Australian Liquor, Hospitality and Miscellaneous Workers Union v Dimension Cleaning Service Pty Ltd
[1998] FCA 1108
•8 SEPTEMBER 1998
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW – employee records – prosecution for payslip deficiencies – ABUSE OF PROCESS – Stay of Proceedings - whether predominant purpose of informant was an improper purpose – whether abuse of process.
Workplace Relations Act 1996 – ss 179, 353A
Workplace Relations Regulations (Cth) – regs 132A, 132B
Evidence Act 1995 (Cth) – ss 97, 98, 99, 100(i) and (ii)
Harriman v The Queen (1989) 167 CLR 590 - considered
Lyons v Commonwealth Bank (1991) 28 FCR 597 - considered
Williams v Spautz (1992) 174 CLR 509 - followed
Spautz v Williams (1983) 2 NSWLR 539 - cited
Re Excel; Worthley v Englind (1994) 52 FCR 69 - cited
Ryman v Seymour CBD Pty Ltd, Federal Court of Australia (unreported) Spender J, 28 February 1997, Matter QG 116 of 1996 – considered and distinguished
White Industries (Qld) Pty Ltd v Flower & Hart (a firm), Federal Court of Australia (unreported) Goldberg J, 14 July 1998, Decision 806/98, Matter QG 198 of 1986 – considered and distinguished
Briginshaw v Briginshaw (1938) 60 CLR 336 - applied
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 - cited
AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION v DIMENSION CLEANING SERVICE PTY LTD
VG 595 of 1997
BEFORE: RYAN JR
PLACE: MELBOURNE
DATE: 8 SEPTEMBER 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 595 of 1997
BETWEEN:
AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION
PROSECUTORAND:
DIMENSION CLEANING SERVICE PTY LTD
DEFENDANTJUDICIAL REGISTRAR:
RYAN
DATE OF ORDER:
8 SEPTEMBER 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
The respondent’s motion of 22 May 1998 be dismissed.
The respondent pay the applicant’s costs in respect of the Motion.
The Information filed on 23 October 1997 be listed for hearing as soon as practicable.
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 595 of 1997
BETWEEN:
AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION
PROSECUTORAND:
DIMENSION CLEANING SERVICE PTY LTD
DEFENDANT
JUDICIAL REGISTRAR:
RYAN
DATE:
8 SEPTEMBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
APPLICATION TO STAY A PROSECUTION
THE PROSECUTION
Dimension Cleaning Service Pty Ltd is defendant to an Information filed on 23 October 1997 and laid under regulation 132A(2) of the Workplace Relations Regulations. The prosecutor is the Australian Liquor, Hospitality and Miscellaneous Workers Union. The Information and an initiating Summons allege that the defendant on 180 occasions between 30 October 1996 and 30 September 1997 failed to specify on payslips given to 14 named employees relevant particulars required by regulation 132B of the Workplace Relations Regulations.
Each failure to provide particulars is the subject of a separate charge so that the Information and Summons contain 180 charges. Some charges allege that the defendant failed to specify the classification of the employee. Some charges allege that the defendant failed to specify on the payslip the date on which the payment of wages was made. Most of the charges allege that the defendant failed to specify the particulars of superannuation contributions made for the benefit of the specific employee and the name of the superannuation fund to which the contributions were made.
The Information and Summons were the subject of a Directions hearing before Marshall J on 11 November 1997 in which the matter was referred to a Judicial Registrar for hearing and determination. Directions hearings were held before Parkinson JR on 6 March 1998, 18 March 1998 and 22 May 1998.
APPLICATION TO PERMANENTLY STAY THE PROSECUTION
The defendant applied by Notice of Motion to stay the proceedings. I have assumed that the Motion to permanently stay the Information was foreshadowed to Parkinson JR in the Directions hearing on 22 May and I note that a draft of the Notice of Motion was faxed to the Melbourne Registry later that day. Indeed, an earlier draft had been faxed to Melbourne on 19 May. In any event, the Judicial Registrar adjourned the matter for further Directions by telephone on Monday 25 May at 2.00 p.m. in Melbourne. Counsel and solicitors for the defendant are based in Adelaide and the telephone hearing was to avoid the expense and inconvenience of travelling to Melbourne for a brief hearing.
The solicitors for the defendant advised the District Registrar in Melbourne by facsimile on 22 May that a Notice of Motion and supporting affidavits would be filed in the Adelaide Registry on 22 May. On 25 May the parties and their advisers agreed that the Motion should be listed for hearing in Melbourne on 25 and 26 June.
The prosecutor was respondent to the motion. I shall refer to the applicant in the Notice of Motion as defendant and the respondent as prosecutor.
In an affidavit in support of the motion, Michael Kokkinos, a director of the defendant company, sought an order to stay the proceedings as an abuse of process on the grounds that the union, as prosecutor, “had improperly brought the proceedings for an ulterior purpose and as an instrument of oppression”.
The motion was heard on 25 and 26 June and 1, 2 and 3 July 1998. Mr Tee, a solicitor in the employ of the prosecuting union appeared for the prosecutor in its role as respondent to the motion. Mr Kourakis, QC appeared for the defendant in its role as applicant in the Notice of Motion.
At the conclusion of the hearing, the parties agreed to file final written submissions. Submissions from the defendant were filed on 23 July and submissions from the prosecutor were received on 5 August 1998.
EVIDENCE FOR THE DEFENDANT
The defendant filed three affidavits in support of the Motion from:
Michael Kokkinos, Director
Simone Darvall, Human Resources Manager
Vecki Brdjanin, Financial Controller.
Mr Kokkinos and Mr Brdjanin also gave oral evidence as did:
Daniel Pearson, formerly National Operations Manager with the defendant
Timothy Michael O’Brien, Managing Director, TVR Security Pty Ltd.
Ms Darvall was not called to give oral evidence but the defendant relied in part on certain aspects of her affidavit evidence (namely paragraphs 4 to 8). Mr Kourakis notified the Court and Mr Tee to this effect. The result is that paragraphs 4 to 8 of Ms Darvall’s affidavit of 23 June 1998 are uncontested and this is evidence of some significance in these proceedings.
Despite objection from Mr Tee on behalf of the prosecutor as respondent to the Motion, Mr Kourakis succeeded in tendering as evidence certain documents namely:
exhibit A6 – Deed of Settlement between Australian Liquor, Hospitality and Miscellaneous Workers Union as prosecutor and Crewes Family Investments Pty Ltd as defendant, certain correspondence related to this prosecution, certain parts of the Information which indicated that the prosecutor in that case was prosecuting Crewes Family Investments in respect of 323 charges which were “payslip offences” similar to those alleged against Dimension Cleaning Service and a copy of an order of Northrop J of 23 October 1997 striking out the Information by consent
exhibit A7 – a Summons of 11 September 1997 with Australian Liquor, Hospitality and Miscellaneous Workers Union as prosecutor and TVR Security Pty Ltd as defendant outlining 75 charges of “payslip offences” similar to those alleged against Dimension Cleaning Service
exhibit A8 – correspondence between TVR Security Pty Ltd and the union in relation to the prosecution outlined in exhibit A7
exhibit A9 – correspondence from solicitors acting for Crewes Family Investments Pty Ltd in respect of the prosecution referred to in the Deed of Settlement in exhibit A6.
EVIDENCE FOR THE PROSECUTOR
The prosecutor filed five affidavits in opposition to the Motion from:
Terry Breheny, Divisional Branch Assistant Secretary
Brian Daley, union secretary
Vaska Dervisovski, Branch organiser
Jim Hatziladas, Branch organiser
Graeme Hogan, Branch organiser.
Messrs Breheny, Daley and Hatziladas and Ms Dervisovski also gave oral evidence.
EVIDENCE OF OTHER PROSECUTIONS – TENDENCY AND COINCIDENCE
Mr Tee opposed the admission of oral and documentary evidence relating to the union prosecutions of Crewes Investments and TVR Security for “payslip offences”. He asserted that:
the evidence was not admissible within the terms of ss 97 and 98 of the Evidence Act 1995 being evidence of conduct or tendency, and evidence of two or more related events designed to prove that because of the improbability of these events occurring coincidentally a person did a particular act or had a particular state of mind
the evidence did not disclose any abuse of process
there was no discernible link between the alleged conduct in the matter before the Court and the conduct in the settlement of a prosecution in Crewes Family Investments or in the continuation of the prosecution in TVR Security
there was no striking similarity between the alleged conduct in the matter before the Court and the conduct in the Crewes Family Investments and TVR Security prosecutions.
Mr Tee asserted that:
the material which the defendant sought to tender demonstrated no more than the parties bringing into negotiations and settling or attempting to settle a number of matters
the defendant had failed to discharge the onus of satisfying the Court that the TVR Security and Crewes Family Investments prosecutions were instituted for a collateral advantage beyond what the law offers and as a means of obtaining an advantage for which the prosecutions were not designed
the proposed evidence would not either by itself or, having regard to other evidence adduced or to be adduced, have significant probative value.
Evidence of tendency is often prohibited under the tendency rule, s 97 of the Evidence Act. Evidence of coincidence or similar fact is often prohibited under the coincidence rule, s 98 of the Evidence Act.
At the conclusion of the second day of the hearing Mr Kourakis had led certain evidence in support of the Notice of Motion. Submissions had been made for and against admitting the Crewes Investments material and a ruling on admissibility was scheduled for the commencement of the third day of the hearing. However, Mr Kourakis then sought leave to lead further and additional evidence relating to another payslips prosecution in which the union had prosecuted a security company known as TVR Security. Leave was sought to admit this evidence, both as evidence related to and in aid of the Crewes Investments material and as separate tendency and coincidence evidence. At that stage the defendant had given no notice of the substance or particulars of the evidence to be adduced although during initial submissions on the Crewes Investments material Mr Kourakis had:
expressed a willingness to provide notice within the terms of ss 97, 98 and 99 of the Evidence Act
submitted that some imprecise warning as to the possible course to be taken by the defendant had been delivered at a telephone directions hearing on 25 May and through a subpoena served on the prosecutor after the Court had declined to order discovery at the directions hearing
observed that the defendant only became aware of information which led to the application to admit the Crewes Investments material on the first day of hearing on 25 June
requested the Court to dispense with notice under s 100(1) and (2) of the Evidence Act.
In any event, on the third day of the hearing (1 July), notice of the Crewes Investments and TVR Security material having been given, Mr Kourakis was allowed to reopen and submissions were taken for and against the admission of the material. The Court concluded that the material, the tendency and similar fact evidence, had sufficient degree of cogency and underlying unity and could demonstrate a real nexus, judged according to experience and commonsense, between the proposed evidence and the facts in issue.
In deciding to admit the evidence the Court was assisted by the analysis of Dawson J in Harriman v The Queen (1989) 167 CLR 590 at 597-602 and the later analysis of Gummow J in Lyons v Commonwealth Bank (1991) 28 FCR 597. The Court took particular note of the comments in Harriman by Dawson J at 597-602 and Toohey J at 606-607 and by Gummow J in Lyons at 603 that evidence of a tendency or propensity to conduct of the kind alleged and in issue is circumstantial evidence of a dangerous kind because of the prejudice that it engenders and that such evidence while it may be relevant and admissible should only be admitted if of a sufficiently high degree of relevance to outweigh the prejudice. It follows that this evidence was admitted because it was assessed as potentially of “a high degree of relevance and of significant probative value”.
THE ALLEGED LINK BETWEEN EMPLOYMENT PROTECTION, WORKPLACE CHANGE AND PAYSLIP PROSECUTIONS
A crucial aspect of the defendant’s allegation of abuse of process is the link alleged to exist between the three prosecutions of Dimension Cleaning, TVR Security and Crewes Family Investments and a union campaign for an Industry Protocol on Workplace Change. During the hearing the Protocol was described as “employment protection at times of workplace change and especially at times when cleaning contracts were being entered and either renewed or changed”.
The allegation that the prosecution of the defendant for “payslip offences” was instituted and maintained for a purpose other than that for which the prosecution was designed, an allegation that the prosecution was instituted and maintained to achieve for the prosecuting union some collateral advantage beyond that which is provided by the relevant Workplace Relations Regulations, is an allegation which arises from, and (the defendant asserts), is linked to, a union campaign on workplace change and employment protection.
The Dimension Cleaning, Crewes Family Investments and TVR Security prosecutions were instituted respectively on 23 October 1997, 20 October 1997 and 12 September 1997.
On 30 September 1997 Mr Daley as Divisional Branch Secretary of the union advised the defendant by facsimile that:
the Australian Building Services Association (ABSA) had resisted and continued to resist any agreement on an Industry Protocol on Workplace Change
“there is little foreseeable hope … of an agreement with ABSA … in the near future”
individual agreement to a Protection of Employment Agreement was being sought with major employers in the cleaning industry
a union delegates’ meeting was scheduled for 1 October 1997 to consider an industrial campaign in response to the ABSA rejection of the Industry Protocol on Workplace Change and the campaign was expected to commence on 6 October 1997.
The facsimile concluded as follows
“Please be advised that if your company does not agree to the attached agreement then industrial action will be taken by our members employed by your company in support of their claim.”
The “attached” agreement was a Protection of Employment Agreement which required any employer entering the agreement to:
notify the union of any permanent change of work organisation
discuss those changes with the union and give consideration to matters raised by the union
give the union a minimum of 28 days’ notice when a cleaning contract is terminated or to be retendered by the current contractor
agree to leave work requirements unchanged in the event that there are no reductions made to the hours of a contract
negotiate “the justification” for any reduction in the number of cleaners, hours or conditions prior to any change occurring
agree that “during the life of a contract … no further change in terms or cuts or changed working arrangements can be made”
in any case in which agreement is not reached refer the matter to the Australian Industrial Relations Commission for conciliation and, if necessary, arbitration.
THE SPECIFIC CLAIM OF ABUSE OF PROCESS
The defendant bases the claim of abuse of process on a statement allegedly made by Mr Breheny on 8 October 1997. In essence the statement is alleged to be a threat by Breheny that he would initiate a “payslip prosecution” against the defendant if Mr Kokkinos declined to sign the Industry Protocol for Workplace Change.
Kokkinos gave the following account of the meeting on 8 October 1997 in paragraph 14 of his affidavit of 23 June 1998:
“I met with Breheney, Brdjanin was also present. Breheney asked whether I would sign the protocol document. When I told Breheney I was opposed to the protocol document he said words to the effect that he would then have little option but to activate the prosecution proceedings. I understood the prosecution proceedings to mean the payslip prosecution. Breheney acted disappointed and said “If you sign it you’re right, if you don’t sign it, face the consequences.”
Counsel for the defendant asserts that the critical factual issue is whether Breheny used words linking the institution of criminal proceedings with failure to agree to the Protocol.
Mr Tee (appearing as counsel for the prosecutor) rejects the implication which Mr Kourakis seeks to draw from Breheny’s threat of “face the consequences”. He asserts that the Court should also reject the implication and that the union strategy in relation to the Protocol involved threats of industrial action but did not involve threats to file a payslip prosecution against the defendant because of the latter’s failure to sign the Protocol.
Mr Tee also asserts that, even if the Court were to accept that the prosecutor was motivated to file the prosecution because of the defendant’s refusal to sign the Protocol, that in itself would not constitute abuse of process, and the defendant would have to satisfy the Court that “the prosecutor did not intend to proceed with the prosecution and was using the proceedings for some ulterior purpose”.
In due course and in these reasons for judgment the Court will make a finding as to whether the initiation and continuation of this prosecution amounts to an abuse of process but observes that, to establish abuse of process, the defendant, contrary to Mr Tee’s submission, does not have to satisfy the Court that the prosecutor did not intend to proceed with the prosecution.
Mr Kourakis draws support for his implication of improper purpose from the following:
Kokkinos in cross-examination agreed with Mr Tee that the reference to “facing the consequences” was made in the context of threatened industrial action but added “and also the payroll prosecution” (T10, L20)
Breheny agreed that he told Kokkinos “that there would be consequences” if the defendant did not sign the Protocol (T34, L5)
Breheny admitted that he raised the question of the prosecution immediately after discussing the Protocol and speaking of the consequences of not signing it (T36, L12-27)
Ms Dervisovski conceded that Breheny may have said “we can probably prosecute any company in this industry” (T11, L8)
Breheny volunteered the opinion in cross-examination that the union “could prosecute every employer in the industry for either breaches of the Act or underpayment of wages” (T27, L33)
Mr Brdjanin deposed that the topic of payslip prosecutions was raised by Breheny in a way that was clearly threatening (affidavit 24 June 1998, paragraphs 5-9)
Ms Darvall deposed that Breheny threatened to make matters difficult for the defendant if it did not sign the Protocol after she was called into the meeting on 8 October 1997 (affidavit 24 June 1998) and she was only called in because payslips had been raised
the prosecutor has failed to explain the coincidence between the timing of the prosecution and the Protocol campaign
the prosecutor gave no prior notice to the defendant as to payslip deficiencies listed in the 180 charges
Breheny was vague and evasive in evidence and shifted ground by first asserting that he raised the issue of payslips with the Operations Manager, Mr Pearson, and later claiming in cross-examination that the payslips were probably raised through a union organiser, Graham McKinnon
Breheny claimed that the defendant had given an assurance (probably to McKinnon) that it would remedy deficiencies in Gordon TAFE’s payslips and had failed to remedy the deficiencies but McKinnon was not called to give evidence and the alleged assurance that the deficiencies would be remedied was not put to Kokkinos (T40)
eventually Breheny claimed that “breach of the Act” was the reason for the prosecution (T40, L38) and “we made the decision to prosecute Dimension because we thought that they had been given adequate opportunities to fix the payslips” (T40, L45-47)
the evidence of the Crewes and TVR prosecutions suggested a practice of pursuing payslip prosecutions for improper purpose.
ABUSE OF PROCESS – LEGAL PRINCIPLES
The inherent power to stay proceedings as an abuse of process is clearly formulated in Williams v Spautz (1992) 174 CLR 509 at 517. The High Court (Mason CJ, Dawson, Toohey and McHugh JJ) accepted the formulation given by Hunt J in Spautz v Williams (1983) 2 NSWLR at 539 in these terms:
“The essence of an abuse of process action is that the proceedings complained of were instituted and/or maintained for a purpose other than that for which they were properly designed or exist, or to achieve for the person instituting them some collateral advantage beyond that which the law offers, or to exert pressure to effect an object not within the scope of the process. The focus in such a suit is on the purpose for which the proceedings exist, and on the dominant purpose of the person charged with abuse of process in instituting them.”
At 519 and 520 their Honours outlined policy considerations for and against a Court satisfying itself that an unfair trial will ensue before granting a stay of prosecution instituted and maintained for an improper purpose:
“… There are some policy considerations which support the view that the court should so satisfy itself. It is of fundamental importance that, unless the interests of justice demand it, courts should exercise, rather than refrain from exercising, their jurisdiction, especially their jurisdiction to try persons charged with criminal offences, and that persons charged with such offences should not obtain an immunity from prosecution. It is equally important that freedom of access to the courts should be preserved and that litigation of the principal proceeding, whether it be criminal or civil, should not become a vehicle for abuse of process issues on an application for a stay, unless once again the interests of justice demand it. In the United States, great weight has been given to these factors (See Rosemount Enterprises Inc. v. Random House Inc. (1966), 261 F.Supp. 691, at pp. 696-697).
These factors have considerable force. There is a risk that the exercise of the jurisdiction to grant a stay may encourage some defendants to seek a stay on flimsy grounds for tactical reasons. But that risk and the other policy considerations already mentioned are not so substantial as to outweigh countervailing policy considerations and deter the courts from exercising the jurisdiction in appropriate circumstances.
As Lord Scarman said in Reg. V. Sang ([1980] A.C. 402, at p.455), every court is ‘in duty bound to protect itself’ against an abuse of its process. In this respect there are two fundamental policy considerations which must be taken into account in dealing with abuse of process in the context of criminal proceedings. Richardson J. referred to them in Moevao v. Department of Labour ([1980] 1 N.Z.L.R. 464, at p. 481), in a passage which Mason C.J. quoted in Jago ((1989) 168 C.L.R., at p. 30). The first is that the public interest in the administration of justice requires that the court protect its ability to function as a court of law by ensuring that its processes are used fairly by State and citizen alike. The second is that, unless the court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the court’s processes may lend themselves to oppression and injustice. As Richardson J. observed ([1980] 1 N.Z.L.R., at p. 482), the court grants a permanent stay:
‘in order to prevent the criminal processes from being used for purposes alien to the administration of criminal justice under law. It may intervene in this way if it concludes … that the Court processes are being employed for ulterior purposes or in such a way … as to cause improper vexation and oppression.’”
The majority went on in Spautz at 526 and 527 to consider the boundaries of the power to stay proceedings as an abuse of process.
“It is otherwise when the purpose of bringing the proceedings is not to prosecute them to a conclusion but to use them as a means of obtaining some advantage for which they are not designed (In re Majory, [1955] Ch. 600, at pp. 623-624) or some collateral advantage beyond what the law offers (Goldsmith v. Sperrings Ltd., [1977] 1 W.L.R., at pp.498-499; [1977] 2 All E.R., at pp. 581-582; see also Varawa (1911), 13 C.L.R., at p. 91). So, in Dowling (91915) 20 C.L.R., at p. 524), Isaacs J. pointed out that ‘if, for instance, it had been shown that the Society had simply threatened Dowling that unless he did what they had no right to demand from him, namely, give up certain names, they would proceed to sequestration, and they had proceeded accordingly, there would have been in law an abuse of the process’. However, because the Society wished to use the process for the very purpose for which it was designed, there was no abuse of process.”
APPLICATION OF THE PRINCIPLES
The reference to purpose is to predominant purpose. In assessing predominant purpose as an improper purpose Mr Kourakis urges the Court to take account of the Crewes and TVR prosecutions in addition to Mr Breheny’s threat of “facing the consequences” as deposed by Mr Kokkinos. He submits that the union, as prosecutor, discontinued against Crewes only after securing agreement to a number of collateral issues including adherence to the Protocol. Mr Kourakis also submits that Mr O’Brien gave unchallenged evidence of admissions made to him by a Mr Gilbert and of union correspondence, both of which demonstrate that the union as prosecutor would have discontinued against TVR if agreement had been reached in time.
The core of the submission by Mr Kourakis on behalf of the defendant is that the threat by Breheny to Kokkinos, the absence of a credible explanation for filing the information on 23 October, so soon after the meeting of 8 October, and the “actual use to which the only other two (September/October) payslip prosecutions were put leads to a conclusion of improper purpose and an abuse of process”. (Final submission paragraph 18, page 13).
The difficulty with the submission is that the state and substance of the evidence does not satisfy me that the predominant purpose of the prosecutor in initiating the payslip prosecution and in pursuing the prosecution was an improper purpose in the context of the prosecution, namely leverage to force the defendant to sign the Protocol.
The evidence of Breheny in cross-examination that the union could prosecute every employer in the industry for either breaches of the Act or underpayment of wages (T27, L33) and a concession of Dervisovski that Breheny may have said “we can probably prosecute any company in this industry” (T11, L8) are of no great assistance. Breheny concedes he threatened Kokkinos but his position is that the threat was that Kokkinos had to face the “consequences” of industrial action not the “consequences” of prosecution.
Accepting for the moment that the threat of 8 October was both a threat of industrial action and of prosecution, there is no evidence that the prosecutor, through Mr Breheny or anyone else, made any other threat or statement other than the threat of 8 October 1997. Between that date and 23 October 1997 when the prosecution was filed, and from October 1997 to May 1998, when the Motion alleging abuse of process was filed, there is no evidence of the prosecutor linking the payslips’ prosecution with the Protocol. Indeed, Mr Tee makes the point that:
by 14 October 1997 the industrial dispute arising out of the refusal of most cleaning companies to sign the Protocol had led to Commissioner Smith of the Australian Industrial Relations Commission recommending that the union abandon the Protocol in favour of “Heads of Agreement”
the union agreed to the course of action recommended by Commissioner Smith
on 17 October 1997 the union advised ABSA of that Agreement
on 23 October 1997 the union advised cleaning companies, including the defendant, of the Agreement
on 23 October 1997, when the prosecutor filed the prosecution, the Commission had taken over the conduct of the dispute arising out of the Protocol and “it is absurd to suggest that the union would on 23 October 1997 file a payslips’ prosecution to pressure Dimension to sign a Protocol it was no longer pursuing, that course of action was at best unnecessary and at worst likely to inflame a situation”.
The timing of the three prosecutions is a matter to be taken into account given that they were instituted on 12 September (TVR), 20 October (Crewes Family Investments) and 23 October (Dimension Cleaning) and during this period the Workplace Change and Protocol campaign was in full swing. On 23 October the union appears to have advised cleaning companies, including the defendant, that it was prepared to consider Commissioner Smith’s “heads of agreement” in lieu of the Protocol and advised ABSA to that effect earlier on 17 October. However, there is substance in the proposition put by counsel for the defendant, in reply to the prosecutor’s submissions, namely that the Protocol campaign was not abandoned and individual agreements were pursued after reference of the dispute to the Commission. The timing of the prosecutions could have moved the scales towards a conclusion of prosecution for improper purpose if the Court was leaning towards such a conclusion on the general weight of the evidence. That is not the situation here.
The Court is very conscious of:
the statement in Spautz at 519 that:
“It is of fundamental importance that, unless the interests of justice demand it, courts should exercise rather than refrain from exercising, their jurisdiction to try persons charged with criminal offences, and that persons charged with such offences should not obtain an immunity from prosecution.”
Mr Kokkinos has claimed in paragraph 21 of his affidavit that the defendant “acted at the earliest opportunity to meet the concerns of the union over payslip information” but admitted in evidence that the payslip information had not been remedied and would be rectified when a new payroll package was introduced on 1 July 1998
there has been no challenge to the substance of the allegations in the Summons and Information
“for an abuse to be found it will be necessary that the offensive purpose be, at the least, the predominant purpose”: Re Excel; Worthley v Englind (1994) 52 FCR 69 at 89.
The Court is also conscious of what the High Court said of the criterion of predominant purpose and the onus of establishing abuse of process in Spautz at 529:
“It has been suggested that the criterion for abuse of process is whether the improper purpose is the sole purpose of the moving party (See, e.g., the use of the word ‘merely’ by Isaacs J. in Varawa (1911), 13 C.L.R., at p. 91). However, in more recent times it has been said, in our view correctly, that the predominant purpose is the criterion. That was the test applied by Lord Denning in Goldsmith v. Sperrings Ltd. ([1977] 1 W.L.R., at p. 496; [1977] 2 All E.R., at p. 589) and by the English Court of Appeal in Metall & Rohstoff v. Donaldson Inc. In giving the judgment of the Court in the latter case, Slade L.J. observed ([1990] 1 Q.B., at p. 469):
‘[A] person alleging such an abuse must show that the predominant purpose of the other party in using the legal process has been one other than that for which it was designed.’
It is, of course, well established that the onus of satisfying the court that there is an abuse of process lies upon the party alleging it. The onus is ‘a heavy one’, to use the words of Scarman L.J. in Goldsmith v. Sperrings Ltd. ([1977] 1 W.L.R., at p. 498; [1977] 2 All E.R., at p. 582) and the power to grant a permanent stay is one to be exercised only in the most exceptional circumstances (Jago (1989), 168 C.L.R., at p. 34; see also Sang, [1980] A.C., at p.455).”
The evidence of Mr Kokkinos is open to the inference that Mr Breheny threatened him at the meeting on 8 October 1997 and that, when Breheny said words to the effect that Kokkinos must face the consequences if he did not sign the Protocol, he was stating an intention to mount a prosecution for an improper purpose. However it is an inference which should not be lightly drawn. It is an inference that Breheny had then and maintained later an intention to prosecute for an improper purpose and that the improper purpose was his dominant purpose. I have no doubt a threat was made. Indeed, a threat was conceded but the threat conceded was a threat of industrial action not a threat to prosecute for payslip deficiencies.
I also believe it is possible, even likely, that Breheny included in his threat a threat to launch a prosecution for payslip deficiencies. It seems to me much less likely that the predominant purpose behind the threat was a prosecution for improper purpose or that the prosecution was launched and maintained for an improper purpose.
It may be that on 8 October Breheny considered a threat of prosecution, if such was intended and incorporated in a threat of “facing the consequences”, as part and parcel of industrial action but that is not the same as a prosecution launched and maintained for an improper purpose.
It may be that there is, within the union, a vindictive motive associated with pursuing a prosecution for what the defendant asserts are essentially minor deficiencies. It may be that a motivation of punishment lurks in pursuit of a company with a director who is active in ABSA but for reasons outlined below a legitimate remedy is not converted to an abuse of process by an ulterior motive. Motive for prosecution and insignificant deficiencies may assist the defendant in terms of penalty should the prosecution proceed but neither issue establishes abuse of process.
In reply to the prosecutor’s submission, counsel for the defendant points out that no claim has been made for monies owing to employees. It is asserted that the Dimension Cleaning prosecution arises ‘from a selective approach by the union as to which employer to target … (and that) … if the Information before the Court was in fact a vehicle by which monies owed to employees could be claimed, the union would be on much stronger ground”. (Reply to Prosecutor’s Submissions page 5)
The prosecution is for breach of the Act and Regulations. A claim for underpayment, if such could be established, is a separate process open under s 179 of the Act. A failure to pursue such a claim, if it be open, might say something about priorities and motivations of the union and might be relevant to penalty. There might be circumstances in which the failure to seek recovery of wages under s 179 might be of some relevance in assessing the likely purpose and dominant purpose behind the prosecution and might be of assistance in leading a court to being satisfied of proper or improper purpose. That is not so here.
In Spautz at 534 Brennan J considered the issue of motive and referred to two cases where sequestration was the primary object intended. He said:
“… In both cases, the creditor had an ulterior motive for pursuing his legal rights, but the ulterior motive did not affect the character of the result which the plaintiff intended the proceedings to achieve. The pursuit of a legitimate remedy is not converted to an abuse of process by an unworthy and ulterior motive.
These cases show that a plaintiff’s intention to achieve a result must be distinguished from his motive for commencing or maintaining a proceeding, though the distinction may be elusive. In Bayne v. Baillieu ((1908) 6 C.L.R. 382, at p. 403), O’Connor J. cited with approval a statement by Holroyd J. in a Victorian case (In re Morrissey (1899), 24 V.L.R. 776, at p. 778):
‘I think that if the object of an act is legal, and there is no wrongful intention in it, but the intention is to do something also legal, founded upon that act – it is perfectly immaterial what the ulterior motive of the party may be – what it may be that prompts him to do the legal act.’
That principle was held to be applicable to an act done in exercise of a legal right arising under a contract or other instrument in Chapman v. Honig ([1963] 2 Q.B. 502, at p. 520) in which Pearson L.J. said:
‘I cannot think of any case in which such an act might be invalidated by proof that it was prompted by some vindictive or other wrong motive. Motive is disregarded as irrelevant.’
In a given case, a distinction may have to be drawn between the purpose of the proceeding and the motive of the plaintiff in commencing or maintaining it (XCO Pty. Ltd. v. Federal Commissioner of Taxation (1971), 124 C.L.R. 343, at pp. 350-351). That distinction depends on a disparity between the plaintiff’s intention and the plaintiff’s motives. Intention relates to the result which the plaintiff desires to obtain by commencing or maintaining the proceeding; motive relates to all the considerations which move that party to commence or maintain the proceeding. The desired result is no doubt an element of the moving considerations, but it does not exhaust those considerations.
In a case where a plaintiff intends to obtain relief within the scope of the remedy available in a proceeding, there is no abuse or process whatever the plaintiff’s motives may be.”
Recent authorities, where permanent stays have issued on the grounds of abuse of process, reveal clear evidence of improper purpose and dominant purpose and of a prosecutor achieving or attempting to achieve some collateral advantage beyond that which the law offers or of a prosecutor exerting pressure to effect an object not within the scope of the prosecution process.
In Spautz, a lecturer, with a long history of initiating prosecutions later found to be abuses of process, commenced an action against a university for wrongful dismissal. He later laid Informations against various officers of the university alleging a number of offences including, criminal conspiracy to defame and conspiracy to injure him without justification and by illegal means. In fact, Dr Spautz “instituted an extraordinary number of proceedings against persons who played a part in the events which concluded in his dismissal” (540). On the application of some of those persons for declaration that particular prosecutions were an abuse of process, the trial judge found that the lecturer’s predominant purpose in instituting and maintaining the criminal proceedings was to exert pressure upon the university to reinstate him and/or to agree to a favourable settlement of the case for wrongful dismissal.
In Spautz at 516 the majority observed:
“As Priestley J.A. noted in the Court of Appeal, there was ample material before the trial judge from which he could draw that conclusion. In particular, there was a mass of documentation comprising newsletters, pamphlets and memoranda which the respondent had written and distributed to members of the University, media outlets, politicians and legal advisers to his opponents in the litigation. This material contained warnings about proposed legal proceedings, demands for reinstatement, discussions of Dr. Spautz’s purpose and motive and, what is more important, threats. In the opinion of the trial judge, the material plainly showed that, from the outset, Dr. Spautz intended to exert pressure on the persons with power to decide the issues affecting him not to proceed in a manner unfavourable to him if they wished to avoid being sued. In this way he sought to bring pressure to bear so that the University would settle his wrongful dismissal action on terms, including reinstatement, favourable to himself. The trial judge found that, although the great bulk of this material was circulated prior to the institution of the proceedings now in question, material later circulated, while different in tone, hinted at the same theme.”
In Ryman v Seymour CBD Pty Ltd, Federal Court of Australia (unreported) Spender J, 28 February 1997, Matter QG 116 of 1996, an estate agent and his wife entered arrangements for the purchase from plans of two apartments or units to be built in residential tower developments in Brisbane. The purchasers signed a contract for a three-bedroom unit and, on the same day, agreed to purchase a two-bedroom unit. In an application in the Federal Court Mr and Mrs Ryman claimed that they were induced to enter a contract by misrepresentations made by the respondent’s agents. There was ample evidence that the applicants had been seeking an extension of time for completion of the contract and the trial judge was satisfied that the proceedings had been initiated with the predominant purpose of pressuring the respondent into delaying or deferring completion of the contract. In Ryman, the uncontradicted facts were found to be contrary to those which were pleaded and the proceeding was struck out as one where no reasonable action had been disclosed and as an abuse of the process of the Court. The initiation of the proceeding for an improper purpose was clear and undeniable on the evidence and the proceeding was categorised as “without any merit and bound to fail”.
In White Industries (Qld) Pty Ltd v Flower & Hart (a firm), Federal Court of Australia (unreported) Goldberg J, 14 July 1998, Decision 806/98, Matter QG 198 of 1986, the trial judge found that delay was the purpose for the institution of the proceeding. The purpose was expressed in writing by the solicitor proposing the proceeding and the purpose so expressed was not to vindicate any right under or in relation to a building contract but rather to stall a quest for moneys due under the contract. The solicitor was found to have held and expressed the view that the proceeding would fail if it went to trial and judgment and to have held and expressed such view when he signed the statement of claim and instituted the proceeding. The purpose of the pleadings were found to be to secure “the advantageous position of having struck the first blow”.
In terms of standard of proof, the trial judge adopted and applied the approach suggested by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 and the majority in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 450. His Honour stated that he had been assisted in making findings and reaching the required degree of satisfaction (of abuse of process) by contemporary documentation available to him.
The evidence of improper and dominant purpose, of achieving or attempting to achieve illegal collateral advantage, of pressure outside the scope of the legitimate litigation process, such evidence is clear and demonstrable in Spautz, Ryman and White Industries. This is not so in this case.
I have already indicated that the state and substance of the evidence does not satisfy me that the predominant purpose of the prosecutor in initiating the payslip prosecution and in pursuing the prosecution was an improper purpose, namely leverage aimed at forcing or persuading the defendant to sign the Protocol.
Like Goldberg J in White Industries I have adopted and applied the approach outlined by Dixon J in Briginshaw at 362:
“But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters ‘reasonable satisfaction’ should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”
Unlike his Honour in White Industries I do not have contemporary documentation of a kind and nature which clearly on its face establishes abuse of process. Being unsatisfied of improper and dominant purpose I will dismiss the motion. These are not “most exceptional circumstances” and the defendant has not discharged the “heavy onus” of satisfying me that an abuse of process has arisen from Mr Breheny’s threat of 8 October 1997.
It is unnecessary for me to determine whether the TVR or Crewes Investment prosecutions were flawed and, in either case, an abuse of process. Again, inferences could be drawn from the evidence which might lead to such a conclusion. The TVR and Crewes Investment evidence was admitted because I assessed it as tendency and similar fact evidence and described it, after the voir dire, as “potentially of a high degree of relevance and of significant probitive value”. Despite that evidence I was not satisfied that the evidence overall was such as to satisfy me of improper purpose in respect of the Dimension Cleaning prosecution.
I will, however, conclude by observing that the prosecution unit in the union would be well advised to maintain clear, accurate and separate written records of:
investigations leading to decisions for or against prosecutions
steps taken to advise potential targets of prosecution the grounds on which prosecution is contemplated
the decision processes and grounds which lead to Informations and Summonses laid under regulation 132A(2) of the Workplace Relations Regulations.
ORDERS
The respondent’s motion of 22 May 1998 be dismissed.
The respondent pay the applicant’s costs in respect of the Motion.
The Information filed on 23 October 1997 be listed for hearing as soon as practicable.
I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Ryan
Associate:
Dated: 8 SEPTEMBER 1998
Solicitor for the Prosecutor: Mr B. Tee Australian Liquor, Hospitality and Miscellaneous Workers Union
Counsel for the Defendant: Mr C. Kourakis, QC Solicitor for the Defendant: Manuel Fuller Merrigan
Dates of Hearing: 25 and 26 June 1998
1, 2 and 3 July 1998Final Submissions from Defendant:
Final Submissions from Prosecutor:
23 July 1998 and 2 September 1998
5 August 1998
Date of Judgment: 8 September 1998
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