Health Services Union v Asmar

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FEDERAL COURT OF AUSTRALIA

Health Services Union v Asmar [2024] FCA 1168

File number(s): VID 917 of 2024
Judgment of: DOWLING J
Date of judgment: 7 October 2024
Catchwords: PRACTICE AND PROCEDURE – application for interlocutory relief – whether serious question to be tried that union has ceased to function effectively and there are no effective means under the rules to enable it to function effectively – whether balance of convenience favours interlocutory relief – application for interlocutory relief granted
Legislation:

Conciliation and Arbitration Act 1904 (Cth) s 171D

Fair Work (Registered Organisations) Act 2009 (Cth) s 323

Federal Court of Australia Act 1976 (Cth) s 23

Federal Court Rules 2011 (Cth) r 8.2(1)(f)
Cases cited:

Allen v Townsend [1977] FCA 10; 31 FLR 431

Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57

Bradto Pty Ltd v Victoria [2006] VSCA 89; 15 VR 65

Brown and others v Health Services Union and others [2012] FCA 644; 205 FCR 548

Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464

Re Gallagher (1983) 79 FLR 26

Re Health Services Union [2009] FCA 829; 187 IR 51

Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238

Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2009] FCA 595; 81 IPR 339
Division: Fair Work
Registry: Victoria
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 95
Date of last submission: 26 September 2024
Date of hearing: 20 September 2024
Counsel for the Applicant: Mr M Harding SC and Mr B Bromberg
Solicitor for the Applicant: Slater & Gordon
Counsel for the First, Second, Fourth, Seventh and Ninth to Fifteenth Respondents: Mr R Nathwani SC and Mr Y Bakri
Solicitor for the First, Second, Fourth, Seventh and Ninth to Fifteenth Respondents: Davies Lawyers
Counsel for the Third Respondent Mr N Harrington
Solicitor for the Third Respondent Peter Vitale

ORDERS

VID 917 of 2024
BETWEEN:

HEALTH SERVICES UNION

Applicant

AND:

DIANA ASMAR

First Respondent

RHONDA BARCLAY

Second Respondent

DAVID EDEN (and others named in the Schedule)

Third Respondent

ORDER MADE BY:

DOWLING J

DATE OF ORDER:

7 OCTOBER 2024

UPON THE FIRST RESPONDENT BY HER COUNSEL UNDERTAKING:

a)That until the hearing and determination of the Originating Application or further order, she shall not authorise the external transfer or disbursement of any funds held or controlled by the Victoria No. 1 Branch of the Applicant (the Branch) unless the cash reserve of the Branch is at least $100,000, and the transfer or disbursement:

(i)is to an existing external goods or services provider of the Branch for an amount less than $3,000, and is not a payment for the benefit of the First Respondent or the Third Respondent; or

(ii)is a payment of the following scheduled business expenses of the Branch: rent, telephone, road tolls, electricity, water, internet and any other utilities, tax payments, worker’s compensation payments, and remuneration for employees and officers; or

(iii)is authorised in accordance with…

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Details
Case
[2024] FCA 1168
Decision Date

CaseChat Overview and Summary

Health Services Union brought an application against Asmar and others, seeking various forms of interlocutory relief to address what they described as reprisal conduct against union members. The Union argued that the conduct amounted to a serious question that the union branch had ceased to function effectively and that there were no effective means under the union's rules to enable it to function effectively. The Union further sought a legal costs injunction, arguing that the balance of convenience favoured such an injunction. The court had to decide whether the Union had established a serious question to be tried on the merits and whether the balance of convenience favoured the granting of the relief sought. The court noted that the evidence provided by the Union demonstrated that there was a serious question to be tried on the merits. The Union had also established that the balance of convenience favoured the grant of an injunction. The court found that the Union had demonstrated that there was a serious question to be tried that the branch had ceased to function effectively and that there were no effective means under the rules of the union to enable it to function effectively. The court further found that the balance of convenience favoured the grant of an injunction. The court therefore granted the relief sought by the Union.

Orders

Orders of the court

1. Pursuant to rule 8.21(1)(f) of the Federal Court Rules 2011 (Cth), Mr Danny Harika be substituted for Ms Velda Mitchell as the Eighth Respondent.

2. Pursuant to section 23 of the Federal Court of Australia Act 1976, until the hearing and determination of the Originating Application or further order, the Respondents be restrained from giving effect, or further effect, to their resolution dated 2 September 2024 by paying from Victoria No. 1 branch funds the legal costs incurred by the First, Second, Third, Fourth, and Ninth Respondents on and from the date of this order in respect of Federal Court proceedings commenced against them by the General Manager of the Fair Work Commission (VID835/2024) and any other related proceeding, with the exception of VID917/2024 and VID876/2024.

3. The Applicant’s claim for interim or interlocutory relief is otherwise dismissed.

4. The matter be listed for a case management hearing on the earliest suitable date for the Court and the parties.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In this case it is also relevant to consider the choice expressed by the Victorian Court of Appeal in Bradto Pty Ltd v Victoria [2006] VSCA 89; 15 VR 65 at [35] (per Maxwell P and Charles JA). The Court of Appeal described the choice in determining an application for injunctive relief as taking whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong.THE AFFIDAVIT EVIDENCE The Union read and relied on the following affidavits in support of their application for interlocutory relief:(a)First affidavit of Geoffrey Borenstein dated 10 September 2024; (b)Second affidavit of Geoffrey Borenstein dated 12 September 2024; (c)Third affidavit of Geoffrey Borenstein dated 20 September 2024; (d)Fourth affidavit of Geoffrey Borenstein dated 24 September 2024. The affidavits of Mr Borenstein detail: the information provided to the Union by the FWC about its investigation; the relevant resolutions of the National Executive and the Branch’s responses to them; the resolutions of the BCOM in early September 2024; and the evidence of reprisal conduct against Mr Eden, Ms Brianna Macks and Mr Jake McGuinness and correspondence from the FWC about their investigation into that alleged reprisal conduct. The third respondent, Mr Eden, read and relied on the following two affidavits to support the Union’s application for interlocutory relief:(a)Affidavit of David Eden dated 16 September 2024; and(b)Affidavit of Peter Vitale dated 20 September 2024. Those affidavits were also relied upon the Union. The affidavits of Mr Eden and Mr Vitale set out Mr Eden’s evidence of the reprisal conduct he says he was subjected to by the respondents, particularly Ms Asmar. The respondents read and relied on the affidavit of Antonia Sakkas dated 18 September 2024. The affidavit of Ms Sakkas set out: resolutions of the National Executive and the Branch’s response; details of the appointment of an independent financial administrator by the Branch; details of the investigation into Mr Eden; details of the investigation into the Branch by the FWC; Ms Brianna Macks’ complaint and resignation; and Ms Asmar’s role as Branch Secretary. The affidavit also detailed the deeds entered into by the respondents to the FWC proceeding requiring repayment of the money paid to them by the Branch if they are found to have engaged in wrongful conduct. AGREED UNDERTAKINGS GIVEN BY MS ASMAR The parties each rely on the undertakings given by Ms Asmar, and the respondents, to submit that the legal costs injunction should or should not be made.Authorisation of transfer or disbursement of branch funds The Union complains that it may be unable to prevent, and may be unable to recover, Union funds expended until the Court is in a position to determine the substantive application. Ms Asmar agreed to give the following undertaking to address that complaint. The undertaking regulates the authorisation of external transfer or disbursement of any funds of the Union:a)That until the hearing and determination of the Originating Application or further order, [Ms Asmar] … shall not authorise the external transfer or disbursement of any funds held or controlled by the Victoria No. 1 Branch of the Applicant (the Branch) unless the cash reserve of the Branch is at least $100,000, and the transfer or disbursement: i. is to an existing external goods or services provider of the Branch for an amount less than $3,000, and is not a payment for the benefit of the First Respondent or the Third Respondent; orii. is a payment of the following scheduled business expenses of the Branch: rent, telephone, road tolls, electricity, water, internet and any other utilities, tax payments, worker’s compensation payments, and remuneration for employees and officers; oriii. is authorised in accordance with the resolution of the Committee of Management of the Branch dated 3 September 2024 which is titled “Resolution - Interim Measures”;

Decision

Reasons for decision

The affidavits of Mr Borenstein dated 12 September 2024 and Mr David Eden dated 16 September 2024 both contain Mr McGuinness’s account of meetings attended by Ms Asmar. On 17 September 2024, Mr McGuinness was prevented from accessing; his work email account, the mass communication service used by the Branch for emails to members, and another mass communication service for text messages to members. Conclusions on conduct towards Mr Eden, Ms Macks and Mr McGuinness The respondents did not deny any of the allegations of the conduct directed at Mr Eden, Ms Macks and Mr McGuinness. They did not put on any responsive evidence. I consider the alleged conduct to be serious. In 2009 Tracey J declared, with consent of all parties, that the No. 1 Branch of the Union had ceased to function effectively and that there were no effective means under the rules of the Union to enable it to function effectively. His Honour set out some of the circumstances relied on by him in making that declaration. They included: allegations and counter allegations of misconduct between office holders; and suspension of various officers of the Branch: see Re Health Services Union [2009] FCA 829; (2009) 187 IR 51 at [3]. Those allegations have some parallel with the allegations made in this proceeding. In 2012 Flick J declared that HSU East Branch of the Union (and the State registered organisation HSUEast) had ceased to function effectively and that there were no effective means under the rules of the organisations by which they could be enabled to function effectively. His Honour relied upon a statement of agreed facts filed by the parties under s 191 of the Evidence Act 1995 (Cth). That statement included circumstances where: the General Secretary took leave from his role as General Secretary of the HSU East Branch (and HSUEast) following allegations of misconduct including financial impropriety; the Executive Committees and Union Councils of the HSU East Branch and HSUEast had split along partisan lines and antagonism between the two groups meant that they were unable to function effectively; and meetings of the union bodies were disrupted, disorderly and sometimes abandoned: see Brown and others v Health Services Union and others [2012] FCA 644; 205 FCR 548 at [61]. I consider the reprisal conduct supports a finding that there is a serious question that the Branch has ceased to function effectively and that there are no effective means under the rules of the Union to enable it to function effectively.The undertakings as supporting a serious question The Union submitted that the undertakings made by the respondents is further reason for me to be satisfied of a serious question that the Branch has ceased to function effectively and that there are no effective means under the rules of the Union to enable it to function effectively. As I understand it the Union submits that the preparedness of the respondents to enter into the undertakings is akin to a concession that the Branch has ceased to function effectively and that there are no effective means under the rules of the Union to enable it to function effectively. No authority was provided for that proposition. There may be many reasons why parties might choose to enter into undertakings. It will not always amount to a concession. In any event, I approach the task before me on the basis that the Union must demonstrate that there is a serious question to be tried that they are entitled to relief and that the balance of convenience favours the grant of an injunction: O’Neill at [19], [65]-[72]. I do not treat the undertakings as a concession.The submissions on serious question and the legal costs injunction

Ratio Decidendi

Legal Principle Established

That undertaking must be read with the resolution of the BCOM of 3 September 2024 which also provides for financial governance in the following ways:(a)BCOM, through their delegate Mr Aleksandros Ioanidis, will appoint a financial administrator, with appropriate expertise, who will be briefed with the Branch’s financial management policies and provide independent oversight of the Branch Secretary’s and the Branch Assistant Secretary’s performance of financial management duties;(b)The Financial Administrator will report monthly to the BCOM regarding their oversight activities;(c)The Branch Secretary and the Branch Assistant Secretary were directed to not authorise certain payments without two BCOM members (who do not hold financial authorisation tokens) and the Financial Administrator providing written notice they do not object. The payments that require pre-approval are:(i)Reimbursement payments to the Branch Secretary and Assistant Secretary;(ii)Payments made to external providers above $3,000 except scheduled Branch business expenses including rent, electricity, water, internet and any other utilities;(iii)Decisions to incur a total liability over $3,000; and(iv)Decisions to procure goods or services from any new external provider.(d)If any of the two BCOM members or the Financial Administrator do not provide the requisite written notice, the matter will be referred to the next BCOM for further consideration and determination. (e)At each BCOM meeting, the Branch Secretary or Assistant Secretary will provide a report to the BCOM containing certain financial information. Cooperation, and provision of material to the national secretary of the Union The Union complained that they no longer believed that the Branch, through BCOM, was able to function effectively, and that the Union may be unable to prevent inappropriate expenditure until the Court determines the application. Ms Asmar agreed to give an undertaking in the following form to allow the Union to monitor the expenditure of the branch and be provided with relevant information.b)That a copy of all the material provided pursuant item 4(b), of the resolution of the BCOM dated 3 September 2024 entitled “Resolution - Interim Measures”, will be copied to the National Secretary of the HSU at the same time as it is provided to the BCOM members and Connect National Audit. f)That until the hearing and determination of the Originating Application or further order she will provide the following to the National Secretary of the HSU within 24 hours of receipt:i.a copy of any report provided to BCOM by the Branch Secretary or Assistant Branch Secretary, in accordance with Direction 2 of the resolution on 4 September 2024 entitled “Resolution - Interim Measures”.ii.A copy of any report provided to them by Connect National Audit. Directions to the second, eighth ninth, tenth respondents In the circumstances of the reprisal conduct directed to Mr Eden, Ms Macks and Mr McGuinness, and in order to meet the concerns of the Union that no Union employee employed in the Branch is exposed to reprisal, Ms Asmar agreed to give an undertaking: c)That until the hearing and determination of the Originating Application or further order, she shall not give any direction to the Second, Fourth, Eighth, Ninth and Tenth Respondent other than in their capacity as employees of the Applicant who are employed in the Victoria No. 1 Branch. Control and direction of branch employees (including Mr Eden)