Australian Building and Construction Commissioner v Auimatagi & Anor

[2019] HCATrans 74

[2019] HCATrans 074

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S323 of 2018

B e t w e e n -

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

and

POMARE AUIMATAGI

First Respondent

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Second Respondent

Application for special leave to appeal

GAGELER J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 APRIL 2019, AT 9.30 AM

Copyright in the High Court of Australia

MR J.L. BOURKE, QC:  If the Court pleases, I appear with my learned friend, MS R.W. SWEET, for the applicant.  (instructed by Bartier Perry)

MR S. CRAWSHAW, SC:  If the Court pleases, I appear for the respondents.  (instructed by Taylor & Scott Lawyers)

GAGELER J:   Mr Bourke.

MR BOURKE: If the Court pleases. We say special leave should be granted in this case because the Full Federal Court did not apply the language of item 7(c) of section 342 of the Fair Work Act.  It replaced the word “prejudicing” with the word “loss or disadvantage” and, in truth, although the Full Court said they were not setting a test that mandated that you prove dollar and cents loss or some type of quantifiable loss, in our submission, when you look at the way they apply the test, that was the effect of that.

GAGELER J:   What did you prove?

MR BOURKE:   We proved there was withdrawal of labour – a withdrawal of services. 

EDELMAN J:   Do you accept that you have to prove prejudicing of any contractor in relation to a contract of service facilities?

MR BOURKE:   Correct, correct. 

EDELMAN J:   How did you prove that, either by reference to what facts or by what inference?

MR BOURKE:   We proved it because the services are – in relation to our subcontractors – were not provided across a period of three days and we did not enjoy the services that we wanted on the site because of the withdrawal of services or labour and that also caused a loss of benefit to the principal in not having those services on those days.

GORDON J:   So, is that what is set out at paragraph 144 and following at application book 36 to 38?

MR BOURKE:   Correct.  And, in our submission ‑ ‑ ‑

GORDON J:   So, does it get any higher than walked off site, work stoppage?

MR BOURKE:   It does not.  But, the critical thing in this – sorry.

EDELMAN J:   How is working off site – how does that lead to an inference of prejudice?  What is the inference of prejudice that you invited the Full Court or the primary judge to find?

MR BOURKE: In our submission, it was direct prejudice. It was an inference because something else happened downstream. It was – we wanted work to be done across a period of three days and because of action of the union in organising subcontractors to not turn up, that work was not done. In our submission, that is classic prejudice – particularly in an industrial setting where you have industrial legislation – the classic industrial weapon on site, such as building sites, is withdrawal of labour. In our submission, the intent of the legislature was that that would be immediately captured. And, it is captured also in the language – and one goes to section 342, the relevant part, (c), at application book 140.

The legislature has used a broad term prejudicing and has said “directly or indirectly”.  And, in our submission, directly engage the withdrawal of labour or the withdrawal of services when one is looking at “indirectly”, you are looking at downstream or consequential loss.  And, that is exactly what the Full Court did.  They started looking downstream – were you out of pocket?  Was there a delay in the critical part?  That is not the point.

EDELMAN J:   So, what the prejudice was, was not getting something to which you were entitled?

MR BOURKE:   Correct, correct.

EDELMAN J:   Every time any independent contractor does not get anything to which they are entitled under a contract for services that will always be prejudice.

MR BOURKE:   There has to be the relevant intent and, in this case, it was the intent.  The section 340 is driven by intent.  It was because the independent contractor exercised a workplace right and then the legislature says, if you have a prohibited intent, we are not going to categorise what type of action – we will just ask, was there prejudice?  You will see that item 7(c) only speaks of action.  Then, you move to prejudice which can be direct or indirect.  What the Full Court did, they moved away from what happened, what happened on those three days, which was work was planned to be done and could not be done and they said the only question needed to be, what happened next?

GORDON J:   Can I ask you to go to application book 109 at paragraph 114, which seems to be the critical paragraph of the Full Court’s reasoning on this aspect?  As I understand it, you do not take issue, really, with anything until the last two sentences, is that right?

MR BOURKE:   We take issue with the fact that the – if one goes to about the fourth line, the discussion of:

Disadvantaged . . . in some way financially or otherwise –

We take issue with that because we say ‑ ‑ ‑

GORDON J:   You do not, do you?  You say that there may have been disadvantage other than financial disadvantage.

MR BOURKE:   Correct.

GORDON J:   You accept that.

MR BOURKE:   Correct.  And, we say, the disadvantage – and, in fact, we say, you really should come back to the word of the idem “prejudice”, is front and square the withdrawal of labour – a classic event that can occur on a building site. 

GAGELER J:   So, do you draw a distinction between disadvantage and prejudice?

MR BOURKE:   Where, in our submission, the Full Court has used the word “disadvantage” – and they appear to have used the word “disadvantage” and “loss” interchangeably – in our submission, they are looking for some quantifiable downstream prejudice.

GAGELER J:   Just looking at the sentence in paragraph 114 to which you have drawn attention, do you go so far as to say that not to have the subcontractors’ workers working for three days was without more prejudice?

MR BOURKE:   Correct, correct. 

EDELMAN J:   That is because your submission is, essentially, that any failure to receive something to which you are entitled, irrespective of whether it has no consequences at all, is always going to be prejudice.

MR BOURKE:   Correct, correct.  It is manifestly prejudice that you are not getting the services you were entitled to or you are not getting the labour that you were entitled to.

EDELMAN J:   So, you would accept, though, that that uses prejudice in a very unusual sense of including no consequences whatsoever.

MR BOURKE:   When you say “consequence”, there is the consequence of, I did not get what I expected to get.  But, there may be – given the very nature of a building site it might be that you put in alternative proposals or you brought in a different contractor in order to cover that.

EDELMAN J:   It may also be that not receiving that to which you are entitled turns out to be a great advantage to you.  That is not this case but there you would say you are still prejudiced.

MR BOURKE:   Correct.  This unmasks the problem because if the Full Court is correct and you have a union that is otherwise taking adverse action because you have exercised a workplace right, but fortuitously or not, the head contractor is able to avoid suffering a loss – a dollar and cents loss – you have no action.  You cannot bring an action under the current construction by the Full Court.  But, if the head contractor is unable to cover those losses and there are losses suffered, you do have an action.

GORDON J:   Is that right?  I mean, it is not useful to deal with hypotheticals, but one can imagine there would still be some loss in a circumstance where you have had to bring in a new team to replace the one that has been done.  So, it is a question of proof, is it not?  There are two questions.  You could have asked questions as the prosecutor and adduced evidence of even a minor form of prejudice which has some material consequence attached to it.  There is nothing preventing you doing that.  Because the reason why it is important – it is important for the relief, the sanction.  The sanction would be proportionate to the loss.

MR BOURKE:   In our submission, of course the magnitude of the loss is relevant if you came to issues of compensation where, in the relevant provision, they talk of loss – they use the word “loss”, not “prejudice”.  But, in our submission, in the nature of a building site where there are numerous contracts, it is not necessarily going to be a simple matter to prove that you suffered loss because there was an interruption of work for a particular period on a project that may be running for years. 

Also, under the Full Court’s approach, the loss has to fall at the feet of the head contractor.  So, if you have an arrangement where the loss is picked up by the principal – the owner of the project – you cannot bring an adverse action case because you have not met the test of prejudice of some type of downstream loss.  In our submission, that cannot have been the intention of the legislature.

EDELMAN J:   Where does the Full Court say that the loss must be only the loss of the head contractor?

MR BOURKE:   The Full Court spoke of the fact that the disadvantage – the fourth line of 114, application book 109:

may or may not have disadvantaged John Holland in some way financially or otherwise –

So, if the loss is borne by the principal, there is no loss by the head contractor – which is the intent of the protection of the section – then you have no right to bring an adverse action case.  In our submission, the Full Court overstated that it could have been a straightforward matter simply to lead some evidence because you do not know, over a period of time, how a project may play out and whether ‑ ‑ ‑

EDELMAN J:   Does not paragraph 114 – the sentence you read to us – have to be read with paragraph 112?

MR BOURKE:   In our submission, that does not dilute that.  What that was a discussion of is what is the relevant contract in respect of the independent contractor.  But, in our submission, 114 makes it clear – also, 113, at application book 109, second line, you are looking at financial loss or other disadvantage to John Holland.  So, whether you can bring an adverse action case or not, will now be determined, on the Full Court’s construction, on how it plays out in a dollar and cents, or downstream, fashion where there has been a clear withdrawal of labour or withdrawal of services.

GORDON J:   I do not know that those first two lines go that far, do they, Mr Bourke?  I think that what they are saying is that we would like to have before us, by a prosecutor, some evidence that demonstrates in a material way – and I use “material” in a sense of substantive, rather than substantial identification of prejudice rather than just the fact that work was closed down for three days.  Now, that might be that work stopped but stopped resulting in the following three things.  This is an evidence case, is it not – evidence, in the sense of lack of evidence. 

MR BOURKE:   In our submission, where the Full Court is saying they want some quantifiable loss and they talk about financially, or otherwise, in our submission ‑ ‑ ‑

GORDON J:   Or other disadvantage.

GAGELER J:   I am not sure they are talking about quantifiable loss, are they?

MR BOURKE:   They may not exclusively but it points to other type of features they are looking for and ‑ ‑ ‑

GAGELER J:   They are looking for something to be pointed to in the evidence beyond the mere withdrawal of labour.  And your case, as I understand it, is withdrawal of labour per se – and I presume in every case is sufficient.

MR BOURKE:   Correct.  And, we say, that gives weight and force to the word “direct” – “directly” prejudice, as distinct from “indirectly” prejudicing and looking for downstream or consequential loss.  In our submission, the narrower construction – you are opening up for evidentiary debates about whether there was any fallout or true loss or whether you made up or avoided the loss because you got in other people who may have been cheaper or better.  Adverse action cases – the ability to bring such a case – should not be played out based on those types of evidentiary matters, in our submission.

GAGELER J:   Were the provisions of the subcontracts in evidence?

MR BOURKE:   No, no.  Can we further say that this is the only item specifically directed to the protection of independent contractors in relation to adverse action taken by a union or a union official?  And, if there are layers of requirements to establish prejudice – as are currently established by the Full Court – there is the risk that those protections will be significantly watered down.  Unless there are any other matters.

GAGELER J:   Thank you.  We do not need to hear from you, Mr Crawshaw.

We are not persuaded that there are sufficient prospects of success on any appeal to warrant the grant of special leave to appeal in this matter.  Special leave to appeal is refused with costs.

MR BOURKE:   If the Court pleases.

AT 9:45 AM THE MATTER WAS CONCLUDED