Australian Security Company Pty Ltd v Australian Liquor, Hospitality & Miscellaneous Workers Union [2003] QSC 316

(5©o3j(Ssc 3l6 State Reporting Bureau Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION ATKINSON J REVISED COPIES ISSUED State Reporting Bureau Date: 10 September, 2003 No 6724 of 2003 AUSTRALIAN SECURITY COMPANY PTY LTD Plaintiff ACN 010 449 555 and AUSTRALIAN LIQUOR, HOSPITALITY AND First Defendant MISCELLANEOUS WORKERS UNION, QUEENSLAND BRANCH, UNION OF EMPLOYEES and KEVIN CRANK Second Defendant BRISBANE ..DATE 26/08/2003 JUDGMENT WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal offence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for their protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those categories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. 1 Ith Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 13 -- 1 HER HONOUR: This is a hearing of an application for interlocutory relief in a claim that was commenced in this Court on 30 July 2003. The application was filed on 12 August 2003 and applies for an order that an interim injunction be granted against the defendants by themselves, their servants, 10 agents, employees or otherwise restraining them from further inducing breaches of contract and interfering with economic relations between the plaintiff and the plaintiff's clients by refraining from all communication with the plaintiff's clients in relation to any of the matters in dispute in these proceedings. During the course of the hearing of the application, leave was granted to amend the application so that the order sought was that the defendants be restrained by themselves, their 30 servants, agents, employees or otherwise until the trial of the action or further or earlier order from: (a) sending, delivering to or advising any client of the plaintiff of the issue of any further notices pursuant 40 to section 381 of the Industrial Relations Act 1999 (Qld) ; and (b) preparing, sending or delivering to any client of the plaintiff letters or written communications including by facsimile, email or otherwise demanding the 50 withholding of moneys otherwise payable by those clients to the plaintiff. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 2 JUDGMENT SC -- 2 of 13 -- A brief chronology of this matter and an identification of the parties involved is necessary before the determination of whether or not the orders should be granted. The plaintiff is a security company that provides security officers for various clients, mainly on the Gold Coast. It appears that it provides two types of security officers: security officers called static security officers whom it says are its employees and mobile security officers. The plaintiff asserts that the mobile security officers are contractors and there is a dispute as to whether or not the mobile security officers are in fact contractors or employees. If they are employees, then it is asserted that they have been underpaid according to the relevant award. The defendants are the Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch of Employees, and Kevin Crank. Kevin Crank is an officer of the union. A number of the mobile security officers who are in dispute as to whether or not they have been underpaid are members of the union. It should be noted, however, that the mobile security officers are not parties to this action. After correspondence between the union and the plaintiff on 24 July 2003 the mobile security officers served attachment notices on clients of the plaintiff under section 381 of the Industrial Relations Act 1999. I will refer to that section of the Act and their entitlements later in these reasons. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 1 10 20 30 40 50 3 JUDGMENT 60 -- 3 of 13 -- 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) On 25 July, the following day, the first defendant instituted 1 legal proceedings against the plaintiff in the Industrial Magistrates Court at Southport by complaint and summons for recovery of the asserted unpaid wages of five of its members who are mobile security guards formerly working or working for 10 the plaintiff. Those wages are claimed to be due and owing under an industrial award from the plaintiff company. Those complaints and summonses were served by registered post upon the plaintiff and can be taken to have been received when such post would ordinarily be received, on 28 or 29 July 2003. On 30 July 2003, the plaintiff commenced legal proceedings in this Court for an injunction and damages for three causes of action: for inducing breach of contract, for interfering with economic relations and for defamation, because, it is 30 asserted, of the service of the attachment notices and accompanying letters on the plaintiff's clients. As I previously said, the application for interim relief was filed on 12 August 2003. 40 The complaint and summonses were returnable in the Industrial Magistrates Court yesterday for directions. 50 HER HONOUR: Directions were given and the matter has been set down for trial in the Industrial Magistrates Court at Southport on 17 December 2003 for five days. 4 JUDGMENT 8C -- 4 of 13 -- Section 381 of the Industrial Relations Act provides that: "An employee whose wages remain unpaid for 24 hours after they are payable and have been demanded by the employee may serve the prime contractor with an attachment notice in the approved form. " Those were the notices to which I earlier referred which were served by the mobile security officers, according to oral evidence which they gave in this Court, on the prime contractors for whom the plaintiff provides services. As I have said, on the day following the service of these notices, the first defendant commenced proceedings for unpaid wages under section 666 of the Industrial Relations Act. In the course of determining whether or not there are unpaid wages, the Industrial Magistrate will be obliged to determine whether or not the mobile security officers in question are indeed employees or are subcontractors. That in turn will determine whether or not the moneys held under the attachment notices should or should not be paid to the mobile security officers under section 382 of the Industrial Relations Act. It will also determine the effectiveness of those notices since they will not be effective unless the mobile security officers are indeed employees. In order to determine whether or not interlocutory relief should be granted in this Court, I have to determine whether or not there is a serious question to be tried and what the balance of convenience is. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 1 10 20 30 40 50 5 JUDGMENT 80 -- 5 of 13 -- In doing so, it is important to remember what is sought in the 1 interlocutory relief and therefore what the serious question to be tried might be. What is sought is an order restraining the defendants from, as I have said, sending, delivering to or advising any client of the plaintiff of the issue of any 10 notices pursuant to section 381, or preparing, sending or delivering to any client of the plaintiff letters or written communications demanding the withholding of the moneys which is the effect of section 381 which would otherwise be payable by those clients to the plaintiff. The interim relief sought does not, of course, deal with the notices that have already been sent whose effectiveness will be determined during the course of the hearing before the Industrial Magistrate. 30 There are three causes of action on which the plaintiff relies in the claim which it has filed in this Court. The first is the tort of inducing breach of contract. In brief, the breaches of contract which are said to have occurred in this 40 case is that certain of the plaintiff's clients upon receipt of the section 381 notices have not only retained the moneys referred to in the section 381 notices but apparently, in at least one case, have retained more money and some have indicated an intention not to deal with the plaintiff in the 5(3 future or an unwillingness to do so. In addition, the very act of withholding the moneys, it is said, is in breach of contract with the plaintiff. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 6 JUDGMENT 6(3 -- 6 of 13 -- 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) It is not argued that the defendants would or should have anticipated that clients would withhold moneys other than those sought under the section 381 notices or would indicate an intention not to deal with the plaintiff again. Rather, it is the withholding of moneys under section 381 that is essentially in issue here. 1 10 As the plaintiff submits, the tort of inducing a breach of contract was described by Justice Isaacs in Short v. The City Bank of Sydney (1912) 15 CLR 148 at 160: 20 "The defendant must have induced or procured the doing of what he knew would be a breach of contract. A bona fide belief reasonably entertained that it was not a breach of contract would be fatal to the claim." As the plaintiff also submits, the essential elements of the 30 tort of inducing or procuring a breach of contract are the knowing and intentional interference by the defendant with the plaintiff's contractual rights without lawful justification. See Kestrel Coal v. Construction, Forestry r Mining and Engineering Union [2001] 1 QdR 634 at 638 and 639. The tort 40 was referred to by the New South Wales Court of Appeal in Fightvision Pty Ltd v. Onisforou (1999) 47 NSWLR 473 at 509 as follows: "In summary, the defendant must know the contract and 50 sufficient of its terms to know that what the defendant induced or procured the party to the contract to do would be in breach of the contract." 7 JUDGMENT 60 -- 7 of 13 -- It is clear that in order to succeed, the plaintiff must show that the defendants intend to induce the plaintiff's customers to breach their contract and they must know that what they induced or procured the party of the contract to do would be in breach of the contract that the client of the plaintiff has with the plaintiff. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 10 However, the evidence on this point is, to say the least, thin. The plaintiff must show not only that the past behaviour was tortious, but also that there is likely to be future tortious behaviour. The plaintiff must show that the union knew when it procured or assisted the issue of the section 381 notices that the mobile security guards were not employees and, therefore, had no right to issue the notices. But is this the case? The union asserts that the mobile 30 security officers are employees within section 5 of the Industrial Relations Act (see the union's letter of 9 January 2003), and therefore they have apparently assisted the security guards to draw up notices under the Industrial Relations Act which they are prima facie entitled to do. 40 Those mobile security officers, if they are employees, are entitled to try to vindicate their asserted statutory rights including their right to serve notices followed up by summonses seeking unpaid wages. 50 But could it be said that the union knew they were not employees? The plaintiff relies upon the contracts it has entered into with the security guards and points to a number JUDGMENT 6C -- 8 of 13 -- 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) of factors in those contracts including but not limited to the fact that the mobile security officers are described as subcontractors and the contract explicitly says they are not in an employment relationship and suggests that they may employ others to do their work. However, there are a number of other factors which point in the other direction and provide some indicia of an employment relationship . For example, the mobile security guards are not entitled to work for other people in the security industry while they are working for the plaintiff; the plaintiff supplies identification cards, warning signs, decals - which I am told are signage for the motor vehicles which must be provided by the guard themselves, logos, necessary stationery, occurrence report pads, and uniforms; the mobile security officers are expected under the contract to work regular hours; they receive weekly regular payment and clause 15.1 of the contract which is Exhibit CHI to the affidavit of Colin Hooker sworn 11 August 2003 provides that the rights granted under the contract are incapable of assignment; there is a complaint process which provides for warnings and ultimate termination in a manner very similar to dismissal of an employee; the mobile security officers are issued with standing orders setting out detailed policies and protocols to control the way in which the work is carried out and, indeed, in those standing orders they are even referred to, whether by mistake 9 JUDGMENT -- 9 of 13 -- 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) or by design, as employees (see Australian Security Company 1 Standing Order number 14: Conflict of Interest). The extent of those standing orders set out careful control of the mobile security officers. In the end, of course, whether 10 or not they are employees or subcontractors is a question of fact to be determined according to the criteria set out by the High Court in Stevens v. Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, and Hollis v. Vabu Pty Ltd (2001) 207 CLR 21. However, as I have said, the evidence that the defendants knew that they were not employees and that, therefore, sending out a section 381 notice would induce a breach of contract is very thin. The second tort pleaded is the tort of unlawful interference 30 with contractual relations. That is a highly contested tort at present. The High Court has been careful not to decide whether or not that tort in fact exists. If it does exist, there must be an intention to harm by unlawful means (see Northern Territory v. Mengel (1995) 185 CLR 307 at 342, 40 Sanders v. Snell (1998) 196 CLR 329). In order to succeed, the plaintiffs would have to show that the issue of the section 381 notices was done with an intention to harm and by unlawful means and yet, of course, that is a statutory procedure available under the Industrial Relations Act. 5C The third cause of action is in defamation. The defamation is said to have occurred in the letter which accompanied the 10 JUDGMENT 6C -- 10 of 13 -- 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) section 381 notices signed by the second defendant on behalf 1 of the first defendant. The courts have always been reluctant to grant pre-emptory injunctions to prevent defamation because of the importance attached by the common law to the right of free speech (see the statement by Lord Esher MR in Coulson v. Coulson [1887] 3 TLR 846). In Gatley on Libel and Slander at paragraph 25.2 it is said that: 20 "the Court will only grant an interlocutory injunction where, (1) the statement is unarguably defamatory; (2) there are no grounds for concluding the statement may be true; (3) there is no other defence which might succeed; (4) there is evidence of an intention to repeat or publish the defamatory statement". That statement of the law was considered in Australia in 30 Chappell v. TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153 and was described as merely a rule of practice, but it was also said that: "The exercise of the discretion in relation to an 40 interlocutory injunction is subject to the independent and overriding principle that such an injunction should not be granted to restrain discussion of matters of public interest or concern." In this case, there are two problems with the grant of an injunction to prevent any further section 381 notices issuing: 50 one is there is no evidence of any intention to do so; and, secondly, it would appear that to issue a section 381 notice is for individuals (and for the officer of the union and the 11 JUDGMENT 80 -- 11 of 13 -- union to assist them) to vindicate a statutory right, and this Court should be very loathe to interfere with the exercise by citizens of rights given by statute. There is, in summary, an issue to be tried but, in my view, it is only a thinly arguable case. I turn therefore to the balance of convenience. The strength of the plaintiff's case is of course relevant to the balance of convenience. Also relevant to the balance of convenience is the fact that currently before the Industrial Magistrates Court there is the question of whether or not there are unpaid wages and that will be determined in a matter which has already now been set down for trial. That question depends on whether the mobile security guards are in fact employees and therefore it will determine the question in issue. It appears to me that that is relevant to both the balance of convenience and the exercise of my discretion. It appears to me that it is appropriate that that matter be determined there. It is a specialist industrial tribunal already seized of the matter (see, for example, Mahony v. Industrial Registrar of New South Wales [1984] 3 NSWLR 315). In addition, on the question of both the balance of convenience and the exercise of my discretion, I note that the section 381 notices have already been issued and there is no evidence of any current intention to issue any more. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) 12 JUDGMENT 1 10 30 40 50 80 -- 12 of 13 -- This application is not about any damage that might have been done by those already issued but the question of whether or not the issue of any further section 381 notices should be restrained. As I have said, as there is no evidence of any current intention to issue further notices, in my view, it is inappropriate to grant the relief sought, and I dismiss the application. 26082003 T03-4/BC5 M/T 1/2003 (Atkinson J) HER HONOUR: The application should be dismissed with costs. The plaintiff should pay the costs of the defendants of and incidental to the application. 1 10 20 30 40 50 13 JUDGMENT 60 -- 13 of 13 --