FEDERAL COURT OF AUSTRALIA Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCA 970 File number: VID 195 of 2016 Judge: O'CALLAGHAN J Date of judgment: 21 August 2017 Catchwords: PRACTICE AND PROCEDURE – application for leave to amend statement of claim – application for leave to further amend defence – application to strike out defence in part Legislation: Fair Work Act 2009 (Cth), ss 363 and 793 Cases cited: Australian Property Custodian Holdings Ltd (in liq) (recs and mgrs apptd) (controllers apptd) v Woolridge (No 2) [2012] VSC 576; 93 ACSR 130 Date of hearing: 19, 23 June 2017 Registry: Victoria Division: Fair Work National Practice Area: Employment and Industrial Relations Category: Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr M J Follett Solicitor for the Applicant: Minter Ellison Counsel for the Respondents: Ms S Kelly Solicitor for the Respondents: Construction, Forestry, Mining and Energy Union – Legal Branch ORDERS VID 195 of 2016 BETWEEN: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent JOSEPH MYLES Second Respondent JUDGE: O'CALLAGHAN J DATE OF ORDER: 21 August 2017 THE COURT ORDERS THAT: 1. Within seven days, the applicant file and serve the amended statement of claim substantially in the form of the document handed to the Court at the hearing on 19 June 2017. 2. Within 30 days, the respondents file and serve their further amended defence consistent with the Court's reasons of today's date. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'CALLAGHAN J: 1 This proceeding concerns alleged contravention by the respondents of civil remedy provisions contained in the Fair Work Act 2009 (Cth) arising out of construction work at the Springvale Rail Crossing Removal Project (the Project). 2 A procedural dispute about the pleadings arose and each party sought leave to amend their respective pleadings. Relevant procedural history 3 On 19 June 2017, the Court granted the respondents an adjournment of the trial in this matter, pending the outcome of an application to the High Court of Australia for special leave to appeal a decision of the Full Court in Australian Building and Construction Commissioner v Powell [2017] FCAFC 89 (Powell). The issue in that case was whether ss 58 and 70 of the Occupational Health and Safety Act 2004 (Vic) conferred a right to enter premises on an official of the Construction, Forestry, Mining and Energy Union (the CFMEU), for the purposes of s 494 of the Fair Work Act 2009 (Cth). After hearing submissions from the parties, I granted the adjournment sought by the respondents because it seemed to me that, on any view, the Powell issue was bound to have a significant impact on the conduct of this proceeding and the rights of the parties. 4 After the adjournment application was determined, the parties indicated that various amendments to the pleadings would be sought. Those issues were listed for hearing on 23 June 2017. 5 Three matters arose for consideration. 6 First, the applicant sought leave to amend its statement of claim in two respects: by inserting new paragraphs 30A, 30B and 30C, which plead another method of attaching liability to Mr Myles for conduct that is already alleged to constitute contraventions of the Fair Work Act 2009 (Cth); and by inserting new paragraphs 33(c) and 54(b). 7 I granted the applicant leave to amend the statement of claim by inserting the new paragraphs 30A, 30B and 30C. In circumstances where the same facts support the new alleged contravention and the trial has been deferred until after the High Court determines the special leave application in Powell, the respondents could not identify any prejudice to them by those amendments being made. Accordingly, I granted leave for the new paragraphs 30A, 30B and 30C to be inserted. The respondents did not oppose the insertion of the new paragraphs 33(c) and 54(b), so the applicants will also have leave to amend the statement of claim in that respect. 8 Secondly, the applicant sought leave to strike out paragraphs 23, 37, 38 and 41-46 of the respondents' defence. The first respondent (the CFMEU) says that it cannot plead to certain allegations in the applicant's statement of claim because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the relevant allegations. The applicant's position is that the first respondent is not entitled to plead its case in that way. 9 Thirdly, the respondents sought leave to file and serve a further amended defence (the proposed defence), which, relevantly, further amends paragraphs 17, 42, 45 and 46 of the amended defence filed on 11 November 2016 to rectify inaccuracies in those paragraphs arising from a deficiency in the instructions obtained by the solicitors for the respondents. The respondents relied upon an affidavit of Ms Kristen Reid in support of the application, which set out the basis for the amendments sought. Subject to reserving its right to challenge the veracity of the evidence given in Ms Reid's affidavit at trial, the applicant did not oppose the proposed further amendments to paragraphs 17, 42, 45 and 46 of the amended defence. The respondents will accordingly have leave to file their further amended defence. SUBMISSIONS 10 It remains to determine the applicant's application to strike out paragraphs 23, 37, 38 and 41-46 of the proposed defence. 11 The applicant says that the allegations in paragraphs 23, 37, 38 and 41-46 concern, in part, Mr Smits and Mr Castles, who are delegates of the CFMEU, and that the CFMEU must make all reasonable enquiries of those men before it can assert that it "cannot plead" because "it does not know" the truth or otherwise of the matters alleged in respect of them. 12 The CFMEU says that it is not obliged to make reasonable, or any, enquiries of Mr Smits or Mr Castles because "nowhere in the body of the [amended statement of claim] will you find any suggestion at all that Mr Castles and Mr Smits were acting in their capacity as CFMEU delegates", or that they were acting "on behalf of the CFMEU", or that they were acting as "officers" of the CFMEU for the purposes of s 363 or s 793 of the Fair Work Act 2009 (Cth). Counsel for the CFMEU contended that "what we do know is that they were employed to work on the project as full-time health and safety officers …". 13 Although I was taken to a number of cases where individuals had sought to invoke a relevant privilege, those cases have no bearing on the issue that arises for determination, as was clear by the end of oral submissions. That is because no issue arises here about any claim to privilege. It is not contended that either Mr Castles or Mr Smits is entitled to claim privilege, nor is it contended that this is a case where the pleading of facts within the knowledge of someone not themselves asserting privilege would impinge upon, impair or render less effective the privilege of a person asserting it: see generally Australian Property Custodian Holdings Ltd (in liq) (recs and mgrs apptd) (controllers apptd) v Woolridge (No 2) [2012] VSC 576; 93 ACSR 130 at [90]-[122]. CONSIDERATION 14 The relevant paragraphs of the amended statement of claim plead as follows: Events of Thursday, 6 February 2014 … 23. The conduct of the OPT Employees and the Oz Fixing Employees alleged in paragraphs 21 and 22 herein was: (a) organised by Myles; and/or (b) counselled or procured by Myles; and/or (c) induced by Myles. PARTICULARS Myles either organised the employees to sit and remain in the Site sheds himself or alternatively, organised for Peter Castles (CFMEU Delegate on the Project) to organise the employees to sit and remain in the Site Sheds. Myles' involvement is also to be inferred from the surrounding facts and circumstances (both before and after the work stoppage), including in particular Myles' later statements and his involvement in having the employees resume work (paragraph 25 below), including his addressing the OPT Employees and the Oz Fixing Employees after the conclusion of the meeting at which the Training Course Request was agreed to, after which those employees resumed work. … 37. At around 6.45p.m on 13 February 2014, Myles convened and conducted what he described as a "union meeting" with four Rigwield Employees alleged in paragraph 36 herein and Rob Smits (night shift peggy and OHS Representative on the Project), in the crib sheds off Newcomen Road behind the Site office on the Site. PARTICULARS Arnold McGill (McDow Construction Manager) entered the meeting at about 6.55p.m and told Myles that he could not be there and that he needed to report to the Site office. Myles responded that he was having a union meeting and that he would be another 5 minutes. 38. Shortly after 7.00p.m, the meeting alleged in paragraph 37 herein ended, Myles left the Site and motioned for the four Rigweld Employees to join him, which they did. … 41. The conduct of the four Rigweld Employees alleged in paragraphs 38-40 herein was: (a) organised by Myles; and/or (b) counselled or procured by Myles; and/or (c) induced by Myles. PARTICULARS Myles organised and encouraged the employees to leave the Site with him at the conclusion of the meeting, including (by inference) through what he said to them during the meeting. Myles' involvement is also to be inferred from the surrounding facts and circumstances (both before and after the work stoppage). One of the Rigweld Employees indicated that the employees were following a CFMEU directive to leave the Site. 42. At some time around or just after 8.00p.m on 13 February 2014, Myles re-entered the Site, proceeded around various areas of the Site in the company of Rob Smits (night shift OHS Representative on the Project) and at around 8.30p.m, directed a group of OPT Employees working in the stormwater sump/retention chamber area to relocate and continue to perform work in another area of the Site (the west slabs area). 43. Between around 8.30p.m and 8.50p.m on 13 February 2014, Myles refused numerous directions from representatives of the Project to leave the Site, despite threats to call the police. PARTICULARS Myles refused directions from Lisa Ranftl (McDow Senior Project Engineer), Innes Menke (BBA Supervisor), Percy Jordan (McDow Superintendent) and Peter Fraser (McDow Project Director). Myles said that he refused to leave until he had finished and that he had a job to do. 44. In various conversations at or around this time: (a) Myles raised issues and questions about the safety of the emergency access to and egress from the stormwater sump/retention chamber; and PARTICULARS Myles raised these issues with Michael Turvey (Safety Advisor), Peter Fraser, Percy Jordan and Innes Menke (b) in response to a statement of Peter Fraser that he was on the Site illegally, said that he was accompanying Mr Smits. 45. In one of the conversations alleged in paragraphs 43 and 44 herein, Peter Fraser requested Myles to produce for inspection a copy of his entry permit and Myles refused or failed to do so, saying words to the effect that "I haven't got any ID, I'm not leaving site, why don't you call the police – I'd love that." PARTICULARS Fraser said to Myles words to the effect "What are you doing on site? Why have you entered illegally? Could you please provide me your permits and any Notice of Suspected Contravention, if you have one? 46. In one of the conversations alleged in paragraphs 43 and 44 herein, Innes Menke requested Myles to produce for inspection a copy of his entry permit and Myles refused or failed to do so. PARTICULARS Menke said to Myles words to the effect "Why are you here? Do you have a right of entry or any other documentation to show why you are here and who you are? You're not wearing the right PPE for the Project for our requirements". Apart from tugging at his short sleeved vest and pointing to his hard hat, Myles did not otherwise reply. Menke then said to Myles words to the effect "If you can't show me any documentation or reason for being here, you need to leave", to which Myles responded with words to the effect "I'm not going anywhere until I'm finished." 15 The proposed defence relevantly says: To the statement of claim dated 4 March 2016 the respondents, adopting the same numbering: … 23. do not plead to paragraph 23 on the basis that it is vague and embarrassing and liable to be struck out by reason that it pleads a conclusion without first pleading the material facts relied on in support of the conclusion, and is thereby irrelevant and under cover of that objection say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. … 37. save that they admit that a meeting was conducted at around 6.45p.m on 13 February 2014 with people including Rod Smits, do not admit the allegations because the second respondent does not recall the events alleged, and say further that: (a) Mr Smits asked the second respondent for assistance with an occupational health and safety concern under s 58(f) of the Occupational Health and Safety Act 2004 (Vic); and (b) that the second respondent entered the site in response to that request for assistance; (c) the second respondent was lawfully on site pursuant to s 70 of the Occupational Health and Safety Act 2004 (Vic). 38. do not admit the allegations in paragraph 38 because the second respondent does not recall the events alleged and therefore does not know the truth or otherwise of the allegation. … 41. do not plead to paragraph 41 on the basis that it is vague and embarrassing and liable to be struck out by reason that it pleads a conclusion without first pleading the material facts relied on in support of the conclusion and is thereby irrelevant and under cover of that objection say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. 42. say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. do not admit the allegations in paragraph 42 because the second respondent does not recall the events alleged and therefore does not know the truth or otherwise of the allegation. 43. do not plead to paragraph 43 on the basis that it is vague and embarrassing and liable to be struck out by reason that it pleads a conclusion without first pleading the material facts relied on in support of the conclusion and is thereby irrelevant and under cover of that objection say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. 44. do not plead to paragraph 41 on the basis that it is vague and embarrassing and liable to be struck out by reason that it pleads a conclusion without first pleading the material facts relied on in support of the conclusion and is thereby irrelevant and under cover of that objection say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege against self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. 45. say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. do not admit the allegations in paragraphs 45 because the second respondent does not recall the events alleged and therefore does not know the truth or otherwise of the allegations. 46. say that the first respondent cannot plead to the allegation because the second respondent has invoked the privilege self-exposure to a penalty and the first respondent therefore does not know the truth or otherwise of the allegations. do not admit the allegations in paragraphs 45 because the second respondent does not recall the events alleged and therefore does not know the truth or otherwise of the allegations. 16 With respect to paragraph 23 of the proposed defence, which is in the same form as the current defence, I will not strike it out. No allegation is made against either Mr Smits or Mr Castles. Mr Castles is referred to in the particulars to paragraph 23, but as counsel for the CFMEU correctly contended, it is not necessary for it to plead to those particulars if it chooses not to do so. 17 Paragraph 37 of the proposed defence, which is also in the same form as the current defence, squarely raises the issue that divides the parties on this application. Counsel for the CFMEU did not dispute the proposition that the obligation of a body corporate pleading a defence is to plead based on all information within the knowledge of its servants and agents who were involved in the relevant events, after making reasonable enquiries of those persons. It was contended, however, as I have outlined above, that no such obligation arises when the relevant allegations are not made against such servants or agents in their capacity as such. No authority was cited for that proposition and I do not accept it. It was not disputed that Mr Castles and Mr Smits are delegates of the CFMEU and, in my view, the obligation to make reasonable enquiries about facts pleaded concerning their involvement in relevant events extends to them. Accordingly, the CFMEU must, having made all such reasonable enquiries in respect of the allegations made in paragraph 37 of the amended statement of claim, plead appropriately. 18 As to paragraphs 38 and 41 of the amended statement of claim, those paragraphs make no allegations of material fact against either Mr Castles or Mr Smits, so no issue about the proposed defence accordingly arises. 19 Paragraph 42 of the amended statement of claim does make an allegation of material fact in respect of Mr Smits. For the reasons that I have given in respect of paragraph 37, the CFMEU must, having made all such reasonable enquiries in respect of the allegations made in paragraph 38 of the amended statement of claim, plead appropriately. 20 As to paragraphs 43-46 of the amended statement of claim, no allegation of material fact is made against either Mr Smits or Mr Castles. Although the amended statement of claim, on a generous view of the matter, might be taken to suggest that Mr Myles was "in the company" of Mr Smits during the events alleged in paragraphs 43-46, the pleading does not say so in terms. Accordingly, in my view, the issue about the need to make reasonable enquiries of Mr Smits in respect of that allegation does not arise. CONCLUSION 21 I will order the respondents to file and serve their further amended defence, consistent with these reasons, within 30 days. As the applicant has not yet filed and served the amended statement of claim handed to the Court at the hearing on 19 June 2017, I will order it to do so, within seven days. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan. Associate: Dated: 21 August 2017