IN THE HIGH COURT OF JUSTICE 1998 Folio No.
QUEENS BENCH DIVISION
21 April 1998
BEFORE MR JUSTICE THOMAS
Between Patrick Stevedores Operations Plaintiffs
Pty Ltd
- and -
International Transport Workers Defendants
Federation
Patrick Elias Q.C. and Julian Wilson (instructed by Simmons and
Simmons) appeared for the Plaintiffs
Mark Cran Q.C. and Dominic Chambers (instructed by Denton Hall)
appeared for the Defendants
The attached is a confidential draft of a Judgment intended to be delivered or
handed down at 2.00 p.m. on Tuesday 21 April 1998.
The Judge intends to direct pursuant to R.S.C. Order 68 Rule 1 that no further
note or transcript need be taken or made of the Judgment once delivered in
final form.
Please inform the Judge's Clerk in writing before or the Judge on delivery or
handing down of the Judgment of any typographical and other obvious errors in
the attached draft.
The Hon. Mr. Justice Thomas
COPIES OF THE TEXT WILL ALSO BE AVAILABLE IN WP51 ON PROVISION OF A CLEAN 3.5"
FLOPPY DISC. APPLY TO THE CLERK TO MR. JUSTICE THOMAS.
Introduction
The Plaintiffs (Patrick) claim an interlocutory injunction against the
Defendants (ITF) to prevent them committing a tort under the law of Australia
by inducing action in other countries in the world to black ships in connection
with a significant industrial and political dispute in the ports of Australia.
Late on the evening of Maundy Thursday 9 April 1998 I granted, ex parte, that
injunction until the next day court working day, Wednesday 15 April 1998, with
liberty to apply to discharge the injunction in the meantime.
The ITF were notified of the injunction on Good Friday 10 April 1998 and
opposed the continuation of the injunction at the hearing that commenced on
Wednesday 15 April 1998. Because of the pressure of other urgent vacation
applications, the hearing was not continuous and only concluded late in the
evening of 16 April. I discharged the injunction the following morning and gave
brief reasons for doing so. I now give my reasons in full.
THE FACTS AS THEY APPEARED BEFORE ME.
(a) The closed shop in the Australian docks
Most workers in the ports of Australia were members of the Maritime Union of
Australia (MUA) and by and large a closed shop operated in the docks.
It was the announced policy of the present Federal Government of Australia
which came to power in 1996 to end that closed shop and reform working
practices in the docks. New federal legislation was passed, the Workplace Act
1996 which restricted the type of industrial action that was could legally be
undertaken.
(b) The ITF
The ITF is a federated trade union within the meaning of s. 1(b) and 118 of the
Trade Union and Labour Relations (Consolidation) Act 1992. The members of the
ITF are known as affiliates and they are trade union organisations and similar
bodies throughout the world; these present;y number over 500 in 125 countries
of the world, representing 5 million members. Its headquarters is in London.
The MUA is an affiliate of the ITF.
Its aims are to provide international solidarity for its members. Under its
constitution it is entitled to promote and co-ordinate schemes for mutual
assistance and support by affiliates in different countries of affiliates in
another country engaged in a trade dispute, disseminating information and
co-ordinating and initiating activities on an international scale
The evidence before me filed on behalf of the ITF was that, with the exception
of the campaign it has waged to provide minimum standards on ships operated
under flags of convenience, it does not take any action itself but only
promotes and co-ordinates action which will be taken by its affiliates; it will
threaten that those affiliates will act together for a common purpose. Its
evidence was that it would inform its affiliates what was happening to an
affiliate and request other affiliates to take what lawful steps they could to
assist the affiliate which needed help; it was, according to the evidence
submitted, that it was a matter for the affiliate alone to decide what action
to take. The ITF would not expect an affiliate to engage in any unlawful
activity; if therefore the ITF requested the blacking of a ship, it would only
expect an affiliate to take such action as was lawful in the particular
jurisdiction where the action was taken.
In June 1997, the ITF dockers section conference at Miami passed resolutions in
favour of co-ordinated international action against de-unionisation of
ports.
(c) The structure of the Patrick group of companies prior to 7 April 1998
Patrick is part of the Patrick group of companies which are in turn
subsidiaries of the Lang Corporation, a substantial Australian public company.
The Patrick group operate container terminals and general cargo stevedoring
facilities in all the major Australian ports, including Melbourne and Sydney.
Their corporate structure is complex and that complexity is said in part to be
due to the progressive acquisition of stevedoring companies by the Lang
Corporation. Patrick is the company within the group which manages the
stevedoring operations in those ports. In the period immediately prior to 7
April 1998, the structure of the operations of the Patrick group was as
follows:
*the stevedores employed by the Patrick group were employed by a series of
companies (Patrick Stevedores No 1 Pty Ltd, Patrick Stevedores No 2 Pty Ltd,
Patrick Stevedores No 3 Pty Ltd, Patrick Stevedores Tasmania Pty Ltd) and these
four companies provided the labour so employed to Patrick.
*the equipment, services and facilities at the ports were supplied to Patrick
by another company within the Patrick group, Patrick Stevedores Operations No 2
Pty Ltd
*Patrick itself had become the lessee of various areas within the major ports
of Australia
The stevedores employed to work within the Patrick group were members of the
MUA.
(d) The strategy of the Patrick companies
It is an inescapable inference from the evidence before me and of the events
that I set out that the Lang Corporation and its subsidiaries in the Patrick
group determined some considerable time before the events of 7 and 8 April 1998
(which gave rise to the ex parte application before me) to employ non union
labour in its stevedoring operations. I have no doubt on the evidence before me
that, as one would expect in a major corporation, very careful planning was
involved in what was clearly going to bring about a major industrial dispute in
Australia and which it was obvious from at least the beginning of February 1998
that it would result in international action by the ITF of the kind they took
announced on 8 April 1998. The ITF suggest that part of the planning include a
re-organisation of the corporate structure of the companies in December 1997 or
January 1998; I have no evidence before from Patrick on this allegation and
that allegation has played no part in my reaching the conclusion to which I
have come.
It would also appear that Patrick and Lang must have appreciated that the
dispute was likely to be the subject of significant political controversy in
the light of the policy of the Federal Government.
It is alleged by the MUA in proceedings in Australia that the Federal
Government and its labour relations minister, Mr Reith and the National Farmers
Federation of Australia joined in a conspiracy for this purpose with Lang and
the Patrick Group of companies. There is no evidence before me in relation to
that and it is not necessary for me to express any view one way or the other. I
am solely concerned with the actions of Patrick, the Patrick group of companies
and the Lang Corporation and I am satisfied on the evidence so far placed
before me that the Patrick group of companies planned for a considerable period
of time their actions to introduce non union labour.
(e) Attempts to use non union labour at Cairns in September 1997
An attempt was at the port of Cairns to use break the MUA's closed shop by
using non union labour. It failed. The ITF's part by them in the events at
Cairns was acknowledged in their press release of 10 March 1998:
"The first attempt to break the MUA failed after ITF co-ordinated international
solidarity resolved a dispute at Cairns in MUA's favour"
The ITF's evidence was that the American shipowner of the ship concerned bowed
to pressure exerted on them by seafarer and dockers unions in the USA and
Singapore affiliated to the ITF.
It was not alleged before me that such pressure involved any unlawful act or
threat of any unlawful act.
(f) Attempts to train in Dubai Australian workers as dockers in December
1997
In late 1997, a Mr Wells and Mr Kilfoyle on behalf of Fynwest Ltd recruited
persons in Australia and sent them to Port Rasheed in Dubai to train as
stevedores. Mr Hara, the general counsel employed by Lang, deposed in his first
affidavit that Fynwest is not related to the Lang Corporation or the Patrick
group. However he did not provide any evidence as to the beneficial ownership
of that company or its relationship with Lang and the Patrick group of
companies or other companies interested in stevedoring in Australia.
However a newspaper report of 10 December 1997 put before me by Patrick
indicated that those recruited including serving Australian soldiers who were
told that:
"they would work as strike breakers in a major industrial dispute in Melbourne
next year and that the operation had the Federal Government approval at the
highest level, according to the [Australian] labour party."
The report stated that those training had been told that they would work for an
Australian stevedoring firm in Melbourne during an industrial dispute expected
to start in April 1998. The report recorded the fact that Mr Corrigan, chief
executive of Patrick, denied any involvement in the training
The MUA general secretary approached the ITF in connection with this. It is
Patrick's case that the ITF informed ship operators that ships using Port
Rasheed could be subject to stoppages, delays or ought rights bans. Indeed this
is not in issue. An ITF bulletin on their webb site on 18 March 1998 stated
that an ITF delegation had met senior representatives of the United Arab
Emirates at their embassy in London to warn them of the consequences of the
training of stevedores that was taking place; Mr Cockcroft the ITF's general
secretary and Mr Marges, the secretary of the dockers section, were reported by
the ITF as having said that container carriers calling at Dubai faced the
prospect of industrial action from port unions worldwide.
Later in December 1997, the training in Dubai was terminated; the materials
before me indicated that this was as a result of a decision of the Government
of Dubai in withdrawing visa for those in training. The ITF's part by them in
bringing this about was also acknowledged in their evidence before me and in
their press release of 10 March 1998:
"The second attempt [to break the MUA] - to train strikebreaking military
personnel in Dubai - was abandoned due to the ITF's threat of a global boycott
of ships using the United Arab Emirates' port"
The ITF had co-ordinated the response that threatened action against Dubai
owned shipping and shipping bound to and from Dubai. There was no evidence
before me that the action threatened was unlawful.
The political nature of the dispute in Australia in relation to the events in
Dubai was made clear by the general secretary of the MUA who was quoted in a
report of 20 December 1997 as stating:
"[The Workplace Relations Act] prohibited us from taking any industrial action
at all. In this past this was a situation that we would have met locally. That
is what we have always done...but I can't do that now without risking the $22
million in assets that my predecessors have built up to back this union.
.....
[The Federal Government's] industrial legislation forced us to go offshore for
support. The only thing I am sorry about is that it took us so long to get
involved and get some return for our international effort...."
The ITF wrote to Mr Howard, the Australian prime minister stating:
"Please be assured that the ITF will not tolerate attempts to weaken or
undermine the [MUA]"
On 27 January 1998, The Sydney Morning Herald published an interview
that had taken place in London with Mr Marges of the ITF where he had again
made clear the ITF's determination to:
"stop or delay ships coming to Australia if the Federal Government took on the
[MUA] on the waterfront
This [the Howard] Government will not stop, I expect, in its attempts to
undermine the position of the MUA. So I expect there will be another attempt
and we will be prepared"
(g) The dispute at Webb Dock, Melbourne in January 1998
The next material events occurred that same day in Australia:
*On 27 January 1998, the National Farmers Federation of Australia announced
that they were setting up a stevedoring operation through a company called PCS
Operations Pty Ltd (PCS). It employed non union labour.
*On 28 January 1988, one of the companies in the Patrick group, subleased berth
no 5 at Webb Dock for a fixed period of 2 years with a continuation thereafter
on a monthly basis. Webb dock is one of four docks in the port of Melbourne;
the Patrick group operated 3 of the 5 berths at that dock and 4 of the 8 berths
at Swanston dock, the container facility at East Swanston Dock. It was one of
those 3 berths at Webb dock that were subleased to PCS.
*On the same day, another company within the Patrick group, entered into an
agreement to lease to PCS from that day the equipment necessary to operate the
No 5 berth as a container facility; No 5 berth had not been a container
facility and the agreement involved moving the necessary equipment from the
other berths to No 5 berth.
The ITF again reacted to this by supporting the MUA. Mr Marges was reported on
1 February 1998 as having stated that the ITF's network of dock workers and
seafarers unions would not stand idle and would target any ships handled in
Australian ports by non-union labour:
"Shipowners or ship managers allowing their vessels to be loaded or unloaded in
this way risk cargoes being delayed or stopped. New Zealand dockers have
already discussed action to support their Australian colleagues. The [National
Farmers Federation] will find that not only home grown unions have teeth"
Mr Marges was quoted on 7 February 1998 as saying that ships form non union
Australian ports:
"would suffer such delay and harassment that they would end up more valuable as
scrap rather than a ship.... The very first ship that leaves Australia using
non union labour we will follow all over the world, targeting it with delays of
hours and days. At the end of the day the ship is useless for carrying cargo
and could never be used again. That's the first ship. If there are any more, we
can organise a lot of problems for them overseas."
It would appear that the action taken by the ITF had some success. It was noted
in an ITF bulletin
published on their webb site on 25 February 1998 that on 4 February 1998, 12 of
Australia's largest shipping companies had stated that they were unwilling to
risk using PCS; some cited ITF pressure; others the localisation of PCS'
operations.
There is one further matter that is material. It is clear that the dispute
involving the National Farmers Federation and their subsidiary PCS had a
political overtone. Support was given to the National Farmers Federation by Mr
Reith, the Federal Minister for Workplace Relations. He was reported as
dismissing Australia's vulnerability to the imposition of sanctions by the
international trade union movement and was reported as saying that the ITF had
"no clout".
(h) Industrial action by the MUA against the Patrick Group of companies
The Patrick companies, as they must have anticipated, became the subject of
action by the MUA.
*The events at Webb dock provoked a strike by the employees of the companies in
the Patrick group who worked at Webb dock; they set up a picket line at the
dock
*The Patrick group contended that the action was illegal under Australian law.
On 13 February 1998, the Vice President of the Australian Industrial Relations
Commission ordered the employees to return to work on 16 February 1998 and they
did so later on that day. This order was made under s 127(2) of the Australian
Workplace Relations Act 1996; I was not provided with the Vice President's
reasons for the making of this Order.
*On 16 February 1998, the employees of the Patrick group at East Swanston dock
commenced a 48 hour strike; they commenced another strike on 19 February
1998.
*On 23 February 1998 Beach J in the Supreme Court of Victoria granted an
interlocutory injunction against the MUA and its officials from directing or
procuring the members of the MUA from stopping the performance of work at Webb
and East Swanston docks. The Judge described the damage being caused by the
strikes to Patrick, producers, importers shipping lines and the community
generally as "alarming". The Judge noted the court's reluctance to intervene in
an industrial dispute, but held that in the circumstances before him, there was
just cause to do so. The court concluded:
"As to the balance of convenience, in my opinion, it is all one way. Patricks
have suffered substantial losses to date as a consequence of the actions of
their employees and would suffer further losses if the strike action were to
continue. On the other hand to grant the interlocutory relief can cause no
financial loss or damage to the defendants"
*On 11 and 12 March 1998, employees of the Patrick group at Port Botany, Sydney
went on a 48 hour strike and an overtime ban; further strike action
subsequently took place
*Other proceedings in the Federal Courts of Australia are in progress between
companies within the Patrick group and the MUA and its officers, but they are
not directly material to the present application.
(i) PCS' offer to ship operators and the ITF's circular of 20 March 1988
In March 1998, PCS circularised ship operators offering them stevedoring
services at Webb dock from early to Mid April at a substantially lower rate
than that offered by others.
On
20 March 1998, the ITF sent a circular to its affiliates and inspectors laying
the ground work for the next action that appeared likely. They attached to the
circular a list of ships sailing from Melbourne to ports throughout the world
(no doubt gathered from the pages of Lloyd's List) with a note that this was
not yet a list of ships to be targeted in support of the ITF's affiliate. The
letter made it clear that the purpose of providing the information was to give
the affiliates an insight into ship movements from Melbourne and that if owners
decided to have ships handled by PCS then, they would be informed so that they
could inform their members.
(j) The action taken by the Patrick group on 7 April 1998
On 7 April 1998, Patrick terminated the contracts under which its four
associated companies supplied them with labour; they did so on the grounds that
there had been various breaches of those contracts.
The directors of those companies formed the view that day that the companies
were insolvent or likely to become so and appointed administrators to each
company. Mr Hara deposed that the reason this view was formed was because of
the termination of the supply contracts, the significant trading losses
sustained, and the lack of alternative funding to meet the costs of the
employees wages. The ITF allege that the reason for the insolvency was the
transfer out of those companies of Aus $66m; there is no evidence of this
before the court on this.
On 8 April 1998, the Federal Court granted an injunction against the
administrators of those companies from retrenching its work force; no details
of that order or the reasons for it were before this court.
On 7 April Patrick entered into a contract with PCS Resources Pty Ltd, a
company in respect of which Mr Hara deposed:
"I understand that PCS Resources PTY Ltd is related to [PCS]".
PCS was the company whose lease of the facilities at Webb dock had been the act
that initiated the industrial dispute. For the purposes of the present
application I will treat both PCS companies as within the same group and refer
to them both as PCS.
PCS agreed to provide the employees and other services necessary at East
Swanston dock, Port Botany, Fremantle and other ports for Patrick to operate
the stevedoring services. PCS employed persons who were not members of the MUA.
The consequence of this action was described by Mr Hara as follows:
"As a result, [Patrick] expects that this will result in it being able to
provide a more competitive and efficient service"
Other agreements, details of which are not before the court, were apparently
entered into with other companies for the provision of non union labour.
(k) The actions of the ITF on 8 and 9 April 1998
As Patrick must have clearly anticipated for a considerable period of time the
ITF made clear that it would target ships making use of berths operated by
Patrick:
*On 8 April 1998, Mr Cockcroft was interviewed in London for several radio
stations that broadcast in Australia:
*On Radio
National, a service that broadcasts nationally in Australia and
internationally, he made it clear that the ITF would now target Patrick. They
would do all it could to prevent ships that used Patrick's facilities from
using other facilities. He said that in countries where it was permissible
there would be direct industrial action by dockers unions against ships bound
for any facility employing the non union work force; there might also be direct
action against any shipping company that used those facilities; any one who
used Patrick was potentially a target.
*On 3 AW
radio which broadcasts from Melbourne, he made clear that Patrick were:
"in the target for whatever action is open to our affiliates world wide....
......
I don't believe that the unions in the United States, in Japan, in Korea, in
Europe are going to stand by and let this happen. Certainly I believe that
there will be a very sustained attempt to target ships and shipping companies
that make use of the new non-union Patricks terminals
......
we shall do and our affiliates will do - because its down to them in the end -
they'll do whatever they can do to make life difficult for the company. "
Mr Cockroft made it clear that he believed that the Government of Australia was
behind the action
*At 7:30 pm on Channel 2, Mr Cockroft stated that the waterside unions world
wide could see what was happening in Australia and they knew that if it was
allowed to happen there, it would happen in every other port around the world.
He made it clear that unions would wish to take legitimate industrial action
around the world in accordance with their own labour laws. He made it very
clear that any legal action against the ITF would be resited.
*Mr Marges was also interviewed on 3 AW that day; he made it clear that the ITF
would tell its affiliates about the action taken by Patrick; ships using their
facilities would take the risk that their affiliates all over the world would
target not only the particular ship, but the whole shipping line; what could be
done depended on the country concerned as more could be done in one country
than in another; however, there were enough ports in the world where the ship
could be delayed and where the ships could be boarded and the ship become
useless to the company
*On 8
April 1998, the ITF prepared a circular addressed to its worldwide affiliates;
it provided information about the events in Australia and previous planning. It
stated:
"The time has now come to implement those plans and, in view of the seriousness
of the situation, I am now asking all ITF affiliates, and the rest of the
international trade union movement, to take action to defend union rights on
the Australian waterfront."
Three types of action were requested:
(1) The sending of messages of solidarity to the MUA and protest letters to
Patrick and the Australian Government
(2) The making of representations to Australian embassies and lobbying of their
own governments
(3) "Finally I would like to ask all ITF affiliates, both in the ports and in
the shipping industries and in other branches of transport to do whatever you
can to influence companies dispatching or carrying cargoes to Australia not to
make use of non-union port facilities operated by Patrick Stevedores. This
action should continue until a settlement satisfactory to the MUA has been
achieved"
The circular was signed by Mr Cockcroft. It was sent by fax to the larger
affiliates, but further distribution was halted after the ITF received notice
of the ex parte injunction.
*Mr Cockcroft gave a further interview on 9 April 1998 on 3LO radio
broadcasting from Melbourne. In that interview, he said that dockers and
seafarers unions throughout the world were approaching those in the shipping
trade that did business with Australia, to persuade them they should not become
involved in what he characterised as a political dispute, but that if they did
use Patrick's facilities, then they would target for action any ship or
company that used non union facilities; those ships would be the subject to
disruption at various ports around the world; he said:
"We know where the ships are going. We know which companies have contracts with
Patricks and which companies don't have contracts with Patricks.
Our unions are able to take effective action in a large number of ports around
the world to ensure that ships that are loaded in Patricks terminals are not
unloaded, and ships which are likely to be unloaded at Patricks will not be
loaded. The legal situation varies from country to country. That won't be the
case in all places..."
It was the affidavit evidence of the ITF that the ITF did not ask and did not
intend to ask its affiliates to take any particular form of action. The
availability of action would vary from country to country:
*in some countries, a decision by the members of an affiliate not to service a
ship would be lawful, even though it would be secondary action. In other
countries it would not.
*In some countries, a refusal to work overtime, even where usual, on a vessel
is lawful in most countries.
As the ITF is not aware of the legality of precise form of action taken in a
given country, it leaves to its affiliates the decision on what to do; it
appreciates that in many countries, what the local affiliate may do may amount
only to using its good relations to bring pressure to bear on ship operators
not to assist in anti- union tactics in Australia, for example by asking that
they use another stevedore using union labour and not Patrick.
It was their evidence that they had not called upon any affiliate or any member
of any affiliate to do anything illegal by the law of the country where that
act was to be done.
(l) The threatened action against the ITF under Australian Trade Practices
Act
On 9 April 1998, the Federal Government of Australia and the Australian
Competition and Consumer Association announced that they would take action
against the ITF and any other party in breach of the Australian Trade Practices
Act 1994. The evidence before me was that under federal law in Australia,
secondary boycotting is illegal; provided the boycott is directed at a
corporation, a union engaging in such action is in breach of the Trade
Practices Act 1974. The chairman of the Competition and Consumer Commission was
reported as stating that:
"The ITF and any person in Australia associated with it, directly or
indirectly, would be more than likely in breach of the Act if they attempted to
apply boycotts in support of the MUA"
(m) Action on board ships in Australia.
The ITF has inspectors in many countries of the world; the evidence of the ITF
was that these were employed by the local affiliate. There were 4 in Australia.
They are primarily used in the campaign against flags of convenience, but they
are also used as a channel of communication to ensure that the affiliate keeps
up to date with ITF communications.
On 8 April 1998, one of these in Australia, Mr Purcell stated in a radio
interview that he had been on board four ships at Swanston Dock, Melbourne and
seen the masters; 2 of those ships, both operated by Mediterranean Line, had
elected to leave berth and not be loaded or unloaded by non union labour.
On 10 April 1998, Mr Purcell told SBS' world news that owners of s hip berthed
at Swanston dock of possible international retribution for doing business with
Patrick. He had impressed upon the master that any ship loaded or unloaded in
Australia by non union labour would face industrial action in the port of
Rotterdam
(n) The actions of other ship operators.
The evidence filed on behalf of Patrick was that representatives of 6 shipping
lines (New Guinea Pacific Line, New Zealand Line Union Direct Line, K Line, NYK
Lines, Cosco, P&O Nedlloyd and P&O Swire Containers, Wilhelmsen Lines,
Toyafuji, Unilnes NZ and Blue Star) had all expressed to Patrick on 8 April
concern at the ITF action and requested that they sub contract the work to
stevedoring companies that continued to employ union labour.
After the grant of the ex parte injunction, P&O Nedlloyd, Blue Star,
Columbus Australia Line and Mediterranean Shipping gave instructions that its
vessels could use Patrick's facilities.
The issue before me
It was common ground that it was not possible to have a full inter partes
hearing as the ITF had not had a sufficient opportunity to put in evidence. The
question before me was whether I should continue the injunction granted ex
parte until a full inter partes hearing which could not take place for 2 to 3
weeks.
It is important to note that Patrick sought the injunction not only in respect
of existing contracts, but also future contracts: they relied on a passage in
the speech of Lord Upjohn in Stratford v Lindley [1965] A.C. 269 page
339:
"Plainly it is just and convenient to order an interlocutory injunction to
preserve the status quo until judgment in the action so as to prevent further
interference by the respondents with the contract now made by the appellant
company with their customers or which they may make with their customers in the
future before judgment in the action. I cannot accept the argument that an
injunction ought is some way to be limited so as to affect only existing
contracts; such a limitation would fail to give the appellant company the
protection, to which they have satisfied me they are entitled, of preserving
the status quo until judgment so as to enable them to carry on business in the
usual way by entering into new contracts from time to time with their
customers."
Patrick's case
(a) The torts said to have been committed by the ITF
Patrick say that the ITF have induced ship operators to break their contracts
by
*making direct inducements or gave encouragements to ship operators to break
their contracts with Patrick;
*procuring such breaches of contracts with Patrick by unlawful means.
(b) The governing law
The choice of law is a question of the lex fori. It was Patrick's submission
that the relevant law was the law of Australia
They relied on the decision of the House of Lords in Dimskall Shipping v
ITF [1992] A.C. 152 at page 169, Lord Goff said:
"The judge was impressed by another argument advanced on behalf of the I.T.F.
which was that a man ought to be able safely to regulate his conduct by
complying with the laws of the country in which he finds himself. This may be
true so far as the criminal law is concerned: but I cannot see that it applies
in the case of matters which may affect the validity of a contract governed by
some other system of law. Of a person enters into such a contract, he has for
most purposes to accept the regime of the proper law of the contract; and if
under that regime a particular form of conduct constitutes duress, or for that
matter undue influence, rendering the contract voidable wherever the relevant
conduct occurs, he has in my opinion to accept the consequences of his conduct
under that system of law. He should not assume that, simply because his conduct
is lawful in the place overseas where it is performed, it cannot for that
reason render an English contract voidable for duress."
(c) Their factual case
They put their factual case under four headings:
(1) The ITF procured or induced their affiliated organisations and their
members to carry out blacking of ships whose owners or charterers had contracts
to use Patrick berths or might enter into such contracts; the blacking was
unlawful as it would involve the employees of companies breaking or threatening
to break their contracts by a refusal to load or unload a particular ship.
They relied on the ITF's circular of 20 March 1998 (see page 8), the circular
published by the ITF on their webb site on 25 February (see page 7), Mr
Cockcroft's interviews on 8 April with Radio National (see page 9) and with 3
AW (see page 10), the ITF's circular of 8 April 1998 (see page 10)
(2) The ITF broadcast though the media threats of blacking against ship
operators or charterers who had contracts to use Patrick berths or might enter
into such contracts;
(3) Though their inspectors they boarded ships to make threats or inducements
to ship operators who were going to berth at Patrick's berths not to berth
(4) They made threats or inducements to ship operators not to deal with
Patrick
The merits of the case for the purposes of considering the balance of
convenience
For the purposes of the application before me, it is not necessary that I
merely conclude that there is a serious issue to be tried in relation to the
question of whether the ITF have committed the tort of inducing breach of
contract or intimidation, because it is accepted that I must look to the
likelihood of Patrick being entitled to an injunction if the action were to go
to trial.
(a) The lawfulness of the action in other countries
It is at the centre of Patrick's arguments that the ITF commits a tort if it
instigates or induces its affiliate to ask its members to black a ship in a
foreign port by, for example, not unloading her in the usual way and its
members black the ship by breaking their contracts with their employers.
Patrick say that this is an unlawful act for the purposes of the tort of
inducing breach of contract and intimidation by the law of Australia (or by the
law of England and Wales, if that is the proper law), even if that act was not
a wrong by the law of the foreign port.
I have used the expression " not a wrong by the law of the foreign port", as
there was no evidence before me as to the correct characterisation of such
action in a foreign port. If a docker refused to work overtime (and thus
delayed a ship) or simply refused to work on a ship, is such action:
(1) a breach by the law of the foreign port of any contract under which he may
be employed;
(2) even though a breach of such a contract, it is one that is not actionable
by the employer
(3) some other wrong under the civil law of that foreign port
There is no evidence before me of the position even in the major ports where
such action might be taken - ports in Japan, Germany, the USA and the
Netherlands.
I consider that clear evidence would be required in the particular
circumstances of this application. This court is being asked to use its
injunctive powers on an interlocutory basis in connection with an industrial
and political dispute in a another sovereign state by requiring the ITF in this
jurisdiction and throughout the world not to induce its affiliates to take
industrial action that is accepted can be lawful in other sovereign states. It
may well be that such action in relation to this political and industrial
dispute in Australia might be entirely in accordance with the law as well as
the social and political views prevalent in that state, though contrary to the
law currently applicable in Australia and the policies being pursued by the
Government of Australia.
Before exercising such powers in this unprecedented situation, the court would
need to have before it material that explains the precise basis on which such
lawful action in one sovereign state is unlawful for the purposes of the tort
of intimidation or inducing breach of contract in Australia, if that is the
governing law or by the law of England and Wales, if that is the governing law.
(b) Have the ITF instigated any unlawful action?
As appears from the evidence, it is the ITF's case that they have not asked any
affiliate or any member of any affiliate to take any action that was unlawful.
Patrick accepted that it was permissible for them to ask their affiliates to
write letters, make representations to their governments, and take other action
but they crossed the line of what was lawful when they made threats to
Patrick's customers not to deal with them or procured or encouraged their
affiliates to ask their members to threaten to break or break their contracts
with their employers with a view to putting pressure on Patrick's customers. By
asking their affiliates to "do what they could to influence" ship operators not
to use Patrick and stating that ships that used Patrick would be "targeted"
worldwide, they were encouraging those affiliates to direct their members to
threaten to break or break their contracts of employment so that the ship
operated by a person who used or might use Patrick would not be loaded or would
be delayed.
However in Torquay Hotel v Cousins [1969] 2 Ch 106 at 147, Winn LJ
ssaid:
"It was one of Mr Pain's main submissions that mere advice, warning or
information cannot amount to tortious procurement of beach of contract. Whilst
granting arguendi causa that a communication which went nor further would, in
general, not, in the absence of circumstances giving a particular significance,
amount to a threat or intimidation, I am unable to understand why it may not e
an inducement. In the ordinary meaning of language it would surely be said
that a father who told his daughter that her fiance had been convicted of
indecent exposure, had thereby induced her, with or without justification, by
truth or by slander, to break her engagement. A man who writes to his
mother-in-law telling her that the central heating in his house has broken down
may thereby induce her to cancel an intended visit.
The court is not concerned in this case with any indirect procuring of breach,
or non-performance of a contract, or with the adoption of indirect means to
produce such a result; it is therefore not appropriate to consider whether such
a mode of procuring such a result is only actionable, as Mr Pain submitted,
where unlawful means, involving, for example, breaches of contract, or
actionable breaches of contract, are involved."
In Thompson v Deakin [1952] Ch 646, Jenkins LJ dealt with direct action
in these terms at page 694:
"Direct persuasion or procurementor inductment applied by the third party to
the contract breaker, with knowledge of the contract and the intention of
bringing about its breach, is clearly to be regarded as a wrongful act in
itself, and where this is shown a case of actionable interference in its
primary form is made out: Lumley v Gye."
He defined indirect action at page 696:
"Nevertheless, I think that in principle an actionable interference with
contractual relations may be committed by a third party who, with knowledge of
a contract between two other persons and with the intention of causing its
breach, or of preventing its performance, persuades, induces or procures the
servants of one of those parties, on whose services he relies for the
performance of his contract, to break their contracts of employment with him,
either by leaving him without notice or by refusing to do what is necessary for
the performance of his contract, provided that the breach of the contract
between the two other persons intended to be brought about by the third party
does in fact ensue as a necessary consequence of the third party's wrongful
interference with the contracts of employment.....
But, while admitting this form of actionable interference in principle, I would
hold it strictly confined to cases where it is clearly shown, first, that the
person charged with actionable interference knew of the existence of the
contract and intended to procure its breach; secondly, that the person so
charged did definitely and unequivocally persuade, induce or procure the
employees concerned to break their contracts of employment with the intent I
have mentioned; thirdly, that the employees so persuaded, induced or procured
did in fact break their contracts of employment; and, fourthly, that breach of
the contract forming the alleged subject of interference ensued as a necessary
consequence of the breaches by the employees concerned of their contracts of
employment.....
It is now well settled that, apart from conspiracy to injure, no actionable
wrong is committed by a person who. by acts not in themselves unlawful,
prevents another person from obtaining goods or services necessary for the
purposes of his business, or who induces others so to prevent that person by
any lawful means. It follows, in my view, that (again apart from conspiracy to
injure) there is nothing unlawful, under the law an enunciated in Allen v Flood
and subsequent cases, in general appeals to others to prevent a given person
from obtaining goods or services, for that is a purpose capable of being
lawfully carried out, and there can, therefore, be nothing unlawful in
advocating it, unless unlawful means are advocated. The result of such
advocacy may well be that unlawful means are adopted by some to achieve the
purpose advocated, but that is not to say that a person who advocates the
object without advocating the means is to be taken to have advocated recourse
to unlawful means. If by reference to the form of actionable interference with
contractual rights now propounede, general exhortations issued in the course of
a trade dispute, such as "Stop supplies to X", "Refuse to handle X's goods",
"Treat X as "black"", and the like, were regarded as amounting to actionable
interference, because persons reached by such exhortations might respond to
them by breaking their contract of employment and thereby causing breaches of
contract between their employers and other persons, and because the person
issuing such exhortations must be taken constructively to have known that the
employers concerned must have contracts of some kind or other with other
persons, and that his exhortations (general as they were) might lead to
breaches of those contracts through breaches of contracts of employment
committed by persons moved by his exhortations, then, the proposition must be
accepted, that it is an actionable wrong to advocate objects which can be
achieved by lawful means, because they can also be achieved by unlawful means;
and to that proportion I decline to subscribe....
Yet we have been referred bo no case in which the persons inciting a strike
have been held liable for actionable interference with contractual relations
between the strikers' employers and the persons with whom they deal; and in
principle I do not think that the inciters of the strike could be hold so
liable in the absence of proof that they knew of the existence of a particular
contract, and, with a view to bringing about its breach, counselled action by
employees in itself necessarily unlawful (as, for example, breach of their
contracts of employment) designed to achieve that end."
These passages were expressly approved by Lord Diplock in Merkur Island
Corpn
It would also need clear evidence that the ITF was instigating that action (if
unlawful under the law of Australia) as opposed to promoting lawful action
against Patrick.
(c) The ITF's knowledge of Patrick's contracts
The contracts for the stevedoring services provided by Patrick
Stevedoring services are arranged in a number of different ways: for example
*Services can be provided under a long term contract
*Services can be provided under a facility or framework contract where the
operator of the ship is not obliged to use the services of a particular
stevedoring company, but if he does so, then the services are performed on the
terms of the framework agreement
*Ad hoc contracts made as and when the operator of the ship needs stevedoring
services.
The type of arrangement will depend on the nature of the services the operator
of the ship is providing; on a regular liner service (for containers or other
cargo), a long term or framework contract would be usual; in the case of non
liner services, such as a voyage taken under a spot charter, an ad hoc contract
may be more usual.
The evidence provided by Patrick was that they had entered into contracts for
the exclusive supply of stevedoring services to various ship operators at
Melbourne, Sydney, Brisbane, Townsville, Fremantle, Port Adelaide, Newcastle,
Port Kembla, Hobart, Bell Bay, and Port Alma; they produced examples of such
contracts with Blue Star Line and Columbus Line at the container ports at
Sydney, Melbourne and Brisbane for a period of 3 years from 1 January 1998 and
a contract for the supply of services to Wilhelmsen Lines at Brisbane for 2
years from 1 January 1998.
It was contended by the ITF that the agreements with Blue Star and Columbus
Line were merely framework agreements; parts of the copies of the agreements
have been obliterated for reasons of commercial sensitivity and without more
detailed argument, it is not easy to classify these agreements; for the purpose
of the present application this is not material.
The legal principles
In Merkur Island Lord Diplock said at p 608:
"The first requirement is actually tow-fold, (1) knowledge of the existence of
the contract concerned and (2) intention to interfere with its performance.
As respects knowledge, I.T.F. had been given an actual copy of the carter on
July 19 980, three days after the "blacking" started but two days before the
application to Parker J. was made. Quite apart from this, however, there can
hardly be any one better informed than I.T.F. as to the terms of the sort of
contracts under which ships are employed, particularly those flying flags of
convenience. I agree with what was said by the Master of the Rolls, ante, p.
591 E-G, on the question of I.T.F.'s knowledge:
"Whatever the precise degree of knowledge f the defendants at any particular
time, faced with a laden ship which, as they well knew, was about to leave
port, the defendants must in my judgment be deemed to have known of the almost
certain existence of contracts of carriage to which the shipowners were
parties. The wholly exceptional case would be that of a ship carrying the
owner's own goods. Whether that contact or those contracts consisted of a time
charter, a voyage charter or one or more bill of lading contracts or some or
all of such contracts would have been immaterial to the defendants. Prima
facie their intention was to immobilise the ship and in so doing to interfere
with the performance by the owners of their contract or contracts of carriage -
immobilising a laden ship which had no contractual obligation to move would
have been a pointless exercise, since it would have brought no pressure to bear
on the owners."
The last sentence of this citation deals also with intention. It was the
shipowners upon whom I.T.F. wanted to bring pressure to bear, because it was
they who were employing seamen at rates of pay lower than those it was the
policy of I.T.F. to enforce. The only way in which income could be derived by
the shipowners from the ownership of their ship was by entering into contracts
with third parties for the carriage of goods under which a primary obligation
of the shipowners would be to prosecute the contract voyages with the utmost
dispatch, and their earnings from their ship would be diminished by its
immobilisation in port. Diminishing their earnings under the contract of
carriage was the only way in which pressure could be brought to bear on the
shipowners."
But precise knowledge is unnecessary; in Stratford v Lindley [1965] A.C.
269, Lord Pearce said at pp 332- 3:
"Did the defendants have sufficient knowledge of the terms of the hirers'
contracts? It is no answer to a claim based on wrongfully inducing a breach of
contract, to assert that the defendants did not know with exactitude all the
terms of the contract. The relevant question is whether they had sufficient
knowledge of the terms to know that they were inducing a breach of contract.
At present there is considerable indication that they had the knowledge.
Moreover, it seems unlikely that they would be ignorant of the simple
commonplace obligation of the hirers under the course of dealing whereby they
had a duty to return the barges tot he plaintiffs. But this is a point which
the evidence at the trial will no doubt illuminate further. Did the defendants
induce the breach? Albeit with expressions of regret, the defendants made it
clear to the Association of Master Lightermen, which in effect represented the
hirers (by letter of November 8 1963) that the hirers could not return the
barges to the plaintiffs. The fact that an inducement to break a contract is
couched as an irresistible embargo rather than in terms of seduction does not
made it any the less an inducement. The defendants were in effect saying to
the hirers: "You shall not carry out you contract with the plaintiffs, and we
have taken steps which will make it impossible, though we regret the
inconvenience to you." If thereby the hirers were induced to break the
contract, the tort is established."
(d) Instigation of a tort
Patrick relied on the principle set out at Clerk & Lindsell on torts at
paragraph 450
Sam, please find me Clerk & Lindsell
() Conclusion
I do not consider that they would have any real likelihood on the basis of the
evidence presently before the court.
Other factors relating to balance of convenience
(a) The nature of the support to be given by the ITF in the industrial and
political dispute
It is clear that the granting of the injunction would severely impair the
ability of the ITF to lend support to the MUA in a bitter and political
industrial dispute in Australia. The ITF's support appears on the evidence
before me to be of vital significance given the history of their support in
relation to what happened at Cairns, Dubai and with PCS at Webb dock. To deny
that support at the commencement of an industrial and political dispute would
be even more detrimental; as Lord Diplock said in NWL v Woods [1979] ICR at p
879:
"it is in the nature of industrial action that it can be promoted effectively
only so long as it is possible to strike whilst the iron is hot; once postponed
it is unlikely that the action can be revived"
(b) The loss that will be sustained by Patrick
(c) The nature of Patrick's pre-emptive strike
There was credible evidence before me that the action to employ non union
labour at the ports in Australia had been carefully planned; in view of the
involvement of the ITF in other matters, it is an inescapable inference that
action to try ad prevent the ITF organising action among its affiliates was
also part of that planning.
A full consideration of the evidence has lead me to conclude that the
interviews given by the ITF on 8 and 9 April 1998 did not in fact afford any
justification for the urgent application made to me on the evening of Maundy
Thursday . There was in fact nothing new in what the ITF was saying; their
position had been clear for months. I am sure that those running Patrick
appreciated this very well. The extension of the targeting to Patrick was an
inevitable consequence of Patrick's actions and those running Patrick must have
appreciated that this would happen in exactly the way it did and planned for it
and for the attack that they launched in England.
It is therefore quite clear to me on the whole of the evidence now before me
that the proper course would clearly have been to apply inter partes. Had that
application been made, then, given the time considerable time which I consider
it inevitable that the action against the MUA employees and the action against
the ITF had been planned within Patrick (as opposed to being planned with the
involvement of their lawyers here and in Australia), it would have been right
to give the ITF a full opportunity to put in evidence, given the very great
importance of this application and the difficult areas of fact and law
involved. An adjournment of at least two to three weeks would have been
needed.
It would therefore be palpably unjust to continue to afford to Patrick the
benefit of a pre-emptive strike which they obtained by careful planning.
Conclusion
It seems to me therefore only just to discharge the injunction. No injustice is
caused to Patrick as had they applied for the injunction inter partes, an
adjournment to file proper evidence would have been inevitable. During the
period which it is necessary to defer the matter to a full inter partes
hearing, it would as wrong to deprive the ITF of the opportunity of providing
the vital support which it and its affiliates wish to give the MUA at the
commencement of a dispute as it would be unjust to reward Patrick with the
benefit of the pre-emptive strike against the ITF which, on the evidence before
me, I have concluded was very carefully planned.
Patrick will in any event have a remedy in damages for that period.
Disclosure on the ex parte application
The ITF submitted that I should, in any event, have discharged the injunction
at once because there had been serious non-disclosure at the ex parte
application. They relied on two matters:
(1) Patrick should have disclose the pre-planning of their actions and that
there was no reason
(2) No proper attempts had been made to contact the ITF on Maundy Thursday and
the court's attention had not, in those circumstances, been drawn to s. 221 of
the Trades Union and Labour Relations (Consolidation) Act 1992.
I was persuaded, on balance, that there was no deliberate failure to make
proper disclosure when the ex parte application was made. In view of the
conclusion I have reached that the injunction must in any event be discharged,
I can express my reasons more briefly:
*
*I accept the evidence of Patrick's solicitors, Miss Katherine Debenham and Mr
Simon Watson that they made some attempts to contact the ITF's offices after
Patrick took the decision to apply for an ex parte injunction at 2:45 pm on
Maundy Thursday.
*I accept the evidence of the solicitors that they advised that an urgent
application could be made only after they had seen on 9 April 1998 the
transcript of an interview Mr Cockcroft had given on 8 April in which he stated
for the first time that Patrick was a target of the ITF. I have, however,
already expressed my conclusion as why Patrick themselves must have appreciated
that there was nothing new in what the ITF had said on 8 April 1998 as that
their reaction was inevitable, given Patrick's decision on 7 April 1998.
*Given the advice of the external lawyers and the difficulty of communication
at such distances, I do not consider that, on the high burden of proof
necessary, I can conclude, despite the finding I have made about Patrick's own
appreciation, that the court was deliberately misled by Patrick as to the
propriety of seeking the ex parte injunction on the evening of Maundy
Thursday.
*Given the urgency that the English and Australian lawyers advising Patrick
believed was necessary and their attempts to contact the ITF that the failure
to draw the Court's attention to s 221 made any difference to my decision that
evening. I accept that.....