FEDERAL COURT OF AUSTRALIA

BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2002] FCA 702

CONTEMPT OF COURT -  assessment of penalty – relevant and mitigating factors – whether findings of Appeal Court relevant to penalty – whether false assertions in conduct of defence and refusal to acknowledge wrongfulness of contempt relevant to assessment of penalty – whether late apology or absence of previous findings of contempt to be considered mitigating factors – whether absence of contempt in interstate branch relevant to assessment of penalty

COSTS – assessment of costs – costs on an indemnity basis – public interest – whether costs should be awarded on indemnity basis where party acts as prosecutor in the public interest – whether order for costs should be altered where party did not maintain all of the charges on appeal – whether the manner in which costs are ordered on appeal are necessarily taken to be guidance in the determination of trial costs.

Cases

Cameron v The Queen [2002] HCA 6 Discussed

North Australia Aboriginal Legal Aid Service Inc v Bradley [2001] FCA 908 Followed

BHP STEEL (AIS) PTY LTD v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Q 9 of 2000

KIEFEL J

BRISBANE

4 JUNE 2002

THE COURT ORDERS THAT:

1.         The respondent, the Construction, Forestry, Mining And Energy Union is fined $120,000 for its contempt of the Court’s Order of 7 February 2000 in failing to immediately cease strike action, namely the authorising of its members to stop performing work at the applicant’s coal mines in New South Wales.

2.         The respondent pay the applicant’s costs of the proceedings on an indemnity basis except for the costs of the first penalty hearing and except insofar as any costs are of an unreasonable amount or were unreasonably incurred.

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

REASONS FOR JUDGMENT

1                     On 15 December 2000 I made a declaration that the respondent, the Construction, Forestry, Mining and Energy Union (the “CFMEU”), was guilty of contempt of this Court “by its conduct in breaching the Order made against it on 7 February 2000 by continuing strike action and authorising its members to stop performing work and procuring and authorising its members to take further strike action”.  The CFMEU was subsequently fined $200,000.  On 12 December 2001 a Full Court of this Court varied the declaration and described the contempt established in these terms:  “failing to immediately cease strike action, namely the authorising of its members to stop performing work at the applicant’s coal mines in New South Wales.”  The matter has been remitted for reconsideration of the question of penalty in light of that variation. 

2                     The charges which were found at trial to have been made out were as follows:

“3.       In breach of the Order, from the time of the making of the Order and continuously thereafter until 4 pm on 9 February 2000, at the [New South Wales mines] the [CFMEU]:

(a)       continued to take strike action for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices;

(b)       continued its ban upon employees attending for work and performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices;

(c)        continued to authorise members of the [CFMEU] who were employees of [BHP Steel] to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices;

(d)       authorised members of the [CFMEU] who were employees of [BHP Steel] to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices;

(f)        procured members of the [CFMEU] who were employees of [BHP Steel] to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices.”

As the Full Court observed, relevant particulars of the first three charges, of continuing the strike, were:

“(i)      failed to inform such employees that the strike which it had required to begin at [BHP Steel’s New South Wales mines] for 24 hours from midnight...on 7 February 2000 had ceased;”

3                     Those particulars referred to by the Full Court in connexion with (d) and (f) were:

“(v)       organised and conducted a union meeting at 10 am…on 8 February 2000 at the Wonoona [sic] Bulli RSL Club, at which a resolution was passed to extend strike action for a further 24 hours from midnight...on 8 February 2000;

(vi)                 at about 10 am... on 8 February 2000 at the Wonoona [sic] Bulli RSL Club, passed a resolution to extend strike action for a further 24 hours from midnight...on 8 February 2000.”

4                     The trial findings dealt with the CFMEU’s conduct from the time its relevant officers came to know of the Order through to the conclusion of a meeting the following morning.  Mr Maher, the General President of the Central Executive, played a key role in these events and he was the only witness called by the CFMEU at trial.  An injunction had issued from the Court on the evening of 7 February 2000 requiring the cessation of strike action.  It was found that Mr Maher had been advised of that Order by BHP Steel’s solicitor at about 10.50 pm that night.  Conversations with other union officials then took place.  In the early hours of the morning further conversations occurred between them, and between them and lodge delegates.  A meeting had been scheduled for 10 am on 8 February 2000.  Mr Maher and another union official spoke to members at the meeting.  The result of the meeting was a decision, on the part of the union members, to take further strike action.

5                     A reiteration of this background and a reference to the reasons of the majority in the Full Court, to which I shall shortly turn, is necessitated by the submissions made by the CFMEU on penalty.  It is submitted that the conduct referable to the contempt which remains is within a relatively narrow compass.  It occurred in a short period and in circumstances where there was, very shortly afterwards, compliance with the Order.  Much of the argument for the CFMEU on the hearing was therefore taken up with an analysis of the reasoning of the Full Court.  Before turning to their reasoning, it may be observed, in general terms, that the variation effected was brought about because their Honours considered that a charge of colourable conduct on the part of the CFMEU at the meeting had not been particularised and because, on their Honours’ view of the evidence, there was insufficient evidence to sustain such a charge.  That is to say, charges (d) and (f), which related to Mr Maher procuring a continuation of the strike or a further strike at the meeting, were found not to be established.  Charges (a), (b) and (c), as particularised, and relating to the continuation of the strike, by failing to bring to members’ attention the fact that it was at an end, were maintained.

6                     The Full Court summarised the trial findings as follows:

50.       Her Honour found (i) that Mr Maher was told of the Order at about 10.50 pm on 7 February as a result of a brief mobile phone call from Mr Humphreys, BHP Steel’s then solicitor; (ii) that if Mr Maher remained unfamiliar with the terms of the Order, these were discussed with him by Mr Everill, the Lodge President of the Appin mine, in a phone call made by the latter to him shortly after 5.00 am on 8 February; (iii) that Mr Fisher, an office-bearer of the Central Executive and District President for the South-Western District of New South Wales had also been advised of the Order by Mr Everill; (iv) that Mr Fisher telephoned Mr Maher at 6.48 am on 8February but “[n]o action was taken by either of them to bring the strike to an end”; and (v) that from about 7.00 am Mr Fisher and Mr Maher could have taken steps to bring the strike to an end, “as Mr Maher effectively conceded in his evidence”.  These findings resulted in a sequence of adverse credibility findings being made against Mr Maher whose own evidence was that he only heard of the injunction some time after 8.30 am on 8 February.  They also required the drawing of several crucial inferences particularly in relation to the states of knowledge and the conduct of Mr Everill and Mr Fisher, neither of whom gave evidence.  These inferences were clearly open to her Honour in light of what had been proved about telephone communications between CFMEU and Lodge Officials and the service of the Order on officials, and in the absence of explanation or contradiction.”

and then went on:

“51.     In relation, then, to charges 3(a), (b) and (c) of the Statement of Charge as particularised in particular (i), the findings so made justified a finding that the breaches as charged had been made out.  And so her Honour found:

            “Mr Maher was told about the Order by Mr Humphreys.  He was told that an injunction had been obtained against the Union relating to the price dispute. Given Mr Maher’s experience he would have understood that there had been an Order made by the Court prohibiting the strike action.  It is not necessary that he be shown to be aware of its full terms:  Sun Newspapers Pty Ltd v Brisbane TV Ltd (1989) 92 ALR 535, 538.  The CFMEU had not at this point been personally served and it was not served until the following morning, but in these proceedings fines are sought and the embargo of 0 37 r 2(1) does not  apply:  Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110, 113.  In any event that rule contains an exception, in the case of notification by other means, such as is recognised by the common law: r 2(5) (and see Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110).  It is not necessary to determine whether other members of the Executive were aware.  It was Mr Maher’s obligation, on behalf of the Union to notify anyone necessary to effect an end to the strike.  It is likely that he did so at the conference dinner and that others were then informed.  If Mr Fisher was not told earlier, Mr Everill almost certainly would have told him when he spoke to him at 6.48 am.  Even at this timehe and Mr Maher could have taken steps to bring the strike to an end, as Mr Maher effectively conceded in his evidence.

            Lodge Officials and members of the Union were waiting for advice from the Executive.  Without it they would not act upon BHP Steel’s advices about the Order.  It was not suggested that there was no action open to the Executive or Mr Maher to put matters in train. Notification was clearly possible.  One may observe how promptly the strike had been notified the day before.”

(The emphasis was added by the Full Court).  In the passages relied upon by the CFMEU, the majority in the Full Court said:

“52.     Notwithstanding the foregoing comments on the findings made apparently with reference to particular (i), reading her Honour’s reasons as a whole, the conclusion that the CFMEU committed a contempt of the Court by breaching the Order also rested on findings purportedly made with regard to particulars (v) and (vi) based on her Honour’s perception of the conduct of the CFMEU at, and the outcome of, the meeting of members held on 8 February addressed by Mr Maher and Mr Fisher.  In particular considerable weight seems to have been placed by her Honour on the failure of the members of the CFMEU employed at the New South Wales mines to return to work after that meeting concluded.  It was implicit in the case presented to her Honour that if the members had resumed employment after the meeting concluded, no distinction would have been drawn between the acts done by the CFMEU to comply with the Order by withdrawing the direction to members to take “strike action” in Queensland and in New South Wales, and the allegation that the CFMEU had committed a contempt of the Court would not have arisen.  Members employed by BHP Steel at the Queensland mines commenced “strike action” on 7 February at least four hours before the members employed at the New South Wales mines.  A return to work by members in New South Wales after conclusion of the meeting would have been, to a large extent, synchronous with the return to work by members at the Queensland mines which, as noted earlier, took place between 10.00 am and 6.00 pm on 8 February.

53.       Notwithstanding the foregoing, it is apparent that her Honour was satisfied that the failure to act between 7.00 am and 10.00 am on 8 February in respect of the New South Wales mines amounted to disobedience by the CFMEU of par 1 of the Order in a degree that constituted contempt of the Court.  As is discussed below, her Honour’s assessment of the seriousness of the contempt was affected by her view of the conduct of the CFMEU at the meeting.  However, the essence of the finding of contempt remained the failure to act between 7.00 am and 10.00 am to withdraw the direction to members to take “strike action” at the New South Wales mines.”

There was a similar observation to the effect of the last sentence at an earlier point in the reasons.

7                     The CFMEU submitted that a number of matters emerge from these reasons.  It was submitted that the Full Court intended to narrow the conduct referrable to the contempt which was maintained to that which occurred in the period between 7 am and 10 am.  In that event regard would not be had to inaction on the part of union officials when they were first informed of the Order the night before, or in the earlier hours of the morning.  It might also be more readily inferred, it was submitted, that any decision not to act until 10 am resulted from an error of judgment and not one to deliberately ignore the Order.  How one was to draw such an inference without any evidence from those concerned was not explained. 

8                     It was also submitted that, in determining the seriousness of the contempt, it is important to bear in mind that “the effect of the Full Court’s observations at par 52 is that the CFMEU has been found guilty of contempt with respect to conduct which, but for circumstances beyond its control (the failure of members to return to work after the meeting), would not even have given rise to an allegation of contempt”.  This submission appears to assume positive findings were made by the Full Court as to CFMEU’s conduct at the meeting and that it amounted to bona fide compliance with the Order.

9                     In my view the arguments fail to have regard to what their Honours were explaining.

10                  In the passages relied upon, their Honours were concerned to distinguish the events which took place before the meeting and the conduct at the meeting.  I take it that this was necessitated by argument put forward by the CFMEU on the appeal as to how the question of contempt was approached at trial and in particular whether it was dealt with as a composite.  In [52] their Honours accepted that regard was had, in the trial findings, to the meeting in determining the seriousness of charges (a), (b) and (c).  The prosecution case had placed importance upon the meeting and its result.  Their Honours then explain that, nevertheless, charges (a), (b) and (c) were principally established at trial by reference to events prior to the meeting.  They may be considered separately from what followed.  Their Honours then go on to deal with the evidence relating to the meeting.  That was the area of principal concern to their Honours on the appeal.

11                  It is also important, in my view, to understand that their Honours were not revisiting the findings relevant to charges (a), (b) and (c) either in relation to liability or penalty.  In the latter respect the topic was argued but not determined by the majority. 

12                  It follows, in my view, that little weight can be placed upon the selection of 7 am as  the commencement of the period.  Although the Court might have simply referred to the whole of the period prior to the 10 am meeting, in separating the conduct relevant to the different charges, the reference to 7 am does not amount to a finding as to when all relevant conduct or inaction commenced.  It merely reflected a concession made by Mr Maher, in evidence, that even at this point something could have been done to end the strike and tended to highlight the fact that nothing was done.  The Order made by the Court, namely that the CFMEU was guilty of contempt by failing immediately to cease strike action, could only refer to its obligation to act upon hearing of the injunction.

13                  Nothing in the passages relied upon, or in what follows in their Honours’ reasons provides positive findings upon which the CFMEU may now rely.  No findings as to the quality of Mr Maher and the other officers’ conduct at the meeting were made.  The evidentiary questions with which their Honours were concerned were those relating to its clarity and whether it was sufficient to establish the charges to the requisite degree.  I consider that the correct approach, in light of the Full Court’s reasons, is to ignore the events which occurred at the meeting.  I add that even if one were to take their Honours as implying that there was compliance at this point, it would have little impact on this hearing without the positive findings I have adverted to.  On either approach the same period is to be considered with respect to the remaining charges.

14                  BHP Steel accepts that it is not possible to take into account, in relation to penalty, the events occurring at the meeting.  That necessitates a different approach to the question of penalty.  It was my earlier view that the conduct of Mr Maher at the meeting had not only procured a further strike, it was further evidence of his, and the CFMEU’s, determination not to comply with the Order.  It added to the seriousness of the matter because it involved not only inaction but the encouragement of further strike action in the face of the Order.   Now the question of penalty must be approached without reference to any such conduct.

15                  That is not to say that the contempt which remains to be considered is not serious.  I would still characterise it as very serious, but without the aggravation of the other conduct.  Relevantly, officers of the CFMEU at high levels failed to take any step to notify members that the strike was at an end.  As earlier found, there was nothing to suggest an impediment to commencing such an activity. It was not necessary that action to comply with the order be successful, however it did need to be taken immediately in order to secure an outcome.  There was no explanation as to why no step was taken except for a false assertion of knowledge gained late and shortly prior to the meeting.  Even if the focus is upon the period between 7 am and 10 am, the Order was discussed between officers at executive levels and with the CFMEU’s solicitor and still nothing was done.  In a radio interview the existence of the Order was not even adverted to by Mr Maher.  In these circumstances the only reasonable inference seems to be that a decision was made not to take steps to comply with the Order until the last possible moment.  That point would arrive at the meeting.  It was undertaken with knowledge of the obligation to comply and possible consequences.  It was undertaken in the belief that the only evidence about notification of the Order at the necessary level would come from Mr Maher.

16                  Reliance was placed by the CFMEU on Cameron v The Queen [2002] HCA 6.  That case would seem to be relevant in two respects.  It concerned a late plea of guilty, brought about because the particulars of the charge initially identified the wrong illegal substance.  As a result the person convicted lost the benefit of a discounting of his sentence, which would have been available on an early plea.  It was held that, for a number of reasons, he could not have been expected to plead to the original charge.  This might be considered as relevant here to the matter of the late apology.  Further, in the course of discussing the practice of discounting sentences for early pleas of guilty, McHugh J [41] observed that it was well accepted that Courts may not increase a sentence in order to mark the Court’s disapproval for the manner in which the proceeding was conducted, even if it involved a scurrilous defence (referring to R v Shannon (1979) 21 SASR 442, 445).  This was relied upon to support the proposition that the mode of conduct of the CFMEU’s defence, including false assertions as to its officers’ knowledge of the Order, could not be taken into account in relation to the assessment of penalty.

17                  Putting the theories about discounting of sentences to one side, it is difficult to see that, in criminal trials, the mode of conduct of a defence could be relevant to the offence for which a person is convicted.  In other areas of the law the conduct of the proceedings may be directly relevant to the assessment of damages.  Defamation trials perhaps come most readily to mind.  They are not however properly analogous to contempt proceedings.  The conduct of some defences in defamation proceedings may itself be productive of further injury to the plaintiff, and that is a matter in issue.  In contempt proceedings, there is the possibility that other charges, such as perjury or a further contempt, might follow from evidence given but these are not matters which will concern a Judge in determining penalty in the original contempt proceedings.  Nevertheless it seems to me possible that the conduct of a defence in contempt proceedings may inform the Court about the attitude of the respondent to the charges in question, and that they may be relevant on that account.

18                  In the present case the later conduct of the CFMEU in the proceedings could be said to show that it refuses to acknowledge its wrong and will go to extreme lengths to ensure that it will not be put in that position.  A lack of contrition is a relevant factor in the assessment of penalty.  Conduct such as this would serve to emphasise its absence.  The conduct may not however be of assistance in evaluating the seriousness of the contempt itself.  It might also be inferred that this conduct is consistent with a calculated and deliberate approach to compliance with the Order.  If so it would serve to confirm the view I have otherwise reached.  In view of the findings I have made, such an inference probably does not add much.

19                  The lack of an apology is indicative of a lack of contrition and therefore provides no basis for mitigation on that account.  It was submitted that the apology now tendered to the Court – that the CFMEU apologises for its failure to comply with the Order by not taking steps as soon as reasonably possible to withdraw or cancel the call to take strike action – should be taken into account as a factor mitigating against penalty.  It is submitted that it was unable effectively to tender an apology until after the Full Court had determined the extent of its liability.  Prior to that it had faced charges which went too far.

20                  I consider that there is a practical difference between the position which prevailed in Cameron v The Queen and the present.  As I have said, the accused was not in a position to plead to the charge because of the way it was particularised and because of the effects a plea to the wrong charge might have.  A better analogy to the present case would be the circumstance where a person was charged with a number of separate offences.  There is nothing to prevent a person in that situation pleading guilty to some only of the offences.  If the CFMEU had acknowledged its wrong in failing to take action immediately upon hearing of the Order, it would have been appropriate to take that into account as an early apology.  It did not do so and sought to challenge all the charges on appeal  An apology proffered now in no way assuages my concern that there is no real remorse.  I could detect none in the approach taken to the seriousness of the contempt on this hearing.  I remain concerned that the CFMEU might not be deterred from similar conduct in the future. 

21                  There are a number of other matters raised by the CFMEU as relevant to mitigation.  I have taken into account that the CFMEU has not been found guilty of contempt by this Court on a previous occasion.  I do not consider it relevant that the Order was complied with in Queensland, nor that there was no ostensible and public defiance of the Order.  I have not previously taken into account the extent of injury to BHP Steel, although I consider it correct to infer that there may have been some.

22                  Taking into account the seriousness of the contempt, in particular because it was calculated and deliberate and the need that a penalty operate as a deterrent, I will order that the CFMEU be fined $120,000.

23                  I had previously ordered that BHP Steel have all of its costs in the proceedings on an indemnity basis.  My view about making such an Order when a party acts as prosecutor in the public interest remains the same.  It is appropriate in this case.  The trial, and the evidence associated with it, were necessitated by the conduct of the CFMEU.  The extent of the evidence was largely rendered necessary by the manner of its defence.  The question which now arises is whether the Order should extend to all of BHP Steel’s costs, given that it did not maintain all of the charges on appeal.

24                  On the appeal the Full Court made no Order as to costs on the appeal concerning liability for contempt, but ordered BHP Steel to pay the costs on the appeal as to penalty.  Although the CFMEU argued for an approach as to costs which would mirror that of the Full Court, I do not consider it to offer guidance as to trial costs.  The Orders made on the appeal simply reflect the parties’ respective success or failure. 

25                  BHP Steel has not succeeded in establishing that the conduct of the meeting constituted a further contempt.  The additional evidence and argument as to these matters was not substantial, although it was considered to be important.  The evidence as to what took place at the meeting was put forward by Mr Maher and there was some, relatively short, cross-examination on it.  The effect on costs overall is not likely to be such as to warrant a reduction in the Order to be made for BHP Steel’s costs. 

26                  It was necessary that BHP Steel prepare the case on penalty and it should have those costs and the costs of one of the hearing days.

27                  In his judgment in the Full Court Merkel J considered that an Order for indemnity costs should be expressed to exclude costs which are of an unreasonable amount or were unreasonably incurred for the reasons given in North Australia Aboriginal Legal Aid Service Inc v Bradley [2001] FCA 908 [90]-[92].  I will make an Order in those terms.  I add that it is not my view that the affidavits prepared and filed with respect to events which took place in Queensland in connexion with the Order were unreasonably incurred, given in particular the directions which required the whole of the prosecution case to be put forward and the likely relevance of that evidence.

28                  There will be Orders accordingly.

Associate:

Dated:              4 June 2002