Federal Commissioner of Taxation v Phillips

ASCOT CARTAGE CONTRACTORS PTY. LTD. v. TRANSPORT WORKERS UNION OF AUSTRALIA
(1978) FLR 148
Trade Practices

COURT

FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Smithers J.(1)

CATCHWORDS

Trade Practices - Secondary boycott - Industrial action - Interlocutory injunction - Principles governing grant of interim relief - Conduct relating to conditions of employment - Prima facie case - Balance of convenience - Trade Practices Act 1974, ss. 45D (1), (3), 80 (2).

HEADNOTE

Ascot Cartage Contractors Pty. Ltd. ("Ascot") is a carrier for oil companies in the Northern Territory. The rates paid for drivers of its vehicles under the Transport Workers' (Northern Territory) Award 1972 were less than the rates paid by the oil companies to their drivers under the Northern Territory (Oil Companies) Award 1975. Officers of the Transport Workers' Union of Australia (T.W.U.) and members thereof being employees of major oil companies operating in the Northern Territory, acting in concert, placed bans upon the loading with petrol and other products at the depots of their employers, of vehicles of Ascot in and for the conduct of Ascot's carrying business. Subsequently the ban was extended to such loading of Ascot vehicles throughout Australia. Similar bans were implemented against the second applicant Red North Trucking Pty. Ltd. The immediate purpose of the bans was to force the applicants to become respondents to the Northern Territory (Oil Companies) Award 1975 in which case the wage rates of their drivers would be equal to those paid by the oil companies to their drivers. The respondents to both applications were the T.W.U. officials and members of that union who were employees of the oil companies.

The respondents argued that their conduct did not contravene the provisions of s. 45D (1) of the Trade Practices Act 1974 because the dominant purpose of that conduct was substantially related to the remuneration, conditions of employment, hours of work and working conditions of the employee respondents, that the initiative in the matter, to which the respondent union officials were merely responding, came from those employees, that such conduct was within the scope of s. 45D (3) of the Act and accordingly did not contravene the provisions of s. 45D (1).

Held: (1) In both matters, all respondents were engaged in conduct in concert for the purpose of causing loss and damage to the applicants' businesses and that that conduct was of a kind likely to have the effect of causing such damage and had in fact done so.

(2) The bans were imposed in circumstances that indicated that the respondent union officials were actively concerned therein and were not merely obliging neutrals in relation to the conduct of the employees.

(3) The immediate purpose of the employees and the respondents was to exert pressure on the applicants to induce them to improve the pay and conditions of their drivers to the same level as those of the drivers of the oil companies. This immediate purpose was part of a general purpose which was to create a situation in which it would be less attractive to the oil companies to use the services of the applicants and more attractive for them to carry their products in their own vehicles by their own employees and that thereby benefits such as increased overtime and work in higher paid work classifications would accrue to such employees. That general purpose was termed by the court, the "oil employment objective".

(4) The oil employment objective was to be regarded as the dominant purpose of the respondents and the employees involved. Accordingly, the issue was whether the purpose of achieving the oil employment objective was a purpose substantially related to the remuneration, etc., of employees as set out in s. 45D (3).

(5) Section 45D (3) is limited to the conditions of the employees in their own employment. The oil employment objective was not related to the conditions which applied in respect of the employment of the respondent employees; it was designed to force their employers to change their method of doing business so that their existing employees would be required by employers to work longer hours or do more of certain, better paid, classes of work but on the terms and conditions of employment already obtaining in their employment.

(6) The exceptions admitted by s.45D (3) relate to conduct committed in relation to the working conditions of employment which exist under current terms of employment and which is designed to change or perhaps preserve those terms.

(7) Parliament did not contemplate that the provisions of s. 45D (3) would be applicable where employees of different employers act in concert for the purpose of injuring the business of some third person for a purpose which is related to the remuneration and conditions of employment accorded to all such employees by all their employers.

(8) It was probable that at the trial of the action, s. 45D (3) would not be available to the respondents. The applicants had made out a prima facie case. On the balance of convenience the injunctive relief should be granted.

World Series Cricket Pty. Ltd. v. Parish (1977), 16 ALR 181, followed.

HEARING

Melbourne, 1978, April 6, 14, 17. #DATE 17:4:1978

APPLICATION.

The applicants in two proceedings sought interlocutory injunctions against the Transport Workers Union of Australia and officials and members thereof. The respondents, it was alleged, had engaged in conduct contrary to the provisions of s. 45D of the Trade Practices Act 1974.

J. I. Fajgenbaum, for the applicant, Ascot Cartage Contractors Pty. Ltd.

W. G. McNally, for the applicant, Red North Trucking Pty. Ltd.

D. M. Ryan and Gareth Evans, for the respondents in both proceedings.

Cur. adv. vult.

Solicitors for the applicant, Ascot Cartage Contractors Pty. Ltd.: Moule Hamilton & Derham.

Solicitors for the applicant, Red North Trucking Pty. Ltd.: W. G. McNally & Co.

Solicitors for the respondents: Ryan Carlisle Needham Thomas.

JUDGE1

April 17.

The following judgment was delivered.

SMITHERS J. These matters were heard together. The first thing to make clear is that these proceedings are still at an interlocutory stage; all parties desire that the matters be treated as though these proceedings are interlocutory in nature, and I so treat them. That being so whether or not an interlocutory injunction is to be granted depends upon the principles which were discussed in World Series Cricket Pty. Ltd. v. Parish (1977) 16 ALR 181 in which Bowen C.J., speaking of the jurisdiction conferred on the Federal Court by s. 80 (2) of the Trade Practices Act, said:

"These words confer a judicial discretion of the widest kind upon the court. It is not an arbitrary discretion but one to be exercised judicially in accordance with principle. These principles concerning the grant of interlocutory injunctions were developed in the Court of Chancery, but have been moulded to what is appropriate for different jurisdictions in which interlocutory relief may be obtained. Whether or not the jurisdiction being exercised is equitable, it is inherent in the nature of an application for interlocutory relief that the evidence upon which the application must be determined will be incomplete and unsatisfactory for the purpose of making a final finding.

"In Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd.

(1968) 118 CLR 618, the

Full Court of the High Court granted an interlocutory injunction pursuant to its statutory jurisdiction under s. 31 of the Judiciary Act 1903 to make such orders in the cause before it as were just. The High Court was seized of the matter under the Patents Act 1952 and was not exercising any inherent equitable jurisdiction. Nevertheless, it invoked principles developed in equity to determine how it should exercise its statutory jurisdiction, though in some ways departing from those principles, where the special nature of the patent jurisdiction made it appropriate to do so. The High Court expressed the view that in all cases including patent cases, a court when contemplating granting or refusing interlocutory relief, must direct itself to both the prima facie strength of the plaintiff's claim and the balance of convenience. A plaintiff is required to make out a prima facie case, 'in the sense that if the evidence remains as it is, there is a probability that at the trial of the action, the plaintiff will be held entitled to relief'

(1968) 118 CLR, at p 622.

The strength of the case which the plaintiff must make out will depend upon the nature of the right which he is seeking to assert, and the consequences which will flow from the making of the interlocutory order. However, where the facts are seriously in dispute, the court will not undertake a preliminary trial of the action in order to forecast a probable result, but rather, if the plaintiff has a fair chance of success (and what will be required will vary according to the nature of the case), the court will proceed to look to the balance of convenience"

(1977) 16 ALR, at pp 185-186. (at p151)

In these particular matters, first of all in matter VG 17 of 1978, it seems clear that the respondent Mr. Hodgson and the respondent Mr. Elliott have engaged in conduct in concert with each other for the purpose and with the effect of causing loss and damage to the applicant Ascot in the course of its business. It is the business of that applicant to supply carrying services to the major oil companies in the Northern Territory and it has built up a good and continuous business. It pays rates for driving of certain vehicles under the Transport Workers' (Northern Territory) Award 1972 less than the rates paid by the oil companies pursuant to the Northern Territory (Oil Companies) Award 1975. (at p151)
The immediate purpose of the conduct in which Mr. Hodgson and Mr. Elliott have engaged in concert is to force the applicant Ascot to observe the same conditions for its drivers as apply to the oil company drivers. (at p151)
It is said for the respondents that the initiative comes from the employees of the oil companies and that the part played by the respondents is in effect merely that of messenger boys for those employees. (at p151)
I am unable to accept this, certainly for present purposes. I am satisfied that wherever the initiative comes from, the respondents, Mr. Hodgson and Mr. Elliott, have acted in concert with each other, and indeed with the employees to support and enforce the bans. Not only have they acquiesced therein, as is said for them, but they have been active in steps taken to enforce and implement those bans, and Mr. Hodgson's affidavit making it quite clear that the bans are operative and will be maintained implies that they are and will be supported by the organization and inevitably by its officers, including himself. (at p151)
It would be quite unreal to regard what is happening as the unaided work of the employees. The bans have been extended, even nationwide, and that puts a complexion on the overt acts of Mr. Hodgson and Mr. Elliott that stamps them as participants rather than merely as obliging neutrals. (at p151)
Thus, to all branches of the union, Mr. Hodgson has sent a telex alerting them as to the existence of the ban and has personally telephoned the office of Mobil Oil Australia Ltd. advising it that the Transport Workers' Union had banned loading and unloading of all the applicant's vehicles throughout Australia. And Mr. Elliott has made it clear to the Darwin installation manager of B.P. Australia Ltd. that should loading of any vehicles of the applicant other than owner-drivers occur, then B.P. Australia Ltd. will have an industrial confrontation with the TWU. Further, Mr. Elliott informed Mr. O'Neil a director of Red North Trucking Pty. Ltd., the applicant in matter NSW G36 of 1978, that "black bans have been placed on your company by the BP and Shell Transport Workers Union members employed by those companies and the TWU and the bans will not be lifted till you agree to be respondents to the Northern Territory (Oil Companies) Award." The accuracy of this statement of events has not been challenged by the respondents. (at p152)
The general probability of their accuracy is supported by the terms of the affidavit of Mr. Hodgson that the dominant purpose of "the conduct complained of by the applicant was and is substantially related to the wages and conditions of employment and to the continuity of that employment itself" of the employees of the major oil companies, and "of oil company employees engaging in that conduct". I quote here the last paragraph of the affidavit. (at p152)
In matter NSW G36 of 1978, the evidence shows that the respondents were all engaged in concert in applying the bans complained of. Before me the respondents justify the conduct on the same basis as is set forth in Mr. Hodgson's affidavit. (at p152)
Drawing inferences from the evidence, as one is required to do on an interlocutory application, it appears that as alleged in NSW G36 of 1978, employees of major oil companies and Mr. Elliott, an officer of the TWU, and, as alleged in VG17 of 1978, Mr. Hodgson and Mr. Elliott, being officers of the TWU, have respectively engaged in conduct in concert for the purpose of causing loss and damage to the applicants' businesses, and that that conduct was of a kind likely to have the effect of causing such damage and has undoubtedly done so. It is said on their behalf that the conduct in question is not to be taken to contravene the provisions of sub-s. (1) of s. 45D of the Trade Practices Act, because the dominant purpose for which the conduct is engaged in is substantially related to the remuneration, conditions of employment, hours of work and working conditions of those employees. It is clear that the immediate purpose of the employees and officers is to exert pressure on the applicants to induce them to improve the pay and conditions of their drivers to the same level as those of the drivers of the oil companies. (at p152)
I accept that this immediate purpose is but part of the general purpose of the employees in question, which is to create a situation in which it will be less attractive to the oil companies to use the services of the applicants and more attractive for them to carry their products in their own vehicles driven by their own employees. The benefits said to be likely to flow to the oil company employees would be greater security in their employment, probably more overtime and employment in driving the larger road trains to which a higher rate of pay attaches, rather than smaller vehicles. I call this the "oil employment objective" and I accept that this oil employment objective might well be the dominant purpose of the oil company employees, but it is not apparent that this is the dominant purpose of the officers or the organization. (at p153)
For them the whole exercise might well constitute nothing more than action to implement a policy of achieving wage rises and better conditions for their members when and wherever that prospect is realistic. Despite these observations I act for present purposes upon the view that this oil employment objective is the dominant purpose of the officers of the organization as well as of the employees. On that basis the question in both matters is whether the purpose of achieving the oil employment objective is a purpose substantially related to the remuneration, conditions of employment, hours of work or working conditions of the respondent employees within the meaning of s. 45D (3) (a) (i), or the remuneration, conditions of employment, hours of work or working conditions of the employee, or any of the employees within the meaning of s. 45D (3) (b) (iii). (at p153)
I am not persuaded that it is and I do not think that it is. No doubt there is a sense in which action designed to achieve greater security of employment, more work in that employment and more of the classes of work in that employment which attract the higher rate of pay is related to hours of work and working conditions of the employees in question. It is, however, a very general sense and if applicable to s. 45D it would introduce a conception that in the context of the Trade Practices Act is somewhat incongruous, that conception being that employees should be free to subject their employer to pressure, to force him to take action to injure the business of another trader with whom he has business relations whereby he would partially or totally cease to use the services of the other trader and in consequence thereof would be more likely to give more work to his own employees. (at p153)
Such a conception would sit uncomfortably in a statute, the general objective of which is to foster fair competition and which is designed to protect the business of individual traders from oppressive action of others who may have the commercial strength to act oppressively. It is a reasonable notion consonant with modern industrial attitudes that within traditional limitations, employees should be free of specific restrictions in taking action for the protection and improvement of the conditions under which they work in the employment which they are offered and accept. But the conception maintained above would be novel and out of harmony with the objectives of the Trade Practices Act. (at p153)
In general the Trade Practices Act forbids an agreement between two traders that neither should do business with another particular trader. It would be surprising that Parliament would tolerate persons in the employment of one trader acting in concert to pressure their own employer to force him to cease to do business with another trader. (at p153)
Looking at the terms of s. 45D (3), it is to be observed that sub-par. (3) (a) (i) contemplates that the persons whose remuneration, conditions of employment, hours of work or working conditions to which the purpose in question is said to be related are persons actually employed and are all persons employed by one and the same employer. This suggests that it is the remuneration and conditions of those persons in that employment which are the relevant subject matters of sub-par. (3) (a) (i). In other words, the relevant words refer to a state of affairs in which the purpose in question relates to the conditions of the employees in their current employment. But the oil employment objective, as I have called it, has nothing to do with the conditions under which employees are employed or would be employed even if the objectives were achieved. The respondent employees have no issue with their own employers as to the conditions which apply or are to apply to work done by them under the terms of their current or future employment. The oil employment objective is designed to force the employer to change his method of doing business so that in the employment of its employees according to the existing terms of employment the employees will be required by the employer to work longer hours or do more of certain of the better paid classes of work the subject of their terms of employment. (at p154)
The extent to which an employer may have the work which he performs for customers carried out by his own employees or by independent contractors is a matter for him. It would be strange that in the course of legislative action to protect traders from oppressive or unfair injury in trade and commerce there would be a provision permitting employees to engage in conduct injurious to an independent contractor for the purpose of inducing their own employer to change his business practices. (at p154)
But if s. 45D (3), sub-pars. (a) (i) and (b) (iii) are construed as though the words "being an employee of an employer" appear after the expression "that person" where it first appears, and similar interpolations are made elsewhere, the argument for the respondents in this case becomes less plausible. It is my view that in the context in which sub-s. (3) of s. 45D appears that interpolation is necessarily implied. It is not that the statute excepts conduct relating to working conditions which would exist if the employer changed his business methods and as a consequence was likely to offer more employment or employment of a different class, but what the statute excepts from the forbidden conduct is that committed in relation to the working conditions of employment which do exist under the current terms of employment and which is designed to change or perhaps preserve those terms. (at p154)

In the course of argument it has been pointed out that s. 45D (3) is in terms restricted so far as it relates to the remuneration, conditions of employment, etc., which are referred to in sub-par. (3) (a) (i) to conditions being the conditions applicable to one of the participant employees in the action which is being taken in concert and other persons all employed by that same employer. Similar considerations apply in relation to sub-par. (3) (b) (iii). It emerges from this that Parliament did not contemplate that the provisions of s. 45D (3) are applicable where employees of different employers act in concert for the purpose of injuring the business of some third person for a purpose which is related to the remuneration and conditions of employment of all such employees in relation to all such employers. (at p155)
This feature of the section confirms my view that the probabilities are that when this matter is considered, as it will be at the trial of this action, the result will be that the subsection will be deemed to be inapplicable to the circumstances existing in this case where, as I have said, there is no current dispute and no impending dispute as to the terms and conditions of their employment as between the employees who are applying the ban - that is the employees of the major oil companies - and their employers, the major oil companies. Accordingly, I think, exercising the jurisdiction by reference to the probability of success at the trial, the applicants have made out a prima facie case. If one goes to the balance of convenience it is clear that the present bans, if implemented, do injure and will result in the virtual suspension if not destruction of the business of the applicant Ascot, and the applicant Scott and the business of Red North Trucking Pty. Ltd. That, of course, would be a very serious detriment to them. (at p155)
If I grant the injunction the detriment to the parties applying the bans is that they will lose the benefit of the action already taken. If one considers it as conduct applying a continuous pressure it is conduct which if lawful can be resumed at any time and the industrial effect thereof, is not to be doubted. Accordingly, in my opinion, the balance of convenience is very much in favour of preserving the status quo under which the applicants carry on their business, the oil companies use their services according to the traditional way, the employees who are applying the ban continue to be paid according to the terms of the oil company award and lose nothing, and the matter be finally considered according to the evidence which is brought forward on 8th May, if this matter comes to trial as at present contemplated. (at p155)

ORDER

Order accordingly.

[1978] FCA 28

17 APRIL 1978