Federated Ironworkers Association of Australia v The Building Workers Industrial Union of Australia & Ors Donrosan Pty Ltd trading as Ideal Shower Screens v The Building Workers Industrial Union of Australia

Re: FEDERATED IRONWORKERS' ASSOCIATION OF AUSTRALIA and DONROSAN PTY LIMITED
trading as IDEAL SHOWER SCREENS
And: THE BUILDING WORKERS' INDUSTRIAL UNION OF AUSTRALIA; DONALD McDONALD;
BRIAN MILLER and BUILDING WORKERS' INDUSTRIAL UNION NEW SOUTH WALES BRANCH
Nos. NG280 and 288 of 1989
FED No. 338
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)

CATCHWORDS

Trade Practices - Secondary boycotts - Bans on installation of shower screens, wardrobes, etc - Bans imposed following dispute regarding superannuation payments and pursuant to demarcation dispute - Application for interlocutory orders - Whether serious question to be tried - Issue as to identity of responsible union - Balance of convenience - Discretion of Court - Whether grant of relief to company should be made conditional on undertakings by it as to future conduct.

Trade Practices Act 1974 ss.45D, 80.

HEARING

SYDNEY

#DATE 30:6:1989

In matter No. NG280 of 1989

Counsel for the Applicant: Mr M F Adams QC with Mr J P Phillips

Solicitors for the Applicant: McLellands

Counsel for the Respondents: Mr S C Rothman

Solicitors for the Respondents: Taylor & Scott

In matter No. NG288 of 1989

Counsel for the Applicant: Mr G Flick

Solicitors for the Applicant: Cutler Hughes & Harris

Counsel for the Respondents: Mr S C Rothman

Solicitors for the Respondents: Taylor & Scott

ORDER

No. NG280 of 1989

UPON THE APPLICANT giving to the Court the usual undertaking as to damages

The first and fourth respondents, their servants and agents, and the second and third respondents by themselves be restrained, pending further order of the Court, from:

(a) imposing, maintaining, giving effect to or enforcing any ban or limitation upon the acquisition of goods or services by any person from Donrosan Pty Limited trading as Ideal Shower Screens;

(b) aiding, abetting, counselling or procuring any person to engage in the conduct referred to in para (a);

(c) inducing or attempting to induce, whether by threat, promise or otherwise, any person to engage in such conduct;

(d) being in any way, directly or indirectly, knowingly concerned in, or party to, such conduct by another person; and

(e) conspiring with any other person or persons to engage in such conduct.

The costs of this application be applicant's costs in the principal proceeding.

There be liberty to any party to apply on 24 hours' notice.
No. NG288 of 1989
UPON THE APPLICANT giving to the Court the usual undertaking as to damages:

(i) giving to the Court the usual undertaking as to damages; and

(ii) undertaking to the Court that, during the continuation of the order hereby granted that;

(A) it will regularly and promptly discharge the whole of its obligations under the Building Unions' Superannuation Scheme; and

(B) it will pay to the Scheme within seven days of any assessment or demand issued to the applicant by the Trustee or Manager of the Scheme any moneys assessed by the auditors to the Scheme as being due by the applicant under that Scheme.

The first and third respondents, their servants and agents, and the second respondent by himself be restrained, pending further order of the Court, from:

(a) imposing, maintaining, giving effect to or enforcing any ban or limitation upon the acquisition of goods or services by any person from Donrosan Pty Limited trading as Ideal Shower Screens;

(b) aiding, abetting, counselling or procuring any person to engage in the conduct referred to in para (a);

(c) inducing or attempting to induce, whether by threat, promise or otherwise, any person to engage in such conduct;

(d) being in any way, directly or indirectly, knowingly concerned in, or party to, such conduct by another person; and

(e) conspiring with any other person or persons to engage in such conduct.

The costs of this application be applicant's costs in the principal proceeding.

There be liberty to any party to apply on 24 hours' notice.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

There are pending in the Court two proceedings alleging contraventions by various persons and bodies of s.45D of the Trade Practices Act 1974. The first proceeding is brought by the Federated Ironworkers' Union of Australia, an employees' organization registered under the Industrial Relations Act 1988. The respondents named in that proceeding are The Building Workers' Industrial Union of Australia, another employees' organization registered under the Industrial Relations Act, Donald McDonald, the branch secretary of the New South Wales branch of that organization and the secretary of the State union called Building Workers' Industrial Union, New South Wales Branch, and also the State union itself. The State union is registered under the Industrial Arbitration Act (NSW) 1940. As will appear, the similarity of name between the State branch of the federal organization and the State union is a cause of some confusion. Except where it is necessary to make a distinction between the two entities I will use the abbreviation "BWIU" to refer to this body in either or both of its manifestations.

In the second proceeding the applicant is Donrossan Pty Limited, a company which carries on the business of manufacturing and installing shower screens, security screens, mirrors, built-in wardrobes and the like. The company trades under the business name "Ideal Shower Screens". The respondents named in that proceeding are the three respondents to the FIA proceeding and, in addition, one Brian Miller, an organizer employed by the State union.
Each of the applicants has moved for interlocutory relief, seeking orders in relation to bans said to have been imposed by the respondents upon the supply of goods and services by Donrosan. Each of the applicants offers the usual undertaking as to damages. The two interlocutory applications have been heard together, the evidence in each matter being treated as evidence in the other, subject to relevance.
Donrosan carries on business principally at two locations: Alexandria in Sydney and Wallsend near Newcastle. Out of its total workforce, some 60 people are employed at Alexandria and some 20 at Wallsend. The company supplies both what it calls the "domestic market", that is the market for equipment to be installed into individual dwelling units by builders, and "the commercial market", large scale residential or commercial projects in which the installation work is usually performed by Donrosan. It is in relation to the latter area of activity that the present dispute arises, employees of Donrosan having been denied permission to instal the company's products in commercial projects.
The dispute goes back to October 1988. Mr S A Fletcher, the managing director of Donrosan, conceded in evidence that, at that time, the company was four months in arrears with its payments under the Building Unions Superannuation Scheme (BUSS). He ascribed this to an oversight by one of the company's staff. The failure of Donrosan to make these payments appears to have been the origin of the dispute between the company and the BWIU. The dispute quickly escalated because of two factors: some of Donrosan's Alexandria employees took out membership of the FIA rather than the BWIU -- thereby creating a demarcation dispute between the FIA and the BWIU -- and, apparently in retaliation, bans were imposed by the BWIU upon Donrosan installations.
On 21 November 1988 the dispute was taken before Commissioner Bennett of the then Conciliation and Arbitration Commission. The claim then made by the BWIU was that Donrosan's employees at Wallsend, who were FIA members, should resign from that organization and join the BWIU. I gather that the Wallsend workers had traditionally been FIA members whilst most of those at Alexandria had been members of the BWIU. At the conference on 21 November, Donrosan, the FIA and the BWIU were all represented. The BWIU representative was Mr Peter McClelland, who announced his appearance as being on behalf of "the Building Workers' Industrial Union of Australia, New South Wales Branch". There was discussion about a number of matters, principally the demarcation dispute between the FIA and the BWIU. A claim was made by Mr McClelland that Donrosan was still in arrears in connection with BUSS. Towards the end of the conference Commissioner Bennett referred to the various matters which had been canvassed as "secondary issues". He indicated that he regarded the bans as the matter of primary importance and asked Mr McClelland why "do you not lift the bans and have talks with the FIA on a national basis if necessary?". Mr McClelland replied:

"My brief in this particular matter is that the bans will stay on until such time as this company honours the understanding which has existed between our union and self for over ten years. That is my brief."

The conference ended by the Commissioner making a series of recommendations:

"Therefore, I recommend: one, that the BWIU takes such steps as are necessary to immediately remove all bans and limitations placed on the work of this company; two, that immediate discussions take place between the Federated Ironworkers Association, Newcastle Branch, and the Building Workers' Industrial Union, Newcastle Branch, for the purposes of resolving this dispute over union membership; three, if the discussions at the branch level prove unsatisfactory, then the matter should be referred by both unions to the New South Wales Labor Council with a request that it appoint a committee to resolve the dispute; four, if these procedures are still unable to resolve the dispute, then the matter should be referred back to this Commission for any assistance it may be able to provide to the parties."

The matter came back before the Commissioner one week later, on 28 November. The Donrosan representative complained that the bans were still in force, details being given. Reference was made to the possibility of invoking s.45D of the Trade Practices Act. Mr John Sutton, who appeared with Mr McClelland and another official "for the BWIU New South Wales branch" outlined the history of the relationship between Donrosan and the BWIU. He referred to an industrial agreement made on 17 February 1988 between The Glass Merchants' Association of New South Wales, of which Donrosan was a member, and the BWIU and complained of breaches of that agreement. Similar allegations were raised in these proceedings, in the cross-examination of Mr Fletcher. Mr Sutton also complained of the conduct of FIA. During the course of his address Mr Sutton said:

"For our part, Mr Commissioner, if there are no further attempts made to coerce the workers at either of the plants into another union, we would be prepared to recommend an immediate resumption of our members and to lift all bans on the company."

Once again the conference concluded with the making of a recommendation by the Commissioner, this time in the following terms:

"1 That all industrial disputation currently being enforced by the BWIU including bans and limitations be lifted forthwith. 2 That all parties including the company, the BWIU and the FIA invoke the status quo position as it existed at 5 October 1988 prior to this dispute. 3 That upon the carrying out of the two foregoing recommendations urgent talks take place between the unions in dispute and the New South Wales Labor Council or the ACTU. 4 That the parties make contact at the appropriate time to arrange for a suitable date before me for a report back."

According to claims subsequently made by the BWIU, it complied with the recommendation of Commissioner Bennett for the lifting of all bans and limitations; but, it said, the other recommendations were not implemented by the other parties. However that may be, by 9 December 1988 the matter was back before the Commissioner with a complaint on behalf of Donrosan that bans had been reimposed. Mr McClelland, who again appeared for "the Building Workers' Industrial Union of Australia, New South Wales branch", justified the BWIU position in relation to the dispute with the FIA. He did not deny the allegation regarding the reimposition of the bans. Once again the conference ended with a recommendation for the termination of industrial action by the BWIU.
On 17 January 1989 the matter was again before Mr Commissioner Bennett. Mr R Miller, who appeared "for the BWIU", informed the Commissioner:

"The bans are still in place because of the fact of the union membership in the factory. A lot of them are still dual ticketed. We still have BWIU members in the factory who are also FIA members."

There was discussion about the possible resolution of the impasse by a ballot of members, leading Commissioner Bennett to recommend the conduct of a ballot by an officer of the Labor Council of New South Wales.
No such ballot was conducted. On 30 January 1989 Commissioner Bennett again heard a report upon the dispute. It was conceded by Mr McClelland, appearing on behalf of "the Building Workers' Industrial Union of Australia, New South Wales branch", that there were currently BWIU bans on three building sites. In response to a direct question as to what was required by the BWIU for the bans to be lifted, Mr McClelland indicated that the BWIU required reversion to the status quo as at 5 October 1988, that is that all Alexandria employees be BWIU members. Mr McClelland indicated that the BWIU had asked the Australian Council of Trade Unions to convene a meeting to discuss the dispute. The conference ended with a recommendation by the Commissioner that the Labor Council of New South Wales be requested by the two unions to discuss the matter with the ACTU urgently.
Upon 2 March 1989, the day following the commencement of the Industrial Relations Act, there came before Commissioner Grimshaw of the Australian Industrial Relations Commission two disputes involving a number of parties, including the FIA and the BWIU. In the course of an opening submission, Mr F Cole, advocate for the Metal Trades Industry Association, referred to bans imposed on Ideal Shower Screens by the BWIU. Reference was made to a leaflet, which is in evidence in these proceedings and which shows a photograph of a BWIU picket line above the following:

"IDEAL SHOWER SCREENS AND THE FIA TRY TO SMASH AWARD RATES AND CONDITIONS - ALL OUT ATTACK ON BWIU - JOBS BANNED - Ideal Shower Screens have been banned for colluding with the Federated Ironworkers' Association to smash award rates and conditions and intimidate BWIU members. Ideal Shower Screens is waging a campaign to force BWIU members to join the right-wing Federated Ironworkers Association. The dispute, which began last October, has seen BWIU members locked out of factories and strike-breaking labour used to cross picket lines.

The dispute began when the BWIU found the company had withheld workers' BUSS super payments. Only two of the 10 workers at the company's Wallsend plant had received payments in the past 16 months, costing them thousands of dollars.

Following a strike by the workers, the company agreed to pay up. Instead it tried to persuade workers to renounce their BWIU membership and join the FIA. ..."

The leaflet concluded with the following, in bold print:

"If the FIA had any trade union principles, they wouldn't have helped the boss to deny the workers thousands in back-paid superannuation, and to shift the workers onto a lower award, just so as to poach a few BWIU members. IDEAL SHOWER SCREENS WILL CONTINUE TO BE BANNED THROUGHOUT THE INDUSTRY UNTIL SUCH TIME AS THEY:

1. Comply with their legal obligation to make all back-payments due to members under the BUSS scheme.

2. Pay their factory members in conformity with the BWIU Glass Workers (state) Award.

3. Stop intimidating their members into joining scab unions such as the FIA."

The leaflet bore the seal of the Building Workers' Industrial Union of Australia, that is the federal organization. It was stated to be authorized by Mr McDonald as "Secretary, Building Workers Industrial Union".

During the course of his address, Mr D Mathews, who appeared for "the Building Workers' Union of Australia", stated that the leaflet was "a factual document", "it does carry the history of this dispute we have with Ideal Shower Screens". In response to a question from the Commissioner, Mr Mathews said that "our members are taking action against Ideal Shower Screens". He explained that "the action is that they refuse to fix their products on certain sites". Later the following exchange occurred:

"THE COMMISSIONER: If I was to direct the Industrial Registrar of this Commission to conduct a ballot of all the employees of Ideal Screens, for them to determine the union of their choice, would you be prepared to lift the bans on Ideal until such time as that secret ballot is concluded? MR MATHEWS: No, Mr Commissioner. THE COMMISSIONER: I can assure you that it will not be conducted like you allege the previous ballot was. This will be done by the Industrial Registrar of this place in accordance with the law. MR MATHEWS: I could not give that sort of commitment until the matter had been discussed by a State executive. They have made decisions in respect to this dispute, and in accordance with the rules of our union they would be the ones who would have to rescind such decisions as have been made."

Commissioner Grimshaw adjourned the proceeding until 10 March, directing that all bans and limitations be lifted in the meantime and that the Industrial Registrar conduct a ballot of the employees of Ideal Shower Screens to determine their choice of union. The evidence does not establish whether or not this ballot has been conducted.

On 8 March 1989 a Notice of Appeal was filed in the Australian Industrial Relations Commission against what was said to be the order made by Commissioner Grimshaw on 2 March 1989. The appellant was identified as "the Building Workers' Industrial Union of Australia", clearly the federal organization. This appeal was, on 20 March 1989, withdrawn by counsel for the appellant; but before then, on 10 March 1989, the matter was again before Commissioner Grimshaw. On that occasion Mr Cole complained that the bans on Ideal Shower Screens remained in place, a statement which was not denied by Mr Sutton, who appeared "for the BWIU". The Commissioner directed the BWIU to lift all bans and limitations in respect of Ideal Shower Screens and adjourned the matter until 16 March 1989.

On 16 March 1989 Mr Cole again complained about the bans. There was prolonged discussion about the whole dispute at the conclusion of which the Commissioner said:

"The Commission has just about exhausted all avenues in seeking a sensible, workable solution to this long drawn out dispute. This matter has now been before the Commission seven times, and all recommendations or directions of the Commission have been totally ignored. At the outset, I should point out that the attitude and actions of the employer have generated much of the hostilities between the competing unions. It is clear, by the evidence to date, that union-wise, the two factories of the Ideal company were under serviced by the BWIU, possibly for years, until the union's actions in obtaining the BUSS for all employees. It seems that with the assistance or, at least, the co-operation of the employer, the FIA has become involved and commenced enrolling employees as members. This, of course, has assisted in bringing about the current bans on the company. I have now conducted a survey of the Sydney employees and have ascertained that not all the employees are unionised. Some are in the FIA, the remainder in the BWIU and/or the Timber Workers' Union. Some are not in any union. Again, I repeat that the Commission has exhausted all avenues in attempts to find a sensible solution by conciliation. I have, therefore, decided that the employees of Ideal, in both Sydney and Newcastle factories, have the choice of either union without being coerced by either union or management. I direct the BWIU to lift all bans and limitations and compete for the membership of Ideal employees on an equal basis with the FIA. I remind the employer of his obligations to both unions under the Industrial Relations Act, in particular, the right of entry and inspection of time and wages records. In conclusion I accept Mr Sutton's suggestion that the ACTU involve itself in this eternal union row. I strongly recommend this course of action.

I repeat, I direct that all bans and limitations be lifted."

Notwithstanding that direction, the bans remained. The matter again came before Commissioner Grimshaw on 4 April 1989 and again on 11 April 1989. On 4 April Mr McClelland conceded that the BWIU had bans in place. On 11 April Mr Sutton stated that there had been little change in the position. He referred to a meeting at the Labor Council in connection with superannuation payments and alleged that Donrosan remained "in serious breach" of the Building Industry Agreement in relation to superannuation. Reference was made to "pyramid subcontracting", which I understand to be the practice of having installations made by persons who are subcontractors rather than employees of the person responsible for installations. After discussion and an adjournment, the Commissioner made a formal order that "the Building Workers' Industrial Union of Australia lift all bans on the receipt of products from Ideal Shower Screens onto building sites".
It appears that this order was disregarded. On 22 May 1989 Commissioner Grimshaw presided at a compulsory conference at which "the Building Workers' Industrial Union of Australia, New South Wales branch" was represented by Mr McDonald and Mr Sutton. Once again it was claimed, this time by the FIA representative, that the bans remained in place. Mr McDonald conceded this to be the position, though he sought to justify the fact by reference to the conduct of both Donrosan and the FIA. Commissioner Grimshaw concluded the discussion by recommending, amongst other things, "that the Commission's decision in respect to the Ideal Shower Screens case be honoured". He then adjourned the matter for two days.
On 24 May the hearing continued. In relation to Ideal Shower Screens -- there were other matters in issue -- it followed much the same course as at the earlier hearing. The debate before the Commissioner was conducted upon the basis that the bans remained in existence. Commissioner Grimshaw indicated that, if the bans were not lifted within 48 hours, he would sign orders varying the appropriate awards to provide that "no work as directed, no pay".
Despite that intimation of intention, the present applicants did not return to the Commission for relief. Instead, on 26 May 1989, FIA filed its Application in this Court. Donrosan followed with an Application filed on 2 June 1989. After certain preliminary directions, arrangements were made for the interlocutory hearing to commence on 22 June 1989.
There is no doubt that, over many months, bans have been maintained on the installation of Donrosan products at various building sites around Sydney. Recently, it appears, a Newcastle site has also been banned. The evidence establishes a consistent pattern of conduct whereby persons coming to a site to fix screens and other fittings are sent away by BWIU representatives, or by other persons after consultation with BWIU representatives. This pattern continues to the present time, people having been denied access to building sites as recently as 8 June 1989 in Sydney and 19 June 1989 in Newcastle. Both Mr McDonald and Mr Miller have played a prominent part in the maintenance and enforcement of the bans.
The bans have resulted in substantial losses being sustained by Donrosan. In his affidavit evidence Mr Fletcher gave details of several jobs in respect of which he had submitted a tender but had been informed by a representative of the building contractor that Donrosan would not be given the order because of the problems which the company had with the BWIU. In other cases contracts actually awarded to Donrosan have been terminated because of the inability of the company to install its products and the building contractor has engaged a competitor of Donrosan.
It must have been obvious to those involved in the imposition of the bans that they would be likely to cause such losses. But it seems that they have not regarded this as a matter of concern. The evidence of Mr Fletcher includes an account of a meeting which he attended at the Labor Council building in Sussex Street on 5 April 1989. Those attending the meeting included Mr Cole, a representative of the FIA and Mr McClelland of the BWIU. According to the unchallenged evidence of Mr Fletcher, Mr Cole said to Mr McClelland: "The company is taking all necessary steps to clear the matter of the superannuation, it's only fair that the BWIU put a moratorium on any bans for a period of time". Mr McClelland replied "You've got to be joking. As far as I'm concerned this company is fucked".
During the course of the hearing of these interlocutory applications a question arose as to the identity of the body which was responsible for the bans. Counsel for the respondents accepted that the bans were imposed "by the BWIU", but he contended that the relevant body was the State union and not the federal organization. I accept that the State union is involved in the bans. For example, an article supporting the bans on Ideal Shower Screens, written by "BWIU organiser Brian Miller", was published in the February 1989 edition of "Unity", the official journal of the State union (and the Federated Engine Drivers' and Firemen's Association). It is conceded that Mr Miller is employed by the State union. Numerous letters promoting the bans have been written on a letterhead styled "Building Workers' Industrial Union of Australia New South Wales branch". There is ambiguity about that title, the State union bearing exactly the same name as the New South Wales branch of the federal organization, subject only to the suggestion of counsel that the word "the" should appear at the beginning of the latter, but not of the former, title. Moreover, further to compound the confusion, the letterhead refers to the named body as being registered under both the Commonwealth and the New South Wales Acts, a legal impossibility. Apparently, the letterhead is used by both the State and federal bodies. However, some of those letters were signed by Mr McDonald as "Secretary" or as "State Secretary". Mr McDonald's federal position is "Branch Secretary". These facts tend to suggest that, in writing the letters, Mr McDonald was acting on behalf of the State, rather than the federal, body. Notwithstanding these matters, there is evidence to suggest that the federal organization is also involved. The best indication of this is the various appearances before the Conciliation and Arbitration Commission and the Australian Industrial Relations Commission. Both of these Commissions, of course, were constituted under federal legislation. In the normal course, federal organizations usually appeared, or appear, before those Commissions. State unions sometimes appear; but there is evidence of a practice, in such a case, for the advocate to point out that he or she is appearing for a State union and to seek leave to appear. This course was not followed upon any of the occasions referred to above. Moreover, as noted, the short-lived appeal against the ruling of Commissioner Grimshaw of 2 March 1989 was lodged on behalf of the federal organization. Plainly, those concerned with the appeal thought that it was the federal organization which had been represented by Mr Mathews on that day.
In making its interlocutory application each applicant relies upon s.45D(1)(b) of the Trade Practices Act. That paragraph, in context, reads:

"45D. (1) Subject to this section, a person shall not, in concert with a second person, engage in conduct that hinders or prevents the supply of goods or services by a third person to a fourth person (not being an employer of the first-mentioned person), or the acquisition of goods or services by a third person from a fourth person (not being an employer of the first-mentioned person), where--

(a) ...

(b) the fourth person is a corporation and the conduct is engaged in for the purpose, and would have or be likely to have the effect, of causing--

(i) substantial loss or damage to the business of the fourth person or of a body corporate that is related to that person; or

(ii) a substantial lessening of competition in any market in which the fourth person or a body corporate that is related to that person supplies or acquires goods or services."

Although, in the case of FIA, the first alternative in the opening words of s.45D(1) is also relied upon, counsel for both applicants principally rely upon the second alternative. They say that the roles of the first and second persons are played by any combination of the present respondents, or any of them with relevant union representatives. The relevant conduct, they say, "hinders or prevents ... the acquisition of goods or services by a third person" (the particular building contractor) "from a fourth person" (Donrosan). As to para (b), although the applicants do not discard sub-para (ii), they rely primarily upon sub-para.(i); contending that both the purpose and effect of the conduct is to cause substantial loss or damage to the business of Donrosan.
It is neither necessary nor desirable for me to express a concluded view about the evidence. It is enough to say that there is clearly a serious question to be tried in connection with each of the elements of the applicants' cases. Counsel for the respondents does not suggest otherwise. Neither does he suggest that the evidence indicates the availability of a defence. For the purpose of these applications, counsel expressly disavows any reliance upon s.45D(3) of the Act, which provides a defence in the case of conduct undertaken for certain industrial purposes. Nor does counsel argue that consideration of the balance of convenience ought to lead the Court to withhold relief. I agree with his tacit concession upon that matter. The damage occasioned by the bans to Donrosan is both substantial and difficult to quantify; it is unlikely to be fully recoverable. On the other hand the respondents are unlikely to suffer any loss if injunctions are granted. The interests of BWIU members can be safeguarded by requiring appropriate undertakings and by reserving liberty to apply.
Apart from putting in issue the involvement in the bans of the federal organization, counsel for the respondent has limited himself to submitting that any relief granted to Donrosan should be conditioned upon the giving of certain undertakings by that applicant. No submission at all is put in response to the case made by the FIA.
The essential proposition of counsel in connection with Donrosan is that this applicant is not free from responsibility for the imposition of the bans. Counsel points to Mr Fletcher's concession of arrears in BUSS payments. He points out that, upon the evidence, the dispute arose because of the company's failure to make these payments and was compounded by the company's action in allowing FIA to "poach" BWIU members. In cross-examination other matters were also put to Mr Fletcher. It was suggested that some employees of Donrosan, who were sent to building sites, were not members of the BWIU, that the company had engaged in pyramid subcontracting and that the company had failed to maintain a proper register of its employees containing, amongst other information, details of each employee's union membership. Counsel argues that, in the exercise of its discretion, the Court should deny relief to Donrosan unless it is prepared to offer undertakings to the Court in relation to each of these matters.
Counsel for Donrosan submits that no undertaking --
other than the usual undertaking as to damages -- should be required of his client. He argues that, in relation to the last three matters, there is no evidence of the conduct complained of. If, as counsel for the respondents suggests, there is conduct by Donrosan which constitutes a breach of a certified industrial agreement, the remedy, according to counsel for Donrosan, is to take proceedings for a penalty pursuant to s.178 of the Industrial Relations Act. Counsel does concede that there have been breaches of Donrosan's obligations in respect of BUSS; but he says that there is no current default.
I accept the submission of counsel for Donrosan in relation to the matters other than the BUSS payments. There is no evidence of any breach by Donrosan of its obligations in respect of any of these matters. And there is no evidence that disputes in connection with any of those matters had anything to do with the imposition or maintenance of any of the bans. If there is a problem in regard to any of these matters, the BWIU has rights under the Industrial Relations Act. If the situation should arise, in the view of the BWIU, that Donrosan acts so unreasonably in connection with one of these matters that it would be oppressive to the BWIU, and detrimental to the interests of its members, to tie the hands of the BWIU in connection with available weapons of retaliation, the respondents can apply to this Court pursuant to the liberty to apply.
In relation to the BUSS payments, the situation is rather different. The failure of the company to keep its BUSS payments up to date was undoubtedly a major cause, if not the major cause, of the initial dispute. It ought not to be necessary for a union to supervise the discharge by an employer of its obligations to make superannuation payments. Oversight by an employee is not an acceptable excuse; management must establish a system which will ensure that oversights do not occur. It is true that, when the matter flared into dispute, a substantial payment was made. There was a disagreement whether that payment was sufficient to discharge the company's obligations. After a meeting with the Labor Council of New South Wales the company made a further payment. There is a continuing dispute as to whether any further moneys are owing; that question is apparently being investigated by the Scheme accountants.
During the course of the hearing of these applications it emerged that a small amount of money was then owing by the company for interest on late-paid BUSS contributions. This sum was then paid. It may therefore be the position that, at the present time, no moneys are due by Donrosan to BUSS. If moneys are found to be owing, it may be that they will be promptly paid.
Notwithstanding those possibilities, it is in my opinion desirable that Donrosan be required to give an undertaking in respect of its BUSS obligations. The company's record in connection with those payments is not good and that record has been a major factor in the current problem between it and the BWIU. If, as I think is appropriate, the BWIU should be restrained from breaching s.45D of the Trade Practices Act, it is reasonable to exact an undertaking designed to ensure that Donrosan does not repeat the conduct which gave rise to that breach. Accordingly, it will be a condition of any relief to Donrosan that the company give an undertaking to the Court, in addition to the usual undertaking as to damages, that during the continuation of the order to be granted in this application, it will regularly and promptly discharge the whole of its obligations under BUSS and that, in particular, it will pay to the accountants of the Scheme within seven days any moneys assessed by those accountants as being due under that Scheme.
So that there may be no misunderstanding of the position, I should say that, in coming to the conclusion that there is a serious question to be tried that the conduct of the respondents constitutes a breach of s.45D of the Trade Practices Act and that it is appropriate to make an interlocutory order in each case, I express no view whatever upon the merits of the current disputes between the parties. The major current dispute appears to be the demarcation dispute between the FIA and the BWIU. The merits of that dispute have not been investigated in these proceedings. It would not have been appropriate to do so; the resolution of demarcation disputes is not a task of this Court. In default of agreement between the unions concerned, such a dispute might be resolved in any one of a number of ways; several of which were discussed before the Commission. It is not for me to comment upon which of those methods is the most appropriate. I simply wish it to be clearly understood that the Court takes no position on the demarcation question. The fact that relief is to be given to the FIA is a result of its ability to demonstrate that, in their conduct of the dispute, the respondents appear to have transgressed s.45D; it does not reflect any view that the underlying position of the BWIU is unreasonable.
In cases where interlocutory relief is granted to applicants the usual course taken, in respect of costs, is to order that the costs of the interlocutory application be the applicant's costs in the principal proceedings. This means that, if the applicant is ultimately successful, these costs are recoverable from the respondent; the basic position of the applicant in the litigation having been vindicated. On the other hand, if the applicant fails at the final hearing, no costs are payable in connection with the interlocutory application. This position is justified by the fact that both parties are shown to have taken inappropriate positions, the applicant in bringing proceedings at all and the respondent in unsuccessfully resisting the interlocutory application. Interlocutory relief may be justified even in a proceeding which ultimately fails.

However, the Court always retains a discretion on costs. Exceptional cases sometimes arise. One such case is where the conduct of a party has been so unreasonable as to put the opposing party to unnecessary expense. In such a case a court may order costs upon a full indemnity basis. Degmam Pty Limited v Wright (No.2) (1983) 2 NSWLR 354 was such a case.
In the present case counsel for Donrosan seeks an order for costs upon an indemnity basis, arguing that the BWIU caused his clients to incur unnecessary costs by putting it to proof of matters about which there was no denial and by taking the point as to the identity of the particular body which took the various steps attributed to the BWIU.
I have considered these matters but I do not think that this is an appropriate occasion upon which to depart from the usual practice. The respondents did not unduly prolong the hearing, which was completed in a little over a day. The matter would have been completed within a day if there had been no occasion to investigate Donrosan's own conduct in connection with BUSS. Finally, the respondents have not been wholly unsuccessful, in that they have persuaded me to exact one of the undertakings sought by them and resisted by Donrosan.

[1989] FCA 338

30 JUNE 1989