Australasian Meat Industry Employee's Union v Aziz, Rashad Basha
[1998] FCA 925
•28 JULY 1998
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW – decision of administrators to dismiss employees – employees injured in their employment and their positions altered to their prejudice by combined conduct of respondents – conspiracy of combined respondents to injure by unlawful means.
INTERLOCUTORY RELIEF – whether serious issue to be tried – balance of convenience.
INJUCTIONS – interim mandatory mareva injunction.
Federal Court of Australia Act 1976 (Cth) s33J
Workplace Relations Act 1996 (Cth) ss178, 298K, 298L, 298U, 298V
Corporations Law (Cth) s574
Australasian Meat Industry Employees’ Union and Ors v Mt Schank Meat Processing Pty Ltd & Anor (von Doussa J, Federal Court of Australia, 21 May 1998, unreported), discussed.
Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, applied.
Patrick Stevedores Operations No 2 Pty Ltd and Ors v Maritime Union of Australia and Ors (1998) 153 ALR 643, applied.
Jackson v Sterling Industries Ltd (1987) 162 CLR 612, applied.
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES’ UNION AND GRAEME LEWIS AND PAMELA DICKER v RASHAD BASHA AZIZ AND OTHERS
VG 302 of 1998
MARSHALL J
MELBOURNE
5 AUGUST 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 302 of 1998
BETWEEN:
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES’ UNION
FIRST APPLICANTGRAEME LEWIS AND PAMELA DICKER
SECOND APPLICANTSAND:
RASHAD BASHA AZIZ
FIRST RESPONDENTNAHED AZIZ
SECOND RESPONDENTRODNEY AZIZ
THIRD RESPONDENTRANDA AZIZ
FOURTH RESPONDENTRASHAD AZIZ INVESTMENTS PTY LTD
FIFTH RESPONDENTSELECT MEAT EXPORTS PTY LTD
SIXTH RESPONDENTSOUTH EAST SERVICES PTY LTD
SEVENTH RESPONDENTMT SCHANK MEAT PROCESSING PTY LTD
EIGHTH RESPONDENTQUALITY MEAT PACKING PTY LTD
NINTH RESPONDENTJUDGE:
MARSHALL J
DATE:
28 JULY 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
UPON THE FIRST APPLICANT by its counsel undertaking to pay to any party adversely affected by the interlocutory injunctions granted by the Court, such compensation (if any) as the Court thinks just, in such manner as the Court directs.
THE COURT ORDERS THAT:
Until the hearing and determination of the application, or further order, the first to seventh respondents inclusive will not by themselves or through their servants or agents acquire from any person or party other than the former employees of Mt Schank Meat Processing Pty Ltd (“Mt Schank Meats”) or Quality Meat Packaging Pty Ltd (“Quality Meats”) services of meatworkers of the kind which were supplied at their abattoirs by Mt Schank Meats and Quality Meats on 1 June 1998. Provided that such respondents may obtain the services of persons other than such former employees where an insufficient number of such former employees is ready, willing and available to perform work on any given day at the premises of the respondents.
Until the hearing and determination of the application, or further order, the first to seventh respondents will not enter into any agreement, arrangement or transaction or take any action having the effect of divesting themselves of their assets or undertakings otherwise than in the ordinary course of business, or otherwise deal with or dispose of their assets or undertakings otherwise than in the ordinary course of business.
The applicants:
(a)cause a notice in the terms specified in the schedule to this order to be published in “The Border Watch” newspaper circulating in S.E. South Australia on or before 31 July 1998;
(b)cause to be mailed to all group members referred to in the application a notice in the terms specified in the schedule to this order.
The date before which a group member may opt out of the representative proceeding is fixed, pursuant to s33J of the Federal Court of Australia Act 1976 (Cth) as 8 August 1998.
On or before 3 August 1998 the applicants have leave to file and serve such amended Application and Statement of Claim as they are advised.
On or before 17 August 1998, the first to seventh respondents file and serve their Defences.
The directions hearing is adjourned to 19 August 1998 at 10.15 am.
Each party be at liberty to apply in relation to these orders on not less than 24 hours written notice to each other party.
The liquidator of the ninth respondent take no further steps in the liquidation before 19 August 1998 save for compliance with any requirements of the Australian Securities Commission.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 302 of 1998
BETWEEN:
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES’ UNION
FIRST APPLICANTGRAEME LEWIS AND PAMELA DICKER
SECOND APPLICANTSAND:
RASHAD BASHA AZIZ
FIRST RESPONDENTNAHED AZIZ
SECOND RESPONDENTRODNEY AZIZ
THIRD RESPONDENTRANDA AZIZ
FOURTH RESPONDENTRASHAD AZIZ INVESTMENTS PTY LTD
FIFTH RESPONDENTSELECT MEAT EXPORTS PTY LTD
SIXTH RESPONDENTSOUTH EAST SERVICES PTY LTD
SEVENTH RESPONDENTMT SCHANK MEAT PROCESSING PTY LTD
EIGHTH RESPONDENTQUALITY MEAT PACKING PTY LTD
NINTH RESPONDENT
JUDGE:
MARSHALL J
DATE:
5 AUGUST 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
On 28 July 1998 the Court dealt with an application for interlocutory orders against the first to seventh respondents. Shortly after the completion of the submissions of counsel the Court announced that it would make the following order (“the order”):
“UPON THE FIRST APPLICANT by its counsel undertaking to pay to any party adversely affected by the interlocutory injunctions granted by the Court, such compensation (if any) as the Court thinks just, in such manner as the Court directs.
THE COURT ORDERS THAT:
Until the hearing and determination of the application, or further order, the first to seventh respondents inclusive will not by themselves or through their servants or agents acquire from any person or party other than the former employees of Mt Schank Meat Processing Pty Ltd (“Mt Schank Meats”) or Quality Meat Packaging Pty Ltd (“Quality Meats”) services of meatworkers of the kind which were supplied at their abattoirs by Mt Schank Meats and Quality Meats on 1 June 1998. Provided that such respondents may obtain the services of persons other than such former employees where an insufficient number of such former employees is ready, willing and available to perform work on any given day at the premises of the respondents.
Until the hearing and determination of the application, or further order, the first to seventh respondents will not enter into any agreement, arrangement or transaction or take any action having the effect of divesting themselves of their assets or undertakings otherwise than in the ordinary course of business, or otherwise deal with or dispose of their assets or undertakings otherwise than in the ordinary course of business.
The applicants:
(a)cause a notice in the terms specified in the schedule to this order to be published in “The Border Watch” newspaper circulating in S.E. South Australia on or before 31 July 1998;
(b)cause to be mailed to all group members referred to in the application a notice in the terms specified in the schedule to this order.
The date before which a group member may opt out of the representative proceeding is fixed, pursuant to s33J of the Federal Court of Australia Act 1976 (Cth), as 8 August 1998.
On or before 3 August 1998 the applicants have leave to file and serve such amended Application and Statement of Claim as they are advised.
On or before 17 August 1998, the first to seventh respondents file and serve their Defences.
The directions hearing is adjourned to 19 August 1998 at 10.15 am.
Each party be at liberty to apply in relation to these orders on not less than 24 hours written notice to each other party.
The liquidator of the ninth respondent take no further steps in the liquidation before 19 August 1998 save for compliance with any requirements of the Australian Securities Commission.”
Par 1 and par 2 of the order were made over the opposition of the first to seventh respondents. There was no substantial disagreement about the making of any other parts of the order. In particular, the eighth and ninth respondents did not oppose the making of par 9 of the order.
Upon the Court making the order the parties were informed that I would deliver my reasons for deciding to make the order as soon as reasonably practicable. What follows are my reasons for making the order.
BACKGROUND
(a)The parties
The first applicant, Australasian Meat Industry Employees’ Union (“the union”), is an organisation registered pursuant to the Workplace Relations Act 1996 (Cth) (“the Act”). The second applicants are representative parties. They represent members of a group of people constituting about 120 individuals who were employees of the eighth respondent or the ninth respondent as at 1 June 1998. The first and second respondents, Rashad Basha Aziz and Nahed Aziz are a married couple. The third and fourth respondents, Rodney Aziz and Randa Aziz are their son and daughter respectively. The fifth respondent, Rashad Aziz Investments Pty Ltd (“RAI”) is a corporation of which Rashad Aziz and Nahed Aziz each hold 50 per cent of the issued shares and are the two directors. RAI is the owner of an abattoir near Mt Gambier in South Australia called “Mount Schank Meatworks” (“the abattoir”). The sixth respondent, Select Meat Exports Pty Ltd (“Select”) is a corporation of which Rodney Aziz is the sole director and the holder of 50 per cent of the issued shares. Randa Aziz is the holder of the other 50 per cent of the issued shares of Select.
The seventh respondent, South East Services Pty Ltd (“South East”) is a corporation of which Rodney Aziz is the sole director and shareholder. The eighth respondent, Mt Schank Meat Processing Pty Ltd (“Mt Schank Meats”) is a corporation of which Rashad Aziz is the sole director and shareholder. The ninth respondent Quality Meat Packing Pty Ltd (“Quality Meats”) is a corporation of which Nahed Aziz is the sole director and shareholder. Mt Schank Meats is currently under administration. Quality Meats is currently in liquidation.
(b)The application
On 3 July 1998 the applicants filed in the Victoria District Registry of the Court an application in which the following relief was sought:
The imposition of penalties on Mt Schank Meats and Quality Meats pursuant to s298U(a) of the Act for contravention of s298K of the Act.
Orders under s298U of the Act for compensation to be paid to terminated employees.
Injunctions restraining contravention of s298K of the Act.
Ancillary orders under s298U of the Act.
The imposition of penalties on Mt Schank Meats and Quality Meats under s178 of the Act and ancillary relief for underpayment of wages and interest thereon.
In the associated jurisdiction of the Court, payments due under the Meat Industry (South Australia) Award.
In the accrued jurisdiction of the Court damages for:
·breach of contract
·conspiracy, and
·inducement of breach of contract
Orders pursuant to the Corporations Law, including leave to proceed against Mt Schank Meats and Quality Meats.
Certain interlocutory orders were sought in the application. When the matter was listed for its first directions hearing on 13 July 1998, interlocutory relief was not pressed on account of certain undertakings which were given by the first to seventh respondents. Those undertakings expired on 28 July 1998. They were in materially identical forms to par 1 and par 2 of the order of 28 July 1998 with the exception of the proviso to par 1.
At the hearing on 28 July 1998 Mr H Borenstein and Mr M G R Gronow, both of counsel appeared for the applicants. Mr M Gray QC, appeared with Mr R Manuel on behalf of the first to seventh respondents. Ms L Ong appeared for the eighth and ninth respondents.
INTERLOCUTORY RELIEF – THE EVIDENCE
The findings of fact made during the course of these reasons for judgment reflect the evidence currently before the Court. The possibility always remains that in the final hearing and determination of the matter the Court may be persuaded to view certain of the facts currently before it in a different light depending upon the totality of the evidence then before it.
The applicants relied on four affidavits of Lachlan Wishart Armstrong, a solicitor employed by the firm of solicitors acting for the applicants, Messrs Gill Kane and Brophy. There was no affidavit filed by the first to seventh respondents although Mr Gray tendered a copy of a decision of the Industrial Relations Commission of South Australia dated 10 July 1998. An affidavit of Philip Newman was filed by the eighth and ninth respondents. Mr Newman is an administrator of Mt Schank Meats and Quality Meats. There was no request by any party to cross-examine Mr Armstrong. Mr Newman’s evidence was also not subjected to cross-examination. Mr Newman gave the following evidence about “the corporate structure in relation to the ….abattoir”:
RAI owns the freehold and the business assets of the abattoir.
RAI purchases livestock to be slaughtered and processed and is entitled to the final processed product.
Select operates the business of the abattoir and is engaged by RAI to slaughter, bone, pack, freeze and store the processed product.
Mt Schank Meats contracted with Select to operate the slaughter floor, including the provision of labour.
Quality Meats contracted with Select to operate the boning room including the provision of labour.
South East contracted with Select to provide labour to Select for the packaging, freezing and storing of the processed product.
The abattoir was sold to RAI in 1992. From 1992 to 1996 the employees at the abattoir were employed by Mt Gambier Meat Processing Pty Ltd (“Mt Gambier Meat”). Rashad and Nahed Aziz were two of the three directors of Mt Gambier Meat and each owned half of the shares in the company. Mt Gambier Meat was deregistered on 27 February 1998 pursuant to action taken by the Australian Securities Commission under s574 of the Corporations Law (Cth).
In 1994 an enterprise agreement was reached between the union and Mt Gambier Meat. The agreement was certified pursuant to the Industrial Relations Act 1988 (Cth) by the Australian Industrial Relations Commission on 3 February 1995. Between 1994 and 1996 persons employed at the abattoir were accorded the terms and conditions of employment provided for in the enterprise agreement. The evidence does not disclose any contractual relationship between Mt Gambier Meat and Select, however in mid 1996 the employment of the employees at the abattoir was apparently transferred to Mt Schank Meats, Quality Meats and South East. Agreements, each in materially identical terms and each dated 26 January 1996, between Select on the one hand and Mt Schank Meats and Quality Meats on the other hand, are exhibits to Mr Newman’s affidavit.
The agreement applicable to Mt Schank Meats contains the following terms:
“1.Mt Shank (sic) Meat Processing Pty Ltd shall provide the labour to Select Meat Exports Pty Ltd for the Slaughter Floor at the Mt Shank (sic) abattoir and shall provide all employees as required by Select Meat Exports Pty Ltd from time to time.
2.Where Mt Shank (sic) Meat Processing Pty Ltd incurs debt for any trade goods or services provided to the abattoir on behalf of Select Meat Exports Pty Ltd then Select Meat Exports Pty Ltd shall pay that debt no later than 120 days from the date that it was incurred.
3.Select Meat Exports Pty Ltd shall reimburse Mt Shank (sic) Meat Processing Pty Ltd for all wages paid by Mt Shank (sic) Meat Processing Pty Ltd on each Wednesday of each week.”
In December 1997 the enterprise agreement was cancelled but prior to then the union commenced proceedings in this Court in the South Australia District Registry seeking that penalties be imposed on Mt Schank Meats and Quality Meats for failing to pay wages in accordance with the enterprise agreement. In his judgment dated 21 May 1998, von Doussa J held that the enterprise agreement was binding on Mt Schank Meats and Quality Meats as successors to parts of the business of Mt Gambier Meat. See Australasian Meat Industry Employees’ Union and Ors v Mt Schank Meat Processing Pty Ltd & Anor, 21 May 1998, von Doussa J, unreported. His Honour is yet to determine the amount of the underpayment of wages in that matter, however the sums involved are likely to be substantial.
On 1 June 1998 Rashad Aziz, on behalf of Mt Schank Meats and Nahed Aziz on behalf of Quality Meats, placed those companies into voluntary administration. This occurred after a meeting with the administrators and legal and accounting representatives of the respondents together with Rodney Aziz on 1 June 1998. Mr Newman and Mr Clive White of Meyrick Webster Chartered Accountants were appointed co-administrators of the two companies. The first meetings of creditors of the companies were held on 9 June 1998 in Mt Gambier. Each meeting confirmed the appointment of the administrators. On 26 June 1998 the creditors of Quality Meats resolved to wind up the company pursuant the Corporations Law. The second creditors meeting in relation to Mt Schank Meats was adjourned on 26 June 1998 to 24 July 1998 and on that date to 22 August 1998.
Mr Newman gave evidence that he “continued to employ the employees of Quality Meats and Mt Schank Meats from 1 June 1998 to 22 June 1998”. It was his understanding that “the employees were retained on a “daily hire” basis.” On 22 June 1998 Mr Newman decided to terminate the employment of the employees of Quality Meats and Mt Schank Meats. The letter was in the following terms:
“As you are aware, on the 1st day of June 1998, Mr C P White and I were appointed joint and several Administrators of the abovenamed company by its director pursuant to Section 436A of the Corporations Law.
I hereby give notification that your employment with the abovenamed company is terminated.
Should you have any further queries, please contact Mr Brent Morgan of this office.
Yours faithfully,
P NEWMAN
ADMINISTRATOR”
Mr Armstrong’s first affidavit includes a reference to a telephone conversation he had with Mr Newman on 23 June 1998. Par 13 and par 14 of that affidavit were in the following terms:
“13.Mr Newman and I then discussed the question whether there existed an arrangement between the companies and Rashad Aziz Investments Pty Ltd (“RAI”) whereby RAI was obligated to reimburse the companies all their costs of supplying labour to RAI. I said that, if the Federal Court judgment meant the companies’ costs of supply had increased then maybe RAI’s obligations increased accordingly. I asked Mr Newman whether he had investigated the possibility of recovering the amount of the increase from RAI.
14.He said this was a matter to be looked into and he referred to the existence of numerous “loan funds” within the group of companies controlled by the Aziz family. He said each company in the group sometimes paid the liabilities of other companies then, it seemed, attributed the payment to a loan account which it would later create in respect of that payment to that other company. He said he could not be sure that RAI had always reimbursed the companies for the full amount of their costs of supplying labour, and these were all matters to be looked into.”
Par 46 and par 47 of the affidavit were as follows:
“46.My understanding of the ongoing financial position of each company, as a result of perusing the Administrators’ Reports and from my conversations with Mr Newman and Mr Nathan outlined earlier in this my affidavit, is that each company, and the other companies in the Aziz group, make frequent use of intra-group loans. “Loans” here would appear to include direct payments to other group companies’ creditors, which payments were retrospectively characterised as loans for accounting purposes.
47.Further, it appears the companies now in administration depended in large part, if not entirely, on such loans. The companies employed the labour used at the abattoir and incurred the costs associated therewith, but disclose no revenue, or source of revenue, other than the monies received by RAI as reimbursements of the costs of the labour. Income from the abattoir presumably was collected by other companies in the group. The companies now in administration were, it appears, in effect supported by the other group companies, in particular by RAI. They could only continue to trade solvently so long as the intra-group loans, and reimbursements from RAI, continued.”
An exhibit to the first affidavit of Mr Armstrong contains the administrators report of 19 June 1998 in respect of Mt Schank Meats under the heading “Transactions with Director / Associated Entities” where the following is set out:
“Prior to our appointment, the company used the funds in the various companies in the group interchangeably giving rise to loan accounts for the services provided by the respective companies and liabilities incurred and satisfied on behalf of other companies. According to the company’s records at the date of our appointment, the amount of $12,923 is owed to the company by Rashad Aziz Investments Pty Ltd.
Our investigations have not revealed any transactions between the company and its director.”
The report in relation to Quality Meats contains the following comparable paragraphs:
“Prior to our appointment, the company used the funds in the various companies in the group interchangeably giving rise to loan accounts for the services provided by the respective companies and liabilities incurred and satisfied on behalf of other companies. At the date of our appointment, according to its books and records, the company was indebted to Rashad Aziz Investments Pty Ltd for the amount of $23,668.
Our investigations have not revealed any transactions between the company and its director.”
Each report also includes a reference to the proceedings before von Doussa J and contains the following information:
“Although the declaration made in the Federal Court was only in respect of six union members, the potential had been established for such a claim to be made against the company by all of its employees. Accordingly, its director sought advice and resolved to appoint Administrators to the company on the 1st June 1998.”
Evidence was also given by Mr Armstrong of steps taken by Select to advertise for and commence to interview prospective employees for positions at the abattoir, despite the termination of the employment of employees of Mt Schank Meats and Quality Meats.
Shortly after the termination of the employment of employees at Mt Schank Meats and Quality Meats a picket was established at the abattoir. As at 10 July 1998 the picket was still in place. There was no evidence before me that the picket, if currently in place, is anything other than a peaceful one.
Mr Armstrong also gave evidence of a practice occurring at the abattoir of it re-opening in August following the usual winter shut down. He referred to a concern in former employees of Mt Schank Meats and Quality Meats that the first to seventh respondents would recommence work using employees other than those who had their employment terminated on 22 June 1998. He also referred to the fact that a small kill had taken place on 15 July 1998 and that former employees engaged at the abattoir were employed on that kill.
TEST FOR INTERLOCUTORY RELIEF
It is not in dispute that whether the Court should grant interlocutory relief in any particular case depends on the determination of whether there is a serious question to be tried in the substantive proceeding and whether the balance of convenience favours the grant of such relief. Further it was not in contest that where appropriate a Court may consider the two parts of the test together. As Woodward J said in Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 472:
“…when it becomes necessary to consider the balance of convenience, it is, I believe, quite proper to continue to bear in mind the apparent strength of the applicants’ case; the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises “a serious question to be tried”) may still attract interlocutory relief if there is a marked balance of convenience in favour of it.”
SERIOUS QUESTION TO BE TRIED – S298K
In my opinion there is a serious question to be tried concerning whether the first to seventh respondents have breached s298K of the Act.
s298K which is found in Pt XA, Div 3 of the Act, provides as follows:
“(1)An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a)dismiss an employee;
(b)injure an employee in his or her employment;
(c) alter the position of an employee to the employee’s prejudice;
(d) refuse to employ another person;
(e)discriminate against another person in the terms or conditions on which the employer offers to employ the other person.
(2)A person must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a)terminate a contract for services that he or she has entered into with an independent contractor;
(b)injure the independent contractor in relation to the terms and conditions of the contract for services;
(c)alter the position of the independent contractor to the independent contractor’s prejudice;
(d)refuse to engage another person as an independent contractor;
(e)discriminate against another person in the terms or conditions on which the person offers to engage the other person as an independent contractor.”
s298L sets out the prohibited reasons for the purposes of s298K and provides as follows:
“(1)Conduct referred to in subsection 298K(1) or (2) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:
(a)is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or
(b)is not, or does not propose to become, a member of an industrial association; or
(c)in the case of a refusal to engage another person as an independent contractor:
(i)has one or more employees who are not, or do not propose to become, members of an industrial association; or
(ii)has not paid, or does not propose to pay, a fee (however described) to an industrial association; or
(d)has refused or failed to join in industrial action; or
(e)in the case of an employee – has refused or failed to agree or consent to, or vote in favour of, the making of an agreement to which an industrial association of which the employee is a member would be a party; or
(f)has made, proposes to make or has at any time proposed to make an application to an industrial body for an order under an industrial law for the holding of a secret ballot; or
(g)has participated in, proposes to participate in or has at any time proposed to participate in a secret ballot ordered by an industrial body under an industrial law; or
(h)is entitled to the benefit of an industrial instrument or an order of an industrial body; or
(i)has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:
(i) compliance with that law; or
(ii)the observance of a person’s rights under an industrial instrument; or
(j)has participated in, proposes to participate in or has at any time proposed to participate in a proceeding under an industrial law; or
(k)has given or proposes to give evidence in a proceeding under an industrial law; or
(l)in the case of an employee, or an independent contractor, who is a member of an industrial association that is seeking better industrial conditions – is dissatisfied with his or her conditions; or
(m)in the case of an employee or an independent contractor – has absented himself or herself from work without leave if:
(i)the absence was for the purpose of carrying out duties or exercising rights as an officer of an industrial association; and
(ii)the employee or independent contractor applied for leave before absenting himself or herself and leave was unreasonably refused or withheld; or
(n)as an officer or member of an industrial association, has done, or proposes to do, an act or thing for the purpose of furthering or protecting the industrial interests of the industrial association, being an act or thing that is:
(i)lawful; and
(ii)within the limits of an authority expressly conferred on the employee, independent contractor or other person by the industrial association under its rules.
(2)If:
(a)a threat is made to engage in conduct referred to in subsection 298K(1) or (2); and
(b)one of the prohibited reasons in subsection (1) of this section refers to a person doing or proposing to do a particular act, or not doing or proposing not to do a particular act; and
(c)the threat is made with the intent of dissuading or preventing the person from doing the act, or coercing the person to do the act, as the case requires;
the threat is taken to have been made for that prohibited reason.”
s298U deals with the orders that the Court may make for conduct in contravention of Pt XA. s298U provides that:
“In respect of conduct in contravention of this Part, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders:
(a)an order imposing on a person or industrial association whose conduct contravened or is contravening the provision in question a penalty of not more than:
(i)in the case of a body corporate - $10,000; or
(ii)in any other case - $2,000;
(b)an order requiring the person or industrial association to reinstate an employee, or to re-engage an independent contractor;
(c)an order requiring the person or industrial association to pay to an employee or independent contractor, or to a prospective employee or independent contractor, compensation of such amount as the Court thinks appropriate;
(d)an order requiring the person or industrial association not to carry out a threat made by the person or association, or not to make any further threat;
(e)injunctions (including interim injunctions), and any other orders, that the Court thinks necessary to stop the conduct or remedy its effects;
(f)any other consequential orders.”
s298V imposes a reverse onus and provides that:
“If:
(a)in an application under this Division relating to a person’s or an industrial association’s conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b)for the person or industrial association to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person or industrial association proves otherwise.”
Mr Gray did not take issue with the existence of a serious issue to be tried with respect to Mt Schank Meats and Quality Meats, especially having regard to the provisions of s298V of the Act which impose a reverse onus. Mr Gray contended, however, that no such serious issue to be tried could be found with respect to the first to seventh respondents who were not the employers of the workers who were dismissed. I disagree. As Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ said in Patrick Stevedores Operations No 2 Pty Ltd and Ors v Maritime Union of Australia and Ors (1998) 153 ALR 643 at 655:
“True it is that the only person who can engage in conduct contravening s298K(1) is an “employer” (a term that is defined to include a person who is usually an employer). But applications under s298U(e), unlike applications made under paras (a)-(d) of s298U in respect of conduct contravening s298K(1), can be made against persons other than an employer. Given that an application is “in respect of” contravening conduct and that the court is empowered to make any order it thinks necessary to remedy the effects of the conduct, the order may be made against persons other than the person who has engaged in the contravening conduct. In so far as the power of the court under s298U(e) is to make an order necessary to remedy the effects of contravening conduct, counsel for the appellants may well be correct in submitting that the power conferred by s298U(e) is exercisable only when those effects have been found to exist. That is the condition upon the power to make a final order; it is not the definition of the jurisdiction to hear and determine an application in respect of alleged contravening conduct. The power to make an interlocutory order is exercised by reference to the relief finally available but that is not, or is not necessarily, to say that the power to make the final order is the source of the power to make an interlocutory order or confines the power to make an interlocutory order.”
In my opinion it was appropriate to make par 1 and par 2 of the order of 28 July 1998 to remedy the effects of the conduct of the first to seventh respondents which in combination with the conduct of Mt Schank Meats and Quality Meats has, on the evidence currently before the Court, brought about a situation where employees have been injured in their employment and had their positions altered to their prejudice by the combined conduct of all respondents. In my view the evidence, as it currently stands, shows that the Aziz family and its corporate emanations attempted to deprive the workers at the abattoir of their right to receive the quantum of payments due to them under the enterprise agreement by ensuring that the employing companies, Mt Schank Meats and Quality Meats, would not be in a financial position to pay the workers their correct entitlements. After the judgment of von Doussa J on 21 May 1998, Rodney Aziz met with his legal and accounting advisers on 1 June 1998 and facilitated the placing of the employer companies under administration. As Mr Gray submitted, “here, the operating factor is the judgment of the Federal Court and the prospect of claims being made as a consequence”.
Further, there is evidence before the Court that the various limbs of the Aziz family corporate group do not act at arms length. The administrator’s report refers to the use of funds within the group “interchangeably”. Additionally there is evidence of an attempt by Select to recruit new employees to the abattoir. It is not unreasonable to infer that a purpose for such recruitment is to replace the workforce terminated, as the evidence now stands, unlawfully and in particular in breach of s298K(1)(b) and (c) of the Act on account of the prohibited reason referred to in s298L(1)(h) of the Act. In my view an interim injunction under s298U(e) of the Act would be ineffective if it was not made with respect to all of the first to seventh respondents, each of whom unless restrained have, on the current state of the material before the Court, further capacity to injure the dismissed workers for a prohibited reason.
SERIOUS QUESTION TO BE TRIED – CONSPIRACY
I am also of the view that there is a serious question to be tried in relation to the applicants’ claims that the first to seventh respondents have engaged in a conspiracy to injure the second applicants by unlawful means. I am satisfied that, as the evidence now stands, the first to seventh respondents conspired with each other and Mt Schank Meats and Quality Meats to terminate the employment of the second applicants by arranging for their employers to go into administration so the Aziz family and the associated corporate group could avoid its obligations to pay these workers what they were entitled to receive under the enterprise agreement. The unlawful means included acts in breach of s298K of the Act by Mt Schank Meats and Quality Meats. The Aziz family and the associated corporate group were complicit in such acts. The corporate group and the individual respondent members of the Aziz family acted to place the employer companies into administration and attempted, as Mr Borenstein said, to use such administration:
“…as a vehicle whereby the employment of these employees would be prejudiced and ultimately terminated by a third party (the administrator) who would be left in a position where really he had no choice, by reason of the conduct of the other respondents.”
As the High Court said in the joint judgment in Patrick Stevedores at 657:
“Although only an employer can engage in conduct contravening s298K(1), all parties to a conspiracy that the employer companies should engage in such conduct are liable as concurrent tortfeasors. If the conspiracy to perform an unlawful act is completed by the performance of the act, it is only necessary for one of the conspirators to have performed the act or to have procured the act to be performed for an action to lie against all.”
Further at 657-658 their Honours said:
“A court whose jurisdiction is invoked in a conspiracy case has power to grant an injunction to prevent the completion or effecting of the conspiracy. Where the acts contemplated by the conspirators have all occurred and the tort is complete, the remedy available to an injured plaintiff is ordinarily limited to the recovery of pecuniary damages. But for over a century it has been established that “there is no rule which prevents the court from granting a mandatory injunction where the injury sought to be restrained has been completed before the commencement of the action”. Where the damage caused by tortious conduct is ongoing and is “extreme, or at all events very serious”, a mandatory injunction may issue compelling the wrongdoer to prevent the occurrence of further damage. Here, if attention be focused on the conspiracy to engage in conduct in contravention of s298K(1)(c) and it is found on trial that that conspiracy was entered into and completed, there would be power to make mandatory orders to prevent damage to the employees flowing from the Group reorganisation. If attention be focused on the conspiracy to engage in conduct in contravention of s298K(1)(a) and it is found on trial that that conspiracy was entered into there would be power to restrain the dismissal of the employees for a “prohibited reason”. These remedies would be available against any or all of the conspirators according to the exigencies of the situation then existing.
If the employees were dismissed before trial in contravention of s298U(a) or pursuant to a conspiracy in contravention of that provision, the damages would be likely to be enormous. The huge amount of the likely damages is a factor relevant to the scope of the relief available against the Group by way of interlocutory injunction.”
BALANCE OF CONVENIENCE
The balance of convenience in this matter favours the grant of interlocutory relief. As a result of the orders made on 28 July 1998, it was possible for work to resume at the abattoir. It was also possible for any terminated employee to be engaged to perform any such work. No prejudice thereby arose to the respondents. What is not now possible is for the work which was ordinarily performed by such workers to be first offered elsewhere.
The balance of convenience also favours the grant of an interim mandatory mareva injunction. Based on the evidence currently before the Court I have no confidence that any order the Court makes will not be attempted to be defeated by some arrangement made by the Aziz family and / or associated corporate group to attempt to reshuffle their corporate and family finances so as to avoid any adverse consequence for them as a result of the applicants seeking to enforce their legal rights. That after all was, as the evidence now stands, their response to the judgment of von Doussa J of 21 May 1998. I am particularly concerned about the evidence of interchangeable use of the funds by members of the Aziz corporate group. My concern is heightened by the potentially massive damages which the respondents may be liable to pay should the applicants obtain the relief they seek in the substantive application. The evidence before me at the moment does not fill me with confidence that the corporate respondents operate at arms length. Also the absence of evidence of a demand by Mt Schank Meats and Quality Meats against Select for the shortfall of monies owing under the enterprise agreement heightens my concern about the absence of arms length dealings within the Aziz corporate group. Consequently I formed the view that the making of a mandatory mareva injunction was essential to protect the integrity of par 1 of the order of 28 July 1998.
In the words of Deane J in Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 625, adapted to this matter, the purpose of a mareva injunction is:
“…to prevent (the respondents) from disposing of (their) actual assets…so as to frustrate the process of the court by depriving the (applicants) of the fruits of any judgment obtained in the action.”
Also in considering the balance of convenience I had regard to the fact that the applicants’ claims, at least as to s298K of the Act and the conspiracy claim, are, on the current state of the material, very strong. Had I not been of the view that there was a very serious issue to be tried I would in any event have considered that there was “a marked balance of convenience” in favour of the granting of interlocutory relief for the reasons outlined above. See Bullock at 472, per Woodward J.
I certify that this and the preceding sixteen (16) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall
Associate:
Dated: 5 August 1998
Counsel for the Applicants: Mr H Borenstein
with Mr M G R GronowSolicitor for the Applicants: Gill Kane and Brophy Counsel for the First to Seventh Respondents: Mr M Gray QC
with Mr R ManuelSolicitor for the First to Seventh Respondents:
Manuel Fuller Merrigan
Solicitor for the Eighth and Ninth Respondents
Ms L Ong of Swersky & Velos Date of Hearing: 28 July 1998
Date of Orders: 28 July 1998
Publication of Reasons: 5 August 1998
0
4
3