Re Construction, Forestry, Mining and Energy Union - [2004] WASC 250

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION: RE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION; EX PARTE LEIGHTON CONTRACTORS PTY LTD & ANOR [2004] WASC 250

CORAM: ROBERTS-SMITH J

HEARD: 16 NOVEMBER 2004

DELIVERED : 16 NOVEMBER 2004

FILE NO/S: CIV 2476 of 2004
EX PARTE
LEIGHTON CONTRACTORS PTY LTD (ACN 00 893 667)
First Plaintiff
KUMAGAI GUMI CO LTD (ABN 74 002 810 317)
Second Plaintiff
AND
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Defendant
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS
Second Defendant

Catchwords:

Injunction - Prohibitory interlocutory injunction - Mandatory interlocutory injunction - Unlawful interference with contractual relations - Major rail construction project - Union demands for increased rates of payment for night work - Work bans - Whether actionable - Substantial financial loss as result of continuing delay of works - Damages - Serious question to be tried - Balance of convenience - Turns on own facts

Legislation:

Nil

Result:

Application for interlocutory injunctions granted

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr K J Mony de Kerloy & Ms E Athanasiou
Second Plaintiff            :     Mr K J Mony de Kerloy & Ms E Athanasiou
First Defendant             :     No appearance
Second Defendant         :     No appearance

Solicitors:

First Plaintiff                :     Freehills
Second Plaintiff            :     Freehills
First Defendant             :     No appearance
Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

DC Thomson & Co Ltd v Deakin [1952] Ch 646
Independent Corporate Services Ltd v Stevens [2002] WASC 280
Merkur Island Shipping Corporation v Laughton (The Hoegh Apapa) [1983] 2 AC 570
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1

Case(s) also cited:

American Cyanamid Co v Ethicon Ltd [1975] AC 396
Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637
Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 5 FCR 464
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Sanders v Snell (1998) 196 CLR 329

ROBERTS-SMITH J: This is an application by way of chamber summons dated today, 16 November 2004. It seeks a number of orders which I will not presently recite in full, but essentially they are orders preventing the defendants (which I will describe as "the Unions") their servants or agents from interfering with the business of the plaintiffs or interfering directly or indirectly with the due performance of various contracts involved in the construction of the Metro CityRail Project.
The substantive action was likewise commenced today by way of a writ of summons dated today, seeking permanent injunctions of the same type.
The application is supported by the affidavit of Anthony Gerard Cariss dated 16 November 2004. There is an undertaking as to damages which has been filed by the plaintiffs.
The substantive action and hence this chamber summons, concerns the alleged deliberate prevention by the defendants of the due performance by the plaintiffs of the contract concerning the Metro CityRail Project.
That is a major project, presently underway in Perth, to extend the existing Perth railway system, including a new link from Perth to Mandurah. It is claimed that the defendants are inducing construction workers to break their contracts of employment with the defendants and subcontractors.
According to the evidence before me, the Metro CityRail Project is divided into a series of packages, one of which was formerly known as Project F and is now known as the New Metro Rail City Project ("the Project"). The contractor is to design, construct and maintain the Project works as set out in a written contract dated 14 February 2004 between the Public Transport Authority and the first plaintiff, Leighton Contractors Pty Ltd and Leighton Holdings Ltd. Under that contract, Leighton has the responsibility for the design, construction and maintenance of the Project works. It is obliged to ensure that the works are completed by a date for practical completion and that its obligations are carried out with all due expedition. In other words, it is subject to the ordinary contractual provisions of the kind one would anticipate imposing time constraints and targets for the completion of the Project. The evidence is that if Leighton does not complete the Project works by the date for practical completion, it must pay liquidated damages which are significant, being $52,000 per calendar day, capped at $16.6 million.
Leighton is subcontracting the design, construction and maintenance of the works to a joint venture, comprising Leighton and the second plaintiff Kumagai Gumi Co Ltd ("the Joint Venture").
Leighton subcontracted the design, construction and maintenance of the Project works to the Joint Venture on 14 February 2004. Subcontracts have in turn been entered into between the Joint Venture and subcontractors, namely Delta Australasia Pty Ltd, D & G Hoist & Crane Hire Pty Ltd and Blackadder Scaffolding (Australia) Pty Ltd for the performance of various aspects of the works. Part of the works include construction of new CityRail works between the Narrows Bridge and Perth, including new stations located at the Esplanade and William Street and interconnecting tunnels. In turn, part of that involves construction of what is described as a "launch box" which is part of the new rail station at the Esplanade. The launch box area is an area of work on the critical path for the progress of the works as a whole. Work commenced on excavating the launch box in mid‑October 2004. Because of space constraints and safety considerations, it is not possible for all aspects of excavation work in relation to the launch box to be done at the same time. Accordingly, a decision was made that excavation work would be performed during the day and strutting and bracing work would be done at night.
On 29 October 2004 there was a meeting at the offices of the first and second defendants in East Perth. That included representatives of the first defendant who outlined an expectation that there should be increased rates of pay outside those outlined in the certified agreement, namely double time for shift work and triple time for weekend work.
On Wednesday 10 November 2004 the Unions instituted a ban on night‑time work on the project. The plaintiffs were informed of the ban by Mr Joe McDonald, an officer of the first and second defendants. The effect of the ban is to prevent employees of the sub‑contractors from working night shifts as required pursuant to the terms of their employment contracts. On that day, employees of subcontractors who presented themselves for work on night shift left the site without commencing work and were greeted by Mr McDonald who told them of the ban and, it is said, in effect, instructed them not to perform any work, which instruction the employees complied with and they did not perform any work in breach of their employment contracts.
It is submitted on behalf of the plaintiffs, and is said in fact to be patently obvious, that the purpose of the ban is to disrupt and delay the carrying out of the works to force the Joint Venture and the subcontractors to agree to pay employees amounts higher than those agreed, that is double time for night shifts and triple time for weekend work.
The evidence establishes that as the work on the launch box is on the critical path, the effect of the ban has been to delay the conduct of the works as a whole and in that way to interfere with the performance of the contract between Leighton and the Joint Venture and the other contracts to which I have referred.
The effect of the ban on night shift is to cause delay of one full working day. That ban is continuing and accordingly the delay is continuing. It is submitted to me, and appears to be the case from the contractual documents annexed to the affidavit, that in addition to liquidated damages incurred, a lost working day also incurs additional losses such as overhead, salary, costs and others which are substantial. The figure of $90,000 has been mentioned.
The position in relation to the substantive proceedings and indeed this application for an interlocutory injunction is not affected by any prohibition in the Workplace Relations Act 1996 (Cth) because a certificate has been issued by the Industrial Relations Commission pursuant to s 166A of that Act. A copy of that is in the material before me.
The principles which apply on an application of this kind are well‑established. I set out those principles in my judgment in Independent Corporate Services Ltd v Stevens [2002] WASC 280. Without quoting from what I there said, the principles may be summarised in this way. First of all, the applicant must satisfy the court there is a serious question to be tried. Secondly, if there is a serious question to be tried, an injunction will not be granted if common law damages would be an adequate remedy. Third, if there is a serious question to be tried and damages would not be an adequate remedy, it is necessary to consider whether the balance of convenience lies in favour of granting or refusing the relief sought.
The claim which is sought to be made here is one of actionable interference with contractual relations. Mr de Kerloy relies in relation to that, on the decision of Merkur Island Shipping Corporation v Laughton (The Hoegh Apapa) [1983] 2 AC 570, and specifically in the passage at 607 from the judgment of Jenkins LJ in DC Thomson & Co Ltd v Deakin [1952] Ch 646 and in particular at 697. The passage reads as follows:
"… first, that the person charged with actionable interference knew of the existence of the contract and intended to procure its breach; secondly that the person so charged did definitely and unequivocally persuade, induce or procure the employees concerned to break their contracts of employment with the intent I have mentioned; thirdly, that the employees so persuaded, induced or procured did in fact break their contracts of employment; and, fourthly, that breach of the contract forming the alleged subject of interference ensued as a necessary consequence of the breaches by the employees concerned of their contracts of employment."
Having read the material before me and heard the submissions of counsel, I am satisfied that the plaintiffs do have an arguable case and there is, to put it in terms of the principle, a serious question to be tried.
So far as the question of damages is concerned, I think the short position at point in relation to that is that the damage, that is to say the financial loss being occasioned on a daily basis by the plaintiffs, is very substantial. The evidence which is before me as to the financial capacity of the Union indicates that the Union as at 2002 had members' funds in the order of $213,000, which clearly would not afford any capacity to pay the sort of damages which are likely to accrue to the plaintiffs should the delay continue.
So far as the balance of convenience is concerned, I am satisfied that the balance is all the plaintiffs' way. There is significant detriment and disadvantage to the plaintiffs from the delay, and not only to them I may say, but also to the public interest (and that includes the subcontractors). The question of the effect of conduct on the public interest is one which in my view it is appropriate to take into account: see Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 at 42. Conversely, it seems to me there is significant merit in the plaintiffs' submission that the defendants are unlikely to be materially adversely affected should they be enjoined by injunction from interfering in the way in which the evidence indicates, with the contractual relations of the plaintiffs, the employees of the plaintiffs and their subcontractors.
For these reasons it seems to me that the applicant has established the necessary circumstances which would lead to the grant of the injunction and I will accordingly make that order.
I am prepared to make orders in terms of the draft orders dated 16 November 2004 which have been handed up.