BGC Contracting Pty Ltd v The Construction Forestry Mining and Energy Union of Workers [2004] FCA 569 (7 May 2004)

FEDERAL COURT OF AUSTRALIA
BGC Contracting Pty Ltd v The Construction Forestry Mining
and Energy Union of Workers [2004] FCA 569

BGC CONTRACTING PTY LTD & ORS v THE CONSTRUCTION FORESTRY MINING & ENERGY UNION OF WORKERS
W38 of 2004

CARR J
7 MAY 2004
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W38 OF 2004

BETWEEN:	BGC CONTRACTING PTY LTD APPLICANT
AND:	SHAMROCK HOLDINGS PTY LTD SECOND APPLICANT SNC-LAVALIN (SA) INC THIRD APPLICANT THE CONSTRUCTION FORESTRY MINING & ENERGY UNION OF WORKERS RESPONDENT
JUDGE:	CARR J
DATE OF ORDER:	7 MAY 2004
WHERE MADE:	PERTH

3. The costs of the application for continuing interlocutory relief 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
WESTERN AUSTRALIA DISTRICT REGISTRY	W38 OF 2004

BETWEEN:	BGC CONTRACTING PTY LTD FIRST APPLICANT SHAMROCK HOLDINGS PTY LTD SECOND APPLICANT SNC-LAVALIN (SA) INC THIRD APPLICANT
AND:	THE CONSTRUCTION FORESTRY MINING & ENERGY UNION OF WORKERS RESPONDENT

1 The matter before the Court is whether interim injunctions which I granted on 18 March 2004 should continue until trial of the application or further order. These reasons are intended to be read with ex tempore reasons in relation to the same matter given on 20 February 2004, BGC Contracting Pty Ltd v The Construction Forestry Mining & Energy Union of Workers [2004] FCA 272 and 18 March 2004, BGC Contracting Pty Ltd v The Construction Forestry Mining & Energy Union of Workers [2004] FCA 417. I shall not here recite the facts and procedural background contained in those reasons other than as follows.

2 On 20 February 2004, I refused the (then) first applicant’s application for interlocutory injunctive relief, but granted liberty to renew that application on two days written notice to the respondent. I did so principally because I thought that it would be in the interests of justice to allow the proceedings before the Western Australian Industrial Relations Commission (described in the earlier reasons) to proceed at least to the stage where it made certain factual findings which might have disposed of the whole of the matter.

3 As described in my reasons of 18 March 2004, events transpired very differently.

4 At that stage, the evidence showed that the Commission proposed, subject to giving the parties an opportunity to speak to a minute it had prepared, to make a declaration that representatives of the Union (in these reasons I incorporate the descriptions used in the earlier reasons) holding the requisite authority under the State Act were entitled to enter the Ammonia Plant premises on the Site for the purpose of holding discussions with relevant employees of the second applicant.

5 I expressed the view that on the materials then before the Court, I was satisfied that the proceedings before the Commission involved a matter arising under the Constitution and that that was a real and substantial Constitutional issue which remained as a live issue in those proceedings. In order to preserve what I considered to be the status quo until there was an opportunity for a fuller argument on the points in issue, I granted what were intended to be short-term interim injunctions to restrain the Union and its officers from further proceeding in the Commission and from attempting to exercise any rights conferred under the State Act until further order.

6 The question whether those injunctive orders should be continued was adjourned to a date to be fixed. Written submissions were filed and the matter was fully argued on 16 April 2004.

7 In the meantime there were further developments in the Commission proceedings. Although the Commission was informed of the short-term interim injunctions, on 24 March 2004 it saw fit to move those proceedings forward (the parties quite rightly took no part in this), noting that it was not "of itself" subject to the orders which had been made by this Court. The Commission expressed the view that s 34(1) of the State Act imposed a "mandatory statutory duty" to do so. It is not necessary to make any comment about the validity or otherwise of that view.

8 The document which the Commission published on 24 March 2004, omitting formal parts, read as follows:

THAT representatives of the applicant, holding the requisite authority under the Act, are entitled to enter the Ammonia Plant construction site premises on the Burrup Peninsula for the purpose of holding discussions with relevant employees of the second respondent who wish to participate in those discussions.’

9 It is, I think, necessary to form a provisional view of the nature of the proceedings before the Commission and the nature of the declaration which it published.

10 I do not propose to refer to all of the relevant legislative provisions in the State Act or to all of the procedural steps which were taken. But, in summary, I think that it is sufficiently clear for present purposes that the proceedings before the Commission started as a conciliation process with conferences being held pursuant to s 44.

11 As that process did not resolve the matter, on 11 February 2004 the nature of the proceedings changed. On that date the Commission, by a formal memorandum, referred the "matter described in the schedule attached hereto" for hearing and determination. In the memorandum the Commission said that this was pursuant to s 44 of the State Act. In paragraph [1] of the Commission’s reasons published on 15 March 2004 it explains that the referral was pursuant to s 44(9). That subsection relevantly provides that where at the conclusion of a conciliation conference any question, dispute or disagreement in relation to an industrial matter has not been settled by agreement, the Commission "... may hear and determine that question, dispute or disagreement and may make an order binding [the parties]". In that set of reasons the Commission stated that it had referred the matter for determination "by arbitration".

12 The Commission, identically constituted, had earlier expressed its views about its jurisdiction or powers in relation to Part II Div 2G of the State Act in a matter known as AFMEPKIU v Transfield Services (Australia) Pty Ltd (2002) 83 WAIG 376. In essence (and I concede that I may not be doing complete justice to the Commission’s reasoning in that matter) the Commission described the statutory scheme as to rights of entry as a code which was intended to be paramount in respect of which it had no jurisdiction or power to impose limitations. As I read the Commission’s decision in that matter, and in the present matter, it exercised its power to make a declaration in the form of a declaration of right during the course of conducting the arbitration.

13 There are two senses in which the verb "to arbitrate" is used. Generally, in the industrial context, so it seems to me, the term is used in the sense of a proceeding which may result in the creation of new rights and obligations. That may be contrasted with, for example, a commercial arbitration under the fairly uniform Commercial Arbitration Acts of the various States where, as a general rule, arbitration mirrors the judicial function of fact finding plus the application of law to adjudicate upon existing rights and obligations.

14 It is in that latter sense that, in my provisional view, the Commission was arbitrating in the present matter and, in doing so, granted a declaration of right. It seems to me, again on a provisional basis, that the wording of s 44(9) is wide enough to confer both arbitral power in the traditional industrial sense and also arbitral power in the judicial sense. As it is a State tribunal, there are no difficulties in that regard. If, as I discussed briefly in my reasons handed down on 20 February 2004, the Commission has been duly constituted (as I thought it was) as a "court of the State of Western Australia" then it was also invested with federal jurisdiction to decide, inter alia, matters arising under the Federal Act – see s 39(2) of the Judiciary Act. I see nothing in these remarks which is inconsistent with the decision of a Full Bench of the Western Australian Industrial Relations Commission in Crewe & Sons Pty Ltd v Amalgamated Metal Workers & Shipwrights Union of Western Australia (1989) 69 WAIG 2623. This brings me to the hearing before the Commission which took place on 23 February 2004.

15 It will be recalled that there were three central matters relied upon by the applicants in these proceedings (respondents before the Commission, henceforth referred to as "the applicants"), namely:

16 It will be recalled that on 20 February 2004 the Commission informed the parties that it had -

17 The Union called only one witness at the hearing in Karratha. That was a Mr Buchan, one of its officers, who held an authority issued pursuant to s 49J of the State Act.

18 When counsel for the Union had closed its case, counsel for the applicants submitted that the Union had not proved facts which would have given rise to a right of entry under s 49H of the State Act. There was no evidence, so it was put, of there being any employees to whom an award extended, being an award which dispensed with the requirement of 24 hours notice in writing. Nor was there any evidence that there were relevant employees on the Site or that Mr Buchan had the requisite purpose when he sought to enter the Site.

19 Counsel for the applicants informed the Commission that in those circumstances they would not be calling any evidence.

20 In my provisional view, based on reading the transcript of the proceedings at Karratha, counsel for the applicants took that course on the basis that the only evidence before the Tribunal was that adduced through Mr Buchan.

21 As I have mentioned in my reasons dated 18 March 2004, and as the Commission itself discloses in its reasons of 15 March 2004, the Commission relied on other "evidence", including information which it had obtained during an inspection of the Site before the hearing and in the absence of counsel for the first and second applicants. In doing so it relied upon the provisions of ss 26(1)(b) and 27(1)(a), (q) and (r) of the State Act.

22 The Commission’s conduct in that regard and the steps which it subsequently took to extend some sort of procedural fairness to the applicants form part of the subject matter of two appeals which have been lodged in separate proceedings in this Court.

23 At the end of the proceedings in Karratha, and in the light of what had transpired during the hearing, counsel for the applicants conceded that the issues under s 109 of the Constitution, which would otherwise have had to be heard on the following Friday, had fallen away. [I interpolate to observe that, in my provisional opinion, the transcript suggests that counsel made that concession on the basis that the evidence taken at the hearing did not give rise to a right of entry under s 49H of the State Act on the proper construction of that Act and without need to refer to the provisions of the Workplace Relations Act. I return to that subject further below.] The Commission concluded the proceedings by saying this:

24 From the Commission’s reasons dated 15 March 2004, it would appear that because the applicants had not led evidence or made submissions about what it described as "their central contentions in opposition to the applicants’ claims" [which in paragraph [5] of those reasons it identified as the effect of the AWAs on the rights of entry asserted under the State Act and the inconsistency between the relevant rights of entry provisions in the Federal Act and those in the State Act], the Commission considered that those claims no longer existed i.e. that among other things the Constitutional issues were no longer live issues.

25 The Union submits that the questions which I identified in my reasons of 20 February 2004 are not serious questions to be tried. It draws attention to the differences in scope and parties (especially union parties) referred to in the Federal Act and the State Act respectively. It also seeks to differentiate the provisions of the Federal Act dealing with AWAs to those which relate to certified agreements. It further seeks to distinguish the agreements in this case with the agreements which were involved in Woodside Energy v McDonald (2003) 119 IR 457.

26 The Union says that if, contrary to its submissions, there is a serious question to be tried, it is a weak one.

27 The Union also relied on what Mr H Borenstein SC, senior counsel for the Union, described as "two new events". The first was that the Union had indicated by a letter dated 18 March 2004 addressed to the first applicant that it had no intention of exercising any right of entry under the State Act in relation to employees of the first applicant at the Site. The Union submitted that there was no existing justiciable controversy between the first applicant and it, and thus no basis for any orders to be made in favour of the first applicant. I will deal with that point immediately. In my view, as I mentioned at paragraph [86] of my reasons of 20 February 2004 the first applicant has a clear interest in the question of potential industrial unrest involving its employees and its sub-contractors, sufficient to support its claim for declaratory and other relief.

28 The next event upon which the Union relies is the fact that the Commission has delivered its decision on 15 March 2004 and made the declaration set out above. The Union says that the effect of the Commission’s decision is to create against the second and third applicants either a res judicata, an issue estoppel or an "Anshun estoppel". Mr Borenstein told me that the Union relies primarily on the Anshun estoppel point.

29 In my provisional view, there are very strong arguments against this submission. The inconsistency defences which the applicants raised in the Commission proceedings cannot, in my provisional opinion, have merged into the judgment of the Commission. The Commission proceeded to that judgment without giving any consideration or ruling on the inconsistency defences. Furthermore the Commission’s decision is the subject of two appeals. I think the res judicata submission is barely arguable.

30 As to Anshun estoppel, the truth of the matter is that the applicants raised the inconsistency arguments at every point. The first applicant raised them at the first and second conferences during the conciliation stage and each applicant pleaded them in their respective Notices of Answer and Counter-Proposal. The applicants sought a stay of the proceedings in the Commission on the very basis that this Court was the more appropriate court to resolve the inconsistency issues. By 17 February 2004, about a month before the Commission saw fit to make its declaration, the first applicant filed this application raising the inconsistency issues. There are, as I have mentioned, two appeals pending against the Commission’s declaration. In my view, the argument based on Ashun is an extremely weak one.

31 The same applies, in my provisional opinion, to the claimed issue estoppel, which senior counsel for the Union conceded was the weakest of the three submissions. I do not think that the Commission’s decision "necessarily decided" the issue of inconsistency.

32 I remain of the view that the applicants’ case raises serious questions to be tried both in relation to whether the right of entry provisions under the State Act are inconsistent with the provisions of the Federal Act, and also as to the application of ss 170VQ(1) and (4) and 170VR(1) of the latter Act.

33 On the state of the evidence before me, all of Killarnee’s employees on the Site have entered into AWAs with it. Shortly before the latest hearing of this matter the Union filed an affidavit to the effect that one of Killarnee’s employees had not signed an AWA. But at the start of the hearing senior counsel for the Union expressly declined to rely on that affidavit.

34 On the materials before me to date, I would regard the applicants’ case on the inconsistency issues and as to the application of ss 170VQ(1) and (4) and 170 VR(1) of the Federal Act as being a reasonably strong one. I now turn to the balance of convenience.

35 The Union relies on the proposition that rights of entry are a vital part of the process of enforcement of awards, which in turn are at the very heart of the system of conciliation and arbitration. I agree that the authorities support that proposition.

36 The Union submits that continuation of the interlocutory injunctions would effectively be to negate permanently its rights in circumstances where it says those rights have been established in the Commission. That is because, so it is put, there is a significant risk that this application will not be finally determined before the second applicant finishes work on the Site. The Union contends that, given the significance of these entry rights, that would be a most significant detriment to impose.

37 The Union builds upon the view of the status quo which I expressed in my February decision. In paragraph [69] of my reasons of 20 February 2004 I expressed the view that the status quo was that the Union might continue to seek entry and, if denied entry and if subsequently the relevant provisions of the State Act are held to have application (i.e. there is a finding in its favour) it could have recourse to the relevant tribunal for the appropriate penalties. Having now had the time and opportunity to give the matter further consideration, I think that the question what precisely is the status quo in this matter is a debateable one and perhaps I should not have expressed my view quite so decisively as I did in the abovementioned paragraph. I think that the question, to which I referred later, in paragraph [27] of my reasons of 18 March 2004, is whether the applicants should, in all the circumstances, be put in a position where they are either obliged to permit entry onto their premises of persons who would otherwise be trespassers, or refuse to admit those persons and face possible enforcement proceedings under the regime provided by the State Act? The principal relevant circumstance is that the Union is seeking to assert rights which the applicants maintain (on what I have found to be a reasonably strong basis) do not exist by reason of the provisions of the Federal Act and s 109 of the Constitution.

38 The Union asserts that any prejudice to the applicants would be comparatively minimal. Furthermore, so the Union contends, there should be weighed against the second and third applicants their failure to press before the Commission the matters upon which they now rely for interlocutory relief.

39 I shall deal with the last point first. In my view, the course which the second and third applicants adopted before the Commissioner at the conclusion of the hearing in Karratha should not now be weighed against them. They were entitled to make the assessment, based on the evidence heard on that day, that the Union’s claims did not get to first base. To a considerable extent, that assessment was borne out, in my provisional view, by the fact that the Commission subsequently had to have resort to other "evidence" which it had obtained before the hearing during an inspection on the Site in the form of conversations it had and observations which it made, none of which was put to the applicants until the parties had returned to Perth. Even then the proceedings were convened at very short notice and only "for mention".

40 I do not think that any of the developments in the proceedings before the Commission should be weighed against the applicants when considering the balance of convenience.

41 I accept that there is some prejudice to the Union in being denied access to the Site if it turns out that they have a legal right to such access. But it is a large Union and the number of workers on Site is relatively small. There is no evidence of any likelihood of substantial damage to the Union, or any threat to its continued existence, or indeed of any safety risks on Site.

42 I think that there is a reasonable prospect that the period of such denial of access would be relatively short. There is also a reasonable prospect that Killarnee will still be on Site when these proceedings are determined at least at first instance.

43 I have considered the applicants’ arguments and the Union’s counter-arguments about whether the Union could have discussions with employees off-site and outside working hours. Mr M C Hotchkin, counsel for the first and second applicants, submitted that there was no evidence for the Union’s assertions that there were difficulties in approaching employees before or after work compared with interviewing them on Site. I am inclined to think that the arguments on both sides in relation to this point are unsupported by evidence about the availability or otherwise of the employees off-site. Further, I note that investigations of the type referred to in s 49I of the State Act (or at least some of them) are likely to require access to the Site. I take that factor into account. That is, I take into account the difficulties to which senior counsel for the Union outlined in his oral address. I am prepared to infer that there is a significant advantage in being able to hold discussions with relevant employees on the Site compared to trying to talk to them about industrial issues before going to work or after they have probably spent long hours at work [I take judicial notice of that probability in accordance with s 144 of the Evidence Act 1995 (Cth)].

44 In addition to the trespasser/threat of prosecution consideration to which I have referred above, I take into account the matters referred to in paragraphs 12, 13 and 15 of Mr Leonard Buckeridge’s affidavit sworn on 19 February 2004. In those paragraphs Mr Buckeridge gives some hearsay evidence of the likelihood of disruption and possibly physical violence if the Union representatives enter the Site. I think that the risk of such violence may be somewhat exaggerated, but I take it into account. In that regard, Mr Buchan’s evidence to the Commission as to his purpose in seeking entry was not as specific in terms of the requirements of the State Act to the extent that one might reasonably expect.

45 I take into account also the evidence adduced by the second applicant to the effect that its work on Site is running behind schedule and that entry by the Union’s representatives is likely to disrupt progress. Again, I am inclined to think that there is a degree of exaggeration in this assertion, but I take it into account.

46 My overall impression in relation to the balance of convenience is that there is not a great deal of prejudice or inconvenience to the applicants or to the Union which turns on whether or not the injunction remains in force. But I accept that there is some prejudice or inconvenience on either side. My assessment is that the inconvenience (in the sense explained in paragraph 66 of my reasons for judgment of 20 February 2004) would be greater to the applicants if the injunctions were discharged than it would be to the Union if they remained in force.

47 If I am wrong in characterising the Commission’s declaration as having been made in the exercise of arbitral power of a judicial nature, and the true position is that the Commission has purported to create rights rather than declare existing rights, that is another reason why, in my opinion, injunctions should remain in place to maintain the status quo. The intent of the injunctions granted on 18 March 2004 was to maintain the status quo pending the opportunity for the issues raised in this application to be argued more comprehensively than had been possible in the urgently-convened interlocutory hearings.

48 If the true characterisation of what the Commission has chosen to do since that date is to hand down an arbitral award purporting to create new legal rights while this Court was already seized of the matter, an interlocutory injunction is all the more appropriate to restrain the exercise of those rights so declared until the determination of the issues raised in this application. That is necessary to protect the integrity of the processes of this Court. Allowing the Union to obtain the advantages of a new arbitral award would, in all the circumstances, be quite unjust.

49 In view of my provisional assessment of the strength of the applicants’ case on the serious questions to be tried and my assessment in relation to the balance of convenience, I consider it would be in the interests of justice for the injunctive relief to be maintained. At the same time, to minimise prejudice to the Union, I shall make such orders and take such administrative steps as are reasonably available to bring the application on for hearing on an expedited basis.

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr.

Counsel for the First and Second Applicants:	Mr M C Hotchkin

Solicitors for the First and Second Applicants:	Messrs Hotchkin Hanly

Counsel for the Third Applicant:	Mr T H F Caspersz

Solicitors for the Third Applicant:	Messrs Blake Dawson Waldron

Counsel for the Respondent:	Mr H Borenstein SC with Mr T J Dixon

Solicitor for the Respondent:	Mr T R Kucera

Date of Hearing:	16 April 2004

Date of Judgment:	7 May 2004

JUDGE:	CARR J
DATE:	7 MAY 2004
PLACE:	PERTH

Federal Court of Australia

BGC Contracting Pty Ltd v The Construction Forestry Mining and Energy Union of Workers [2004] FCA 569 (7 May 2004)