForce One. If I understood him correctly, the effect of his evidence this morning was that Mr Watson required Anderson Formrite Proprietary Limited to use WorkForce One, but that it was WorkForce One that gave him the assurances about the quality of its men. However, that apparent factual difference may ultimately be resolved, the applicant seeks to further amend the Amended Statement of Claim in the manner indicated above. 18 I am not satisfied that an amendment should be allowed which permits the addition in paragraph 12 of the words 'and that generally the engagement of WorkForce One would cause the subcontract works to run more smoothly.' That may well have been the evidence of Mr Anderson as to what was said to him, but it does not seem to me to amount to a representation of fact which would relevantly fall within ss 51A or 52 of the Trade Practices Act 1974 (Cth). I am not disposed to allow an amendment to paragraph 12, which would involve the inclusion of those particular words which seem to me to be rather general in nature. 19 Consistent with what I have just said, I would not allow an amendment to paragraph 31, which would allow the addition of the words 'and generally the engagement of Workforce One did not cause the subcontract works to run smoothly.' 20 As to the other matters included in the proposed amendments to paragraphs 12 and 31, it seems to me that they are entirely appropriate, given the factual matrix which was alleged in the Amended Statement of Claim, filed so long ago, and the relevant admissions made in relation to Mr McIlwaine's status and Mr Paul Watson's status as employees of the respondent. One might have inferred, apart from the detail which is provided elsewhere in the pleading, that a representation that a contract labour hire company would 'ensure that the best available workers were supplied' would carry with it an implication that unsatisfactory workers could be readily removed from the site and replaced. 21 In relation to the addition of a particular in terms of paragraph (vii) under paragraph 31 it seems to me that the matter there alleged is in substance no different from that which was alleged in particular (viii) under paragraph 26 to which reference has earlier been made. 22 As senior counsel for the applicant has said, should it be necessary for Mr Anderson to be recalled he can be made available on short notice. Subject to the arrangements between the parties, I would expect Mr Anderson to return, if required, tomorrow so that he could be further cross-examined by senior counsel for the respondent if he wished to do so. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 28 July 2009 Counsel for the Applicant: B A J Coles QC and A W Smith Solicitor for the Applicant: John de Mestre & Co Counsel for the Respondent: B D Hodgkinson SC and A C Harding Solicitor for the Respondent: Clayton Utz Date of Hearing: 20 July 2009 Date of Judgment: 20 July 2009