BUWA Transport Pty Ltd v Cleanaway Waste Management Limited
[2024] FedCFamC2G 1324
•3 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
BUWA Transport Pty Ltd v Cleanaway Waste Management Limited [2024] FedCFamC2G 1324
File number(s): SYG 3089 of 2024 Judgment of: JUDGE MCCABE Date of judgment: 3 December 2024 Catchwords: FAIR WORK – interlocutory relief sought by way of injunction – current contract for service to end – injunction sought for parties to enter a further contract on the same terms – whether there is an arguable case – balance of convenience – application dismissed. Legislation: Fair Work Act 2009 (Cth) s 12
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 140
Cases cited: EG FuelCo (Australia) Ltd v Ampol Australia Petroleum Pty Ltd [2021] NSWSC 989
MP Water Pty Ltd v Veolia Water Australia Pty Ltd [2021] NSWSC 582
Division: Division 2 General Federal Law Number of paragraphs: 28 Date of hearing: 29 November 2024 Counsel for the Applicant: Mr M Baroni Solicitor for the Applicant: Haywards Solicitors Solicitor for the Respondent: Mr B Edghill (Sparke Helmore Lawyers) ORDERS
SYG 3089 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: BUWA TRANSPORT PTY LTD ACN 601 618 197
Applicant
AND: CLEANAWAY WASTE MANAGEMENT LIMITED ACN 000 164 938
Respondent
ORDER MADE BY:
JUDGE MCCABE
DATE OF ORDER:
29 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The application for an injunction filed 28 November 2024 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE MCCABE:
The applicant, BUWA Transport Pty Ltd (BUWA), has lodged a claim under the Fair Work Act 2009 (Cth) (the Act) alleging contravention of a general protection. BUWA contends it was subject to adverse action within the meaning of the Act on account of the conduct of its director, Mr Walsh, who was a union delegate to the workplace in question. Mr Walsh also contributed to workplace health and safety processes.
The adverse action is alleged to be a decision by the respondent, Cleanaway Waste Management Limited (Cleanaway), to not renew BUWA’s contract with Cleanaway when the contract came to the end of its five-year term on 30 November 2024. Cleanaway had informed the applicant on or about 23 October 2024 that it would not renew or renegotiate the contract at the end of the term. Cleanaway also separately notified BUWA to make its vehicle available to Cleanaway so that a crane apparatus belonging to Cleanaway could be removed.
BUWA’s substantive application was filed with the Court on 27 November 2024. It has asked for compensation and other orders. It also filed an application in a proceeding on 28 November 2024 seeking an injunction. BUWA has asked the Court to make an interlocutory order requiring Cleanaway to enter a fresh contract with BUWA on the same terms for a year, or at least until the substantive dispute can be resolved by the Court.
The interlocutory application was brought on as a matter of urgency in the afternoon of 29 November 2024 because the contract was due to expire on 30 November 2024. After hearing from the parties, I decided not to grant the interlocutory relief sought. I gave a brief outline of my reasons at the conclusion for the hearing but told them I would provide a more comprehensive explanation in writing after adjourning for the day, given the lateness of the hour. These are the reasons for that decision.
The contract
The contract in question was annexed to the affidavit of Mr Walsh dated 28 November 2024 (exhibit 1). The substance of the contract provides for the applicant to supply and operate a truck that was to transport heavy rubbish bins as part of Cleanaway’s service to its customers. The truck bore the Cleanaway logo and operated from Cleanaway’s depots according to a roster created by Cleanaway, and in accordance with Cleanaway’s policies and procedures. BUWA had done business with Cleanaway since 2014: BUWA was incorporated to take on a five-year contract with Cleanaway that was subsequently renewed in 2019.
Clause 4 of the 2019 contract deals with the term of the agreement. Schedule B, to which clause 4 refers, says the term of the agreement is five years – albeit that the term might be extended at the discretion of Cleanaway on such terms as may be agreed. Clause 4 also provided the parties could agree in writing to extend the term. Clause 4 also provided that if the parties did not agree to a formal extension but BUWA continued performing work after the expiration of the term as before, the term would be taken to be extended in three-month increments.
There was no dispute for the purposes of the interlocutory hearing that the applicant is an independent contractor engaged by Cleanaway for a fixed term. There was also no dispute for the purposes of the interlocutory hearing that the provisions of the Act still applied to the arrangement because the contract was a ‘workplace instrument’ recognised under s 12 of the Act.
The position of Mr Walsh
Mr Walsh is one of two shareholders and is a director of BUWA. He also controls another company which is separately engaged by Cleanaway under its own contract. (The contract of the other company has not been impacted by the current disagreement.) Mr Walsh drives BUWA’s vehicle and has served as a union delegate and as a member of a workplace health and safety committee at the relevant depot. In his affidavit of 28 November 2024, Mr Walsh described friction between Cleanaway management and him in his capacity as delegate. Suffice to say Mr Walsh believes Cleanaway has not taken all its workplace obligations seriously, and that he said as much to Cleanaway management.
The argument over renewing the contract for a further term
Notwithstanding that friction, Mr Walsh says in his affidavit that he wants BUWA to remain engaged with Cleanaway. As I understand it, he hopes BUWA could sell its business as a going concern or continue to perform work under the contract.
With those possibilities in mind, Mr Walsh said he has repeatedly offered to upgrade BUWA’s equipment. He says BUWA agreed to do that at its own expense, if necessary. The key to that upgrade would be replacing the company’s Scania truck with a newer, more reliable vehicle. The existing vehicle is ten years old. Mr Walsh had supplied Cleanaway with a letter from Scania, which had supplied maintenance services under a contract. Scania opined the vehicle had reached the end of its useful life. Scania said it would not enter into a new service agreement in respect of the vehicle because it was likely to experience increasingly serious issues. As I understand BUWA’s case, Mr Walsh was reluctant to proceed with an upgrade in the absence of an extended term. He says Cleanaway’s management were unwilling to support the upgrade.
Cleanaway points to the letter from Scania in support of its claim that the decision not to renew the contract is a business decision based on the fact BUWA’s vehicle is too old. It was becoming unreliable. The affidavit of Mr Vella, Cleanaway’s manager, dated 29 November 2024 (exhibit 3) refers to reliability and (unspecified) safety issues that arise out of operating an older vehicle. Cleanaway says, in effect, the truck is not up to standard and Cleanaway does not care to renew the contract in those circumstances.
Mr Walsh, on behalf of the applicant, disputes that explanation of Cleanaway’s motives. He says the age of the vehicle should not be an issue because BUWA had offered to acquire a new vehicle. He also appears to suggest in his affidavit of 28 November 2024 that some of the issues with reliability might be because Cleanaway had not undertaken work on the vehicle in its workshop that Cleanaway was required to perform.
The form of the proposed interlocutory relief and the exercise of the discretion
BUWA has asked the Court to make an order under s 140 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) requiring that Cleanaway enter a fresh contract with BUWA for a term of at least a year, or at least extend the term of the existing contract beyond its current term. The power to make such an order is a discretionary one. I will discuss below the considerations which inform the exercise of that discretion, but I should note two matters at the outset:
·First, there can be an expedited hearing in this case. BUWA says it can have its statement of claim and evidence filed prior to Christmas. Mr Edgehill, who appeared for Cleanaway, did not have instructions on whether his client’s case would be ready by the end of January, but he had no objection in principle to an expedited hearing.
·Second, BUWA formally gave the usual undertaking as to damages.
I turn then to the form of the order that is sought. Mr Baroni, counsel for BUWA, conceded the proposed interlocutory relief was, in effect, a mandatory injunction that required Cleanaway to extend a business relationship rather than simply refrain from engaging in identified conduct. Mr Baroni acknowledged a mandatory injunction was less common than a prohibitive order, and conceded the Court would have to be mindful of the fact such an order would compel the respondent to take positive steps. That requirement might increase the inconvenience to the respondent and make it less likely that damages would be an adequate remedy for the respondent if the applicant were to fail at the final hearing: see EG FuelCo (Australia) Ltd v Ampol Australia Petroleum Pty Ltd [2021] NSWSC 989 (EG FuelCo) at [35]-[38] per Stevenson J. Having said that, Mr Baroni argued the relationship between BUWA and Cleanaway is not like a regular employment relationship in which courts would be wary of making what amounted to an order for specific performance. He argued the relationship in question here was really a business-to-business relationship, albeit one that has a dimension under the Act. He also says the positive steps that would be required of Cleanaway were not significant: there was work to be done in Cleanaway’s business and BUWA – which was already integrated into that business – stood ready to continue as before.
That brings me to the exercise of the discretion. The parties agreed the Court would ordinarily look to at least two matters when deciding whether to exercise the discretion to make an interlocutory order like the one sought in these proceedings: see EG FuelCo at [35]; see also MP Water Pty Ltd v Veolia Water Australia Pty Ltd [2021] NSWSC 582 (MP Water) at [56] per Rees J. First, the Court would consider whether there was an arguable case such that the status quo ought to be maintained: MP Water at [56].
My assessment of the case is necessarily impressionistic, since it would be inappropriate to conduct a mini-trial at this juncture. I note Mr Edgehill acknowledged there was an arguable case which turned on questions of law and fact that would have to be resolved at a hearing. I agree.
The second consideration is the balance of convenience (MP Water at [57])[1] – with particular attention to any inconvenience that might be experienced by Cleanaway given the proposed orders might place a greater burden on it compared to the more common prohibitive injunction. While Cleanaway was prepared to concede BUWA had an arguable case that had to be resolved at a final hearing, Mr Edgehill argued the balance of convenience weighed against the exercise of the discretion.
[1] In MP Water, Rees J explained the balance of convenience test as follows:
“…whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury which the defendant would suffer if an injunction was granted: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46. Whether an applicant for an interlocutory injunction has made out a sufficient prima facie case and whether the balance of convenience favours the grant of such relief are related, not independent, questions: Warner-Lambert Co LCC v Apotex Pty Ltd [2014] FCAFC 59; (2014) 311 ALR 632 at [70] per Allsop CJ, Jagot and Nicholas JJ; Mineralogy v Sino Iron at [87].”
BUWA relies on Mr Walsh’s affidavit. Mr Baroni pointed out BUWA is already integrated into Cleanaway’s operations, and he told me from the bar table that Mr Walsh has recently been contacted by Cleanaway administrative staff enquiring about his availability to do work right up to the last moment under the existing contract. (There was a dispute about this: Mr Vella’s affidavit filed on behalf of Cleanaway suggested Mr Walsh had already indicated unavailability in the preceding week in anticipation of the contract coming to an end.)
Mr Vella said in his affidavit that he had already begun the process of reallocating the work that would previously have been done by BUWA to one of the other contractors or employees operating from the same depot. The fact Cleanaway’s managers had begun to rework rosters would create some (albeit relatively minor) administrative inconvenience that might impact on other drivers and contractors.
Mr Vella’s affidavit focused on the problems associated with having an old and unreliable vehicle as part of its operation. There does not appear to be any doubt the vehicle is experiencing challenges: Mr Walsh agreed it needs to be replaced, and he is unhappy that BUWA was not given a clear path to do so. Requiring Cleanaway to accept the risk of unreliability is an imposition on its business and customers; moreover any injury to its business that resulted from that unreliability might be difficult to remedy through an award of damages if Cleanaway prevailed in the substantive application. I acknowledge Cleanaway has other resources that could be deployed to fill any gaps should BUWA’s vehicle be unavailable, but I infer from Mr Vella’s affidavit that these resources need to be organised through carefully choreographed rosters involving large numbers of workers and contractors. There may be difficulties responding quickly to sudden problems. Mr Walsh’s evidence that he is still being contacted up to the last moment tends to suggest Cleanaway is scrambling to cover its existing commitments. In those circumstances, Cleanaway may be particularly vulnerable to the disruption caused by an unreliable vehicle. I would add there is no reason to doubt the unreliability issues are likely to manifest more frequently given the service contract with Scania is lapsing. I note Scania reported it was (or expected it would be) “repairing, replacing or rebuilding major components multiple times”: annexure PV-1 to the affidavit of Mr Vella.
Mr Vella also referred to an unparticularised concern about safety issues that might arise from having such an old vehicle operating from its depot. It is difficult to know what to make of this concern without further explanation.
On balance, I am satisfied there are good reasons to believe requiring Cleanaway to retain an old and increasingly unreliable vehicle on its rosters would be an inconvenience – and potentially a substantial inconvenience.
Mr Walsh referred in his affidavit to the fact another company that he controls has a separate contract with Cleanaway. That company employs a driver to operate its vehicle. Mr Walsh said if he were longer driving the BUWA vehicle because the contract was lost, there may not be a need to retain the other company’s driver. There was limited evidence before me as to the likelihood of that occurring; I also had limited evidence as to the disposition of the other driver. While that individual may experience inconvenience, it is unclear that it will be significant.
Mr Baroni pointed out BUWA risks being left with an old vehicle that cannot be readily redeployed to work for another firm. He said the challenges will be even greater if Cleanaway were permitted to remove the lifting apparatus attached to the BUWA vehicle. Cleanaway owns that apparatus and has said that it wants the apparatus returned. It is unclear why there is a pressing need to do so given the current proceedings, but I accept for present purposes that the vehicle would become practically useless without the apparatus. Of course, the challenge for BUWA is that everyone seems to concede the vehicle is at the end of its useful life. It has limited value at this point in any event. The vehicle would presumably be sold for a nominal amount in the near term regardless of whether BUWA retained the benefit of the contract.
I was also told BUWA was hopeful of following what it says was an established practice amongst Cleanaway’s contractors: it wanted to effectively sell the business as a going concern, albeit one that did not have a suitable vehicle at the time. That would require an extension of the contract or a fresh contract for a sufficient term. Mr Walsh referred to suggestions from Mr Vella that an extension would be forthcoming. If that were so, BUWA might have a legitimate expectation of a roll-over. Mr Vella denies he said anything of the sort. It is difficult to see how extending the term of the contract for a relatively short period to maintain the status quo pending the outcome of the litigation would put BUWA in a position to market the business as a going concern. At most, ordering that the status quo be preserved would give BUWA some negotiating leverage against Cleanaway. That is not the point of an injunction.
The contract makes clear the term can be extended or renewed but only by mutual agreement. Cleanaway is entitled to structure its business on this basis. If there is a case to be made about the disappointment of a legitimate expectation, that depends on oral representations; damages are likely to be a sufficient remedy for the breach of any legitimate expectation. Damages are also likely to be a sufficient remedy if the applicant has been the subject of adverse action.
Mr Edgehill also raised questions over the timing of the application for interlocutory relief. He said BUWA has known of the end date of the contract since at least 23 October 2024 when it received the notice from Cleanaway. He was critical of BUWA waiting until the last minute to lodge the application. Mr Baroni argued there was nothing to this point. He pointed out the parties had been exchanging correspondence about the possibility of a resolution up until 25 November 2024. He said once it became apparent those negotiations would not be fruitful, BUWA acted promptly. To the extent there has been delay in commencing these proceedings, I am not inclined to hold that against the applicant in circumstances where it cannot be said it rested on its rights.
Conclusion
Having considered all these matters, I am satisfied it is not appropriate to provide the interlocutory relief. The potential for an expedited hearing and the fact damages are likely to be an adequate remedy if BUWA succeeds weigh against making orders. The potential inconvenience to Cleanaway associated with being forced to rely on an increasingly unreliable vehicle is significant. These matters outweigh the other concerns. The application for interlocutory relief is dismissed.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McCabe. Associate:
Dated: 3 December 2024
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