Patrick Stevedores Operations No 2 Pty Ltd & Ors v Maritime Union of Australia & Ors

(1998) 77 FCR 478

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(Judgment by: WILCOX, von DOUSSA) Court:

Judges:
WILCOX
von DOUSSA JJ

Subject References:
CORPORATIONS
Leave to proceed against a company under administration.
COURTS
Jurisdiction to grant an interlocutory injunction before a determination that a contravention of s 298K of the Workplace Relations Act 1996 (Cth) has occurred
power to make an order under s 298U of the Act against a person not an 'employer'
PRACTICE AND PROCEDURE
Interlocutory injunctions
whether in the nature of specific performance of an agreement for personal services
effect on third parties
whether injunctions beyond what is necessary to protect the position of the injured parties
manner in which court should maintain the status quo

Legislative References:
Corporations Law - 440D; 443A; 447A
Federal Court of Australia Act 1976 (Cth): - 23
Workplace Relations Act 1996 (Cth) - 298K; 298L; 298U

Case References:
Ascot Investments Pty Ltd v Harper - (1981) 148 CLR 337
Australian Liquor, Hospitality and Miscellaneous Workers Union v Terranora Lakes Country Club Pty Ltd - (1996) 14 ACLC 1200
Australian Meat Industry Employees Union v Sunland Enterprises Pty Ltd - (1988) 81 ALR 213
Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd - (1996) 3 WLR 27
Foxcroft v The Ink Group Pty Ltd - (1994) 12 ACLC 1063
Jackson v Sterling Industries Limited - (1987) 162 CLR 612
JC Williamson Ltd v Lukey - (1931) 45 CLR 282
Optus Network Pty Ltd v City of Boroondara - (1997) 2 VR 318
Pioneer Water Tanks (Australia 94) Pty Ltd v Delat Pty Ltd - (1997) 16 ACLC 36
Sanderson Motors (Sales) Pty Ltd v Yorkstar Motors Pty Ltd - (1983) 1 NSWLR 513
Slater Walker Superannuation Pty Ltd v Great Boulder Gold Mines Pty Ltd applied - [1979] VR 107

Hearing date: 22 APRIL 1998
Judgment date: 23 APRIL 1998

MELBOURNE

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Judgment by:
WILCOX
von DOUSSA

The issues raised in these applications for leave to appeal against the decision of North J are of considerable legal interest. Ordinarily, we would have taken the time to write more lengthy reasons in which we could have elaborated our views upon those issues. However, under the circumstances of this case, the priority must be a speedy decision.

Within a couple of hours of North J's orders being made on Tuesday, on the application of counsel for the Patrick operators, we stayed the operation of three of them: orders 1 and 2, which in effect require the Patrick operators and Patrick employers to treat as operative the Labour Supply agreements made between them last September, and order 4, which precludes the Patrick operators from using personnel supplied by others. We stayed those orders, not because we had any view about their merits - at that stage we had not even seen North J's reasons - but simply because it seemed to us undesirable to run the risk of the chopping and changing that would occur if the orders were allowed to operate for a short time and were then set aside on appeal. However, under those circumstances, it was obviously only fair to the parties who had succeeded in obtaining the orders, the MUA and the employees, to deal expeditiously with the merits of the applications. This we have been able to do, with the active co-operation of the legal representatives of the parties and the staff of the Court, to all of whom we express our gratitude.

The case

Before dealing with the case as presented, it is perhaps useful for us to say a word on what the case is not about. We do so because many commentators on the decision of North J appear to have laboured under a misconception of the role of a court in a situation like this.

As individuals, each member of the Bench, like all sensible Australians, is in favour of an efficient waterfront. Export income is the economic life blood of our nation. Most of our exports depart by sea, many through container terminals. It is obviously important to ensure that the operation of container terminals is as efficient and economical as reasonably possible. But these are personal views. We each have personal views, not necessarily identical, about how this might best be achieved. But the Court, as a Court, has no view about such matters. The Court does not have the material that would be necessary for it to make a judgment about the efficiency of the Australian waterfront, either in absolute terms or relative to other countries, the causes of such inefficiencies as may exist, or the desirable steps to overcome any perceived problems. This material has not been placed before the Court because the parties have realised, although some commentators have not, that these are not issues for the Court's determination. The business of the Court is legality. Just as it is not unknown in human affairs for a noble objective to be pursued by ignoble means, so it sometimes happens that desirable ends are pursued by unlawful means. If the point is taken before them, courts have to rule on the legality of the means, whatever view individual judges may have about the desirability of the end. This is one aspect of the rule of law, a societal value that is at the heart of our system of government. It follows that this judgment should be seen only as a judgment about legal issues, not a view about the social, economic and political arguments concerning waterfront management that have dominated the media during the last couple of weeks.

Lest it be thought our approach upholds anachronisms, it is worth observing that the law lying at the heart of this case is not some long-standing and outdated rule but federal legislation enacted as recently as 1996, under the auspices of the present government.

The decision of North J

We do not propose to recount the underlying facts of the case. They are carefully and uncontroversially chronicled in the reasons of North J and well known to everybody involved in the case. Nor do we propose to rehearse all the issues and North J's response to them. They also are well known.

Having regard to the need for urgency of decision, we hope it will not be thought discourteous to anybody if we confine our comments to the major issues raised with us by counsel for the applicants for leave to appeal, the Patrick operators and PCS. We will come to those matters in a moment. In the meantime, it is appropriate to say we have read, and carefully considered, the whole of North J's reasons for judgment but we find them free from appellable error. In relation to the first issue he had to confront, whether there was a serious question to be tried in respect of the claims made by the applicants, the MUA and employees, his Honour's reasoning is tightly structured and compelling. Significantly, it has not been subjected to serious attack before us. In relation to the second issue, the proper discretionary order to be made, having regard to the overall balance of convenience, the question for us is not whether we would have ascribed the same weight to each element as his Honour, or even come to the same overall conclusion, but whether his Honour erred in law or in the application of legal principle, failed to take into real account a proper matter for his consideration, took into account some extraneous matter or reached a decision so extraordinary that it must be concluded his discretion miscarried. Counsel have submitted to us that North J did fall into errors of this kind and we will discuss those submissions.

In order to do so properly, it is desirable first to identify the claims that North J found raised a serious issue for trial and to explore the power of the Court to make the orders he made.

North J made three findings about serious issue for trial. First, he held there was a serious question to be tried "that the employers injured the employees in their employment or altered the employees' position to their prejudice by entering into the Business Purchase agreements and the Labour Supply agreements or by appointing administrators".

Second, he held there was a serious question to be tried that one reason why the employers made those agreements in the form they took, and the reason why they appointed the administrators, was because the employees were members of the MUA, and the employers wanted to dismiss them to replace them with a non-MUA work force.

Third, he found there was a serious question for trial that the fifth respondent, Patrick Stevedores Operations No 2 Pty Ltd, (then known as Patrick Stevedores ESD Pty Ltd), agreed to participate in a strategy, one part of which was that the employers would act in breach of s 298K(1) of the Workplace Relations Act 1996 (Cth) by entering into those agreements and appointing administrators in due course. Section 298K(1) of the Act provides:

"An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:

(a)

dismiss an employee;

(b)

injure an employee in his or her employment;

(c)

alter the position of an employee to the employee's prejudice;

(d)

refuse to employ another person;

(e)

discriminate against another person in the terms or conditions on which the employer offers to employ the other person

".

The term "prohibited reason" is defined by s 298L(1) of the Act. It includes membership of an industrial association.

Power to make the orders

The substantial orders made by North J - as distinct from directions concerning the future conduct of the litigation - concern only the Patrick operators; that is the Patrick operators (orders 1, 2, 3, 4 and 6) and the Patrick employers (orders 2, 3 and 5). Although counsel for Patrick operators submitted otherwise, there is no doubt about the power of the Court to make orders directed to the Patrick employers. These are the four companies who have, at all material times, employed the employees. They are each an "employer" within the meaning of s 298K(1) of the Workplace Relations Act . North J has found there is a serious question to be tried that, in September 1997, each of them infringed paragraphs (b) and Copyright of that subsection.

Section 298U confers on the Court powers to make various orders in respect of conduct contravening Part XA (which includes s 298K). The orders include:

"

(e)

injunctions (including interim injunctions), and any other orders, that the Court thinks necessary to stop the conduct or remedy its effects;

(f)

any other consequential orders."

Counsel for the Patrick operators argue that those powers are only exercisable after the Court has made a finding of fact that there has been a contravention of s 298K(1). They say it is not enough that there be an allegation of contravention, even an allegation in relation to which a judge has found there is a serious question for trial. There must be an actual finding; until then the Court is powerless to intervene.

If this is correct, it will be apparent the power to grant injunctions will often be rendered nugatory, in a practical sense. We do not think it is correct. There is nothing in s 298U which compels such an interpretation; on the contrary, the reference to interim injunction suggests the power was intended for use at a time when relevant events were still occurring, when the factual picture might be unclear.

Counsel relied on authorities concerning s 80(1)(a) of the Trade Practices Act 1974 (Cth). But the scheme of that legislation is quite different. Section 80(1)(a) deals with permanent injunctions. Not surprisingly, the legislation requires that the Court be satisfied that a person has engaged, or is proposing to engage, in conduct that breaches the Act before making a permanent injunction. Section 80(2), by contrast, empowers the Court to grant an interim injunction pending determination of the case where, in its opinion, it is desirable to do so. Section 298U of the Workplace Relations Act does not make separate provision for permanent and interim orders. It confers general powers, to be exercised at the discretion of the Court but, of course, in accordance with the general principles involving the granting of injunctions. These include the making of interim orders designed to maintain the rights of parties pending a final resolution of the case.

The more significant question is the power of the Court to make orders against the Patrick operators. Although these companies were closely associated with the Patrick employers, being all members of the group of companies ultimately owned by Lang Corporation Ltd, and Patrick Stevedores Operations Pty Ltd being the owner of all the shares in the four employer companies, the two companies that North J called "Patrick operators" are different legal entities to the four companies he called "Patrick employers". As counsel for Patrick operators pointed out, Part XA of the Workplace Relations Act contains no "aiding and abetting" or "knowingly concerned" provisions like those in s 75B of the Trade Practices Act . Although s 298U(1)(e) and (f) are cast in wide terms, without any limitation as to the persons against whom injunctions and orders may be made, it is probably correct, as counsel suggest, to interpret it as not extending to orders that affect the rights of, or impose duties on, persons other than the employer (or, in an appropriate case, an industrial association): see Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337. That statement should be read subject to what was said in that case by Gibbs J at 354-355 concerning shams and third parties controlled by a person against whom injunctions could properly be made. It has not been contended in the present case that the September 1997 agreements were shams; on the contrary, there is every reason to believe they were intended by the parties to have full effect; and this is not a case of the third party companies being controlled by the employer, rather the reverse. So we think it extremely doubtful that s 298U of the Workplace Relations Act authorises the orders made by North J against the Patrick operators.

It does not follow those orders were beyond power. Section 23 of the Federal Court of Australia Act 1976 confers on this Court "power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate".

In Jackson v Sterling Industries Limited (1987) 162 CLR 612 at 622 Deane J said this about the section:

Wide though that power is, it is subject to both jurisdictional and other limits. It exists only `in relation to matters' in respect of which jurisdiction has been conferred upon the Federal Court. Even in relation to such matters, the power is restricted to the making of the `kinds' of order, whether final or interlocutory, which are capable of properly being seen as `appropriate' to be made by the Federal Court in the exercise of its jurisdiction.

What is "appropriate" in this case, in relation to the Patrick operators? The answer must have regard to the case made against them. If an order has the effect, or may have the effect, of preventing or mitigating the harm that will or may be suffered by an applicant as a result of alleged wrongful behaviour of a particular person, it is an "appropriate" order, within the language used by Deane J. In other words, there must be a relationship between the alleged wrong, the likely damage and the effect of the order.

In the present case one wrong alleged against the Patrick operators, and found to raise a serious question for trial, is that those companies conspired with the employer companies to restructure members of the Patrick group of companies in such a way as to enable the employers to breach s 289K(1) of the Workplace Relations Act . Orders 1, 2 and 4 are designed to prevent that result occurring.

It is true, as counsel for Patrick observe, that damages are the relief usually awarded in conspiracy cases. But that is probably because, in most cases, by the time the court is able to deal with the case irreparable harm has already been sustained; in which case no injunction will be useful. If it should happen that an applicant gets to court before irreparable damage has been suffered, there seems to be no reason in principle why the court should not grant injunctive relief to prevent or mitigate the threatened damage. It is true that conspiracy is a tort developed by the common law and that the injunction is a remedy fashioned in the Courts of Equity. But it is now over 100 years since the fusion of law and equity has enabled courts to use equitable remedies in aid of common law proceedings and it has become commonplace for them to do so; for example, to restrain a trespass.

It seems to us the only thing that needs to be considered in relation to the Court's power to issue injunctions against Patrick operators, including mandatory injunctions such as orders 2 and 4, is whether it is interim relief related to wrongful conduct alleged against those respondents (the conspiracy) and fairly calculated to prevent or mitigate harm to the applicants from that wrongful conduct. Upon the basis of the tentative findings of North J, which are not challenged before us, that question must be answered affirmatively.

The orders will have the tendency to provide stevedoring business, and therefore income, to the Patrick employers, thereby enabling them to continue to employ the employees. That result will, in turn, have the effect of precluding the Patrick employers from justifying termination of the services of the employees on the basis that they are redundant. In short, the orders will have the tendency to frustrate achievement of the objects of the conspiracy, involving the Patrick operators, about whose existence North J was satisfied there was a serious issue for trial.

In our view, there is no problem about the power of the Court to make all the orders under challenge.

A submission was put by counsel for the Patrick operators that an agreement between various parties to contravene s 298K of the Workplace Relations Act could not be the subject of a civil action for conspiracy. Counsel cited a number of authorities, but they were cases where the agreement that was alleged to constitute a conspiracy was itself the unlawful act; so the conspiracy and unlawful act were co-terminous as to parties and actions. That is not this case. As counsel themselves emphasised, only an "employer" can contravene s 298K of the Act and there is no aiding and abetting provision. A conspiracy necessarily involves additional parties who may not be sued under the Workplace Relations Act . The concept of a conspiracy between a number of people whereby one of them is to do an unlawful act is well known to our law; and it is well established that an action for damages will lie against any of the conspirators at the suit of anybody damaged by actions taken pursuant to the conspiracy.

Section 440D of the Corporations Law

The Patrick operators contend that his Honour erred in granting leave to proceed under s 440D of the Corporations Law even for the limited purpose of prosecuting proceedings relating only to the interim relief claimed. In support of this contention, the Court was referred to Australian Liquor, Hospitality and Miscellaneous Workers Union v Terranora Lakes Country Club Pty Ltd (1996) 14 ACLC 1200; Foxcroft v The Ink Group Pty Ltd (1994) 12 ACLC 1063 and Pioneer Water Tanks (Australia 94) Pty Ltd v Delat Pty Ltd (1997) 16 ACLC 36.

In our opinion these cases do not assist the Patrick operators. In Foxcroft , Young J drew a distinction between companies in administration that are seeking to continue trading, and companies in liquidation. His Honour expressed the view that orders under s 440D should be made only sparingly in the former situation as such orders are likely to impede the administrator in carrying out the duties imposed on an administrator under Part 5.3A of the Corporations Law.

The present case is a highly unusual one. If an order under s 440D had not been made there is no real prospect that the companies under administration would have continued to trade. In all likelihood they would have been placed in liquidation. However, leave to proceed under s 440D allowed the orders granted by North J to be made. These orders are intended to have the effect that the companies in administration will be able to resume trading and to regain a revenue flow.

In Foxcroft , Young J noted that refusing an order under s 440D would not defeat the claim against the company in administration, but merely defer its enforcement until after the administration. Here, the refusal of an order under s 440D would have the effect of defeating the central claim made by the applicants in the primary application.

In Terranora , Davies J refused an order under s 440D as, in the circumstances of that case, he considered such an order would have the effect of frustrating the intent of the Corporations Law . In this case, for the reasons just given, it would be the failure to make such an order that would have that effect. Moreover, Davies J concluded his judgment by stating that, if there is an outstanding question whether or not the terminations of employment were in breach of an award, that would be a proper matter for the relevant court with jurisdiction to resolve, and leave to proceed for the purpose of obtaining a ruling on that question would be appropriate. In the present case, a central allegation is that there have been breaches of the award and a certified enterprise agreement. Davies J was concerned that leave should not be given for proceedings that could lead to orders for reinstatement that would impose a personal liability on the administrator for the wages of reinstated workers. However, in this case the question of personal liability of the administrator is dealt with by the undertaking of the applicants not to hold the administrator personally liable for wages. We do not consider North J erred in granting leave to proceed under s 440D for the limited purpose stated in the order.

"Minimalist approach"

Counsel for the Patrick operators contended that North J erred in not adopting a "minimalist approach" in determining the application for interim relief. They contended the Court should not make interlocutory injunctions that are wider in ambit than is necessary to secure the position which the applicants seek to vindicate: Optus Network Pty Ltd v City of Boroondara (1997) 2 VR 318 at 336-337. It was submitted that the MUA and the other applicants, by the relief claimed in the principal proceeding, seek to turn back events to the position that existed prior to September 1997 when the Business Purchase agreements and share buy back transactions occurred. The applicants are seeking, in effect, to have former assets, revenue streams and share capital of the employer companies reinstated, so that engagement of the MUA workforce in accordance with the former agreements could occur.

Counsel submitted this position could be achieved at trial so long as there existed (1) respondents able to satisfy any monetary award that might be made, (2) power in the Court to order reinstatement and (3) employers against whom the reinstatement could be ordered. As to the first matter, it was submitted Lang Corporation Ltd and its subsidiaries could meet the award. As to the second matter, they submitted there is authority that the passage of time is not a bar to the Court making an order for reinstatement under s 298U of the Workplace Relations Act : see Australian Meat Industry Employees Union v Sunland Enterprises Pty Ltd (1988) 81 ALR 213 at 218-219. As to the third matter, counsel contended that all that was necessary was that the employer companies, presently under administration, not be placed in liquidation in the meantime. They submitted there was an ample power in the Corporations Law to prevent that occurring should winding up be threatened, but at the present time there was no real threat that would happen. At most liquidation was only one of the options open to the creditors who are yet to vote on the future of the companies: see Corporations Law , ss 435(2), 439A, 439C. On this basis, they submitted, North J should have made no order, save possibly an order, perhaps under s447A of the Corporations Law , to the effect that the administration not lead to the winding up of the employer companies.

In support of this submission, counsel contended the orders actually made were too broad, with the consequence that they unnecessarily and inappropriately interfered with the role and duties of the administrators, and imposed obligations on the parties that were uncertain.

We shall refer to some of the perceived difficulties shortly, but first we record our disagreement with the notion that the position of the applicants would have been sufficiently protected by ensuring only the three matters identified by counsel. For present purposes it may be accepted that Lang Corporation Ltd would be able to meet any pecuniary remedies. A favourable exercise of the Court's power to order reinstatement of a workforce of 1,400 people in the circumstances contemplated by counsel's submission is less clear. Every case must be decided on its particular facts. The delays in the trial of the present proceedings could be many months. If relief of the kind actually granted was denied, the inevitable reorganisation of activities and participants on the waterfront could make it unrealistic, for a host of practical considerations, to order reinstatement of all the applicants.

It is on the third matter, however, that we disagree most strongly. The applicants are presently employees of the companies in administration. If interim relief were denied, they would be dismissed. Pending the trial, they would be required to reorganise their own life situations. They would either find new jobs, or suffer the well recognised stresses and emotions of being unemployed. The companies in administration, even if they were kept out of liquidation, would remain without assets. The prospects of re-establishing a situation where the companies would be able to re-employ the displaced workforce would become more and more difficult as the weeks went by. From a practical view point we consider orders of the kind made by North J were necessary to ensure that the rights which the applicants are seeking to vindicate are not rendered futile before their completion at the trial.

It is plain that North J was concerned about the pressing practical difficulties that might arise for the administrators in the day to day management of the companies if the Labour Supply agreements were reinstated. The reasons for judgment make it clear that his Honour closely considered whether the orders can be implemented. It is easy, in the abstract, to suggest problems that might arise, as counsel's submissions demonstrate. However, North J was impressed by the administrator's preparedness to confront and resolve problems as they arose. Many of the theoretical problems which can be suggested are of a kind that lend themselves to practical solutions. The orders reserve liberty to apply, and if problems arise which cannot be sensibly worked out between the parties, directions from the Court, or further orders, can be sought.

Form of undertakings

Another basis of challenge to the propriety of the orders made by North J was that certain of the undertakings that were proffered by the applicants to obtain the grant of the injunction were deficient in a number of respects.

One undertaking that was given by counsel for the applicants was that "until the hearing and determination of this proceedings, or until further order, they (that is the applicants) will not engage in any industrial action". The order recites that for the purposes of the undertaking "industrial action" does not include certain described conduct.

Two deficiencies were identified. First it was said that the undertaking did not, in terms, bind the members of the class that were represented in the proceeding by one of the second applicants, Kieran Coyle. That class is defined in the statement of claim as employees of the Patrick employers who are members of the MUA. The second alleged deficiency is that as there had been no definition of what was meant by "industrial action" the undertaking was so ambiguous that it was not capable of proper supervision and enforcement by the Court and thus should not have been accepted by North J as the price for the grant of the orders.

The first alleged deficiency is more apparent than real. There is no doubt that the undertaking was intended to be proffered not only on behalf of the named applicants but also on behalf of the represented parties and was so received by the Court. In any event, if there is any doubt about the matter, that doubt was clarified when counsel for the applicants re-stated the undertaking as given not only on behalf of the named applicants, but also on behalf of the parties represented by Mr Coyle.

The second complaint is not without justification although it must be said that no similar complaint was made to the trial Judge when the undertaking was proffered. Be that as it may the applicants are content that the undertaking be modified so that "industrial action" is defined in the terms of paragraphs (a) to (d) in the definition of "industrial action" found in s 4 of the Workplace Relations Act .

There was another complaint about this undertaking. It was said that the trial Judge was in error in accepting that it should alleviate the Patrick employers' apprehension about further industrial action and was thus a factor in favour of the grant of the injunctions.

There are a number of reasons why this submission should be rejected. First and foremost it was for the trial Judge to evaluate whether the undertaking was likely to be honoured. There is no reason to think that his Honour erred in that evaluation. Secondly, it should be said most forcefully that if, as the Patrick employers fear, the undertaking will not be honoured then they will be entitled, in addition to asking for other relief, to immediately approach the Court to have the orders discharged. Absent some exceptional circumstances, it might reasonably be thought they would be granted that relief.

The second undertaking about which complaint was made was that by which the applicants undertook that they would not hold the administrators appointed to the Patrick employers personally liable for their wages and other benefits arising from their employment with the Patrick employers for which the administrators would otherwise incur personal liability as administrators during the course of their administration.

One argument against this undertaking was that its effect was to oust the operation of the award that governed the employment of the second applicants and the represented parties. We consider this submission misunderstands the offer made by the applicants which we consider is correctly worded in the following way in the order:

AND UPON THE APPLICANTS by their Counsel further undertaking that they will not hold the administrators appointed to the First, Second, Third and Fourth Respondents personally liable for their wages and other benefits arising from their employment with the First, Second, Third and Fourth Respondents for which the administrators would otherwise incur personal liability as administrators during the course of their administration.

The undertaking does not purport to reflect an agreement not to be paid for work done. It records only that the applicants will not hold the administrator personally liable for the wages if the employer companies are at the time unable to pay them. Personal liability for their services would otherwise arise under s 443A(1) of the Corporations Law. The undertaking reflects that the employer companies will incur a legal liability to pay remuneration according to the award, although in the event that revenue and other sources of finance are temporarily insufficient, payment may be deferred until funds are available. No point was taken before North J that the undertaking may be in terms that run foul of s 443A(2) which provides that s 443A(1) applies despite any agreement to the contrary. That possibility has been identified in argument before this Court. It is an issue that could be dealt with on further application to North J, but for convenience we consider this Court should amend the order by adding a new order to the effect that the undertaking shall be effective notwithstanding s 443A(2).

Effect on Third Parties

A variety of submissions were put substantially to the effect that the orders had the effect of adversely affecting the rights of innocent third parties and that it was wrong to make the orders in those circumstances.

It is true that if an interlocutory order, especially an interlocutory injunction, would operate unfairly on an innocent third party that is a reason against the making of the order. North J clearly understood this. His reasons for judgment demonstrate that this factor was taken into account. His Honour considered that, in the circumstances of the case, the effect of the injunctions on third parties should not assume the importance that it otherwise would do. The principal reason was that the relevant third parties, being those who had entered into agreements with Patrick operators that would for practical purposes be rendered ineffective by the injunctions, did so knowing of the risk that a Court might make some order that would affect their rights. It seems to us, on the evidence, there cannot really be a dispute about this finding. Further, we do not accept the assertion that the learned trial Judge did not have in mind the effect that the injunctions would have had on employees of the third parties who would also be affected by the grant of the injunctions. It goes without saying that, if the third parties are adversely affected by the orders, so also would be the expectations of their employees. The failure to make express mention of the employees does not demonstrate any error.

There is one submission on this aspect of the argument that should be specifically mentioned. It concerns the agreement between PCS and Patrick operators. By that agreement Patrick operators may be liable to pay an amount of approximately $10 million to PCS if it is unable to take the labour which by that agreement it agreed to take from PCS. The learned trial Judge was of the opinion that clause 16.1 of that agreement had the effect that, if Patrick operators was unable to use labour to be supplied by PCS as a result of any injunction granted by the Court, then Patrick operators would not be obligated to pay the sum of $10 million approximately.

We accept the possibility that, on its proper construction, clause 16.1, which provides that, "no party is liable for any failure to perform or delay in performing its obligations under this agreement if that failure or delay is due to anything beyond that party's reasonable control" does not operate in the manner which his Honour thought it did. But this error would not undermine the basis for the grant of the injunctions. The fact is that it was not the making of the agreement that imposed the obligation on Patrick operators to pay PCS the sum of $10 million approximately. That obligation was assumed by Patrick operators on 14 April 1998. By that time the applicants had commenced this proceeding and had on foot a motion for the grant of injunctive relief. The hearing of the application for the grant of interlocutory relief had been set down to commence on 15 April 1998. In that circumstance the obligation or potential obligation to pay $10 million approximately was simply an irrelevant consideration so far as the grant of interlocutory relief was concerned.

Continuing Business

One obvious effect of the orders made is that the Patrick operators will be required to take their labour from the Patrick employers. Thus, in a practical sense, the injunctions require the specific enforcement of the Labour Supply agreements.

It is well settled that specific performance of a contract for personal services will generally not be granted: JC Williamson Ltd v Lukey (1931) 45 CLR 282; Co-Operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1996] 3 WLR 27.

Here the relevant order is one by which the Patrick operators are restrained from giving effect to the purported termination of the Labour Supply agreements. As was pointed out by Yeldham J in Sanderson Motors (Sales) Pty Ltd v Yorkstar Motors Pty Ltd [1983] 1 NSWLR 513, such an order might be made notwithstanding the fact that a court might not order specific performance of the agreement whose termination is to be restrained. The rights and obligations of the parties to the Labour Supply agreements are not being supervised by the Court. They are regulated by the terms and conditions of the Labour Supply agreements themselves.

Moreover, having regard to the provisions of the Workplace Relations Act 1996 it should not be assumed that the principles expressed in cases such as JC Williamson, supra, and Argyll , supra, have application to contracts of employment regulated by that Act. For example, the Act contemplates the reinstatement of a wrongfully dismissed employee. When the legislation contemplates relief of that type then there is no reason why interlocutory relief which may have the same practical effect should not be available to an employee whose rights have been arguably unlawfully infringed.

Quite apart from our own views on this aspect of the case, it is clear that North J gave detailed consideration to this very question. He pointed out, quite correctly in our opinion, that if any difficulty arises from the operation of the injunction the party affected can return to the Court to apply for a variation of the injunction. We do not apprehend any error in his Honour's approach to the problem. Moreover, we are firmly of the view that if the parties behave in a fashion which accords with common sense and displays some element of good will then there should be no difficulty with the practical operations of the Labour Supply agreements. If we are wrong in this belief then the Court is well able to remedy any problem at short notice.

Clause 2.2

The orders made by North J will mean that the Patrick operators will not be able to employ non-union labour. One provision of each of the Labour Supply agreements, which the Court ordered should not be treated as terminated, is that each agreement does not contain an exclusive right for the relevant Patrick employer to supply labour to the Patrick operators. This was said to be an impermissible inconsistency.

The use of an interlocutory injunction is for the purpose of maintaining the status quo or establishing or maintaining a state of affairs which is, on the balance of convenience, appropriate to be maintained until trial: see Slater Walker Superannuation Pty Ltd v Great Boulder Gold Mines Pty Ltd [1979] VR 107 at 110. In this case, North J considered that the appropriate state of affairs to be maintained was that which had existed for many years, namely that the Patrick operators employed as their labour force members of the Maritime Union of Australia. The fact that this state of affairs is inconsistent with cl 2.2 of each of the Labour Supply agreements is beside the point. The terms and provisions of those agreements cannot dictate to the Court what is the appropriate state of affairs that is to be maintained pending trial.

The true question to be considered is whether his Honour erred in holding that the Patrick operators should be prevented from making use of non-union labour. In view of the volatile circumstances that could result if the Patrick operators were free to engage non-union labour and thereby subvert the effect of the Labour Supply agreements which his Honour believed ought to remain in force, no error of principle in his Honour's reasons is disclosed.

Personal relationships

One of the matters that has weighed most heavily with us in relation to balance of convenience concerns personal relationships. There is no doubt the actions taken by parties to this proceeding, and their supporters, has polarised public opinion; not least on the waterfront itself. Incidents have occurred, on both sides of the dispute, that reflect little credit on those involved. They have engendered hostility and, in some cases, justifiable fear. We treat these matters seriously but like North J we do not think the personal relations problems that will undoubtedly exist during the changeover and settling period ought to deter the Court from making whatever orders are otherwise appropriate. Threats made in anger, however vile, are usually just that; they subside when the cause of the anger is removed. Vendetta is not the Australian way. All parties will need to exercise restraint in adjusting to the changed arrangements required by North J's orders; provided there is proper leadership we are confident they will.