Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd

[1986] FCA 284

Re: THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION; JACK O'TOOLE; TREVOR
SURPLICE; DICK ANNEAR and PAT ROUGHAN
And: MUDGINBERRI STATION PTY. LIMITED
No. V G36 of 1986
Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Morling J.

CATCHWORDS

Practice - action to set aside judgment allegedly obtained by fraud or false evidence - necessity for strict proof - fraud not established - falsity not established - action dismissed

HEARING

SYDNEY

#DATE 21:7:1986

ORDER

Application dismissed.

Applicants must pay the respondent's costs.

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

JUDGE1

On 12 July 1985 I made final orders against the applicants in matter No. G 123 of 1985 ("the injunction proceedings"). Those orders included orders restraining the applicants from, in effect, engaging in conduct proscribed by s.45D(1) of the Trade Practices Act 1974 (Cth). The orders made on that date and the reasons which I gave for making them appear in Mudginberri Station Pty Limited v Australasian Meat Industry Employees Union and Others (1985) 61 A.L.R. 280. In the present proceedings the applicants (who were the respondents in the injunction proceedings) seek a declaration that the orders made on 12 July are voidable and an order that they be set aside. Other consequential relief is sought. In substance, the ground upon which relief is sought is that fraudulent or false evidence was given in the injunction proceedings by Mr J. Pendarvis, the managing director of the respondent ("Mudginberri"). It is contended that the giving of that evidence affords a sufficient basis for the present proceedings.

1. The applicants submit that the Court has ample jurisdiction to grant the relief sought. First, it is submitted that the Court has the inherent jurisdiction of a superior court with respect to its own judgments or orders, and that such jurisdiction extends to the making of the orders sought. Secondly, the applicants rely upon the express power conferred upon the Court by s.80(3) of the Trade Practices Act 1974 to rescind or vary injunctions. Thirdly, it is submitted that ss. 22 and 23 of the Federal Court of Australia Act 1976 are a sufficient source of power. Section 22 provides, inter alia, that the Court shall grant all remedies to which any party appears to be entitled in respect of a claim properly brought forward by him, and s.23 empowers the Court, in relation to matters in which it has jurisdiction, to make orders of such kinds as the Court thinks appropriate. Finally, reliance is placed upon Order 35 rule 7(2)(b) and (d) of the Federal Court Rules which provide, inter alia, that the Court may if it thinks fit set aside a judgment or order after the order has been entered where the order was obtained by fraud or where the order is an injunction. Since I have formed the view that the application cannot succeed on the merits I do not find it necessary to determine whether I have jurisdiction to make the orders sought. However, it would be unfortunate if the Court did not have jurisdiction to set aside orders procured by fraud. There is much authority for the proposition that a party who wishes to impeach a judgment obtained by fraud may do so by commencing independent proceedings for that purpose: see, Jonesco v Beard (1930) AC 298 at p 300; McHarg v Woods Radio Pty Limited (1948) VLR 496 at 497 and Hillman v Hillman (1977) 2 NSWLR 739 at p 744 and cases there cited. But see also Re Barrell Enterprises and others (1972) 3 ALL ER 631 at p 639 where Russell L.J. said that, in England, the cause of action to set aside a judgment on the ground of fresh evidence had lapsed.

2. During the course of his evidence in the injunction proceedings on 9 July 1985 Pendarvis claimed that Mudginberri had incurred losses amounting to $183,000 between 24 June and 9 July 1985 as a result of a picket line set up and maintained by the applicants. His evidence was supported by the tender of a document which was admitted into evidence as Ex. D. The relevant portion of the document is in the following terms:
   
   

"Export value (August) $2.76 /kilo

Domestic value (August) $1.77 /kilo

Value loss per kilo $0.99

Average daily production 12,324 kg.

Value loss per day $12,200.00

24/6/85 to 9/7/85 (15 days) loss to date $183,000.00"

Pendarvis also said that Mudginberri's daily losses were continuing.

1. When Ex. D was tendered counsel made the following remarks to the bench:
   
   

"MS SIMPSON: Your Honour, I do not object to it so far as it is meant to establish a substantial loss within section 45D(1). I could not concede that this would be admissible on the question of damages. Damages are still in issue in this case, although not at this stage. I would object to it if it were tendered on the issue of damages, but I do not object to it as establishing 45D(1) - - -

MR ROFE: I am only tendering it purely on the issue of substantial loss and damage."

(T.336)

1. After Ex. D was admitted, counsel for Mudginberri called further evidence as to the effect which the picket line was having on its operations. During the course of this evidence the following exchanges occurred:
   
   

"HIS HONOUR: Ms Simpson, is there any issue about this part of the case now?

MS SIMPSON: No, your Honour.

HIS HONOUR: ... as I understand what was said yesterday, there is no contention - it is agreed that there is a picket line there. It has been there for some time.

MS SIMPSON: Yes, your Honour.

HIS HONOUR: The first respondent has organised it and the second to the fifth respondents are assisting it and promoting it and generally taking part in it.

MS SIMPSON: Yes, your Honour.

HIS HONOUR: If that is the case, do we need this witness' evidence, Mr Rofe?

MR ROFE: If there is no issue, your Honour that these respondents are acting in concert, engaging in conduct that is hindering or preventing the supply of goods and services by third persons to the applicant and continuing to do so - if there is no issue as to that or that there is a hindering and preventing of the acquisition of goods or services by third persons from the applicant - then I agree, your Honour. We have about three or four witnesses who will be giving evidence to this effect, but we have had no indication that there is any concession on that aspect of the case.

HIS HONOUR: Ms Simpson, you take your own course; but is there (sic) real point of this case, 45D(3) or D(1)?

MS SIMPSON: 45D(3) together with the discretionary matters. It is not D(1) at all. I thought I made that clear yesterday morning.

HIS HONOUR: In your submissions, you will be conceding that but for the 45D(3) matters and but for discretionary matters, the claim for relief would be made out.

MS SIMPSON: I would certainly be conceding the factual matters in 45D(1), your Honour.

(T.397-398)

1. In my reasons for judgment the following passage appears:
   
   

"On 9 May 1985 the applicant commenced its operations at Mudginberri for the 1985 season. The following day the picket line was established and has since been maintained. The first five respondents do not dispute that the first respondent was instrumental in organizing the picket line and continues to be responsible for maintaining it. Nor do they dispute that the second, third, fourth and fifth respondents are all taking a part in the maintenance of the line.

The effect of the picket line was to shut down the applicant's export operations. There is evidence, which I accept, that the shut down has caused and is causing the applicant substantial losses. Meat may not be exported unless it has first been inspected by appropriately qualified meat inspectors. It is the responsibility of the Department of Primary Industry to allocate inspectors to the Mudginberri abattoir. Three meat inspectors have been assisgned to it. The evidence established that the inspectors have declined to cross the picket line. There is evidence, which I accept, that Mr Roughan told one inspector that, if necessary, physical force would be used to prevent inspectors working if they crossed the picket line. There is also evidence, which I accept, that the transport of goods to the abattoir has been impeded because of the picket line. In the last few weeks the applicant has been able to carry on limited operations at the abattoir by producing meat for the domestic market, but I am satisfied that it is still suffering continuing loss and damage to its business.

I am satisfied on the evidence that the applicant has made out a case that the first, second, third, fourth and fifth respondents are engaging in conduct proscribed by s.45D(1) of the Act. The evidence establishes quite clearly that those respondents are, in concert with each other, engaging in conduct that hinders or prevents the supply of services by the meat inspectors to the applicant, and that such conduct is engaged in for the purpose and is likely to have the effect of causing substantial loss or damage to the applicant's business. Indeed, although no formal admissions were made, it was all but conceded by counsel for the respondents that the evidence established a breach of s. 45D(1)."

(61 A.L.R. at pp.282-283)

1. In para. 17 of the amended Statement of Claim the applicants allege that the evidence given by Pendarvis was false at the time it was given in that:
   
   

"(a) The said Pendarvis believed that at the time of giving the said evidence that 98.5% of the meat produced by the Respondent between the 24th June and 9th July, 1985 would be sold by the first named Respondent on the export market for $2.76 per kilogram.

(b) Or alternatively, at the time of giving the said evidence the first named Respondent had sold meat produced between the 24th June and the 9th July, 1985 to the Agricultural Development and Marketing Authority of the Northern Territory for a price of $2.30 per kilogram."

Particulars of alleged sales were given.

1. The applicants also allege that Pendarvis' evidence was given fraudulently, in that he knew it to be false or, recklessly, in that he did not care whether it was true or false. They further allege that the order made on 12 July permanently enjoining them was procured by Pendarvis' fraud. In support of this claim, they allege that in order to make the permanent injunction order I had to find, and did find, that the conduct of the applicants would have or be likely to have the effect of causing substantial damage or loss to Mudginberri's business, and that in so finding I necessarily relied on Pendarvis' evidence.

2. Many of the facts which give rise to the present proceedings were ventilated in the hearing of the claim for damages in matter No. G 123 of 1985 ("the damages proceedings"). Those proceedings were brought on for hearing after an appeal against my decision in the injunction proceedings was dismissed (see 61 A.L.R. 417). In my reasons for judgment in the damages proceedings I have dealt at some length with the nature and effect of the transaction entered into between the respondent and the Agricultural Development and Marketing Authority ("ADMA"). I have also dealt with the evidence given by Pendarvis as to his understanding of the effect of the ADMA transaction and with the evidence given by Messrs Saville and Cavanagh, who are respectively the chairman and general manager of ADMA. Their evidence, as well as additional evidence, is before me in the present proceedings.

3. It is convenient first to consider whether Mudginberri would have succeeded in obtaining the orders made on 12 July if the alleged false or fraudulent evidence had not been given. Mudginberri's claim in the injunction proceedings was based upon s.45D(1)(b)(i) of the Trade Practices Act. Relevantly, that section required Mudginberri to prove that the applicants were engaging in conduct which was likely to have the effect of causing substantial loss or damage to its business. As the above references to the transcript show the applicants all but conceded that the claim under s.45D(1)(b)(i) had been made out. The only real defence raised was that the conduct complained of was protected by s.45D(3). Nevertheless, there was abundant uncontradicted evidence before the Court that the conduct had caused and was continuing to cause the complete closure of Mudginberri's export business. At no stage in the long running saga of the dispute between the parties has the contrary ever been suggested. Nor could it have been.

4. Mudginberri's business was, almost exclusively, the exporting of meat. It was inevitable that the closure of the business while the picket was in place would be likely to cause substantial damage to that business. The closure deprived Mudginberri of its established and traditional source of income. It must have been of great importance to it that its export trade, particularly in buffalo meat, be preserved. A market once lost might not have been recaptured.

5. In the circumstances as they existed when the injunction proceedings were determined and in the light of the virtual concession made by the applicants' counsel it is inconceivable that the Court could have reached any conclusion other than that the applicants were engaging in conduct which was likely to have the effect of causing substantial damage to Mudginberri's business. To conclude otherwise would have been perverse. Thus, irrespective of Ex. D the orders Mudginberri sought would have been made by the Court.

6. Counsel for the applicants argue that if it is shown that false or fraudulent evidence was tendered to the Court and that the Court took it into account in reaching its decision, it is not to the point that there was other evidence before the Court which justified the making of the orders. I do not think this submission is correct. Support for the argument is said to be found in Hip Foong Hong v H. Neotia and Co (1918) A.C. 888; Jonesco v Beard (1930) A.C. 298 and Ronald v Harper (1913) V.L.R. 311. I can find nothing in the lastmentioned case to support the proposition for which it is cited. The first two cases were appeals from decisions granting (Hip Foong Hong) and rejecting (Jonesco) new trials on the ground of fraud. In Hip Foong Hong, Lord Buckmaster, speaking for the Privy Council said at p.894: "A judgment that is tainted and affected by fraudulent conduct is tainted throughout, and the whole must fail;". That statement was made in the context of the facts of the case and the issue which fell to be decided. The case was one in which one opium dealer sued another for breach of a contract to sell a large quantity of opium. The defence was that the contract had been cancelled by arrangement between the parties. There was conflicting evidence at the trial as to whether the contract had been cancelled. The unsuccessful party sought a new trial alleging that new documentary evidence had become available showing evidence given at the trial to be false. Plainly the fraudulent suppression of the documents, if established might have affected the whole of the trial judge's decision. Jonesco, like Hip Foong Hong, was a case in which the fraud, if established, would have affected the credibility of the whole of the successful party's case. Neither case bears any resemblance to the present. Total rejection of Pendarvis' alleged false or fraudulent evidence would not cause any change to be made in the orders made in the injunction proceedings.

7. Having regard to the desirability of there being an end to litigation, there are powerful considerations of public policy against setting aside orders made in contested litigation where such orders would have been made in any event because of uncontradicted evidence which supported the making of them. These considerations of public policy apply, a fortiori, where the allegation is that false, as distict from fraudulent, evidence was given at the trial.

8. What I have already written is sufficient to dispose of the application. Nevertheless I shall consider whether the applicants have made out their claim that Pendarvis gave false evidence in support of Mudginberri's case. The claim is based upon two quite separate allegations. The first allegation is that Pendarvis gave false evidence that Mudginberri had incurred losses of $183,000 and was incurring continuing losses. The falsity was said to appear from his evidence in the damages proceedings that as at 9 July 1985 he believed that the meat produced between 24 June and 9 July had a value on the export market of $2.76 per kg and that the meat that would be produced after 9 July would have the same value. This allegation, which is made in para. 17(a) of the amended Statement of Claim, was but faintly pressed in argument.

9. The effect of what Pendarvis said on 9 July was that the meat that had been produced since 24 June and that Mudginberri was continuing to produce had a value of $1.77 per kg, this being its value on the domestic market. He also gave evidence that the Commonwealth meat inspectors had refused to cross the picket line and that consequently the abattoir had been producing meat for the domestic market only.

10. As at 9 July the meat which had been produced since 24 June and which Mudginberri was continuing to produce could not be exported. If the meat had been sold at that date its selling price would have been the price which it would have commanded on the domestic market. There is no evidence that a higher price might have been paid for it because of any possibility that permission to export it might subsequently be obtained. The fact that Pendarvis believed (erroneously, as events transpired) that the meat would ultimately be sold on the export market for $2.76 per kg did not give it a value in excess of the price for which it could be sold on the domestic market. Indeed, as appears from my reasons for judgment in the damages claim, the evidence given by Pendarvis on 9 July as to the value of the meat was subsequently proved to be substantially correct since permission was never obtained to export the meat. At no stage did the meat have a value of $2.76 per kg, or anything like that sum. There is no substance in the first allegation.

11. The second allegation is that Pendarvis' evidence that Mudginberri had sustained and was sustaining the abovementioned losses was false in that, as at 9 July 1985, Mudginberri had sold the meat to ADMA at $2.30 per kg. This allegation which is made in para. 17(b) of the amended Statement of Claim, was vigorously pursued. The evidence in the damages proceedings as to the nature and operation of the ADMA transaction was tendered in these proceedings. In addition, further evidence was given by Messrs Pendarvis, Saville and Cavanagh and two drafts of an agreement dated 29 August 1985 (Ex. V in the damages proceedings) were tendered and admitted. The relevant terms of this exhibit are referred to in my reasons in the damages proceedings. Saville adhered in every respect to the evidence he gave in the damages proceedings. Having seen him again in the witness box my opinion of him as an honest and reliable witness is confirmed. He said that the moneys advanced to Mudginberri were paid from an account from which advances were made to grain growers. Moneys in this account were not used to purchase grain. He told ADMA's accountant that interest on the moneys advanced to Mudginberri would be calculated at the end of the transaction. He said numerous drafts of Ex. V were produced but he did not recognize the particular draft shown to him in cross examination and subsequently admitted in evidence in the present proceedings. It appears that this draft was produced by some unknown person in the service of the Northern Territory Government. The draft, which appears to have come into existence in July 1985, uses language apt, in some respects, to describe a sale of the meat, but in its entirety the document uses language more apt to describe an hypothecation. Whatever the draftsman had in mind, Saville at no stage described the transaction as a sale. The document actually executed by him, i.e. Ex. V, described the moneys paid by ADMA as an "advance ... to Mudginberri for operational purposes."

1. Pendarvis disclaimed any intention to deceive or mislead the Court when giving his evidence in the damages proceedings. I accept his disclaimer. I reject the allegation that he gave deliberately untruthful or fraudulent evidence. I think he was an honest witness whose evidence is reliable on most of the matters upon which he was questioned. His understanding of the somewhat unusual transaction whereby ADMA advanced moneys against the security of meat being produced on a day to day basis was imperfect and confused. His evidence reflected his misunderstanding of the legal effect of the arrangement he made with ADMA. It would be unfair to Pendarvis to rely upon that evidence to support the grave allegations of perjury and fraud made against him. Such allegations must be established by strict proof - see Jonesco v Beard (supra) at p.300, which must be "clear and cogent such as to induce, on a balance of probabilities an actual persuasion of the mind as to the existence of the fraud." - see Rejfek v McElroy (1965) 112 C.L.R. 517 at p.521. I am far from being so persuaded. Indeed, I am persuaded that Pendarvis did not give deliberately untruthful or fraudulent evidence.

2. It should be added that Pendarvis had little, if any, incentive to commit the perjury alleged against him. He must have appreciated that Mudginberri's claim that the picket was likely to substantially damage its business was unanswerable. The very purpose of the picket was to damage the business. It was incontestable that the picket had achieved its purpose. Production of meat for export had been stopped. In these circumstances Ex. D was of minimal importance to Mudginberri's case. For Pendarvis to have committed perjury by verifying Ex. D would have been to take an entirely unnecessary risk. It would have been not only wicked but foolish. I am satisfied Pendarvis is neither.

3. There is nothing in the additional evidence called in these proceedings that causes me to alter the views I have formed based on the evidence given in the damages proceedings. I have given reasons in my decision in the damages proceedings for rejecting the applicant's argument that the effect of the ADMA transaction was that the meat was sold to ADMA. I adhere to those reasons and no good purpose would be served by repeating them in this decision. In my opinion the meat was not sold to ADMA at a price of $2.30 per kg or at any other price. It was not wrong for Pendarvis to tell the Court on 9 July that the meat had a value of only $1.77 per kg.

4. Even if it were the fact that the meat was sold to ADMA at $2.30 per kg, Pendarvis' failure to mention that fact on 9 July would not justify setting aside the orders made in the injunction proceedings. That price was significantly below the export price of $2.76 per kg. If it had been shown that the meat was being sold to ADMA at $2.30 per kg it still would have been demonstrated that the applicants' conduct was causing Mudginberri a loss of 46 cents per kg, i.e. over $5000 per day. This in itself would have been abundant proof that the applicants' conduct was likely to cause substantial loss and damage to Mudginberri's business. In my opinion, therefore, there is no substance in the allegations in the amended Statement of Claim.

5. The application is dismissed with costs.