Alfred v Construction, Forestry, Mining and Energy Union

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

JUDGE: TRACEY J DATE: 2 june 2011 PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant is an inspector appointed for the purposes of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act"). He has laid a charge of contempt of Court against the Construction, Forestry, Mining and Energy Union ("the CFMEU") alleging contravention of orders made by the Court on 20 May 2010 and varied on 24 May 2010. 2 The charges arise out of events which occurred at a site in Epping at which the new Melbourne Wholesale Fruit, Vegetable and Flower Market ("the market") is being constructed. The CFMEU organised a blockade of the site for some 10 days between 19 May and 28 May 2010. During this time productive work ceased because the blockade prevented workers and equipment from entering the site. A more detailed account of what occurred during this period is given in other reasons for judgment handed down today: see Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556 ("Alfred (No 1)"). This account is based on a statement of agreed facts which was tendered by the parties. The facts were agreed for the purposes of this proceeding, including the adjudication of the Applicant's motion that the CFMEU be adjudged guilty of contempt. 3 After the blockade commenced, another inspector, appointed under the BCII Act, sought and obtained interim orders against the CFMEU to restrain the continuation of the blockade. Those orders were made on 20 May 2010. Order 1 provided: "Until the hearing and determination of this proceeding or until further order, the respondent whether by itself, its officers, employees or agents be restrained from: (a) preventing or hindering the access of any person or vehicle to the construction site for the new Melbourne Wholesale Fruit, Vegetable and Flower Market at 315 Cooper Street, Epping; (b) counselling or procuring any person not to enter the said site; (c) counselling or procuring any employee or agent of, or person contracted to, Bovis Lend Lease Pty Ltd or Fulton Hogan Pty Ltd, not to work upon the said site; (d) placing or leaving any vehicle, trailer, apparatus, equipment or thing within 100 metres of any entrance to the said site; and (e) attending or organising or procuring any person or persons to attend, within 100 metres of any entrance to the said site, save for such entry to the site as may be authorised by law, for the purpose of using a public road for reasons unconnected with the said site or for the purpose of complying with these orders." 4 On 24 May 2010 these orders were varied by adding a new sub-paragraph 1(f) which dealt with "interfering with the site or its perimeter fencing". 5 There is no dispute that these orders were served on the CFMEU shortly after they were made and that senior officials of the organisation were aware of the substance (if not the terms) of the orders. 6 By a further amended statement of charge dated 15 April 2011 the Applicant has alleged that the CFMEU was in contempt of Court in that: "In breach of sub-paragraphs 1(a), 1(d) and 1(e) of the Order, during the period between about 10.13am on Friday 21 May 2010 and about 1.38pm on 28 May 2010 (the relevant period) the respondent by itself, its officers, employees or agents did not refrain from preventing or hindering the access of any person or vehicle to the Site." 7 The charge was particularized as follows: "During the relevant period, the respondent through numerous of its organisers and officials: a) regularly attended the immediate vicinity of the main gate entrance of the Site; b) maintained a significant physical presence at the main gate entrance of the Site; c) left the crushed rock and left or maintained a 44 gallon drum, with the wood fire burning in it, directly in the main gate entrance as an impediment to persons or vehicles accessing or leaving the Site; d) arranged for or otherwise caused or permitted the delivery of wood to continue the wood fire in the 44 gallon drum; e) continued to use at or near the main gate entrance of the Site the deckchairs, gazebos, 44 gallon drum(s) and temporary fencing as impediments to persons or vehicles accessing or leaving the Site; f) left at and around the main gate entrance of the Site CFMEU flags and signs with derogatory messages about Bovis Lend Lease Pty Ltd and Fulton Hogan Pty Ltd; and by each and all of that conduct continued to prevent or hinder the access of any person or vehicle to the Site. During the relevant period, the respondent by itself, its officers, employees or agents placed or left vehicles within 100 metres of the main entrance to the Site, specifically the following vehicles registered to the respondent and made available for use by its organisers and officals. a) on 21 May 2010, WOK-939, WOK-940, XQS-050; b) on 24 May 2010, WML-264, WML-266, WTY-070; c) on 25 May 2010, WML-268, WOK-939 d) on 26 May 2010, WOK-939; e) on 27 May 2010, WOK-939, WML-264, XBU-609. At the time of the making of the order at about 5pm on 20 May 2010, there were several things at the main gate entrance to the Site including: a) CFMEU flags; b) a large pile of crushed rock; c) one or more 44 gallon drums; d) firewood; e) deck chairs; f) temporary gazebos; g) temporary fencing panels. By sub-paragraph 1(d) of the Order, the respondent was required to refrain from placing or leaving any of those things within 100 metres of any entrance to the Site. The respondent by itself, its officers, employees or agents breached this requirement in sub-paragraph 1(d) of the Order by: a) failing until about 1.38 pm on Friday 28 May 2010 to take any steps, or any effective steps, to remove those things from the main entrance to the Site or from within 100 metres thereof; b) using one or more 44 gallon drum(s), the firewood, the gazebos and the deck chairs for the purposes of maintaining the picket at the main entrance to the Site until about 1:38 pm on Friday 28 May 2010. Numerous of the respondent's organisers and officials attended within 100 metres of the main entrance to the Site during the relevant period, namely Ralph Edwards, Mick Powell, Shaun Reardon, Elias Spernovasilis, Tom Watson, Gareth Stephenson, Noel Washington, Gerry Benstead, Derek Christopher, Fergal Doyle, Brendan Pitt and Matt Hudson." 8 These particulars allege both action and inaction on the part of the CFMEU. Some obstacles to movement on to and from the site were in place at the time the Court's order was made. Other obstacles were introduced later in defiance of the Court's order. Order 1(a) restrained the CFMEU from "preventing or hindering" the access of persons or vehicles to the site. It was not disputed that this order operated to require the CFMEU to remove obstacles which were impeding access to the site at the time the orders were made: see Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No 2) (1987) 15 FCR 64 at 74-5 (per Wilcox J). 9 The CFMEU, through its counsel, pleaded guilty to this charge.

PENALTY 10 Section 31(1) of the Federal Court of Australia Act 1976 (Cth) identifies the power possessed by this Court to punish contempt: "Subject to any other Act, the Court has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court." 11 The power possessed by the High Court to punish contempts is specified in s 24 of the Judiciary Act 1903 (Cth): "The High Court shall have the same power to punish contempts of its power and authority as is possessed at the commencement of this Act by the Supreme Court of Judicature in England." 12 When the Judiciary Act commenced, the Supreme Court of Judicature in England had power to punish for contempt, whether civil or criminal: see Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 105-6. The penalties available to the Court depend on who is identified as the respondent to the proceeding: see High Court Rules 2004 (Cth) Rule 11.04.1. In this case, the only respondent is the CFMEU. None of the individual officers or members involved in the contempts was named as respondent. Where, as here, the contemnor is a body corporate, Rule 11.04.1(b) of the High Court Rules provides that the Court may order "that the contemnor pay a fine, that some or all of the property of the contemnor be sequestrated or that both the contemnor pay a fine and some or all of the property of the contemnor be sequestrated." 13 The parties jointly submitted that an appropriate pecuniary penalty for the CFMEU's contempt of court would fall within the range of $100,000 to $175,000. The CFMEU contended, in argument, that the penalty should fall at the very bottom of the range. 14 The considerations relevant to the determination of an appropriate penalty for contempt of court were discussed by the High Court in Mudginberri Station. See also Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 ("BHP Steel") and Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 501-2. Those considerations include: The nature and circumstances of the contempt; The effect of the contempt on the administration of justice; The contemnor's culpability; The need to deter the contemnor and others from repeating the contempt; The absence or presence of a prior conviction for contempt; The contemnor's financial means; and Whether the contemnor has exhibited general contrition and made a full and ample apology. 15 Both parties accepted, in argument, that each of these considerations had potential relevance to the fixing of an appropriate penalty for contempt in the present proceeding.

The nature and circumstances of the contempt 16 The circumstances in which the contempt occurred are explained in my reasons for judgment in Alfred (No 1). These reasons should be read together with those in Alfred (No 1). The blockade was imposed shortly after the CFMEU had abandoned its appeal against the approval of a greenfields agreement between Fulton Hogan and the Australian Workers Union. Its objective, in which it was ultimately successful, was to force Fulton Hogan to enter into an agreement with it which regulated the terms and conditions of employment of the employees of Fulton Hogan engaged at the market site. This was to be achieved by conduct which the officials involved well knew to be unlawful. 17 On the day after the blockade was instituted the Court granted an injunction which restrained continuation of the blockade. The Court's orders were promptly served on the CFMEU. The terms of the orders (or the substance of them) were known to officials involved in the blockade. So much is evident from comments made by Mr Ralph Edwards, the president of the Victorian Branch of the union's Construction and General Division in the course of meetings held on 26 and 27 May 2010 in the presence of other officials and representatives of Fulton Hogan. When asked, on 26 May 2010, whether the CFMEU was proposing to comply with the Court's orders, he responded with words to the effect: "It's not for me to say. The last time it cost us a shit load of money." That was, apparently, a reference to the penalties imposed by the Court under the BCII Act as a result of the conduct of the union and some of its officials in the course of a dispute relating to work on the West Gate Bridge: see Williams v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2010] FCA 754. Pecuniary penalties totalling $1,325,000 were imposed on that occasion. On the following day Mr Edwards was even more specific. He said that: "I'm here to do a deal because I know our organisation is in contempt of court in relation to the picket at the site. I understand it is going to be expensive but our fighting fund will have to fix it." (emphasis added). 18 Not deterred by the Court orders the CFMEU maintained the blockade. In doing so it prevented productive work taking place on the site. It deprived some sub-contractors of access to equipment which was on the site. It arrogantly asserted a right to determine who entered the site and what work could be undertaken on it. To provide just one example of this conduct, a union official was said to have told an employee of Fulton Hogan during the blockade: "It's a CFMEU site. It [the blockade] will go on for as long as we say it will go on". When, ultimately, it had achieved its objective, it departed without removing many of the obstacles which it had placed across the entrance. Employees of Bovis and Fulton Hogan were left to remove a large rock pile, 44 gallon drums, rubbish and other debris. 19 The CFMEU submitted that Fulton Hogan's conduct incited or induced it to engage in the offending conduct. That conduct, so it was submitted, gave rise to extenuating circumstances which mitigated the contravention. 20 A more extensive account of the dealings between the CFMEU and Fulton Hogan is provided in Alfred (No 1) at [18]-[24]. In summary, complaint was made about Fulton Hogan's negotiation of a greenfields agreement with the AWU without notice to the CFMEU; the CFMEU's suspicion that approval of the agreement by Fair Work Australia had been procured by false representations that Fulton Hogan had no employees working at the site when it made the agreement with the AWU; and that Fulton Hogan had not responded to the CFMEU's approaches seeking the making of an agreement with it. 21 I have dealt with the CFMEU's "provocation" argument in Alfred (No 1) at [73]-[77]. I do not repeat what was there said. For the reasons there explained the argument carries little weight in mitigating the seriousness of the CFMEU's contempt.

The effect of the contempt on the administrative of justice 22 The CFMEU accepted that the power to punish for contempt serves the purpose of disciplining the defendant and vindicating the authority of the Court: see Mudginberri Station at 112-3. It submitted that its agreement to pay a penalty of at least $100,000 and to pay the applicant's costs on an indemnity basis, those costs being fixed at $150,000, provided an appropriate punishment and vindication of the authority of the Court. 23 The CFMEU also tacitly accepted that the underlying rationale of every exercise of the contempt power is that it is necessary to uphold and protect the effective administration of justice: see Mudginberri Station at 107 (per Gibbs CJ, Mason, Wilson and Deane JJ); it is the means by which the law vindicates the public interest in the due administration of justice: see Attorney-General v Times Newspaper Ltd [1974] AC 273 at 315-6; and is the way in which the Court preserves respect for its role and the rule of law: see Australian Competition and Consumer Commission v Hughes (2001) ATPR 41-807 per Tamberlin J. 24 The public interest in the administration of justice requires compliance with all orders and undertakings: see Witham v Holloway (1995) 183 CLR 525 at 532-3. In Witham the High Court said (at 533): "All orders, whether they be Mareva injunctions, injunctions relating to the subject matter of the suit, or, simply, procedural orders, are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties." 25 On the day after the blockade of the site commenced the Court made orders which, among other things, restrained the CFMEU, by its servants or agents, from preventing access to the site. In particular, the union was restrained from placing obstacles within 100 metres of the entrance to the site. Copies of these orders were promptly served on the CFMEU. Its officials (including those involved in the blockade) were aware that the orders had been made. Despite this, the blockade continued for a further week. In the course of that week additional obstacles were placed across the entrance. Union owned vehicles were repeatedly brought and parked within 100 metres of the entrance. Union officials congregated close to the entrance. 26 This was a very public flouting of the Court's orders. The blockade occurred in a public place. Placards and flags identified the blockade with the CFMEU. In the course of negotiations with the contractors, CFMEU officials made it plain that the blockade would remain in place, notwithstanding the Court's orders, until the CFMEU had achieved its objective. If this meant that the Union would be required to pay a penalty for contempt of Court, so be it. During this time the CFMEU had access to alternative, lawful, means of resolving its dispute with the contractors. It chose not to exercise them. 27 The CFMEU's actions constituted a serious interference with the administration of justice.

Deterrence 28 The CFMEU submitted that, in dealing with this consideration, the Court should bring into account what was described as "the significant burden" which would be imposed on the union by any costs order which was made against it and by the fact that it had to bear its own legal expenses of the proceeding. 29 The question of what, if any, influence awards of costs should have on the determination of penalties for contempt was considered by the Full Court in BHP Steel. Moore J held (at 354) that it was appropriate to take into account the significant burden likely to have been imposed by the indemnity costs order which had been made by the primary judge. Tamberlin and Goldberg JJ agreed, with the reservation (at 360) that: "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 penalties should reflect these matters." 30 In the circumstances of the present case, deterrence, both specific and general, is an important consideration. As was the case in BHP Steel, the present contempt by the CFMEU was "public, serious and substantial." It involved a conscious decision to ignore orders made by the Court and to use the financial resources of the union to satisfy any pecuniary penalty imposed. A meaningful penalty must be imposed in order to attempt to deter the CFMEU, and others who, but for the risk of a high penalty, may be tempted to emulate that union's flagrant disregard of Court orders. The fact that a contemnor has incurred legal expenses in defending charges is to be borne in mind when a penalty is determined, but this consideration does not, as I held in Bovis Lend Lease Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 650 at [40], weigh heavily in mitigation of penalty.

Prior Convictions 31 The parties were agreed that there were two relevant prior convictions for contempt. They occurred in BHP Steel and in Bovis Lend Lease. 32 The CFMEU submitted that BHP Steel should be given little weight because the contemptuous conduct there involved occurred in February 2000 and arose out of conduct engaged in by another division of the union in New South Wales. It also cautioned that relevant prior convictions cannot lead to the imposition of a penalty that is disproportionate to the gravity of the instant contraventions. 33 I accept these submissions. 34 Bovis Lend Lease also dealt with a blockade of a construction site. Its consequences were far less serious than those which attended the present blockade. The union was found to have been guilty of contempt of court by maintaining an obstruction and interfering with the passage of persons in vehicles on to the site of the new Royal Children's Hospital in Parkville in breach of orders made by a judge of this Court. Although vehicles were prevented from entering, gainful work continued on site. A fine of $75,000 was imposed. This penalty did not deter the CFMEU from contravening similar restraining orders in this case.

Contemnor's Circumstances and Financial Means 35 The CFMEU did not seek to rely on its financial means as a matter which ought to be brought into account in fixing penalty. It did, however, note that it had agreed to pay a substantial penalty for contempt and to pay the applicant's costs on an indemnity basis. 36 There has been no suggestion that the CFMEU lacks the financial resources to meet any fine which I might impose. On the contrary, it would appear that it has a fund which has been established for the purpose of meeting such orders.

Apology 37 The CFMEU acknowledged that it had not apologised for its contempt of the Court's orders. It did, however, contend that the absence of an apology was not an aggravating circumstance that might justify higher penalty than might otherwise be justified. 38 The CFMEU's submission in this regard is supported by authority: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] FCA 336 (per Kiefel J at [10]). I accept it.

Related penalty 39 In Alfred (No 1) I imposed a pecuniary penalty of $100,000 on the CFMEU in respect of contraventions of the BCII Act. Those contraventions arose out of the same course of conduct which gave rise to the charges of contempt of court which I am presently considering. I accept the submission of the parties that it is relevant, in fixing a monetary penalty for contempt, to take account of this pecuniary penalty.

CONCLUSION 40 The declaration sought by the Applicant should be made. 41 In all of the circumstances I consider that a fine of $150,000 should be imposed on the CFMEU for its contempt of paragraphs 1(a), 1(d) and 1(e) of the order made by this Court on 20 May 2010. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.