FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017]

FCAFC 50

Appeal from: Construction, Forestry, Mining and Energy Union v BHP

Coal Pty Ltd (ACN 010 595 721), QUD 1139 of 2015, Order dated 19 August 2016

File number: QUD 683 of 2016 Judges: GREENWOOD, FLICK AND RANGIAH JJ Date of judgment: 23 March 2017 Catchwords: PRACTICE AND PROCEDURE – application for leave

to appeal – paragraphs of amended statement of claim struck out – paragraphs ambiguous or likely to cause prejudice or embarrassment – decision not attended by sufficient doubt – no substantial injustice – application for leave to appeal dismissed

Legislation: Fair Work Act 2009 (Cth) ss 340, 342, 361, 362, 550, 793

Federal Court of Australia Act 1976 (Cth) s 31A Federal Court Rules 2011 (Cth) rr 7.23, 16.02, 16.03, 16.21, 16.41, 16.43, 16.45, 20.13

Cases cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc

(1981) 148 CLR 170 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013) 216 FCR 70 Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 Bruce v Odhams Press Ltd [1936] 1 KB 697 Dare v Pulham (1982) 148 CLR 658 Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 Gould, Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 Lee v Westpac Banking Corporation [2015] FCA 467 Lion-Dairy & Drinks Pty Ltd v Sinclair Knight Merz Pty Ltd [2013] FCA 869

Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 Minogue v Williams [2000] FCA 125 Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99 Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 Thorpe v Commonwealth (No 3) (1997) 71 ALJR 767 Wright Rubber Products Pty Ltd v Bayer AG [2008] FCA 1510 Yorke v Lucas (1985) 158 CLR 661

Date of hearing: 21 November 2016 Registry: Queensland Division: General Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 73 Counsel for the Applicant: Mr H Borenstein QC with Mr J Fetter Solicitor for the Applicant: Hall Payne Lawyers Counsel for the First and Second Respondents:

Mr A Duffy QC with Mr I Neil SC

Solicitor for the First and Second Respondents:

Ashurst Australia

Counsel for the Third and Fourth Respondents:

Mr C Murdoch

Solicitor for the Third and Fourth Respondents:

Corrs Chambers Westgarth

ORDERS

QUD 683 of 2016 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY

UNION Applicant

AND: BHP COAL PTY LTD (ACN 010 595 721) First Respondent BM ALLIANCE COAL OPERATIONS PTY LTD (ACN 096 412 752) Second Respondent DOWNER EDI MINING PTY LTD (ACN 004 142 223) (and another named in the Schedule) Third Respondent

JUDGES: GREENWOOD, FLICK AND RANGIAH JJ DATE OF ORDER: 23 MARCH 2017 THE COURT ORDERS THAT: 1. The application for leave to appeal is dismissed.

2. There will be no order as to costs.

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

REASONS FOR JUDGMENT

THE COURT:

1 On 19 August 2016, a single judge of this Court ordered that a number of paragraphs of the

applicant’s amended statement of claim (“ASOC”) be struck out. The applicant seeks leave

to appeal against that order.

2 For the reasons that follow, the application for leave to appeal will be refused.

The amended statement of claim

3 The applicant’s claim is for pecuniary penalties and other relief against the respondents on

the basis that each of them contravened s 340(1)(a)(i) of the Fair Work Act 2009 (Cth) (“the

FWA”) by either taking or being involved in adverse action against the employees of the first

respondent (“BHP Coal”).

4 The second respondent (“BMA”) operates the Blackwater Mine, located near the town of

Blackwater in central Queensland. BMA and BHP Coal are related entities. The ASOC

alleges that BMA had a contract with BHP Coal under which BHP Coal would supply its

employees to do particular work at the mine.

5 The third respondent (“Downer Mining”) is a mining contractor. It is the owner of the fourth

respondent (“Downer Blasting”). The ASOC alleges that Downer Mining and Downer

Blasting were also contracted by BMA to supply labour to perform work of the same kind as

BHP Coal’s employees, but at different locations within the mine. The ASOC pleads that,

under their respective enterprise agreements, Downer Mining and Downer Blasting pay their

employees substantially less than BHP Coal pays its employees.

6 Until it was struck out, paragraph 28B of the ASOC pleaded that prior to August 2015,

Downer Mining and Downer Blasting approached BMA and proposed that they be given the

work performed by BHP Coal’s employees and indicated that they would do the work at a

lower cost than BHP Coal.

7 Paragraph 29 of the ASOC alleged that in or about August 2015, BMA “agreed” with

Downer Mining and Downer Blasting “for the supply of labour to carry out the Work…in

replacement of BHP Coal and the Employees”.

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8 Paragraphs 30-33 of the ASOC alleged that BMA contravened s 340(1)(a)(i) of the FWA by

taking adverse action against the employees of BHP Coal because those employees had a

“workplace right”. That workplace right was said to consist of the benefit of BHP’s

enterprise agreement. In oral submissions, the applicant’s counsel explained that the

applicant’s case is that BMA took “adverse action” against BHP Coal’s employees within the

meaning of s 342(1) Item 3 of the FWA by injuring BHP Coal in relation to the terms and

conditions of its contract with BMA, altering BHP Coal’s position to its prejudice and

refusing to make use of services offered by BHP Coal.

9 Paragraphs 38, 40, 40A and 41 of the ASOC pleaded that BMA also contravened

s 340(1)(a)(i) of the FWA through the operation of s 362. By making and implementing the

agreement between BMA, Downer Mining and Downer Blasting, BMA was said to have

advised, encouraged, incited or coerced BHP Coal to take adverse action against its

employees. That adverse action was alleged to be redeploying employees, transferring or

dismissing them, or proposing that they accept voluntary redundancies.

10 Paragraphs 33A, 34, 35, 42 and 43 of the ASOC pleaded that Downer Mining and Downer

Blasting contravened s 340(1)(a)(i) of the FWA as they were persons “involved in” the

contraventions by BMA within s 550 of the FWA.

11 Paragraphs 44 and 45 of the ASOC alleged that BHP Coal contravened s 340(1)(a)(i) of the

FWA as a person “involved in” the first of the contraventions by BMA.

The judgment of the primary judge

12 On 22 February 2016, BMA and BHP Coal filed an interlocutory application seeking

summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), or

alternatively, orders that a number of paragraphs of the ASOC be struck out. On the same

date, Downer Mining and Downer Blasting filed an interlocutory application seeking

summary judgment or, alternatively, that certain paragraphs of the ASOC be struck out.

13 On 19 August 2016, the primary judge ordered that paragraphs 28B, 29, 30, 31, 32, 33, 33A,

34, 35, 38, 39, 40, 40A, 41, 42, 43, 44 and 45 of the ASOC be struck out.

14 Paragraphs 29 and 30 of the ASOC were central to her Honour’s reasons. Those paragraphs

read as follows:

29 In or about August 2015, BMA agreed with Downer for the supply of labour to carry out the Work being performed by the Employees in replacement of

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BHP Coal and the Employees (BMA-Downer Agreement).

Particulars

Frans Knox informed the Employees of the BMA-Downer Agreement in a letter dated 20 August 2015. An announcement of the BMA-Downer Agreement was also made by Rag Udd on 20 August 2015. The BMA-Downer Agreement was also confirmed in a letter dated 31 August 2015 from Hilton Hurst of Downer Mining to Stephen Smyth of the CFMEU. The Applicant will refer to the full terms of these documents at trial. These documents may be inspected by appointment at the office of the Applicant’s solicitors.

30 By making the BMA-Downer Agreement, BMA has or threatened to:

(a) terminate the labour supply agreement with BHP Coal in relation to the performance of the Work;

(b) alter the position of BHP Coal to its prejudice in relation to the supply of labour for the performance of the Work; and

(c) refuse to make use of the services of BHP Coal in relation to the supply of labour for the performance of the Work.

Particulars

A. On 20 August 2015, Udd (writing as Asset President, BMA) circulated an announcement to all email addresses on the BMA system. The announcement stated that BMA “has awarded” the Work to Downer, and that the contractual arrangements “contain performance guarantees that will enable us to achieve productivity targets and cost reductions”.

B. On the same day, Knox wrote a letter (on BMA letterhead) to each Employee, advising them of the BMA-Downer Agreement, informing them the Work would be “outsourced” and that approximately 306 roles would be affected.

C. At the 21 August consultation, Knox and McKenzie displayed a series of powerpoint slides bearing the BMA logo. The slides stated that in consequence of the BMA-Downer Agreement there was a “surplus” of 210 Employees and a “possible need for redundanc[ies]”.

D. On 26 August 2015, McKenzie wrote a letter to the CFMEU (on BMA letterhead) confirming that the surplus of Employees ‘cannot be addressed by natural attrition’.

E. Further consultation meetings between McKenzie and CFMEU representatives were held on 24 and 27 August, 2 and 22 September, and 14 October 2015, during which meetings it was explained that the surplus Employees would either be redeployed within the Mine, transferred to another Mine, or else offered a “voluntary redundancy”. During each meeting, slides featuring the BMA logo were displayed. After each meeting the minutes were circulated, on BMA

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letterhead.

F. On or about 30 October 2015, BMA produced a document entitled “Blackwater Restructure Summary Data” which stated that BMA had completed its “decisions” about the surplus Employees, and had decided that BHP Coal would dismiss 43 of the Employees by way of “voluntary redundancy”, transfer 67 of them to other Mines, and redeploy 99 of them to other roles within the Mine.

G. These decisions were implemented by BHP Coal in November and December 2015.

H. The effect of the BMA-Downer Agreement is that BHP Coal is no longer required to perform the Work and it will instead be performed by Downer. The date upon which the labour supply agreement with BHP Coal was terminated, or will be terminated, is not presently known. Further particulars will be provided after discovery.

I. The effect of the BMA-Downer Agreement is to prejudice BHP Coal in relation to its supply of labour for the performance of the Work by reducing its operations at the Mine and any revenue earned therefrom. Further particulars will be provided after discovery.

J. The effect of the BMA-Downer Agreement is that BMA will no longer use the services of BHP Coal to supply labour for the performance of the Work and the labour will instead be supplied by Downer.

(Underlining omitted.)

15 The primary judge’s reasoning commenced with paragraph 30 of the ASOC. Since

paragraph 30 was based on the BMA-Downer Agreement as defined, her Honour also

considered paragraph 29 in this context. Her Honour held that paragraph 30 should be struck

out on the grounds set out in s 16.21(1)(c)-(e) of the Federal Court Rules 2011 (Cth) (“the

Rules”). Her Honour gave four reasons for that conclusion.

16 First, there appeared to be confusion in the applicant’s case as to the nature of the BMA-

Downer Agreement. The particulars of the BMA-Downer Agreement given in paragraph 29

referred to three documents, two of which referred to service contracts between BMA and the

Downer entities. Her Honour considered that the reference to the agreement in paragraph 29

was to be understood as a reference to a contract. Before her Honour, BMA had produced

evidence to the effect that only three contracts were entered in August 2015 between BMA

and the Downer entities, none of which provided for the Downer entities to replace BHP

Coal. However, the applicant had submitted to her Honour that the BMA-Downer Agreement

as defined in paragraph 29 of the ASOC was not a reference to a contract, but merely to “a

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mutual arrangement or understanding”. In these circumstances, her Honour concluded that

the applicant’s case as to the nature of the BMA-Downer Agreement was confused.

17 Second, her Honour found that material facts were not pleaded in support of the conclusion in

paragraph 30 of the ASOC that “by making” the BMA-Downer Agreement, BMA had or

threatened to do the acts pleaded in paragraphs 30(a), (b) and (c). Her Honour concluded that

the connection between the making of the BMA-Downer Agreement and the acts described in

paragraphs 30(a), (b) and (c) was unclear.

18 Third, her Honour adopted Nicholson J’s ruling in Maritime Union of Australia v Geraldton

Port Authority (1999) 93 FCR 34 at [244] that an offer of voluntary redundancy is not a

threat to injure an employee in his or her employment. Subparagraph F of the particulars to

paragraph 30 of the ASOC stated that BMA had decided that BHP Coal would “dismiss” 43

employees by way of voluntary redundancy. It can be inferred that her Honour considered

subparagraph F to be irrelevant in the absence of any allegation that the redundancies were

not truly voluntary.

19 Fourth, her Honour held that subparagraphs H, I and J of the particulars to paragraph 30(c)

were conclusory, and that subparagraphs H and I were inconclusive given their dependence

on the provision of further particulars at an indeterminate date.

20 The primary judge also concluded that paragraph 29 of the ASOC should be struck out,

relying on the first of the reasons given in respect of paragraph 30, namely confusion in the

applicant’s case as to the nature of the BMA-Downer Agreement. Her Honour noted that if

the applicant intended to allege that the BMA-Downer Agreement was merely a mutual

arrangement or understanding, that allegation was not supported by the particulars to

paragraph 29, which referred to documents which, in turn, referred to contracts between

BMA and the Downer entities.

21 Her Honour proceeded to give reasons why paragraphs 31, 32, 33, 33A, 34, 35, 38, 39, 40,

40A, 41, 42, 43, 44 and 45 of the ASOC should also be struck out. It is sufficient to say that

one of the reasons given by her Honour for striking out those paragraphs was that each of

them referred to and relied upon paragraphs 29 or 30. As paragraphs 29 and 30 were struck

out, the other paragraphs could not stand.

22 The primary judge then turned to paragraph 28B of the ASOC. Her Honour accepted the

respondents’ submission that paragraph 28B failed to specify who from Downer Mining and

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Downer Blasting was alleged to have approached BMA and who from BMA was approached,

and that the particulars provided did not support the facts alleged. The applicant submitted

that it had pleaded the allegation as best it could and that it did not have knowledge of the

material facts, but her Honour noted that there were possible avenues for the applicant to seek

those facts, including preliminary discovery. Her Honour concluded that paragraph 28B of

the ASOC should be struck out.

23 The primary judge considered the respondents’ application for summary judgment against the

applicant, but rejected the application. Her Honour held that the applicant should have leave

to file a further amended statement of claim.

Leave to appeal

24 There are no exhaustive or rigid rules of practice or criteria governing the grant of leave to

appeal: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at

177. However, two important factors are whether the judgment is attended by sufficient doubt

to warrant it being reconsidered by the Full Court, and whether substantial injustice would

result if leave were refused, supposing the judgment to be wrong: Décor Corporation Pty Ltd

v Dart Industries Inc (1991) 33 FCR 397 at 398-399; Samsung Electronics Company Ltd v

Apple Inc (2011) 217 FCR 238 at [26].

25 Appellate courts exercise “particular caution” in reviewing decisions pertaining to practice

and procedure: Adam P Brown Male Fashions at 177. The striking out of paragraphs of the

ASOC was a matter of practice and procedure.

26 Leave to appeal is more readily given where the interlocutory judgment affects a party’s

substantive rights: Minogue v Williams [2000] FCA 125 at [19]. In this case, the judgment

does not affect the applicant’s substantive rights since the primary judge gave the applicant

leave to replead.

Consideration

27 The applicant’s oral submissions as to the merits of the proposed appeal focused principally

on paragraph 29 of the ASOC. The applicant accepted that each of the succeeding

paragraphs struck out was related to paragraph 29. The applicant conceded that in the

proposed appeal the fate of each of the paragraphs struck out, other than s 28B, will depend

upon the fate of paragraph 29.

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28 The applicant’s draft notice of appeal contains the following ground in respect of paragraph

29 of the ASOC:

31. Her Honour erred in striking out paragraph 29 for the reason that it contained insufficient detail to enable Downer to answer it, and for the reason that there was confusion in the agreement pleaded, in relation to which the Applicant relies on grounds 1 to 6 above.

29 Grounds 1 to 6 of the draft notice of appeal deal with paragraph 30 of the ASOC. Of those

grounds, only ground 2 has any relevance to the striking out of paragraph 29. That ground

states:

2. Her Honour erred in finding that there was confusion in the Applicant’s case as to the precise nature of the BMA-Downer Agreement as defined in paragraph 29 of the ASOC, by herself confusing the defined agreement with the two formal contracts between BMA and Downer which were produced on affidavit by BMA.

30 In its written submissions, the applicant argues that:

30. Her Honour found that the “BMA-Downer Agreement” pleaded at ASOC [29] was to be understood as a reference to three contracts placed into evidence by the Respondent. That finding affected her Honour’s decision to strike out not only ASOC [29], but every other paragraph challenged, save for ASOC [28B]…

31. Her Honour failed to consider and deal with ASOC [29] in its own terms. Her Honour was distracted by the contracts produced by the Respondents which led her into error. Her Honour wrongly assumed that ASOC [29] seeks to plead those formal contracts. It does not. It simply pleads an agreement – in the ordinary sense of a mutual arrangement or understanding – the effect of which is stated, namely, that Downer would “replace” BHP Coal. Further details of the agreement, and its implementation, are given in the particulars to ASOC [30].

32. The question for her Honour was whether ASOC [29] raised an intelligible factual allegation. It clearly did and her Honour erred in striking it out.

(Citation omitted.)

31 In their oral submissions, counsel for the applicant said:

And we made the point before her Honour that we were not suggesting or referring to any particular contract in a formal sense. We were referring to an agreement or arrangement, in the commonly understood sense, which called for certain things to happen, and then we plead that they happened.

…

The documents that we rely on are not contractual documents. We never said they were. But they are documents which contain, effectively, admissions from the parties of the arrangement. And the particulars which were given are also consistent with those admissions.

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32 The applicant submits that the primary judge wrongly found that the BMA-Downer

Agreement pleaded in paragraph 29 was to be understood as a reference to the contracts

placed into evidence by BMA. The applicant also submits that her Honour failed to

understand that the relevance of the documents and information referred to in the particulars

was that they gave rise to an inference of a mutual arrangement or understanding to the effect

that the Downer entities would replace BHP Coal.

33 The applicant’s submission that the primary judge found that the BMA-Downer Agreement

was a reference to the contracts placed into evidence by BMA is not correct. Her Honour

referred to these contracts, but did not make the finding alleged by the applicant. Rather, her

Honour found that paragraph 29 of the ASOC should be struck out because there was

“apparent confusion in the [applicant’s] case as to the nature of the BMA-Downer

Agreement”. The confusion her Honour referred to was that the applicant asserted that its

case was that the BMA-Downer Agreement defined in paragraph 29 was merely a mutual

understanding or arrangement, but what appeared to be pleaded was that the agreement was a

contract. Her Honour decided that there was inconsistency between the case that was pleaded

and the case that the applicant said it intended to plead.

34 Rule 16.21(1) of the Rules provides:

16.21 Application to strike out pleadings

(1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

(a) contains scandalous material; or

(b) contains frivolous or vexatious material; or

(c) is evasive or ambiguous; or

(d) is likely to cause prejudice, embarrassment or delay in the proceeding; or

(e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

(f) is otherwise an abuse of the process of the Court.

35 In striking out paragraph 29 of the ASOC on the basis of confusion in the applicant’s case,

the primary judge appears to have relied on paragraphs (c) and (d) of r 16.21(1) of the Rules,

and to have concluded that paragraph 29 was ambiguous or likely to cause prejudice or

embarrassment to the respondents.

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36 The function of pleadings is to state with sufficient clarity the case that must be met: Gould,

Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517, Dare v

Pulham (1982) 148 CLR 658 at 664, Banque Commerciale SA v Akhil Holdings Ltd (1990)

169 CLR 279 at 286. In this way, pleadings serve to ensure the basic requirement of

procedural fairness that a party should have the opportunity of meeting the case against him

or her: Akhil Holdings at 286. These principles are embodied in r 16.02(1)(d) of the Rules

which requires that a pleading “state the material facts on which a party relies that are

necessary to give the opposing party fair notice of the case to be made against that party at

trial”. They are also consistent with r 16.21(1)(c) which provides that a pleading must not be

evasive or ambiguous, and r 16.21(1)(d) which provides that a pleading must not be likely to

cause prejudice or embarrassment.

37 The body of paragraph 29 of the ASOC stated that:

In or about August 2015, BMA agreed with Downer for the supply of labour to carry out the Work…in replacement of BHP Coal and the Employees (BMA-Downer Agreement).

38 The body of paragraph 29 set out the broad effect of the BMA-Downer Agreement and when

it was made, but said nothing else about the form or nature of the agreement. The agreement

fell to be understood by reference to the particulars that followed. The particulars referred to

three documents. Those documents were a letter from BMA to the employees of BHP Coal

dated 20 August 2015, a written announcement made on 20 August 2015 and a letter from

Downer Mining to the applicant dated 31 August 2015. The particulars did not specify what

parts of those documents were relied on. Nor did they specify the significance of those

documents. Accordingly, a reader of the paragraph would be left to infer the relevance of the

documents to the BMA-Downer Agreement from the contents of the documents.

39 The written announcement made on 20 August 2015 stated that BMA had awarded “new

service contracts” to the Downer entities to perform certain operations at the Blackwater

Mine. The document said that the contractual arrangements contained performance

guarantees that would enable BMA to achieve productivity targets and cost reductions. The

letter from Downer Mining dated 31 August 2015 was headed “New Contracts at the BMA

Blackwater Mine”. The letter referred to “the award of service contracts to Downer”. The

letter dated 20 August 2015 from BMA to the employees of BHP Coal stated that a number

of specified operations would be “outsourced” at the Blackwater mine.

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40 An ordinary person reading the body of paragraph 29 together with the particulars would

conclude that the BMA-Downer Agreement consisted of the service contracts referred to in

two of the documents described in the particulars. None of those documents refer to any

other mutual arrangement or understanding. An ordinary reader would not infer that the

BMA-Downer Agreement is a mutual understanding or arrangement underlying or additional

to the service contracts, rather than the service contracts themselves.

41 The ASOC must also be read in light of the applicant’s Amended Originating Application.

Paragraph 4A of that document seeks a declaration that “the BMA-Downer Agreement as

defined in the Amended Statement of Claim…is null and void for illegality.” The applicant

must be taken to contend that paragraph 4A seeks a declaration that a mere mutual

arrangement or understanding, without legal force, be declared null and void. If so, it is

difficult to understand how such a declaration could be obtained. Instead, the obvious

construction of paragraph 4A is that the applicant seeks that a contract be declared null and

void.

42 In its written submissions, the applicant appears to suggest that it was the drafter’s intention

to plead a mutual arrangement or understanding. However, it is necessary to construe a

pleading objectively – not by reference to what a party says it intended the pleading to mean.

On a natural reading, the reference to the agreement in paragraph 29 of the ASOC was a

reference to a contract between BMA and the Downer entities. The applicant did not say

what it says it meant, and apparently did not mean what it said. The reference to the

agreement in paragraph 29 was ambiguous, uncertain and confusing. The respondents were

not given fair notice of the case they were required to meet.

43 The applicant is, in a sense, correct to say that the service contracts produced by BMA to the

Court were a distraction. However, it was a distraction born of the applicant’s own pleading.

On the face of paragraph 29, the reference to the BMA-Downer Agreement appeared to be to

a contract. BMA’s response was to produce what it said were the contracts it entered into

with the Downer entities in August 2015 and seek summary judgment on the basis that the

contracts did not, contrary to the allegation in paragraph 29, amount to an agreement for the

supply of labour to carry out the work in replacement of BHP Coal and its employees. The

argument for summary judgment fell away when it emerged that the applicant’s case relied

on a mutual understanding or arrangement anterior to or separate from the service contracts.

Her Honour referred to the contracts to demonstrate the confusion created by the discrepancy

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between what the applicant had pleaded and what the applicant said it intended to plead. The

applicant has not demonstrated that her Honour’s discussion of the contracts involved any

error.

44 The Court has a discretion to decline to strike out a defective pleading. Clearly enough,

“great caution” should be exercised before striking out a party’s pleaded case and thereby

potentially placing an impediment in the path to the vindication of a claim for relief. To do

so would expose a party to the prospect of being unfairly denied access to the courts. Greater

uncertainty, perhaps, surrounds those circumstances in which a party may be exposed to

procedural unfairness by being confronted with a pleading which (for example) is accepted to

be sufficiently ambiguous or uncertain such that it should be struck out. To permit such a

pleaded case to proceed to hearing exposes that party to the prospect of unfairness by being

confronted with a deficiently pleaded case. Where any unfairness may be addressed by the

provision of further particulars or evidence, the discretion may be exercised to permit such a

case to proceed to hearing notwithstanding non-compliance with r.16.02: cf. Wright Rubber

Products Pty Ltd v Bayer AG [2008] FCA 1510 at [5], Lion-Dairy & Drinks Pty Ltd v

Sinclair Knight Merz Pty Ltd [2013] FCA 869 at [15]. Although it would be imprudent to

attempt to constrain the accepted discretion of the Court, it may nevertheless be observed that

there would need to be a reason why a claim which is accepted to be inadequately pleaded

should proceed to hearing without any potential unfairness to the opposing party being

adequately addressed. The touchstone, perhaps, can be no more precisely expressed than a

recognition that any pleading should adequately place an opposing party in a position where

it fairly knows the case to be met. Pleadings, after all, are the “servants, not the masters of

the judicial process”: Thorpe v Commonwealth (No 3) (1997) 71 ALJR 767 at 774-775.

45 Within this context, the applicant submits that even if there was ambiguity in its pleading of

the BMA-Downer Agreement, the primary judge should not have struck out paragraph 29 of

the ASOC, but should instead have ordered that the applicant provide further particulars. It is

not apparent that the applicant made any submission to that effect to the primary judge.

Certainly, no such submission was contained in the applicant’s written submissions before

the primary judge. In any event, her Honour noted that the applicant said that it had given the

best detail it could as it was not privy to the BMA-Downer Agreement. In light of that

concession, and in the absence of any application for discovery, there would have been no

utility in ordering the provision of further particulars.

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46 The applicant cannot demonstrate error in the primary judge’s finding that paragraph 29 of

the ASOC should be stuck out on the basis of confusion in the applicant’s case. As that

finding provides one unassailable reason for striking out the paragraphs succeeding paragraph

29, it is unnecessary to consider the other reasons given by her Honour for striking out those

paragraphs. However, paragraph 28B of the ASOC, which stands apart, remains to be

considered.

47 Paragraph 28B of the ASOC stated:

28B In the period prior to August 2015, Downer Mining and Downer Blasting (together, Downer) approached BMA and proposed that they be given all of the Work being performed by the Employees, instead of BHP Coal and that they would do it at a lower cost to BMA than BHP Coal.

Particulars

On 21 August 2015, at a consultation meeting with representatives of the Employees (the 21 August consultation), Knox stated that ‘Downers came to us and said they can make a step change in productivity performance for us, in pre-strip and the package that goes with that in maintenance as well as the drilling and blasting, that will guarantee – are guaranteeing us a performance outcome and a low cost’.

48 Paragraph 28B of the ASOC was relevant to the applicant’s claim that Downer Mining and

Downer Blasting contravened s 340(1)(a)(i) of the FWA under the accessorial liability

provision in s 550 as “persons involved” in the contraventions by BMA. More specifically,

the applicant alleged that the Downer entities were “knowingly concerned” in the

contravention.

49 The primary judge accepted the Downer entities’ submission that paragraph 28B was pleaded

in terms too general to allow them to know the case they were required to meet. In particular,

the paragraph did not specify who from the Downer entities is alleged to have approached

BMA and who from BMA was approached. Her Honour held that in circumstances where

paragraph 28B failed to plead material facts, it was not a sufficient response for the applicant

to say that it had pleaded the allegation as best it could. Her Honour noted that there were

possible avenues by which the applicant could have sought out the material facts, including

seeking preliminary discovery pursuant to r 7.23 of the Rules.

50 The applicant has not challenged the view taken by the primary judge that the identities of the

Downer representatives and the BMA representatives were material facts. There is, however,

some doubt about whether the identities of persons whose knowledge or intention is to be

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imputed to a company are material facts, rather than evidence by which material facts are to

be proved.

51 Rule 16.02(1)(d) of the Rules provides that a pleading must:

[S]tate the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial, but not the evidence by which the material facts are to be proved…

52 Rule 16.02(1)(d) of the Rules must be read subject to r 16.03(2), which provides:

However, a party need not plead a fact if the burden of proving the fact does not lie on that party.

53 The “material facts” referred to in r 16.02(1)(d) of the Rules are those that are necessary for

formulating a complete cause of action. In Bruce v Odhams Press Ltd [1936] 1 KB 697,

Scott J said at 712-713:

The cardinal provision in r. 4 is that the statement of claim must state the material facts. The word “material” means necessary for the purpose of formulating a complete cause of action; and if any one “material” fact is omitted, the statement of claim is bad; it is “demurrable” in the old phraseology, and in the new is liable to be “struck out”…

The function of “particulars” under r. 6 is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim–gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial. Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a “material fact” and a “particular” piece of information which it is reasonable to give the defendant in order to tell him the case he has to meet; hence in the nature of things there is often overlapping…

54 Even if the identities of persons whose knowledge or intentions are to be imputed to a

company are not material facts, that information would ordinarily be required to be the

subject of particulars.

55 Rule 16.41(1) of the Rules deals with the provision of particulars as follows:

(1) A party must state in a pleading, or in a document filed and served with the pleading, the necessary particulars of each claim, defence or other matter pleaded by the party.

56 Rule 16.45(1) of the Rules provides:

(1) If a pleading does not give a party fair notice of the case to be made against that party at trial and, as a result, the party may be prejudiced in the conduct

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of the party’s case, the party may apply to the Court for an order that the party who filed the pleading serve on the party:

(a) particulars of the claim, defence or other matter stated in the pleading; or

…

57 Rule 16.43 of the Rules provides, relevantly:

16.43 Conditions of mind

(1) A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies.

…

(3) In this rule:

condition of mind, for a party, means:

(a) knowledge; and

(b) any disorder or disability of the party’s mind; and

(c) any fraudulent intention of the party.

58 The applicant pleaded that Downer Mining, Downer Blasting and BHP Coal contravened

s 340(1)(a)(i) of the FWA, by the operation of s 550, as persons involved (in the sense that

they were knowingly concerned) in the contraventions by BMA. Paragraph 28B of the ASOC

was relevant to the allegation against the Downer entities.

59 The effect of s 361(1) of the FWA is that in an adverse action case where it is alleged that a

respondent took action for a particular reason or with a particular intent, it is presumed that

the action was taken for that reason or with that intent, unless the respondent proves

otherwise. Section 361(1) does not usually apply to an allegation of contravention of s 340(1)

through the operation of s 550: see Port Kembla Coal Terminal Ltd v Construction, Forestry,

Mining and Energy Union [2016] FCAFC 99 at [448], Automotive, Food, Metals,

Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013)

216 FCR 70 at [241]. The applicant alleges “knowing involvement” within the meaning of

s 550 of the FWA against the Downer entities. To be knowingly involved, those respondents

must have intentionally participated in the contravening conduct, with actual knowledge of

the essential facts which constituted the contravention: see Yorke v Lucas (1985) 158 CLR

661 at 667. It may be that s 361(1) of the FWA has application to the question of whether the

respondents intentionally participated in the contravening conduct, but the point was not

argued before the primary judge or in the appeal and it is unnecessary to decide it. The

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immediate point in respect of paragraph 28B of the ASOC is that the applicant carries the

onus of proving that the Downer entities had the requisite knowledge.

60 A mental state such as knowledge can only be attributed to a corporation by attributing it to

one or more of the corporation’s officers or employees: Krakowski v Eurolynx Properties Ltd

(1995) 183 CLR 563 at 582-583. For the purposes of the FWA, s 793(2) provides that if it is

necessary to establish the state of mind of a body corporate, it is enough to show that the

relevant conduct was engaged in by a person specified in s 793(1) and that person had the

required state of mind. The persons specified in s 793(1) are an officer, employee or agent (an

“official”) engaged in conduct on behalf of the body corporate within the scope of his or her

actual or apparent authority; and any person acting at the direction or with the consent or

agreement of an official if the direction, consent or agreement is within the scope of the

official’s actual or apparent authority.

61 In Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 at [53], Besanko J held that the people

whose knowledge was to be attributed to a company should be identified in the statement of

claim. Similarly, in Lee v Westpac Banking Corporation [2015] FCA 467 at [23]-[25],

Dowsett J held that a party pleading the imputed knowledge of a company must identify in its

pleading any agent, officer, employee or other person whose relevant knowledge the pleader

seeks to attribute to the company, and must identify such knowledge.

62 Neither case specifically decided whether the identities of the relevant persons are material

facts, or evidence by which a material fact (the knowledge of the company) is to be proved.

The point was not argued in this case, and it is unnecessary to decide it. That is because the

applicant failed to identify any relevant officer of the Downer entities in the ASOC at all. If

the identities of the relevant officer or officers were material facts, r 16.02(1)(d) of the Rules

required the applicant to plead that matter. If their identities were a matter of evidence, then

rr 16.4(1) and 16.43 required that information to be particularised. The applicant’s failure to

identify any relevant officer at all justified the primary judge’s order to strike out paragraph

28B of the ASOC.

63 The applicant complained to the primary judge and to this Court that it cannot plead or

particularise the identities of the relevant officers of the Downer entities because it does not

know who they are. It would have been open to the primary judge to refuse to strike out

paragraph 28B of the ASOC in the exercise of the Court’s discretion. Her Honour noted that

the applicant had failed to make an application under r 7.23 of the Rules for preliminary

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discovery which might have allowed it to find out the identities of the relevant officers. It is

true that an order for preliminary discovery is limited to the circumstance where the

prospective applicant does not have sufficient information to decide whether to start a

proceeding. The more appropriate application may have been for a limited form of discovery

pursuant to r 20.13 of the Rules. No such application was made, whether before or during the

hearing of the application to strike out the ASOC. In these circumstances, there was no

miscarriage of the primary judge’s discretion.

64 It remains open to the applicant to apply to the primary judge for discovery even now. Even if

the applicant were able to demonstrate some prospect of success in the proposed appeal, the

availability of such an application, together with the grant of leave to replead, tell against

there being any substantial injustice warranting a grant of leave to appeal.

65 Another difficulty for the applicant is that the particulars did not support the pleading in the

body of paragraph 28B of the ASOC. The body alleged that Downer Mining and Downer

Blasting proposed to BMA that they be given the work instead of BHP Coal and that they

would do it at a lower cost than BHP Coal. However, the particulars said only that a

representative of the Downer entities stated that they would do the work at a “low cost”, not a

lower cost than BHP Coal.

66 Although these conclusions require that the application for leave to appeal must be dismissed,

there is one further matter which should be dealt with. Paragraph 40 of the ASOC pleaded

that by making and implementing the BMA-Downer Agreement, BMA advised, encouraged

or incited BHP Coal to take adverse action against its employees, or BMA took action with

intent to coerce BHP Coal to engage in such adverse action. That pleading was relevant to the

allegation that BMA contravened s 340(1)(a)(i) through the operation of s 362 of the FWA.

67 The primary judge gave six reasons for ordering that paragraph 40 of the ASOC be struck

out. The sixth reason was that r 16.43 of the Rules requires that facts relied upon to

demonstrate a “condition of mind”, such as intent, be particularised, but paragraph 40 failed

to identify the person or persons whose intent could be attributed to BMA. The applicant

challenges this aspect of her Honour’s reasoning, and the respondents do not seek to defend

it.

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68 The applicant’s submissions and the primary judge’s sixth reason proceed on the premise that

intention (falling short of fraudulent intention) is a “condition of mind” for the purposes of

r 16.43. It is far from clear that intention of that kind falls within r 16.43, but that point was

not argued. We will proceed on the assumption that r 16.43 does encompass the intention of

a party.

69 Where an applicant alleges that a respondent has contravened s 340(1)(a)(i) through the

operation of s 362(1) of the FWA by reason that the respondent took action with intent to

coerce another person to engage in adverse action, s 361(1) imposes an onus on the

respondent to prove that it did not have that intent. In this case, BMA has the onus of proving

that it did not intend to coerce BHP Coal into engaging in adverse action against its

employees. Rule 16.03(2) of the Rules provides that a party need not plead a fact if the

burden of proving the fact does not lie on that party. Thus, while the applicant’s pleading

must raise an allegation that BMA took the action with intent to coerce, it is not required to

plead the identities of the persons whose intent is to be attributed to BMA. Assuming that

r 16.43(1) applies, it requires that a party who pleads a condition of mind must state in the

pleading particulars of the facts on which the party relies. However, there can be no

requirement to provide particulars of facts which r 16.03(2) does not require to be pleaded.

70 It follows that the primary judge erred in striking out paragraph 40 of the ASOC on the basis

that it did not identify the person or persons whose intent was to be attributed to BMA.

Despite that error, any appeal would necessarily fail because her Honour was correct to strike

out paragraph 40 for the reason that it depended on and went with paragraph 29 of the ASOC.

71 For these reasons, the application for leave to appeal will be dismissed.

72 The written submissions of BHP and BMA baldly state that there should be an order for costs

in their favour “having regard to section 570(2)(a) and (b) of the FW Act.” Section 570(1) of

the FWA provides, relevantly, that a party to proceedings in a court in relation to a matter

arising under the FWA may be ordered to pay costs incurred by another party only in

accordance with s 570(2). Section 570(2)(a) and (b) provide that a party may be ordered to

pay such costs only if the application was instituted vexatiously, or without reasonable cause,

or where the party’s unreasonable act or omission caused the other party to incur costs.

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73 The applicant’s written submissions in reply note that BHP and BMA had failed to develop

their submission as to costs. Neither was that submission explained in oral argument. In

these circumstances, the Court is not satisfied that its power to award costs is enlivened.

Accordingly, there will be no order as to costs.

I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood, Flick and Rangiah.

Associate:

Dated: 23 March 2017

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SCHEDULE OF PARTIES

QUD 683 of 2016

Respondents

Fourth Respondent: DOWNER EDI MINING-BLASTING SERVICES PTY LTD (ACN 009 687 487)