Construction, Forestry, Mining & Energy Union v BHP Steel(AIS) Pty Ltd [2003] FCAFC 13 (21 February 2003)

Last Updated: 21 February 2003

FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 13

CONTEMPT OF COURT - appellant found guilty of contempt of court - penalty reduced following appeal to Full Court - appeal from judgment on assessment of penalty - factors not taken into account by primary judge - partial compliance with court order - conduct of officials at union meeting - rationale for exercise of contempt power - nature of contempt by respondent - delay in giving effect to court order - impediment to proper administration of justice - contempt by representative body - whether primary judge erred in assessment of penalty - whether appellant's compliance in Queensland should have been taken into account - whether conduct of union officials should have been considered when assessing penalty

COSTS - indemnity costs awarded against appellant by primary judge - costs order not taken into account by primary judge when fixing penalty imposed - discretion to award indemnity costs in contempt proceedings - public nature of appellant's contempt - whether primary judge erred in not considering indemnity costs awarded when assessing penalty imposed

Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 cited

Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd (1986) 10 FCR 177 cited

Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, Federal Court, 3 May 1991) cited

Re Wilcox; Ex parte Venture Industries Pty Ltd (2) (1996) 72 FCR 151 cited

McIntyre v Perkes (1988) 15 NSWLR 417 referred to

Adlam v Noack [1999] FCA 1606 referred to

LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213 cited

Perkes v Landon (1988) 15 NSWLR 408 cited

Plating Company v Farquharson (1881) 17 Ch 49 referred to

Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 cited

Attorney-General; ex rel Leyton (Essex) Urban District Council v Walthamstow Urban District Council (1895) 11 TLR 533 cited

Rex v Ogilvie (1928) 23 Tas LR 69 at 76 referred to

GCT Management Ltd v The Laurie Marsh Group Ltd [1973] 14 RPC 432 referred to

Michigan v Mathew [1966] 3 RPC 47 cited

Marron v Salvemini; Re Scardigno [1969] WAR 178 cited

Sunibrite Products (Aust) Pty Ltd v Jabuna Pty Ltd [1980] FCA 4; (1980) 47 FLR 73 referred to

Brambles Holdings Ltd v Trade Practices Commission [1980] FCA 120; (1980) 32 ALR 328 referred to

Australian Competition and Consumer Commission v Australian Business Reports Pty Ltd (1997) 19 ATPR 41-577 referred to

Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Limited [2002] FCA 1758 discussed

Australasian Meat Industry Employees Union v Mudginberri Station Pty Limited [1986] HCA 46; (1986) 161 CLR 98 followed

Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 referred to

House v the King [1936] HCA 40; (1936) 55 CLR 499 referred to

Shott AG Australian Supplement to Borrie & Lowe's Law of Contempt, (2nd ed)

Lowe & Sufrin Borrie & Lowe's Law of Contempt, 3rd ed., 1996

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v

BHP STEEL (AIS) PTY LTD ACN 000 019 625

Q 100 OF 2002

MOORE, TAMBERLIN AND GOLDBERG JJ

SYDNEY

21 FEBRUARY 2003

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 100 OF 2002

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	CONSTRUCTION FORESTRY, MINING AND ENERGY UNION APPELLANT
AND:	BHP STEEL (AIS) PTY LIMITED ACN 000 019 625 RESPONDENT
JUDGES:	MOORE, TAMBERLIN AND GOLDBERG JJ
DATE OF ORDER:	21 FEBRUARY 2003
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be allowed in part and the order as to the amount of the penalty be set aside.

2. The appellant pay a penalty of $50,000, such fine to be paid to the District Registrar, Federal Court of Australia, Commonwealth Law Courts, Level 6, 119 North Quay, Brisbane.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 100 OF 2002

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	CONSTRUCTION FORESTRY, MINING AND ENERGY UNION APPELLANT
AND:	BHP STEEL (AIS) PTY LIMITED ACN 000 019 625 RESPONDENT

JUDGES:	MOORE, TAMBERLIN AND GOLDBERG JJ
DATE:	21 FEBRUARY 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

MOORE J:

1 I have read the joint judgment of Tamberlin and Goldberg JJ and I agree with their Honours that the learned primary Judge erred in the exercise of her discretion in the way they discuss. I generally agree with their reasons, including why a penalty should still be imposed and the amount. However I should refer to one further matter bearing on the question of penalty. Counsel for the Union submitted that her Honour erred in law by failing to take into account the heavy costs burden imposed by the order for indemnity costs when determining the penalty. At pars [23] and [26] of the judgment of 4 June 2002, the primary Judge said:

"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.

...

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."

2 On appeal, the majority of the Full Court did not address the specific issue of indemnity costs in contempt proceedings now raised in this appeal. Merkel J did however briefly advert to this issue. At par [189] his Honour said:

"It was open to her Honour and, if it be relevant, to this Court, to have regard to the burden of the costs order in fixing penalty. However, it is also open, as a matter of discretion, to regard each as a separate issue."

3 There is no settled principle or rule of law that when a judge imposes a penalty in contempt proceedings, the judge must take into account the impact of an order requiring the contemnor to pay the moving party's costs on an indemnity basis. Accordingly, it cannot be said that the primary Judge erred in determining the penalty without considering the impact of the indemnity costs order. However, because her Honour erred in other respects this Full Court is exercising the discretionary power to impose a penalty. In doing so, what is the relevance of the indemnity costs order made by her Honour?

4 The power to award costs in all proceedings is a discretionary one. There are however a number of general principles that govern the exercise of the Court's discretion to award costs. One is the general convention that costs, in the absence of some special circumstances which may justify some other order, are awarded to the successful litigant on a party and party basis: see generally Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225.

5 Because of the potentially burdensome nature of indemnity costs, they are awarded in exceptional cases. The discretion to award indemnity costs is exercised in "special" or "unusual" circumstances, where the justice of the situation requires the making of such an order: see especially Colgate-Palmolive Company v Cussons Pty Ltd, Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd (1986) 10 FCR 177. While the categories of cases where indemnity costs can be ordered are not closed [Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, Federal Court, 3 May 1991) per French J at [8]], the categories of case tend to involve gross party misconduct during the trial or proceedings: see also the judgment of the Full Court in Re Wilcox; Ex parte Venture Industries Pty Ltd (2) (1996) 72 FCR 151.

6 In contempt proceedings the discretion to award costs on an indemnity basis appears to be founded on particular considerations. It is clear from the primary judge's reasons that her Honour saw the public role taken by BHP in prosecuting the contempt proceedings, as a central factor in the order for indemnity costs. There has been limited judicial consideration of what principles (if any) govern the ordering of indemnity costs in contempt cases. It is at least clear, following McIntyre v Perkes (1988) 15 NSWLR 417 (see Samuels JA 424-428 and Rodgers A-JA 434-436) (which involved a comprehensive review of the authorities including some suggesting the existence of a rule), that there is no general principle or rule of law in contempt cases that a successful applicant or successful prosecutor is routinely awarded costs on an indemnity basis: see also to the same effect in this Court, Adlam v Noack [1999] FCA 1606 per Mansfield J at [29], LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213 per Lindgren J at [64]-[65]. Indeed as is the conventional practice in most cases, costs are routinely awarded in contempt cases on a party and party basis. In McIntyre v Perkes Samuels JA (at 424 and 428) relevantly said:

"The respondent, however, submitted that the judge had erred in failing to apply `the normal rule which in cases where an intentional contempt of Court is proved on an application by a private prosecutor is for costs to be ordered on a basis calculated substantially to indemnify the prosecutor.'

...

In my opinion this survey, no doubt not exhaustive but reasonably extensive, of the textbooks and cases does not reveal any rule of law or any established practice binding upon the judge in this case and requiring him to make one of the orders for which the respondent contended."

7 The decision to award costs on an indemnity basis in contempt cases is a discretionary one: McIntyre v Perkes per Samuels JA 424 and 428 and Rogers A-JA 434; in this Court LED Builders Pty Ltd v Eagle Homes Pty Ltd per Lindgren J at [64] and Adlam v Noack per Mansfield J at [29]. One basis for doing so is to `punish' a contemnor: see Perkes v Landon (1988) 15 NSWLR 408 at 414.

8 In a significant number of cases where indemnity costs have been awarded in contempt proceedings, there is a link between the award of indemnity costs and the penalty for contempt. Costs can be explicitly awarded in substitution for or in lieu of a monetary or other penalty. In Plating Company v Farquharson (1881) 17 Ch 49 at 57 James LJ said that in a case of committal the costs are sometimes given to the party moving by way of indemnifying him, instead of committing the respondent: see also Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 at 197 (the writ of sequestration was suspended); Attorney-General; ex rel Leyton (Essex) Urban District Council v Walthamstow Urban District Council (1895) 11 TLR 533 at 534 (the writ of sequestration was suspended). In Adlam v Noack Mansfield J said at [29]:

"such an order [for indemnity costs] is made from time to time, particularly where no other punishment for the contempt is ordered." (Emphasis added).

9 See also Shott AG, Australian Supplement to Borrie & Lowe's Law of Contempt (2nd ed) at 120, for a list of additional Australian and other authorities where in contempt proceedings indemnity costs were ordered in lieu of penalty. In Rex v Ogilvie (1928) 23 Tas LR 69 at 76 Nicholls CJ (on behalf of the Court) imposed no fine, but ordered the contemnor to pay the whole costs of the proceeding: to similar effect was the judgment in GCT (Management) Ltd v The Laurie Marsh Group Ltd [1973] 14 RPC 432 at 438, a case where the respondent was found to have breached a series of undertaking to the court: see also Michigan v Mathew [1966] 3 RPC 47 at 53. In some cases the court has clearly indicated that an order for costs on an indemnity basis is considered to be a wholly sufficient penalty for contempt: see Marron v Salvemini; Re Scardigno [1969] WAR 178 at 182.

10 The imposition of a costs order with significant financial consequences as a means of punishing a contemnor is evident in cases decided in this Court. In Sunibrite Products (Aust) Pty Ltd v Jabuna Pty Ltd [1980] FCA 4; (1980) 47 FLR 73 Bowen CJ said at 79:

"[I]t appears to me that it will be sufficient to mark the court's disapproval of the failure to comply in a proper way with the undertaking if Jubuna is ordered to pay Sunibrite's costs as between solicitor and client of this motion."

In Brambles Holdings Ltd v Trade Practices Commission [1980] FCA 120; (1980) 32 ALR 328 at 342, Franki J said:

"I consider that I should do no more than mark the court's disapproval by ordering the respondents to pay to the applicant its costs of the motion as between solicitor and client."

In Australian Competition and Consumer Commission v Australian Business Reports Pty Ltd (1997) 19 ATPR 41-577, Finn J said at 44,010:

"In the circumstances the sanction appropriate to vindicate the authority of the Court and the public interest in the administration of justice would be an order that the respondents pay the applicant's costs of and incidental to this application, to be taxed on an indemnity basis."

11 Although the conduct in question in Sunibrite Products v Jabuna and Brambles Holdings v Trade Practices Commission was considered to be "minor" or "technical" contempt, costs as a penalty have been ordered where there has been "grievous" or "serious" contempt: see for example Michigan v Mathew above where an order for indemnity costs was seen as a sufficient penalty for "grievous" conduct; see also GCT (Management) Ltd v The Laurie Marsh Group Ltd where Whitford J indicated he did not regard the contempt [the breach of the undertakings] as trivial.

12 In the 3rd edition of Borrie and Lowes Law of Contempt the learned authors say at 641 that an award for costs on any basis may in itself amount to a substantial sanction and can be taken into account in determining what sum, if any, the contemnor should be fined. In Adlam v Noack Mansfield J said at [30]:

"I have had regard to the circumstances in which Ms Adlam was, in effect, obliged to institute the contempt proceedings. She is not only endeavouring to protect her own interests, but also ensuring that the infringement of an order of the Court does not go unremarked. I have, to a not insignificant degree, tempered the fine which I would otherwise have imposed upon Mr Noack, to reflect the order for costs in those terms." (Emphasis added).

13 In the present matter I consider that it is 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, which has not been varied as a result of this appeal. To the extent that the appellant challenged the indemnity costs order in so far as it related to numerous affidavits relied on by BHP, the preparation of which the primary Judge said should be included as part of the costs, the relevance of those affidavits was singularly a matter for her Honour.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

Associate:

Dated: 21 February 2003

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 100 OF 2002

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	CONSTRUCTION FORESTRY, MINING AND ENERGY UNION APPELLANT
AND:	BHP STEEL (AIS) PTY LIMITED ACN 000 019 625 RESPONDENT

JUDGES:	MOORE, TAMBERLIN AND GOLDBERG JJ
DATE:	21 FEBRUARY 2003
PLACE:	SYDNEY

REASONS FOR JUDGMENT

TAMBERLIN & GOLDBERG JJ:

14 This is an appeal from a judgment of a Judge of the Court delivered on 4 June 2002 where the primary Judge fined the appellant ("the Union") an amount of $120,000 for contempt of an order made on 7 February 2000, because the Union had failed to cease strike action. The strike action of the Union was described as the authorising of its members to stop work at the respondent's coal mines in New South Wales. The Union was also ordered by the primary Judge to pay the costs of the proceeding on an indemnity basis.

HISTORY

15 In early February 2000 there was an industrial dispute between the respondent ("BHP") and the Union which related to coal prices and which led to a work stoppage at BHP coal mines in New South Wales and Queensland. On 7 February 2000 at approximately 9.50 pm BHP obtained an injunction against the Union in respect of the strike action.

16 The order in substance required the Union to cease immediately such action with respect to BHP's coal mines in the two States.

17 Union members working in the Queensland mines were informed of the orders by Union officials on the morning of 8 February 2000 and were directed to comply. They returned to work from 10 am onwards on 8 February. However, Union members in New South Wales did not return to work until approximately 3 pm on 9 February 2000.

18 On 3 March 2000, BHP brought a proceeding for contempt in respect of the stop work action at five New South Wales mines. No contempt was alleged against the Union with respect to the Queensland mines.

19 The charge of contempt was heard by the primary Judge, who on 15 December 2000, found that the Union was in contempt of the order of 7 February and on 30 March 2001, in a separate judgment, the primary Judge imposed a fine of $200,000.

20 The Union then appealed both judgments to the Full Court, which ordered that the declaration made by the primary Judge on 15 December 2000 in respect of the contempt, which originally provided that:

"The Construction, Forestry, Mining and Energy Union is 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."

be varied to read:

"The Construction, Forestry, Mining and Energy Union is guilty of contempt of this Court by its conduct in breaching the Order made against it on 7 February 2000 by failing to immediately cease strike action, namely, the authorizing of its members to stop performing work at the applicant's coal mines in New South Wales."

21 It can be seen that the nature of the contempt is significantly different in the two orders. In the original order of the primary Judge, the contempt involves the continuance of the strike action and the procuring of further strike action. In the order of the Full Court there is no reference to procuring further strike action; rather the reference is to the failure to immediately cease strike action. This is an important distinction because the original order involves an active step as opposed to an omission.

22 The Full Court upheld the appeal by the Union from the primary Judge's judgment of 31 March 2001 and ordered that the matter be remitted to the primary Judge for reconsideration of penalty and costs having regard to its reasons for judgment. On 4 June 2002, the primary Judge delivered reasons in a further judgment on penalty which reduced the fine to $120,000 and ordered that except for the costs of the earlier penalty hearing and except in so far as costs were of an unreasonable amount or were unnecessarily incurred, the respondent should pay the costs of BHP on an indemnity basis.

THE FULL COURT DECISION

23 The Full Court comprised Lee, Finn and Merkel JJ: Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Limited [2001] FCA 1758. A joint judgment was delivered by Lee and Finn JJ and there was a separate judgment by Merkel J.

24 In their joint judgment their Honours characterised the contempt at [26] as follows:

"On the findings made by her Honour, at some time before the commencement of that meeting, the CFMEU could have published a statement that it had withdrawn the call for, and authorisation of, `strike action'. Her Honour stated that Mr Maher had conceded, in effect, that the CFMEU could have brought an end to its `strike action' by about 7.00 am on 8 February. Therefore, the substance of the alleged contempt arising out of disobedience of par 1 of the Order was the failure of the CFMEU to act between 7.00 am and 10.00 am on 8 February."

25 Their Honours then proceeded to summarise the findings of the primary Judge in relation to Mr Maher, who was at the relevant time the General President of the Central Executive of the Union, as follows, at [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 8 February 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."

26 At [53] their Honours returned to the substance of the contempt, as they perceived it, in these terms:

"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. ... 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."

27 The primary Judge had found and was satisfied that the Union, through Mr Maher, acted at the meeting on 8 February in such a way as to ensure a continuation of the strike action. At [62] the Full Court said:

"The view her Honour took of what Mr Maher said suggests that she found that his action in directing the CFMEU members to return to work was colourable."

28 At [64] the Full Court said:

"Irrespective of the absence of an appropriate particular, the evidence presented in respect of the conduct of the meeting was not capable of supporting a finding that the CFMEU acted colourably. Although her Honour found Mr Maher to be an unsatisfactory witness in his claims that he was unaware of the Order until the morning of 8 February and that he had not discussed the terms of the Order with other CFMEU officers, that alone did not permit a finding to be made beyond reasonable doubt as to the conduct of the CFMEU at the meeting. There had to be some evidence on that issue."

29 The conclusion of the Court was expressed at [77]-[79] in these terms:

"77 On the evidence adduced it could not have been concluded beyond reasonable doubt that, in breach of the Order, the CFMEU engaged in procuring or authorising members to stop work for the purposes of a dispute concerning the negotiation of `export coal prices'.

78 It follows that the appeal by the CFMEU against the declaration made by her Honour succeeds to the extent that the declaration that the CFMEU committed a contempt of Court by procuring or authorising its members to take further action is set aside and the terms of the declaration varied accordingly. Otherwise the appeal is dismissed.

79 Her Honour's assessment of the appropriate fine to be imposed, and the order made that the CFMEU pay BHP Steel's costs on an indemnity basis, depended upon findings made by her Honour that are to be set aside. Therefore, the appeal against the orders made by her Honour for the imposition of a fine and for the payment of costs must be allowed, the orders set aside and the matter remitted to her Honour for re-determination of those issues in accordance with these reasons."

30 Merkel J considered that there was no reason to reduce the penalty from $200,000 to some lesser amount and he found that the order for indemnity costs should remain, save for a qualification dealing with the issue of reasonableness.

PENALTY - REASONS FOR JUDGMENT ON REMITTAL

31 On remittal of the matter, the primary Judge reduced the fine to $120,000. The reasons for judgment refer to and quote from the Full Court decision in some detail. In particular, the primary Judge noted the Full Court finding that the charge of colourable conduct had not been particularised and that there was not sufficient evidence to sustain such a charge.

32 The primary Judge formed the view that as a consequence of the Full Court reasons, the correct approach was to ignore the events which occurred at the Union meeting on 8 February. In reaching this conclusion the primary Judge observed at [14]:

"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." (Emphasis added)

33 At [15] the primary Judge noted:

"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."

34 In the primary Judge's concluding remarks on the question as to the amount of penalty, the primary Judge said at [21]-[22]:

"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." (Emphasis added)

RELEVANT PRINCIPLES

35 The relevant principles were discussed by the High Court in Australasian Meat Industry Employees Union v Mudginberri Station Pty Limited [1986] HCA 46; (1986) 161 CLR 98. In that case the majority judgment (Gibbs CJ, Mason, Wilson and Deane JJ), referred to the distinction adopted by the authorities between casual, accidental and unintentional disobedience on the one hand and wilful disobedience on the other in relation to the imposition of a penalty for contempt of Court. Their Honours said that a deliberate commission or omission which was in breach of an injunctive order would constitute wilful disobedience unless it was casual, accidental or unintentional. In that case the Court was considering the imposition of a daily fine on a Union and it considered that in its nature, such a fine was a coercive measure, designed to encourage the Union to lift the action as opposed to a measure which was solely punitive.

36 In the present case the fine is deterrent and punitive in nature but having regard to the history of the matter it could not be said to be coercive in nature because the time for compliance had passed. The majority emphasised (at 107) that the underlying rationale of the exercise of the contempt power was that it is necessary to uphold and protect the efficient administration of justice. In the case of an imposition of a fine or where committal is ordered, the purpose is to protect the efficient administration of justice by demonstrating that the Court's orders will and must be enforced. If a Court lacks the means to enforce its orders then they could be disobeyed with impunity and ultimately litigants would suffer and administration of justice would be brought into dispute: see Lowe & Sufrin Borrie & Lowe's Law of Contempt, 3rd ed., 1996, at 4. There is an important distinction between casual disobedience, where it may readily appear that the primary purpose of exercising the power is to vindicate the rights of the successful party, and instances of disobedience accompanied by public defiance, where the primary purpose of exercising contempt power is to establish the Court's authority: see Mudginberri at 108. It is also clear from the decision in Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 534, that in substance, proceedings such as the present are to be decided in accordance with the criminal standard of proof.

37 In the present case it is of significance that the order of the Court was in relation to a proposed short term, twenty-four hour work stoppage, and delay in giving effect to such an order which was urgently obtained on short notice, assumes a significance because the longer the delay in such a case the more substantial is the impediment to the proper administration of justice and compliance with the enforcement of the judicial process. It is for this reason that a failure to comply even for a number of hours is to be seen prima facie in the present context as an important failure warranting a substantial fine.

38 The important distinction in the authorities is between a casual, accidental or unintentional failure to comply and one where there is a deliberate flouting of the Court's order or some public defiance of the Court's order. It is clear that in the latter case, the contempt would attract a more serious penalty or punishment than in the former and would call for stronger coercive measures where such measures are appropriate.

39 A careless attitude to a respondent's obligations to the Court and failure which is incompatible with the diligent attempt to implement a Court order are significant manifestations of contempt. In each case the question arises whether the party has made a reasonable attempt to comply with the Court's order.

40 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.

REASONING ON APPEAL

41 On reading the judgment of the primary Judge on penalty, given on 30 March 2001, it is evident that the Judge considered the conduct of Union officials at the meeting on 8 February to be of central importance in reaching the conclusion that the Union intended to maintain strike action rather than to comply with the Court's order. This accords with the Judge's reasons at [85]-[86] in the earlier judgment of 15 December 2000 on the question of liability for contempt, as follows:

"85 I am satisfied that the CFMEU through Mr Maher, acted at the meeting in such a way as to ensure a continuation of strike action. The resolution to effect further strike action was in large part the result of that conduct, even if one allows for the expression of some annoyance about service on union officials. It does not seem possible reasonably to draw any other inference, given the course Mr Maher undertook and in the absence of a credible explanation on his part or other evidence providing that explanation.

86 The CFMEU continued the strike action, the ban upon work implicit in it and the authority to members to stop performing work. It procured and authorised members to further do so at the meeting. Charges (a), (b), (c) (d) and (f) are therefore made out. The conduct involved a breach of the Orders to cease the strike and not to continue or take further strike action. It was not only deliberate in the sense referred to in the authorities, it must have resulted from a considered decision."

42 At [4]-[8] of the judgment on penalty on 30 March 2001, the primary Judge referred to the "determination on the part of the respondent's officers not to permit or encourage compliance with the order." The primary Judge also referred to the persistence of the Union's officers in deliberate disregard of the order.

43 In that judgment the primary Judge refers to officers concentrating efforts on obtaining a continuation of the strike and attempting to create an impression of a lack of knowledge to avoid detection and to disguise in a devious way knowledge of the existence of the orders. The primary Judge refers to the commitment of Union officers to continue the strike action and in particular considered that Mr Maher appeared to have orchestrated the events and was fully aware of the status of the Court orders.

44 The primary Judge also considered, as the Judge did in the earlier reasons on liability for contempt and subsequently in the second judgment on penalty, that compliance in Queensland was irrelevant to the question of penalty.

45 In our opinion, the primary Judge erred in the second penalty judgment under appeal, in not paying any regard to the conduct at the meeting of 8 February 2000 at all. On the reasoning of the Full Court it was not shown that the resolution proposed was colourable. The Full Court considered that it was not open to conclude beyond reasonable doubt that in breach of the order, the Union pursued or authorised members to stop work for the purposes of the dispute. It found that the appeal by the Union against the declaration by the primary Judge succeeded to the extent that the declaration that the Union had committed a contempt of Court by procuring or authorising its members to take further strike action was in error and should be set aside and a fresh declaration made.

46 The statements of Mr Maher and Mr Fisher at the meeting directing compliance were matters which ought to have been taken into account on the question of penalty. This material went directly to the attempt to comply with the order, although somewhat belatedly given that the strike was called for only a twenty-four hour period.

47 If the resolution and the deliberations at the meeting were not colourable then they ought to have been taken into account in our view in so far as they exhibited a step by senior officers of the Union to comply with the Court's orders. This is a matter both relevant and important to take into account in considering the question of penalty. Yet it was not weighed at all by the primary Judge in balancing the relevant considerations as to the quantum of the penalty.

48 In addition, in our view, it was erroneous to conclude that compliance in Queensland was irrelevant and should be excluded from consideration. Although constituting only partial compliance, it is a significant step and it does reflect respect for the Court's order 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 our view it has considerable importance.

49 On the basis of the primary Judge's findings it was open to conclude that there was a failure to comply with the order after Union officials had become aware of it from late on 7 February through to the meeting at 10.00 am on 8 February 2000. However, even if this period, extending beyond the three hours between 7.00 am and 10.00 am referred to by the Full Court, is taken into account, the position is not in our view materially altered because the main consideration on the basis of which the original penalty of $200,000 was imposed was an active, devious and deliberate encouragement to continue the strike action at the meeting. The Full Court found that there was no colourable attempt or pretence in the actions of the Union officials in relation to that proposal, in particular on the part of Mr Maher and Mr Fisher in informing members that the strike must be discontinued.

50 If the essence of the contempt is the failure to act over three or even eight hours, including the night of 7-8 February, that is a less serious matter than an open defiance or a deliberate and knowing attempt to frustrate the implementation of the Court's orders. We do not consider that the fine imposed by the primary Judge in the present case gives due weight to these considerations. We are cognisant of the principles set out in House v the King [1936] HCA 40; (1936) 55 CLR 499 at 504-505, but consider that the primary Judge's discretion miscarried as there was a failure to take note of the two material considerations to which we have referred. Given the exclusion of two significant relevant considerations and the substance of the Full Court analysis of the essence of the contempt, we consider that the fine of $120,000 is excessive. In our view, a fine for $50,000 would more closely reflect the concern of the Court with the gravity and content of the important failure to act to ensure compliance with due diligence in the narrow time-frame arising from the nature of the strike action, noting that it was a relatively brief twenty-four strike which had been called.

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.

52 The appellant contended that the appeal should be allowed and that because the contempt was a minor one, no penalty whatsoever should be imposed on the Union. Although the penalty has been substantially reduced the contempt is serious and a substantial penalty is appropriate.

53 We have read the observations of Moore J concerning the appropriateness of taking the costs order into account when fixing a penalty. In the light of the authorities referred to by his Honour, 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. Taking into account all the circumstances, including the consideration that indemnity costs have been awarded below, we consider the appropriate penalty is $50,000.

54 Having regard to the order for reduction in penalty we consider that each party should pay its own costs of the appeal. We do not vary the indemnity costs order made by the primary Judge in respect of the hearing at first instance.

55 The orders of the Court are that the appeal should be allowed in part as to the amount of the fine. The order of the primary Judge as to the penalty should be set aside and the penalty to be imposed is reduced to $50,000.

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tamberlin and Goldberg.

Associate:

Dated: 21 February 2003

Counsel for the Appellant:	R Kenzie QC C Howell
Solicitor for the Appellant:	R L Whyburn & Associates
Counsel for the Respondent:	W Sofronoff QC M A Hoch
Solicitor for the Respondent:	Blake Dawson Waldron
Date of Hearing:	8 November 2002
Date of Judgment:	21 February 2003