FEDERAL COURT OF AUSTRALIA

Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries [2000] FCA 708

CONTEMPT – breach of court orders - penalty – relevance of apology – consideration of remedies that are appropriate to meet the exigencies of the particular case

Concrete Constructions Pty Ltd v PGEU (No 2) (1987) 15 FCR 64 - considered

AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 - applied

Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 – considered

Guthrie v Robertson (1987) 13 FCR 336 - cited

AUSTRALIAN INDUSTRY GROUP v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

N 1357 of 1999

JUDGE:          MERKEL J

PLACE:          MELBOURNE

DATE:            29 MAY 2000

THE COURT ORDERS THAT:

1.      A fine of $20,000 be imposed on the fourth respondent, Craig Johnston.

2.      A fine of $20,000 be imposed on the fifth respondent, Dean Mighell.

3.      The said fines be paid to the District Registrar of the Federal Court of Australia, 305 William Street, Melbourne, within 30 days.

4.        (a)     The fourth, fifth and sixth respondents pay the applicant’s taxed costs incurred in relation to its motion for contempt in respect of par 2 of the orders of Whitlam J made on 22 November 1999.

       (b)     The applicant pay the fourth, fifth and sixth respondents’ taxed costs incurred in relation to the applicant’s motion for contempt in respect of par 1 of the orders of Whitlam J made on 22 November 1999.

5.      Liberty to apply be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 12 May 2000 the Court declared that:

“The fourth respondent, Craig Johnston, the fifth respondent, Dean Mighell and the sixth respondent, Cesar Melhem are guilty of contempt of this Court by their conduct in breaching paragraph 2 of the orders made by Whitlam J on 22 November 1999 by failing to provide to the applicant by 10.00 am on Tuesday, 23 November 1999 or at all, a written notice on the letterhead of the MTFU in the terms set out in cl 3.2 (second occurring), of the Order of the Australian Industrial Relations Commission made on 20 November 1999 in proceeding C No 24275 of 1999.”

2                     The further hearing of the motion of the applicant (“the AIG”) that the fourth, fifth and sixth respondents (“the individual respondents”) be fined for their contempt constituted by their breaches of par 2 of the orders made by Whitlam J was adjourned to 22 May 2000.  On that day the Court heard submissions by counsel on behalf of the AIG and on behalf of the fourth respondent (“Johnston”), the fifth respondent (“Mighell”) and the sixth respondent (“Melhem”).  In addition, Johnston, Mighell and Melhem filed evidence as to their financial circumstances, as well as references as to their good character.

3                     At [74] to [82] of my reasons for judgment I outlined my reasons for concluding that the individual respondents had committed a serious contempt of Court which, subject to any further submissions and material placed before the Court, warranted the imposition of a penalty.  In particular, I emphasised that:

·        the fact that the breaches of the orders of Whitlam J were by union leaders holding important offices in a federation of national trade unions made the contempt more serious;

·        the Workplace Relations Act 1996 (Cth) (“the Act”) has struck a carefully prescribed balance in relation to the rights of all parties to an industrial dispute to engage in industrial action;

·        as part of that legislative balance, unions (and their officers), who have sought and obtained injunctive relief from the Court to protect the rights conferred under the Act in respect of employees, cannot assume that they can apply for court orders to protect their rights when it suits them, but then ignore court orders which protect the rights of other parties to the dispute, simply because compliance with such orders is seen to be adverse to their interests or objectives;

·        in the event that any of the orders made by Whitlam J were seen by the individual respondents to be contentious, the legal process provides remedies other than those chosen by the individual respondents.

4                     It was common ground that one of the rationales lying behind punishment for a contempt involving wilful disobedience of a Court order “is the very substantial purpose of disciplining the defendant and vindicating the authority of the courts” see AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 112-113 per Gibbs CJ, Mason, Wilson and Deane JJ.  In that context there are a number of factors that warrant the imposition of an appropriate financial penalty in the present case.

5                     First, I am satisfied that the contempt was constituted by a wilful and serious breach of par 2 of the orders made by Whitlam J.  The orders had come to the notice of the individual respondents, who made a conscious decision not to comply with them.  The breach was exacerbated by certain statements made by Mighell and by Johnston to representatives of the media on 23 and 24 November 1999.  The statements, which displayed an intention to defy the orders, were summarised at [54] of my reasons:

“After service of the Court orders Mighell made statements on 23 November 1999 to a journalist, and on radio, to the effect that he would not let union members down by calling off the meetings.  Johnston also made a statement to a journalist on 23 November 1999 that the meetings were proceeding, and on 24 November 1999 that the “laws are bad laws, they are crook laws.  They need to be broken, they need to be rescinded”.   The statements were made by Johnston in the context of possible “litigation” that might be taken by the AIG.”

6                     Mighell and Johnston did not seek to purge or mitigate their contempt by an apology or a statement that indicated any regret for, or remorse about, their conduct in breaching the orders of Whitlam J: cf Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 498-499.  Rather, they maintained their position of defiance.  The submissions made on their behalf suggest that the contravening conduct might well be repeated if Mighell or Johnston were to see that course as consistent with their “political” beliefs.

7                     Counsel for Mighell and Johnston said that the orders of Whitlam J created a conflict for them because the orders were inconsistent with his clients’ “fundamental belief in the principle that workers have a right to meet” (T 20).  Counsel added that he could not go into the question of the motives of his clients without turning that issue into a statement of their “political beliefs” (T 20).  However, he suggested that the proceedings had brought home to his clients the Court’s interest in the due administration of justice as well as the public interest in the Court having its orders obeyed.  Ultimately, the most that counsel could put forward in support of his plea for mitigation was that if his clients:

“are placed in this situation in the future they are going to think very seriously about their responsibility to the administration of justice.” (T 22)

8                     I accept that Mighell and Johnston believe in “the principle that workers have a right to meet” (T 20).  Plainly, workers, as well as other members of the community, have a right to meet.  However, that right, as with all other rights, is to be exercised in accordance with law.  Consequently, the right to meet does not permit those wishing to exercise the right to trespass upon or ignore the legal rights of others.

9                     The respondents’ conduct in convening mass stopwork meetings of workers during, and not outside of, working hours, without the authorisation of their employers, was regarded by the Industrial Relations Commission, and by Whitlam J, as unprotected industrial action under the Act.  The action also appears to have been regarded by the Commission and his Honour to be a request to employees to act in breach of their contracts of employment.  As I endeavoured to explain in my previous reasons for judgment, if Mighell or Johnston had grounds for believing that the orders made by Whitlam J wrongfully infringed the rights of workers to attend the meetings during working hours, or of union officials to organise the meetings, then the appropriate remedy was to challenge those orders by way of appeal, rather than by disobedience.

10                  In contrast to Mighell and Johnston’s position, Melhem, through his counsel, indicated that he wished to apologise to the Court for his contempt.  In particular, Melhem acknowledged that the administration of justice requires that the Court not be frustrated in its processes or its orders.  He also acknowledged that, in not complying with par 2 of the orders of Whitlam J, there was an interference with the administration of justice and the authority of the Court for which Melhem “unreservedly” apologised.

11                  A number of factors were relied upon by counsel for the individual respondents in support of a plea for mitigation in relation to penalty.  The main factors relied upon were:

·        the limited financial means and capacity of each of the respondents to pay any financial penalty imposed by the Court;

·        the evidence as to good character of each of the individual respondents and their general contribution to community activities.

12                  I would add that there was no evidence before the Court that suggested that the individual respondents had committed any offences that may have been relevant to the issue of penalty.  Furthermore, I accept that the subject matter of the contempt relates to a campaign for improved work conditions: see Concrete Constructions Pty Ltd v PGEU No 2 (1987) 15 FCR 64 at 86.

13                  I have concluded that, other than in respect of costs, no financial penalty should be imposed on Melhem.  He has unreservedly apologised for his contempt.  Secondly, in his capacity as Assistant Secretary of the MTFU he does not appear to have been a major protagonist in the decision making activities that gave rise to the contempt.  Finally, Melhem did not make public statements defying the authority of the Court or of its orders.

14                  However, I have concluded that it is appropriate to impose a fine in respect of the breaches of the Court orders by Mighell and Johnston.  I have determined that, in all the circumstances, individual penalties of $20,000 are appropriate for Mighell and Johnston respectively.  They have been the major protagonists in respect of the contempt, have publicly defied the orders made against them, have not apologised for, or otherwise endeavoured to purge, their contempt and have shown no remorse or regret for their actions.  I would add that, while I consider that Melhem’s apology is an important matter in mitigation of penalty, I have regarded the failure of Johnston and Mighell to apologise as relevant to, but not a matter in aggravation of, the penalty that is appropriate in all the circumstances.

15                  For the above reasons I propose to order that Mighell and Johnston be punished for their contempt by the imposition of a fine upon each of them in the sum of $20,000.  The fines are to be paid to the District Registrar of the Court within 30 days (see O 35 R 5(1)).  I do not regard it as appropriate that I order that, in default of payment, a term of imprisonment be served.  There are adequate enforcement procedures for the recovery of a fine imposed by the Court (see s 53 of the Federal Court of Australia Act 1976 (Cth), O 37 R 7 and R 8 of the Rules of the Federal Court, O 66 of the Rules of the Supreme Court of Victoria and Guthrie v Robertson (1987) 13 FCR 336)).  I should indicate that, in fixing the amount of the fines I have taken into account the financial means of Mighell and Johnston, including their current respective gross salaries as union officials (which exceeds $50,000 in the case of Mighell and which, currently, is “around” $50,000 in the case of Johnston), and the fact that the enforcement procedures available include orders for the attachment of earnings (see O 72 of the Rules of the Supreme Court of Victoria).

16                  I propose to reserve liberty to apply to resolve any difficulties that may arise in relation to enforcement.  In that regard I note that O 37 R 8 of the Rules of the Federal Court permits a “party interested in the execution or enforcement of an order” to apply to the Court ex parte for directions as to its execution or enforcement.

17                  The question of costs in the present case raises particular difficulties.  I am satisfied that the individual respondents are entitled to their taxed costs of and incidental to their defence of the unsuccessful motion for contempt in respect of par 1 of the orders of Whitlam J.  However, I am also satisfied that each of the individual respondents should pay the taxed costs of the AIG in respect of its successful motion for contempt in respect of the breach of par 2 of the orders of Whitlam J.

18                  The difficulties arise because, with some exceptions, the contempt motion proceeded in a manner which makes it difficult to distinguish between costs that were incurred in respect of the allegation of contempt in relation to par 1 of the orders and the costs that were incurred in respect of the allegation of contempt in relation to par 2 of the orders.  The thrust of the AIG’s case related to par 1, rather than par 2, of the orders.  However, in the result, the AIG has succeeded in making out a case of contempt against the individual respondents on one of the two bases upon which it relied.

19                  It was in that context that I requested submissions from the parties as to an appropriate outcome that would avoid the current dispute being prolonged by requiring a Registrar to decide the interrelated, and difficult, costs issues on taxation.  However, I have considered the submissions of the parties and have concluded that, at this stage, it is not possible to make a costs order fixing an amount that would be just and fair to the parties.  Accordingly, I propose to make costs orders on the basis that costs follow the event, leaving

it to the Registrar to determine the consequences of those orders.  I have also concluded that, in all the circumstances, the costs should be taxed on a party and party basis.

Associate:

Dated:              29 May 2000