FEDERAL COURT OF AUSTRALIA

Brookfield Multiplex FSH Contractor Pty Ltd v McDonald [2013] FCA 1380

THE COURT ORDERS THAT:

1.    A penalty of $40,000 be imposed on the first respondent.

2.    The penalty imposed in paragraph 1 be paid into the Consolidated Revenue Fund within 60 days of these orders.

3.    The first respondent pay the applicants’ costs of the penalty hearing on an indemnity basis to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    By a statement of charge brought by the applicants, the first respondent (McDonald) and the Construction, Forestry, Mining and Energy Union (CFMEU) are charged with having committed a civil contempt on 26 February 2013 by disobeying an order of this Court made on 15 February 2013. The content of the statement of charge is largely replicated in the statement of agreed facts referred to below.

2    At the outset of the hearing, the applicants discontinued their application against the CFMEU, and McDonald admitted liability for the contempt with which he is charged.

3    McDonald's admission of liability constitutes an admission as to each of the elements of a civil contempt identified in, for example, Australasian Meat Industry Employees' Union v Mudginberri Station Proprietary Limited (1986) 161 CLR 98 at 106-107, 112-113 (Mudginberri Station); Bovis Lend Lease Pty Ltd v Construction, Forestry, Mining and Energy Union (2009) 254 ALR 306 at [47]; Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] VSC 275 at [8]; and Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 at [31].

Agreed statement of facts

4    The hearing proceeded with an agreed statement of facts (ASOF), amended during the hearing, constituting the evidence. I will now set this out in full.

Background

1.    The First Applicant is, and was at all material times:

(a)    a corporation within the meaning of the Corporations Act 2001 (Cth) (Corporations Act); and

(b)    engaged as the head contractor to perform building work at a building project known as the Fiona Stanley Hospital Project located at Murdoch Drive, Murdoch, Western Australia (FSH Site).

2.    The Second Applicant is, and was at all material times:

(a)    a corporation within the meaning of the Corporations Act; and

(b)    engaged as the head contractor to perform building work at the St John of God Murdoch Hospital Project and the Western Australian Institute of Medical Research Project, both located at Murdoch Drive, Murdoch, Western Australia.

3.    The Third Applicant is, and was at all materials times a corporation within the meaning of the Corporations Act.

4.    The First Respondent (McDonald) is and was at all material times:

(a)    an officer of the Third Respondent (CFMEU), holding the office of Assistant Secretary of the CFMEU's Construction and General Division, Western Australian Divisional Branch,

(b)    an employee of the CFMEU.

5.    The CFMEU is and was at all material times:

(a)    an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (FW (RO) Act); and

(b)    by reason of the matters in paragraph 5(a), a body corporate pursuant to section 27 of the FW (RO) Act.

The Injunction

6.    On 15 February 2013, amongst other things, the following order (Order 2) was pronounced and made during a hearing in these proceedings against McDonald on the application of the Applicants:

"2.    Until the hearing and determination of this proceeding or further order, Joseph McDonald and the Construction, Forestry, Mining and Energy Union (whether by their officers, employees, agents or howsoever otherwise) be restrained from:

(a)    attending within 100 metres of any entrance or exit to:

(i)    Fiona Stanley Hospital Project located at Murdoch Drive, Murdoch, Western Australia;

(ii)    Western Australia Institute of Medical Research located at Murdoch Drive, Murdoch, Western Australia; and

(iii)    St John of God Murdoch Hospital, located at Murdoch Drive, Murdoch, Western Australia,

(together, the Sites), save for such entry to the Sites as may be authorised by law pursuant to the provisions of Part 3-4 of the Fair Work Act 2009 (Cth), or for the purpose of using a public road for reasons unconnected with the Sites;…."

7.    At all material times, Order 2 remained operative and binding on McDonald.

8.    When Order 2 was made by the Court on 15 February 2013, McDonald was not present in court, but the CFMEU was present and appeared by Jack Nicholas, a solicitor employed by the CFMEU, throughout the proceedings on that day, including when Order 2 was pronounced.

9.    A copy of the orders containing Order 2, which was endorsed with a warning of the consequences if the Order was disobeyed, was validly and effectively served personally on McDonald at or about 3.45pm on 18 February 2013.

10.    A copy of the endorsed orders containing Order 2, in the form in which they were served on McDonald as set out in paragraph 9 is annexed and marked ‘A’.

The Contempt on 26 February 2013

11.    On 26 February 2013, Michael Buchan (Buchan), the Secretary of the CFMEU, attended and entered the FSH Site pursuant to an entry notice issued to "Brookfield Multiplex" at 9.08am on 25 February 2013 under section 484 of the Fair Work Act 2009 (Cth) (FW Act). Buchan confirmed his proposed entry, pursuant to this notice, with Brett Beattie, Site Manager.

12.    Buchan's attendance at the FSH Site followed a meeting with Stephen McConkey (McConkey), Regional Managing Director, at 10:35am on 26 February 2013 (Buchan and McConkey Meeting).

13.    During the course of the Buchan and McConkey Meeting, Buchan requested that he hold a meeting at the FSH Site on 26 February 2013 to "settle things down" and there was no request made or authorisation provided for McDonald to also attend. McConkey agreed to Buchan's request for him to attend the FSH Site on 26 February 2013.

14.    Shortly before about 12.20pm on 26 February 2013, McDonald attended within 100 metres of Gate Three at the FSH Site, which is located at the southern side of the FSH Site (Southern Entrance). McDonald understood, quite erroneously, that the Order had the effect of excluding him from the FSH Site rather than the 100 metre exclusion zone. He made this error because, although he was aware that the Order had been made, and had been personally served with the Order on 18 February 2013, he "had not read it thoroughly" or "in detail". (The words inside the quotation marks are McDonald’s own words, taken from an affidavit that he made in connection with this interlocutory application on 22 May 2013.)

15.    The Southern Entrance is an entrance or exit to the FSH Site within the meaning of Order 2(a)(i).

16.    McDonald then approached, entered and then remained inside the gate house, which is a solid enclosed structure located at the Southern Entrance (Gate House), until about 12.30pm on 26 February 2013.

17.    At or about 12.25pm on 26 February 2013, at which time McDonald was still inside the Gate House, Buchan was informed that McDonald was in breach of the Order by being within 100 metres of an entrance or exit to the FSH Site (Notification of McDonald's Breach).

18.    After, and notwithstanding being given the Notification of McDonald's Breach, Buchan, in response to being asked if he had read the Order, said words to the effect of: "Not all of it. It won't be a problem because Joe [McDonald] will only be here for a few minutes".

19.    At or about 12.30pm on 26 February 2013, having remained in the Gate House since about 12.20pm on 26 February 2013, McDonald left the Gate House and walked to an area immediately adjacent to the Gate House known as the muster area (Muster Area).

20.    The Muster Area is located on the FSH Site and within 100 metres of the Southern Entrance.

20A.    McDonald's state of mind was as follows:

(a)    I attended the muster point adjacent to the FSH Site on 26 February 2013;

(b)    The muster point is not on the FSH Site, but is adjacent to it;

(c)    I was not aware that this action would breach the Injunction.

21.    When he arrived at the Muster Area, and for the whole of the period from about 12.30pm until about 1.00pm on 26 February 2013 during which he remained at the Muster Area, McDonald stood immediately next to Buchan on an elevated platform.

22.    At or about 12.40pm on 26 February 2013, Buchan addressed a meeting of approximately 300 construction workers from the FSH Site (Meeting) for approximately five minutes.

23.    Shortly after Buchan addressed the Meeting, at about 12.45pm on 26 February 2013, McDonald addressed the Meeting for approximately 15 minutes using a microphone that was amplified by a portable speaker. Neither McDonald nor Buchan breached the Order by virtue of the words uttered. Neither expressed hostility to the Order of the Court.

24.    During his address to the Meeting, McDonald said words to the effect of: "Multiplex only listens when you take industrial action like the industrial action taken by workers on a Multiplex site during negotiations on the current EBA." However, it is agreed that McDonald was not urging any industrial action against the Applicants, in breach of the Order.

25.    Shortly after about 1.04pm on 26 February 2013, after McDonald had been standing immediately next to Buchan at the Muster Area for about 30 minutes since about 12.30pm on 26 February 2013, the Meeting concluded and Buchan and McDonald walked out of the Muster Area towards the Southern Entrance, exited the FSH Site through the Southern Entrance, and then passed beyond 100 metres from the Southern Entrance.

26.    For the whole of the period from shortly before about 12.20pm on 26 February 2013 (when McDonald first attended within 100 metres of the Southern Entrance) until shortly after about 1.04pm on 26 February 2013 (when McDonald passed beyond 100 metres from the Southern Entrance), McDonald was and remained within 100 metres of the Southern Entrance.

27.    After leaving the FSH Site, Buchan and McConkey had a telephone conversation, during the course of which, the following exchange occurred:

McConkey:    "I'm a bit disappointed that you had to take Joe."

Buchan:    "Joe needed to be there as he was involved."

McConkey:    "Surely you could have conveyed that message yourself."

Buchan:    "No, I needed him here, as he was involved and I wasn't."

McConkey:    "I'm really disappointed in that. We'll be engaging the lawyers to tell them about this and it'll go where it needs to go."

28.    The attendance by McDonald was not authorised by any of the Applicants or by law pursuant to the provisions of Part 3-4 of the FW Act, or was for the purpose of using a public road for reasons unconnected with the Sites referred to as such in Order 2.

29.    At all material times, McDonald had knowledge of the fact that the Order had been granted against him.

30.    McDonald understood that the Order prevented him from accessing the FSH Site but did not appreciate that it also prevented him from being within 100 metres of any entrance to the FSH Site.

31.    McDonald's misunderstanding of the Order, as described in paragraph 30, does not excuse his breach of the Order. McDonald subsequently acknowledged this in an affidavit, and admitted liability for the breach. He accepted that the breach was a serious matter, and apologised to the Court. These statements constituted admissions, which are also accepted as agreed facts.

McDonald's breach of Order 2

32.    By reason of the facts and matters set out in paragraphs 14 to 26 above McDonald committed a contempt of Order 2 on 26 February 2013 by engaging in the conduct set out in paragraphs 14 to 26 above.

Previous contempt findings against McDonald

33.    The table below sets out previous proceedings in which McDonald has been found guilty of contempt with the penalty imposed also stated:

    (Original emphasis.)

5    The issues for determination are the assessment of the penalty for McDonald's admitted contempt and whether any monetary penalty should be ordered to be paid to the applicants. McDonald accepts that he should pay the applicants’ costs on an indemnity basis: National Australia Bank Limited v Juric (No 2) [2001] VSC 398 at [67]-[70].

Jurisdiction

6    The Court has power to punish contempt of its orders under s 31(1) of the Federal Court of Australia Act 1976 (Cth). This provision confirms that 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. Accordingly, s 31(1) requires to be read in conjunction with s 24 of the Judiciary Act 1903 (Cth) which empowers the High Court to punish for contempt.

Relevant principles

7    The purpose of a penalty for a civil contempt “is to protect the efficient administration of justice by demonstrating that the court's orders will and must be enforced”: Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 at [36] (BHP Steel).

8    The power to punish a contempt serves the purpose of disciplining the defendant and vindicating the authority of the court: Mudginberri Station at 112-113; Bovis Lend Lease v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 650 at [11]-[12] (Bovis (No 2)). The public interest in the administration of justice requires compliance with the orders of a court: Witham v Holloway (1995) 183 CLR 525 at 532-533; see also, Law Institute of Victoria Limited v Nagle [2005] VSC 47 at [4]-[5].

9    The considerations generally relevant to the determination of an appropriate penalty for civil contempt are discussed in Bovis (No 2) at [6]. They are capable of application in this case and include:

(a)    The contemnor's personal circumstances;

(b)    The nature and circumstances of the contempt;

(c)    The effect of the contempt on the administration of justice;

(d)    The contemnor's culpability;

(e)    The need to deter the contemnor and others from repeating conduct;

(f)    The absence or presence of a prior conviction for contempt;

(g)    The contemnor's financial means; and

(h)    Whether the contemnor has exhibited general contrition and made a full and ample apology.

10    I will consider such of these as are particularly significant in this case.

The nature and circumstances of the contempt

11    A distinction is drawn, for example, between a casual, accidental or unintentional failure to comply with the court's orders on the one hand, and on the other a failure that involves a deliberate flouting of the court's orders or public defiance of the court's order: BHP Steel at [38].

12    The first category calls for a less serious penalty or punishment than the second category.

13    McDonald's contempt does not fall into either category. According to the ASOF McDonald “had not read it [the order] thoroughly” or “in detail”. These very general expressions have no specific content to explain what is meant, more fully, by them. However, they demonstrate that McDonald made no reasonable attempt to comply with the Court's order.

14    The three orders made by the Court on 15 February 2013 were in short compass. The only substantive order is Order 2 which under para (a) commences with the words “attending within 100 metres of any entrance or exit to” immediately before, at (a)(i), the words “Fiona Stanley Hospital Project …”.

15    It is difficult to see how, on even a cursory reading of the document, this could have escaped McDonald’s notice. Yet it is an agreed fact that he erroneously understood that this order had the effect of excluding him from the FSH Site rather than the 100 metres exclusion zone. His reading of the order must have been something less than cursory.

16    There was no reasonable effort made by McDonald to ascertain and understand the terms of the order, not least by reading it. McDonald knew that the order had been made. He knew that it related to his conduct on the applicants' sites, and he was served with the order personally. Despite this he did not bother to read the order thoroughly or in detail.

17    This was so notwithstanding that, less than six months before, McDonald had been found guilty of contempt of another order of this Court, and fined a total $50,000 ($25,000 for each of two separate contempts): Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2012) 224 IR 457 (the Diploma case). On that occasion his explanation for his contempt was that he had "assumed" that the order was no longer in operation.

18    Such a careless attitude to his obligations to the Court, and a failure that is incompatible with a diligent attempt to implement the Court's order, are each significant manifestations of McDonald's contempt: BHP Steel at [39].

19    That McDonald was operating on 26 February 2013 with an imperfect understanding of the order was entirely due to his failure to properly read and consider Order 2. McDonald, in his written submissions, accepts that this is not one of the rare cases where, despite liability being established, a court might decline to proceed simply because the breach was "casual, accidental or unintentional" and that although McDonald did not know the order's content, he should have known. It was accordingly wilful as a matter of law. It was the product of an unreasonable indifference to what he must have known was a most serious order of the Court. As a senior official of the CFMEU he knew he was the subject of an injunctive order. He ought to have read the order carefully. He should also have made it his business to know exactly what constituted, relevantly, the Fiona Stanley Hospital Project located at Murdoch Drive, Murdoch, Western Australia.

20    As a fact the Muster Area where McDonald addressed the Meeting was located on the FSH Site. It is agreed that McDonald’s state of mind when he attended there was that the Muster Area was adjacent to but not on the FSH Site. Again, there is no explanation in the agreed facts as to why McDonald held this erroneous view.

21    It is a reflection of what I regard as McDonald’s cavalier attitude to compliance with Order 2.

McDonald's culpability

22    McDonald's actions were both voluntary and deliberate. There is no requirement that a contemnor had the subjective intent to deliberately breach an order; it is necessary only that, as in this case, the person was aware of the order and the acts that constituted the disobedience were deliberate and not otherwise inadvertent or involuntary: Australian Competition and Consumer Commission v Info4PC.com Pty Ltd (2002) 121 FCR 24 at [10].

The consequences of the contempt

23    The applicants sustained no loss or damage as a result of McDonald's contempt. However, that is not a factor that weighs significantly in his favour in the determination of the appropriate penalty: Bovis (No 2) at [16]-[17].

Specific and general deterrence

24    Both specific and general deterrence are relevant considerations and they require that a penalty be set in a meaningful amount: Bovis (No 2) at [38] and [40].

25    Justice Dowsett in Temple v Powell (2008) 169 FCR 169 at [64] observed that the general record of conduct of the contravenor is a relevant consideration upon the question of penalty, including the person’s attitude to the law as disclosed by such conduct. Repeated conduct of a particular kind may call for a more significant weight to be attributed to specific deterrence. Whilst not a contempt case these observations are nonetheless, in my opinion, apt to the present case.

26    It is relevant to consider such antecedent conduct to consider whether, for example, the disobedience is an “uncharacteristic aberration” or a “continuing attitude of disobedience to the law”: Veen v The Queen [No 2] (1988) 164 CLR 465 at 477 per the majority.

27    McDonald also has an earlier prior conviction for contempt of court for breach of an undertaking given to the District Court of Western Australia for which, in contempt proceedings in the Supreme Court of Western Australia, he was fined $2,000: Zaknich v McDonald [2000] WASC 151. This followed a trial. McDonald had undertaken to the District Court that he would not enter certain premises unless he had first complied with certain conditions and would not hold discussions on those premises with employees other than during the employees’ meal time or other breaks.

28    McDonald’s evidence that he had not entered the relevant premises or that the relevant meeting took place where he said it had was not believed by the trial judge. Justice Scott at [48] found that McDonald had “never put his mind to the question as to whether the area where the meeting occurred was in breach of his undertaking”, and at [50] that he “paid scant regard to the undertaking” and that “its terms mattered little to him”. His Honour concluded that “[h]e [McDonald] did not consider the undertaking to be of any particular significance and … was not concerned whether his conduct was in breach of the undertaking or not”. Later, at [67], his Honour described McDonald’s actions as a “blatant disregard of his undertakings”.

29    McDonald’s careless attitude in this case is consistent with his erroneous assumption made in the Diploma case and his blatant disregard of the undertaking in Zaknich.

30    This reflects McDonald’s indifference to compliance with undertakings to and orders of courts. His antecedents in this respect, together with his conduct in this case, establish a pattern of indifference. This I find should be given significant weight in assessing an appropriate penalty.

McDonald's apology

31    McDonald has admitted breaching the order and apologised to the Court for doing so. His contrition is a factor relevant to penalty.

Penalty

32    McDonald submits for the reasons which follow that the objective gravity of his breach is at the lower end of such breaches: it was of short duration - 40 minutes; it was a breach by entering a penumbral exclusion zone, not by entering the site itself; it occurred 35 metres off site, at lunchtime, without causing any loss of work; it was not associated with other illegal activity such as imposing secondary boycotts; rather, it occurred in the context of a lawful and prudent intervention by Mr Buchan. He submits, therefore, that the contempt was unusually free of disruptive results and that it terminated voluntarily and peacefully. He contends that it is less egregious than other examples of contempt.

33    These submissions are in part factually wrong. Part of the conduct constituting the contempt occurred on the FSH site.

34    General deterrence is important. However, for reasons I have expressed there is a need for greater weight to be given in this case by way of specific deterrence. It is evident that the penalty imposed on McDonald in 2012 did not achieve the purpose of specific deterrence. The contempt in the present case was serious. It disclosed a cavalier attitude on the part of McDonald both to Order 2 and to this Court. McDonald seems to have learned nothing following the imposition of the penalties in Diploma. His repeated conduct, as I have observed, discloses a pattern of indifference. This weighs heavily against any moderate penalty contended for on his behalf. Nonetheless, I take into account McDonald’s contrition as a discounting factor. I would impose a penalty of $40,000.

Payment of the penalty

35    The applicants submit that there is jurisdiction to order that the penalty be paid to them. They contend that, in making this application, they are acting in a position analogous to a common informer, and for the same reasons common informers are often the recipients of a penalty, such an order should be made in this case. They rely upon Woodside Burrup Pty Ltd v Construction, Forestry, Mining and Energy Union (2011) 209 IR 302.

36    It was submitted for McDonald that the public nature of the sanctions sought, the absence of loss or damage and the danger of attaching a financial attraction to the establishment of aggravating features on penalty militated against the making of the order which the applicants seek.

37    The matter is not without some controversy. Woodside Burrup concerned whether civil penalties imposed under industrial legislation ought be paid to the private litigant prosecuting the penalty claims rather than, as here, a penalty imposed for contempt. No submission was made that the Court did not have power to make such an order in this case. Indeed it seems to have been assumed that the Court does have such a power. I do not need to determine this question. Even assuming that the Court does have such power I would not exercise it in the case of contempt proceedings. Such proceedings as I have observed have a particularly public character concerning, as they do, the efficient administration of justice, and vindicating the authority of the Court.

38    Those features are absent in civil penalty proceedings brought in the industrial context. I will order that the penalty be paid into the Consolidated Revenue Fund within 60 days of these orders.

Orders

39    Accordingly, for these reasons there will be orders that:

1.    A penalty of $40,000 be imposed on the first respondent.

2.    The penalty imposed in paragraph 1 be paid into the Consolidated Revenue Fund within 60 days of these orders.

3.    The first respondent pay the applicants’ costs of the penalty hearing on an indemnity basis to be taxed if not agreed.

Associate:

Dated:    17 December 2013