Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd
[2006] FCA 1777
•19 DECEMBER 2006
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd [2006] FCA 1777
TRADE PRACTICES – restrictive trade practices – applicant alleged union liable as an accessory to company’s contraventions of ss 45E and 45EA of Trade Practices Act 1974 (Cth) – where contract, arrangement or understanding between company and union – whether contained provision included for purpose of preventing or hindering company from acquiring goods or services from electrical contractors who did not have certified agreement with the union – consideration of ‘contract, arrangement or understanding’ and ‘purpose’ – where applicant relied on inferences to be drawn from circumstantial and indirect evidence – where union did not call any witnesses or rely on any affidavit evidence
TRADE PRACTICES – whether accessorial liability provisions of Trade Practices Act apply to union that is party to contract, arrangement or understanding contravening ss 45E and 45EA – whether legislature intended to exclude union from liability under ss 76 and 80 – accessorial liability provisions apply to union – consideration of scope of declaratory and injunctive relief
Trade Practices Act 1974 (Cth) ss 4, 4D, 4F, 45, 45D, 45E, 45EA, 76, 80
Workplace Relations Act 1996 (Cth)
Trade Practices (Boycotts) Amendment Act 1980 (Cth)
Workplace Relations and Other Legislation Amendment Act 1996 (Cth)Australian Competition and Consumer Commission v Edison Mission Operations and Maintenance Loy Yang Pty Ltd [2006] FCA 853 referred to
Gibbins v Australasian Meat Industry Employees’ Union (1986) 12 FCR 450 approved
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Corke Instrument Engineering Australia Pty Ltd (2005) 223 ALR 480 considered
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited
Keith Russell Simplicity Funerals Pty Ltd v Cremation Society of Australia (ACT) Ltd (1982) 57 FCR 472 cited
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2004) 141 FCR 183 considered
Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission [2005] ATPR 42-078 applied
Trade Practices Commission v Email Ltd (1980) 43 FLR 383 considered
Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 considered
Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 5 ALR 465 cited
Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 2) (1979) 26 ALR 609 cited
Federal Commissioner of Taxation v Lutovi Investments Pty Ltd (1978) 140 CLR 434 cited
Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 cited
Australian Competition and Consumer Commission v APCO Service Stations Pty Ltd [2006] HCATrans 272 cited
Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 applied
Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 5 FCR 140 cited
Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 cited
R v Associated Northern Collieries (1911) 14 CLR 387 cited
Jones v Dunkel (1959) 101 CLR 298 followed
News Ltd v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 applied
Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 followed
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 cited
South Sydney District Rugby League Football Club Ltd v News Ltd (2001) 111 FCR 456 considered
ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 applied
Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 cited
Australian Broadcasting Commission v Parish (1980) 43 FLR 129 cited
Australian Builders’ Labourers’ Federated Union of Workers Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 cited
Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 considered
Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 considered
Briginshaw v Briginshaw (1938) 60 CLR 336 followed
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 distinguished
L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 cited
Australian Workers’ Union v John Holland Pty Ltd (2001) 103 IR 205 considered
Mallan v Lee (1949) 80 CLR 198 considered
Giorgianni v The Queen (1984) 156 CLR 473 considered
R v Tyrell [1894] 1 QB 710 cited
Yorke v Lucas (1985) 158 CLR 661 followed
Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 cited
Pereira v Director of Public Prosecutions (1998) 82 ALR 217 cited
Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 cited
Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334 cited
Electricity Supply Association of Australia v Australian Competition and Consumer Commission (2001) 113 FCR 230 cited
ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248 considered
Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 considered
Trade Practices Commission v Mobil Oil Australia Ltd (1985) 4 FCR 296 cited
Trade Practices Commission v Walplan Pty Ltd (1985) 7 FCR 495 cited
Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563 cited
BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 citedAUSTRALIAN COMPETITION AND CONSUMER COMMISSION v IPM OPERATION AND MAINTENANCE LOY YANG PTY LTD (FORMERLY KNOWN AS EDISON MISSION OPERATION AND MAINTENANCE LOY YANG PTY LTD) (ACN 055 563 696) AND COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
VID 79 OF 2005YOUNG J
19 DECEMBER 2006
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 79 OF 2005
BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND:
IPM OPERATION AND MAINTENANCE LOY YANG PTY LTD (FORMERLY KNOWN AS EDISON MISSION OPERATION AND MAINTENANCE LOY YANG PTY LTD) (ACN 055 563 696)
First RespondentCOMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Second Respondent
JUDGE:
YOUNG J
DATE OF ORDER:
19 DECEMBER 2006
WHERE MADE:
MELBOURNE
THE COURT DECLARES THAT:
1.Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent:
(a)aided, abetted, counselled, procured and induced the First Respondent to make; and
(b)was knowingly concerned in and party to the First Respondent making,
a contract, arrangement or understanding with the Second Respondent which contained a provision that:
(c)the First Respondent would not engage a Contractor to perform work at the Loy Yang B power station in Victoria unless that Contractor had a current certified agreement with the Second Respondent; and
(d)was included in the contract, arrangement or understanding for the purpose of preventing or hindering the First Respondent from acquiring goods or services from Contractors who did not have a current certified agreement with the Second Respondent,
with the consequence that the First Respondent thereby contravened s 45E(3) of the Trade Practices Act 1974 (Cth).
2.Prior to August 2001, the First Respondent was accustomed to acquire goods or services from certain Contractors, and in those circumstances, in August 2001, the Second Respondent counselled, procured and induced the First Respondent to give effect to the provision of the contract, arrangement or understanding with the Second Respondent referred to in paragraph 1 of these declarations, with the consequence that the First Respondent thereby contravened s 45EA of the Trade Practices Act.
AND THE COURT ORDERS THAT:
3.The Second Respondent, whether by itself, its officers, servants or agents, be restrained for a period of three (3) years from the date of these orders from:
(a)aiding, abetting, counselling or procuring the First Respondent to make;
(b)inducing or attempting to induce by threats or promises the First Respondent to make; or
(c)being directly or indirectly knowingly concerned in or party to the First Respondent making,
a contract, arrangement or understanding with the Second Respondent containing a provision that:
(d)the First Respondent will not engage a Contractor to perform work at the Loy Yang B power station in Victoria unless the Contractor has a current certified agreement with the Second Respondent; and
(e)is included in the contract, arrangement or understanding for the purpose of preventing or hindering the First Respondent from acquiring goods or services from a Contractor who does not have a current certified agreement with the Second Respondent.
4.The Second Respondent, whether by itself, its officers, servants or agents, be restrained for a period of three (3) years from the date of these orders from:
(a)counselling or procuring; or
(b)inducing or attempting to induce by threats or promises,
the First Respondent to give effect to a provision of a contract, arrangement or understanding with the Second Respondent which the First Respondent made in contravention of s 45E(3) of the Trade Practices Act, being a provision that:
(c)the First Respondent will not engage a Contractor to perform work at the Loy Yang B power station in Victoria unless the Contractor has a current certified agreement with the Second Respondent; and
(d)is included in the contract, arrangement or understanding for the purpose of preventing or hindering the First Respondent from acquiring goods or services from a Contractor who does not have a current certified agreement with the Second Respondent.
AND THE COURT NOTES THAT:
For the purposes of these declarations and orders:
(a)‘Contractor’ means a contractor who:
(i)the First Respondent is accustomed to acquire goods or services from; and
(ii)employs people whose employment is governed by the National Electrical, Electronic & Communications Contracting Industry Award 1998 or its equivalent.
(b)The First Respondent is accustomed to acquire goods or services from a Contractor where:
(i)the First Respondent is a regular acquirer of such goods or services from the Contractor; or
(ii)when last acquiring such goods or services, the First Respondent acquired them from the Contractor; or
(iii)at any time within the immediately preceding three (3) months, the First Respondent acquired such goods or services from the Contractor,
but not where goods or services have been acquired by the First Respondent from the Contractor over a period of time, that period has ended, and thereafter the Contractor has refused to supply such goods or services to the First Respondent.
(c)A ‘certified agreement’ means an agreement certified under the Workplace Relations Act 1996 (Cth).
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
VID 79 OF 2005
BETWEEN:
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND:
IPM OPERATION AND MAINTENANCE LOY YANG PTY LTD (FORMERLY KNOWN AS EDISON MISSION OPERATION AND MAINTENANCE LOY YANG PTY LTD) (ACN 055 563 696)
First RespondentCOMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Second Respondent
JUDGE:
YOUNG J
DATE:
19 DECEMBER 2006
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
This proceeding is brought by the Australian Competition and Consumer Commission (‘ACCC’) against the first respondent, IPM Operation & Maintenance Loy Yang Pty Ltd, which was formerly known as Edison Mission Operation & Maintenance Loy Yang Pty Ltd (‘Edison’), and the second respondent, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘CEPU’). The allegations at the heart of the proceeding are that the respondents were parties to a contract, arrangement or understanding which contravened ss 45E(3) and 45EA of Pt IV of the Trade Practices Act 1974 (Cth) (‘TPA’). Essentially, the ACCC alleges that the contract, arrangement or understanding included a provision that Edison would not engage any electrical contractor to perform work at the Loy Yang B power station (‘Loy Yang B’) in the Latrobe Valley in Victoria unless the contractor had entered into an agreement with the CEPU which was certified under the Workplace Relations Act 1996 (Cth). The parties and the witnesses used the terms ‘certified agreement’ and ‘enterprise bargaining agreement’ or ‘EBA’ interchangeably to describe this kind of agreement. The term ‘electrical contractor’ was used by the parties and the witnesses to refer to a contractor who employs people whose employment is governed by the National Electrical, Electronic and Communications Contracting Industry Award 1998. I will adopt this shorthand expression in these reasons for judgment.
Edison and the ACCC have agreed on terms of settlement for the resolution of the proceedings. Pursuant to those terms of settlement, Edison has filed a defence in which it admits to contraventions of ss 45E(3) and 45EA of the TPA. Subject to orders of the Court, Edison and the ACCC have also agreed on proposed orders concerning declarations, pecuniary penalties and costs.
The CEPU contests the allegations against it. On 7 April 2006, I ordered that the contested proceeding between the ACCC and the CEPU concerning the CEPU’s liability under ss 76 and 80 of the TPA be heard prior to the penalty hearing as between the ACCC and Edison: see Australian Competition and Consumer Commission v Edison Mission Operations and Maintenance Loy Yang Pty Ltd [2006] FCA 853. There was no appearance for Edison at the hearing of the contested proceeding between the ACCC and the CEPU.
The hearing proceeded by viva voce evidence. The ACCC called five witnesses. Four of the witnesses, Colin Sutherland (‘Sutherland’), Paul Burns (‘Burns’), Wayne Buckley (‘Buckley’) and Mark Pearson (‘Pearson’) were employees of Edison or a related company at all relevant times. Sutherland was a general manager of Edison Mission Energy Australia Pty Ltd (‘EME’) and a director of Edison and certain of its related entities including Valley Power Pty Ltd (‘Valley Power’). Burns was the manager of community and employee relations for EME and was stationed at Loy Yang B. Sutherland and Burns had the principal carriage of discussions between Edison and the CEPU in August 2001. Pearson was the maintenance manager of EME’s plant at Loy Yang B. Buckley held the position of maintenance coordinator for EME at Loy Yang B and reported directly to Pearson. Nothing in this case turns on any distinction between the various corporate entities within the Edison group of companies and, where the context permits, I refer to them simply as ‘Edison’. The other witness was David Nabulsi (‘Nabulsi’), the sole director of a company called DJN Electrical & Instrumentation Pty Ltd (‘DJN’). Prior to August 2001, DJN regularly supplied services to Edison at Loy Yang B in its capacity as an electrical contractor.
In addition, the ACCC relied on an affidavit of Rodney McKemmish (‘McKemmish’) sworn 7 September 2006. Exhibit RMCK-3 to McKemmish’s affidavit is his expert forensic report in relation to the authenticity and source of certain emails which were discovered by Edison and which are relevant to the ACCC’s case against the CEPU. The affidavit was received in evidence subject to the CEPU’s objection to those parts of the affidavit in which McKemmish purported to express an opinion identifying the author of certain emails. The objection is a good one and I uphold it. McKemmish is not in a position to give admissible evidence concerning the authorship of the emails. His evidence is only admissible to the extent to which he addresses the authenticity and technical source of the emails. Apart from this objection, the CEPU did not dispute McKemmish’s evidence.
The CEPU did not call any witnesses or rely on any affidavit material in support of its case.
THE ISSUES
There are two main issues in this proceeding. The first concerns the nature, scope and terms of the contract, arrangement or understanding that was made or arrived at between the respondents. The ACCC submitted that the true nature, scope and terms of the contract, arrangement or understanding can be inferred from the circumstances surrounding a written heads of agreement between Edison and the CEPU, which was signed on behalf of Edison on 23 August 2001 (‘the heads of agreement’). The ACCC’s primary argument was that the contract, arrangement or understanding was not confined to the literal terms of the heads of agreement, and that it prevented or hindered Edison from acquiring services from electrical contractors including DJN because they did not have a certified agreement with the CEPU. Further, the ACCC argued that the contract, arrangement or understanding was given effect by Edison. Alternatively, the ACCC argued that the same consequences follow even if the contract, arrangement or understanding is entirely embodied in the heads of agreement.
The CEPU advanced a narrower approach, submitting that the contract, arrangement or understanding between the respondents was confined to the heads of agreement, which, on its terms, did not contravene ss 45E(3) of the TPA. The CEPU submitted that the events leading up to the signing of the heads of agreement are merely evidence of negotiations between the parties. It submitted that those events did not give rise to a ‘meeting of the minds’ between Edison and the CEPU that is sufficient to attract liability under ss 45E(3).
The second issue concerns the CEPU’s accessorial liability under ss 76(1) and 80(1) of the TPA. In accordance with their respective terms, ss 45E and 45EA impose liability on a person who enters into the prohibited arrangement with an organisation of employees (ie, a union), an officer of such an organisation, or a person acting for and on behalf of such an officer or organisation. Neither s 45E nor s 45EA imposes liability on the union. The CEPU argues that ss 45E and 45EA make the union a principal to the contravention but do not impose liability on it and that, in those circumstances, the CEPU cannot be liable under ss 76 and 80 of the TPA as an accessory to the alleged contraventions of ss 45E(3) and 45EA.
THE PEAKER PLANT
Edison is one of a number of related companies involved in the operation of Loy Yang B. In April 2001, Valley Power, a corporation related to Edison, agreed to acquire land from the State of Victoria adjacent to Loy Yang B for the purpose of building a new gas fired electricity generation plant (‘the peaker plant’). The State required that the peaker plant be operational by February 2002, so as to meet the demands of peak electricity use during the summer months. To this end, the agreement for the acquisition of land from the State required construction of the peaker plant to proceed in accordance with a strict timetable. Crucially, it was agreed that if the peaker plant was not ready for commercial operation by the first week of February 2002, the land would revert to the State and no compensation would be payable to Valley Power.
Valley Power entered into contracts with Simon Engineering (Australia) Pty Ltd (‘Simon Engineering’) dated 10 July 2001 and 26 July 2001 pursuant to which Simon Engineering agreed to undertake preliminary work in relation to the peaker plant. However, there were delays in commencing construction work, and from July 2001 until September 2001 Valley Power was in negotiation with Simon Engineering about the terms of the contract pursuant to which Simon Engineering would begin construction of the peaker plant.
In July 2001, Simon Engineering informed Sutherland that the commencement of construction work on the peaker plant was being delayed because it was unable to get certain unions, including the CEPU, to sign a site labour agreement (‘the Simon Engineering site agreement’).
Time was of the essence for Edison, as Valley Power was behind schedule to complete construction of the peaker plant by February 2002. Edison was concerned that further delays might force it to cancel the project altogether.
DJN ELECTRICAL AND INSTRUMENTATION PTY LTD
In 2001, DJN did not have a certified agreement with the CEPU. In fact, DJN had never entered into a certified agreement or enterprise bargaining agreement with the CEPU.
As the principal and sole director of DJN, Nabulsi knew that Peter Mooney (‘Mooney’) was the local area representative for the CEPU. Between 1998 and 2001, Nabulsi had several discussions with Mooney about the possibility of DJN signing an enterprise bargaining agreement with the CEPU. However, due to what Nabulsi described as the inflexibility of the CEPU’s ‘pattern’ or standard enterprise bargaining agreement, he was not prepared to sign an agreement on behalf of DJN.
From about 1999 until July 2001, DJN provided services as an electrical contractor to Edison at Loy Yang B. DJN supplied those services pursuant to a service agreement with Edison, whereby DJN was engaged to supply services to Edison as an electrical contractor at Loy Yang B either on a ‘fixed price’ or ‘hourly rate’ basis. In 2001, DJN provided services to Edison at Loy Yang B in the months leading up to August 2001.
In 1999 and again in 2000, Nabulsi signed a service agreement on behalf of DJN for a twelve month period that ended, respectively, on 21 July 2000 and 21 July 2001. On 19 June 2001, Edison wrote to DJN advising that the service agreement between Edison and DJN was due to expire on 21 July 2001. Subject to agreement on price, Edison sought to renew the service agreement for a period of three years. The letter from Edison asked DJN to sign a formal contract for the supply of services, complete the contract schedules, and return the documents to Edison.
The documents were not signed on behalf of DJN or returned to Edison as requested by the letter of 19 June 2001. This was because Nabulsi was informed in August 2001 that Edison would no longer be utilising DJN’s services as DJN had declined to enter into a certified agreement with the CEPU.
THE EVENTS OF AUGUST 2001
Although much of the evidence was not contested, there were a number of specific areas in which the evidence, its effect, or the inferences to be drawn from it, were in dispute. On a number of issues, questions were also raised as to whether the account given by one witness should be preferred to that given by another. My findings of fact as to the events that transpired in August 2001 are incorporated in the discussion that follows. I will return to the question whether those events support the conclusion that there was a contract, arrangement or understanding between Edison and the CEPU that contravened s 45E(3) after I have considered the relevant legal principles.
The 9 August meeting
On Thursday 9 August 2001, Industrial Relations Victoria convened a meeting in an attempt to resolve the impasse to the signing of the Simon Engineering site agreement (‘the 9 August meeting’). The meeting was attended by two representatives from Industrial Relations Victoria, a representative of the State Treasurer, representatives from Edison, and a representative from the CEPU, Dean Mighell (‘Mighell’). Mighell held the position of state secretary of the Electrical Trades Union (Victorian branch) (‘ETU’). The ETU is a division of the CEPU. The representatives from Edison were Sutherland and Burns.
The most specific account of the 9 August meeting was given by Burns. He said that Mighell raised two issues on which the CEPU required Edison’s agreement. The first issue was that the CEPU required Edison’s agreement that its representatives could have access to the Loy Yang B site for the purposes of interviewing union members on site. The second issue was that the CEPU required Edison’s agreement that electrical contractors who perform work at the Loy Yang B site must have an enterprise bargaining agreement to which the CEPU was a party.
Burns made a handwritten note at the 9 August meeting of the matters that were discussed. It stated:
‘Meeting with Dean Mighell. ETU
Present:1.Col Sutherland
2.DM. issues raised before.
access to site
EBAs in place – ongoing as well as outages.3.PB position
4.Environment issue’
The second half of the page on which Burns wrote this note relates to a telephone conference which took place on 10 August 2001. The telephone conference is discussed below.
By reference to his note of the 9 August meeting, Burns expanded somewhat on his evidence. He said that Sutherland spoke first at the meeting and then Mighell raised the issues on which the CEPU wanted an agreement. In doing so, Mighell said that Edison was aware of the problems as the issues had been raised before. The issues were that the CEPU required access to the Loy Yang B site for the purposes of interviewing its members working on site, and it required that EBAs be in place for ongoing electrical work as well as planned outages at the Loy Yang B site.
Although Burns understood that the reason for the meeting was to attempt to get the Simon Engineering site agreement signed, he said that Mighell did not say anything about the site agreement during the course of the meeting. Nor did he recall Sutherland or anyone else at the meeting saying anything about the site agreement. According to Burns, Sutherland said that Edison would consider the site access issue and the electrical contractors issue internally, and that Sutherland would respond to Mighell on the electrical contractors issue and Burns would respond on the site access issue.
Sutherland’s evidence concerning these matters was not as precise. He did not have any direct recollection of the actual words used by Mighell. His recollection was that Mighell said that there were no bans affecting the Loy Yang B site but Mighell did have some concerns that he wanted addressed. Only two of the concerns affected Edison. The first was that there was a need to improve access for CEPU officials to the Loy Yang B site. The second was that where there were electrical contractors on site, he wanted ETU members protected through an enterprise bargaining agreement. Sutherland’s evidence was that he said that Edison would need to consider those matters internally and would revert to the ETU about finding a solution.
On this topic, and on other topics, I prefer the evidence given by Burns to that given by Sutherland wherever there is any substantial difference or conflict in their evidence. I have based this assessment on the demeanour of the two witnesses and a careful consideration of the nature and content of their evidence. Generally speaking, Sutherland’s evidence tended to be vague and somewhat obfuscatory in relation to key events. His evidence concerning the 9 August meeting is one instance of this; other instances will be identified as I proceed to make findings about the relevant events. In contrast, I found Burns to be an exemplary witness who provided forthright, honest and well-considered responses to the questions he was asked.
Other events on 9 August
At 3.33 pm on 9 August, Burns received an email from his personal assistant, Wendy Jongerius, which stated:
‘Howdy. Here is the doc with the keyed clause in it.’
The email attached a document called ‘Clause.doc’ which read:
‘All Contactors performing work at (insert Company name) under the scope of the Electrical, Communications Contracting Industry Award, shall have a current certified Agreement with the CEPU Electrical Division, Victorian Branch prior to commencing work at (insert Company name).’
Burns could not recall precisely where the words of the document came from and he had no clear recollection of dictating them. Burns said that he had not asked anyone to provide him with a clause.
Later that afternoon, Burns sent an email at 6.07 pm to Sutherland on the subject ‘CEPU Proposed Agreement’ (‘Burns’ 9 August email’). The email read:
‘Dean Mighell’s clause:
Regards – Paul’
The attached document contained the text of ‘Clause.doc’ extracted above. In full, the document read:
‘All Contactors performing work at (insert Company name) under the scope of the Electrical, Communications Contracting Industry Award, shall have a current certified Agreement with the CEPU Electrical Division, Victorian Branch prior to commencing work at (insert Company name).
I think the correct title may be National Electrical, Electronic and Communications Contracting Industry Award 1998.’
In examination in chief, Burns was asked why he had referred to the clause as ‘Dean Mighell’s clause’ in his email to Sutherland:
‘[COUNSEL]: … So why did you describe it in the text of the email as:
Dean Mighell’s clause.
? --- [BURNS]: I believe it was a clause that would assist Mr Sutherland in resolving the issue that he was to deal with.
[COUNSEL]: And in what way did you think it would resolve the issue that Mr Sutherland had to deal with? --- [BURNS]: I believe that was the gist of what Mr Mighell was seeking.’
Burns was also asked where he sourced the name of the award in the second paragraph of the document. Burns said he thought he looked up the correct title of the award on the internet, and then made the correction and sent the email to Sutherland. Burns said he had not been asked to provide a clause to Sutherland.
The ACCC invited me to infer that Burns was provided with a clause by Mighell or the CEPU for inclusion in the proposed agreement between Edison and the CEPU. I am not prepared to infer that the drafting of the clause originated with Mighell or the CEPU. I find that Burns dictated the clause. He had not asked anyone to provide him with the clause, and he had not been asked to provide a clause to Sutherland. I also accept that the words of the clause represented Burns’ understanding of the ‘gist’ of what Mighell had requested at the 9 August meeting. Burns provided the clause to Sutherland because he thought that it would assist Sutherland in resolving the electrical contractors issue.
The text of the clause tends to support Burns’ description of the request that Mighell made at the 9 August meeting, namely that Edison agree that all electrical contactors must be covered by a current certified agreement with the CEPU before they would be permitted to perform work at Loy Yang B. After Sutherland received Burns’ email, he did not raise any objection to the way in which the clause described the agreement that the CEPU was proposing.
A teleconference also took place on the afternoon of 9 August, after the meeting with Mighell, between several Edison personnel to discuss how Edison would respond to the issues raised by Mighell (‘the 9 August teleconference’). The participants in the 9 August teleconference were Sutherland, Burns, Pearson, Buckley and Barry Warrillow (‘Warrillow’). Warrillow was the Loy Yang B plant manager. During the teleconference, Burns advised the others that Edison was negotiating with Mighell to try to resolve issues relating to the construction of the peaker plant and the finalisation of the Simon Engineering site agreement. He said that one of those issues related to Edison’s practice of engaging electrical contractors who did not have a certified agreement with the CEPU. Pearson gave evidence that Burns reported that, in order to get the site agreement up, Edison was seeking to negotiate an agreement with the CEPU that only electrical contractors who had a certified agreement with the CEPU would be permitted on the Loy Yang B site. In the teleconference, Burns asked Pearson and Buckley to investigate the cost implications of such an agreement with the CEPU.
Immediately after the teleconference on 9 August, Warrillow also asked Pearson to look at the potential implications of the CEPU’s demand and to identify which contractors were likely to be affected by an agreement of that kind. Pearson then asked Buckley, who worked for him, to collate the information that Edison had on its files in relation to contractors that it had service agreements with and to ascertain further information in relation to their pay rates.
At 4.06 pm on 9 August, Pearson sent an email to Warrillow, Burns and Buckley on the subject of ‘Contractors and EBA’s’. Pearson’s email addressed a number of issues relevant to the review he had been asked to carry out. The email identified DJN as an electrical contractor who did not have an EBA with the union. The email stated:
‘Barry, in reviewing the Contractors and their EBA’s there are a couple of issues.
1. If the ETU is saying that the Agreement must be certified that is one thing. If they are saying that the Agreement MUST state that it covers Power Station Sites then this is quite different.
…There is also the issue that some Contractors may not be able to get the Union to sign on because they will not agree to a 36 hour week. Excluding these companies may assist the Unions in pushing the 36 hour week.
Assuming that any State Wide agreement is considered to be satisfactory then the types of contractors which could be in the spotlight would be as follows. Some of these have agreements however they will not have the Union as signatories.
DJN Electric – Carry out smaller electrical works onsite.
- Work done under “The National Electrical, Electronic & Communications Contracting Industry Award 1998”…’Buckley’s recollection was somewhat different. He said that it was on the afternoon of 10 August that he was asked to investigate the financial consequences for Edison if the proposed arrangement with the CEPU was put into place. Buckley prepared a spreadsheet analysing the financial implications for Edison by 4.46 pm on 10 August. In my view, the probabilities are that Pearson’s recollection is correct and the instruction was first given on 9 August. However, nothing turns on the different recollections of Pearson and Buckley in this regard.
The teleconference of 10 August
On the afternoon of Friday 10 August, a teleconference involving a number of Edison executives and staff was held to discuss the situation with the CEPU (‘the 10 August teleconference’). Sutherland said that the teleconference commenced at about 2.00 pm. The participants in the teleconference included Warrillow, Pearson, Buckley and Burns in Warrillow’s office at Loy Yang B; Sutherland was present in the Melbourne office; and Robert Driscoll, the vice president of Edison in California, and Joseph Bacchi, the regional operations manager in the Asia Pacific Region, were elsewhere. According to Burns, Chris Webber, general counsel for Edison, may also have been present but did not participate in the discussion.
Burns’ file note of the 10 August teleconference states:
‘Telephone hook up R. Driscoll, C Sutherland, J Bacchi, C Weber (LV) BW, MP, WB & PB
- Col – outlined mtg above and proposed settlement.
1 Grandfather existing contracts
2.’The vertical arrow in the note points to the first part of the page that sets out Burns’ note of the 9 August meeting: see [22] above.
In his evidence, Burns said that Sutherland outlined what had happened at the 9 August meeting and proposed that the issues be settled. There was then general discussion about the two issues that the CEPU had asked the company to address concerning site access and the requirement that contractors have a certified EBA in place with the CEPU. By the end of the meeting, Burns said that agreement was reached as to what Edison was going to do:
‘We in essence agreed that we would only employ electrical contractors that had a certified EBA in place and that the one contractor that – the only contractor that seemed to be impacted which was DJN, would continue the work which it had been commissioned to do until that had concluded.’
Burns recollected that Pearson or Buckley mentioned during the teleconference that the only contractor who appeared to be affected by this agreement was DJN. Burns also gave evidence that the reference to ‘Grandfather existing contracts’ in his handwritten note referred to the fact that DJN would be permitted to continue work it had already been commissioned to do until that work was concluded.
Pearson’s understanding of what was discussed in the teleconference was that Edison was minded to proceed down the path of entering into an agreement with the CEPU that would put a limitation on Loy Yang B maintenance, such that only electrical contractors who had certified agreements with the CEPU would be engaged. Pearson said it was explained that Edison was proceeding down this path in order to get the Simon Engineering site agreement for the peaker plant signed, so that construction of the plant could commence. Pearson also said that towards the end of the meeting, or just afterwards, Warrillow instructed him, and Buckley, that they were not to engage electrical contractors who did not have a certified agreement with the CEPU and that they should look at putting that instruction into place.
Buckley gave evidence to similar effect. He said that there was general discussion at the teleconference about entering into an arrangement with the CEPU that Edison would only engage electrical contractors at Loy Yang B who were covered by an EBA with the CEPU. He also said that the arrangement was being discussed because it was seen as a prerequisite to reaching a site agreement for the construction of the peaker plant. He understood that the effect of the arrangement would be that some electrical contractors that Edison was currently engaging at that point of time who did not have an EBA with the CEPU would be excluded from the site. He had in mind one particular contractor who would be excluded, namely DJN, but he did not recall mentioning DJN’s name during the course of the teleconference. Buckley said that the proposed arrangement represented a change in Edison’s practices.
Sutherland’s evidence was much vaguer and it was discordant with the evidence given by the other witnesses. Like the other witnesses, he said that the teleconference commenced with him giving a report of the 9 August meeting held with Industrial Relations Victoria and the ETU, in which he explained the union’s concerns. However, he said that no solution was agreed to at the meeting, other than the fact that Burns was to look at ways and means of improving access to the site for the union and that Driscoll simply instructed him (ie Sutherland) to fix the issue concerning electrical contractors as quickly as possible. He said his response to Driscoll was that he would endeavour to find a solution as quickly as possible.
I prefer, and accept, the evidence given by Burns, Pearson and Buckley to that given by Sutherland, to the extent of any inconsistency. In particular, I find that the discussion at the 10 August teleconference was to the effect that Edison would agree with the CEPU that it would only engage electrical contractors who had a certified EBA in place with the union to perform work at Loy Yang B, and that Sutherland, Burns and others were instructed by Driscoll to ensure that such an agreement was made as quickly as possible. I accept Burns’ further evidence that the discussion at the 10 August teleconference established the principles on which Edison would proceed in its discussions with the CEPU, and that there was no discussion about the particular steps that would be taken to give effect to any such agreement with the CEPU. I also find that the discussion in the 10 August teleconference made it very clear that the reason for proposing an agreement with the CEPU of the kind discussed was to get the Simon Engineering site agreement signed, thereby enabling the construction of the peaker plant to proceed without further delay. I accept Burns’ evidence that DJN was specifically mentioned as the only contractor who would be affected.
The meeting between Sutherland and Mighell on 10 August
Immediately after the 10 August teleconference, Sutherland arranged an urgent meeting with Mighell at the CEPU offices in Carlton. Sutherland met with Mighell at 3.00 pm (‘the 10 August meeting’).
Against this backdrop, Sutherland’s evidence of what happened at his meeting with Mighell at 3.00 pm is far from satisfactory. Sutherland gave evidence that, from his point of view, the purpose of the 10 August meeting was to ‘get some face to face understanding’ about the CEPU’s position and to confirm with Mighell the issues discussed at the 9 August meeting. He said that Mighell reiterated the concerns he had raised at the 9 August meeting. In particular, Mighell said that the concerns pertinent to Loy Yang B were still the access issues for officials of the ETU and he was seeking the protection of EBA coverage for any ETU members who might from time to time be engaged in contract work at Loy Yang B. Sutherland remembered Mighell using the words ‘protection of members’. He said that Mighell put the issues in earnest terms and the general tenor of the discussion was that these were serious issues that Edison would have to find a way to address. Sutherland said he did not offer Mighell a solution that day because he did not have one. But he said that he made it clear to Mighell that Edison would return as soon as it could to offer something to the union on both issues.
Although there is no contrary account of the 10 August meeting, I have reservations about whether Sutherland gave a full and frank account of it. This is particularly so given the consensus agreement that was reached by the relevant executives of Edison at the 10 August teleconference, the urgency with which Sutherland arranged the meeting with Mighell, and the terms of a letter to Mighell that Sutherland subsequently signed on 13 August. There is, however, no direct evidence that Sutherland told Mighell at the 10 August meeting that Edison intended, or at least was disposed, to enter into an agreement with the CEPU to the effect that it would not engage electrical contractors to carry out work at the Loy Yang B site if they had not entered into a certified enterprise bargaining agreement with the CEPU.
Other events on 10 August
Buckley forwarded his financial analysis to Pearson by email at 4.46 pm on 10 August. The spreadsheet examined the rates paid to certain contractors, including DJN, and assessed the financial impact if Edison increased pay rates to the level prescribed in EBAs that had been signed by the CEPU. Pearson forwarded the spreadsheet on to Warrillow within the hour, under cover of an email which stated:
‘The spread-sheet below shows the cost differences, based on expenditure for last year. The contractors also use a mix of full time and casual workers. The differences between full time rates is, as seen, very small. The differences in casual rates gets up to 16%. For the sake of determining worst case the spreadsheet has taken the casual rate difference and applied this to the expenditures from the previous year.
As noted in the sheet DJN is the only electrical contractor concerned.
I do not believe we have any long term commitments to any Electrical Contractors (who do not have a Union EB) however I will check fully on Monday.’
This email was copied to Burns and Buckley.
Burns’ emails of 12 August
On Sunday 12 August, Burns sent a number of emails to other Edison staff in relation to the site access issue. In an email to Warrillow and Sutherland sent at 9.50 am, Burns suggested that a letter be sent to Mighell first thing on Monday 13 August in relation to the site access issue. In the email, Burns set out the terms of his suggested letter. Burns said that in case Sutherland and Warrillow agreed that a letter in those terms should be sent, he had left a signed letter under Warrillow’s door. Burns also said that, if they agreed, he would arrange a meeting with Mooney of the CEPU to agree on a protocol for site access. Burns suggested that the meeting could be on Tuesday morning.
At 12.17 pm, Burns sent an email to Sutherland and Warrillow (‘Burns’ 12 August email’) on the subject:
‘Completed ETU letter in case you need it’.
Burns’ 12 August email attached a document called ‘Dean Mighell 130801.dc’. The document was a draft letter to Mighell in relation to the site access issue. It read in substantially the same terms as he had suggested in his previous email to Warrillow and Sutherland:
‘13 August 2001
Dean Mighell
Secretary
Communications Electrical Plumbing Union
139-155 Queensberry Street
Carlton South
Vic 3053Dear Mr Mighell
Access to Loy Yang B Site
I am writing to you in relation to the two issues you raised regarding access to the Loy Yang B site by CEPU Officials for the purpose of visiting Contractors and/or their employees who are members of your union, when we met on 9 August 2001.
Firstly, Edison Mission Energy will facilitate access to the site by CEPU Officials as requested.
Secondly, Edison Mission Energy will not be insisting that the prescribed notice as required by the Workplace Relations Act need be given.
I have contacted Mr Peter Mooney to make arrangements on an agreed protocol for such visits.
With goodwill from both parties, I am confident that EME’s and the CEPU’s needs can be met.
Yours sincerely
Paul Burns
Manager of Community/Employee Relations’Burns said he prepared the draft letter on 12 August so that Warrillow could send it on Monday 13 August if he chose to do so, as Burns was not going to be at the office that day. Burns said he believed the address of the CEPU was 139-155 Queensberry Street, Carlton South, as recorded in the draft letter.
The 13 August letter
The evidence includes a letter dated 13 August signed by Sutherland on behalf of Burns (‘the 13 August letter’) on EME letterhead. The letter states:
‘Mr D Mighell
Secretary
CEPU
139-155 Queensberry Street
CARLTON SOUTH VIC 3053Dear Mr Mighell
CONTRACTORS AT LOY YANG B POWER STATION
Further to our discussions last week, I am able to confirm the proposal concerning contract work being undertaken at Loy Yang B Power Station.
We propose the parties (EME and CEPU) agree to the following position.
All contractors performing work at Loy Yang B power station under the scope of the Electrical, Communications Contracting Industry Award, shall have a current certified Agreement with the CEPU Electrical Division, Victorian Branch prior to commencing work for their respective contractor at the site.
Please indicate your acceptance of this position on behalf of the CEPU
Yours sincerely
[Sutherland’s signature]
for
…………………………… …………………………Paul Burns Dean Mighell
Manager of Community/Employee Relations Secretary, CEPU Victoria’
The ACCC contended that Edison’s response to the CEPU’s demand was expressed in the 13 August letter. The ACCC invited the Court to infer that the letter was sent to, and received by, the CEPU on or about 13 August.
Senior counsel for the CEPU accepted that, on its face, the 13 August letter was a complete acceptance of the demand which Mighell was said to have made at the 9 August meeting. But the CEPU denied that there was sufficient evidence to establish that the letter was sent by Edison, or received by Mighell or the electrical division of the CEPU. The CEPU submitted that the alleged dispatch of the 13 August letter is inconsistent with later conduct by Edison and the CEPU in entering into the heads of agreement on 23 August. The CEPU submitted that the safer inference to draw is that the 13 August letter was not dispatched by Edison or received by the CEPU.
There is scant evidence about the creation and alleged dispatch of the 13 August letter. Sutherland identified his signature on the 13 August letter, but said he did not know when the letter was prepared and could not recollect where it was typed. Sutherland had no recollection of giving the letter to his secretary to post. However, he did not suggest that he signed the letter but then changed his mind and instructed his secretary not to post it.
Although Sutherland signed the letter, senior counsel for the ACCC did not ask Sutherland about its drafting or its contents. He did not, for instance, ask Sutherland about the statement in the first paragraph of the letter, which appears to be saying that the letter confirms a proposal that Sutherland had put to Mighell in discussions the previous week. The evidence is that Edison did not put a proposal at the 9 August meeting, so the letter may have been referring to Sutherland’s meeting with Mighell on 10 August. Unfortunately, these questions were not addressed in evidence.
In cross-examination, Sutherland said that he did not receive any response from Mighell that claimed to be a response to the 13 August letter. He did not get back a copy of the 13 August letter that had been countersigned by Mighell. He agreed with senior counsel for the CEPU that neither Mighell nor anyone from the CEPU complained to him that there had already been a ‘deal’ in the terms of the 13 August letter when the draft heads of agreement was provided to the CEPU on 20 August. Sutherland also agreed with senior counsel for the CEPU that it was a strange letter to send to Mighell in light of the fact that Sutherland said that he and Burns had agreed to seek legal advice from Corrs Chambers Westgarth (‘Corrs’) on Friday 10 August.
Burns said that he had no involvement with the preparation of the 13 August letter and did not know who created the document. He said he thought that Sutherland had created it, because the letter was signed by Sutherland and was on EME letterhead. Burns was questioned by senior counsel for the ACCC as to when he became aware of the 13 August letter. Burns thought he first became aware of it in December 2001. However he mentioned that while searching for documents in response to the ACCC’s letter of 27 October 2003, he had discovered that he had ‘an email of it much earlier’. Burns said that he had not absorbed the content of that email at the time. Burns was not asked to elaborate on the substance of the email or the circumstances in which it was received.
I am satisfied that Sutherland created the 13 August letter. I infer that he did so in part by ‘cutting and pasting’ sections of text from two documents which had been provided to him by Burns. The first document was the clause attached to Burns’ 9 August email to Sutherland. The second document was Burns’ draft site access letter attached to Burns’ 12 August email to Warrillow and Sutherland. The address of the CEPU at the top of Burns’ draft letter is substantially replicated in the address of the 13 August letter, and the signature block at the bottom of Burns’ draft letter is replicated at the bottom of the 13 August letter. In other words, Sutherland included these parts of Burns’ draft letter in the 13 August letter.
One important question is whether the 13 August letter was dispatched by Edison and received by the CEPU. The letter was signed by Sutherland. The effect of his evidence was that it would be posted by his secretary in the ordinary course of business. Sutherland did not suggest that he intercepted or prevented the dispatch of the letter. There is no evidence that Sutherland’s instructions changed after the 10 August teleconference at which he was instructed to enter into an agreement with the CEPU to the effect that electrical contractors would be required to have a current certified agreement with the CEPU before commencing work at Loy Yang B. The dispatch of the letter is consistent with Sutherland’s instruction to fix the problem urgently so that the Simon Engineering site agreement could be signed. There was no evidence from Mighell or any CEPU officer that the CEPU did not receive the letter.
The 13 August letter was addressed to the Mighell as the secretary of the CEPU at 139-155 Queensberry Street, Carlton South. The evidence shows that Mighell was the state secretary of the ETU, which is a division of the CEPU, located at 516-520 Swanston Street, Carlton South. There is also evidence from Burns that the address of the CEPU was correctly stated in the 13 August letter as 139-155 Queensberry Street, Carlton South. In addition, the evidence given by Sutherland indicates that the CEPU office is at the corner of Queensberry and Swanston Street, and that the entrance to the part of the office occupied by the ETU division is on Swanston Street. There is no reason to suppose that a letter, which I find was correctly addressed to the CEPU at 139-155 Queensberry Street, Carlton South, would not reach Mighell in his capacity as state secretary of the ETU.
The CEPU submitted that I should not infer that the 13 August letter was dispatched by Edison, or received by the CEPU, because to do so would be inconsistent with, or at least make no sense in the light of, the parties’ subsequent conduct. I will return to the CEPU’s submissions in this regard after I have considered the later events. This is necessary because my findings about the 13 August letter are interrelated to my findings about the parties’ later conduct and the scope of their contract, arrangement or understanding. For present purposes, it is sufficient to indicate that I am satisfied on the balance of probabilities that the 13 August letter was dispatched by Edison, and received by the CEPU, in the normal course.
The meeting between Buckley and Nabulsi on 13 August
On 13 August, a meeting took place between Nabulsi and Buckley at Loy Yang B. Buckley arranged the meeting. At the meeting, Buckley asked Nabulsi whether DJN still intended not to enter into a certified agreement with the CEPU. The two had discussed the issue previously and Buckley knew that Nabulsi had previously determined not to make a certified agreement with the CEPU. Nabulsi reiterated DJN’s position that it would not sign an EBA with the CEPU. Buckley said he informed Nabulsi that the consequences of that position were that Edison was ‘unlikely’ to engage DJN’s services. Nabulsi gave evidence that Buckley told him, without any qualification, that DJN’s services would no longer be utilised. Nabulsi said he was told that the reason why DJN’s services were no longer to be utilised was that Edison had been asked by the CEPU not to engage the services of contractors that did not have an EBA with the CEPU.
Buckley said that he understood that Edison had a verbal agreement with the CEPU on 13 August, although he could not recall what led him to believe that. Buckley also said that after the 10 August teleconference he had a conversation with someone whose identity he could not recall to the effect that Buckley should contact Nabulsi and arrange a meeting to talk to him. It is apparent that Buckley contacted Nabulsi and advised him that Edison would no longer be utilising DJN’s services because of the instructions that were given to him at, or after, the 10 August teleconference.
Nabulsi was a frank and direct witness. I accept his evidence that he was told by Buckley in unequivocal terms that DJN’s services would no longer be utilised by Edison because Edison had been asked by the CEPU not to engage the services of electrical contractors that did not have an EBA with the CEPU.
The memorandum of understanding dated 15 August
The evidence includes a copy of the certified agreement for the peaker plant project which is signed by Simon Engineering and a number of unions, including the CEPU. The final page of the certified agreement is a memorandum of understanding dated 15 August 2001 between the signatories to the certified agreement (‘the Simon Engineering MOU’). It states:
‘MEMORANDUM OF UNDERSTANDING
SIMON ENGINEERING
LATROBE VALLEY GAS FIRED POWER STATION AGREEMENT
This Memorandum of Understanding confirms that at a meeting held today Wednesday August, 15, 2001, the Company, and the Unions, reached agreement on the Site Project Agreement for the construction of the Latrobe Valley Gas Fired Power Station at Loy Yang.
The parties agree that there are no further issues or claims and the words of the agreement, and the wages and conditions listed therein are the final understanding of what was agreed.
The Unions now undertake to forward the agreement to their respective Secretary’s [sic] with a recommendation for Signature.
The Company will arrange for the issue of Statutory Declarations and the lodgement of the Agreement with the AIRC for Certification.’
The Simon Engineering MOU was signed by Mooney on behalf of the CEPU. The document appears to have been overlooked by counsel for the ACCC. Neither counsel for the ACCC nor counsel for the CEPU referred to it at the hearing. However, there is no reason why I should not regard it as a business record that evidences that a meeting took place on 15 August 2001 at which Simon Engineering and the CEPU reached agreement on the site agreement for the construction of the peaker plant.
From the whole of the evidence, I infer that the CEPU would not have entered into the Simon Engineering MOU unless it had first been notified by Edison that Edison agreed to its demand that electrical contractors performing work at Loy Yang B power station must have a current certified agreement with the CEPU prior to commencing work at the site.
The team meeting on 16 August
A meeting of team leaders of Edison’s maintenance staff took place at Loy Yang B on Thursday 16 August. At the meeting, Pearson and Buckley informed the team leaders that Edison had entered into, or was entering into, an arrangement with the CEPU whereby it would only be using electrical contractors who had a certified agreement with the CEPU. Pearson said that the advice which he and Buckley gave to the team leaders was given pursuant to the instructions that Warrillow gave them towards the end, or immediately after, the teleconference on 10 August. At the team meeting, Buckley and Pearson identified DJN as the contractor likely to be excluded by the arrangement.
Pearson could not recollect whether the meeting had taken place on 16 August or on the following Thursday, 23 August. However, I am satisfied by Buckley’s evidence that the team leaders meeting took place on Thursday 16 August. This view is consistent with all of the other evidence.
The heads of agreement
In the week of 13 August, Edison sought and obtained legal advice from Corrs. Sutherland said that he attended an initial meeting with Corrs but he could not remember when. Burns said that he was not involved in instructing Corrs.
On Monday 20 August, Sutherland sent an email to Mighell which stated:
‘Dean - Attached is a draft agreement as prepared by our solicitors. Please call me call me on Tuesday, if you can.
Regards
Col [Sutherland]’The email attached a draft heads of agreement between Edison and the CEPU that had been prepared by Corrs. The draft heads of agreement was phrased in language that differed considerably from the 13 August letter. Clause 4.1 of the draft heads of agreement provided:
‘4 THE COMPANY SHALL
4.1 The Company [Edison] shall request that companies that:
(a)are contracted to work for the Company at the Site; and
(b)who employ people whose employment is governed by the National Electrical, Electronic and Communications Contracting Industry Award 1998;
have acceptable industrial arrangements in place before work is commenced.’
Sutherland gave evidence that he thought that the draft heads of agreement would be ‘the solution’ he and Burns were looking for. He was not examined on whether he spoke to Mighell on Tuesday 21 August as foreshadowed in his 20 August email, although Sutherland confirmed that it was his intention to speak to him the day after sending the email.
Burns recalled a discussion after Sutherland’s 20 August email had been sent, probably on 23 August, in which Sutherland told Burns that the way the draft heads of agreement was worded was not satisfactory to the CEPU. Burns gave evidence that Sutherland said words to the effect that the draft heads of agreement ‘didn't give the union anything.’
This passage provides no support for an inference that the legislature intended to exclude a union from liability for its involvement in a contravention of s 45E. On the contrary, it suggests the legislation was aimed at prohibiting ‘undesirable conduct’ by unions. While the second reading speech relates to the original enactment of s 45E in 1980, which was repealed in 1993, there is no evidence that the legislature intended to exclude a union from accessorial liability when s 45E was re-enacted in 1996 (at which time s 45EA was also introduced). The explanatory material for the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) sheds little light on the purposes of ss 45E and 45EA specifically; however, the provisions were part of a package of amendments designed to prohibit certain forms of industrial action.
Insofar as it is possible to discern the policy of the legislation, it is unlikely that the legislature intended to exclude a union from liability in relation to a contravention of ss 45E and/or 45EA. Unions are not a class of persons whom the legislation is designed to protect: see Mallan v Lee; cf R v Tyrell [1894] 1 QB 710. Quite the opposite, ss 45E and 45EA were designed to prohibit certain types of industrial action by unions. Although liability is imposed on a union as principal for the purposes of some provisions of Pt IV of the TPA, the fact that this course is not taken in relation to ss 45E and 45EA does not, of itself, evidence a legislative intention to exclude a union from liability under ss 76(1) and 80(1).
In light of these matters, I cannot accept that the absence of an imposition of liability on a union as principal under ss 45E and 45EA supports an inference that the legislature intended to exclude a union from liability under ss 76(1) and 80(1).
Senior counsel for the ACCC referred me to an extract from the bills digest for the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth), a parliamentary paper circulated upon the introduction of the Bill. I do not afford the document any real weight, but it is consistent with the view that the legislature intended that the 1996 Act would ‘expose unions to the hefty sanctions’ under the TPA, including under the accessorial liability provisions as amended.
In Gibbins, Smithers J imposed liability on the union under s 80(1) of the TPA. His Honour found at 474 that it was ‘beyond question’ that the AMIEU, which was a party to a contract, arrangement or understanding which contravened s 45E, had aided, abetted, counselled and procured Borthwicks’ contraventions. Then, as now, a union could not contravene s 45E as a principal.
It is also worth noting that ss 76(1) and 80(1) of the TPA catch accessorial conduct of the kinds falling within paras (d), (e) or (f), which includes persons who are directly or indirectly knowingly concerned in, or party to, a contravention: cf Giorgianni. The application of accessorial liability to persons who are parties to a contravention indicates that the legislature intended that accessorial liability would attach to parties to a contract, arrangement or understanding which contravenes the principal provision.
I am satisfied that ss 76(1) and 80(1) apply to a union which is a party to a contract, arrangement or understanding which contravenes ss 45E and 45EA. It follows that the CEPU is not excluded from accessorial liability under ss 76(1) and 80(1) of the TPA in relation to contraventions of ss 45E and 45EA.
The next question is whether the CEPU’s conduct attracts liability under ss 76(1) and 80(1). The principles of accessorial liability applicable to the present case can be shortly stated. It is necessary to prove knowledge of the essential elements constituting the contravention: Yorke v Lucas (1985) 158 CLR 661 at 670. The requirement of ‘knowledge’ is actual and not constructive knowledge: Giorgianni at 504-507; Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 5. Actual knowledge may be established as a matter of inference from the circumstances surrounding the contravention: Pereira v Director of Public Prosecutions (1998) 82 ALR 217 at 219.
My factual findings put beyond doubt the conclusion that the CEPU was a party to the heads of agreement and the broader arrangement with Edison. The evidence establishes that the CEPU made demands which instigated, induced and procured Edison to make both the broader arrangement and the heads of agreement. The same evidence establishes that the CEPU aided and abetted, and was knowingly concerned in, the making of the contract, arrangement or understanding between Edison and the CEPU.
As to whether the CEPU was involved in Edison’s contravention of s 45EA, it is necessary to bear in mind the width of the concept of ‘give effect to’. It is defined in s 4(1) as including the doing of ‘an act or thing in pursuance of or in accordance with’ the contract, arrangement or understanding. An act or thing may be done in accordance with a contract, arrangement or understanding even though the person who did that act or thing did not have the contract, arrangement or understanding in mind at the time: TNT at 68. Independent decisions made by parties to a contract, arrangement or understanding can nevertheless give effect to an arrangement made between them: Dowling v Dalgety Australia Ltd (1992) 34 FCR 109.
I have found that Edison gave effect to the contract, arrangement or understanding by excluding DJN from performing work as an electrical contractor at Loy Yang B. In pursuance of the arrangement, the CEPU signed the Simon Engineering site agreement. Further, in its discussions with Edison in August 2001, the CEPU incited, induced, counselled and procured Edison’s exclusion of electrical contractors who did not have a certified agreement with the CEPU from performing work at Loy Yang B. I am satisfied that the CEPU thereby counselled, procured and induced Edison’s contravention of s 45EA.
DECLARATORY RELIEF
In accordance with its amended application, the ACCC is entitled to a declaration that the CEPU aided, abetted, counselled, procured, induced, and was knowingly concerned in and a party to Edison’s contravention of s 45E(3), and that the CEPU counselled, procured and induced Edison’s contravention of s 45EA.
There is utility in making a declaration of the kind sought by the ACCC: see Rural Press at 92 [95]. It will record the consequences of the Court’s findings in a legally binding way, and will mark the Court’s disapproval of the CEPU’s conduct. However, it is essential that the terms of the declaration are tied to the proven facts: see Rural Press at 91 [90]; cf Bass v Permanent Trustee Company Ltd (1999) 198 CLR 334; and Electricity Supply Association of Australia v Australian Competition and Consumer Commission (2001) 113 FCR 230. I propose to vary the terms of the declarations sought by the ACCC to ensure that they accord with and are sufficiently tied to the factual findings I have made.
INJUNCTIVE RELIEF
The principles governing the grant of final injunctive relief under s 80 of the TPA, in a case such as this, are not in doubt. Section 80(1) confers a wide power on the Court to grant an injunction where it is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute conduct of the description in paras (a)-(f). It has been described as a ‘widely drawn remedial provision available to restrain conduct which may infringe upon [the] public interest by contraventions of the provisions of the Act in Part IV and Part V’: per French J in ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248 (‘ICI’) at 268. The breadth of the Court’s discretion is underscored by s 80(4) which permits the Court to grant injunctive relief whether or not the person intends to engage in conduct of the kind restrained, or the person has previously engaged in conduct of that kind, or there is an imminent danger of substantial damage to any person if the conduct is repeated or continued.
There are at least three limitations on the Court’s power under s 80. They were summarised by Merkel J in Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203-204 in these terms:
‘First, the power is confined by reference to the scope and purpose of the TPA and in particular s 80. It is within the scope and purpose of s 80 to grant injunctive relief which is designed to prevent a repetition of the conduct for which the relief is sought.
Secondly there is a contextual limitation within s 80 itself. As the jurisdiction to grant an injunction is enlivened by an alleged or actual contravention of a provision of Pt IV, IVA or V of the TPA, there must be a sufficient nexus or relationship between the contravention and the injunction granted. It is that nexus or relationship that enables determination by the Court of whether the injunction sought is “appropriate”.
Thirdly, there is the constitutional limitation which requires that the injunction granted be related to the case or controversy the subject of the proceeding.’
In ICI, the Full Court at 257-258 and 267-268 rejected a submission that s 80 creates a presumption in favour of a grant of a final injunction where a contravention or proposed contravention of the TPA is made out. Lockhart J said at 256-257 that the public interest character of s 80, and the breadth and flexibility of its statutory provisions, do not mean that traditional equitable doctrines are irrelevant. It remains relevant to consider questions of repetition of conduct, whether it has ever occurred before, or whether imminent substantial damage is likely, although the absence of any one or more of those elements is not fatal to the grant of an injunction. Equally, the public interest character of s 80 means that deterrence is a relevant consideration. French J said that there is room within the statutory framework and its underlying policy for an injunction which is not intended to restrain an apprehended repetition of contravening conduct, but to deter an offender from repeating the offence: ICI at 268. In Trade Practices Commission v Mobil Oil Australia Ltd (1985) 4 FCR 296, Toohey J said that in the case of a particularly flagrant breach and in the absence of any evidence of an intention on the offender’s part to continue the conduct, it might nonetheless be appropriate to mark the Court’s disapproval by an injunction as well as a monetary penalty: at 300.
As to the terms in which a final injunction should be granted, the Court’s discretion is as wide as the phrase ‘as the Court determines to be appropriate’. On first principles, it is plain that the terms of an injunction should be clear and unambiguous, leaving no room for doubt as to the nature and scope of the future conduct that falls within its boundaries: see, eg, ICI at 259 per Lockhart J. A final injunction should not be granted in terms which simply enjoin the respondent not to breach the Act: see Trade Practices Commission v Walplan Pty Ltd (1985) 7 FCR 495; Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563 at 574; ICI per Lockhart J at 259-260; and BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 (‘BMW’) at 465-466 [36]-[39].
The terms of an injunction will not be appropriate if it extends to conduct that does not have an appropriate nexus with the contravening conduct that attracts the operation of s 80: see ICI at 367 per Gummow J. Depending upon the nature of the contravening conduct, it may be legitimate to grant an injunction against a respondent preventing it from engaging in conduct in a similar manner, or to like effect, as the conduct which was the subject of the established contravention: see ICI at 261; and BMW at 465 [36]. The desirability of granting an injunction in this extended form will depend on the circumstances of the case and the existence of a sufficient nexus with the conduct that contravenes the Act.
In the present case, the ACCC sought injunctive relief against the CEPU in extremely wide terms. Effectively, the first order seeks to restrain the CEPU from aiding, abetting, counselling, procuring, inducing or attempting to induce, or being knowingly concerned in or party to Edison making a contract, arrangement or understanding with the CEPU where the contract, arrangement or understanding contains a provision that was included for the purposes described in s 45E(3). The second order goes further and seeks to restrain the CEPU from aiding, abetting, etc any person making a contract, arrangement or understanding with the CEPU that contains a provision contravening s 45E(3). The third order seeks to restrain the CEPU from counselling, procuring, inducing or attempting to induce Edison to give effect to a provision of a contract, arrangement or understanding between Edison and the CEPU where the provision was included for a purpose proscribed by s 45E(3). The fourth order is similar to the third except that it seeks to restrain the CEPU from counselling etc any person to give effect to a provision of a contract, arrangement or understanding between that person and the CEPU which contains a provision included for a proscribed purpose. None of the proposed injunctions are confined to the particular contract, arrangement or understanding which gave rise to Edison’s contraventions in this case, and none are limited in time. In my opinion, the injunctions are cast far too widely.
The first question is whether the Court should exercise its discretion to grant any injunction against the CEPU or its officers in the circumstances which now prevail. The arrangement between Edison and the CEPU came to an end in late November 2003. DJN resumed work at Loy Yang B in early 2004. There is no suggestion in the evidence that the accessorial conduct on the part of the CEPU has recurred, or that it is likely to recur. On the other hand it is relevant to take into account the deliberate nature of the conduct that the CEPU engaged in during August 2001.
The terms of the injunctive orders proposed by the ACCC raise questions as to the appropriateness of granting any injunctive relief. In an attempt to keep the injunctions within proper bounds, the ACCC’s proposed orders are replete with definitional provisions that attempt to mirror the requirements of s 45E(1), (3) and (7). Despite these extensive definitions, the ACCC’s draft orders do not capture the exception which appears in s 45E(8). The extensive definitional clauses that are attached to the draft orders mean that each order takes on a rather abstract appearance that largely restates the requirements of s 45E(1), (3) and (7) of the TPA. Two of the proposed orders refer specifically to a contract, arrangement or understanding between Edison and the CEPU, but even those orders are not aimed at the August 2001 arrangement because that ended long ago. The other two orders are directed to conduct that, inter alia, procures or induces any person to make, or to give effect to, any arrangement between that person and the CEPU where it contains a provision that would satisfy the requirements of s 45E(1), (3) and (7). As a result, these orders very much have the appearance of orders that attempt to restate the general prohibition that appears in s 45E of the TPA.
In my opinion, the terms of the injunctive orders proposed by the ACCC are plainly inappropriate. On the authorities, any injunction must have a clear and sufficient connection with the proven conduct that attracts the jurisdiction of the Court. Any injunction must also be capable of being expressed clearly and in a manner which can be understood by those required to comply with it. I would not contemplate an injunction that operates indefinitely. Where an injunctive order is sought in respect of a class of conduct, similar to proven conduct that has come to an end, I consider that it should only operate for a limited period of time. This is a course commonly taken in the authorities.
On balance, I am persuaded that this is a case in which it is appropriate to grant an injunction for a limited period, and in quite specific terms, that will operate by way of deterrence and mark the Court’s disapproval of the CEPU’s conduct. In my view, the injunction must have a close nexus with the proven conduct that attracts the jurisdiction of the Court. I consider that it should operate for a period of three years and no longer.
OTHER RELIEF
The ACCC also seeks penalties and costs. I propose to hear submissions on those matters before making final orders.
I certify that the preceding two hundred and thirty-five (235) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. Associate:
Dated: 19 December 2006
Counsel for the Applicant: N O'Bryan SC with P Gray Solicitor for the Applicant: Australian Government Solicitor Counsel for the First Respondent: There was no appearance for the First Respondent Counsel for the Second Respondent: H Borenstein SC with D Guidolin Solicitor for the Second Respondent: Electrical Trades Union of Australia Date of Hearing: 2, 3, 4, 5 October 2006 Date of Judgment: 19 December 2006
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