CEPU v Telstra Corporation

[2011] FMCA 307

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CEPU v TELSTRA CORPORATION [2011] FMCA 307

INDUSTRIAL LAW – Right of entry – whether “premises” includes individual workstations – summary dismissal – tests for.

Fair Work Act 2009, ss.12, 487, 501, 502, 518 (1)(a), 793; pts.3, 4
Federal Court of Australia Act 1976 (Cth), s.31A (2)(b)
Federal Magistrates Act 1999 (Cth), s.17A
Federal Magistrates Court Rules 2001, r.13.10

Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499

Barnett v Territory Insurance Office [2011] FCA 155
Curran v Thomas Borthwick & Sons Ltd (1990) 26 FCR 241
Fair Work Ombudsman v Maclean Bay Pty Ltd [2010] FCA 1378
Keynes and Others v Rural Directions Pty Ltd and Others (No.2) (2009) 72 ACSR 264
Portuguese Cultural & Welfare Centre Inc v AMCA [2011] FMCA 144

PZ Cussons (International) Ltd v Rosa Dora Imports Pty Ltd [2007] 74 IPR 372

Spencer v The Commonwealth [2010] 241 CLR 118

Applicant: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION

Respondent: TELSTRA CORPORATION

File Number: MLG 736 of 2010

Judgment of: F. Turner FM

Hearing date: 4 April 2011

Date of Last Submission: 4 April 2011

Delivered at: Melbourne

Delivered on: 5 May 2011

REPRESENTATION

Counsel for the Applicant: Mr White

Counsel for the Respondent: Mr Snaden

Solicitors for the Respondent: Blake Dawson

ORDERS

1. The Application in a Case filed on 7 February 2011 seeking summary dismissal of the Application filed 18 May 2010 is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 736 of 2010

COMMUNICATIONS, ELECTRICAL, ELECTRONIC,
ENERGY, INFORMATION, POSTAL, PLUMBING AND
ALLIED SERVICES UNION

Applicant

And

TELSTRA CORPORATION

Respondent

REASONS FOR JUDGMENT

1. This matter involves an application by the Telstra Corporation (“Telstra”) for summary dismissal of an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (the “CEPU”).

2. By application filed on 18 May 2010 and Further Amended Statement of Claim filed on 19 January 2011, the CEPU alleges breaches of the Fair Work Act 2009 (the “Act”) relating to alleged denial of right of entry, and seeks the imposition of penalties on Telstra.

3. At the hearing on 4 April 2011 Mr White appeared for the CEPU and Mr Snaden for Telstra.

4. The CEPU alleges that Telstra and its managers, having been given appropriate notice of entry by permit holders from the CEPU:

   ·Refused entry to Telstra premises, and/or

   ·Unduly delayed entry to Telstra premises; and/or

   ·Intentionally hindered or obstructed permit holders when attempting to exercise their rights.

5. That action is said to have been in breach of sections 501 and 502 of the Act which provide as follows:

   501   Person must not refuse or delay entry

   A person must not refuse or unduly delay entry onto premises by a permit holder who is entitled to enter the premises in accordance with this Part.

   Note:     This section is a civil remedy provision (see Part 4‑1).

   502   Person must not hinder or obstruct permit holder

   (1)A person must not intentionally hinder or obstruct a permit holder exercising rights in accordance with this Part.

   Note:     This subsection is a civil remedy provision (see Part 4‑1).

   (2)To avoid doubt, a failure to agree on a place as referred to in paragraph 483(5)(b), 483C(6)(b) or 483E(6)(b) does not constitute hindering or obstructing a permit holder.

   (3)Without limiting subsection (1), that subsection extends to hindering or obstructing that occurs after an entry notice is given but before a permit holder enters premises.

6. It is alleged that on “24 March 2010 at about 9am officials of the CEPU gave Telstra entry notices and arrived later at the Telstra premises”.

7. It is alleged that the officials advised employees of Telstra that they “wanted to interview employees at their work desks”.

8. It is alleged that, after seeking advice, an employee/employees of Telstra advised the officials that “they were only able to interview employees during the employees’ breaks”.

9. It is alleged that as a result of enquiries, the officials suspected that Telstra had contravened relevant award provisions.

10. It is alleged that by reason of s.793 of the Act, the state of mind of the managers is the state of mind of Telstra.

11. Section 793 provides:

    793   Liability of bodies corporate

    Conduct of a body corporate

    (1)     Any conduct engaged in on behalf of a body corporate:

    (a)by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or

    (b)by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

    is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

    State of mind of a body corporate

    (1)If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

    (a)that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

    (b)that the person had that state of mind.

    Meaning of state of mind

    (1)     The state of mind of a person includes:

    (a)the knowledge, intention, opinion, belief or purpose of the person; and

    (b)the person’s reasons for the intention, opinion, belief or purpose.

    Disapplication of Part 2.5 of the Criminal Code

    (1)Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.

    Note: Part 2.5 of the Criminal Code deals with corporate criminal responsibility.

    (2)     In this section, employee has its ordinary meaning.

The Law

1. “Premises” is defined in s.12 of the Act as follows:

   Premises includes:

   (a)any land, building, structure, mine, mine working, aircraft ship, vessel, vehicle or place; and

   (b)a part of premises (including premises referred to in paragraph (a)).

2. By Application in a Case filed on 7 February 2011 Telstra seeks summary dismissal of the proceedings pursuant to r.13.10 of the Federal Magistrates Court Rules 2001 (the “Rules”) which provides:

   The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:

   (a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or

   (b)the proceeding or claim for relief is frivolous or vexatious; or

   (c)the proceeding or claim for relief is an abuse of the process of the Court.

3. Mr Snaden submitted that the principles to be applied by the Court are as set out by Federal Magistrate Lucev in Portuguese Cultural & Welfare Centre Inc v AMCA [2011] FMCA 144 at [4]-[8] as follows:

   4.Section 17A of the Federal Magistrates Act 1999 (Cth) provides as follows:

   (2)The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

   (a) …

   (b)  the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

   (3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

   (a)  hopeless; or

   (b)  bound to fail;

   for it to have no reasonable prospect of success.

   5.It is also relevant to note that r.13.10 of the Federal Magistrates Court Rules 2001 (Cth) provides as follows:

   The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:

   (a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or

   (b) the proceeding or claim for relief is frivolous or vexatious; or

   (c) the proceeding or claim for relief is an abuse of the process of the Court.

   6.The Federal Court possesses a like power under s.31A(2)(b) of the Federal Court of Australia Act 1976 (Cth). In relation to that power it has been observed that:

   a)a court must be satisfied that the applicant has no reasonable prospect of success;

   b)the court need not be satisfied that the proceeding is hopeless or bound to fail;

   c)the legislature’s intention in introducing the provisions concerning summary dismissal was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by authorities like Dey v Victorian Railways Commissioners and General Steel Industries Inc v Commissioner for Railways (NSW) & Ors which required that the allegations be quite clearly so untenable that they could not possibly succeed;

   d)there was not an intention on the part of the legislature to remove the bar completely;

   e)the mere presence of a trifling, implausible, tenuous or tangentially relevant factual controversy is not a bar to the exercise of the summary dismissal power; and

   f)what is required is a prediction of the outcome of a trial on the merits but not an actual adjudication of those merits.

   7.     The Federal Court has also observed as follows in relation to the principles applicable on an application for summary dismissal:

   6. Success under s 31A [of the FC Act] does not require a demonstration that the case is hopeless or bound to fail. The following principles are of general application to an application under s 31A:

   (a)  the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;

   (b)  the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;

   (c)  in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;

   (d)  it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;

   (e)  if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;

   (g)  it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;

   (h)  evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;

   (i)  in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party.

4. Mr Snaden submitted that the principles in Portuguese Cultural & Welfare Centre are consistent with the High Court’s findings in Spencer v The Commonwealth [2010] 241 CLR 118 at [128]-[133], regarding the equivalent powers of the Federal Court.

5. Mr Snaden submits that the test is ‘whether or not the application has reasonable prospect of success” and “what is required is a prediction of the outcome of a trial on the merits, but not an adjudication of those merits” (per Lucev Federal Magistrate in Portuguese Cultural & Welfare Centre at [6(f)]).

6. Mr White submits the definition of “premises” in s.12 of the Act is inclusive.

7. Mr White agreed that the decision in Portuguese Cultural & Welfare Centre (supra) sets out a number of conclusions “on how the variety of Courts have interpreted the power to strike out”.

8. Mr White referred to the decision in Spencer v The Commonwealth (supra) at [25] –[26] as follows:

   “Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success” (Mr White submitted that there is no binding decision on the questions of law here. The quote continues) “where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact”.

9. The caution by Lord Hope is set out in Spencer (supra) at [21] as follows:

   In Three Rivers District Council v Bank of England [No 3], Lord Hope of Craighead discussed the scope of the inquiry on an application for summary disposition under r 24.2 of the CPR:

   "The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, …that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all."

10. Mr White referred to the decision in Keynes and Others v Rural Directions Pty Ltd and Others (No.2) (2009) 72 ACSR 264 at [47] where Justice Besanko held that:

    “Where the plaintiff’s cause of action depends on an arguable question of law then summary judgment may not be entered”.

11. Mr White referred to the decision in Fair Work Ombudsman v Maclean Bay Pty Ltd [2010] FCA 1378 at [10] and [11], where Justice Marshall stated:

    The discretion in s 31A should only be exercised in the clearest of cases, where there is a high degree of certainty that there are no reasonable prospects of a case being prosecuted successfully.

    11.    The present case is one concerning areas of law which Counsel both contend have not previously been ventilated. Consequently, there is no authority on the application of s 902 (1)(b) of the WR Act and the way the section is to be applied to accessorial liability. In the current circumstances, it would be an erroneous exercise of power to invoke s 31A concerning issues which have not previously been raised before a Court in relation to a statutory provision, the interpretation of which remains untested.

12. Mr White referred to the decision in Barnett v Territory Insurance Office [2011] FCA 155 where Justice Marshall held that if the applicant’s proposition is arguable the appropriate course is that the claim should await trial.

13. Mr White referred to the decision in PZ Cussons (International) Ltd v Rosa Dora Imports Pty Ltd [2007] 74 IPR 372 at [13] where Justice Kenny stated:

    The key is to address the statutory question. That is, under s 31A, in order to grant summary judgment, I must be satisfied that the respondents have no reasonable prospect of success in defending the infringement claim. As s 31A(3) makes clear, this does not mean that I must be satisfied that their defence is hopeless or bound to fail.

14. Mr White submitted that Justice Sundberg “in Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499 at [37] summarised a number of principles including that the test is not to conduct a fact finding exercise but to determine whether the claim is sufficiently strong to warrant a trial (citing Jefferson Ford 167 FCR at [23] per Finklestein J [74 per Rares J] 130 per Gordon J). Further, in determining whether there are reasonable prospects of success, the Court should draw all reasonable inferences in favour of the non moving party and, finally, that the moving party bears the onus of persuading the court that its opponent has no reasonable prospects of success”.

15. Having regard to the authorities referred to the Court finds that the principles for summary dismissal of the application pursuant to r.13.10 are:

    ·If there is a real issue of fact or law to be decided and the rights of the parties depend on it, the matter should go to trial: Portuguese Cultural & Welfare Centre (supra).

    ·To dismiss summarily, a Court must be satisfied that the applicant has no reasonable prospect of success: Portuguese Cultural & Welfare Centre (supra).

    ·Summary dismissal may be appropriate where the success of the proceedings is critically dependent on a proposition of law which would contradict a binding decision of the High Court, as a Court could conclude that the application has no reasonable prospects of success: Spencer (supra).

    ·Where the plaintiff’s case depends on an arguable question of law, summary judgment may not be entered: Keynes (supra).

    ·Summary judgment should only be exercised in the clearest of cases where there is a high chance of certainty that there are no reasonable prospects of a case being prosecuted successfully: Fair Work Ombudsman v McLean (supra).

    ·It would be an erroneous exercise of power to dismiss summarily where the matter “concerns issues which have not been raised before a Court in relation to a statutory provision, the interpretation of which remains untested”: Fair Work Ombudsman v Maclean (supra).

The Submissions

1. Mr Snaden submits that paragraphs 25 to 28 of the Further Amended Statement of Claim have no reasonable prospect of success.

2. Mr Snaden submits that the CEPU defines “premises” as “the individual work desks of the employees”.

3. Mr Snaden states that Telstra attacks paragraphs 25 and 26 on three bases.

4. First, whether the terms “premises” or “part of a premises” requires some physical distinction between different areas in any given premises (Transcript “T” 4 April 2011 p.7, l.35).  He submits that as each of the call centres was open-plan, that once access was gained onto the floor on which the relevant call centre was run, the person with access “could freely move around the floor”, and that “to define a particular desk within an open plan area as being ‘part of a premises’ is an artificial construction of that (sic “the”) term ‘a part of premises’”.  He submits that the work desks are “all the same premises”.  Annexure MT-8 to the affidavit of Michael Tamvakologos sworn 7 February 2011 shows that the entry notices specified the premises as “Building 1 and Building 3, 301 Burwood Highway Burwood”.

1. Telstra’s second objection is that the entry notices said nothing about entry onto individual work desks, and that s.501 of the Act prohibits refusal or undue delay of entry to somewhere that the permit holder is entitled to enter pursuant to Parts 3-4 of the Act, and that to be so entitled a permit holder must comply with all the requirements of Subdivision C of Division 2 of Part 3-4 of the Act. It is submitted that a requirement of that Division (s.487) is that the notice needs to comply with s.518 of the Act, specifically s.518(1)(a), that “an entry notice must specify… the premises that are proposed to be entered”.  It is submitted that “none of the entry notices specified that the officials sought to enter the individual workstations, and that therefore the officials were not entitled to enter those premises”.

2. Telstra’s third objection is that none of the conduct alleged against it (via its managers) amounts to a refusal or undue delay.  It is submitted that the manager’s ‘advised’ the officials “that they… were only able to interview employees during the employees’ meal breaks”.  It is submitted that the managers “did not physically prevent” the officials from so pursuing “what they wished to do”.

3. Mr Snaden referred to the decision in Curran v Thomas Borthwick & Sons Ltd (1990) 26 FCR 241 where “hinder or obstruct” was said to involve a requirement to do some positive act by way of hindrance or obstruction, or at least decline to move.  The definition of these words is not apposite here.  The question here is whether the managers giving the advice amounted to a refusal or undue delay.  That is arguable.

4. Mr Snaden submits that the officials were granted entry to the premises specified in the entry notices and that therefore the Act was not breached.

5. Mr White submits that as the present case concerns areas of law which have not previously been ventilated, it would be erroneous to dismiss the application summarily.

6. Mr White submits that Telstra’s first ground of objection is misconceived, that is, that “part of a premises” does not include “individual work stations within a large open plan space not physically separated from one another” [Outline of Applicant’s Submissions filed 4 April 2011 para.2(a)(i)].  Mr White submits that it would be incorrect to define “premises” or “part of a premises” to “exclude a particular part of the premises”.

7. Mr White referred to para.22 (of the Outline of Applicant’s Submissions) and contends that to so limit the meaning of “premises” would defeat the purpose of that part of the Act.

8. Mr White referred to Keynes (supra) that “where the plaintiffs’ cause of action depends on an arguable question of law then summary judgment should not be entered”.

9. Mr White submits that Telstra’s second ground of objection, ignores the inclusive definition of “premises”, and would lead to absurdities.

10. Mr White submits that Telstra’s third ground of objection that “mere advice that a permit holder cannot go to a part of a premises cannot amount to a refusal or undue delay” is misconceived.  Mr White handed to the Court extracts from the New Shorter Oxford English Dictionary and the Macquarie Dictionary where “advise” is defined as including “inform, notify” and “to give some information or notice about something” and submits that when someone is told that they are unable to do something they are “refused or unduly delayed”.

11. Mr White submits that the question of “whether or not the directions in this case amounted to a hindrance, obstruction or undue delay… is a question of mixed fact and law”.

12. Mr Snaden made submissions in reply.  He submits that what happened was that “the officials were told, informed, advised…” about “rights that they did or did not have under the Act”, and although that was a positive act [within the meaning in Curran v Thomas Borthwick (supra)], the rest of the test is that the conduct has to affect to some appreciable extent the usual means of the gaining of entry or the exercise of rights under the Act. He submits that the giving of advice did not affect the union officials’ ability to exercise the rights they wished to exercise.

13. Mr Snaden submits that the fact that there is no authority on what is meant by “part of premises” should not prevent summary dismissal.

14. Mr Snaden repeats that if a union official wishes to enter premises they must identify that part of the premises they wish to enter.

Findings

1. The Court finds that it is arguable that the entry notice specified the premises that were proposed to be entered, which included those parts where the individual desks were located.

2. It is an arguable question of fact and law, on which there is no authority, that “the premises” included those parts where the individual desks were located.

3. It is arguable that the advice given by the managers to the officials amounted to a refusal or caused undue delay.

Decision

1. The Court finds that the application depends on arguable questions of fact and law and that summary dismissal should not be ordered Keynes (supra).

2. There is a real issue of fact and law to be determined Portuguese Cultural & Welfare Centre (supra).

3. The Court is not satisfied that the CEPU has no reasonable prospect of success.

4. The Application in a Case filed on 7 February 2011 seeking summary dismissal of the Application filed 18 May 2010 is dismissed.

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of F. Turner FM

Associate: 

Date:  5 May 2011