McKernan v Fraser

The plaintiffs, Leon Fraser and John Stapleton, brought an action against the defendant, Peter McKernan, the secretary of the Federated Seamen's Union at Port Adelaide. The dispute arose when the Adelaide Steamship Co. selected the plaintiffs for engagement as greasers on the m.s. Manunda. McKernan intervened, stating the plaintiffs were unfinancial and that other seamen would refuse to work with them if they were signed on. Subsequently, the shipping company refused to engage the plaintiffs. The plaintiffs sued McKernan for inducing breach of contract, alternatively for maliciously coercing the company not to enter into contracts, and alternatively for conspiracy to injure. The Special Magistrate found for the plaintiffs, a decision upheld by the Full Court of South Australia. The matter proceeded to the High Court of Australia.

The High Court was required to determine several legal issues. Firstly, whether the "picking-up" or selection of the plaintiffs constituted a binding contract of employment, and if so, whether McKernan had induced its breach. Secondly, whether the refusal of other seamen to work with the plaintiffs constituted an unlawful strike under the South Australian Industrial Code 1920. Thirdly, whether the actions of McKernan and other union members amounted to an unlawful conspiracy to injure the plaintiffs.

A majority of the High Court (Rich, Dixon, Evatt, and McTiernan JJ.) held that the judgment should have been for the defendant. Their reasoning was that the "picking-up" was merely preliminary to a contract and did not establish contractual relations, thus no breach of contract was procured. Furthermore, the refusal to work did not fall within the definition of a "strike" under the Industrial Code, as it involved refusing to enter into new employment rather than ceasing existing work. Regarding conspiracy, the court found that for such a claim to succeed, the sole or dominating purpose must be to harm the plaintiff, not merely to advance the defendants' own trade or vocational interests. In this case, the union's actions were motivated by a desire to benefit themselves and advance their interests, not solely to injure the plaintiffs.

Consequently, the High Court allowed the appeal, setting aside the judgment of the Supreme Court of South Australia and ordering that judgment be entered for the defendant.