Cruse v Multiplex Limited [2008] FCAFC 179 (5 November 2008)

Last Updated: 6 November 2008

FEDERAL COURT OF AUSTRALIA

Cruse v Multiplex Limited [2008] FCAFC 179

INDUSTRIAL RELATIONS – Trade union making claim for payment of wages for period of industrial action – Industrial action to coerce employer into making payment – Claim made and industrial action organised by shop stewards at workplace – Relevance of their knowledge as to whether their acts involved contraventions of law – Whether absence of evidence that they did know that their acts involved contraventions of law equivalent to evidence that they did not know – Whether distinction affected exercise of discretion in imposition of penalty – Relevance of union policy regarding reason for industrial action – Whether fact of acting in accordance with policy was mitigatory.

PENALTY – Contravention by trade union of statutory prohibition upon claims for payment of wages for periods of industrial action and upon industrial action to enforce such claims – Claim made and industrial action organised by shop stewards at workplace – Relevance of their knowledge as to whether their acts involved contraventions of law – Whether absence of evidence that they did know that their acts involved contraventions of law equivalent to evidence that they did not know – Whether distinction affected exercise of discretion in imposition of penalty – Relevance of union policy regarding reason for industrial action – Whether fact of acting in accordance with policy was mitigatory.

DECLARATIONS – Contested proceeding substantially settled by acceptance of applicant’s case – Contraventions of statutory provisions admitted – Whether declarations recording details of contraventions should be made – Whether merely involved a record of parties’ settlement – Utility of declarations in the circumstances.

Workplace Relations Act 1996 (Cth), ss 187AA, 187AB

Australian Competition and Consumer Commission v Francis [2004] FCA 487 (2004) 142 FCR 1
Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247
Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd (2004) 207 ALR 329
Carr v Higgins Coating Pty Ltd [2005] FCA 1809; (2005) 148 IR 201
Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428
Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543
Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53

WARREN CRUSE v MULTIPLEX LIMITED (ACN 008 687 063), CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, JOHN SETKA, GRANT THORSON, PETER JOHN COSTELLO, ALFIO DI VIRGILIO, MARK EDWARDS, JOSE ESTEVES, MAX HOOD, HUSEIN KARUPOVIC, JUSTIN NORMAN, NICKOLAS CON PAPANOTAS, STEVE SAVIC and ANTTI GREGORY BODNARUK
VID 1223 OF 2007

GRAY, GOLDBERG & JESSUP JJ
5 NOVEMBER 2008
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1223 OF 2007

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

BETWEEN:

WARREN CRUSE Appellant

AND:

MULTIPLEX LIMITED (ACN 008 687 063) First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent JOHN SETKA Third Respondent GRANT THORSON Fourth Respondent PETER JOHN COSTELLO Fifth Respondent ALFIO DI VIRGILIO Sixth Respondent MARK EDWARDS Seventh Respondent JOSE ESTEVES Eighth Respondent MAX HOOD Ninth Respondent HUSEIN KARUPOVIC Tenth Respondent JUSTIN NORMAN Eleventh Respondent NICKOLAS CON PAPANOTAS Twelfth Respondent STEVE SAVIC Thirteenth Respondent ANTTI GREGORY BODNARUK Fourteenth Respondent

JUDGE:	GRAY, GOLDBERG & JESSUP JJ
DATE OF ORDER:	5 NOVEMBER 2008
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. A penalty of $2,500.00 be imposed on Construction, Forestry, Mining and Energy Union, an organisation within the meaning of the Workplace Relations Act 1996 (Cth), for –

(a) making a claim that Multiplex Limited make payments to its employees in relation to the period of a meeting commencing at about 8.30 am on 5 August 2003 and in relation to a period commencing at about 1.10 pm on that day and lasting until about 10.00 am on 6 August 2003 during each of which periods those employees engaged in industrial action at the site of the Concept Blue Apartment Project at 336 Russell Street, Melbourne, contrary to s 187AB(1)(a) of the Workplace Relations Act 1996 (Cth); and

(b) organizing and engaging in industrial action against Multiplex Limited with intent to coerce that employer to make the payments referred to in (a), contrary to s 187AB(1)(b) of the Workplace Relations Act 1996 (Cth).

THE COURT DECLARES THAT:

1. On 5 and 6 August 2003, Grant Thorson, an officer of Construction, Forestry, Mining and Energy Union, an organisation within the meaning of the Workplace Relations Act 1996 (Cth), contravened –

(a) s 187AB(1)(a) of that Act by making a claim that Multiplex Limited make payments to its employees in relation to the period of a meeting commencing at about 8.30 am on 5 August 2003 and in relation to a period commencing at about 1.10 pm on that day and lasting until about 10.00 am on 6 August 2003 during each of which periods those employees engaged in industrial action at the site of the Concept Blue Apartment Project at 336 Russell Street, Melbourne; and

(b) s 187(1)(b) of that Act by organizing and engaging in industrial action against Multiplex Limited with intent to coerce that employer to make the payments referred to in (a).

2. Grant Thorson, an employee of Multiplex Limited, contravened s 187AA(2) of the Workplace Relations Act 1996 (Cth) –

(a) on 8 August 2003, by accepting from Multiplex Limited a payment in relation to the period of a meeting commencing at about 8.30 am on 5 August 2003; and

(b) on 15 August 2003, by accepting from Multiplex Limited a payment in relation to a period commencing at about 1.10 pm on 5 August 2003 and lasting until about 10.00 am on 6 August 2003,

during each of which periods he engaged in industrial action at the site of the Concept Blue Apartment Project at 336 Russell Street, Melbourne.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1223 OF 2007

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

BETWEEN:

WARREN CRUSE Appellant

AND:

MULTIPLEX LIMITED (ACN 008 687 063) First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent JOHN SETKA Third Respondent GRANT THORSON Fourth Respondent PETER JOHN COSTELLO Fifth Respondent ALFIO DI VIRGILIO Sixth Respondent MARK EDWARDS Seventh Respondent JOSE ESTEVES Eighth Respondent MAX HOOD Ninth Respondent HUSEIN KARUPOVIC Tenth Respondent JUSTIN NORMAN Eleventh Respondent NICKOLAS CON PAPANOTAS Twelfth Respondent STEVE SAVIC Thirteenth Respondent ANTTI GREGORY BODNARUK Fourteenth Respondent

JUDGE:	GRAY. J
DATE:	5 NOVEMBER 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

GRAY J:

1 This appeal raises the question whether a single judge of this Court was in error in refusing to impose penalties on, and make declarations with respect to the conduct of, a trade union and one of its shop stewards. The appeal is from the judgment in Cruse v Multiplex Limited [2007] FCA 2015. In his reasons for judgment, the learned primary judge made very full findings of fact, based on an agreed statement of facts submitted to him and on evidence by way of affidavits, on which there was no cross-examination.

2 The facts and circumstances of the case are also set out in detail in the joint reasons for judgment of Goldberg and Jessup JJ on the appeal, which I have had the opportunity to read in draft form. I am unable to agree with their Honours as to the result of the appeal, but it is only necessary for me to set out briefly my reasons for disagreeing.

3 The notice of appeal begins with the proposition that the primary judge’s dismissal of the application against the second, fourth and fifth respondents without penalty was manifestly inadequate. It proceeds to challenge almost every conclusion reached, or point expressed, by his Honour in his reasons for judgment.

4 At the conclusion of his reasons for judgment, the primary judge added a passage, in which he discussed whether the decision to institute the proceeding before him, or to continue it, was justified. At [52], his Honour referred to Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500 at [3], where Finkelstein J said:

In Australia prosecuting authorities have prosecutorial guidelines which deal with, among other things, the matters to be taken into account when deciding whether to initiate a prosecution. Two major factors are considered: the sufficiency of the evidence and whether the public interest requires that a prosecution be pursued. The guidelines list a number of factors that should be taken into account when evaluating the public interest. They include: the seriousness or triviality of the alleged offence; whether the prosecution would be perceived as counter-productive, for example by bringing the law into disrepute; the degree that the offence is of public concern; the likely sentencing result; the necessity of maintaining public confidence in the courts; and the offender’s degree of culpability. There is no reason why these factors should be confined to the institution of criminal prosecutions; they have equal applicability to contraventions of quasi-criminal statutes such as the Workplace Relations Act 1996 (Cth). If these factors had been considered here in all likelihood the action would not have been brought. That is not, however, a matter about which complaint can be made; the discretion whether or not to prosecute a case is not amenable to judicial review

5 The primary judge then continued:

53 In response to the concern of the Court concerning the justification for pursuing these cases, the applicant in this case explained in his affidavit that the purpose for taking action was to combat the culture of unlawful conduct in the construction industry identified by the Royal Commission. 54 The Royal Commission painted a picture of widespread violence, intimidation and disregard for the law in the construction industry. Despite the reference by the Royal Commission to a great deal of evidence of paying, receiving and demanding strike pay, there was no evidence before the Court that the payment of strike pay in respect of industrial action taken where a fellow worker had been killed on a construction site was the type of unlawful conduct which concerned the Royal Commission. Instead, the 18 prosecutions, all dealing with the events of 5 and 6 August 2003 and a related incident, targeted behaviour which, even though unlawful, flowed from a concern with safety in the workplace in a dangerous industry, which arose from a departure from what had been an accepted industry practice for years, and which caused no damage to others. Against the background of the culture of violence and intimidation reported by the Royal Commission, it may be that proceeding against persons for conduct which did not have those elements could, in the words of Finkelstein J in Seelite at [3], "be perceived as counter-productive ... by bringing the law into disrepute". 55 The union policy was changed in August 2005. Prior to that time six out of the 18 cases had been determined, including Seelite, in which Finkelstein J had indicated that the guidelines for prosecution should be applied in these cases. The change in policy meant that the circumstances to which the applications were directed would probably not arise again. At that point the public interest in enforcing lawful behaviour had been achieved. It is difficult to see what purpose was served by continuing the applications thereafter. 56 Further, the six cases decided prior to the policy change provided modest outcomes to the applicant. In three of the six cases decided before the policy change no monetary penalty was imposed, and in the other three cases the monetary penalty was insignificant. The sentencing outcomes referred to in Seelite, should have persuaded the applicant to bring the litigation to an end. 57 Despite these factors, 11 further applications were pressed. In the result in five of them no monetary penalty was imposed. In two others, the penalty imposed (one by agreement) was $1000 or below. These limited outcomes suggest that the time and expense involved in continuing the proceedings was not justified. The public purse funded the legal expenses of the applicants. Each of the 18 cases, including this case, required a day of Court time and probably, on average, an equal amount of time for the preparation of judgments, thereby requiring in total nearly 2 months of Court time. It is unlikely that the public would regard such cost to the community as well incurred. 58 These remarks relating to the conduct of the applicant play no part in the determination of the application before the Court. They are made with a considerable degree of caution. The decision whether to bring such proceedings is not a matter for the Court but for the prosecuting authority: Seelite at [3]. However, there are some circumstances in which the Court becomes aware of the conduct of parties to litigation which, although not directly relevant to the determination of the proceedings, should be the subject of some observation because of the particular vantage point which the Court has as a result of hearing the proceedings. The circumstances of this case fall within that category. 59 A serious impediment to the Court forming an informed view about such circumstances is that the conduct of the prosecuting authority is not the subject of evidence and the usual requirements of natural justice which would apply in the determination of an issue before the Court. With this handicap in mind, the applicant was invited at the end of this proceeding to respond to the criticisms which now have been set out in the previous paragraphs. Mr Maidment took instructions and responded by submitting, in effect, that the Court had no role in addressing the issue beyond the circumstances of the present case. Whilst the occasions when it will be appropriate for the Court to make such observations will be rare, the circumstances of these 18 proceedings call for some comment in the public interest.

6 Despite his Honour’s clear statement at the beginning of [58] that his remarks played no part in the determination of the application before him, the appellant relied on them as a ground of appeal. The notice of appeal characterised them as among extraneous or irrelevant matters which had been relied on by his Honour to guide or "effect" the exercise of his discretion. In his outline of submissions, the appellant suggested that his Honour was "motivated" to dismiss the application as against the second, fourth and fifth respondents, because of his view of the application of the relevant legislation in circumstances where industrial action arose against the background of a death in the building industry. Reference was made to passages in [51]-[59] of his Honour’s reasons for judgment. Further, the appellant’s submissions referred to passages in the transcript of the proceeding before his Honour, and to views expressed by his Honour in reasons for judgment in another case.

7 It is perfectly proper for a court to take into account its view of the public policy involved in bringing, or continuing, a proceeding of a penal nature, in the exercise of the Court’s discretion as to penalty. If the primary judge in the present case had done so, it would have been open to the appellant to contest on appeal the accuracy of the view that his Honour had formed about public policy. His Honour said clearly that he did not take into account the views he expressed at [53]-[59]. For the appellant to argue that the views his Honour expressed were taken into account was to accuse his Honour of dissembling. Such an accusation is a serious one. If it is to be pursued, it requires more than mere assertion to justify it. It is sometimes necessary that judges speak out on matters of concern in the administration of justice, in the context of particular proceedings before them. Judges ought not to be deterred from doing so, when the proper occasion arises, because of the prospect of what they say being used as a ground of appeal.

8 It is even more misguided for the appellant to have referred to what the primary judge said in the course of argument before him. Judges often put propositions for the purpose of testing them in the course of argument. They may believe in the truth of those propositions but be persuaded to the contrary. They may not believe in the truth of those propositions, but advance them for the purpose of seeing whether their correctness can be established. The process by which a judge raises questions about matters relating to a proceeding before him or her is vital to the administration of justice. It is entirely wrong to seek to argue on appeal that, because a judge said something at a point in the course of argument in the proceeding, he or she is taken to have relied on what was said as some form of unstated factor in reaching a conclusion.

9 It is therefore important in the administration of justice to maintain the principle that what the Court says are the reasons for its judgment are those reasons. An appeal must stand or fall by those reasons. Whatever a judge may have said in another case, in the course of argument, or by way of remarks appended to reasons for judgment is not to be taken as part of the reasons for judgment. To the extent that Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 suggests to the contrary, it is plainly wrong in principle and should not be followed.

10 When these issues were raised with counsel for the appellant during the hearing of the appeal, counsel for the appellant properly resiled from the arguments based on the primary judge’s remarks in [52]-[59] of his reasons for judgment, in another of his judgments, and in the course of argument in the proceeding before him.

11 It is clear that the ground of manifest inadequacy cannot be upheld. It is also clear that most of the challenges to the conclusions expressed by the primary judge in his reasons for judgment are baseless. There is one error identified in the reasons for judgment of Goldberg and Jessup JJ. The error relates to the finding that the fourth and fifth respondents (who were the Union’s shop stewards at the relevant workplace at the time) did not know that what they were doing involved a contravention of the law.

12 It is correct to say that, in reaching this finding, his Honour converted a negative (the absence of evidence that the shop stewards knew) into a positive (the finding that the shop stewards did not know). There was no basis on which his Honour could reach a positive finding, but the fact that he did so did not amount to an error that would invalidate the exercise of his discretion. It is clear that, whether the shop stewards actually knew they were contravening the law, or whether they were simply not shown to have known that they were contravening the law, his Honour would have come to exactly the same conclusion. In the absence of evidence that the shop stewards did have knowledge, his Honour could not have acted on any basis other than that they did not. The exercise of a judge’s discretion is not to be overturned on a basis as slender as the distinction between the positive and negative sides of the same proposition, in circumstances such as this.

13 If I am wrong, and it is necessary for this Court on appeal to deal with the question of penalties, I would reach the same conclusion as that reached by the primary judge. The contraventions of s 187AB(1)(a) and (b) of the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act") (provisions which have since been repealed and replaced by s 508(1)(a) and (b) of the Workplace Relations Act), alleged against the Union and the two shop stewards, occurred because of the application of the Union’s policy in relation to deaths on construction sites in Victoria. Such a death had occurred. Pursuant to the policy, employees on the site at which the two shop stewards worked stopped work for a meeting and did not resume work until after the conduct of the safety audit to which the policy referred. Multiplex Limited (the case against which was dealt with separately) was the head contractor on the site. It had a past practice of condoning the cessation of work in accordance with the Union’s policy, until the end of the safety audit. Without prior warning, once the safety audit had concluded, Multiplex indicated to the shop stewards that it did not propose to pay employees for time they did not work during the safety audit. This was a change of practice on the part of Multiplex. It is likely that Multiplex had an obligation to pay its employees, when it had permitted them to refrain from performing productive work during the safety audit. The shop stewards reported to their workmates the decision that had been conveyed to them. It seems clear that the intention of management in conveying the decision to the shop stewards was for the purpose of using them to inform other employees of the decision. It was understandable that the abrupt change of practice would produce a reaction. It was assumed that the shop stewards encouraged the taking of industrial action. If they did so, it was necessary to treat them as not knowing that such action involved a contravention of the law. Similarly, claims they made for payment during the safety audit were to be treated as not involving knowing contravention.

14 It is not clear when the Union became aware of the conduct of its shop stewards. The Union did not attempt to rely on the defence under s 187AB(3) of the Workplace Relations Act (now s 508(3)) that it had taken reasonable steps to prevent the action. All that is known is that, by the following morning, the Union was aware that industrial action was being taken. One of its officials then went to the site and informed management that he would recommend a return to work. A return to work occurred shortly afterwards.

15 In these circumstances, it is difficult to attach culpability to the Union. The appellant does not seek any penalty against the fourth respondent and, for reasons unconnected with the facts of the case, no longer wishes to obtain any remedy against the fifth respondent. Given that the Union’s contravention is entirely dependent on the contravention by its shop stewards, by virtue of s 187AB(2)(d) of the Workplace Relations Act, it would be unjust to impose a penalty against the Union when none is sought against the shop stewards.

16 In addition, no issue of deterrence arises. The primary judge found that the Union’s policy in relation to deaths on construction sites has been changed, so that it no longer involves a cessation of productive work during the conduct of a safety audit. It is therefore extremely unlikely that there will be contraventions of s 508(1) of the Workplace Relations Act by the Union, or by others, in the foreseeable future, in comparable circumstances.

17 No useful purpose would therefore be served by imposing a financial penalty on the Union.

18 As to the making of declarations, which the appellant seeks against the Union and the fourth respondent, I take the view that there is no point in making a declaration. For reasons that I have expressed in Carr v Higgins Coatings Pty Ltd [2005] FCA 1809 (2005) 148 IR 201 at [20] and in Australian Competition and Consumer Commission v Francis [2004] FCA 487 (2004) 142 FCR 1 at [92]- [113], I am of the view that a declaration that simply records the historical fact of a contravention of a statutory provision is not a declaration of right, made in the exercise of the power conferred on this Court by s 21 of the Federal Court of Australia Act 1976 (Cth).

19 If it were considered appropriate to make something that looks like a declaration, in order to record the Court’s conclusion, it would be appropriate to include in it the statement that the Court had decided to impose no penalty. It may be that the appellant would complain that a statement to the effect that there had been no penalty imposed on the fourth respondent would not be complete unless it said that this was because the appellant had not asked for one. If all that were necessary to explain what the Court had done, the declaration would be so long as to lose its point. More importantly, it would perform the function of reasons for judgment in explaining what view the Court took, why it had taken it, and what it had done or not done.

20 For these reasons, I would dismiss the appeal.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Associate:

Dated: 5 November 2008

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1223 OF 2007

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

BETWEEN:

WARREN CRUSE Appellant

AND:

MULTIPLEX LIMITED (ACN 008 687 063) First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Second Respondent JOHN SETKA Third Respondent GRANT THORSON Fourth Respondent PETER JOHN COSTELLO Fifth Respondent ALFIO DI VIRGILIO Sixth Respondent MARK EDWARDS Seventh Respondent JOSE ESTEVES Eighth Respondent MAX HOOD Ninth Respondent HUSEIN KARUPOVIC Tenth Respondent JUSTIN NORMAN Eleventh Respondent NICKOLAS CON PAPANOTAS Twelfth Respondent STEVE SAVIC Thirteenth Respondent ANTTI GREGORY BODNARUK Fourteenth Respondent

JUDGES:	GOLDBERG & JESSUP JJ
DATE:	5 NOVEMBER 2008
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

GOLDBERG & JESSUP JJ:

21 Before the court is an appeal from an order made by a single Judge of the court on 17 December 2007 that the application of the appellant, an inspector under the Workplace Relations Act 1996 (Cth) ("the WR Act"), for declarations and penalties in relation to admitted contraventions of ss 187AA and 187AB of the Act (as these sections were numbered at the relevant time) be dismissed.

22 The events out of which the proceeding arose occurred at the site of the construction of the Concept Blue apartments at 336 Russell Street, Melbourne in August 2003. The first respondent, Multiplex Limited ("Multiplex"), was the head contractor on that site. The second respondent, the Construction, Forestry, Mining and Energy Union ("the Union") was an organisation of employees registered under the WR Act. Many of the employees working on the Concept Blue site, both for the first respondent and for various sub-contractors, were, it seems, members of the Union. The fourth respondent, Mr Grant Thorson, was an employee of Multiplex, a member of the Union, and a shop steward of the Union for its members employed on the site. The fifth respondent was also an employee of Multiplex on the site and a Union shop steward but, for reasons unconnected with the merits of the case, the appellant sought, and was given leave, to discontinue his appeal as against the fifth respondent.

23 The proceeding before his Honour originally involved many more parties than were relevant in the appeal. The claims against Multiplex were dealt with by Merkel J in Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428. The claims against some other respondents were discontinued. At the time of the proceeding before the trial Judge, the appellant prosecuted his claims against the Union, and the fourth and fifth respondents. In the circumstances, what is controversial in the present appeal is his Honour’s decision to dismiss the application as against the Union and the fourth respondent.

24 At the time which is relevant to the appeal, the relevant provisions of the WR Act included the following:

187AA (1) An employer must not make a payment to an employee in relation to a period during which the employee engaged, or engages, in industrial action ...

(2) An employee must not accept a payment from an employer if the employer would contravene subsection (1) by making the payment.

(3) A contravention of subsection (1) or (2) is not an offence.

187AB (1) An organisation, or an officer, member or employee of an organisation, must not:

(a) make a claim for an employer to make a payment to an employee in relation to a period during which the employee engaged, or engages, in industrial action; or (b) organise or engage in, or threaten to organise or engage in, industrial action against an employer with intent to coerce the employer to make such a payment.

(2) For the purposes of subsection (1), action done by one of the following bodies or persons is taken to have been done by an organisation:

(a) the committee of management of the organisation; (b) an officer, employee or agent of the organisation acting in that capacity; (c) a member or group of members of the organisation acting under the rules of the organisation; (d) a member of the organisation, who performs the function of dealing with an employer on behalf of the member and other members of the organisation, acting in that capacity. (3) Paragraphs (2)(c) and (d) do not apply if: (a) a committee of management of the organisation; or (b) a person authorised by the committee; or (c) an officer of the organisation; has taken reasonable steps to prevent the action. (4) A contravention of subsection (1) is not an offence. ...

187AD (1) In respect of contraventions of section 187AA or 187AB, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders:

(a) an order imposing on a person who contravened or is contravening that section a penalty of not more than $10,000;

...

(c) injunctions (including interim injunctions), and any other orders, that the Court considers necessary to stop the contravention or remedy its effects; (d) any other consequential orders.

25 According to the reasons of the trial Judge –

The parties presently before the Court tendered a statement of agreed facts. On the basis of those facts, the fourth and fifth respondents admitted that they contravened s 187AA(2) by accepting payment from Multiplex in circumstances where Multiplex would contravene s 187AA(1) by making the payments. Further, on the basis of the agreed facts, the second, fourth and fifth respondents admitted that they contravened s 187AB(1)(a) by making a claim for payment to nine employees (including the fourth and fifth respondents) (the employees) in relation to a period on 5 and 6 August 2003 when the employees engaged in industrial action as defined, and they contravened s 187AB(1)(b) by organising or engaging in the industrial action against Multiplex with an intent to coerce Multiplex to make the payments. The action taken by the fourth and fifth respondents in making a claim for payment and engaging in industrial action constitutes action taken by the Union.

In addition to the statement of agreed facts, the evidence at trial was placed before the court by way of affidavits relied on by each of the parties, upon which there was no cross-examination.

26 According to the findings of the trial Judge, on 1 August 2003 a construction worker was killed in Shepparton while performing irrigation channel works. That work was not connected with work on the Concept Blue site. However, at 8.30 am on the next working day on that site, 5 August 2003, employees on site, including employees of Multiplex, stopped work to attend a meeting conducted by the fourth and fifth respondents. There followed a full "safety audit" of the site pursuant to a policy of the Union entitled "On Site Fatalities Policy and Procedure", to which we refer further below. The safety audit concluded at about 1.00 pm, and at about 1.10 pm Multiplex asked the fourth and fifth respondents to return to work, adding that nobody would be paid for lost time. That intimation amounted to a departure from the erstwhile practice of Multiplex, which had been to pay for time lost during the conduct of safety audits. Thereupon the fourth and fifth respondents refused to discuss the issue of a return to work. The employees did not work for the rest of that day. They attended a meeting on site, conducted by the fourth and fifth respondents, at 7.30 am the following day. That meeting resolved not to return to work until the dispute over payment was resolved. At 8.30 am, an organiser for the Union met with representatives of Multiplex and told them that he would instruct the workers to return to work. The organiser then conducted a meeting of the workers on site, following which, at about 10.00 am, there was a return to work.

27 At trial, it was agreed that the failure of the employees of Multiplex (of whom there were nine, including the fourth and fifth respondents) to work during the meeting at 8.30 am on 5 August, and between 1.10 pm on that day and 10.00 am on 6 August, constituted industrial action within the meaning of ss 187AA and 187AB of the WR Act. It was neither agreed nor alleged that the failure of employees to carry out work during the period of the safety audit itself was industrial action. It was also agreed that, in taking the industrial action, the employees of Multiplex were acting in accordance with a decision made by, or with a direction given by, or with the consent of, shop stewards of the Union, including the fourth and fifth respondents. It was further agreed that those respondents made a claim upon Multiplex for it to pay the employees for the period during which they took industrial action, and that they organised and engaged in industrial action subsequent to 1.10 pm on 5 August with intent to coerce Multiplex to make such a payment. Multiplex in fact paid nine employees for the period from 1.10 pm on 5 August to 10.00 am on 6 August wages which totalled $1,057.35. There was neither admission nor evidence as to whether that payment was the result of the industrial action which occurred in contravention of s 187AB.

28 The affidavit evidence relied on by the appellant dealt first with two reports issued by the Royal Commission into the Building and Construction Industry, one dated 5 August 2002 and the other dated 24 February 2003. Broadly, the Commissioner had deprecated the practice of making claims, enforced by industrial action, for strike pay contrary to ss 187AA and 187AB. The affidavit then dealt with the purposes and operation of the Building Industry Taskforce and later the Australian Building and Construction Commission (established on 1 October 2005). Amongst other things in this respect, the deponent said:

On 1 August 2003 a fatality occurred on a farm in Shepparton, nearly 200 kilometres from the Melbourne CBD. As a consequence of this fatality the Taskforce investigated allegations that 33 major building sites in Melbourne were shut down for part or all of two days. To date, the Inspectors appointed to the Taskforce have commenced 18 proceedings against multiple Respondents, including Multiplex, the CFMEU, CEPU, 17 subcontractors, 6 shop stewards or delegates, 3 union organisers and a number of employees of Multiplex. Each of these proceedings concerns (amongst other allegations in some cases) the events which occurred on building sites in Melbourne on 5 and 6 August 2003 following the fatality in Shepparton. The proceedings were instituted in direct response to an apparent industry wide disregard for the rule of law concerning strike pay. The ABCC does not intend to flood the Courts with isolated prosecutions. But it recognises the need for appropriate cases to be prosecuted to achieve the goal of general deterrence from continued unlawful industrial action. There are no further cases pending that relate to these background facts.

29 The Union relied upon an affidavit affirmed by its Victorian State secretary, Mr Martin Kingham. He referred to, and exhibited a copy of, the Union policy on fatalities in the industry to which we have referred. The policy read as follows:

ON SITE FATALITIES POLICY AND PROCEDURE The following on site fatalities policy and procedure was adopted at the joint CFMEU – Construction and General Division/FEDFA Division shop stewards meeting on Tuesday 25th June, 2002, and the joint BIG Secretaries meeting on Thursday 20th June, 2002:- When the Victorian Construction Unions (VTHC BIG) have a confirmed death of a unionised construction worker arising out of an industrial accident on site, the following steps will be taken:

(i) The immediate needs of the affected family will be the first priority.

(ii) The site where the death occurs will immediately stop work and other sites of the same principal contractor will also stop.

(iii) Mass meeting on site will be called in the industry and following day to hear a report on the incident. Then the following will occur:

(a) All productive work will stop and a full, thorough safety audit will be conducted by all available safety committee members from the basement to the roof and any OHS problems immediately rectified. Clean up works arising from the audit will be undertaken (as per VBIA) with areas progressively opened to production once listed items have been addressed.

(b) In addition the site meetings will take up an agreed minimum amount per worker to be collected by the relevant Shop Stewards. This will be donated immediately to the deceased worker’s family via the appropriate union office where a receipt will be issued and shall be displayed on site notice boards.

(c) Any other actions required can be voted on at a site mass meeting.

(iv) Industry-wide stop work action may occur with the mutual agreement of BIG Secretaries, taking into account the nature and circumstances of the incident leading to the death of the worker.

Explanatory note: The recent history of industry-wide stoppages following a death of a worker on site arose out of a direct response to the following factors affecting the construction sector in the 1990’s: the weakening of OHS legislation, standards and regulations by the Kennett Government; a dramatic rise in the number of deaths occurring in the industry; the removal of a dedicated construction industry inspectorate within the Workcover Authority. The sustained campaign by construction unions against these developments assisted in the election of the Bracks government in 1999. Subsequently the Victorian Government has reinstituted the dedicated construction industry inspectorate of 40 plus officers with the Workcover Authority, a number of OHS laws have been tightened and the government has proposed new Industrial Manslaughter legislation, (The Crimes Workplace Deaths and Serious Injuries Bill), directly targeting grossly negligent employers. The Victorian VTHC BIG Construction Unions believe it is time to modify our strategies in a transitional manner, while still reserving our collective rights to return to a more militant stance if government policies and employer attitudes lead to a return to the poor OHS management practices in the industry.

Mr Kingham said that the practice for which the policy provided had generally been agreed to by employers, with the result that employees were paid while an audit was undertaken. In the words of the trial Judge:

Mr Kingham then outlined the history which gave rise to this practice. In 1999 there were 15 deaths in the industry. In order to draw the attention of the Victorian government to the problem, a 24 hour stoppage would be called in response to a death in the industry. In due course, the government appointed more Worksafe inspectors to redress the problem. Whether as a result of these appointments or otherwise, the number of deaths in the construction industry decreased. This improvement gave rise to discussions in the industry and a change in the practice. Employers were concerned that a full day’s production was being lost on the occasion of each fatality. The discussions took place in a forum called the Victorian Building Industry Agreement Consultative Committee which comprised representatives of all the construction unions and construction companies. The employer representatives suggested that the stoppages be limited to the time of the safety audit and completion of the rectification work. Employees were to be paid while these activities were undertaken. The unions accepted this suggestion and an agreement to this effect was made in 2002. It was ratified by all the construction unions through the Building Industry Group organised by the Victorian Trades Hall Council. The practice was followed by most employers thereafter.

Mr Kingham said that the policy had been changed in August 2005, such that productive work would thereafter continue during the conduct of a safety audit and the taking of any necessary safety rectification measures. According to Mr Kingham, this change in the practice should produce the result that there would be no further proceedings under provisions such as ss 187AA and 187AB in the context of any deaths in the construction industry.

30 In his reasons, the trial Judge referred also to affidavits affirmed by each of the fourth and the fifth respondents. Although his Honour extracted passages from the affidavit of the fifth respondent, in the light of the discontinuance of the appeal in relation to him, it is appropriate that we set out the following substantially corresponding passages from the affidavit of the fourth respondent:

At this stage I had no reason to suspect that the process was being conducted in anything other than with the agreement of Multiplex management. I also assumed that this included that those person [sic] engaged on the Site who were not involved in the safety rectification work or the safety audit and who were sitting in the crib huts on the Site would be paid for the time that they were sitting in the crib huts not performing any productive work. I had this belief because nobody had said to me prior to commencing the safety audit that other employees have to go back to doing productive work otherwise they would not be paid. Secondly, the practice had been at Multiplex when there had been a death in the industry that they would pay for the period that employees weren’t working productively while the safety audit and rectification work was taking place. I understood that this was an agreed process in the circumstances of a death in the construction industry. It was not until the completion of the safety audit that Multiplex informed the members of the safety committee and I that they were not going to pay employees for the time they were sitting in the shed while the safety audit was being undertaken. This directive came from Gary Young who was not on the Site at the time but had communicated this directive over the phone. ... There was a mass meeting held to inform workers on the Site of Multiplex’s position. The members at the Site decided that they would not return to work until the issue about payment had been resolved. I did not speak against this position being adopted.

31 Although the facts before the trial Judge were either agreed or uncontested, there was no agreement as to how his Honour should dispose of the appellant’s application. The questions which arose in that respect were, first, whether penalties should be imposed on the Union under s 187AD of the WR Act, secondly, if there were to be penalties, in what amount should those penalties be fixed, and thirdly, whether the declarations as sought by the appellant, or any declarations, should be made in the circumstances. His Honour answered the first and third of these questions in the negative, the result of which was that the appellant’s application was dismissed.

32 With respect to penalties, the trial Judge carefully examined all of the circumstances surrounding the admitted contraventions of the WR Act by the Union. It was not suggested that a penalty should be imposed upon the fourth respondent. At the conclusion of the relevant section of his reasons, his Honour conveniently summarised the position as it appeared to him as follows:

All of the considerations discussed in these reasons lead me to the view that the Court should decline to impose a monetary penalty on the Union in the circumstances of this case. Without seeking to limit the importance of any of those considerations it is useful to summarise some of them which highlight the justification for this course as follows:

• there was one contravention of s 187AB(1)(a) and one contravention of s 187AB(1)(b) by the Union;

• the contraventions relate to a relatively small number of employees, namely nine;

• the contraventions relate to a relatively small payment namely, $1,057.35;

• the contraventions were by shop stewards employed by Multiplex, who did not know they were acting in contravention of the law;

• the contraventions were spontaneous acts taken against a change in the practice of Multiplex which had previously paid for lost time after a death in the industry;

• the shop stewards were acting in accordance with the Union policy, which responded to concern in the construction industry for the safety of construction workers.

• there was no injury or damage to any parties as a result of the contraventions;

• the Union is unlikely to contravene again because the policy has been changed;

• other unions are unlikely to contravene because they were party to the change in the policy;

• the Union has not contravened the section before;

• the Union has been punished for contraventions which at least had a common background with the present contraventions.

33 With respect to the appellant’s claim for declarations, his Honour followed the approach of Gray J in Carr v Higgins Coating Pty Ltd [2005] FCA 1809; (2005) 148 IR 201, [21]:

It is also important to note that a declaration settles a controversy; it does not simply give effect to an agreement.

The trial Judge continued:

There is a public interest in recording in a formal way the fact that the law has been contravened. This purpose is achieved by reasons for judgment referring to the agreed facts and the admissions made. A declaration however clothes the outcome with an authority which it does not have. It gives the outcome the appearance of a remedy granted by the Court after a deliberation on the facts and the law. A declaration which reflected the true agreed position would commence "Declaration that on the basis of facts agreed between the parties and the admission by the respondent that it contravened s 187AB(1)(a) by .....". Such a declaration adds nothing to a reference in the reasons for judgment that the contraventions are admitted on the basis of agreed facts which are set out in those reasons.

Additionally, his Honour noted that the fourth respondent was an individual who had not contravened s 187AB before, which was a "strong mitigating factor" in his Honour’s view.

34 On the hearing of the appeal, the appellant accepted that, in each of the respects which is presently controversial, the decision of the trial Judge involved the exercise of a judicial discretion of the kind that would be overturned only in accordance with the well-known principles in House v The King [1936] HCA 40; (1936) 55 CLR 499. It was submitted on behalf of the appellant that, in each respect, the exercise of his Honour’s discretion had miscarried, and that we should impose appropriate penalties upon the Union, and make declarations with respect to the conduct both of the Union and of the fourth respondent.

35 Although the arguments presented on behalf of the appellant were extensive, only in one respect can we discern any appellable error in the way the trial Judge dealt with the case on penalties. It will be noted that an item on his Honour’s summary list of considerations which moved him to impose no penalties in the circumstances of the case was that "the contraventions were by shop stewards employed by Multiplex, who did not know they were acting in contravention of the law". A reading of his Honour’s reasons as a whole discloses that this consideration cannot be dismissed as relatively inconsequential; indeed, we are inclined to think that it was quite significant in the overall balancing of discretionary considerations undertaken by his Honour.

36 The agreed facts did not deal with the question whether the fourth or fifth respondents knew that they were acting in contravention of the law in relation to their conduct on the Concept Blue site on 5 and 6 August 2003. The question was not touched upon, one way or the other. Although both of those respondents affirmed affidavits which were admitted into evidence, those affidavits too said nothing about the deponents’ state of knowledge as to whether their conduct involved a contravention of the law. His Honour recognised that circumstance in the following paragraph of his reasons:

Another consideration to be taken into account on the question of penalty is whether the contraventions were deliberate. The conduct of the fourth and fifth respondents was deliberate in the sense that they intended to make the claims for payment and participated in the stoppages in order to force Multiplex to pay the moneys sought. In this case, the only conduct relied upon was conduct by the fourth and fifth respondents and there is no statement in the agreed facts that they knew that their conduct was in contravention of the law. They were not cross-examined on their affirmations.

Later in his reasons, his Honour drew some distinctions between the case before him and Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543. In this respect, his Honour said:

In the present case, the dispute on 5 and 6 August 2003 was handled by the shop stewards on site. The employees returned to work on 6 August after a visit by the organiser, Mr Setka. He was originally named as the third respondent in this proceeding. The applicant sought and was given leave to discontinue the application against him. The agreed facts do not indicate that the fourth and fifth respondents knew that their actions contravened the Act.

37 To this point in his reasons, his Honour had accurately reflected the state of the evidence before him. However, his Honour continued:

There was a significantly higher degree of culpability in Caelli than in the present case. Here, the Union acted through shop stewards who were employees of Multiplex on site and who were not aware that their action was unlawful. In Caelli, the Union acted through an employed organiser who knew that his conduct was unlawful. In the present case the conduct was limited to the time immediately following the refusal by Multiplex to follow its usual practice of paying for lost time. The evidence of the fourth and fifth respondents is that they assumed that the employees would be paid for the period of the safety audit because that had been the practice of Multiplex in the past and that they had no reason to suspect that the safety audit was conducted without Multiplex’s agreement. The dispute arose because Multiplex departed from its previous practice. The conduct was spontaneous and reactive. In Caelli, the conduct was taken a few weeks later at a different site and the conduct thereby had a degree of calculation, planning and deliberation that is absent in this case. It was taken against a known practice of Caelli of refusing to pay for lost time.

The next reference to the subject of the fourth and fifth respondents’ consciousness of the unlawfulness of their conduct was in the summary list of considerations to which we have referred above.

38 As is apparent from the extracts set out above, his Honour proceeded from an observation that there was nothing in the agreed facts, or in the evidence otherwise, which indicated that the fourth and fifth respondents knew that their conduct was in contravention of the law to what was effectively a finding that they did not know that what they were doing was in contravention of the law. With respect to his Honour, that finding was not open on the evidence before him. The absence of an agreed fact, or of any evidence, one way or the other on this subject was accepted by counsel for the respondents, but it was submitted, in effect, that, if counsel for the appellant wanted his Honour to take into account the circumstance that the fourth and fifth respondents knew that they were acting contrary to law, he should have established that fact, and should have cross-examined them on the matter. That is correct so far as it goes, but the way his Honour dealt with the subject in his reasons went further than merely to decline to accept such a submission by counsel for the appellant upon the ground that there was no evidence as to the fourth and fifth respondents’ knowledge. His Honour made the positive finding that those respondents did not know that they were acting contrary to the law. Such a finding, in our respectful view, cannot be sustained simply on the basis that counsel for the appellant declined to cross-examine those respondents with a view to eliciting evidence to the contrary effect.

39 For the reasons set out above, we take the view that the considerations by reference to which the trial Judge informed the exercise of his discretion on the matter of penalties involved an error of fact which cannot be dismissed as inconsequential. The appeal must be allowed in relevant respects, and we should proceed to consider the matter of penalties for ourselves.

40 Of the items set out on his Honour’s summary list of considerations, we would, with respect, agree that the first, second, third, fifth, seventh, eighth, ninth and tenth are proper matters to be taken into account in the determination of an appropriate penalty to be imposed on the Union. We would adopt those considerations as our own. Generally, they point to the imposition of a penalty towards the lower end of the range. However, the question arises: is this is an appropriate case in which to impose no penalty at all?

41 According the sixth item on his Honour’s list, the shop stewards on site, including the fourth and fifth respondents, were acting in accordance with the Union policy, which responded to concerns in the construction industry for the safety of construction workers. There are, with respect, two aspects of this proposition as to which we have reservations. First, as is apparent from the terms of the policy itself, it is no part of the policy that employees stopping work in accordance with its terms should be paid their wages for the period of the stoppage. So much was accepted by counsel for the respondents, but they submitted that, alongside the policy as such, there existed a practice which was described by Mr Kingham in his affidavit in the following terms:

I am aware that at the time of the events which lead to this prosecution that there was a general practice in the construction industry that [sic] following a death of a construction worker. That practice involved a safety audit of the site (and not just the site where the death occurred but on all commercial construction sites) and this is followed by safety rectification work of any safety issues identified in the safety audit. While this safety audit and safety rectification work is being undertaken no productive work takes place. This practice is generally agreed to by the employers. Accordingly, the employees are paid while this process is undertaken. Whether it was specifically agreed in the matter currently before the Court I can not say and the evidence that I provide to the Court is in a general sense as opposed to the factual basis of this proceeding.

Counsel submitted that, when his Honour referred to the circumstance that the shop stewards were "acting in accordance with the Union policy", he should be taken to have intended a reference to the practice to which Mr Kingham referred; or at least, in our consideration of the matter, we should focus upon the practice as well as the policy, rather than upon the policy alone.

42 We are content to proceed as proposed by counsel for the respondents. However, as Mr Kingham made clear, the practice to which he referred was in the nature of a general tendency across the industry as a whole. He was not pretending to know whether, in the facts of the present case, Multiplex as employer had agreed to the stoppages of work on which the appellant relied under s 187AB or to the payment of wages therefor. Further, Mr Kingham also made it clear that the practice to which he referred related to the period of the conduct of the safety audit itself, not to the separate, albeit associated, stoppages upon which the appellant relies. We cannot discern in the features of the practice to which Mr Kingham referred, any (even general) agreement by employers to pay wages for work stoppages which are not involved in an audit as such.

43 The second aspect of the sixth item as to which we have reservations relates to the purposes for which his Honour deployed his conclusion that the shop stewards were acting in accordance with the Union policy. We consider, with respect, that this might have been a proper consideration by way of mitigation in the case of individuals, such as the fourth and fifth respondents, who implemented the Union policy on particular building sites. However, in this part of his reasons, his Honour was concerned only with the question whether a penalty should be imposed upon the Union as an organisation. In this respect, we do not consider it to be mitigatory that representatives of the Union were acting in accordance with the Union’s own policy. Given that they were so acting, the more significant question, in our view, is whether the policy was contrary to the law as expressed in s 187AB of the WR Act. The trial Judge did not deal with that question in his reasons for judgment.

44 The same Union policy was implemented in the facts of the case leading to the judgment of the Full Court in Ponzio. Marshall J said (158 FCR at 545 [3]) that the facts and circumstances of that case illustrated "the inherent conflict between adhering to the 2002 policy and complying with ss 187A [sic] and 187AB of the Act." The same conclusion was at least implicit in the reasons of Lander J (158 FCR at 558 [86]-[87]). Jessup J (158 FCR at 574 [153]) considered that there was "no reason to assume ... that the union ... would have contemplated a protocol for safety audits and the like that necessary involved a breach of the law." It seems that the members of the Full Court in Ponzio took the view that, if par (iii)(a) of the policy required the cessation of "all productive work" in circumstances where the employer in question had not agreed to that cessation, and if the payment of wages for the period of the cessation was later claimed, and/or if industrial action was engaged in or organised in support of such a claim, implementation of the policy according to its terms would necessarily have involved a contravention of s 187AB(1)(b) of the WR Act. The appropriateness of this conclusion on the facts of the present case is somewhat clouded since, at least at the time when the safety audit at the Concept Blue site was being undertaken, the shop stewards on site believed that they had the agreement of Multiplex to the conduct of the audit (and, we infer, to the cessation of productive work during the period of the audit). That circumstance, however, was referred to in the fifth item on his Honour’s list and does not, in our respectful view, sustain the correctness of the proposition that the mere fact that the shop stewards were acting in accordance with Union policy should be regarded as a mitigating factor in the appellant’s case against the Union as an organisation.

45 However the foregoing considerations may be, the present case does not involve a claim for payment in relation to time lost during the conduct of the audit. It involves a claim for payment during the time of a stop work meeting held immediately before the audit, and during the period on the afternoon of 5 August and the morning of 6 August when the stoppage of work was for the express purpose of claiming payment for time not worked, rather than to facilitate the conduct of the safety audit itself. In all the circumstances, we would not regard it as a mitigating factor, in the appellant’s case against the Union, that the shop stewards on site were acting in accordance with the Union policy, whether or not understood in the context of the wider practice to which Mr Kingham referred.

46 We turn next to the eleventh item on the trial Judge’s summary list of considerations. It is true that the Union has been punished for contraventions which had "a common background" with those admitted in the present case. However, relevantly to this eleventh item, the situation was not one in which a multiplicity of contraventions necessarily, or at least most probably, followed from a single conscious act on the part of the Union. By way of contrast, we would accept that, for example, the indiscriminate conduct of safety audits across the whole building and construction industry, or some segment of it, in accordance with the Union policy might legitimately be regarded as a single conscious act which was carried into effect in a multiplicity of separate employment situations. However, in relation to the contraventions of s 187AB(1) of the WR Act, what was required, and what happened, was the conscious act of making a claim from Multiplex, and a considered response to the refusal of that claim by Multiplex. These actions were not the necessary, or even the most probable, consequence of a single decision taken with reference to the industry as a whole. For our own part, we would not regard the circumstance that the Union has been punished for other contraventions which have no more than a common background as mitigating apropos the seriousness of its conduct in relation to Multiplex as an employer on the Concept Blue site. We consider that the contraventions of s 187AB(1) of the WR Act should stand alone, and should attract appropriate penalties without reference to the fact that the Union had been punished for other contraventions.

47 Taking into account the matters to which we have adverted above, we consider that a penalty should be imposed upon the Union in the present case. The Union should have credit for the mitigating circumstances as to which we have agreed with the trial Judge. Another factor which we would take into account is the fairly prompt action of the organiser of the Union in coming to the Concept Blue site on the morning of 6 August 2003. We have no information as to the role he actually played in securing a return to work, but his presence at least demonstrated what we infer was a legitimate concern on the part of the Union that industrial action in possible breach of s 187AB should not be allowed to continue unchecked.

48 As his Honour found, in the facts of the case there was one contravention of par (a), and one contravention of par (b), of s 187AB. The maximum penalty for each, at the relevant time, was $10,000. As mentioned previously, we consider that a penalty somewhat towards the lower end of the range is called for in each case. A penalty of $1,500 would, in our view, be appropriate for each contravention considered as a single entity. Because the two contraventions were closely related in point of time, context and purpose, we would then apply the totality principle in order to arrive at a single penalty to be imposed on the Union for the two contraventions. In our view, that penalty should be $2,500.

49 Turning to the appellant’s claim for declarations, it is important, in our assessment of the matter, to be clear about the particular basis upon which the trial Judge exercised his discretion not to grant the relief sought. He did so because the contraventions to which the declarations would have related were established by the agreement of the parties, not by the adjudication of the court. Following Gray J in Carr, his Honour took the view, as a matter of discretion, that it would be inappropriate to clothe the outcome of the proceeding with an authority which it did not have. Was this a permissible basis upon which his Honour might have declined to make declarations?

50 It is, in our view, as well to recall that there are at least five different situations in which the court might, for various reasons, express a reluctance to make orders of a particular kind – specifically, in the present context, declarations. They are:

1. Where the dispute said to underlie the proceeding as a whole is entirely hypothetical, thereby not properly attracting the exercise of the judicial power of the Commonwealth.

2. Where, in a proceeding conventionally commenced and properly attracting the judicial power of the Commonwealth, the underlying dispute has been settled, and it is part of the settlement that the court should be asked to make particular orders by consent.

3. As in situation 2, but where the parties are not agreed on the remedial orders which should be made (albeit that the facts and law are agreed or not controversial).

4. Where the terms of the declaration sought record the result of the case, but do not establish the content of the parties’ ongoing rights or obligations.

5. Where the declarations sought are in the form of what Gummow, Hayne and Heydon JJ described as "a bad precedent" in Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53, 91 [90].

51 The reason given by the trial Judge in the present case for declining to make a declaration corresponded with what we have described as the third situation in the previous paragraph. With respect to his Honour, we do not consider that the judgment of Gray J in Carr was, in relevant respects, precedent for regarding the mere fact that the matters in contention in the proceeding had been settled, and that the facts and law were thereafter agreed or uncontroversial, as a sufficient basis for declining to make a declaration, where otherwise one would have been appropriate.

52 Carr involved an application under s 187AD in relation to an admitted contravention of s 187AA by an employer. In light of a number of mitigating factors, of apparently quite obvious significance, counsel for the applicant in that case conceded that it would be an appropriate case for no penalty to be imposed. Gray J agreed with that assessment. His Honour continued (at [19]-[24]):

Counsel for the applicant contends that I should nevertheless make a declaration in the form sought in the application. A declaration is not, and is not contended to be, an order consequential upon any of the orders referred to in s 187AD(1) of the Workplace Relations Act. In order to find a power for the Court to grant a declaration it is necessary to go, as the applicant concedes, to s 21 of the Federal Court of Australia Act 1976 (Cth). Subsection (1) of that section provides:

The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

As I have said in my judgment in Australian Competition and Consumer Commission v Francis [2004] FCA 487; (2004) 142 FCR 1 at [92]–[113], I have great difficulty accepting that a declaration which does nothing more than record a historical event is properly described as a declaration of right. A declaration of right settles a state of dispute between parties, by declaring what the rights of one or other or both of them are, and enables them to conduct their relations in the future on the basis that their rights are thereby established. In essence, it is a remedy looking towards future conduct, rather than at past conduct. It is also important to note that a declaration settles a controversy; it does not simply give effect to an agreement. In the present case, there is an agreement that there has been a contravention by the respondent of s 187AA(1)(b) of the Workplace Relations Act. In my view, the making of a declaration reflecting that agreement would not be a proper exercise of the Court’s power. I am aware that it has become a practice under the Trade Practices Act 1974 (Cth) (the Trade Practices Act) for applicants to seek, and for the Court to make, declarations that appear to do nothing other than reflect the fact that past conduct amounts to a contravention of provisions of that Act. Declarations in that form have often been made in cases in which the option of a penalty has not been available, but have also been made in cases where a penalty is an option, and even in cases in which penalties have been opposed. It is perhaps too late to protest about that practice under that Act, it having been sanctioned by the High Court of Australia, at least impliedly, in Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; (2003) 216 CLR 53 at [89]–[90] per Gummow, Hayne and Heydon JJ, by the failure of the High Court to condemn the making of declarations of that kind, even though it condemned the particular, rather vague, form of the declarations that had been made in that case. Recent cases under s 187AA of the Workplace Relations Act suggest that the practice is threatening to spill over from the Trade Practices Act to that area. There have been a number of cases in which judges have made declaratory orders where they have not imposed penalties under s 187AA. In no case, so far as I am aware, has any judge engaged in discussion in reasons for judgment about whether the making of such a declaration is appropriate. In my view, it is not. Counsel for the applicant contends that the making of a declaration would send the right message to others that the law is being enforced. I am not sure that a case such as this would gain such notoriety that others would inevitably learn what they would learn from reading s 187AA of the Act, namely that it is unlawful to make payments to employees who are engaging, or have engaged, in industrial action. As I have said, there are circumstances in which the making of orders by courts in relation to conduct of parties that is essentially innocent can operate more to bring into disrepute the laws under which the orders are made than to maintain the integrity of that system of laws. I think it would be unfortunate to be making any declaration in a case such as this, which I think would not tend to promote respect for the law.

It will be seen that a declaration was refused in Carr because of Gray J’s view that it was not appropriate for the practice which had developed under the Trade Practices Act 1974 (Cth) "to spill over" into the arena of s 187AA of the WR Act. The vice in that practice, according to his Honour, was that declarations of the kind that he deprecated "appear to do nothing other than reflect the fact that past conduct amounts to a contravention of provisions of [the Trade Practices Act]". This was, in effect, the fourth situation referred to above. Although Gray J said that it was "important to note" that a declaration settles a controversy, rather than simply giving effect to an agreement, that was not, it seems, the essential basis by reference to which his Honour declined to make a declaration in Carr. With respect to the trial Judge in the present case, we take the view that his Honour exercised his discretion against the appellant in relevant respects by reference to an observation made by Gray J in Carr, rather than by reference to the ratio decidendi to be identified in that judgment.

53 As Gray J noted in Carr, the joint judgment in Rural Press has at least implicitly given approval to declarations of the kind referred to in the fourth situation mentioned above; provided always, of course, that the form of such declarations avoids the "bad precedent" referred to in the fifth situation. There can, therefore, be no objection in principle to the making of a declaration where the purpose and utility thereof is formally to record the basis upon which the proceeding in question has been resolved (whether by adjudication or otherwise). We agree with the way the matter was put by Lee J in Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd (2004) 207 ALR 329, 333 [21]:

However, on the other hand it may be said that there is some utility in declaring contraventions of the Act to have occurred in order to define and publicise the type of conduct that constitutes a contravention of the Act and to set out clearly the foundation on which the consequential orders by way of injunction and pecuniary penalty, including those based on accessorial liability, are grounded: see Rural Press Ltd v ACCC [2003] HCA 75; (2003) 203 ALR 217 per Gummow, Hayne, Heydon JJ at [95]; RAIA Insurance Brokers Ltd v FAI Insurance Co Ltd [1993] FCA 92; (1993) 41 FCR 164 at 167[1993] FCA 92; ; 112 ALR 511 at 514 per Davies J, Beaumont, Spender JJ at FCR 175– 8; ALR 522–5.

With respect to those who take a different view, we cannot agree that the acceptability of declarations which record the outcome of a proceeding is confined to matters arising under the Trade Practices Act. The decision whether to make a declaration will, of course, always be a matter for the discretion of the court, but, if the circumstances are otherwise appropriate, we cannot see why a declaration of this kind might not at least be an available remedy in any proceeding.

54 Returning to the reasons of the trial Judge in the present case, as we have pointed out above, his Honour appeared not to be concerned merely that the declaration sought would go no further than to record the outcome of the proceeding before him. Rather, it was the fact that he was being asked to make a declaration on the agreement of the parties, and that there had been no adjudication, which was of concern to his Honour. With respect to his Honour, we do not consider that the fact that a case has been substantially settled, to the point where all issues of fact and law are agreed or otherwise uncontroversial, should of itself exclude the declaratory remedy from consideration, if otherwise the making of a declaration would be appropriate. Neither do we agree with his Honour that the making of a declaration in circumstances of the kind which came before him would have clothed the outcome with an authority which it did not have. The outcome had the authority which attends any completed proceeding in the court. A declaration would have formally recorded the outcome and, in our respectful view, would have been wholly consistent with the intrinsic authority thereof.

55 We do not for a moment suggest that the trial Judge was obliged to make a declaration, much less that he was so obliged simply because of the measure of agreement which existed between the parties. The remedy of a declaration is always discretionary; nothing we have said in these reasons should be taken as implying that it might not have been declined on proper grounds. Our point is simply that the circumstance that the facts and law had been agreed, or were substantially uncontroversial, should not have been regarded as sufficient of itself to disqualify the appellant from obtaining this remedy, and should not have been treated as though the authority of the court was not legitimately, and quite conventionally, invoked in the grant thereof.

56 In the present case, the applicant relied upon an Amended Statement of Claim dated 10 December 2004. In their Defence dated 24 March 2005, the Union, and the fourth respondent, denied virtually all of the significant allegations made against them. By the time the matter came on for hearing, the parties had agreed to a statement of facts which corresponded very closely with the allegations set out in the Amended Statement of Claim. That is to say, at the point of the institution of the proceeding, and for a considerable time thereafter, the parties were directly in dispute in relation to matters which lay at the core of the appellant’s case. This was not an instance where parties, substantially in agreement from the outset, have simply had recourse to the judicial process for the purpose of securing the stamp of authority to arrangements as to which there is no dispute.

57 We are unable to regard the present case as any different from normal litigation which is commenced because, in a situation of disputation, one party considers himself or herself to be entitled to remedies which it is within the jurisdiction of the court to grant, where the other party contests the basis of that entitlement, and where, before trial, the proceeding is settled upon agreed terms. This was not a case in which the settlement went to the point of agreeing upon the remedies to be sought. This left the trial Judge in the position where, against a background of substantial agreement, he was obliged to determine the appellant’s application for particular remedies in an environment of forensic disputation to that extent. While the appellant’s application for a declaration was undoubtedly one to be determined in the discretion of the trial Judge, we do not, with respect, consider it was open to his Honour to decline that relief upon no basis other than that, by the time he came to consider the question, the parties had reached that measure of agreement.

58 Dealing with the application for a declaration for ourselves, we can see no particular utility in granting such a remedy in the case of the Union. The penalty which we would impose is one for which s 187AD of the WR Act directly provides, and our order in that regard should make clear what was the contravention for which the penalty was imposed.

59 In the case of the fourth respondent, however, the appellant did not seek, and we shall not impose, a penalty. On the other hand, we do not think that an order dismissing the proceeding as against the fourth respondent would accurately or appropriately reflect the outcome of the proceeding as against him. We do not accept that the reasons of the court alone will provide a sufficient public record of the way in which the appellant’s application was resolved in relevant respects. As Lee J said in Midland Brick, there is some utility in using the declaration to define and publicise the type of conduct that constitutes a contravention of the WR Act. In our view, that utility is more obvious in a situation in which contraventions are admitted or have been found, in which no other relevant orders are to be made, and in which, therefore, the only formal record of the disposition of the proceeding, absent the making of a declaration, would be a dismissal thereof.

60 With respect to the trial Judge’s reference to the circumstance that the fourth respondent was an individual who had not been found to have contravened s 187AB of the WR Act in the past, we take the view that that circumstance is appropriately recognised in the appellant’s decision not to seek the imposition of a penalty upon that respondent. For our own part, we do not consider that the circumstance is sufficient to neutralise or to outweigh the considerations referred to above, by reference to which we would exercise our own discretion to make a declaration in the case of the fourth respondent.

61 For the reasons set out above, we take the view that the appeal should be allowed, that a penalty of $2,500 should be imposed on the Union, and that declarations should be made recording the constituent elements of the fourth respondent’s contravention of ss 187AA and 187AB of the WR Act.

62 We have had the opportunity to read the reasons for judgment of Gray J in draft form. Having regard to the manner in which the appeal was conducted, it was not necessary to address the issues raised by Gray J in pars 4 to 10. The fact that we have not done so should not be taken as our agreement with the observations of Gray J in those paragraphs.

63 In particular, when a ground of appeal is that a trial Judge’s exercise of discretion has miscarried, consistently with the principles in House v The King, counsel for the appellant should not be inhibited from submitting that observations and statements made by the Judge in the course of the trial have had a bearing on the Judge’s exercise of discretion, if counsel has formed the view that there is a basis for such a submission. The conduct of a trial by a Judge, and statements made by the Judge in the course of the trial, may be relevant to a ground of appeal even though such conduct and statements are not referred to in the Judge’s reasons for judgment.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Goldberg & Jessup.

Associate:

Dated: 5 November 2008

Counsel for the Appellant:	RJH Maidment SC with PM O’Grady
Solicitor for the Appellant:	Australian Government Solicitor
Counsel for the Respondents:	JBR Beach QC with CW Dowling
Solicitor for the Respondents:	CM Gamble

Date of Hearing:	13 May 2008
Date of Judgment:	5 November 2008