Construction, Forestry, Mining & Energy Union v BHP Steel

The order of the primary judge 99 The primary judge construed the first injunction as requiring the CFMEU to immediately cease strike action. Her Honour said: "The language of the first injunction here is in strong terms in its requirement to 'cease' and it is plain that some urgency attends the requirement for action in that regard because the CFMEU is to do so 'immediately'. It had a choice as to how it was to end the strike it had started, although some steps are so obvious that they go without saying. The requirements of the Order and the result to be achieved were clear." 100 In reaching that conclusion her Honour relied on the reasoning of Wilcox J in Concrete Constructions Pty Ltd v Plumbers & Gasfitters Employees' Union (No 2) (1987) 15 FCR 64. In that case the order restrained the respondent "from maintaining, giving effect to or enforcing any ban …". In a contempt proceeding for breach of the order Wilcox J accepted that a party cannot be committed for contempt on the ground that, upon one of two possible constructions of an order, it had been breached: see Australian Consolidated Press Limited v Morgan (1965) 112 CLR 483 at 515-6. However, Wilcox J (at 72) explained the distinction between such an order and the one he was considering: "However, there is a fundamental difference between an order which is uncertain and an order which, being certain in its meaning, leaves to the addressee a choice as to the manner of compliance …. Provided that the order specifies with certainty the result to be achieved it is not normally for the applicant to suggest, or for the Court to prescribe, a particular method of complying with the order. As Chitty J said in Walthamstow [Attorney-General v Walthamstow Urban Council (1895) 1 TLR 533], 'it was the duty of the defendants to find out the proper means of obeying the order'." 101 Wilcox J held that the order specified what was to be done, by requiring that the Union, its servants and agents, not maintain, give effect to, or enforce any ban which had been imposed before that date. 102 The CFMEU submitted that her Honour erred in construing the order as requiring the CFMEU to take any positive steps. It contended that the order was cast in negative terms, lacked specificity and wrongly assumed the union had the capacity to "cease" the strike action in the sense of compelling employees to return to work. 103 In Australian Industry Group v Automotive, Food, Metals, Engineering, Printed and Kindred Industries Union [2000] FCA 629 ("AIG") at [33] I stated: "Orders of the Court must be in 'clear and unambiguous terms which leave no room for the persons to whom they are directed to wonder whether or not their future conduct falls within the scope or boundaries of the injunction' (ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259 per Lockhart J). Although it is the duty of a defendant to ascertain the proper means of obeying an order, a defendant will not be committed for contempt where the order is not clear and therefore, on one construction of it, there may not have been a breach. In such cases the breach will not have been established beyond reasonable doubt: see Iberian Trust Ltd v Founders Trust and Investments Co [1932] 2 K.B. 87 at 95, Redwing Ltd v Redwing Forest Products Ltd (1947) 177 L.T. 387, John Fairfax & Sons Pty Ltd v Australian Consolidated Press Ltd (1960) SR (NSW) 413 at 416, Australian Consolidated Press Ltd v Morgan (1964) 112 CLR 483 at 503, 506, 515-516, Re Bramblevale Ltd (1969) 3 All ER 1062 at 1064, Concrete Constructions at 71-72 and Nexus Mortgage Securities Pty Ltd v Ecto Pty Ltd (1998) 4 VR 220 at 222-223." 104 If it is intended that positive steps are to be taken under an order it will usually be preferable for the order to specify the steps that are required to be taken. Such an order will limit the scope for argument as to the meaning of the order, what the order requires and whether it has been complied with. The different outcomes of the contempt proceedings against the union (where no steps were specified) and its officers (where steps were specified) in AIG affords a good example of the benefit of specificity. 105 The injunctions ordered by the primary judge clearly and unambiguously required the CFMEU to immediately cease the strike action that it had started, the bans it had imposed, its authorisation to members to stop performing work and not to continue or extend that action, the bans or the authorisation for the purpose of the export coal price dispute ("the proscribed purpose"). It is clear from the terms of the injunctions that their subject matter is industrial action by the unions and that the proscribed purpose is the purpose of the unions in taking that action. The injunctions are not directed at and do not prohibit strike action by the members of the unions nor are the injunctions directed at any purpose of those members in engaging in strike action. 106 I agree with the primary judge's conclusion that the order required the CFMEU to "immediately" take positive steps to bring about a result, namely cessation of the CFMEU's strike action in relation to the export coal price dispute. The CFMEU had a duty to decide how it would take the necessary steps to immediately cease the union's strike action but it was not entitled to do nothing or to delay calling off the strike it had called. In the context of the twenty four hour strike that had already commenced, the word "immediately" was clearly intended, and would be understood by the union, to bear its ordinary dictionary meaning, that is: "without lapse of time, or without delay; instantly; at once." (The Macquarie Dictionary) 107 The CFMEU was not required to procure its members to return to work. Rather, the CFMEU was to immediately take the necessary steps to bring the strike it had called to an end and give appropriate directions to ensure that any bans on work or authorisations to stop work were, likewise, at an end. The orders also restrained the CFMEU from taking, procuring or authorising any further strike action or imposing any further bans for the proscribed purpose. 108 Accordingly, I do not accept the CFMEU's argument that there was ambiguity, uncertainty or lack of specificity in the terms of the order or that it required the CFMEU to bring about a result it could not achieve.

The contempt charges 109 BHP Steel's Statement of Charge stated that the CFMEU be fined for its "contempt in failing to comply with the Order" of the primary judge made on 7 February 2000. Paragraph 1 recited the terms of the Court orders but omitted (presumably inadvertently) any reference to the proscribed purpose in para 2 of the orders. Paragraph 2 provided details of some thirty-seven verbal, facsimile and personal service notifications of the terms of the order as well as notification of the order by the broadcast of its terms over local radio. 110 Paragraph 3 of the Statement, relevantly, stated: "3. In breach of the Order, from the time of the making of the Order and continuously thereafter until 4 pm on 9 February 2000, at the Applicant's Tower Colliery, Elouera Colliery, West Cliff Colliery, Appin Colliery and Cordeaux Colliery the Respondent: (a) continued to take strike action for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices; (b) continued its ban upon employees attending for work and performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices; (c) continued to authorise members of the Respondents who were employees of the Applicants to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices; (d) authorised members of the Respondents who were employees of the Applicants to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices; (e) directed members of the Respondents who were employees of the Applicants to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices; (f) procured members of the Respondents who were employees of the Applicants to stop performing work in accordance with the applicable awards or certified agreements for the purposes of a dispute or disagreement about or concerning negotiations or the outcome of negotiations over export coal prices. The affidavits relied upon by the applicants in relation to these allegations are identified in the particulars below. PARTICULARS OF CHARGE The employees of the Applicant listed below in Schedule A failed to return to work on their appointed shifts as set out in Schedule A because the Respondent: (i) failed to inform such employees that the strike which it had required to begin at the Respondent's said collieries for 24 hours from midnight AEDST on 7 February 2000 had ceased; … (ii) failed, between the time of the said Order was made and 4 pm on 9 February 2000 to inform such employees that they should return to their duties; … (iii) failed to cancel a meeting that had been called for 10 am AEDST on 8 February 2000 at the Wonoona [sic] Bulli RSL Club, for the purposes of the strike; … (iv) by its authorised officer, one Tony Maher, at about 8.30 am AEDST on 8 February 2000 on ABC radio, represented that the strike was continuing in order to 'drive home a message to BHP Steel'; … (v) organised and conducted a union meeting at 10 am AEDST on 8 February 2000 at the Wonoona [sic] Bulli RSL Club, at which a resolution was passed to extend strike action for a further 24 hours from midnight AEDST on 8 February 2000; … (vi) at about 10 am AEDST on 8 February 2000 at the Wonoona [sic] Bulli RSL Club, passed a resolution to extend strike action for a further 24 hours from midnight AEDST on 8 February 2000. …". 111 Schedule A, which appeared under sub-paras (i) and (ii) of the Particulars, described and set out the paragraphs in the Applicant's Affidavits which identified the employees who allegedly failed to return to work (para (i)) or who were not informed that they should return to work (para (ii)). Under each of the other sub-paragraphs particulars were given of the paragraphs of the Applicant's affidavits upon which reliance was being placed. 112 One of the main grounds of the CFMEU's appeal was that the primary judge failed to make findings in respect of the charges as particularised and, to the extent findings were made, it contended that the Particulars could not have constituted a contempt. In substance, the CFMEU submitted it was convicted of a contempt with which it had not been charged. It contended: "In the Statement of Charge in the present matter the charge itself is in the broadest possible terms. The charges are broken into six sub paragraphs each alleging positive conduct on the part of the appellant in breach of the order. The conduct/omissions alleged to constitute the contempt were identified, and only identified, in six particulars of charges. It is not clear to which if any of the sub paragraphs of the charge each particular of charge is directed. It was to the charge as particularized, and only to the charge as particularized, that the appellant was required to and did direct its evidence. Her Honour erroneously failed to make findings with respect to: (a) Whether any of the particulars were established; (b) Which particulars went to establishing which count, if any, of the charge; (c) Whether if established the particulars could constitute contempt of the orders. The particulars of the charge were either not provided (Particulars (i) - (ii) and (vi)), or could not on any view have constituted (and were not found by her Honour to constitute) contempt of the Order (particulars (iii) - (v) inclusive)." 113 The contempt with which a person is charged must be sufficiently explicit in the Statement of Charge, read fairly and as a whole. If it is not, a contempt conviction can be set aside, even if the facts found may have otherwise justified the conviction: see Coward v Stapleton (1953) 90 CLR 573 at 579-580 and Australian Building Construction Employees' and Builders' Labourers' Federation v Minister of State for Industrial Relations (1982) 43 ALR 189 ("the BLF case") at 211-212. 114 As was stated Coward v Stapleton at 579-580 by Williams ACJ, Kitto J and Taylor J: "…it is a well-recognized principle of law that no person ought to be punished for contempt of court unless the specific charge against him be distinctly stated and an opportunity of answering it given to him: In re Pollard; R v Foster; Ex parte Isaacs. The gist of the accusation must be made clear to the person charged, though it is not always necessary to formulate the charge in a series of specific allegations: Chang Hang Kiu v Piggott. The charge having been made sufficiently explicit, the person accused must then be allowed a reasonable opportunity of being heard in his own defence, that is to say a reasonable opportunity of placing before the court any explanation or amplification of his evidence, and any submissions of fact or law, which he may wish the court to consider as bearing either upon the charge itself or upon the question of punishment." See also Doyle v The Commonwealth (1985) 156 CLR 510 at 516. 115 In Concrete Constructions at 73 Wilcox J, in analogous circumstances, discussed the role of particulars in a Statement of Charge: "The second question is whether the statements of charge sufficiently specify the alleged breaches. I think that they do. In each case the charge sets out the relevant orders and then alleges, in positive terms, that the respondent did the enjoined act. In essence, the complaint is that, the respondent being told to refrain from particular conduct, the respondent in fact committed that conduct. This is a clear enough allegation. It is true that, without more, the respondent would not know whether it is the case of the applicant that it carried out some positive act amounting to breach, and if so what act, or whether it is said that there was a contravention by the failure of the respondent to take a positive step necessary to bring to an end the condition of maintaining the ban. But that is the function of particulars; and in each of these cases particulars were included in the charge. In relation to omissions it is difficult to do more than to say that no action was taken. But this is sufficient. The respondent then knows the case it has to meet and that it will be an answer to that part of the case to show, if it can, either that no positive action was, under the circumstances, required or that it did take the relevant step. … In the case of allegations of positive actions in contravention of an order particulars of a charge should inform the recipient of the substance of the case sought to be made. It is not necessary to set out the evidence which will establish that case; that will normally be contained in the affidavits." 116 On appeal in The Plumbers and Gasfitters Employees' Union of Australia v John Holland Constructions Pty Limited (1988) 10 ATPR 40-849 at 49,141 the Full Court observed: "In each matter the essence of the charge is that the Union committed conduct which it had been ordered not to commit. We agree with the trial Judge that, so far as unions are concerned, it is difficult to do more than to say no action was taken and that this is sufficient. Allegations of positive conduct by the Union in contravention of the Court's orders were stated in the particulars sufficiently, precisely and clearly to inform the Union of the charges and to give it a proper opportunity to answer them. We think each charge was stated with sufficient precision, and was supported by adequate particulars. We should, however, make some reference to the particulars given of the charge in the Concrete Constructions and John Holland matters. It was submitted that particular (a) was defective in that it could not be said that the Union refused to inform employees that bans had been lifted when the bans had not in fact been lifted. We agree that the form in which this particular is cast is a little curious, but we think it sufficiently conveyed to the Union the substance of the allegation being made. In effect, it conveyed to the Union that what was alleged was that it had decided not to lift the relevant bans and, accordingly, not to inform the men on the job of any change in the Union's attitude. We think that, taken as a whole, the particulars left the Union in no doubt as to what was alleged against it." 117 In the present case the CFMEU, as it was fully entitled to do, made clear that it was called upon to meet and was meeting the charge as particularised, and not otherwise. When an issue arises as to the sufficiency of the charge, as particularised, the Court is to discern the gist or the substance of the contempt alleged and determine whether that was sufficiently conveyed to the alleged contemnor in the Statement of Charge. 118 The CFMEU's written and oral submissions on the Statement of Charge sought to analyse each sub-paragraph of the Particulars out of context with little regard to the sub-paragraphs of para 3 which were being particularised. Further, little or no regard was had to the various paragraphs of BHP Steel's affidavits which were being relied upon by BHP Steel. In that regard it can be accepted that the affidavit evidence served with the Statement of Charge cannot be relied upon to remedy any deficiency in the Statement of Charge and also that an alleged contemnor cannot be required to extract and cull from the material relied upon or referred to in the Particulars the conduct alleged to constitute the contempt being charged: see Harmsworth v Harmsworth (1987) 1 WLR 1676 at 1683 and 1686. 119 Nonetheless, the test remains whether the gist or substance of that conduct has been sufficiently conveyed in the Statement of Charge to enable the alleged contemnor to meet the charge. While incorporation of documents by reference in the Statement of Charge is, in general, undesirable there is no rule that a document may not be so incorporated. In that regard, Order 40 r 5 provides for an application for punishment for an alleged contempt to be made by motion on notice. Rule 6 provides: "A statement of charge, that is, a statement specifying the contempt of which the accused person is alleged to be guilty, shall be subscribed to, or filed with, the notice of motion or application." 120 Under Rule 8 the affidavit evidence relied upon is to be served with the notice of motion and the statement of charge. 121 In the present case, the procedure of incorporating paragraphs from the affidavits as part of the Particulars appears to have come about as a result of a suggestion by her Honour and does not appear to have been the subject of complaint by the CFMEU. 122 The questions raised by the CFMEU's submissions are whether: · the contempt charged and found to have been established was sufficiently explicit in the Statement of Charge, read fairly and as a whole; · the facts found by the primary judge established beyond reasonable doubt that the CFMEU had engaged in the conduct alleged in the Statement of Charge to have constituted the contempt. 123 Paragraph 1 of the Statement of Charge sets out the orders made by the primary judge. Paragraph 2 sets out the details of the notifications "of the terms" of the order. The notifications, given late in the evening of 7 February and in the early morning hours of 8 February, include an alleged notification of the terms of the order to Mr Maher by telephone late in the evening of 7 February 2000. 124 Paragraph 3 alleges that in breach of the order "from the time of the making of the Order and continuously thereafter until 4 pm on 9 February 2000" at BHP Steel's New South Wales mines: · the CFMEU continued to take the strike action and continued its bans and authorisations to stop performing work for the purpose of its dispute with BHP Steel over coal export prices (sub-paras (a), (b) and (c)); · the CFMEU authorised, directed and procured members to stop performing work for the purpose of that dispute (sub-paras (d), (e) and (f)). 125 The contempt alleged in sub- paras (a), (b) and (c), is alleged to be, inter alia, a breach of the order requiring the CFMEU to immediately cease and not to continue strike action, bans and authorisations for the proscribed purpose. The charge is essentially one of omission or failure to act as required by the order. 126 Subject to a question relating to purpose, the contempt alleged in sub-paras (d), (e) and (f) is alleged to be a breach of the order requiring the CFMEU not to continue strike action, bans and authorisations for the proscribed purpose and to refrain from taking, procuring, advising or authorising any further strike action, bans or authorisations for the proscribed purpose. Although there is some overlap between the two sets of charges, the charges in sub-paras (d), (e) and (f) allege the taking of positive steps in breach of the order prohibiting and restraining such conduct. As explained above the Statement of Charge inadvertently omitted any reference in para 2 of the orders relating to the proscribed purpose. The deficiency in that regard was rectified in the particulars of the contempt charges each of which explicitly referred to the proscribed purpose. 127 It is plain that the reference to purpose in sub-paras (a), (b) and (c) is a reference to the purpose of the CFMEU, and not that of its members. Arguably, there is some ambiguity as to whether the reference to purpose in sub-paras (d), (e) and (f) is a reference to the purpose of the CFMEU or to the purpose of its members. A difficulty confronting an argument that the purpose referred to is that of the members is that it requires that, notwithstanding the identical form the particulars take, the purpose in sub-paras (a), (b) and (c) is to read as the purpose of the unions and the purpose in sub-paras (d), (e) and (f) is to read as the purpose of the members. 128 As explained above the orders were directed at the conduct and purpose of the CFMEU, and not that of its members. Further, the industrial action alleged to have been taken in breach of the orders was that taken by the CFMEU. Finally, a breach of the order based on acts rather than omissions would require action by the CFMEU for the proscribed purpose. In that context, a fair reading of the relevant paragraphs as a whole demonstrates that the purpose being referred to in all of the sub-paragraphs is that of the CFMEU. Any doubt about that matter is resolved by the particulars that were provided of the positive steps allegedly taken in breach of the order by the CFMEU (in sub-paras (iv), (v) and (vi) of the Particulars) which all refer to conduct of the CFMEU or of its officers without any reference to the conduct or purpose of its members. 129 Accordingly, I am satisfied that the charges relate, and would be taken by the CFMEU to relate, only to acts or omissions to act, for the proscribed purpose, by the CFMEU or by its officers. 130 Particulars (i) and (ii) specify a failure to inform the relevant employees that the strike had ceased and that they should return to their duties. The paragraphs in the affidavits referred to as part of the particulars are to the effect that notwithstanding the Court order the employees referred to did not return to work on their appointed shifts. 131 On a fair reading of the Statement of Charge as a whole the gist or substance of the breach alleged in paras 3(a), (b) and (c) and in sub-paras (i) and (ii) of the Particulars is the breach by CFMEU, as from the making of the order, of continuing its existing strike action, bans, and stop work authorisations to its members by failing to immediately cease the action, the bans and the authorisations. The breach found and declared by the primary judge that is relevant to that charge is the CFMEU's conduct of "continuing strike action and authorising its members to stop performing work". In my view that contempt, in respect of which the CFMEU was convicted, was sufficiently explicit in the Statement of Charge. 132 The main findings of the primary judge were summarised earlier in these reasons. Her Honour found that, as from shortly before 11 pm on 7 February, Mr Maher was aware of the Court order and, at the latest, by 5.00 am on 8 February he was aware that it required the cessation of the CFMEU's strike action. Her Honour also found that, at the latest, by shortly prior to 7.00 am on 8 February Mr Fisher (a member of the Central Executive in a position to comply with the order) was also aware of the order. Messrs Maher and Fisher took no immediate action to bring the strike to an end and for so long as Mr Maher and Mr Fisher did not act to call an end to the strike, as they were well aware, it continued. Her Honour noted that Mr Maher effectively conceded in his evidence that from 8.48 am on 8 February he could have taken steps to bring the strike to an end. A breach of omission to act in the manner required by the orders was clearly established by those findings. 133 The CFMEU's defence was that the strike was called off by Messrs Maher and Fisher at the meeting of members of the union on 8 February. On the finding made by her Honour that there was a failure to immediately cease strike action the acceptance of that defence would not have the consequence that the orders were not breached. Rather, they may have the consequence that the breach was not a wilful or serious breach so that there was either no contempt or, if there was, it did not warrant punishment. Her Honour, however, rejected the defence. 134 The primary judge accepted that Messrs Maher and Fisher said to the meeting that, as a result of the Court order, the employees were required to return to work. However, after having regard to the context in which the statements were made and to, inter alia, her view that the CFMEU's conduct at the meeting was designed to encourage the workers not to cease strike action, her Honour concluded that to say what occurred "was paying mere lip service to the CFMEU's obligation to bring the strike to an end may be something of an understatement". Her Honour found that Mr Maher's conduct at the meeting evidenced "a determination, on the part of the CFMEU, to continue the strike action". Her Honour said that the members attending the meeting "could not have been left in any doubt about Mr Maher's and the CFMEU's lack of sincerity in not supporting the strike. They would have understood they were being encouraged to do so". 135 It was open to the primary judge to conclude that the conduct of Messrs Maher and Fisher at the meeting fell short of taking steps to bring the strike called by the CFMEU to an end. Thus, her Honour's findings, which were open to her on the evidence, amply supported the conclusion that she was satisfied beyond reasonable doubt that the charge of contempt in paras 3(a), (b) and (c), as particularised in sub-paras (i) and (ii) of the Particulars, had been made out. Accordingly, BHP Steel was entitled to a declaration that the CFMEU breached the Court order by "continuing the strike action and its authorisation to members to stop performing work". 136 As explained above the contempt alleged in paras 3(d), (e) and (f), as particularised in sub-paras (v) and (vi) of the Particulars, is that the order of the primary judge was breached by the CFMEU, for the proscribed purpose, authorising, directing and procuring members employed at BHP Steel's New South Wales mines to extend strike action for a further 24 hours from midnight on 8 February 2000. The particulars are to the effect that the CFMEU organised and conducted a union meeting which resolved "to extend strike action for a further 24 hours from midnight … on 8 February 2000". The plain implication is that the CFMEU breached the order as: · it had organised and conducted the meeting which authorised, directed or procured the extension of "strike action"; · that conduct was engaged in by the CFMEU for the proscribed purpose. 137 In my view, the gist or substance of the contempt alleged was made sufficiently explicit in the Statement of Charge, as particularised, without the necessity of resorting to the paragraphs of the affidavits specified in the Particulars. In any event, reference to those paragraphs adds little to the particulars already given. The most that can be said is that the Affidavit material referred to, which exhibits a transcript of proceedings before the Industrial Relations Commission, shows that: · the extension of the strike was alleged by the CFMEU to be in protest against BHP Steel's harassment and intimidation of its workers when it informed them of the Court orders; · BHP Steel contended, but the CFMEU disputed, that the extension breached the Court order and the union's reliance upon extension of the strike as being for a purpose other than the proscribed purpose was misplaced. 138 The breach of the Court order found and declared by the primary judge that is relevant to the charge in paras 3(d), (e) and (f) is the conduct of the CFMEU in "procuring and authorising its members to take further strike action". For the reasons set out above the conduct alleged to constitute that contempt was sufficiently explicit in the Statement of Charge. The CFMEU has not demonstrated that it was not allowed a reasonable opportunity of being heard in defence of that charge. 139 The CFMEU, as it was fully entitled to do, elected to file an affidavit by Mr Maher and rely upon her Honour's acceptance or rejection of his evidence in defence of the charges. The affidavit was to the effect that Messrs Maher and Fisher directed members to return to work but that the members, acting on their own initiative, resolved that a 24 hour stoppage take place from midnight "due to the harassment and intimidation towards our elected union officials… by BHP Management". If Mr Maher's evidence was accepted it constituted a complete defence to the contempt charged in sub-paras (d), (e) and (f). 140 The concern I have with this aspect of the appeal is whether the findings of the primary judge supported the declaratory relief her Honour granted, or whether they amounted to a finding that Mr Maher's, or the CFMEU's, conduct of the meeting of 8 February was calculated to defeat or frustrate the effect of the Court order (see Seaward v Paterson (1897) 1 Ch 545), a contempt that was not specified in the Statement of Charge. 141 The declaratory relief granted in respect of the CFMEU's conduct at the meeting on 8 February, which was based primarily on Mr Maher's conduct, was that the CFMEU procured and authorised the members to extend the existing strike. Of course, for that conduct to have breached the orders it must have been engaged in by the CFMEU for the proscribed purpose. 142 Although it is clear that the primary judge found that the steps taken by Messrs Maher and Fisher at the meeting fell short of bringing the strike action called by the CFMEU to an end, whether her Honour found that, for the proscribed purpose, they procured and authorised an extension of the CFMEU's strike action is not quite as clear. The relevant findings, therefore, are those relating to the conduct and purpose of Mr Maher at the meeting, rather than findings in relation to the conduct and purpose of the members attending the meeting. Relevantly, her Honour made the following findings (the emphasis added is mine): · Mr Maher: "…spoke of the current and highly volatile issue of coal prices, which was the basis for the current strike action. An obvious purpose of a meeting in these circumstances is to determine what action is now to be taken. Members of the Union would be waiting for guidance from the Executive and Mr Maher in particular." [63] · "I find it impossible to view the report of issues relating to BHP, the first matters drawn to the members attention, as serving some pacifying purpose…The resolution Mr Maher brought to the meeting would also have solidified anger and resentment towards the company and put in the minds of the employees present the prospect of further strike action… It was submitted that one should not regard the reference in the resolution to the giving of mandate for further action to the Union as referrable to the resolution for further strike action which is said to have come shortly afterwards from the floor. I accept that that might be the case. It seems to me however that Mr Maher was driving the meeting in the opposite direction from one which would result in the end of strike action. I am only able to infer that the undertaking of that course of action was the result of a determination that the CFMEU prevail against the company." [69] · One of Mr Maher's motives at the meeting was: "the need on the part of Mr Maher and the Executive to maintain leadership and authority. I do not think that the influence this was likely to have had should be underestimated." [71] · After the meeting Mr Maher said words to the effect that the workers had expressed their anger at BHP's betrayal of them and that "the future of the district is at the core of their anger at this meeting". Her Honour regarded the statements as relating to the export coal price dispute and said they were "relevant to the question of the true purpose of the further strike" [73]-[74]. · On the purpose of the further strike action: "…It is, in my view, clear that the issue of coal prices was an important one at the meeting and that it explained much of the anger which drove the employees to determine upon this course of action. Mr Maher's own statements confirm this. The inescapable conclusion is that the strike action was directed at this even if it was also a response to the notification and service of the Orders….It is likely, in my view, that it was recognised by some persons present at the meeting that any further strike action must be distanced from the prohibited purpose…." [76] · "There is no doubt, in my view, that the CFMEU's conduct at the meeting was designed to, and had the effect of, encouraging the employees not to cease the strike action and to take it further. Mr Maher's words were an active encouragement to continue an expression of anger against the company. …It is not difficult to imagine that the address by Mr Maher to the meeting did nothing to lessen the anger he was determined to keep alive. He took no serious steps to dissuade them from further strike action. If he did speak some words of non-support they were very few. They could hardly have been thought sufficient for that purpose. The members could not have been left in any doubt about Mr Maher's and the CFMEU's lack of sincerity in not supporting the strike. They would have understood they were being encouraged to do so." [77] · "The decision to continue with the meeting and the conduct of Mr Maher at it is evidence of a determination, on the part of CFMEU, to continue the strike action." [84] · "I am satisfied that the CFMEU through Mr Maher, acted at the meeting in such a way as to ensure a continuation of strike action. The resolution to effect further strike action was in large part the result of that conduct, even if one allows for the expression of some annoyance about service on union officials." [85] 143 I have set out the main findings of the primary judge on this issue in detail because of my concern as to whether her Honour was satisfied beyond reasonable doubt that Mr Maher, acting on behalf of the CFMEU, for the proscribed purpose procured and authorised an extension of "strike action" or whether, in an endeavour to defeat or frustrate the orders, he procured and authorised a new strike for a different purpose. Her Honour's findings appear to have been directed at both questions. A fair summary of her Honour's findings is that she was satisfied beyond reasonable doubt that: · Mr Maher's purpose in conducting the meeting was to continue and extend strike action by procuring the workers to resolve to strike in protest at BHP Steel's harassment and intimidation of union members and officials; · in truth, Mr Maher procured the workers to direct their anger and the strike at BHP Steel's conduct in relation to the coal export price dispute "even if it was also a response to the notification and service of the orders"; · Mr Maher breached the Court order by procuring the extension of strike action for purposes that included the export coal price dispute. 144 The findings to which I have referred, including those relating to Mr Maher's purpose, were open to her Honour on the evidence and supported her conclusion that she was satisfied beyond reasonable doubt that the charge of contempt in para 3(d), as particularised in sub-paras (vi) and (vi) of the Particulars, had been made out. It follows that BHP Steel was entitled to a declaration that the CFMEU breached the Court order by "procuring…its members to take further strike action". To the extent her Honour may be taken to have also held that the purpose of the members in resolving to strike included the proscribed purpose, I would have difficulty in concluding that such a finding was reasonably open on the evidence. However, for the reasons outlined above the purpose of the members was not an element of the conduct alleged in the Statement of Charge to have breached the orders and was therefore not a relevant issue. 145 The basis for the declaration that Mr Maher's conduct also authorised the members to extend strike action is more problematic. The findings against Mr Maher on this issue were based on the same conduct. Her Honour, however, did not appear to address the legal and factual complexity of whether what occurred was capable of constituting an authorisation by the CFMEU to its members to extend strike action by the members. 146 I have concluded that it is appropriate to allow the appeal in part on this limited issue. I have arrived at that conclusion as I doubt that her Honour's findings extended to authorisation and that doubt ought to be resolved in favour of the CFMEU. For the above reasons, it is appropriate to excise from the declaration made by her Honour the words "and authorised". I would add that, in the present case, whether the conduct in question breached two aspects, or only one aspect, of the Court order is not of significance to the nature of the contempt committed or the appropriate penalty. 147 It follows that, save for one aspect of no real consequence, in my view the CFMEU has failed in its appeal in relation to the Statement of Charge and whether her Honour's findings were sufficient to establish the contempt charged. Inferences 148 The CFMEU did not challenge the primary facts found by the primary judge. Rather, it contended that her Honour erred in drawing inferences adverse to the CFMEU on the basis of those findings. The CFMEU contended that, as it did not challenge the primary findings of fact, the Full Court is in as good a position as the trial judge to decide on the proper inferences to be drawn from them. 149 The adverse inferences drawn by her Honour were based, in part, on her rejection of critical aspects of Mr Maher's evidence and her Honour's adverse impressions of Mr Maher as a witness. In that regard her Honour found that Mr Maher was "false in his denials of knowledge and of communications" concerning the Court orders and was not "bona fides" in his conduct of the meeting of 8 February. As explained above, that led her Honour to hold that Mr Maher's conduct of the meeting on 8 February was designed to, and had the effect of, encouraging BHP Steel's employees not to cease, but rather to extend, strike action by them. 150 A further difficulty confronting the CFMEU's submissions is the need for appellate caution before reversing a trial judge's evaluation of the facts. As the Full Court said in Esso Australia Resources Ltd v Commissioner of Taxation (1998) 84 FCR 541 at 554: "…even in cases where the primary facts are not in dispute and the trial judge's evaluation of the facts does not depend on an assessment of the credibility of witnesses there is nevertheless a need for appellate caution in reversing the trial judge's evaluation of the facts. As was said recently by Lord Hoffmann (with the agreement of all other members of the House of Lords) in Biogen Inc v Medeva plc [1997] RPC 1 at 45: 'The need for appellate caution in reversing the judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans une nuance), of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation.'" 151 The primary judge explained her general approach to the inferences she was entitled to draw at [78]-[79]: "78. In my consideration of the evidence I have drawn inferences which do not assist the CFMEU. In many cases, no evidence to the contrary was put forward to dispel a possible inference. The witnesses in question were available. If one was overseas, arrangements could have been made for the reception of his evidence. I am therefore somewhat fortified in my view that the inferences I have drawn are likely to be correct. It was submitted by senior counsel for the CFMEU that the Court is not in a position to draw any inferences about aspects of the evidence for the reason that a number of witnesses to the events in question, indeed directly involved in them, were not called by it. Reliance was sought to be placed upon cases concerning inferences available where an accused has not given evidence. It was then submitted that since the CFMEU did elect to give some evidence, no such adverse inference was possible. I do not consider this to be a correct approach. The question is not whether an inference of guilt may be drawn, as sometimes arises in criminal cases. It is whether inferences are available from the evidence presented which may be confirmed to an extent by a failure to rebut them by calling available witnesses. 79. The rule in Jones v Dunkel (1959) 101 CLR 298 requires that there be inferences available from the evidence which favour the other party. The failure of the CFMEU to call evidence in these circumstances does not provide positive evidence of a fact or circumstance, but, unexplained, leaves the Court in a position where opposing inferences can be more confidently drawn because they stand uncontradicted by the person who could say something about the true state of the facts: Jones v Dunkel, 308; Minister for Aboriginal & Torres Strait Islander Affairs v State of Western Australia (1996) 67 FCR 40, 62. It was also submitted, in connection with the application of the rule, that BHP Steel could have called the witnesses in question. I do not accept the submission. The rule looks to the party who might reasonably be expected to call the witness in question in their case." 152 The CFMEU contended that her Honour's reliance on Jones v Dunkel (1959) 101 CLR 298 ("Jones v Dunkel") was misplaced. In particular, it submitted: · the inferences her Honour drew from the extensive telephone conversations between union officials, particularly in the early morning hours of 8 February, were wrongly drawn; · her Honour ought not to have been "fortified" in drawing adverse conclusions against the CFMEU's case by its failure to call certain witnesses. 153 As was recently emphasised in RPS v The Queen (2000) 199 CLR 620 at 631-632 ("RPS") drawing inferences from proved facts is "plain commonsense". That is no less so in a criminal matter, although a Jones v Dunkel inference ought only to be drawn in a criminal matter after taking into account the onus on the prosecution to prove its case beyond reasonable doubt without the accused being bound to give evidence (see RPS at 633). As was observed by the primary judge, this qualification is not relevant in the present case as Mr Maher, in his capacity as General President of the Central Executive of the CFMEU, elected to give evidence. 154 In response to Mr Maher's statement that he only became aware of the Court order at about 9.30 am on 8 February, BHP Steel adduced evidence of extensive telephone communications between union officials late into the night of 7 February and early in the morning of 8 February. Almost all of the conversations occurred after the Court order, out of normal working hours, and involved CFMEU officials who could be expected to be concerned with the CFMEU's response to the Court order. They included telephone communications between Mr Maher and CFMEU officials and telephone communications between those officials and other CFMEU officials. No satisfactory explanation was given by Mr Maher as to the content of the calls. The CFMEU did not call any official who participated in the calls, other than Mr Maher, although it was well aware that BHP Steel was inviting the Court to draw the inference that the calls were concerned with the CFMEU's response to the Court order. In those circumstances, it was open to her Honour to rely upon the calls, together with other evidence, to infer that Mr Maher's denials of knowledge of the Court order prior to 9.30 am on 8 February were false. I would add that on the basis of the findings her Honour had made and the reasons she gave for those findings, it was "plain commonsense" for her Honour to do so. 155 The primary judge, in reliance on Jones v Dunkel, was fortified in making those adverse findings. Jones v Dunkel looks to the party who might reasonably be expected to call a witness who would ordinarily be expected to shed light on the subject in question: see RPS at 632. A critical matter in issue related to the time at which Mr Maher became aware of the Court order. A number of the union officials participating in the various telephone conversations would be expected to be able to shed light on that issue but they were not called by the Union. The failure to call any of those officials plainly falls within the principles enunciated in Jones v Dunkel. In my view her Honour did not erroneously state or apply the principles she discussed. 156 Her Honour also drew certain inferences in arriving at her finding that Mr Maher was not bona fides in his conduct of the meeting on 8 February [[61]-[77]]. The finding, including the inferences upon which the finding was based, was plainly open on the evidence and, as with her Honour's findings concerning Mr Maher's knowledge of the Court order, were carefully explained and reasoned by her and have not been shown to be erroneous. 157 Accordingly, the grounds of appeal based on the inferences drawn by the primary judge have not been made out.

Reasonable apprehension of bias 158 The CFMEU also claimed that the primary judge erred in law in not acceding to its application that she should disqualify herself from hearing the matter on the grounds that certain statements made by her had given rise to a reasonable apprehension of bias. The statements relied upon were made on the first day of the hearing of the contempt application, which had been case managed by her Honour. They were in the following passages of the transcript: "HER HONOUR: I've got no particular view, I hasten to add, about anyone. It's not at all clear to me what part anyone in particular played in relation to this. The only thing that it is apparent is that the order was breached. Now we have to deal with how that came about and what steps were taken. MR KENZIE: Well, your Honour ‑ ‑ ‑ HER HONOUR: I appreciate your arguments about the terms of the order and I'll hear from you in relation to that. MR KENZIE: Yes, well, can I say that ‑ ‑ ‑ HER HONOUR: I appreciate that you've got legal technical arguments about whether or not there was an obligation to do anything. That's really what you're referring to now. MR KENZIE: Yes, it is. HER HONOUR: But it is the case that the order said discontinue strike and the strike continued; that's all I'm referring to. MR KENZIE: I know, your Honour, but there are substantial arguments about that flowing from recent ‑ ‑ ‑ HER HONOUR: All I'm saying is that the order said discontinue strike and the strike continued. I'm saying no more than that. I'm conscious of the argument set out in your outline but I'm concerned that someone might be unwittingly putting themselves in a position where they could be exposed to difficulties later. MR KENZIE: Well, your Honour, I must say I am concerned at what your Honour just said. There is a substantial argument about breach of the order. HER HONOUR: I appreciate that. I've read your submissions; I've said that. But at a very simple level the order said discontinue and there was a continuation or a separate strike. There's another argument about whether or not it was a strike for a different purpose. I appreciate all of that. I'm not giving a concluded view about the legal outcome. I'm saying at a factual level a strike continued, that's all. MR KENZIE: Yes. Can your Honour just pardon me a moment? Your Honour, I seek a short adjournment to deal with that matter, only a brief adjournment. HER HONOUR: Yes, certainly." 159 After requesting a short adjournment senior counsel for the CFMEU announced that he had been instructed to ask her Honour not to sit further in the matter as her statements that the Court order had been breached might give rise to a reasonable apprehension of bias. In the course of dealing with that application the primary judge explained her use of the word "breached' in relation to the order as follows: "…I can understand lawyers having a concern that a judge is actually using the legal conclusion whereas it is painfully clear to me that what the order required to be done as I said was not - that was not the outcome reached, and certainly in relation to the material, there seems to be some argument. But as I've said, beyond that I have not got a full grip on the facts and I'm aware and have read your submissions in relation to the meaning of the order and I am open to persuasion on all those matters." 160 The primary judge refused the application of the CFMEU and said that she did not propose to disqualify herself. The CFMEU is appealing against that refusal. 161 The CFMEU contended that the primary judge's comments involved an unequivocal conclusion that her order had been breached, a matter critical to the outcome of the proceeding. BHP Steel disputed that contention. Relying upon the context in which her Honour's remarks were made, BHP Steel contended that it was clear that her Honour was merely expressing her preliminary view that the desired result of the Court order had not been achieved, as the strike had continued. 162 The category of apprehended bias raised by the CFMEU's application to her Honour is that of a reasonable apprehension of bias by prejudgment. The underlying principle, which is now well established, is: "that a judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." (Livesey v. New South Wales Bar Association (1983) 151 CLR 288 at 293-4) The apprehension referred to is that of the "reasonable observer" who is - "presumed to approach the matter on the basis that ordinarily a judge will so act as to ensure both the appearance and the substance of fairness and impartiality." (Livesey at 299). In Re JRL, ex parte CJL (1986) 161 CLR 342 at 352 Mason J (as he then was) said: "It seems that the acceptance by this Court of the test of reasonable apprehension of bias in such cases as Watson and Livesey has led to an increase in the frequency of applications by litigants that judicial officers should disqualify themselves from sitting in particular cases on account of their participation in other proceedings involving one of the litigants or on account of conduct during the litigation. It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. …In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be 'firmly established': Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; Watson; Re Lusink; Ex parte Shaw. Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour." 163 These principles were recently restated in Johnson v Johnson (2000) 201 CLR 488 at 492 by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ: "…the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide." 164 In the course of considering observations made by a judge in the course of a hearing, their Honours said (at 493). "… the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly… Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of 'the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case.'… Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them." 165 Their Honours also pointed out (at 494) that it is not reasonable to isolate certain words used by a judge from their context and then proceed to parse and analyse their meaning in order to establish that they might have created the impression that the judge has already pre-determined a critical issue in the case. If her Honour's observations about a "knowing contempt" or a "knowing breach" of her order are removed from their context they might well create an impression of prejudgment in the reasonable bystander. However, when the context and the totality of the relevant passages are considered a quite different impression emerges. Her Honour's initial comments expressed concern that witnesses be made aware that the Court was taking the contempt proceeding very seriously and any person "who did take part in a knowing breach of the orders" might themselves be dealt with for contempt notwithstanding that BHP Steel had not joined that person as a party. Her Honour hastened to add, however, that she had "no particular view" as to the part anyone had played in the matter but, as it was apparent that the order was breached, the Court had to deal with how that came about and what steps were taken. The primary judge later explained that she used "breached" in the sense that the order said "discontinue the strike" and a strike continued, although her Honour accepted there was an argument about whether it was a strike for a different purpose. In that context her Honour said that she had not expressed a "concluded view about the legal outcome". Rather, she had been saying that "at a factual level a strike continued". Later, her Honour re-iterated that, although the outcome sought by the order (ie cessation of the strike) had not been achieved, she did not have a "full grip on the facts" and was "open to persuasion" on the matters raised by the CFMEU in its submissions. 166 In my view the fair minded lay observer would reasonably apprehend that the views expressed by her Honour were that, in so far as the strike had not ceased, prima facie, the Court order appears to have not been complied with, but that that was only a tentative view as she did not have a "full grip" on the facts and was open to persuasion on the issues raised in the submissions of the CFMEU. In these circumstances, a fair-minded lay observer would not reasonably apprehend that her Honour might not bring an impartial and unprejudiced mind to the resolution of the questions she was required to decide. 167 Accordingly, the appeal by the CFMEU on this ground must fail.

Penalty 168 The CFMEU instituted a separate appeal on penalty. The CFMEU's main contention was that the primary judge erred in imposing a penalty of $200,000 in respect of conduct that was qualitatively different to the conduct that constituted the contempt. It also claimed that, as a result of erroneous findings made by her Honour, she regarded the contempt committed by the CFMEU to be more serious than was warranted. 169 The difficulty with the CFMEU's submissions in relation to her Honour's findings is that they substantially overlap with a number of submissions that I have rejected in respect of her Honour's findings in relation to the CFMEU's conviction for contempt. As a consequence, the submissions did not face up to the seriousness of the contempt with which the CFMEU had been charged and convicted. 170 In substance, the primary judge found that the CFMEU, acting in its own interests substantially through its President, Mr Maher, wilfully disobeyed the Court order by not only continuing the strike but by procuring an extension of strike action in respect of the New South Wales mines. The extension of the strike was found to have been brought about by Mr Maher's manipulation of the meeting of employees held on 8 February for the proscribed purpose. The observations made by her Honour, in explaining why she considered the contempt to be "especially serious", included: · the CFMEU, through officers of the highest level, acted cynically in encouraging its members not to comply with the Court order; · the CFMEU's officers determined from the outset "not to permit or encourage compliance with the order"; · "[k]nowing full well of the seriousness of non-compliance with an order", the union engaged in "calculated and devious attempts to disguise any knowledge of the order's existence" and even then it "persisted with a deliberate disregard of the order"; · the CFMEU breached the order as "maintenance of the strike action was considered more important than compliance with a Court order"; · the denial of the existence of the order was "dishonest and cynical, as was the conduct of these proceedings". 171 Save for the observation concerning the CFMEU's conduct of the proceedings before the primary judge, the other observations made by her Honour were a qualitative assessment or evaluation by her of the conduct she found constituted the contempt committed by the CFMEU, of the motivation of the CFMEU for engaging in that conduct, and of the contemporaneous surrounding circumstances. It has not been established that her Honour's conclusions were not open to her on the evidence and, in so far as the observations related to the conduct of the union and its officials on 7 and 8 February, they amply justified her Honour's conclusion that the contempt was "especially serious" and called for a penalty to be imposed that acted as a deterrent and made it plain that such approaches are to be "condemned". 172 The CFMEU contended that her Honour, in part, punished the CFMEU for determining "not to permit" compliance with the order, a contempt with which the CFMEU had not been charged or convicted. When her Honour's observation in that regard is read in context it is clear that the determination her Honour was referring to was the determination of the CFMEU, through its officers, to act in a manner that would ensure that there was no prospect that the order would be obeyed in respect of the New South Wales mines. That determination was not a new or further contempt; rather, it was one of the bases for her finding that the CFMEU had acted wilfully in breaching the Court order. Further, the statement that the CFMEU would not "permit" its members to comply with the order appears to be the consequence of her Honour's finding that the strike had not ceased. The consequence of the strike not ceasing is that the bans for workers attending for work during the strike continued. 173 Accordingly, I do not accept that the CFMEU was punished for conduct that was qualitatively different to the conduct that constituted the contempt. Rather, in punishing the CFMEU for the contempt with which it had been charged and convicted, her Honour, correctly in my view, had regard to the conduct in question and the relevant surrounding circumstances. 174 There is a question as to the relevance of the union's conduct of its defence to the contempt charge. While it may be accepted that a sentencing court in a criminal proceeding may have regard to the conduct of the offender at or in connection with the trial as an indication of remorse or lack of remorse (see, for example, Sentencing Act 1991 (Vic) s 5(2C), and the Crimes Act 1914 (Cth) s 16A(2)(f)), it has been said to be axiomatic that "neither a refusal by an accused person to admit an alleged offence, nor a plea of not guilty, nor even the telling of a deliberate lie by way of the maintenance of a claim of innocence, can properly be treated as aggravatory, for the purpose of penalty, in the event that a finding of guilt is ultimately made": see Hanneberry v Legal Ombudsman [1998] VSC 142 at [21], R v Gray [1977] VR 225 at 231, and Cho Hung Yam (1991) 55 A Crim R 116 at 117. 175 Little turns on this issue as it does not appear to have been relied upon by the CFMEU and, in any event, I am not satisfied that the primary judge treated the union's conduct of the proceeding as an "aggravatory" factor in relation to penalty. 176 The CFMEU also criticised the primary judge's failure to take into account a number of factors in determining penalty. Those factors were said to be no previous convictions; the order had been complied with in respect of the Queensland mines; the contempt was of short duration; no injury was suffered by BHP Steel; no meaningful apology could be expected to be proffered prior to appeal; there was no public defiance of the order; and the circumstances in which the order was brought to the attention of the CFMEU officers, particularly Mr Maher. 177 There is no substance in the CFMEU's submissions on this issue. In so far as the matters relied upon were relevant to the question of penalty I am not satisfied that, on a fair reading of her Honour's reasons, she failed to consider those matters. Rather, it appears that her Honour gave them such weight as she considered appropriate in the particular circumstances of the present case. In any event, the factors relied upon by the CFMEU do not undermine the critical finding of her Honour, for the reasons she gave, that the contempt was "especially serious" and warranted a substantial penalty. 178 I would add that the CFMEU's submissions fail to have regard to a number of matters, including: · it was plainly open to her Honour to regard compliance with the order in relation to the Queensland mines as not being relevant to penalty in respect of the wilful breach of the order in relation to the New South Wales mines; · in any event, it does not follow from the fact that the CFMEU was not prosecuted for contempt in respect of the Queensland mines that it did not breach the Court order in respect of those mines; it may well be that the CFMEU's conduct in calling off the strike at those mines, whether it did so "immediately" or not, did not warrant a contempt proceeding or alternatively, was no more than a technical contempt that did not warrant punishment; · the short period in which the order was to operate made more, rather than less, immediate the need for action by the CFMEU to respond to it; · it is far from clear that BHP Steel suffered no injury or loss; · exercising a right of appeal against conviction for contempt need not be inconsistent with the proffering of a genuine apology; · there was "public defiance" in the sense that the CFMEU's conduct found to be in contempt was intended to and did create the impression in public that the strike action at the New South Wales mines had not ceased. 179 The seriousness with which her Honour regarded the contempt and the purposes for which she imposed the fine of $200,000 meant it was well within the range of penalties that were appropriate and open to her to impose. I would add that even if, contrary to my view, it had been established that her Honour erred in some minor respect, and the quantum of the penalty become a matter for the Full Court, I would regard a penalty of $200,000 as appropriate in any event. In that regard it is appropriate to repeat certain observations I made in AIG (at [78]-[81]), in response to a submission that certain breaches of a Court order by senior union officials were only "technical" breaches: "Unions have sought, and obtained, injunctive relief from the Court to protect the rights conferred under [the Workplace Relations Act 1996 (Cth)] in respect of employees: see for example Patrick Stevedores No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1, Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463, BHP Iron Ore Pty Ltd v Australian Workers Union [2000] FCA 430. I pointed out in ACI Operations Pty Ltd at [63] that there is no special rule relating to injunctive relief in industrial disputes or actions. Plainly, the protection of legal rights is severely undermined if parties to a dispute act on the basis that they can apply for court orders to protect their rights, but ignore court orders which protect the rights of other parties to the dispute, simply because compliance with such orders is seen to be adverse to their interests or objectives, or that of their members. The rule of law in a democratic society does not permit any member of that society, no matter how powerful, to pick and choose the laws or court orders that are to be observed and those that are not. Maintenance of the rule of law in our society does not only require that parties are able to resort to courts to determine their disputes (Patrick Stevedores Operation No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 641 at [1] per Hayne J), it also requires that parties comply with the orders made by the courts in determining those disputes. If the individual respondents believed that the orders of Whitlam J were wrongly made, then it was open to them to appeal, or apply for leave to appeal, against those orders. Instead, they breached them. The fact that the breaches are by union leaders holding important offices in a federation of national trade unions makes them more, rather than less, serious: see Gallagher v Durack (1983) 152 CLR 238 at 244. If such breaches are treated as no more than 'technical' breaches, then the carefully prescribed processes provided for under the Act, available to, or to be observed by, unions, employees, employers and employer organisations alike, will quickly erode. Also, if aspects of the statutory scheme or of the orders made by Whitlam J were seen to be contentious, the political and legal processes of our democratic society provide remedies other than those chosen by the individual respondents." 180 Putting to one side the indemnity costs order, with which I will shortly deal, for the above reasons the CFMEU has not made out its grounds of appeal in relation to penalty.

Indemnity costs 181 When the primary judge handed down her initial judgment convicting the CFMEU of contempt, without having heard the parties on the question of costs, her Honour ordered that the CFMEU pay BHP Steel's taxed costs of the proceeding. Subsequently, BHP Steel sought an order that her Honour vacate that order and replace it with an order for indemnity costs in its favour. For reasons that need not be explored for present purposes, the original costs order was entered but was subsequently set aside by her Honour. Her Honour, however, acceded to BHP Steel's application and vacated her original costs order and replaced it with an order that the CFMEU pay BHP Steel's "costs of the whole of the proceedings, such costs to be taxed on an indemnity basis". 182 The CFMEU claims that her Honour erred in making those orders and, if they stand, in failing to take the burden of the costs order into account on the issue of penalty. 183 The primary judge said she would vacate her original costs order because: · the basis upon which costs should be taxed had not been raised or argued before her; · although the application for indemnity costs had not been foreshadowed by BHP Steel such an application would have had to await findings in relation to the conduct of the CFMEU before meaningful submissions could be made on the question of indemnity costs; · her Honour had not forewarned the parties that final orders, as distinct from findings, would be made at the conclusion of her reasons for judgment on the issue of whether contempt had been committed. 184 The question of vacating the original costs order was a matter of discretion for the primary judge. The reasons her Honour gave for vacating the order are compelling and no error of principle has been demonstrated in relation to the exercise of her discretion. 185 Her Honour's reasons for granting indemnity costs were expressed by her as follows: "Parties who prosecute contempt cases are often recognised as performing a public duty and an order for indemnity costs is made so that they will not be out of pocket because they have undertaken that role. This is such a case. And it is a case where the applicant was put to considerable expense in adducing evidence and piecing together what occurred because of the decision made by the respondent not to explain the events which took place and to call only one witness in answer to the charges. There are strong reasons why the applicant should have its order for indemnity costs in relation to the proceedings culminating in the declaration, as well as the penalty and costs proceedings. In relation to the points raised by the respondent, I add only the following: the applicant was almost entirely successful in its prosecution. This is not a case for dealing separately with charges made out. It acted properly, in my view, in putting forward the evidence relating to the conduct of the respondent in Queensland and could not have been expected to think, if it is realistic in hindsight, that the facts would have been agreed to in whole or in part. In any event, this is a matter for the taxing officer to assess on account of reasonableness. The applicant conceded, in light of one of the respondent's contentions, that the order for indemnity costs should carry the rider that it is not to include costs unreasonably incurred. Such an order was made in Degmam v Wright. I would not have thought a taxing officer needed this reminder." 186 The question of costs was also a matter of discretion for her Honour. Save for one aspect of that order, I am not satisfied that any error has been demonstrated in relation to the exercise of the discretion. The aspect, about which I have some concern, was her Honour's decision to leave the issue of reasonableness to the taxing officer. In North Australian Aboriginal Legal Aid Services Inc v Bradley [2001] FCA 908 at [90]-[92] Wilcox J made the following observations on the appropriate form of an order for indemnity costs in a contempt proceeding: "I am prepared to make an order for costs in favour of NAALAS against Mr Burke; but not on an indemnity basis. I have an aversion to orders for indemnity costs. I expressed my view in Coshott v Learoyd [1999] FCA 276 at para 51 in these words: '… one of the difficulties about an order for indemnity costs is its open-ended nature. Because the underlying concept is one of indemnity, the order allows recovery even of costs that have been unreasonably incurred, or incurred in an unreasonable amount. The Court will rarely know whether such costs have been incurred. So the Court risks making an order that is unreasonable in effect. This is not a proper course to take, even as a response to unreasonable behaviour on the other side.' Callinan J, of the High Court of Australia, recently expressed a similar view in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26 at para 40. In Coshott v Learoyd I made a costs order that was modelled on that of the Full Court in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151. That order allowed recovery of 'all costs except insofar as they are of an unreasonable amount or were unreasonably incurred so that, subject to such exceptions, (the successful party) will be completely indemnified by (the unsuccessful party)'. I propose to make a similar order in this case." 187 I respectfully agree with his Honour's observations. In my view her Honour's order for indemnity costs should have specifically dealt with the issue of reasonableness. Accordingly, it is appropriate to allow the appeal in part on this issue and replace her Honour's order for indemnity costs with the form of order made by the Full Court in Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1997) 72 FCR 151 at 159 ("Re Wilcox"). 188 As the costs order is to be qualified in that way the complaints of the CFMEU about the problematic and potentially unreasonable quantum of costs for which it may be liable under the original costs order, fall away. The qualification is also relevant to the contention that her Honour ought to have had regard to the burden of her costs order as a mitigating factor in relation to penalty. 189 It was open to her Honour and, if it be relevant, to this Court, to have regard to the burden of the costs order in fixing penalty. However, it is also open, as a matter of discretion, to regard each as a separate issue. Once the indemnity costs order has been qualified as set out above there is no reason, in the circumstances of the present case, to regard the burden of that order as a matter that ought to reduce the penalty of $200,000 to some lesser amount. 190 Accordingly, save for variation of the indemnity costs order as set out above, the grounds of appeal in relation to her Honour's costs orders have not been made out.

Costs of the appeal 191 BHP Steel also sought an order for indemnity costs of the appeal. There is some force in BHP Steel's contention that, as the public duty aspect of its role in upholding her Honour's orders on appeal is not qualitatively different from the public duty aspect of the role it fulfilled in prosecuting its case for those orders, the same indemnity costs order should be made on the appeal. On the other hand the CFMEU's appeal was against a conviction and penalty in a matter of a criminal nature. In such cases there ought not to be any prima facie rule in favour of indemnity costs. Rather, each case must be considered by having regard to the particular circumstances of the case. 192 There are some distinguishing features in relation to the appeal. The CFMEU acted bona fide and properly in the conduct of its appeal. That may be contrasted with her Honour's finding that the conduct of the proceedings below by officers of the CFMEU was "dishonest and cynical". Also, the CFMEU has succeeded in part on two aspects of the appeal, albeit that they may not be significant aspects. 193 In the particular circumstances of the present case I have concluded that it is appropriate that the CFMEU be ordered to pay BHP Steel's taxed costs of the appeal, but not on an indemnity basis.

Conclusion 194 For the above reasons I would order that the appeal be allowed in part by the deletion of the words "and authorised" from the declaration made by the primary judge and by the order her Honour made for indemnity costs being replaced with an order for such costs in the form of the order of the Full Court in Re Wilcox. Otherwise, I would order that the appeal be dismissed with costs. I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Counsel for the Appellant: R Kenzie QC; C Howell

Solicitor for the Appellant: R L Whyburn & Associates

Counsel for the Respondent: W Sofronoff QC; L Kelly

Solicitor for the Respondent: Blake Dawson Waldron