Everett v Australian Services Union - [2007] FMCA 1665

FEDERAL MAGISTRATES COURT OF AUSTRALIA

EVERETT & ANOR v AUSTRALIAN SERVICES UNION

[2007] FMCA 1665

TRADE PRACTICES – Respondent’s application to strike out applicants’ statement of claim – whether activities of union can properly be characterised as being in trade or commerce – ordinary usage of terms considered.

Miller’s Trade Practices Act 2007
Trade Practices Act 1974 (Cth), s.52
Workplace Relations Act 1996 (Cth)
Federal Court of Australia Act 1976, s.31A

ACCC v AFMEPKIN & Others [2004] FCA 517
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Hearn v O’Rourke [2003] FCAFC 78
Cameron v Hogan (1934) 51 CLR 358

Applicants:

DIANNE ELIZABETH EVERETT & LORRAINE ANNE O'KEEFFE

Respondent:

AUSTRALIAN SERVICES UNION

File number:

MLG 462 of 2007

Judgment of:

Burchardt FM

Hearing date:

11 September 2007

Date of last submission:

18 September 2007

Delivered at:

Melbourne

Delivered on:

12 October 2007

REPRESENTATION

The Applicants:

In person

Counsel for the Respondent:

Mr J. Bornstein

Solicitor for the Respondent:

Maurice Blackburn Cashman

ORDERS

The application be dismissed.
The Applicants’ pay 75 percent of the Respondent’s costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLG 462 of 2007

DIANNE ELIZABETH EVERETT &
LORRAINE ANNE O'KEEFFE

Applicants

And

AUSTRALIAN SERVICES UNION

Respondent

REASONS FOR JUDGMENT

In about January 2002 Dianne Everett joined the Australian Services Union (“the ASU”). Lorraine Anne O'Keeffe had already joined the ASU in about February 2000.
They remained union members for some years (I am not sure whether they are still members) and now wish to sue the ASU.
The ASU has applied to strike out the Applicants' amended statement of claim filed on 16 May 2007. The ASU contends that the amended statement of claim not only does not disclose any cause of action, but that the circumstances of the dispute between the parties is such that the statement of claim is incapable of being amended to provide a justiciable cause of action.
Furthermore, the ASU makes a number of criticisms of the style and form of the amended statement of claim.
The issues that arise for determination are:
a)whether the amended statement of claim or the facts thus far disclosed is capable of grounding a claim under the Trade Practices Act 1974 (Cth) (“the Act”). If this is not the case, then there is no jurisdiction in the Court to examine the other issues raised by the amended statement of claim;
b)whether the breach of contract claim pleaded by the Applicant is capable of being made out in any event;
c)whether if the answers to a) and b) are favourable to the Applicants, the amended statement of claim should be repleaded.

The Trade Practices Claim

The central point advanced by the ASU is that as a trade union, while it is incorporated pursuant to the provisions of the Workplace Relations Act 1996 (Cth), its activities are not properly characterised as being in trade or commerce.
A trade union does not seek to make a profit. Its aims and objects are designed essentially to advance and progress the interests of its members. It has no shareholders as such and, at least in its dealings with its members, it does not conduct itself in such a fashion that its activities can be fairly said to be in trade or commerce.
By way of contrast Ms O’Keeffe submitted that unions do operate in trade or commerce. She pointed out that you have to be a member and pay your membership dues to gain any benefits from the union. She said that the ASU is a business which owns property and that its annual reports show profits.
No evidence was put before me to prove that such reports as the ASU provides to its members on an annual or other basis showed profits.
Mr Bornstein for the ASU informed me that he had not been able to find any authority directly on point. I am not aware of any such authority either, other than a very short remark made by Gray J about three unions in ACCC v AFMEPKIN & Others [2004] FCA 517 at [8], where his honour observed “they are not profit-making enterprises”.
In the circumstances one goes back to first principles.
The ASU can only lawfully do things that are within the scope of its objects. Those objects are set out at clause 4 of its constitution, of which a certified copy was provided to the Court.
When one looks at clause 4 it is readily apparent that the union's objects are first and fundamentally concerned with improving the interests of its members. It is not necessary to set out objects a to z and aa to ak. It is fair to characterise each and every matter set out therein as being to do with promoting the interests of the union as part of the organised labour movement and to promote the interests of the members of the union.
Some of the objects might, in certain circumstances, give rise to trade or commerce, such as:
h. To establish and maintain clubs and other recreational facilities and amenities for the benefit of members and of their families.
i. To establish, operate and maintain health services.
j.       To establish funds for the benefit of members ...
l.       To establish and/or maintain union and/or labour and trade union journals, newspapers and other publications and radio, television and other electronic broadcasting by any other means including, but not limited to the purchase of shares in a corporation carrying on such activity.
s.   To establish a fund for the assistance and support of trade unionists.
w.To invest funds.
y.To purchase, take on lease or in exchange, hire or otherwise acquire any real property and in particular any land, buildings, or easements for any purposes relating to the conduct of the union.
aa.To sell, improve, manage, develop, exchange, lease, dispose of, turn to account or otherwise deal with all or any part of the property and rights of the union or of a branch.
It would seem to me that it is possible to imagine circumstances without too much difficulty where objects of the sort I have just set out might give right to activities that would involve trade or commerce.
Nonetheless, the conduct of which the Applicants complain is not of that character.
If one turns to the amended statement of claim the conduct of which the Applicants complain is set out at paragraphs 8 (Ms Everett) and 9 (Ms O’Keeffe).
The acts asserted to have been done or not sufficiently or properly done by the ASU all relate to a failure alleged against the ASU to provide meaningful assistance and advice when requested.
Miller’s Trade Practices Act 2007 at 1.52.20 quotes this extract from the High Court’s decision in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603-604:
“it is plain that s 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business…The reference to conduct “in trade or commerce” in s.52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character.”
In Hearn v O’Rourke [2003] FCAFC 78 Dowsett J stated at [29]:
“the focus must be upon the conduct in question and not upon the range of activities in which a relevant corporation may be engaged. In other words, one does not simply identify the conduct in question, note that the relevant corporation is engaged in commercial activity of some kind, then look for a connection between the two. Because corporations are usually formed to engage in commercial activities, it will rarely be difficult to find such a connection. The correct approach is to determine whether or not the relevant conduct can, according to ordinary usage, be described as having occurred in the course of dealings "...which, of their nature, bear a trading or commercial character". The commercial undertakings of the corporation in question may be relevant to the exercise. However, the more important question will be whether the conduct is of a kind which is usually of a commercial nature.”
Here, what is essentially put by the Applicants is that the union failed to intervene in a timely or appropriate way when they were in trouble in their employment. The details of which the complaint is made are set out in considerable length in an “Outline of Submissions for Opposing Dismissal of Claim” filed in this Court by the Applicants on 11 September 2007.
It is readily apparent that a trade union is not in a general sense ordinarily to be seen as a commercial or trading entity. That is clear from the nature of such organisations. They are not primarily, to extract from the judgment of Dowsett J, usually formed to engage in commercial activities.
Trade is defined by the Macquarie Dictionary first, as:
“The buying and selling, or exchanging, of commodities either by wholesale or by retail, within a country or between countries.”
There are other definitions such as:
“To give in return; exchange; barter”
Or
“To make an exchange”
The first definition referred to above was plainly not chosen by accident. It is the sort of meaning that most readily comes to mind when the word trade is used.
The other two definitions which I have extracted are those that go closest to being helpful to the Applicants.
Commerce is defined by the Macquarie Dictionary as
“Interchange of goods or commodities, especially on a large scale between different countries”
There are other definitions which are not of assistance.
It is noteworthy that s.52 of the Act is situated in the part of the Act that deals with consumer protection. It is against this backdrop that one has to examine what it is said the union did to see whether it was in this instance in trade or commerce.
The representation that the Applicants assert is in effect “if you pay our membership fees we will give you good assistance of the sort unions provide to members”. That representation has within it obvious implicit qualifications and ambiguities. What objective indicia would there be to measure the quality of the assistance to be provided, for example?
Even leaving aside such difficulties, and assuming that the representation for which the Applicants’ contend were made out, in my opinion the provision of assistance and advice to union members by a union, even though it will not take place if the union has not been paid the relevant membership fees, is not properly characterised as being in trade or commerce.
Trade and commerce are phrases in common parlance and easily understood. I regret to say that I cannot accept the Applicants' assertion that the sort of trade union activity of which they complain is of that character.
It therefore follows that the Applicants' claim cannot be made out. It cannot be made out by repleading. There is therefore no jurisdiction in the Court to entertain this claim.

The breach of Contract Claim

It is well established that the Court can entertain in its accrued jurisdiction matters that form part of the whole justiciable controversy even in circumstances where the primary claim is unsuccessful. Nonetheless, here the primary claim under the Trade Practices Act is so clearly untenable that it would not be appropriate to entertain the ancillary contract claim in any event.
Having said that, however, I would indicate that in my view the criticisms advanced by Mr Bornstein of the contractual claim pleaded in the amended statement of claim are in substance correct.
For the contractual claim to succeed, I would have to find that the Applicants’ joining the union gave rise to an enforceable contract between them and the union itself.
Mr Bornstein referred to Cameron v Hogan (1934) 51 CLR 358 at 373 in support of this submission and I accept that it is to the effect that he alleges. What the High Court there found was that:
“It can seldom be the true meaning of the rules of any large association of such a kind that those undertaking office thereby enter into a contract with each and every member that they will execute the office in strict conformity with the rules. If, however, it were determined that the committee or officers of a voluntary association, in attempting to exclude the member complaining, or in some other respect, had committed a breach of contract, the remaining members of the association would not be responsible. The committee or officers may be agents for the members of the association. But, if so, they are agents for all the members. If in the case of a member complaining they have violated the rules, they have exceeded their authority. Upon no doctrine of agency can one of the joint principles hold the others responsible.”
Mr Bornstein has not been able to find any authority, and neither have I, which touches directly upon this issue. Cameron v Hogan, in the extract above, appears to me to support the thrust of Mr Bornstein's submissions.
I prefer the position contended for by Mr Bornstein which is that the mere membership of a union does not give rise to an enforceable set of contractual obligations on the part of the union to observe each and every one of its objects as a contractual condition in favour of each of the members.
Rather, the way forward for the Applicants would be to pursue an application to compel the union to act in conformity with its rules, a statutory remedy provided by the Workplace Relations Act. The fact that it has been felt necessary to put such a provision in a statutory scheme only goes to reinforce the proposition that there is no common law right to the same effect.
Accordingly, I would hold, were it necessary to do so, that the contractual claims pleaded are incapable of being made out.

The Repleading Point

Mr Bornstein advanced a large number of other technical pleading objections to the amended statement of claim. Some of these, in my view, had considerable force whereas others were of a purely technical sort that should not have been pressed. It is not necessary for me to set out in any detail my conclusions on this aspect of the matter, because I have already, for the reasons given, decided that the Court does not have jurisdiction to entertain the Trade Practices claim, and further if it were necessary to do so, would also dismiss the contract claim.
It is clear that Ms Everett and Ms O’Keeffe feel deeply affronted by what they feel is the failure of the ASU to properly represent and assist them in their time of trouble at their respective places of work. Having seen them in Court on several occasions and carefully read all of their extensive written submissions it is clear that these emotions are sincerely and genuinely held. (It should be noted that the written submissions forwarded to the Court by e-mail on 18 September 2007 were in parts hard to follow. It is clear, however, that the British and American cases referred to arise from the particular statutory schemes in those countries.)
Nonetheless, and unfortunately for the Applicants, their application in this case is, for the reasons given, not capable of being made out. Self-evidently, therefore, there are no reasonable prospects of the Applicants successfully prosecuting the proceeding (s.31A, Federal Court of Australia Act 1976). The application must be dismissed.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Deputy Associate: Ann Pretty

Date: 12 October 2007