Boral Resources (Vic) Pty Ltd v CFMEU (Ruling No 1)
[2015] VSC 445
•26 August 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2013 00928
BETWEEN
| BORAL RESOURCES (VIC) PTY LTD (ACN 004 620 731) AND OTHERS | Plaintiffs |
| and | |
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION | Defendant |
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JUDGE: | BELL J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 25 August 2015 |
DATE OF RULING: | 26 August 2015 |
CASE MAY BE CITED AS: | Boral Resources (Vic) Pty Ltd v CFMEU (Ruling No 1) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 445 |
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EVIDENCE – allegation in amended statement of claim of ban constituting tort of intimidation – judgment entered in default of defence – scope of ban as pleaded thereby taken to have been admitted and no longer in issue – proposed evidence about what union told plaintiff target of ban about its purpose and intended manner of implementation – whether relevant to any fact in issue – whether relevant to impact of ban upon customers and market of plaintiff – whether inconsistent with allegations pleaded in amended statement of claim – Evidence Act 2008 (Vic) ss 55, 56.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiffs | Mr S Wood QC with Mr D Ternovski | Herbert Smith Freehills |
| For the defendant | Ms R Doyle SC with Mr J Gurr and Ms P Knowles | Slater and Gordon |
HIS HONOUR:
The union objects to evidence proposed to be led by Boral Resources (Vic) Pty Ltd under two categories:
(1)Evidence of what Mr Setka (in the presence of Mr Reardon) (from the union) said to Mr Dalton and Mr Head (from Boral Resources) at a meeting on 23 April 2015.
(2)Evidence from customers of Boral Resources, but not those in any specific category in which it makes a claim for loss, about the impact upon them of the bans specified in the amended statement of claim dated 14 February 2013.
In both cases, the union contends that the evidence does not relate to any fact in issue. In relation to category (1), the scope of the ban is taken to have been admitted by the entry of default judgment and is therefore not in issue. In relation to category (2), the evidence is too remote to be probative of the impact of the ban upon the market for Boral Resources’ products or any other issue in dispute.
These objections of the union are made without prejudice to other grounds of objection that it has foreshadowed, and may hereafter have, to the evidence.
I note that the claim for damages is pressed only on behalf of Boral Resources.
The trial that has now commenced before me follows the judgment in default of defence that was entered on 20 May 2013. The order of the court was that the union pay Boral Resources damages to be assessed. This is the trial of that assessment.
Boral Resources’ claims are set out in its amended statement of claim. It relies upon the tort of intimidation. As here relevant, it is claimed that:
·on or about 14 February 2013 the union determined that there would be a ban against the purchase of concrete products from Boral Resources by Victorian construction principals and sub-contractors (para 6)
·since that date, the union has communicated that ban to those principals and sub-contractors (para 7)
·as a result of those communications, they have declined to place orders for the supply of concrete products with Boral Resources (para 12)
·as a result, it has suffered loss and damage (para 14).
It is common ground that, by reason of the entry of default judgment, these allegations in the amended statement of claim are taken to have been admitted. In this trial for the assessment of damages, there are therefore two issues:
(1)Causation: was any loss suffered by Boral Resources caused by the bans?
(2)Quantum: what is the amount of that loss and damage?
Boral Resources’ claims for damages were particularised in its statement of particulars dated 14 April 2015 under three categories:
(1)Market-wide losses suffered as a result of the union’s conduct.
(2)Lost orders for supply of building products on specific sites as a result of that conduct.
(3)Damages arising from loss of market share and damage to customer relationships and reputation by reason of that conduct.
In its opening submissions, Boral Resources developed these particulars so that it now claims losses in these three categories:
(1)Losses on specific projects.
(2)Market-wide losses in the segment comprised of projects with a union presence (broken down into these two sub-categories):
(i) historic market-wide projects claim; and
(ii) future market-wide projects claim.
(3)Reduced profit due to the price-reduction strategy that Boral Resources adopted to mitigate its loss, broken down into these two sub-categories:
(i) reduced profit to date; and
(ii) reduced profit in the future.
With that background, I turn to the objections raised.
Evidence regarding statements by Mr Setka (in Mr Reardon’s presence)
According to the outlines of evidence that have been filed, the evidence in this category will be given by Mr Dalton and Mr Head. As to Mr Dalton, the intended evidence will be that, at the meeting on 23 April 2013:
(a)Mr Setka said that there was a deep feeling in the CFMEU against Daniel Grollo and John Van Camp of Grocon.
(b)Mr Setka discussed evidence that Mr Van Camp had given about a discussion between Mr Van Camp and Mr Dalton. Mr Setka said that Mr Dalton was making a pain of himself to the CFMEU.
(c)Mr Setka said that the CFMEU is at war with Grocon and wants to cut off the enemy’s supply lines.
(d)Mr Setka said that the CFMEU would increasingly focus on Boral Resources and that truck emissions testing would be the next action that the CFMEU would take against Boral Resources.
(e)Mr Setka said that the CFMEU would target membership of Boral Resources’ concrete batchers (who work at Boral Resources’ concrete plants).
(f)Mr Setka said that all Boral Resources had to do was stop supplying Grocon for a couple of weeks.
(g)Mr Setka said that when the war was over, the CFMEU would control what market shares Boral Resources would get.
(h)Mr Dalton told Mr Setka that Boral Resources would not comply and would continue to supply Grocon.
It is intended that Mr Head’s evidence will be along similar lines.
In Boral Resources’ opening submissions, it was announced that evidence would also be given that Mr Setka said at the meeting that concrete was like an intravenous drug that the building industry could not live without.
It was submitted for the union that this body of evidence relates to no fact in issue because the scope of the ban was set out conclusively in the amended statement of claim and taken to have been admitted. That scope could not be expanded or developed by evidence. The conversation alleged occurred between Boral Resources representatives and union representatives, not between union representatives and representatives of Boral Resources’ customers. The conversations were not capable of shedding any light upon how those customers did react, or might react, to the ban. Evidence of the actual impact of the ban was conceded to be a relevant category of evidence; several witnesses were expected to give evidence of this kind without objection. While it was permissible to lead direct evidence of the effect of the ban on Boral Resources’ customers, it was not permissible (because irrelevant) to give evidence of the scope of the bans and the union’s motivations. The evidence was not relevant to any issue relating to market-share losses or any other category of loss. Finally, upon the same substratum of facts, union representatives (including Mr Setka) were the subject of penalty proceedings in the Federal Court of Australia which raised issues about the extent of their participation in the present proceeding.
I accept as a governing principle that, by its evidence, Boral Resources cannot expand the scope of the ban alleged in the amended statement of claim and now taken to have been admitted. Nor can it give evidence that is inconsistent with those allegations. The issues in the assessment of damages trial that I am now conducting are delimited by those allegations. As contended for the union, Boral Resources is ‘stuck with’ the cause of action pleaded in the amended statement of claim pursuant to which judgment in default was entered. The cause of action which the judgment vindicates was based upon a ban of a particular pleaded scope beyond which Boral Resources cannot go.
However, in my view Boral Resources would not, by the evidence, be expanding the scope of the bans. Rather, for the purpose of laying the factual foundation for the damages assessment, it would be providing evidence that was rationally probative of the effect of the ban as pleaded upon Boral Resources’ customers, its market share and other categories of alleged loss specified in its particulars and opening.
As required by the rules of pleading, the amended statement of claim makes allegations of material fact and law, not evidence. By reference to the tort of intimidation, the ban and its scope were specified. Boral Resources did not provide particulars of an evidentiary nature about the ban and its implementation. The rules of pleading did not require it to do so. Evidence of such matters is reserved for the trial. That is the stage that has now been reached.
In this proceeding, the function of the court is to determine whether any losses suffered by Boral Resources were caused by the pleaded ban, and, if so, what is the quantum of that loss. In order to make that determination, it is relevant for Boral Resources to lead evidence (otherwise admissible) about the effect of the ban on its customers and its market as long as that evidence is not inconsistent with the amended statement of claim. I will not allow it to lead evidence of a different ban or wider ban, but (with one exception) I do not think that that is what it intends to do.
I do not accept the submission made for the union that the evidence is irrelevant because it is evidence of what Mr Setka (in Mr Reardon’s presence) told representatives of Boral Resources rather than representatives of its customers. Boral Resources was the target of the ban. The evidence is probative of the impact of the ban upon its customers, particularly when combined with direct evidence of those customers about that subject. That is relevant to all of Boral Resources’ categories of loss. Given that such direct evidence is relevant, admissible and to be given, it is not logical to exclude evidence about what the union hoped to achieve by the ban and how it would implement it. That the relevant conversations occurred between union representatives and Boral Resources’ representatives, not union representatives and customer representatives, does not make the evidence irrelevant. Due account can be taken of that fact. The evidence would also be relevant to whether Boral Resources suffered price-reduction losses because it would go to whether its market-recovery strategy was caused by the bans and reasonable.
In terms of the Evidence Act 2008 (Vic), the proposed evidence (with the one exception) is relevant and admissible under s 56(1) because it meets the test of relevance specified in s 55(1). The scope of the ban pleaded in the amended statement of claim is not a fact in issue in the proceeding because, by the default judgment, it is taken to have been admitted. But (as to both causation and quantum) the impact of the ban is a fact in issue in the proceeding in relation to the categories of loss on which Boral Resources relies and the proposed evidence is relevant to that issue.
The exception is that I do exclude the evidence referred to in para (e) of Mr Dalton’s outline. This evidence is not related to the pleaded ban and is not probative of any issue in this trail.
Any issues raised by the fact that some union representatives (including Mr Setka) are the subject of penalty proceedings in the Federal Court of Australia will have to be separately addressed.
Evidence from customers of Boral Resources in non-claimed sites
Having considered the submissions of the parties in relation to this category of evidence I have decided that I will not rule on this objection at this early stage in the trial. I will defer consideration of this objection pending further submissions and consideration.
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