FEDERAL COURT OF AUSTRALIA

Bovis Lend Lease Pty Ltd v Construction Forestry Mining and Energy Union (No 2) [2009] FCA 650

CONTEMPT – contempt of Court – penalties – considerations relevant to penalty – contempt found to be wilful – whether contempt public in nature - the effect of the contempt on the administration of justice - the contemnor’s culpability – whether any relevant prior convictions - relevance of lack of apology – whether any order for costs should mitigate penalty

Federal Court of Australia Act (1976) (Cth) s 31(1)

High Court Rules 2004 (Cth) r 11.04.01

Judiciary Act 1903 (Cth) s 24

Attorney-General v Times Newspaper Ltd [1974] AC 273 referred to

Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 applied

Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 considered

Australian Competition and Consumer Commission v Hughes (2001) ATPR 41-807 referred to

Australian Competition and Consumer Commission v Info4PC.Com Pty Ltd (2002) 121 FCR 24 referred to

Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (2000) 97 IR 474 referred to

BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2000] FCA 1853 referred to

BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2001] FCA 336 referred to

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

Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651 referred to

Bovis Lend Lease Pty Ltd v Construction Forestry Mining and Energy Union (2009) 254 ALR 306 referred to

Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 applied

Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 referred to

Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1994) 94 IR 231 referred to

Draffin v Construction, Forestry, Mining and Energy Union [2009] FCA 243 referred to

Furlong v Maxim Electrical Services (Aust) Pty Ltd (No 3) [2006] FCA 1705 referred to

Hoare v The Queen (1989) 167 CLR 348 referred to

Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134 referred to

Inn Leisure Industries Pty Ltd (Provisional liquidator appointed) v D F McCloy Pty Ltd (No 2) (1991) 28 FCR 172 referred to

Jones v Toben (No 2) [2009] FCA 477 referred to

Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 considered

Levy v State of Victoria (1997) 189 CLR 579 referred to

Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 referred to

Oshlack v Richmond River Council (1998) 193 CLR 72 referred to

Pine v Expoconti Pty Ltd (2005) 147 IR 426 referred to

Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500 distinguished

Ponzio v B & P Caelli Construction Pty Ltd [2006] FCA 1221 referred to

Ponzio v B & P Caelli Consturctions Pty Ltd (2007) 158 FCR 543 considered

R v Wattle Gully Goldmines N.L. [1980] VR 622 referred to

Rip Curl International Pty Ltd v Phone Lab Pty Ltd (2004) 63 IPR 496 referred to

Temple v Powell (2008) 169 FCR 169 referred to

Textile Clothing and Footwear Union of Australia v Morrison Country Clothing Australia Pty Ltd (No 2) [2008] FCA 1965 referred to

Trade Practices Commission v CSR Ltd [1991] ATPR 52,135 (41-076) referred to 

Veen v The Queen (1979) 143 CLR 458 referred to

Veen v The Queen (No 2) (1988) 164 CLR 465 referred to

Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 followed

Witham v Holloway (1995) 183 CLR 525 applied

BOVIS LEND LEASE PTY LTD v CONSTRUCTION FORESTRY MINING AND ENERGY UNION

VID 114 of 2009

TRACEY J

19 JUNE 2009

MELBOURNE

THE COURT DECLARES THAT:

1.         The Respondent is guilty of contempt by maintaining an obstruction and interfering with the passage of persons in vehicles proceeding into the New Royal Children’s Hospital situated at 52 Flemington Road, Parkville on 19 February 2009 and on 23 February 2009, in breach of paragraph 1 of the orders of Marshall J made on 19 February 2009.

THE COURT ORDERS THAT:

2.         A penalty of $75,000.00 be imposed on the Respondent.

3.         The penalty imposed in paragraph 2 of these orders, be paid into the Consolidated Revenue Fund within 60 days of the date of these orders.

4.         The Respondent pay the Applicant’s costs of the penalty hearing on an indemnity basis.

5.         The Respondent pay one half of the Applicant’s costs of the contempt hearing on an indemnity basis

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                          On 19 February 2009 and again on 23 February 2009 officials and members of the Respondent (“the CFMEU”) obstructed and interfered with the passage of vehicles seeking to enter the New Royal Children’s Hospital Site, in breach of an order made by Marshall J on 19 February 2009 (“the Order”).  I have found that the CFMEU thereby committed contempt of Court: see Bovis Lend Lease Pty Ltd v Construction Forestry Mining and Energy Union (2009) 254 ALR 306; [2009] FCA 194.  It is now necessary to determine appropriate penalties for these contempts.

2                          The Applicant submitted that the CFMEU should be fined between $200,000.00 and $250,000.00 in relation to each of the two incidents of contempt and sought its costs on an indemnity basis.  The Applicant urged the Court to impose an effective penalty, lest serious and lasting damage to the fabric of the law result: see Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 115 (“Mudginberri Station”).

3                          The CFMEU accepted that it should pay the Applicant’s costs of the penalty hearing, on a party-party basis, and submitted that a penalty in the sum of $10,000 was appropriate.  It was submitted that, as the application for contempt was only partly successful, each party should bear its own costs of the two motions for contempt.

PARTICIPATION OF THE ABCC

4                          As in the proceeding for contempt, Mr N J D Green, of Queen’s Counsel, announced that he appeared for the Australian Building and Construction Commissioner (“the ABCC”) and sought leave to be heard.  Again, Senior Counsel for the CFMEU objected.  I indicated that I would hear Mr Green on matters on which only the ABCC was able to assist the Court: see Levy v State of Victoria (1997) 189 CLR 579 at 604-5.  He made short oral submissions.  Counsel for the ABCC sought to emphasise the matters the ABCC considered the Court should pay regard to when determining the appropriate penalty.  These matters largely reflected those emphasised by the parties.  As a result, I did not consider that the ABCC was able to assist the Court in dealing with the question of what, if any, penalty should be imposed.

PENALTY

5                          Section 31(1) of the Federal Court of Australia Act 1976 (Cth) identifies the power possessed by this Court to punish contempts:

“Subject to any other Act, the Court has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court.”

The power possessed by the High Court to punish contempts is specified in s 24 of the Judiciary Act 1903 (Cth):  

“The High Court shall have the same power to punish contempts of its power and authority as is possessed at the commencement of this Act by the Supreme Court of Judicature in England.”

When the Judiciary Act 1903 (Cth) commenced, the Supreme Court of Judicature in England had power to punish for contempt, whether civil or criminal: see Mudginberri Station at 105‑106.  The penalties the Court may impose depend on who is identified as the respondent to the proceeding: see High Court Rules 2004 (Cth) r 11.04.1.  In this case, the only respondent was the CFMEU.  None of the individual officers or members involved in the contempts was named as a respondent.  Where, as here, the contemnor is a body corporate, r 11.04.1 (b) of the High Court Rules 2004 (Cth) provides that the Court may order:

“… that the contemnor pay a fine, that some or all of the property of the contemnor be sequestrated or that both the contemnor pay a fine and some or all of the property of the contemnor be sequestrated.”

6                          The considerations relevant to the determination of an appropriate penalty for contempt of Court were discussed by the High Court in Mudginberri Station; see also Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 (“BHP Steel”) and Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 501-502.  Those considerations include:

·          The contemnor’s personal circumstances;

·          The nature and circumstances of the contempt;

·          The effect of the contempt on the administration of justice;

·          The contemnor’s culpability;

·          The need to deter the contemnor and others from repeating contempt;

·          The absence or presence of a prior conviction for contempt;

·          The contemnor’s financial means; and

·          Whether the contemnor has exhibited general contrition and made a full and ample apology.

7                          As noted above, the penalties suggested by the Applicant and the CFMEU vary substantially.  It is clear that the suggested penalties reflected each party’s view of the severity of the CFMEU’s conduct, and the factors each party chose to emphasise in its submissions.

8                          The CFMEU submitted that the most significant considerations were the nature and circumstances of the contempts, the effect of the contempts on the administration of justice, the contemnor’s culpability, the need for deterrence and the absence of any relevant prior convictions.

9                          The Applicant, on the other hand, emphasised the CFMEU’s circumstances and its financial means, the public nature of the defiance, the need to deter contemptuous conduct, the failure of the CFMEU to apologise or express contrition for its conduct and the existence of a prior conviction for contempt.

Nature and circumstances of the contempt

10                        The CFMEU directed attention to a range of matters which it submitted should be brought into account in the fixing of any penalty.  The first was the subject matter of the principal proceeding.  In this case the Applicant sought, inter alia, damages for interference with the contractual relations between it and one of its subcontractors.  That claim provided the serious question relied on by Marshall J in granting injunctive relief on 19 February 2009.  The aim of the injunctive relief (which included the Order) was to enable the Applicant to continue construction work at the Site and to prevent interference in the contractual relations between it and the subcontractor.  The conduct of the CFMEU did not prevent the Applicant from continuing construction work at the Site.  On the contrary, the Site continued to operate and all 400 employees employed at the Site continued to work.  There was no evidence that there was any loss occasioned by the Applicant because a truck could not enter the Site on each of the 19 and 23 February 2009.  Further, so it was said, in the “industrial picket setting in which the offending conduct occurred” the gravity of the offending conduct was at the low end of interference or obstruction.  The breach of the Order involved no threats, intimidation or violence.  There was no physical contact with the trucks.  The conduct was constituted by omissions, namely, the failure to remove objects, which “occurred in circumstances where, whilst there was an attempt to enter [the Site], it was not a concerted attempt.”  In these circumstances, it was submitted, the “penalty imposed ought to reflect the fact that the objectives of the orders of Marshall J were not circumvented.”

11                        The underlying rationale of every exercise of the contempt power is that it is necessary to uphold and protect the effective administration of justice: see Mudginberri Station at 107 (per Gibbs CJ, Mason, Wilson and Deane JJ).  The power to punish contempts serves the purpose of disciplining the defendant and vindicating the authority of the court (see Mudginberri Station at 112-113); it is the means by which the law vindicates the public interest in the due administration of justice: see Attorney-General v Times Newspaper Ltd [1974] AC 273 at 315-316; Borrie & Lowe, The Law of Contempt, (3^rd ed, Butterworths, 1996) p 1 and is the way in which the Court preserves respect for its role and the rule of law: see Australian Competition and Consumer Commission v Hughes (2001) ATPR 41-807 per Tamberlin J.  There are many facets to the administration of justice (Borrie & Lowe, p 1).  While the effect of the contempt on the ability to prosecute the principal proceeding may be relevant in assessing the effect of the contempt on the administration of justice: see, for example, Textile Clothing and Footwear Union of Australia v Morrison Country Clothing Australia Pty Ltd (No 2) [2008] FCA 1965, the subject matter of the principal proceeding does not define the scope or the effect of the contempt on the administration of justice.  In Attorney-General v Times Newspaper Ltd [1974] AC 273 at 309 Lord Diplock considered the requirements of the due administration of justice: 

“The due administration of justice requires first that all citizens should have unhindered access to the constitutionally established courts of criminal or civil jurisdiction for the determination of disputes as to their legal rights and liabilities; secondly, that they should be able to rely upon obtaining in the courts the arbitrament of a tribunal which is free from bias against any party and whose decision will be based upon those facts only that have been proved in evidence adduced before it in accordance with the procedure adopted in courts of law; and thirdly that, once the dispute has been submitted to a court of law, they should be able to rely upon there being no usurpation by any other person of the function of that court to decide it according to law. Conduct which is calculated to prejudice any of these three requirements or to undermine the public confidence that they will be observed is contempt of court.”

12                        The public interest in the administration of justice requires compliance with all orders and undertakings: see Witham v Holloway (1995) 183 CLR 525 at 532-533.  In Witham theHigh Court said (at 533):

“All orders, whether they be Mareva injunctions, injunctions relating to the subject matter of the suit, or, simply, procedural orders, are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties.”

13                        The submission that the penalty imposed ought to reflect the fact that the objectives of the Order, as perceived by the CFMEU, were not circumvented is misconceived.  In my view, it reflects the cavalier attitude taken by the CFMEU to the Order and the Court, and misconstrues the objective of the Order.  The Order prohibited the CFMEU, whether by itself, its officers, servants, agents or howsoever otherwise from doing any act, or directing, advising or authorising, or doing or continuing any act to aid, abet, counsel, procure, encourage or induce any person to obstruct or interfere with the passage of any person, whether on foot or in a vehicle proceeding into or from the Site.  The immediate purpose of the Order was to ensure that access to the Site by persons and vehicles should not be impeded.  The Order was ignored.  CFMEU officials and members were responsible on two occasions for obstructing the passage of vehicles which could otherwise have entered the Site.  It was purely fortuitous (if it be the case) that the impugned conduct did not disrupt work on the Site

14                        It is no answer to say that the contempt was constituted by omissions or to seek to diminish the gravity of the contempt by relying on the conduct of the drivers of the obstructed vehicles.  Furthermore, the claim that the offending conduct was constituted by omissions cannot be accepted.  CFMEU officials parked union-owned vehicles across the entrance to the Site.  From time to time vehicles were removed and replaced by other vehicles.  A tent or marquee was erected in such a position as to prevent the opening of one of the gates.  The only sense in which the conduct of the officials and members might properly be characterised as involving omissions is that it included the failures and refusals to move the obstructions when requested to do so by representatives of the Applicant and as required by the Order.

15                        The CFMEU was determined not to obey the Order and did not make a reasonable attempt to comply with the Order: see Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 at 358.  The conduct of the CFMEU was not casual, accidental or unintentional and was therefore wilful for the purposes of the law of contempt: see Australian Competition and Consumer Commission v Info4PC.Com Pty Ltd (2002) 121 FCR 24 at 57; Mudginberri Station at 113.

16                        The lack of evidence that any loss and damage was sustained as a result of the CFMEU’s misconduct is not a factor which weighs heavily in its favour.  The CFMEU relied on Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500 to support this element of its case.  Pine involved contraventions of s 187AA of the Workplace Relations Act 1996 (Cth) which prohibited an employer from paying an employee during a period when the employee was engaged in industrial action.  Four employees were inadvertently paid $656.72, approximately half of which covered the period of industrial action, in breach of s 187AA.  Finkelstein J noted that not every contravention of every law needs to be punished and determined not to impose any penalty in the circumstances. His Honour said at [10]:   

“… No harm has been done to anyone.  The contravention was inadvertent.  It is unlikely to occur again. The amount of wages involved is insignificant.  In these circumstances it would be quite wrong to punish the respondents.  Nothing would be achieved by the imposition of a pecuniary penalty.  There is no need for a specific deterrent:  it is simply not necessary.  And if any penalty were imposed it would be so low that it could not act as a general deterrent.”

17                        In my view, this decision does not assist the CFMEU.  His Honour was dealing with a trivial and inadvertent breach of a civil penalty provision.  He was not concerned with deliberate contemptuous conduct.  No issue involving the undermining of the community interest in the effective administration of justice was involved.  Moreover, as I have said, a penalty imposed to punish contempt is not designed to compensate for any loss suffered by those affected by the contempt.  Such compensation must be sought through other legal avenues.  It is usual for the Court to order that a penalty for contempt be paid into the Consolidated Revenue Fund not to any party who can establish that it suffered economic loss by reason of the misconduct.

18                        The CFMEU was also concerned that “the Court should be careful not to impose a penalty misdirected at the members of the respondent.”  As I understood this part of its argument it came down to this:  union members should not be penalised for the actions of officials over whom they had no control.  They would be so penalised if a monetary penalty were to be imposed on the union rather than on the officials and members who had participated in the contemptuous conduct.  It was submitted that it was open to the Applicant to name the CFMEU officers involved in the incidents on 19 and 23 February 2009 as respondents to the contempt proceeding.  It had chosen not to do so.  As a result, so it was contended, any penalty imposed against the CFMEU would penalise innocent persons, the ordinary members of the CFMEU who had not been involved in the conduct, rather than being directed at those who had engaged in the offending conduct: see R v Wattle Gully Goldmines N.L. [1980] VR 622.  Payment of the penalties would diminish funds contributed by members which would otherwise have been directed for their benefit.  

19                        In developing this contention the CFMEU relied on comments made by Gray J in Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517.  In that case, three unions admitted to engaging in conduct in contravention of s 45D of the Trade Practices Act 1974 (Cth) and agreed that each union should pay a penalty of $100,000.00.  Gray J stated that he would have imposed a penalty considerably less than that agreed and, as the penalties were uniform, considered that no attempt had been made to attribute relative blame amongst the respondents.  His Honour noted that:

·          the respondents were “not profit-making enterprises” and did not “engage in the conduct the subject of the proceeding for their own gain, or the gain of their officials”; see also Draffin v Construction, Forestry, Mining and Energy Union [2009] FCA 243 at [44].

·          the respondents’ overriding concern was to protect the employees from possible exploitation in circumstances where their terms and conditions of employment were negotiated on an individual basis;

·          with the exception of a short period, access to the site was not blocked;

·          the respondents had agreed to compensate the operator of the project for its losses; and

·          the respondents were entitled to credit for their cooperation with the Australian Competition & Consumer Commission and for saving public money in relation to the litigation.  

20                        The CFMEU emphasised the statement by Gray J (at [8]) that, “[i]n these circumstances, to call upon the respondents each to pay such a large sum from their resources, which ultimately come from the pockets of wage-earners appears to be excessive.”  However, tellingly, his Honour also said (at [10]) that “[a] factor that would tend to increase the size of the penalty is that the picket continued to be operated despite the orders of the Australian Industrial Relations Commission.”  It is also necessary to bear in mind that his Honour was not dealing with a charge of contempt, but with a penalty for admitted breaches of the Trade Practices Act where the penalty was capped by statute and in circumstances where the parties had agreed on a penalty which was greater than that his Honour would have otherwise ordered.  Importantly, his Honour specifically held that, a breach of orders, made by the Commissioner, would warrant the imposition of a more severe penalty than might otherwise be called for.  

21                        No evidence was submitted by the CFMEU as to its financial position, or how the payment of a fine would penalise “innocent persons” not involved in the contempt.  On the limited evidence before me, it is difficult to see how the payment of a fine would penalise “innocent persons” except in the sense that any monetary penalty which is paid out of the union’s funds would not be available to be applied to activities which might be thought to advance the interests of members.  This will always be the result whenever a union is required to pay a penalty for contempt or a contravention of some statutory provision.  It cannot operate as a bar to the imposition of penalties.  A court may impose a lower penalty if the offending conduct is carried out by rogue officials and members.  Where, as is presently the case, the conduct is that of elected officials who were acting in the course of their duties, the fact that ordinary members of the organisation may, perhaps, be affected by the imposition of a penalty, will weigh far less heavily.  If the members are dissatisfied with the conduct of the officers who have engaged in or condoned the offending conduct they may vote against them when they next stand for election.

The effect of the contempt on the administration of justice

22                        The CFMEU sought to argue that the contempts did not have a significant adverse effect on the administration of justice.  In this context it also relied on its submissions that the Court should have regard to the fact that the objectives of the Order were not circumvented and there was no loss or damage as a result of the contempt. For the reasons outlined above, I either do not accept these submissions or accord them little weight.  In addition, the CFMEU contended that it was entitled to rely on the presumption of innocence in relation to the charges laid by the Applicant which were not established and that it was proper for the Court to consider what it described as its “partial compliance” with the Order.  

23                        In Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350Tamberlin and Goldberg JJ (with whom Moore J generally agreed) considered (at 359 [48]) that compliance with the Court’s orders by the CFMEU in Queensland was relevant and should have been taken into consideration in assessing the amount of the penalty for the CFMEU’s contempt in New South Wales.  Their Honours held:

“Although constituting only partial compliance, it is a significant step and it does reflect respect for the court’s orders and a readiness to comply. The weight to be given to such consideration is of course a matter for the primary judge, but it could not be excluded from consideration as irrelevant or insignificant.”   

In the circumstances of that case their Honours considered that the partial compliance had “considerable importance.”

24                        The argument advanced in support of the CFMEU’s “partial compliance” claim was that the evidence before the Court was not sufficient to allow the Court to make findings that any additional contraventions had occurred.  While the CFMEU is entitled to a presumption of innocence in relation to the charges of contempt that were not established, it does not follow that it is entitled to the benefit of a finding of partial compliance with the Order in relation to this conduct.  A lack of evidence to establish a charge does not amount to evidence of partial compliance.  There was no evidence of partial compliance.  Counsel did not identify any act on the part of CFMEU officials and members who were involved in the picket which constituted partial compliance with any of the orders made by Marshall J.  On the contrary the CFMEU may have been liable for further contempts had the charges been framed differently.  It may well, for example, have been found guilty of contempt had it been charged with failing forthwith to remove obstructing vehicles upon being served with Marshall J’s orders.

“Personal” circumstances of the contemnor

25                        The Applicant highlighted the fact that the CFMEU is a large representative body and referred to the following statement on the CFMEU’s website:

“[The CFMEU is the] largest and most powerful trade union representing construction workers in Australia. It has members on all major building, and most civil construction projects across the country.”

The CFMEU invited the Court to ignore the reference to the website.  

26                        In Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 Tamberlin and Goldberg JJ considered (at 358 [40]), that the fact that contempt had been committed by a large representative body was a relevant consideration in assessing an appropriate penalty:

“Generally, it can be said that the adverse impact on the important public interest in the effective administration of justice which results from defiance of a court order or from a failure by a powerful institution or body to comply in a timely manner with an order will generally be more significant than a failure to comply with an order made against a private individual litigant engaged in a personal dispute which does not impact on the community to the same extent. This is a relevant consideration in the present case where the contempt is committed by a large representative body.” 

I respectfully agree.  The CFMEU is a large organisation and it deployed considerable resources in order to maintain the obstruction to an important public hospital development.

Means of the CFMEU

27                        The Applicant next referred to the substantial means of the CFMEU.  It tendered evidence which showed that as at 31 December 2007, the CFMEU Construction and General Division – National Office had net assets of $8,239,524.00 and the Construction and General Division Victorian Divisional Branch recorded net assets of $39,795,785.00.  This was not disputed by the CFMEU; nor did it seek to tender any evidence which demonstrated its current financial position.  

Absence or presence of prior convictions

28                        The Applicant relied on the conviction which was imposed on the CFMEU in Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 (which varied the declaration of Kiefel J in BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2000] FCA 1853, see further [42] below),   as a relevant prior conviction.  In that case the CFMEU was also required to pay indemnity costs: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2002] FCA 702.  The CFMEU accepted that prior convictions were relevant and may justify a heavier penalty than might otherwise be imposed.  Counsel for the CFMEU told the Court that the CFMEU had not been found guilty of contempt of Court in relation to any earlier action taken in Victoria; the “only potential prior conviction” of the CFMEU was the conviction imposed in the BHP Steel case.  It was submitted that “prior convictions of another autonomous division and/or autonomous branch of the respondent should not be taken into account”.  Reliance was placed on Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 and Temple v Powell (2008) 169 FCR 169.  Alternatively, the CFMEU submitted that, if the fine was considered a relevant prior conviction, in the absence of statutory provision, it could not lead to the imposition of a penalty that was disproportionate to the gravity of the instant offence: see Hoare v The Queen (1989) 167 CLR 348; Veen v The Queen (1979) 143 CLR 458 and Veen v The Queen (No 2) (1988) 164 CLR 465.

29                        The Applicant did not allege that the CFMEU had been convicted of any contempts of Court apart from the conviction incurred in BHP Steel.  It did, however, take issue with the CFMEU’s submissions relating to its Branch and Divisional structure.

30                        Such submissions are not novel.  They have been rehearsed in a number of the authorities relied on by the CFMEU.  These authorities have recently been reviewed by Jessup J in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548. 

31                        In Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758, the CFMEU was found guilty of contempt by reason of “its conduct in breaching the Order made against it … by failing immediately to cease strike action, namely, the authorizing of its members to stop performing work at the Applicant’s coal mines in New South Wales.” Hundreds of CFMEU members were involved in the strike at coal mines in New South Wales and Queensland. Counsel for the CFMEU submitted that it was the Mining and Energy division of the CFMEU that was convicted of contempt in that case, and that division had no involvement with Victoria, or the Victorian Divisional Branch of the Construction and General Division of the CFMEU, which was the autonomous division of the CFMEU involved in the contempt in this case.

32                        In Leighton Le Miere J was called on to determine the appropriate penalty to be imposed on the CFMEU for contraventions of s 38 of the Building and Construction Industry Improvement Act (Cth) and followed the approach taken by Branson J in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, which accepted that previous contraventions of Pt XA of the Workplace Relations Act 1996 (Cth) were a relevant consideration in determining the appropriate penalty for a subsequent contravention of Pt XA of that Act.  His Honour continued:      

“It is not appropriate to consider all contraventions of any industrial legislation by any Branch of the [CFMEU] anywhere in Australia. The [CFMEU] is a very large organisation that operates throughout Australia. Branches, Divisions, officers and representatives of the [CFMEU] are involved in dealings with employers in relation to industrial matters every day. It is inappropriate to take account of conduct of the [CFMEU] through various Branches, Divisions and officers or representatives that is of a different character than the contravening conduct in question and are contraventions of different legislation…” (Emphasis added).

33                        Prior convictions incurred as a result of misconduct by another autonomous division or branch of the CFMEU will not be taken into account where the character of the conduct is different from the conduct in question.  This is because of the dissimilarity of the offending conduct and not because of the degree of autonomy accorded to divisions and branches by the CFMEU rules.  As Jessup J pointed out in Williams, an earlier offence of the CFMEU is no less an offence by that corporate body because it was committed by a division or branch other than the one responsible for the offence presently under consideration.  Moreover, as his Honour observed, “the deterrent effect of a penalty would be significantly compromised if the court were obliged to turn a blind eye to a prior contravention merely because it occurred in a different division or branch of an organisation”: at [20]. 

34                        Both BHP Steel and the present case involved contempts of Court, occasioned by the breaching of an injunctive order.  I consider that the conviction in BHP Steel is a relevant prior conviction.

Public nature of the defiance

35                        The Applicant also submitted that the defiance of the Order was public in nature: see Mudginberri Station at108.  The Applicant tendered the transcript and a sound recording of a radio interview of Bill Oliver, Victorian Branch Secretary of the CFMEU Construction and General Division, in support of this contention.  The tender was not objected to by the CFMEU, save as to relevance.  The interview took place on 25 February 2009, the third day of the contempt hearing.  It was broadcast on 774ABC radio.  When asked by the interviewer “[w]hy are your members blocking access to the site?”, Mr Oliver replied “Well, we’ve got a problem down there … and we’ve ended up in a court situation, sort of thing, at the moment.”  It was clear that Mr Oliver was referring to this Court.  The Order was not mentioned.  Counsel for the CFMEU contested the submission that the CFMEU was in public defiance of the Court’s order.  He contrasted the circumstances in Mudginberri Station where the union was found to be in public defiance of the court’s order because the secretary of the union had stated publicly that the union would not pay the fine imposed by the Court with Mr Oliver’s remarks.  

36                        A public announcement of defiance of the kind which occurred in Mudginberri Station may readily be characterised as being “public in nature”.  The statement was made in circumstances where it was plainly intended that it would be reported and it was, in fact, widely disseminated in the media.  Although Mr Oliver was interviewed on a radio station he did not make any statement that the union was defying or was intending to defy orders made by this Court.  Plainly he was aware of the proceeding and he knew, or ought to have known, of the orders made by Marshall J.  He did not, however, acknowledge that the union was acting in defiance of them.  I do not, therefore, consider that the statements made by Mr Oliver during the radio interview can be said to have expressed defiance of the Court’s orders.

37                        There were, however, a number of acts of public defiance of the Court’s orders at the Site.  When presented with copies of the orders by representatives of the Applicant, a number of the CFMEU’s officials either refused to accept them or allowed them to fall to the ground despite being advised of the nature of the documents.  Statements were also made by some of the officials to the effect that they would act on advice from the union office rather than have regard to the terms of the orders which they were told required them to desist from obstructive action.  This conduct occurred outside the Site gates and in the presence of employees of the Applicant.  They constituted public acts of defiance even though they were not publicised to the wider community.  Such defiance is not to be treated with the same gravity as defiance of the kind which occurred in Mudginberri Station.  It is, however, a matter of relevance in fixing a penalty in the present case.

Deterrence

38                        The Applicant submitted that the conduct of the CFMEU in this proceeding, (see generally Bovis Lend Lease Pty Ltd v Construction Forestry Mining and Energy Union (2009) 254 ALR 306; [2009] FCA 194 at [23]-[29], [32]-[33]), was such that the Court could not be confident that the CFMEU would be deterred from engaging in similar conduct in the future unless a significant penalty were imposed.  It was accepted by the CFMEU that there was a need for specific and general deterrence where contempts of Court have occurred.  Counsel for the CFMEU submitted that the legal expenses which it had incurred in relation to the case constituted a significant deterrent, independently of any monetary penalty which might be imposed.  They contended that it was proper for the Court to take into consideration the “significant burden imposed by any costs order against [a] respondent”:  see BHP Steel at [13] and [53]; and the fact that the defending of the proceeding had involved a cost burden on the CFMEU. The CFMEU’s legal costs were said to be $78,000. In support of this contention, the CFMEU also relied on Ponzio v B & P Caelli Construction Pty Ltd [2006] FCA 1221; Ponzio v B & P Caelli Consturctions Pty Ltd (2007) 158 FCR 543; Pine v Expoconti Pty Ltd (2005) 147 IR 426; and Furlong v Maxim Electrical Services (Aust) Pty Ltd (No 3) [2006] FCA 1705.  

39                        The question of what, if any, influence awards of costs should have on the determination of penalties for contempt has been considered by a Full Court.  In Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350Moore J held (at 354) that it was appropriate to take into account, when determining the penalty, the significant burden likely to have been imposed by the indemnity costs order of the primary judge.  Tamberlin and Goldberg JJ agreed, with reservation (at 360):

“In light of the authorities referred to by his Honour [(at 351 – 353)] we accept that in exercising the wide discretion given as to the amount of any penalty, the consideration that indemnity costs have been awarded is a relevant matter to take into account. Nevertheless, given the underlying principle that disobedience to court orders must be discouraged, in a case such as the present, simply to impose a minimal penalty on the basis that indemnity costs have been ordered may be perceived to downplay the significance of the contempt. The contempt here was public, serious and substantial and the penalty should reflect these matters.”

40                        The additional cases relied on by the CFMEU involved contraventions of civil penalty provisions.  In those cases it was accepted that the trouble and cost of defending the proceeding served the purpose of personal deterrence.  The Full Court in Ponzio v B & P Caeli Constructions Pty Ltd (2007) 158 FCR 543 did not, however, consider that the need for general deterrence would be met unless a monetary penalty was also imposed:  see at [97], [164].  In any event and for the reasons earlier articulated, I consider that cases concerning contraventions of civil penalty provisions to be of limited assistance where contempts of court have occurred.  In the circumstances of this case deterrence both specific and general is an important consideration.  The penalty must be imposed at a meaningful level so as to deter the CFMEU, and others who, save for the risk of a high penalty, may otherwise engage in contravening conduct: see generally Australian Competition and Consumer Commission v Info4PC.Com Pty Ltd (2002) 121 FCR 24 at 54; Australian Competition and Consumer Commission v Hughes (2001) ATPR 41-807 at [24]; Trade Practices Commission v CSR Ltd [1991] ATPR 52,135 (41-076). The fact that a contemnor has incurred legal expenses in defending charges is to be borne in mind when a penalty is determined but this consideration does not weigh heavily in mitigation of penalty.

Apology or contrition

41                        It is common ground that the CFMEU has not apologised for its contempt.  The Applicant contended that the lack of contrition on behalf of the CFMEU and the absence of an apology meant that any penalty should not be mitigated on this account.  The CFMEU submitted that it “can properly be said to have purged its contempt”: the conduct of which it was found guilty had not re-occurred since 23 February 2009 and there had been no picket at the Site since 2 March 2009.  The CFMEU relied on BHP Steel and submitted that, where liability was contested, the lack of any apology or admission of guilt does not carry any significant weight.

42                        In BHP Steel the CFMEU had contested the charges of contempt at trial but was found guilty: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2000] FCA 1853. While the penalty hearing was pending, the CFMEU appealed. Following the penalty hearing Kiefel J held that, while the lack of an apology is not an aggravating circumstance, the making of an apology can operate to reduce a penalty: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2001] FCA 336.  Her Honour ordered that the CFMEU be fined $200,000.  On appeal, a Full Court found that the CFMEU was guilty of contempt on a more limited basis than that found by her Honour: see Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758.  The matter was remitted to Kiefel J for reconsideration of the question of penalty.  The CFMEU then apologised.  It submitted that it had been unable to tender an apology until after the Full Court had determined the extent of its liability: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2002] FCA 702 at [19].  Her Honour was not re-assured by the apology, but reduced the penalty to $120,000.  The CFMEU again appealed.  In Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350Tamberlin and Goldberg JJ (with whom Moore J generally agreed) said (at 360 [51]):

“A number of other matters were raised in argument concerning the absence of any proper timely apology or of any admission of guilt. However, given the fact that the liability for contempt was contested, in our view, these considerations do not have any significant weight.”

Their Honours reduced the amount of the fine to $50,000.  For completeness I note that their Honours delivered a further judgment in which they specified the time for payment of the fine: see Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 62.  

43                        In my view, the position remains that, where a contemnor has admitted the contempt, genuine contrition and a full and ample apology may reduce the penalty: see, for example, Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR494 at 501; Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (2000) 97 IR 474; Australian Competition and Consumer Commission v Info4PC.Com Pty Ltd (2002) 121 FCR 24.  However, where, as here, the charges of contempt are contested, the absence of an apology by the contemnor does not carry any significant weight in the sentencing process.

COSTS

44                        The Applicant submitted that the CFMEU should pay its costs of both the contempt motions and the penalty hearing on an indemnity basis.  The CFMEU submitted that each party should bear its own costs of the motions (both the Applicant’s unsuccessful motion dated 20 February 2009 and the motion dated 24 February 2009 which was successful in part), and that it should only pay the Applicant’s costs of the penalty hearing calculated on a party and party basis.

45                        The Court has an unfettered discretion in determining whether and on what basis to award costs: see Oshlack v Richmond River Council (1998) 193 CLR 72; Bodruddaza v Minister for Immigration and Multicultural Affairs (2007) 228 CLR 651.  It is common for costs to be awarded in favour of a successful Applicant in contempt proceedings: see BHP Steel at 351; Rip Curl International Pty Ltd v Phone Lab Pty Ltd (2004) 63 IPR 496.  Courts, however, have awarded costs on a party and party basis (see: for example, Jones v Toben (No 2) [2009] FCA 477) and on an indemnity basis (see: for example, BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2002] FCA 702).  The reason that indemnity costs are frequently awarded where an applicant has successfully prosecuted charges of contempt is that the applicant has not been seeking any remedy on its own behalf but rather has been upholding the various public interests which are served by prosecutions for contempt of Court. 

46                        In this case, the Applicant’s case was only partly successful.  This gives rise to the possibility of an apportionment of costs: see, for example, Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 48,134; Inn Leisure Industries Pty Ltd (Provisional liquidator appointed) v D F McCloy Pty Ltd (No 2) (1991) 28 FCR 172.  

47                        No evidence was filed as to the Applicant’s costs.  Counsel for the Applicant advised the Court that his client’s costs were $125,000, calculated on a solicitor/client basis.   As already noted counsel advised the Court that the CFMEU’s legal costs in defending the contempt charges was in the order of $78,000.

CONCLUSION

48                        Although the CFMEU has been found guilty of two contraventions of the Order those contraventions occurred only a few days apart and were the result of continuing conduct.  I, therefore, consider it appropriate to impose one penalty in respect of these incidents.  Having regard to the considerations outlined above, I consider that a penalty in the sum of $75,000 is appropriate.  

49                        The CFMEU should also pay the Applicant’s costs of the penalty hearing on an indemnity basis.  The motion dated 20 February 2009 was not successful.  The motion dated 24 February 2009 was successful in part.  Although the majority of the evidence was filed prior to 24 February 2009, the Applicant relied on all of the evidence to support both charges.  The findings of contempt related to incidents which occurred on 19 and 23 February 2009 that is on days near the beginning and the end of the relevant period.  In my view, it is appropriate that the CFMEU pay half of the Applicant’s costs of the contempt proceeding on an indemnity basis.

Associate: 

Dated:         19 June 2009