CFMEU v Lendlease Engineering Pty Ltd
[2019] FCCA 746
•29 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CFMEU v LENDLEASE ENGINEERING PTY LTD | [2019] FCCA 746 |
| Catchwords: INDUSTRIAL LAW – Allegation of contravention of.345 of the Fair Work Act2009 (Cth) – application for summary dismissal or to strike out all or part of Statement of Claim. |
| Legislation: Fair Work Act 2009 (Cth), ss.182, 183, 185, 345 Federal Court Rules 2011 (Cth), rr.16.21 , 16.42 |
| Cases cited: Australian Competition and Consumer Commission v Meriton Property Services Pty Ltd [2017] FCA 1305; (2017) 350 ALR 494 |
| Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Respondent: | LENDLEASE ENGINEERING PTY LTD |
| File Number: | SYG 1971 of 2017 |
| Judgment of: | Judge Barnes |
| Hearing date: | 13 November 2017 |
| Date of Last Submission: | 29 November 2017 |
| Delivered at: | Sydney |
| Delivered on: | 29 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Pearce |
| Solicitors for the Applicant: | Mr Fischer |
| Counsel for the Respondent: | Mr Shariff |
| Solicitors for the Respondent: | FCB Workplace Law |
ORDERS
The Applicant’s Statement of Claim be struck out.
The Applicant have leave to file and serve and Amended Statement of Claim on or before 1 May 2019.
If the Applicant files and serves an Amended Statement of Claim, the Respondent file and serve an Amended Defence on or before 22 May 2019.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1971 of 2017
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Applicant
And
| LENDLEASE ENGINEERING PTY LTD |
Respondent
REASONS FOR JUDGMENT
These Proceedings
The Construction, Forestry, Mining and Energy Union (CFMEU) commenced proceedings in this court against Lendlease Engineering Pty Ltd (Lendlease) alleging that Lendlease made a representation that was in contravention of s.345 of the Fair Work Act 2009 (Cth)(the FW Act).
Lendlease seeks that these proceedings be summarily dismissed pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 (Cth) (the FCCA Act) or r.13.10 of the Federal Circuit Court Rules 2001 (the Rules) or, in the alternative, that the Statement of Claim (SoC) or paragraphs 26 to 31 thereof be struck out.
Lendlease’s application is supported by an affidavit of Benjamin Josef Gee, solicitor, affirmed on 8 August 2017.
CFMEU opposes the application and relies on an affidavit of its solicitor, Thomas Edward Fischer, affirmed on 13 October 2017.
Background
From July 2016 to approximately March or April 2017 Lendlease, CFMEU, the Australian Workers Union (AWU) and other bargaining representatives were engaged in negotiating a new enterprise agreement to cover Lendlease employees involved in civil construction work at a number of sites. This was to replace an earlier enterprise agreement. According to Mr Gee, during this period there were a number of bargaining meetings (the last of which was held on 28 March 2017) and two periods of protected industrial action. Five drafts of the proposed enterprise agreement were said to have been issued to the bargaining representatives. Lendlease then engaged Cirrena IVS Pty Ltd, an independent voting service, to conduct a ballot of its employees in relation to the proposed enterprise agreement.
Lendlease employees, including Mr Maher who is described in the SoC as the industrial relations manager, NSW for Lendlease, prepared “Access Period Packs” containing a copy of the enterprise agreement proposed by Lendlease, made presentations to employees at Lendlease sites and handed out copies of the proposed agreement.
After the proposed enterprise agreement was agreed to by the employees, Lendlease applied to the Fair Work Commission (the FWC) under s.185 of the FW Act for approval of the agreement. CFMEU opposed this application. On 8 June 2017 the Lendlease Engineering Pty Ltd New South Wales Enterprise Agreement 2017-2019 (referred to as the Enterprise Agreement) was approved (see Lendlease Engineering Pty Limited [2017] FWC 3080).
CMFEU sought to appeal to the Full Board of the FWC. Permission to appeal was refused on 15 August 2017 (see Construction, Forestry, Mining and Energy Union v Lendlease Engineering Pty Limited [2017] FWCFB 4001).
The representation complained of by CFMEU is said to be contained cls.1.4 and 1.5 of the Enterprise Agreement, which are as follows:
1.4 It is anticipated that the Unions will give notice to the Fair Work Commission (FWC) pursuant to s.183 of the Act in order that this Agreement will cover them.
1.5 All parties covered by the Agreement will be referred to as a Party or the Parties.
Under cl.1.3, the “Unions” referred to in cl.1.4 are the AWU and the CFMEU.
In the SoC, CFMEU alleged in paragraphs 25 to 31 that:
THE WORKPLACE RIGHT
25. At all material times on 13 April 2017, and thereafter, the Applicant had a workplace right within the meaning of s 341 of the FW Act in that, because the Applicant was a bargaining representative for the proposed agreement, the Applicant was able to be covered by the proposed agreement, if it was approved, for the purposes of s. 53 of the FW Act by giving written notice pursuant to s. 183 of the FW Act (the workplace right).
THE REPRESENTATION
26. The proposed agreement contained a representation by the Respondent to the effect that, if the proposed agreement was approved, the Applicant intended to exercise the workplace right to be covered by the proposed agreement (the Representation).
PARTICULARS
(a) The representation was contained in clauses 1.4 and 1.5 of the proposed agreement.
(b) The representation was made to all persons who received a copy of the proposed agreement, notably all wages staff to whom the Access Pack was distributed.
MAHER’S CONTRAVENTION OF SECTION 345 OF THE FW ACT
27. At all material times, the Representation was false and misleading because the Applicant did not intend, if the proposed agreement was approved, to exercise the workplace right.
28. In consequence of the matters pleaded in paragraphs 6, 8, 11, 12, 13, 23 and 24 Maher knew, on 10 April 2017 and at all material times thereafter, that the Representation was false and misleading because Maher knew that the Applicant did not intend, if the proposed agreement was approved, to exercise the workplace right.
29. In the alternative to paragraph 28, in consequence of the matters pleaded in paragraphs 6, 8, 11, 12, 13, 23 and 24 Maher was reckless, on 10 April 2017 and at all material times thereafter, as to whether the Representation was false and misleading because Maher knew that the Applicant did not intend, if the proposed agreement was approved, to exercise the workplace right.
30. In consequence of the matters pleaded in Paragraphs 9, 10, 14, 15, 16, 17, 18, 19, 20, 21, 27, 28 and 29 the conduct of Maher by:
(a) making and publishing the Representation;
(b) causing Cirrena IVS to make and publish the Representation;
(c) causing [another employee of the Respondent, V] to make and publish the Representation; and
(d) causing [another employee of the Respondent, O] to make and publish the Representation
was conduct in contravention of s. 345 of the FW Act.
31. In consequence of the matters pleaded in Paragraphs 27, 28, 29 and 30 the conduct of Maher in making and publishing the Representation was conduct in contravention of s.345 of the FW Act.
In paragraphs 32 to 39 it is alleged that pleaded conduct of Mr Maher and of two other persons was conduct of Lendlease in consequence of which it contravened s.345 of the FW Act.
Section 345 of the FW Act is as follows:
(1) A person must not knowingly or recklessly make a false or misleading representation about:
(a) the workplace rights of another person; or
(b) the exercise, or the effect of the exercise, of a workplace right by another person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.
Relevantly, CFMEU alleged (at paragraph 27 of the SoC) that the representation in cl.1.4 of the Enterprise Agreement was “false and misleading” because it “did not intend, if the proposed agreement was approved, to exercise the workplace right” under s.183 of the FW Act to give the FWC notice that it wanted the Enterprise Agreement to cover it and that Mr Maher “knew” or “was reckless” as to whether the representation was “false and misleading” because he knew CFMEU did not intend, if the proposed agreement was approved, to exercise the workplace right.
Lendlease’s submissions
Lendlease sought summary dismissal on the basis that CFMEU had no reasonable prospect of successfully prosecuting the proceedings. In the alternative, Lendlease sought an order that the SoC (or paragraphs 26 to 31) be struck out. It was acknowledged in submissions that if the strike out action succeeded, the court may decide to give leave to CFMEU to file an amended statement of claim.
In support of the summary dismissal application Lendlease referred to Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 in relation to the meaning of the words “no reasonable prospect of success” and to the consideration of applicable principles in Australian Securities and Investments Commissions v Cassimatis & Anor [2013] FCA 641; (2013) 220 FCR 256 at [46]-[50].
It was submitted that it was clear that the discretionary power to summarily dismiss a proceeding in s.17A of the FCCA Act (and the Federal Court equivalent in s.31A of the Federal Court of Australia Act 1976 (Cth) (the FCA Act)) was conferred with a view to “strengthening” the powers of the courts to enter summary judgment and to “soften the test for a successful application for summary judgment” (see Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 at [25] cited in Cavar v Green Gate Pty Ltd [2015] FCA 1179 at [28]). Lendlease contended that, as discussed in Spencer at [53]-[56], the concept of “no reasonable prospect of success” was a radical departure from earlier tests for summary disposal of proceedings considered in Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.
Insofar as it was pleaded (at paragraphs 28 to 29 in the SoC) that Lendlease knew (through its employee Mr Maher) that CFMEU did not intend to exercise the workplace right to be covered by the Enterprise Agreement if it was approved, Lendlease submitted that nowhere in the paragraphs relied on in support of this proposition (paragraphs 6, 8, 11, 12, 13, 23 and 24) was it pleaded that before the alleged publication of the representation CFMEU had communicated to Mr Maher or Lendlease that it did not intend to be covered by the Enterprise Agreement if it was approved. Rather, the pleading referred to rival positions in relation to bargaining and a communication after the alleged publication of the representation.
It was also submitted that whether a union decided to exercise a workplace right to be covered by an agreement after it was made was not tied to whether the union supported the proposed agreement in the course of bargaining.
In any event, Lendlease submitted that the SoC was based on a fundamentally false premise that cl.1.4 was conveying an actual fact. Lendlease contended that it was clear that all cl.1.4 of the Enterprise Agreement conveyed was a mere statement or opinion, belief or anticipation on its part, as opposed to a statement of actual fact (see generally, Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88).
It was said to be plain from the text of cl.1.4 that it was not conveying any fact as to CFMEU’s intentions. Rather, this clause was said to convey Lendlease’s state of mind, that being “anticipation” as to a state of affairs that may arise in the future, being what Lendlease anticipated that CFMEU (and AWU) would do.
Such characterisation was said to be consistent with the statutory context, given that s.183 of the FW Act only permitted a bargaining representative (such as CFMEU) to apply under s.185 of the FW Act to be covered by an Enterprise Agreement after such an agreement was “made” by a vote by a majority of the Lendlease employees (see s.182 of the FW Act).
There was said to be no substance to CFMEU’s pleading regarding Lendlease’s knowledge or recklessness, because it assumed that the impugned clause conveyed a fact that CFMEU would seek to be covered by the Enterprise Agreement, when that was not what was being conveyed.
Lendlease contended that the SoC failed to properly characterise the representation in cl.1.4 of the Enterprise Agreement and that CFMEU’s central allegation that cl.1.4 of the Enterprise Agreement conveyed a fact as to CFMEU’s intention (that is that CFMEU had evinced an intention to be covered by the Enterprise Agreement) could not be maintained as pleaded at paragraphs 27 to 29 in the SoC, either as a matter of fact or law.
Counsel for Lendlease explained that it was not suggested that a statement of opinion or a prediction could not give rise to a contravention of s.345 of the FW Act, but rather that the problem with CFMEU’s pleading was that the central allegation was that cl.1.4 conveyed a fact, whereas that was not the case.
Insofar as it now appeared that CFMEU’s case may be intended to be that the representation as to a future matter was misleading because at the time it was made Lendlease did not have a belief that the event would come to pass, Lendlease contended that the pleading did not adopt this approach, but proceeded on the basis that the representation impliedly conveyed a statement of fact as to a present intention or a present fact.
It was pointed out that in paragraph 26 of the SoC it was pleaded that the proposed Enterprise Agreement contained a representation to the effect that CFMEU intended to exercise a workplace right. This was said to involve a pleading that the representation contained a present fact which was then said (in paragraphs 27 to 29 of the SoC) to be false and misleading because (at that time) CFMEU did not have that intention (and that Lendlease knew or must have known this because it had disagreed with CFMEU about matters in the bargaining process).
However Lendlease submitted that to the extent that it was now indicated in CFMEU’s submissions that it was relying on the fact the representation conveyed a prediction or an opinion, this was not the way the case had been pleaded as it did not address such a case. It was suggested that if this was the case, the pleading (in paragraphs 28 and 29) that it was “[i]n consequence of the matters pleaded in paragraphs 6, 8, 11, 12, 13, 23 and 24” that Mr Maher knew that CFMEU did not intend to exercise the workplace right, was hopeless.
Lendlease suggested that if CFMEU now accepted that the asserted representation conveyed a prediction or opinion of Lendlease, then it would have to plead (and establish) not only that the prediction did not come to pass, but also that Lendlease did not believe that the conduct or event would come to pass (see Ting v Blanche (1993) 118 ALR 543 at 552).
Moreover, insofar as the SoC referred in the listed earlier paragraphs to issues raised in the bargaining process, Lendlease contended that the pleading of haggling about bargaining did not go to the central issue of whether Mr Maher or some other employee or representative of Lendlease (with authority) had a reasonable basis to believe that CFMEU intended to be covered by the agreement if it was approved.
While Lendlease acknowledged that decisions of the FWC were not binding on this court, it was pointed out that issues raised in these proceedings had already been considered in proceedings before the FWC in which CFMEU alleged that Lendlease had misled employees by including a provision in the Enterprise Agreement (cl.1.4) that wrongly gave employees the impression that the Unions “supported” the Enterprise Agreement. This allegation had been rejected by Commissioner Roe at first instance who addressed the distinction between support and coverage as follows in [2017] FWC 3080:
[50] The clause does not say that the unions will be covered by the Agreement but rather that it is likely that they will seek to be covered. It is commonplace that unions often give notice to be covered by an agreement they have participated in the bargaining for, even where they do agree with the outcome of the bargain. Of course, there are cases where unions decline to seek to be covered by an agreement they do not support but in my experience, there are just as many cases where they seek to be covered notwithstanding they did not support the content of the agreement. I am not satisfied that a clause which says that the unions may be covered by the Agreement is a clause which can be properly understood as meaning that the unions support the Agreement.
[51] I am not satisfied that the coverage clause mislead employees.
In addition, while in CFMEU v Lendlease the Full Bench of the FWC acknowledged (at [15]) that whether there was a contravention of s.345 of the FW Act was “a matter for formal consideration elsewhere”, Lendlease submitted that the remarks of the Full Bench in refusing to grant permission to appeal disclosed persuasive reasoning. The Full Bench stated at [35]:
In our view, it is clear that clause 1.4 refers to an anticipated state of affairs that may arise in the future, and does not convey an actual fact. The clause does not imply that the Appellant had evinced an intention to be covered by the Agreement. Clause 1.4 merely conveys a belief on the part of the Respondent as to the future intention of the Appellant and the AWU. There is no suggestion that the Respondent did not genuinely hold such a belief. Further, conveying such a belief did not have a tendency to lead a person into error. The reasonableness of the belief and that it did not have a tendency to lead a person into error (here those who were to be covered by the proposed Agreement) was supported by the fact that:
(a) The same clause had been included in the two previous agreements that applied to the enterprise covered by the Agreement;
(b) The CFMEU had, in fact, during the approval of the previous agreements applied to be covered by those agreements;
(c) Mr Maher gave evidence that the clause was included in the Agreement because it was contained in earlier drafts and none of the bargaining representatives raised an issue about the clause; and
(d) As the Commissioner found, it is commonplace for unions to apply to be covered by an enterprise agreement, even when they have not supported the making of the agreement.
Counsel for Lendlease observed that its “anticipation” as to the future intention of the AWU had come to pass, as it was now covered by the Agreement (see LendleaseEngineering Pty Limited [2017] FWCA 3169 at [3]).
Lendlease pointed out that, as referred to by the Full Bench of the FWC, cl.1.4 of the Enterprise Agreement was in near identical terms to cl.1.5 in the earlier 2013 enterprise agreement and that after that agreement had been approved by the FWC in 2013, CMFEU had given notice pursuant to s.183 of the FW Act that it wished to be covered by it, as had also been the case with a previous (2010) enterprise agreement which contained a similar term. In addition, Lendlease referred to Mr Gee’s evidence that the earlier drafts of the Enterprise Agreement proposed in pre-agreement negotiations (in which the CFMEU was involved) had contained proposed cls.1.4 and 1.5. It was suggested that cl.1.4 had not been addressed by any bargaining representative and had not been in dispute in the bargaining meeting of 28 March 2017 and that it was known and understood at that time that Lendlease would be putting the proposed Enterprise Agreement to a vote by employees.
Lendlease submitted that there was therefore no basis to contend that it had knowledge of the alleged falsity or misleading nature of the “fact” said to have been conveyed by cl.1.4 or that there was any recklessness within s.345 of the FW Act.
In oral submissions counsel for Lendlease referred in some detail to the decision of Mortimer J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation [2017] FCA 1091 (CEPU) in relation to s.345 of the FW Act.
In CEPU Mortimer J discussed issues to be considered under s.345, in particular the approach to be taken in determining whether representations as to future matters were misleading. Her Honour referred (at [217]-[226]) to principles in relation to s.52 of the Trade Practices Act 1974 (Cth) (the TPA) and s.18 of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the ACL) which had been addressed by the parties. Her Honour made the point (at [221]) that, absent a provision such as s.51A of the TPA or s.4 of the ACL, a statement about future conduct would only be caught if it was established that a representation was false or misleading about past or existing facts or it could be proved that the person making the representation as to an anticipated future outcome did not believe that such a forecast was true or was recklessly indifferent as to the truth of the forecast.
Mortimer J also expressed the view in CEPU (at [225]) that it would be inappropriate to impose any evidentiary burden on the maker of the representation in the context of s.345 of the FW Act.
Lendlease submitted that while s.345 may be seen as applicable to a representation about a future matter in light of the approach taken in CEPU, it was necessary for CFMEU to plead (and to establish) that the representation involved a statement of the state of mind of Lendlease (of anticipation) when the representation was made and that Lendlease did not have that state of mind or that for some other reason the representation was false or misleading (see CEPU at [219]-[228]) and James v ANZ Banking Group Ltd (1986) 64 ALR 347 at
372-3 per Toohey J).
Lendlease also submitted that CFMEU’s contention that CEPU supported its argument that s.345 was intended to capture “future” representations, ignored the more fundamental point made by Mortimer J at [224] that it was “clear” that Parliament had restricted the operation of s.345 to “circumstances where a mental element, or particular state of mind, is present, in contrast to the terms of s 18” (of the ACL).
It was said to be apparent from the text of s.345 that the scope of the prohibition was confined to circumstances where a person “knowingly or recklessly” made a false or misleading representation, in contrast to the position under s.18 of the ACL and its predecessors in respect of which it had been held that it was not necessary to prove an intention to mislead or any state of mind (see for example Australian Competition and Consumer Commission (ACCC) v Meriton Property Services Pty Ltd [2017] FCA 1305; (2017) 350 ALR 494 at [186] citing Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [56] per French CJ, Crennan, Bell and Keane JJ).
On this basis Lendlease submitted that CFMEU’s pleading about the relevant mental element of “knowledge” or “recklessness” in particular at paragraphs 27 and 28 of the SoC (based on factual matters pleaded at paragraphs 6, 8, 11, 13, 23 and 24) did not address the fundamental difficulty with the SoC.
As indicated, it was submitted that CMFEU had not pleaded or articulated a case on the basis that it had directly conveyed or communicated to Lendlease that it did not intend to be covered by the Enterprise Agreement if it was approved by employees such as to falsify the basis of Lendlease’s “anticipation” that that would be a likelihood in the future. Rather, it was suggested that what was said in the SoC to have been communicated to Lendlease was, at its highest, CMFEU’s disagreement with the “deal” Lendlease was proposing to put to the employees and a wish to see a further version of the agreement.
This was said to be analogous to the facts in CEPU, in which Mortimer J had concluded (at [232]) that there was no evidence that the maker of the representation had knowledge of the matter in question and had found that in the absence of knowledge or recklessness, the alleged contravention of s.345 of the FW Act could not be maintained.
In addition, pleaded allegations by CFMEU regarding emails between CFMEU and Lendlease were said to relate to matters after the alleged representation had been made and not to advance the case as to Lendlease’s state of mind.
Lendlease also submitted that CMFEU’s submission regarding the type of person to whom the representation was allegedly made had proceeded on a mischaracterisation of Lendlease’s submissions. The point was said to be not to whom the representation were made, but rather whether, in determining whether the representation was misleading, it could be concluded that “…the impugned conduct viewed as a whole has a tendency to lead [such] a person into error” (see ACCC v Meriton Property citing Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [25] per French CJ). The “true question” was said to be whether the mere statement of “anticipation” as to a state of affairs contained in cl.1.4 was likely to lead the employees into error, not the actuality of that state of affairs. It was also contended that no reasonable employee would have read the clause in any other way.
Lendlease submitted that insofar as CFMEU had contended that because factual matters were in dispute, summary dismissal was inappropriate, it had failed to identify what factual issues were relevantly in dispute in relation to whether Lendlease had a reasonable basis for a belief that CFMEU would, if the Enterprise Agreement was approved, want to apply to become covered by the Enterprise Agreement.
As to CFMEU’s submissions about the factual matters before the court and whether Mr Maher would be called, Lendlease submitted that CMFEU’s contentions were fundamentally misconceived. It was submitted that it was axiomatic that in a summary dismissal application the facts were to be taken at their highest (see Fair Work Ombudsman v Australian Workers’ Union [2017] FCA 528; (2017) 271 IR 139 at [18] per Bromberg J) and pointed out that the present proceedings were civil penalty proceedings in which CMFEU had not sought to challenge the conclusion in CEPU at [225] that s.345 of the FW Act did not impose an evidentiary burden on the maker of the impugned representation.
Lendlease submitted that the fact that s.345 of the FW Act restricted contraventions to circumstances involving a mental element (see CEPU at [224]) highlighted the need for the pleading to articulate with precision why (if it was asserted that cl.1.4 involved a prediction or opinion) there was no reasonable basis for a belief on the part of Lendlease that the predicted event would occur, particularly as CFMEU would bear the legal and evidentiary burden to establish the mental element.
Lendlease contended that in these circumstances CFMEU’s pleaded case had no reasonable prospects of success as it did not disclose a maintainable case at law based on relatively narrow and undisputable facts and that the application should be summarily dismissed.
In the alternative, Lendlease submitted that CFMEU’s SoC, or paragraphs 26 to 31 thereof (which contain the essence of the asserted contravention of s.345), should be struck out, in particular as being embarrassing, as not disclosing a cause of action or as likely to cause prejudice.
In this respect Lendlease submitted that as the Rules of this court were silent in relation to strike out, the relevant Federal Court Rules 2011 (Cth) (the FCA Rules), in particular r.16.21, applied.
It was submitted that there were “pleading issues” throughout the SoC for the reasons discussed above, and that if the court was minded to strike out part or all of the SoC but to give CFMEU some opportunity to replead, CFMEU would have to articulate the point in time it communicated to Lendlease that it had no intention to be covered by the agreement (insofar as this remained the basis for the claim).
Lendlease reiterated the contention that while the SoC alleged that the representation contained in the Enterprise Agreement was that CFMEU “intended to exercise the workplace right to be covered by the proposed agreement”, this was based on a false premise, as cl.1.4 did not in fact convey that CMFEU held an intention to be covered by the Agreement, but rather that Lendlease “anticipated” that AWU and CFMEU would seek to be covered by the Enterprise Agreement.
Insofar as CFMEU’s case was now on the basis that cl.1.4 involved a prediction or opinion about something that might arise in the future (see Ting v Blanche at 547-552) it was submitted that this was a very different case to the case presently pleaded. Lendlease contended that even taken at is highest on all the facts pleaded, CFMEU’s SoC did not disclose a cause of action as to why Lendlease’s “anticipation” was knowingly or recklessly false or misleading, as required by s.345 of the FW Act. It was contended that nothing in the SoC identified why Lendlease knew or was reckless about its own state of anticipation. Lendlease submitted that it could not be established that it was in contravention of s.345 by proof that CFMEU did not have the relevant intention.
Lendlease also pointed out that r.16.42 of the FCA Rules (which applies by virtue of Schedule 3 to the Rules), required a party who pleaded fraud or misrepresentation to state in the pleading particulars of the facts on which it relied, and that r.16.43 imposed a similar requirement in relation to pleadings as to state of mind. It was submitted that the pleaded facts as to the basis for the claim in this case, including the claim that the representation was knowingly false, was tantamount to an allegation of dishonesty or fraud. In light of this it was submitted that the court could not proceed on the basis that CFMEU’s case would be made good by evidence called in Lendlease’s case or by way of documents under subpoena, as this would be tantamount to a fundamental inversion of the onus of proof. It was also submitted that in a civil penalty case and bearing in mind the legal and evidentiary onus falling upon CFMEU, it was not appropriate for the court to consider what evidence may be called by Lendlease. Rather, it was submitted that the court must have regard to the facts as pleaded in the SoC and to Mr Gee’s affidavit, and that even allowing for the mischaracterisation of cl.1.4 by CFMEU, none of these “facts” established a pleaded basis for the assertion of knowledge or recklessness on the part of Lendlease and that the fact that previous agreements contained the same clause and that the drafts of the Enterprise Agreement contained the same clause (without demur from the unions) were to the contrary.
In these circumstances, Lendlease submitted that CFMEU’s case as pleaded, and taken as its highest, did not disclose a cause of action as to a contravention of s.345 of the FW Act.
CFMEU’s submissions
CFMEU took issue with the remarks by the Full Bench of the FWC at [35] set out at [32] above. In written submissions counsel for CFMEU suggested, in a somewhat surprising tone, that reliance on the FWC analysis of the meaning of cl.1.4 in the Enterprise Agreement would be inappropriate, as it would be “akin to accepting lay person in-expert (sic) evidence on the meaning of the representation” and that no weight should be given to the Full Bench’s opinions of the clause because “[f]or reasons that can only be attributed to concentration or reading problems, the Full Bench has, as noted, earlier completely failed to notice the clear submission of the applicant, at [49] of its outline, that the representation was knowingly misleading by Lendlease and proceeded to make a finding that ‘There is no suggestion that the Respondent did not genuinely hold such a belief’” (errors in original).
CFMEU submitted not only that factual findings of the FWC were not conclusive in the present proceedings, but also that paragraph 35 of the Full Bench decision involved an “extraordinary” conclusion that there was no suggestion Lendlease “did not genuinely hold” the belief as to the intention of CFMEU and AWU said to be expressed in cl.1.4, given that in its case outline to the Full Bench, CFMEU had stated at [49] that “the representation was knowingly misleading by Lendlease”.
The Full Bench of the FWC was addressing a different issue in a context in which CFMEU had contended that cl.1.4 wrongly gave Lendlease employees the impression that the unions “supported” the agreement. It is not in dispute that the view of the FWC is not binding, although it may be persuasive. However this is not the place for consideration of the correctness of the approach taken by the Full Bench of the FWC in considering whether to refuse leave to appeal. The recitation of CFMEU’s submission in this respect should not be taken to indicate agreement with such criticism.
In support of the proposition that summary dismissal would be inappropriate, CFMEU claimed that background factual matters were disputed. In this context it took issue with the content of Lendlease’s summary of background facts, particularly insofar as it was based on hearsay evidence in Mr Gee’s affidavit, notwithstanding that the present application is interlocutory in nature.
It was pointed out that Mr Gee’s evidence was based “wholly” on what he (as a solicitor employed by the solicitors for Lendlease) had been informed by Mr Peter Ryan, the National Manager, Workplace Relations, for Lendlease. CFMEU claimed that, contrary to this evidence, negotiations in relation to the Enterprise Agreement had not been a “done deal” and that any assertion by Lendlease to this effect was inconsistent with the facts CFMEU had pleaded in its SoC, in particular at paragraphs 11 to 13 which set out emails between Mr Kelly (representing CFMEU) and Mr Maher (representing Lendlease). It labelled as “curious” the pleading by Lendlease that it did not know and was unable to admit whether Mr Kelly had received further communication from Mr Maher prior to 13 April 2017 and submitted that this suggested that Lendlease had not interviewed Mr Maher. It was also suggested that “Mr Kelly will be giving evidence for [CFMEU]”.
CFMEU contended that if, as Lendlease claimed, the AWU had in fact applied to be and was now covered by the Enterprise Agreement (and if this fact was relevant to the facts in issue), then it would “no doubt lead evidence to that effect when the factual issues in dispute were examined by the Court”.
CFMEU also submitted that there was no substance in any contention that it was clear that Lendlease’s state of mind in making the representation was neither knowingly false nor reckless. CFMEU contended this was based on “factual issues capable of being disputed and in dispute”, rendering summary judgment entirely inappropriate.
It was acknowledged that s.17A of the FCCA Act was the relevant statutory provision and that Spencer was the leading authority on the meaning of the words “no reasonable prospect of success”. However, it was pointed out that in QS Holdings Sarl v Paul’s Retail Pty Ltd [2011] FCA 853 Kenny J had observed at [16] that “[s]ummary judgment would appear inappropriate where there are ‘factual issues capable of being disputed and in dispute’”, and had suggested in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No.4) [2011] FCA 1126; (2011) 203 FCR 293 at [15] that the remarks of French CJ and Gummow J in Spencer (at [25]) indicated that s.31A of the FCA Act required “a practical judgment by the [court] as to whether the applicant has more than a ‘fanciful’ prospect of success”.
Insofar as Lendlease sought, in the alternative, that the SoC be struck out, CFMEU referred to Kenny J’s observations in Polar Aviation at [10]-[12] that the power to strike out a pleading must be exercised with caution and only in plain and obvious cases; that the question on a strike-out application was not whether the facts pleaded were in themselves sufficient to give rise to a cause of action, but rather whether it would be open to the applicant, upon the pleadings, to prove the facts at trial which would constitute a cause of action; and that notwithstanding the need for caution, a judge could appropriately decide a point of law that arose in a strike-out application to avoid the need for a lengthy trial. CFMEU did not, however, suggest that the court should resolve the issue of the meaning of cl.1.4 of the Enterprise Agreement for the purpose of these interlocutory proceedings.
CFMEU also referred to observations of Mason CJ and Gaudron J in Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286 in relation to pleadings and to authorities such as Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803; (2011) 209 IR 263 per Collier J in relation to whether a pleading disclosed no reasonable cause of action, was embarrassing or pleaded a conclusion at such a level of generality that the other party did not know in advance the case it had to meet.
CFMEU understood that Lendlease was asserting that cl.1.4 of the Enterprise Agreement was not conveying any fact as to CFMEU’s intentions, but was conveying a statement of belief or opinion as to anticipation on the part of Lendlease. It disputed any assertion that cl.1.4 was not capable of being a representation within the terms of s.345 of the FW Act. It was submitted that it had “never” been the law that a statement of belief or opinion may not be a representation and pointed out that Toohey J had stated in James at 372 that “a statement relating to the future may contain an implied statement as to present or past fact” and that “[a] statement involving the state of mind of the maker of the statement, eg promises, predictions and opinions, ordinarily conveys the meaning that the maker of the statement had a particular state of mind when the statement was made and that there was basis for that state of mind”.
CFMEU also pointed out that in Global Sportsman the Full Court of the Federal Court had observed (at 88) in relation to the scope of s.52 of the TPA:
Many statements, for example, promises, predictions and opinions, do involve the state of mind of the maker of the statement at the time when the statement is made… A statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or by implication) that the maker of the statement had a particular state of mind when the statement was made and, commonly at least, that there was basis for that state of mind. If the meaning contained in or conveyed by the statement is false in that or in any other respect, the making of the statement will have contravened s 52(1) of the Act.
Reference was also made to the remarks of Hill J in Ting v Blanche in relation to the effect of s.51A of the TPA. His Honour stated, at 552, that:
Representation as to future facts may, of course, constitute conduct which is misleading or deceptive or likely to mislead or deceive within s 52 of the Act, irrespective of the operation of s 51A. However, without the intervention of s 51A the burden would remain upon the applicant to show that the representation, in whatever form it took, was misleading or deceptive or likely to mislead or deceive. In the ordinary case where a representation as to future conduct or events is alleged to have been made, that means that the burden would be upon the applicant to show not merely that the conduct or event has not come to pass but also that at the time the representation was made the respondent did not believe that the conduct or event would come to pass or that there was no basis for a belief that the conduct or event would come to pass.
CFMEU contended that, accepting for the purposes of argument of the strike out motion, Lendlease’s characterisation of the statement in cl.1.4 of the Enterprise Agreement as either conveying its state of mind or a statement of its belief or opinion, it could nonetheless be readily accepted on the authorities that such conduct was capable of being a representation within the meaning of s.345 of the FW Act. CFMEU submitted that it could not be said that it had no reasonable prospect of successfully prosecuting the proceeding or that it was plainly or obviously wrong in characterising such a representation as false and misleading. For the same reason it was submitted generally that there was no substance to Lendlease’s contentions in relation to the pleading of knowledge or recklessness in paragraphs 28 to 31 of the SoC.
In oral submissions counsel for CFMEU appeared to accept that cl.1.4 may be characterised as a statement of belief or opinion, but rejected the proposition that it could not also convey an implied statement of a present or past fact (see James at 372) and amount to a representation. It was pointed out that in Global Sportsman at 88 it had been suggested that the publication of incorrect information may constitute misleading conduct if it contained or conveyed a representation and that a prediction (as cl.1.4 was said to be) or opinion would involve the state of mind of the maker of the statement at the time it was made (also see James and Ting v Blanche).
As to the issue of whether CFMEU could succeed in the absence of any pleading that it had told Lendlease that it did not intend to exercise its workplace rights, it was submitted that this was not a necessary requirement, that knowledge on the part of Lendlease could be an inference drawn from Mr Maher’s actions and that it was sufficient to rely on the factual matters pleaded in relation to discussions about the proposed Enterprise Agreement between Mr Maher and Mr Kelly of the CFMEU.
CFMEU submitted that the conclusion of Mortimer J in CEPU at
[224]-[225] that s.345 of the FW Act was intended to capture representations as to future matters supported its previous submissions, as did the suggestion that the party alleging the contravention must prove a particular state of mind in the maker of the statement. Indeed, it was contended that the approach suggested in CEPU in relation to s.345 of the FW Act supported the view that the court could not be satisfied that it was appropriate to dismiss the proceedings summarily.
CFMEU observed that in CEPU, unlike in the present case, it had been alleged only that the particular representation was misleading and not also false. It was acknowledged that the remarks in CEPU at [230]-[248] were nonetheless instructive in relation to the Court’s consideration of the present application. CFMEU pointed out that Mortimer J had considered whether the party making the allegation had laid a sufficient evidentiary foundation for the Court to infer that at the time of the representation the maker of the representation had the requisite knowledge that the statement was misleading, as well as whether the statement was misleading. It was suggested that, rather than dismiss this issue out of hand, her Honour considered all of the evidence which had ultimately been received by the Court.
Such an approach was said to be consistent with other authority, such as in Hadgkiss v Construction, Forestry, Mining and Energy Union [2008] FCAFC 22; (2008) 166 FCR 376, in which the Full Court of the Federal Court took no issue with the fact that in considering a prohibition on making a false or misleading representation the judge at first instance had made findings as to what was intended by the maker of a statement by reference to evidence concerning context and circumstances.
It was submitted that at this stage of the proceedings, the court only had a few factual matters before it, which were “proved” only by a hearsay solicitor’s affidavit and that access to subpoenaed material could shed more light on Mr Maher’s state of mind in the time leading up to the making of the representations.
CFMEU also pointed out that in CEPU the maker of the statement in issue had not been called to give evidence (at [229]). It was submitted that although it was not yet known where Mr Maher would be called to give evidence in this case, he had no privilege against disclosure as he was not a party to the proceedings and was not the subject of any penalty proceedings.
Finally, CFMEU submitted that, contrary to Lendlease’s contention, the particular group to whom the representation was alleged to have been directed had been properly identified in the SoC at [26] as being all the persons who received a copy of the proposed agreement, notably all wages staff to whom the access pack (containing a copy of the proposed agreement) was distributed.
Consideration
As indicated, Lendlease sought that the substantive proceedings be dismissed on the basis that the proceedings had no reasonable prospect of success, or in the alternative, that the statement of claim, in particular paragraphs 26 to 31, be struck out.
In relation to the summary dismissal application Lendlease relied on s.17A of the FCCA Act and also referred to r.13.10 of the Rules. Section 17A is relevantly as follows:
(2) The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(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.
(4) This section does not limit any powers that the Federal Circuit Court of Australia has apart from this section.
Rule 13.10 of the Rules provides:
Disposal by summary dismissal
The Court or a Registrar may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court or the Registrar is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim…
The parties were in agreement that the leading authority on the meaning of the expression “no reasonable prospect of success” is the decision of the High Court in Spencer. In Spencer Hayne, Crennan, Keifel and Bell JJ addressed issues raised by the application of s.31A of the FCA Act (the equivalent of s.17A of the FCCA Act). Their Honours indicated (at [52]) that the provisions in s.31A have the combined effect that the necessary inquiry is whether there is “a ‘reasonable’ prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail”.
In that context, their Honours acknowledged (at [53]) that the approach taken under s.31A of the FCA Act (and the same may be said for s.17A of the FCCA Act) involved a radical departure from the approach taken in earlier provisions permitting the entry of summary judgment (see Spencer at [53]-[55]).
In considering the inquiry that is now necessary in relation to summary judgment or dismissal, their Honours also made the point that no paraphrase of the expression “no reasonable prospect” could be adopted as a sufficient explanation of its operation or definition of its content (at [58]) and that full weight must be given to the expression as a whole (at [60]). Their Honours observed that “it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly” (at [60]) and suggested that the elucidation of what amounts to “no reasonable prospect” could best proceed though a succession of decided cases in the same way as content had been given to other generally expressed statutory phrases, such as the phrase “just and equitable” when used to identify a ground for winding up a company.
The parties each referred to Federal Court cases which followed Spencer. As indicated, CFMEU cited the 2011 decision of QS Holdings which involved an application for summary judgment in favour of an applicant under s.31A(1) of the FCA Act. CFMEU relied on the fact that Kenny J had cited the remarks of French CJ and Gummow J in Spencer at [25] that “where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue” (see QS Holdings at [16]).
CFMEU also referred to the fact that in Polar Aviation Kenny J had observed at [15] that French CJ and Gummow J had stated in Spencer at [25] that “Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a ‘fanciful’ prospect of success”. As the submissions for CFMEU observed, her Honour discussed the different manner in which Hayne, Crennan and Keifel and Bell JJ had explained their conclusion in Spencer, before concluding that “in effect, no hard and fast rule can be laid as to when summary judgment is available. Much depends on the case at hand. The critical question is that set by the statute – has the moving party persuaded the court that the opposing party has no reasonable prospect of success” (Polar Aviation at [17]).
In Polar Aviation, Kenny J made the point (at [18]) that there is a “clear distinction” between the operation of s.31A of the FCA Act and the strike out provision in the FCA Rules. Her Honour concluded that a further amended statement of claim should be struck out. Rather than grant the applicants leave to replead, in Polar Aviation Kenny J dismissed the proceedings in circumstances where the applicants had neither sought leave to replead nor produced a proposed amended pleading and the extensive history of the matter indicated that the applicants had already had ample opportunity to remedy, if possible, the deficiencies in their case (and see the Full Court decision in Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97; (2012) 203 FCR 325 at [93]).
In the more recent decision of Cassimatis cited by Lendlease, Reeves J considered applicable principles under s.31A(2) of the FCA Act and post-Spencer authorities, including Polar Aviation at first instance and on appeal and also QS Holdings. The remarks in relation to s.31A of the FCA Act also apply to s.17A of the FCCA Act. In Cassimatis one party had placed greater reliance on the approach taken by Hayne, Crennan, Keifel and Bell JJ in Spencer (as has Lendlease in this case) while the other party pointed to the judgment of French CJ and Gummow J (as did CFMEU).
Relevantly, Reeves J made the point that while selective quotations from Spencer may tend to suggest that there was a significant difference between the two joint judgments, in fact the area of difference was quite confined and related to the fact that the judgment of Hayne, Crennan Keifel and Bell JJ in Spencer appeared to discourage recourse to cases decided under earlier statutory provisions for summary judgment in construing what was required or any gloss being added to the text of s.31A itself, whereas French CJ and Gummow J appeared to consider that earlier cases may be of some continuing utility and relevance in that task.
In any event, as Reeves J also pointed out in Cassimatis at [19], both joint judgments in Spencer emphasised the necessity for caution in dismissing proceedings summarily and indicated that this was a matter to be determined in the particular circumstances of the case at hand. It was in this context that, as acknowledged in Cassimatis at [20], all three judgments in Spencer (including that of Heydon J) ultimately came to the conclusion that the mixed questions of fact and law raised by Mr Spencer made summary determination inappropriate.
In Cassimatis Reeves J observed that the party seeking summary dismissal bears the onus of persuading the court and that “the determination of a summary dismissal application… does not require a mini-trial based on incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial” but rather is to be based on “a practical judgment of the case at hand” and a “critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial ” (at [46]). His Honour also pointed out that the relevant circumstances in a summary dismissal application would partly depend on the stage on which the proceedings had reached (at [47]-[50]).
As to the strike out application, it is relevant to have regard to the remarks of Lindgren J in White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298 (which were adopted by French CJ and Gummow J in Spencer at [23]) in relation to the forerunner to r.16.21 of the FCA Rules. Lindgren J observed at [47]:
…evidence may disclose that a person has or may have a “reasonable cause of action” or “reasonable prospects of success”, yet the person’s pleading does not disclose this. In such a case O 11 r 16 empowers the Court to strike out the pleading but O 20 r 2(1)(a) would not empower the Court to order a stay or dismissal, and s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts.
Rule 16.21 of the FCA Rules is relevantly, as follows:
(1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:
…
(c) is evasive or ambiguous; or
(d) is likely to cause prejudice, embarrassment or delay in the proceeding; or
(e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(f) is otherwise an abuse of the process of the Court…
The Rules of this court make no provision in relation to striking out pleadings. Rule 1.05(2) provides that if in a particular case if the rules are insufficient or inappropriate the Court may, relevantly, apply the FCA Rules in whole or in part and modified or dispensed with, as necessary. In addition, r.1.05(3) of the FCCA Rules provides:
(3) Without limiting subrule (2):
(b) the provisions of the Federal Court Rules set out in Part 2 of Schedule 3, apply, with necessary changes, to general federal law proceedings.
Part 2 of Schedule 3 to the Rules includes reference to r.16.21 of the FCA Rules. It is directly applicable in these proceedings in circumstances where the matter has proceeded by way of a statement of claim and defence.
As Lendlease submitted, a pleading needs to state with sufficient clarity the case that must be met so as to ensure that the other party has the opportunity of meeting the case against it (see Akhil Holdings at 286 per Mason CJ and Gaudron J). A pleading can be struck out for being likely to cause prejudice, embarrassment or delay where the pleading is susceptible to various meanings, contains inconsistent allegations, contains alternatives which are confusingly intermixed, or irrelevant allegations tending to increase expense (Shelton v National Roads and Motorists Association (NRMA Ltd) [2004] FCA 1393 at [18]) or where it contains defects which result in the pleading being unintelligible, ambiguous, vague or too general so as to embarrass the opposing party which does not know what is alleged against it (Fair Work Ombudsman v Eastern Colour at [18 ]).
Further, a pleading can be struck out as embarrassing where it simply asserts a conclusion to be drawn from facts not stated (Trade Practices Commission v David Jones (Australia) Pty Ltd (1985) 7 FCR 109 at 114; Fair Work Ombudsman v Eastern Colour at [39]), or where it simply repeats the language of a provision of legislation and then baldly asserts a contravention of that provision, without more (Fair Work Ombudsman v Eastern Colour at [40] citing McKellar v Container Terminal Management Services Ltd [1999] FCA 1101; (1999) 165 ALR 409 at [23]).
Relevantly, a pleading may be struck out as failing to disclose a reasonable cause of action where it has not set out all the material facts necessary to formulate a complete cause of action, such that it has failed to define the issues with sufficient clarity that other parties understand and have the opportunity to meet a case made against them (see H 1976 Nominees Pty Ltd v Galli (1979) 40 FLR 242; Christou v Stantons International Pty Ltd [2010] FCA 1150 at [5]).
The central elements of the SoC in issue in this case are to be found in paragraphs 26 to 31 which are set out at [11] above. In turn, those paragraphs rely on earlier pleaded matters.
On its face, as pleaded, CFMEU’s case appears to be that cl.1.4 of the Enterprise Agreement conveys a present fact or statement as to CFMEU’s state of mind, rather than a statement of anticipation by Lendlease as to what CFMEU and AWU would be likely to do if the proposed Enterprise Agreement was approved. However in submissions CFMEU appeared to accept not only that a representation may convey a prediction or an opinion, but also that Lendlease’s characterisation of cl.1.4 may be correct.
Insofar as CFMEU maintains a contention that cl.1.4 conveys a present fact, despite the onus it bears it has not pleaded or articulated a case that it directly conveyed or communicated to Lendlease, or to a Lendlease representative, that it did not intend to be “covered” by the Enterprise Agreement if it was approved.
On the other hand, if CFMEU accepts Lendlease’s characterisation of cl.1.4 of the Enterprise Agreement as conveying a representation as to Lendlease’s state of mind, belief or anticipation then, as Lendlease submitted, this is not reflected in the pleading and the SoC does not disclose how, taken at its highest on the facts pleaded, there is a cause of action that such statement of opinion or anticipation was knowingly or recklessly false or misleading within s.345 of the Act.
I accept that, for the reasons outlined in the submissions for Lendlease, there is, at the very least, a lack of clarity in the SoC such that Lendlease has not been given notice of the real substance of the claim against it (cf. Priest v State of New South Wales [2006] NSWSC 12 at [34] and Akhil Holdings at 286 per Mason CJ and Gaudron J). In these circumstances the present pleading can be described as embarrassing. Lendlease cannot know what is alleged against it.
Moreover, to the extent that CFMEU suggested that matters would emerge in evidence from Lendlease, this is to be seen in light of the fact that in CEPU at [225] Mortimer J accepted that s.345 of the FW Act does not impose any evidentiary burden on the maker of the statement.
I bear in mind the distinction between the pleading of a reasonable cause of action and the existence of a reasonable cause of action. At this stage CFMEU’s pleaded case lacks clarity largely because the central allegation appears to be that cl.1.4 conveys a present fact, but it is now not clear that this is what is intended. If it is the former, then Lendlease’s criticisms of the pleading as to knowledge or recklessness of the alleged falsity or the misleading nature of the present fact conveyed by cl.1.4 have force, particularly given the evidentiary burden imposed on CFMEU. If, on the other hand, CFMEU’s case is intended to be that cl.1.4 contains a representation as to a future matter which is false or misleading because at the time it was made Lendlease did not have a belief that the event (CFMEU seeking to be “covered” by the agreement) would come to pass, as Lendlease submitted, this has not been pleaded.
I have borne in mind that the clarification in CEPU of some of the principles in relation to the scope and operation of s.345 of the FW Act occurred after the SoC was filed (and see Spencer at [34], [47]-[48] and [61]-[62]) and that while CFMEU has not sought leave to replead or produced a proposed amended pleading, this is not a case in which it can be said that it has had ample opportunity to remedy the deficiencies in its case.
In my view it is inappropriate in the circumstances of this case to conclude that CFMEU has no reasonable prospect of success, notwithstanding the difficulties with the pleading outlined by Lendlease. However, the SoC has failed to define the issues with sufficient clarity such that Lendlease can understand and have the opportunity to meet the case against it. This warrants striking out the SoC in its entirety.
However, to allow CFMEU opportunity to clarify and replead the cause of action relied on (and the basis for that cause of action) it should have leave to file an amended SoC.
I certify that the preceding one hundred and nine (109) paragraphs are a true copy of the reasons for judgment of Judge Barnes
Associate:
Date: 29 March 2019
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