Federal Court of Australia Pacific National Services Pty Ltd v Australian Rail Tram and Bus Industry Union [2020] FCA 1678 File number: NSD 1238 of 2020 Judgment of: NICHOLAS J Date of judgment: 19 November 2020 Catchwords: INDUSTRIAL LAW – where applicant seeks an interlocutory injunction restraining the respondent from organising its members to take industrial action at blast furnace – where industrial action could require dumping of hot metal – whether risk of destruction to property by industrial action – interlocutory injunction granted Legislation: Fair Work Act 2009 (Cth) ss 408, 415(1) Cases cited: BlueScope Steel (AIS) Pty Ltd v Australian Workers' Union (No 1) (2012) 226 IR 149; [2012] FCA 935 Copyright Agency Ltd v Haines (1982) 1 NSWLR 182 Overseas Tankship (U.K.) Ltd v Morts Dock & Engineering Co. Ltd. [1961] AC 388 (JC) Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 32 Date of hearing: 18 November 2020 Counsel for the Applicant: Mr Shariff SC Solicitor for the Applicant: Seyfarth Shaw Australia Counsel for the Respondent: Ms L Saunders Solicitor for the Respondent: Australian Rail Tram and Bus Industry Union ORDERS NSD 1238 of 2020 BETWEEN: PACIFIC NATIONAL SERVICES PTY LTD (ACN 052 134 362) Applicant AND: AUSTRALIAN RAIL TRAM AND BUS INDUSTRY UNION Respondent order made by: NICHOLAS J DATE OF ORDER: 19 November 2020 THE COURT NOTES THAT: Upon the applicant, by its counsel, giving the usual undertaking as to damages, namely to: (a) submit to such 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 these orders; and (b) pay the compensation referred to in (a) to the person or persons there referred to. THE COURT ORDERS THAT: 1. Until 6.00pm on Friday 20 November 2020 or further order: (a) the Respondent is restrained from organising industrial action by its members who are employees of the Applicant ("Member Employees") at the Port Kembla steelworks in circumstances where the Respondent is given notice by the Applicant that dumping of hot metal from the No. 5 Blast Furnace will be necessary provided that such organisation of industrial action is only restrained to the extent necessary to avert any need to dump hot metal; and (b) upon the Respondent being given notice in accordance with subpara (a) above, the Respondent is required to direct Member Employees to cease any such industrial action to the extent necessary to avoid the need to dump hot metal. 2. Notice may only be given by the Applicant to the Respondent pursuant to order 1 where the Applicant has, by it servants or agents with personal knowledge of the relevant facts, formed the opinion in good faith and on reasonable grounds that circumstances have arisen justifying the giving of such notice. 3. The Applicant file and serve any Amended Originating Application within 14 days. 4. Each party have liberty to apply on 3 hours' notice or on such shorter period of notice as a Judge may allow. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT NICHOLAS J: 1 The Applicant ("Pacific National") seeks an interlocutory injunction to restrain the Respondent ("ARTBU") from organising its members to take industrial action to the extent that this industrial action leads to, or results in, the "dumping" of hot metal from a blast furnace that is operated at the steelworks in Port Kembla, New South Wales ("Steelworks"). An interlocutory injunction of this kind (in similar but not identical circumstances) was granted by Perram J in BlueScope Steel (AIS) Pty Ltd v Australian Workers' Union (No 1) (2012) 226 IR 149; [2012] FCA 935 ("Bluescope Steel"). 2 There are a number of interlocutory orders sought by Pacific National. However, during the course of the hearing attention focused on proposed order 1 which is in the following terms: 1. That the Respondent be: (a) restrained from organising industrial action by Member Employees at the Port Kembla steelworks ("Steelworks") in circumstances where the Respondent is notified by the Applicant or becomes aware that the action will result in the dumping of hot metal from the No. 5 Blast Furnace ("Blast Furnace"), where such organisation of action is only to be restrained to the extent necessary to avert the risk of the dumping of hot metal; and (b) required to advise Member Employees to cease any such action to the extent necessary to avert the risk of the dumping of hot metal. 3 Pacific National is engaged by Bluescope Steel (AIS) Pty Ltd ("BlueScope Steel") to conduct rail operations at the Steelworks. A blast furnace is operated at the Steelworks, which is operated 24 hours per day and seven days per week. Molten iron ore is made in the blast furnace. Pacific National is engaged to operate locomotives to haul the molten iron ore from the blast furnace to a location known as the "Basic Oxygen Steelmaking furnace" ("BOS") using specialist wagons, called torpedo ladles. The torpedo ladles are heated to high temperatures to avoid solidification of molten ore. The molten iron ore is made into steel at the BOS and is then treated and cast into slabs. Locomotives then haul the steel slabs to Port Kembla mills for further processing or onto trains to be transported elsewhere. 4 The process of work that involves molten iron ore being turned into steel is inherently dangerous. One of the major risks is that if the steel production chain is interrupted and there are not enough torpedo ladles to accommodate the molten iron ore from the BOS, the molten iron ore which is constantly produced at the blast furnace needs to be "dumped". In a written submission, Pacific National submitted that the dumping of iron ore creates significant safety risks and leads to the destruction of property. In oral submissions Mr Shariff SC, who appeared for Pacific National, focused his attention on the potential for "destruction of property". 5 On 10 November 2020, the ARTBU (which is negotiating with Pacific National for a new enterprise agreement) notified Pacific National that its members would be taking industrial action in the form of a full 24 hour stoppage commencing at 6.00pm on Thursday, 19 November 2020. Each of the relevant ARTBU members is an employee of Pacific National who is required by their contractual arrangements to work during the period of the notified 24 hour stoppage if rostered. 6 The result of the industrial action is that Pacific National will not be able to rely upon members of the ARTBU to perform any work during the 24 hour period of the stoppage. According to the evidence, Pacific National has arranged for supervisory employees and a small workforce of casual labour ("the contingent workforce") to perform the relevant work. However, it says that there is a limited supply of qualified labourers that have the competencies to perform the relevant work because it requires extensive training specific to the Steelworks and the hauling of hot metal. 7 There are three shifts that will be performed over the relevant 24 hour period. The contingent workforce can only be allocated in a limited number of ways due to the fact that only some of the workers (being the supervisory employees) have the skills and competencies to perform driving work. There are also limitations in that not all of the available labour can be allocated to every shift as these workers are required to have breaks between shifts due to fatigue and safety requirements. 8 Under existing arrangements for rostering and allocating the contingent workforce Pacific National will be able to operate three locomotives at the Steelworks, which will be sufficient for the operations at the blast furnace to continue in a safe manner. However, Pacific National says that this allocation of labour has little to no margin for error as it is dependent on a sufficient number of workers being able to perform the driving duties. 9 The evidence shows that if there is a single unplanned absence at or prior to the commencement of each of the shifts, or during a shift, Pacific National will not have an adequate supply of labour to operate three locomotives. If Pacific National is able to operate only two locomotives, there is a high likelihood that molten iron ore will need to be dumped due to the inability to maintain throughput of molten iron from the blast furnace to the BOS. 10 Although there are occasions at the Steelworks where BlueScope requires the dumping of hot molten iron ore, this occurs in controlled circumstances where Pacific National has available to it the full cohort of its workforce, which it will not have during the 24 hour stoppage. 11 Pacific National says that the order it seeks is intended to be protective, and its purpose is not to prevent the ARTBU and its members from taking industrial action generally, but only not to do so if that action has the result or will lead to the dumping of molten iron ore. In practical terms, this is likely to arise if there is one or more unplanned absences at or before a shift or during a shift over the period of the 24 hour stoppage. The potential for such absences is said by Pacific National to give rise to the need for one or more of the striking workers with the relevant skills and competencies to stop striking to perform the relevant work, without affecting any of the other workers who may continue to strike. 12 It is not disputed by Pacific National that the industrial action (ie. the 24 hour stoppage) is protected within the meaning of s 408 of the Fair Work Act 2009 (Cth) ("the Act"). However, Pacific National submits that circumstances may arise in which the industrial action falls outside the immunity provision in s 415(1). Section 415(1) provides: 415 Immunity provision (1) No action lies under any law (whether written or unwritten) in force in a State or Territory in relation to any industrial action that is protected industrial action unless the industrial action has involved or is likely to involve: (a) personal injury; or (b) wilful or reckless destruction of, or damage to, property; or (c) the unlawful taking, keeping or use of property. 13 It was not disputed by Ms Saunders, who appeared for the ARTBU, that a prima facie liability for tortious interference in contractual relations would arise in respect of industrial action that fell within any of the exceptions referred to in s 415(1). 14 Pacific National submitted that, to the extent that the industrial action fell within any of the three exceptions referred to in s 415(1), the ARTBU would be liable to Pacific National for one or more of the economic torts (eg. unlawfully interfering in contractual relations) against which s 415 provides immunity subject to specified exceptions. 15 At the hearing, Pacific National relied solely on subpara (b) of s 415(1). That subpara will apply in relation to any industrial action that has involved, or is likely to involve, the wilful or reckless destruction of, or damage to, property. 16 Pacific National contended that there was a significant risk that the industrial action would involve the wilful or reckless destruction of molten iron ore that would need to be dumped in the event that Pacific National could not operate the three locomotives. 17 Ms Saunders submitted that "wilful" conduct usually involves something done intentionally or deliberately, in that the person knows what they are doing and intends to do it, whether or not they have ill intent. She submitted that it could not be sensibly said that the industrial action involves the wilful dumping of hot metal. 18 Ms Saunders also submitted that the evidence relied upon by Pacific National does no more than suggest that there is a risk that hot metal may have to be dumped. She emphasised that the risk of dumping occurring was slight and that the Applicant's evidence failed to demonstrate that the proposed industrial action was likely to result in dumping occurring. There a number of issues raised by these submissions. 19 First, Ms Saunders' submission in relation to the concept of "wilful destruction" suggests that the destruction of property (here the dumping of metal) must be a direct consequence of the industrial action. A similar argument was considered by Perram J in Bluescope Steel. 20 In that case his Honour noted a submission for the respondent at [15] suggesting that the cause of any damage to the applicant's blast furnace and the hot metal itself was the result of the usual, or at least expected, operation of the plant. The submission put to his Honour was that the potential for damage relied upon by the applicant in that case should not be seen as being caused directly by the proposed industrial action. His Honour did not accept that argument. His Honour held that there was a triable issue as to whether s 415(1) of the Act extends to indirect damage. 21 In the present case I also think there is a triable issue as to whether the damage referred to in s 415(1)(b) is limited to damage directly caused by the relevant industrial action. In any event, the concept of "direct" damage can itself be somewhat elusive: see Overseas Tankship (U.K.) Ltd v Morts Dock & Engineering Co. Ltd. [1961] AC 388 (JC) at 416. 22 The other issue raised by Ms Saunders' submissions concerns the significance to be attributed to the words "has involved or is likely to involve" in s 415(1). It is common ground that no protected industrial action has yet been taken. Her submission was that it is simply not open to find, even at a prima facie level, that the industrial action was "likely to involve" the destruction of property. 23 In my view the application before me is, in substance, an interlocutory injunction in aid of a claim for a final quia timet injunction. It is true that Pacific National has not sought a final injunction in its originating application (it has merely sought a declaration) but it should be given the opportunity to amend to include a claim for such an order. 24 If, hypothetically speaking, this proceeding had been heard on a final basis today, then the question that would arise would be whether Pacific National had established an entitlement to a quia timet injunction restraining the ARTBU from engaging in conduct that involves, or is likely to involve, the wilful or reckless destruction of property. 25 The jurisdiction to grant quia timet relief (whether by way of final order or, a fortiori, by way of interlocutory order in aid of a claim for a final order) is flexible and not fettered by rigid rules as to the extent of the risk presented by the threatened breach of the applicant's legal and equitable rights. As McLelland J (as his Honour then was) explained in Copyright Agency Ltd v Haines (1982) 1 NSWLR 182 at 192: There is no universally applicable criterion as to the degree of probability of apprehended injury to the rights of a plaintiff, or as to the degree of seriousness of such injury, which it is necessary to establish to found quia timet relief. Specific statements as to these matters which are to be found in some of the cases must in my opinion be treated as giving guidance only in analogous cases. The court's general discretionary power under the Supreme Court Act, 1970, s 66(1), to grant quia timet relief should not be regarded as being fettered by rigid or special rules unrelated to the requirements of justice in the particular case. In my opinion the position is correctly stated in the following passage from a judgment of Russell LJ, with whom the other members of the court agreed, in the English Court of Appeal in Hooper v Rogers [1975] Ch 43, at p 50: 'In different cases differing phrases have been used in describing circumstances in which mandatory injunctions and quia timet injunctions will be granted. In truth it seems to me that the degree of probability of future injury is not an absolute standard: what is to be aimed at is justice between the parties, having regard to all the relevant circumstances.' (cf Grasso v Love [1980] VR 163, at p 167.) 26 It seems to me that it is not necessary for Pacific National to show, in order to obtain a quia timet injunction in this case, that the relevant industrial action is more likely than not to involve the wilful or reckless destruction of property. Rather, the issue is whether the risk of such destruction occurring is such as to warrant the grant of quia timet relief and whether, having regard to all other relevant circumstances, the Court is satisfied that the interests of justice require that such relief be granted. Central to the exercise of the Court's discretion to grant quia timet relief is the extent of the risk that conduct within the scope of the exception provided for in s 415(1)(b) will occur and the nature and seriousness of any damage that may be suffered. 27 In the present case I am satisfied that there is a triable issue as to whether, in the absence of an interlocutory injunction in some suitable form, Pacific National will be exposed to tortious action that is not within the scope of the immunity provided by s 415(1). I am also satisfied that damages would not provide the applicant with an adequate remedy in the event that there was a need to dump hot metal. 28 At least some of the damage likely to be suffered by the Applicant would consist of what I expect would be readily quantifiable economic loss. However, the position is complicated by the fact that Pacific National provides its services to BlueScope which is, no doubt, an important customer. Quantifying the damages attributable to harm done to Pacific National's business relationship with BlueScope arising out of the need to dump hot metal is likely to be a much more difficult exercise. 29 On the balance of convenience, Ms Saunders emphasised the importance of the right of the ARTBU to organise lawful industrial action in the interests of its members and the rights of those members to participate in such industrial action. 30 The same argument was addressed by Perram J in BlueScope Steel. His Honour said at [24]: That leaves the balance of convenience. To an extent, this turns on questions of relief. The AWU and its members have a legal right to engage in protected industrial action, unmolested by civil litigation. The only injunctive relief I am prepared to countenance – I return to this below – are orders directed at the protection of the physical integrity and continuing operation of the blast furnace and the need to avoid the dumping of hot metal. If the relief is limited in that way then I think the balance of convenience favours the granting of relief. This AWU will be able to continue its protected industrial action provided the integrity of the blast furnace is not threatened and the dumping of hot metal is avoided. 31 I propose to take a similar approach. The orders I propose should ensure that the ARTBU and its members will not be affected by the interlocutory injunction except in circumstances where the need to dump hot metal actually arises. The orders I will make are designed to ensure that no worker will be required to return to work during the 24 hour stoppage unless dumping of metal would otherwise be likely to occur. 32 Orders accordingly. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Nicholas. Associate: Dated: 19 November 2020