Victoria International Container Terminal Limited v Lunt & Ors

[2020] HCATrans 143

[2020] HCATrans 143

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M35 of 2020

B e t w e e n -

VICTORIA INTERNATIONAL CONTAINER TERMINAL LIMITED

Applicant

and

RICHARD SIMON LUNT

First Respondent

FAIR WORK COMMISSION

Second Respondent

AUSTRALIAN MARITIME OFFICERS UNION

Third Respondent

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Fourth Respondent

Application for special leave to appeal

KIEFEL CJ
NETTLE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO CONNECTION TO MELBOURNE

ON FRIDAY, 11 SEPTEMBER 2020, AT 11.32 AM

Copyright in the High Court of Australia

____________________

MR S.J. WOOD, QC:   If it pleases the Court, I appear with my learned friend, MR N. BURMEISTER, for the applicant.  (instructed by Seyfarth Shaw Australia)

MR N.J. WILLIAMS, SC:   May it please the Court, I appear with MR C.J. TRAN, for the first respondent.   (instructed by Maurice Blackburn Lawyers)

KIEFEL CJ:   Yes, Mr Wood.

MR WOOD:   Thank you, your Honour.  The trial judge below found that there was a sham constituted, as his Honour found, by the device of the front man inserted by the union to avoid defences based on the union’s own conduct.  The trial judge dismissed the proceeding as an abuse on the basis of that sham, yet the Full Court waved it through.  The reason the Full Court waved this sham through was because, in our respectful submission, it made two fundamental errors.  The first is it looked solely at this question of abuse of process through the prism of illegitimacy of purpose – that is, it ignored the question of whether the uncontested facts before the Full Court amounted to oppression to the applicant or otherwise an affront to the administration of justice.

The second error that the Full Court made was to look at that question of illegitimacy of purpose too narrowly.  Dealing with the first error first, that error is best found at paragraph 18 of the reasons for judgment of the Full Court.  In the last sentence – this is at page 60 of the application book – the Full Court found:

There was therefore “no impropriety of purpose” and no abuse of process.

The Full Court did not go on to examine, absent any impropriety of purpose, whether there was otherwise oppression to the applicant or that the circumstances constituted an affront to the administration of justice.  That error is illogical.  It confuses sufficiency with necessity because the…..fallacy, that is, just because illegitimacy of purpose will generally amount to an abuse of process does not prove the inverse, an absence of illegitimacy of purpose does not not mean there was no abuse of process.

The second error made by the Full Court was to look at the question of illegitimacy of purpose too narrowly.  It focused entirely upon the purpose of Mr Lunt and ignored the purpose of the scheme.  The purpose of the scheme put in place by the union was to avoid defences based on its own conduct which had caused the very set of events it wanted to set aside to come into existence. 

That error by itself, that is, the question of looking at error – of looking at the question of illegitimacy of purpose too narrowly would not have been a problem had it been for the first error, that is, the failure to examine the scheme through the prism of oppression to the applicant and whether or not, in all the circumstances, what occurred amounted to an affront to the administration of justice.  It is, in our submission, a very simple case – or a very simple error with profound consequences.  The consequences of this ‑ ‑ ‑

KIEFEL CJ:   Mr Wood ‑ ‑ ‑

MR WOOD:   Sorry, Chief Justice.

KIEFEL CJ:   Yes, thank you.  In relation to Justice Rangiah’s reasons – the primary judge – do you say there are more than one bases upon which his Honour found abuse of process?

MR WOOD:   We do say that, your Honour.  It would not matter if there was not, but we do say there were more than three bases upon which his Honour found there to be an abuse of process.  But even if there were not three independent bases, the Full Court exercising its jurisdiction, which only arose if it found error, was therefore bound on a rehearing to examine the question for itself. 

It could…..dismiss the applicant’s application to dismiss proceedings as an abuse merely because in its view there was no illegitimacy of purpose.  It had to go on and determine whether the uncontested facts before it constituted oppression to the applicant or an affront to the administration of justice – and they just did not do that.

NETTLE J:   The primary judge did that, did he not, at paragraph 68 and following in his judgment?

MR WOOD:   Yes, your Honour.

NETTLE J:   That is to say, having dealt first with the improper purpose then went on to deal with the basis on which it might be held to have been an abuse of process?

MR WOOD:   Yes, your Honour, he did, and the Full Court did not do that and that is the error.  It does not matter for the question of oppression or the question of affront to the administration of justice whether Mr Lunt…..that is narrowly in the absence of the scheme was held to be legitimate.  One had to look at the purpose of the scheme and why Mr Lunt was in the position that he was, and that is what the Full Court failed to do. 

In those circumstances we say this Court should grant special leave to appeal because, firstly, if it does not, then the sham will continue and be effected, Mr Lunt’s case will go on to trial and he will be able to give effect to the scheme and avoid the union being called to account for its changed position.

The second reason is a fundamental one.  It is the duty of all courts to protect abuses of their processes, doubly so for this Court in its role of ensuring that all Australian courts are used properly and the courts are not used, or the processes of the courts are not used as instruments of oppression.

Thirdly, if purpose is the only touchstone for examining or determining whether or not a sham such as this constitutes an abuse of process, then there will be no control over shams of this type where the puppet’s purpose is to give effect to the puppeteer’s purpose, and the broader circumstances and facts and overall objective of the scheme are ignored.  We are happy to take questions, obviously, if the Court has any for us, but it strikes us as - excuse me, Chief Justice, I talked over you. 

KIEFEL CJ:   I was going to say - thank you, Mr Wood - we will hear from Mr Williams. 

MR WILLIAMS:   Your Honours, there is a fundamental point of principle raised in this case, otherwise the applicant’s case is entirely one for the exercise of the visitorial jurisdiction.  We have it on a point of principle that proceedings can only be…..predominant…..litigating…..an environmental case brought by someone for the predominant or motivating purpose of protecting an area for the benefit of the applicant’s children is an abuse of process. 

The consumer organisation could not bring a trade practices case in respect of dangerous goods because their organisation…..is only to benefit others.  Nor could a union could bring a case on behalf of a member…..employer’s conduct seeking relief from which only the member will benefit.  The applicant’s radical position which…..common law principle and…..authority…..consumer organisations suing for the benefit of…..member…..corporate…..or for those members themselves collectively. 

Much emphasis was put in the…..on the suggestion that this was part of a scheme put in place to avoid defences that were available against the union.  There was no defence available against the union that brought this case other than the submission that relief should be denied in the exercise of discretion. 

The discretionary factors governing denial of relief to the union were…..sharply dissimilar to those to be applied to an application brought by the union member.  The union member litigating for that person’s own purposes would be met with the defence, you are a paid‑up member of the union, it is your representative it signed up and on particular facts found here, if it is found that the union member is burying the case for the predominant purpose conferring a benefit on the union, then the discretionary factors would, in truth, be no different.

So it is not a case of avoiding a legal defence that is available.  There was no legal defence.  This was purely a…..from the discretion…..considered relied on the whole of the facts at…..discretionary question to be conceded in light of the nature of the challenge which was that this agreement had been invalidly approved and that it was void. 

There…..claims and…..an assertion that the lawfulness of the agreement which had been procured, and I will say more about that in just a moment, should be protected from judicial scrutiny.  It says the union cannot bring a challenge to validity, because it had acquiesced in the approval and would be denied…..discretion.  Now, your Honours appreciate we dispute that.

The consequence of VICT’s position must be that no employee could bring such a case.  No individual would have a predominant purpose of personal gain in exposing themselves to the cost of litigation in return for the relatively modest financial return to that person…..with quashing the enterprise agreement.  Indeed, VICT said as much in its reply at AB 104 in paragraph 5, the other person who brought the case would be a union…..

But what the applicant’s gratuitous and pejorative language in this application serves to conceal is…..vital on the question of discretionary relief.  It is the true character of VICT allowing conduct in question in the proceedings which it seeks to have summarily dismissed.  Eight VICT employees, and only eight…..meeting, which was a meeting that was convened on three days’ notice.

…..those employees were…..in a position that would be…..by the agreement if made.  None of them were…..employees.  Instead they were well remote from that, they were IT support employees, a senior IT business…..operational analysts…..system…..and a safety trade…..  Now, if they were not employees that will be covered under the agreement, when made, the preconditions for the approval of the agreement would not be met.  It would be void.

VICT’s defence, such as it was, was that the company agreed to further agreement…..those employees to move into stevedoring positions of the kind covered by the agreement before the operations commenced……evidence…..communication at all, nor by affidavit evidence from any of the employees concerned in the generalised assertion by the director of human resources and industrial operations.

Now, both VICT and the primary judge approached the application for dismissal on the basis that Mr Lunt had a prima facie case, that is, that he could succeed on those facts, he could succeed in showing that the agreement was procured by…..up employees who would never be covered by it and that its approval was therefore invalid.

Mr Lunt also alleged, and this had to be accepted at the prima facie level, that the agreement did not satisfy the better off overall test, and the proper inquiries by the Commission revealed that.  Now, it is in that context ‑ ‑ ‑

NETTLE J:   Mr Williams, may I ask, is the primary judge correct in paragraph 2 in stating that the union’s predecessor union acquiesced in the initial approval of the enterprise agreement?

MR WILLIAMS:   Yes.

NETTLE J:   So that, if it were, an industrial representative organisation of Mr Lunt and others like him thought that the agreement was satisfactory for their interests, it might be assumed?

MR WILLIAMS:   Well, just exactly how that came about might be a fact that is ultimately agitated in the proceeding.  But it is certainly the fact that the union acquiesced in the agreement and in doing so indicated its acceptance of those matters.  Just exactly what consideration has gone into that…..no other stevedore, no other people concerned with stevedoring operations employees is a matter that is not yet determined.

NETTLE J:   That would be something that would go to the exercise of discretion as to whether the union should be heard in view of its initial acquiescence?

MR WILLIAMS:   Yes.  It would be equally be – not necessarily whether it should be heard, but whether it should be able to obtain relief in circumstances where it acquiesced.  It would invariably have a right to be heard, but the only relevant question would be the discretionary question of relief.

That defence, as VICT…..it is not, of course, a defence but those matters could be raised against…..long‑time member and…..acquiesced and particularly could they be raised if it is established, as the primary judge accepted, that Mr Lunt brought the proceeding for the predominant purpose of conferring a benefit on the union, on the corporate representative of all the employees.

But the Full Court was, with respect, perfectly correct in its application of Williams v Spautz.  Your Honours, here we are in the territory that your Honour Justice Nettle and President Maxwell were in Treasury Wine Estates, that is, Mr Lunt wanted the relief not for himself but for the union, but he could only obtain the relief for the union by obtaining it for himself.  It is not that he wanted some collateral purpose, it is not that he wanted some other side purpose.  The only route to his motivation is by achieving his direct purpose and that is in validating the agreement by bringing this proceeding.

NETTLE J:   Mr Williams, do you oppose the contention that, as well as deciding the matter on the basis of abuse of process, Justice Rangiah also decided upon the basis that it was an abuse of process for the union to put up a front man, as it were, in order to avoid the risk of it being denied relief in the exercise of discretion?

MR WILLIAMS:   We do.  Justice Rangiah found one abuse with three consequences ‑ each of the three consequences in PNJ.  The abuse in each case, there could have been no independent basis here and Justice Rangiah correctly, with respect, applied the principle in Williams v Spautz.  His Honour concluded that it was perfectly valid for Mr Lunt to bring the case to obtain relief for the benefit of the union and then there was no independent abuse. 

NETTLE J:   Can I refer you to paragraph 119 of Justice Rangiah’s judgment, paragraph 119?

MR WILLIAMS:   I will turn to it.

NETTLE J:   Thank you.

MR WILLIAMS:   We respectfully…..correct in what I said about this.  His Honour…..of purpose and said that he had taken into account the distinction between purpose and motivation but there is simply no way around this.  The only way Mr Lunt could obtain a benefit for the union was to obtain the relief in the proceeding.  So his immediate purpose in the proceeding, that which he sought, the result…..was the invalidation of the agreement.  It is not a disqualification of such a litigant that the person seeks to bring it about for an ulterior motive, provided the person genuinely seeks the relief, as in Treasury Wine Estates, in the example that your Honour and President Maxwell gave in paragraph 11 - provided the person genuinely seeks the relief in the proceeding…..ulterior motivation is beside the point.

NETTLE J:   What about paragraph 133, the other basis as it appears upon which the trial judge decided?

MR WILLIAMS:   Well, first of all, in the opening parts of that paragraph, what his Honour is alluding to is an aspect of Mr Lunt’s improper purpose – as his Honour found it.  But then in the concluding paragraph – sorry, the concluding part of the paragraph – all of that depends on his Honour’s findings about the illegitimacy of purpose.  But it bears no independent…..  This is not an occasion which…..illegitimate and beyond that it was oppressive because he brought three different cases in different courts seeking the same point.  There was no independent allegation of abuse or oppression there.  It was the illegitimacy of purpose that was at the ‑ ‑ ‑

NETTLE J:   Where is that in 133 and 134, that those conclusions and findings are predicated on a finding of illegitimate purpose?

MR WILLIAMS:   First of all, it begins with “the true moving party” point…..not an objection.  It is not an objection that another person is the true moving party.  Third party cost applications are predicated on that.  So, his Honour starts off with his finding about the illegitimacy of purpose and it is that then that leads to the conclusion about unjustifiable oppression.  Similarly, in the device of using the “front man”, all of this is predicated ‑ ‑ ‑

KIEFEL CJ:   Mr Williams, but that does not explain paragraph 134, does it, because his Honour is saying, in addition, allowing the CFMMEU to act through Mr Lunt and overcome problems in the proceedings would bring the administration of justice into disrepute.  That is a separate ground as appears from paragraph 130.  

MR WILLIAMS:   We say two things about that.  First we say, it is - at its heart this was all about the illegitimacy of purpose.  If one started with the proposition that what Mr Lunt was doing was perfectly permissible – had this all be done upfront on bringing this to the CFMMEU, then, in our submission, there could have been no possible objection to it.  But the second and more direct thing we would say about this is, this is purely a visitorial jurisdiction point.  This is purely about whether the notice of appeal was drawn widely enough to call this in.  There is no general point of principle underlying this and for the Court to engage the visitorial jurisdiction ‑ ‑ ‑

KIEFEL CJ:   But, Mr Williams, in terms of its importance it involves the use of court processes.  I think that elevates it slightly. 

MR WILLIAMS:   Well, we accept that it involves the use of court processes, and we accept the importance of protecting, but these questions will need to be determined in their proper context, bearing in mind they are not defences – they are discretionary bases for refusing relief.  The time in which these matters truly arise is when questions of relief arise, and the case has been heard and determined on the whole of the evidence, which, as we submit, will involve a deal of evidence about VICT’s own conduct - role in this evidence which is focused upon Mr Lunt.

In our submission, if the agreement was invalidly approved, void, that has consequences for third parties.  It is in the nature of – it is an instrument having an element of statutory effect and whatever the motivation of the claimants bringing the case – even if it were the union saying we did this, we got it wrong, we did not pay sufficient attention, or we changed our mind, if it were shown that the agreement was invalid, void, to use the words of Bhardwaj, there would be powerful discretion…..relief. 

…..discretion, the union would be able to seek the relief.  It is purely a discretionary question.  It is whether…..accept that…..party agreeing to proceeding in order to avoid legal defences that were available to another – now that is where we get a different question and we raise – that would raise much more difficult questions.  But where the issues are purely discretionary, in our submission, there is no possible issue of principle involved in this and especially when the…..principle that underlies it is one that is as long settled as that in Williams v Spautz. 

We are really here flagging the position of the…..who sues another, who prosecutes another because he wants to have him thrown out of office, but nonetheless seeks the conviction of the person as a way of achieving this.  That is the…..against Mr Lunt in this.  He wanted this relief because he wanted it for the union’s benefit.  Now, there is nothing wrong with that.

KIEFEL CJ:   Yes ‑ ‑ ‑

MR WILLIAMS:    …..

KIEFEL CJ:   I am sorry, I thought you had finished. 

MR WILLIAMS:   …..perfectly correct in what your Honour said in paragraphs 6, 7 and 8 and there is no possible basis for impugning that.  Those are our submissions. 

KIEFEL CJ:   Thank you, Mr Williams.  Do you have anything in reply, Mr Wood?

MR WOOD:   Chief Justice, that is whether these defences can be raised against Mr Lunt.  Of course, they are discretionary defences if they were raised against the union if the union had not interposed Mr Lunt but they cannot be raised against Mr Lunt.  Firstly, he was not involved in the approval process, so acquiescence cannot be raised against him.  Secondly, he was employed sometime after the approval of the agreement so delay cannot be used against him and, thirdly, you cannot visit the conduct of the union upon Mr Lunt in this regard.  That is the very reason that Mr Lunt was interposed in the place of the union to avoid these defences being able to be raised against him.

KIEFEL CJ:   Yes, thank you.  The Court will adjourn to consider the course that it will take.

AT 12.02 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.06 PM:

KIEFEL CJ:   There will be a grant of special leave in this matter limited to the ground relating to paragraph 134 of the primary judge’s reasons.  Mr Wood, that is the administration of justice ground and you would need to reformulate the ground of appeal, the single ground.

MR WOOD:   We will do that, your Honour.

KIEFEL CJ:   Yes, thank you.  What is your estimate of time for the hearing?

MR WOOD:   Certainly no more than one day.

KIEFEL CJ:   It is quite a narrow point.  Do you think it would be half a day?

MR WOOD:   It could be, your Honour, it could be.

KIEFEL CJ:   Mr Williams?

MR WILLIAMS:   It might be done within half a day but there would be a question of the scope of the evidence relating to that ground that I have not really considered independently, but yes, I think it would be a greater than even chance of it being concluded in half a day.

KIEFEL CJ:   All right then.  I will say easily less than a day.  Thank you. 

The Court will now adjourn until 12.30.

AT 12.07 PM THE MATTER WAS CONCLUDED