Universal Cranes (Townsville) Pty Ltd v Construction, Forestry, Mining and Energy Union

[2012] FWA 3691

[2012] FWA 3691

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.611 - Application for costs

Universal Cranes (Townsville) Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(AG2011/3717)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 2 MAY 2012

Summary: application for costs - role of a representative organisation - discontinuation of objection prior to hearing - bulk of costs incurred at earlier point in time - discretion to award costs exercisable upon satisfaction of preconditions - application dismissed.

[1] This is an application for an order for costs under s.611 of the Fair Work Act 2009 (“the Act”) by Universal Cranes (Townsville) Pty Ltd (“the Applicant”). The party against whom the costs order is sought is the Construction, Forestry, Mining and Energy Union (“CFMEU”).

[2] Section 611 of the Act provides as follows:

611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: FWA can also order costs under sections 376, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).

[3] The grounds for the application as stated by the Applicant are that the “CFMEU either frivolously or vexatiously instituted the Proceedings in circumstances where, at the time the Proceedings were commenced it was obvious or ought to have been that the Proceedings had no reasonable prospect of success.”(sic) 1

[4] There is some element of conflation in the grounds for the application as I have cited above. But I have reasonably presumed that the Applicant confines the grounds for its application to s.611(2)(a) of the Act.

[5] The background to the application concerns an application for approval of an enterprise agreement the title of which was the ‘Universal Cranes (Townsville) Pty Ltd Employee Collective Agreement 2011’ (“the Agreement”).

[6] On 17 January 2012, Fair Work Australia (“FWA”) corresponded with the CFMEU and invited the union to file a Form F18 in relation to the approval of the agreement. That correspondence indicated a deadline for response by 5.00pm 24 January 2012.

[7] On 20 January 2012 the CFMEU indicated it would not be filing a Form F18.

[8] It was not until on or about 16 February 2012 that FWA was informed that the CFMEU intended to object to the approval of the agreement. FWA requested that any submisisons be provided on 1 March 2012. Those submissions were not received until some five days after this due date, following the approval of an extension of time by FWA.

[9] In those submissions the CFMEU contended that the Applicant had contravened s.228(1) of the Act.

[10] The nub of the CFMEU's claim was that the Applicant had coerced the employee to agree to the proposed enterprise agreement, as it then was.

[11] The CFMEU's written submissions in support of that claim referred to a meeting with employees in which the Applicant’s representative advised that if the proposed agreement was not approved, Mr Albert Smith (a 50% owner of the Respondent’s business) would withdraw his funding and the Company would be required to cease operating.

[12] The Applicant in this matter contends that the CFMEU failed to provide any evidence in support of those very serious allegations. The CFMEU did provide FWA with a statement signed by Mr Michael Robinson, an industrial organiser of the CFMEU, on 6 March 2012.

[13] That sworn statement included a claim by Mr Robinson that immediately following the conclusion of a bargaining meeting at which the Respondent's representative had indicated it intended to put the proposed agreement to a ballot of the relevant employees, he began to receive a number of telephone calls from CFMEU members.

[14] Mr Robinson's statement further indicated that the CFMEU members in those telephone calls expressed concern that they had been coerced into voting “yes” to the proposed agreement because of statements made to them by a part owner of the Applicant's business.

[15] The statement went on to claim that CFMEU delegates had met with 16 employees who had intended to vote “No” to the agreement.

[16] Mr Robinson went on to indicate that he had subsequently been informed that the agreement had been approved and only seven “No” votes had been cast.

[17] The Applicant contended that the CFMEU was never in possession of any more than hearsay knowledge and at no time was it in a position to rebut the direct evidence to the contrary that its witness had led. This witness statement was filed on 12 March 2012.

[18] The CFMEU was put on notice on and after 5 April 2012 that the Applicant considered its evidence to be hearsay.

[19] The CFMEU withdrew its objections in the evening of 10 April 2012, some hours after the 5.00pm deadline given to it by FWA to clarify its intentions in relation to the proceedings (which were set down for Friday, 13 April 2012 in Townsville).

[20] The central claim by the Applicant is that the CFMEU's evidence was of insufficient quality and weight to be capable of succeeding at trial.

[21] Consequently, the Applicant contended that the CFMEU must be acting vexatiously, or else it should have been reasonably apparent to the CFMEU that its objections had no reasonable prospect of success.

[22] More particularly, the Applicant claimed that the application is vexatious because its case was born of “a bitterness arising from the vote having gone against the wishes of the CFMEU”, and that on “the evidence, the vote in favour of the agreement represented a failure by the CFMEU to win the hearts and minds of members”. 2 The CFMEU, according to the Applicant, was motivated by “retribution” and sought “a show of industrial might [...] to cause the employer as much pain as it could”.3 It appears that for the same reasons the Applicant contended the CFMEU's application was frivolous.

[23] The Applicant also contended that in the absence of any evidence of key facts with which to mount a credible objection to the approval of the Agreement, the claims by the CFMEU had no reasonable prospect of success. This much, according to the Applicant, must have been apparent to an organisation such as the CFMEU which is well resourced and experienced in matters of this kind.

CONSIDERATION

[24] As an issue of construction, s.611 of the Act appears premised upon costs being ordered against a person who made an application or who has responded to an application. In the circumstances before me the CFMEU had not made an application (at its own initiative) but have responded to an application (for the approval of a single enterprise agreement).

[25] I make the further point that the award of costs by FWA is a discretion that is exercisable at large upon the satisfaction of the preconditions set out in s.611(2)(a) of the Act and\or s.611(2)(b) of the Act. This matter becomes relevant below.

[26] It appears to me that in responding to the application the CFMEU had concerns about the conduct of the employer at a particular point in the bargaining process. It provided a sworn statement to that end. No claim is made in this matter that that sworn statement - and as to what the CFMEU had been informed - was untruthful.

[27] The sworn statement as provided by Mr Robinson attested to him having been contacted by more than one member of the CFMEU who was an employee of the Applicant in relation to a perception of coercion in respect of the bargaining process. This was the evidence before the CFMEU at the time of it having instituted the proceedings (by which I mean no more than the point in time that it raised the objection to the agreement approval proceeding).

[28] That evidence, slender as it was, would be the cause of reasonable concern for a representative employee organisation. Given the basis on which an association of employees is registered as an organisation under the Act, it is not information that the CFMEU could readily discard as it has bearing on whether or not the relevant enterprise agreement was genuinely approved.

[29] It is a matter of little surprise that on the basis of the evidence that was at hand at the time, and to which it had sworn, that the CFMEU sought to agitate the issue that it did to test the position of the Applicant in relation to its conduct.

[30] Despite the assertions by the Applicant's representative as set out above, there is no evidence of vexatiousness on the part of the CFMEU, such as might be found in a statement or comment by an official or a pattern of conduct. The surrounding facts do not permit me to draw an inference of this kind either. Nor does the application strike me as being frivolous: what was put to the CFMEU in its representative capacity went to the basis of the application for approval of the agreement, and as such was hardly a matter of little concern.

[31] Equally, however, once it was exposed to the Applicant’s evidentiary case in full, the CFMEU ought to have reassessed its willingness to press its objections. That is, after such time as the Applicant filed its materials on 12 March 2012, the CFMEU was in a position to evaluate the strength of its case. It appears not to have evaluated its relative case with any seriousness until some two or so days before the hearing itself, on 13 April 2012.

[32] There is an arguable case, therefore, that the CFMEU ought reasonably to have appreciated at some short period after 12 March 2012 that its application, without more, was without reasonable cause as it lacked the necessary quality of evidence to mount a credible case against the approval of the agreement.

[33] By this time, however, it seems reasonable to conclude that the bulk of the costs associated with the application in general, and in relation to the CFMEU's objection, had been incurred. In respect of the CFMEU's objection, the witness statements had been collected and prepared in response to the CFMEU’s claims and the relevant materials had been filed.

[34] Undoubtedly there were some other expenses incurred subsequently, and I do not know their precise magnitude, but they are unlikely to be of such a scale as to warrant me exercising my discretion (in all the circumstances) to make an order for costs. Clearly, had the case proceeded to hearing, however, the result may have been very different.

[35] For these reasons, I dismiss the application for costs.

SENIOR DEPUTY PRESIDENT

Final written submissions:

Respondent: 27 April 2012

Applicant: 1 May 2012

 1   Form F6 Application for Costs dated 12 April 2012 at PN 1.

 2   Form F6 Application for Costs dated 12 April 2012 at PN 27.

 3   Form F6 Application for Costs dated 12 April 2012 at PN 27.

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