Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Anor

[2017] HCATrans 106

[2017] HCATrans 106

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M11 of 2017

B e t w e e n -

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

and

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

First Respondent

JOSEPH MYLES

Second Respondent

Application for special leave to appeal

KIEFEL CJ
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 MAY 2017, AT 10.51 AM

Copyright in the High Court of Australia

MR T.M. HOWE, QC:   May it please the Court, I appear with my learned friend, MR C.J. TRAN, for the applicant.  (instructed by Sparke Helmore)

MS R.M. DOYLE, SC:   May it please the Court, I appear with MS J.D. WATSON for the respondents.  (instructed by Slater and Gordon)

KIEFEL CJ:   Ms Doyle, we might hear from you first.  As you might predict by that, we are interested to know why there should not be a grant of special leave, given the nature of the order in this matter.

MS DOYLE:   Your Honours will have seen from the decision of the Full Court below that their Honours concluded that it is not within power of the Federal Court and it is therefore not appropriate, to borrow from the language of section 545, to make an order which restrains party A, here the Union, from using or spending its property or funds in a manner which is not unlawful, for the purpose of ensuring that a pecuniary penalty imposed on another party, party B, here a union official, is rendered more severe.

Against that background and teasing out a little what their Honours found below, the Chief Justice said that there is a difference between what is relevant to or perhaps in relation to deterrence and what is appropriate to be done in pursuit of that object.  That emerges from the Chief Justice’s reasons at paragraphs 5 and 7. 

In that context, the Chief Justice said there must be limits which attach to what is appropriate or, to put that another way, otherwise the word “appropriate” would have no work to do.  Then the Chief Justice and Justice Jessup, in slightly different language but to the same end, analysed the problem in this way.  Their Honours said those limitations on the word “appropriate” are to be derived principally from the text of the Act.  That is an orthodox, well‑trodden path in terms of statutory construction.  Under that rubric, their Honours said here we are dealing with a scheme for imposing pecuniary penalties in situations where the court has satisfied itself that there has been a contravention of the Act.

KIEFEL CJ:   You are really saying that the Full Court unanimously determined the matter and it is not attended by sufficient doubt and that trumps the notion that it is a question of law of public importance.

MS DOYLE:   That is true; it goes further than that.  There is no difference of opinion in the court.  There is no Full Court decision to the contrary.

KIEFEL CJ:   It is a rather novel question, I think.  That is the issue, is it not?

MS DOYLE:   In one sense, yes, but in another sense, orders of the impugned type have been sought on a number of occasions ‑ more than a handful, less than 100 – they have been sought by the regulator, howsoever named from time to time.  Orders of the impugned type have only been made by single judges of the Federal Court twice.  The first of those was Justice Flick.

GORDON J:   That was in a completely different form.

MS DOYLE:   It was in a different form and it did not survive an appeal to the Federal Court, albeit for different reasons, but Justice Jessup’s judgment, powerfully, in our submission, points out why one can place no weight on what his Honour Justice Flick found.

GORDON J:   I think the point is that a number of judges have tried to achieve an objective of indemnity prohibition, a number of forms have been adopted and nothing has, in a sense, worked or has not survived appeal, and the question arises in that context, you have statutory provisions in other legislation which deal with it directly, the Corporations Act and ‑ ‑ ‑

MS DOYLE:   They do, your Honour, but pausing there, those other provisions on which we relied and no judge so far has been interested in drawing on them but, in our submission, they remain a powerful force in favour of our contention with respect to what is appropriate for this reason.

Section 77A of the Competition Act and section 199A of the Corporations Act deem certain indemnification arrangements entered into between companies and their officers to be unlawful and deem the architecture of any arrangement that seeks to bring about such an indemnification arrangement to be void.

Now, that is important in a number of respects.  The first is when this very same legislature – when the Parliament of the Commonwealth wants to or sees the need to prohibit or constrain in some way indemnification arrangements, which one might rightly assume, in our submission, must be for a general purpose of deterrence or of rendering compliance with those other regimes more likely to occur – it is a carrot and stick approach, if you like – it does so by dint of express words but not by conferring power on a court to making prohibition orders on indemnification arrangements where the court thinks it is appropriate. 

Rather, the statute sets out in no uncertain terms the types of arrangements and the circumstances in which they will be prohibited.  So without descending to the detail, the best example is perhaps section 77A of the Competition Act which says where there is a civil liability of the following type, contravention of Part IV and Part V, indemnification arrangements between companies and their directors and other senior officials are unlawful and any arrangement including insurance arrangements sought to be entered into to prop up that sort of indemnification arrangement are void. 

It is our submission here and has been at each level of these proceedings that the existence of those two provisions and two others that we cite in a footnote in our submissions which have received no judicial consideration, but the existence of those supports very powerfully what the Chief Justice and Justice Jessup said but in a different context.  Their Honours can be taken to have been saying that in the absence of express words, one could not read in this sort of power – the Chief Justice because his Honour found it offended the principle of legality ‑ ‑ ‑

GORDON J:   This is the point at page 79 in paragraph 11 ‑ ‑ ‑

MS DOYLE:   Yes.

GORDON J:   ‑ ‑ ‑ that is, you cannot make unlawful that which is lawful, i.e. you cannot prohibit someone from using their own resources in the way they see fit.

MS DOYLE:   Yes, and even more powerfully so, we submit, when one bears in mind that when the Commonwealth has determined that companies, a different type of corporate entity from a union but one nonetheless ‑ ‑ ‑

GORDON J:   I think the point is – I wonder whether the point is a bit broader, and that is not only the legality principle to which it alludes at page 79, paragraph 11, but working out what the parameters of that are.

MS DOYLE:   Yes.

GORDON J:   So that here you have on the applicant’s construction, it would seem to suggest, one does not work out where the line is drawn.  So if you compare it with the orders made by Justice Flick, they were in a completely different form and did not suffer from that vice.  In other words, is it to be limited to a parent paying for a child?  Is it to be limited to a particular person?  Is it to be limited to a party to a proceeding?  Where is the line drawn on an argument that there is a power to make an indemnity prohibition order?

MS DOYLE:   Quite, and the Chief Justice and Justice Jessup gave their own examples.  They were careful in each case, in our submission, to say they were not engaging in impermissible reasoning backwards from consequences but Justice Jessup did remark on the way through stress testing this against what might be otherwise unintended consequences was important.  Now, both judges in that context pointed to the prospect that these orders might be made in a form which would prohibit a lender, a bank, a wealthy relative, for example, from putting up the cash, if I can put it in that form.

In argument, the Chief Justice went further and gave examples of whether or not these orders might become more and more granular, forcing a contravener to draw on a particular pocket of their own funds.  For example, his Honour posited this hypothetical.  What if the decision‑maker knew that I was attached to a particular asset?  Could it be ordered that I only pay the penalty imposed on me by selling my vintage car or by selling an expensive piece of artwork, not two examples likely to attach in the case of these union officials but perhaps examples that were apt to make his Honour’s point?

If one takes that into account, one can see that if one can red circle funders – relatives, wealthy philanthropists, particular banks or all banks – not only is that a very surprising result but it is not a result that one sees, for example, in the criminal courts.  No questions are asked about who will pay and perhaps this does blend into what seems to be my friend’s point.

The Chief Justice and Justice Jessup said one cannot use section 545(1) to render more severe the impact of a penalty imposed under section 546.  Our friends take that point and turn it into a question of efficacy but in our submission the question of whether a fine will be paid might give rise to questions of efficacy, but the question of by whom is a question of severity.

That is what the Chief Justice and Justice Jessup were driving at and obviously Justice North insofar as his Honour agrees with both of the other sets of reasons.  It is that question that troubled their Honours in a scheme that first of all relates to imposition of civil penalties; secondly, clearly has two provisions with different purposes, 545 and 546. 

It is certainly a scheme in which it is made abundantly clear an order can be made under either or both – we accept that – and certainly there is a matter on which my learned friend and I are agreed.  Everybody it seems agrees, as do the Chief Justice at paragraph 7 and Justice Jessup at paragraphs 58 and 59 that section 545(1) could not be used to increase the maximum of the penalty imposed under 546. 

One is then left with really one more question and that is:  what is the meaning of the word “appropriate”.  The Chief Justice and Justice Jessup draw the line at a penalty being rendered more severe, relying on the power under 545(1), and in the Chief Justice’s case his Honour goes a little further and says it is really an aspect of the principle of legality.  The Union is perfectly entitled to spend its money as it sees fit, so long as the expenditure is not unlawful. 

This mode of arranging one’s affairs, about which there was no evidence but a reasonable assumption was made, namely that fines may be paid by the Union rather than by the individuals themselves, that one would expect that the legislature has not unthinkingly abrogated that understanding of there being an ordinary lawful way in which one might organise one’s affairs.

Justice Jessup put that slightly differently.  His Honour did not draw on the principle of legality but at paragraph 60 his Honour did say one would expect to find clear words and it is not for this Court to devise its own version of a more effective form of deterrence.

I have really leapt there to the substance of our argument, but in order to answer your Honour the Chief Justice’s question, why does that mean no grant should lie, there is a unanimous decision of the Full Federal Court and the point I was starting to develop was that there was no difference of opinion in that court.

It is in that context that I have pointed to the fact that a form of order and I accept it was a different form of order made by Justice Flick has not survived.  The only other order that has been made is the order by her Honour Justice Mortimer, which has not survived.

Our friends in their submissions point to the fact that the regulator has on foot some applications of this kind and would like to make more but, with respect, there is presently only a handful of such applications in the list and if leave is not granted of course the answer is clear - there is now a Full Court decision saying that orders of this type do not fit within the rubric of what is appropriate.

The other question of public importance our friends attempt to enliven - this is the regulator’s submissions at paragraphs 39 to 49 - include the following.  Our friends say it is a question of public importance because the Fair Work Act is central to the Australian economy and its objects include reference to productivity and fairness.

We have what I hope is not too glib a response to that and that is the fact that the promotion of economic growth and productivity is one of the Act’s objects just simply cannot elevate every aspect of construction of that Act into a question bearing the status of having public importance.

Our friends do attempt in a sense to say that there is a difference of opinion within the court and in that context our friends refer to the orders made by Justice Flick and Justice Mortimer.  We say, with respect, that controversy has been quelled; the two orders did not survive.

The only other point our friends make is the question of whether the decision of the Full Court is attended by sufficient doubt and I really addressed that at the outset of the submissions I have made.  I think I should address one other point that figures largely in my friends’ submissions and that is the Shin Kobe point.  My friends rely heavily on a submission that because this is a conferral of power on a court, and therefore must be exercised judicially, it tends in favour of a broad construction.

We accept the proposition up to that point, but after that the position between the parties diverges dramatically.  Our friends at paragraphs 30 and 36 of their submissions really seem to be going this far.  They seem to be submitting that because the power is required to be exercised judicially and one can assume that the Federal Court will afford procedural fairness, although I open brackets here somewhat unkindly to remark that in fact it has been found the Union was denied procedural fairness in this very case on a different ground of appeal, close brackets, and because appeals are available, our friends then draw these matters together at paragraphs 30 and 36 and effectively say well, there you go.

GORDON J:   That proposition suffers, I think, at least from one difficulty, does it not, on your contention and that is that what happens if it is a prohibition order in respect of a non‑party?

MS DOYLE:   Yes.  I think to be fair, my friends do anticipate that a court like the Federal Court would make efforts to bring a non‑party before it as it would, for example, in a costs application.

GORDON J:   So does that mean, just so I am clear, that the contention is that the person who has had the fine imposed has to identify who would indemnify them?

MS DOYLE:   Yes.

GORDON J:   I mean ‑ ‑ ‑

MS DOYLE:   I do not know.  That is perhaps the logical conclusion.  I had a more direct response to that proposition which is all of that begs the question with respect to my friends.  First of all we have to construe what is appropriate.  We cannot take refuge in a presumption that because it is going to be exercised by a court any order that emanates from it is appropriate. 

The second question, your Honour’s question, is an equally important one and also one that admits of no practical answer.  If any prohibition order restraining any party – so let us borrow some of the examples that were traversed in front of the Full Court – a bank – could be made, then your Honour is right. 

Perhaps it then falls upon those in the room including the judicial member themselves to identify who might now be affected and make sure they are heard, and that the unusual outcome or that the unusual answer that that provides tends to suggest that this would be a very unusual sort of procedure that would start to be visited upon the court whenever these indemnification orders are sought, at least if they travel outside this form which has been made here.

The other response we make to our friends’ reliance on the presumption that a power to be exercised judicially is of a special type is, of course, that is only a presumption and a consideration.  The decision in David Grant makes it clear that of course a later or more specific provision must be borne in mind when construing the outer limits of such a conferral jurisdiction.  We say that is exactly what their Honours did here in a very orthodox way, carefully parsed each phrase – relevant phrase – of 545 and 546 and took a step back and looked at how the two worked together in the context of a penal scheme.

Next, of course, the Chief Justice also said – and all of this must operate with and live with in some manner the principle of legality, and his Honour could not get past the reality that what the order does is constrain what is otherwise a lawful use of one’s assets.  Unless there are any further questions, those are our submissions.

KIEFEL CJ:   Yes, thank you, Ms Doyle.  We will hear from you, thank you, Mr Howe.

MR HOWE:   Your Honours, like most special leave questions coming before this Court, this particular special leave question has rule of law implications but the implications hanging off this special leave question, in our submission, have greater operational relevance and significance than usual because of the field of activity in which the special leave question arises. 

The question itself is whether or not a generally conferred power upon a court to make appropriate orders in a civil penalty regime permits the court to make an order against a co‑contravener with respect to non‑indemnification of another contravener who is an employee or official of the first‑named contravener in circumstances where the trial judge is positively satisfied that absent such an order the…..objectives and purposes of the legislative regime in question would not be achieved.  Justice Mortimer at first instance ‑ ‑ ‑

GORDON J:   There are two aspects to that.  The first is the first part of your proposition you just put.  Is it your submission that the discussions we have been having with Ms Doyle are irrelevant to this question, i.e. the extent to which it could extend to third parties?  Just so I am clear about it, I did not read your submissions that way.  So is it, you put it in terms of co‑contravener and that the indemnity prohibition order being limited to those co‑contraveners, as I understood the proposition you just put.  Is that right?

MR HOWE:   Yes, that is the precise special leave question ‑ ‑ ‑

GORDON J:   No, no, that is not what I asked.

MR HOWE:   ‑ ‑ ‑ that we had formulated.

GORDON J:   That is the question you have put.  Does that mean that there is no contention that it goes beyond that power?

MR HOWE:   Well, firstly, we do not think it is necessary for the Court to dispose of the question of statutory construction in this case by considering and adjudicating whether section 545 would permit an order to be made against a non‑party such as a parent or a relative and so on. 

We, if pressed, in due course, if special leave is granted on any appeal, would submit to the Court if the question arose that there is no emphatic exclusion of the possibility of such an order being made but because the non‑indemnification order would be made against, firstly, a non‑party, and secondly, someone who did not contravene the statute, those two facts would very substantially rob an order against an innocent, as it were, disinterested third party of its appropriateness in all but exceptional circumstances because, one could ask rhetorically, why would such an order serve the purposes of specific or general deterrence. 

Here we have a pre‑existing relationship between the contraveners – Union and union official.  We have both joined as parties in the proceedings and we have findings of contravention on the part of both and not, as it were, in a ships passing in the night kind of way.  Her Honour Justice Mortimer held that the Union itself positively condoned the commission of the contravention by Mr Myles and Mr Myles ‑ ‑ ‑

KIEFEL CJ:   Be that as it may though, Mr Howe, is not the difficulty that you have that you require an implication for this power?

MR HOWE:   No, your Honour, it is the reverse difficulty.  On our submission, the natural width of the language of section 545 ‑ ‑ ‑

GORDON J:   Section 545 or 546?

MR HOWE:   Section 545 because section 546 authorises the making or the imposition of the pecuniary, the monetary penalty order itself, so we are concerned with section 545 and we submit that the natural amplitude of those words is such as to permit the making of an order if the Court is positively satisfied it is appropriate so to do by reference to the deterrent purposes of the statutory regime.  It is really the respondents who contend for the introduction of a very significant negative implication against the amplitude of the power.

GORDON J:   I do not know.  If you go back to Jackson v Sterling Industries, the principle is clear.  The Court only gets power to the extent that the grant of remedies is appropriate to the protection of the subject matter.

MR HOWE:   Yes.

GORDON J:   So, here the subject matter is what is in 546, the imposition of a pecuniary penalty for the contravention of particular conduct.  So I do not know that it is a negative implication, it is a question of construction.

MR HOWE:   Well, with respect, this Court has continually emphasised that the proper approach to civil penalty regimes is to construe them by reference to the primacy, if not the exclusive organising principle, of specific and general deterrence.  Here, Justice Mortimer the trial judge for reasons which are not contested and not in issue held that the objective of deterrence, specific and general, would simply not be achieved absent the making of a non‑identification order against a co‑contravener who basically acted in concert with the individual contravener in securing a knowing and intended unlawful act.

GORDON J:   What about the existence of the express provisions in other statutes?  I know we do not construe one statute by reference to another but the Commonwealth obviously perceives it to be necessary in other statutory regimes to give the courts particular and specific powers to make these sorts of orders.

MR HOWE:   With respect, your Honour, that is a pertinent question.  Can I answer it in this way?  Those distinctive statutory provisions, and on our researches they only exist in four of the approximately 40 civil penalties regimes administered by the Commonwealth, they are of an entirely different effect, and in those particular cases under the Consumer ‑ ‑ ‑

GORDON J:   Let us call it the Competition Act because that is the easiest.

MR HOWE:   ‑ ‑ ‑ and Competition Act, the Corporations Act and ASIC and so on, what the legislature has done is to emphatically declare or stipulate the outcome – that is, there shall be simply no non‑identification in these particular circumstances and that ordains the result.

The very fact that that mechanism exists, which is quite different, does not speak or tell against the court intending by the conferral of a broad power upon a court to make appropriate orders, that in particular circumstances if satisfied that the achievement of the deterrent purposes of the legislation made it necessary to do so, the court would exercise a discretion to make a non‑indemnification order.  They are quite different mechanisms ultimately directed, we accept, to keeping faith with the deterrent principles of the regime. 

But it is not as though the mere fact that the legislature could have dealt with the subject matter in this emphatic ordaining way that it intended that a court would not have power to make a particular order in circumstances where it was positively satisfied it was necessary so to do.  Your Honours must bear in mind that section 545 is not properly described as a mere ancillary source of power or a power to make complementary orders.

There need be no monetary penalty imposed and orders can be made under section 545, and of course they can be made in addition to orders under section 546.  So section 545 in many respects is intended to be very wide and a freestanding source of power to deal with contravening conduct, and where a pecuniary penalty is imposed, and for very cogent reasons identified by a trial judge, it is considered that nothing worthwhile will come from the imposition of the monetary penalty, absent a non‑identification order, we say the legislature must have intended to permit that result, bearing in mind ‑ ‑ ‑

KIEFEL CJ:   Well, you put it on the basis that the court’s concern is the efficacy of its orders and that this power must exist for that purpose.

MR HOWE:   Exactly so.

KIEFEL CJ:   On another view, it is a policy question, is it not, about whether or not unions should fund union representatives in relation to the payment of penalties?  It is a question of appropriateness of the application of union funds, and that is in the area of legislative policy, is it not?

GORDON J:   In the same way that the Corporations Act has adopted a policy that corporations to which the directors or officers are involved should indemnify the directors or officers.

MR HOWE:   Yes, there are definitely those statutory schemes of that emphatic kind ‑ ‑ ‑

KIEFEL CJ:   Having said that, that does not mean that there is not an area for discussion and the question is whether or not this is a question of sufficient importance.

MR HOWE:   Yes.  Well, just on that topic, your Honour, what we know is that we are dealing here with a level of serial, ongoing, sustained, non‑contravention, both by the Union and the union official.  The factors identified by Justice Mortimer as sustaining the order were the history of contraventions, the fact that the history involved deliberate and knowing contraventions by both the Union and the official. 

The fact that the contraventions were characterised by what was called a contumelious disregard of the obligation to observe the law, the fact that the contraventions involved on the part of both the Union and its official coercive and intimidatory behaviour that affected not simply the joint venturers who were undertaking the construction but innocent co‑contractors, in this case the concreting contractor ‑ ‑ ‑

KIEFEL CJ:   That might mean that if the court has power it would be a proper exercise of the power but it begs the question whether there is power.

MR HOWE:   I am addressing the question of public importance because in the light of those particular factors which your Honours can almost take judicial notice have a very high degree of currency generally in relation to industrial workplaces, particularly construction sites, the question as to whether a court has power to address the features of that sort of conduct, in our submission, is a matter of profound public importance, not simply something of interest to the public but a matter of real and substantial public interest in the relevant sense.

Your Honours will recall in the case of Barbaro, sometimes called the “agreed penalties case” this Court stipulated very, very cogently that civil penalty regimes would never work if they permitted miscreants, contraveners, to treat or regard penalties imposed as a mere cost of doing business, and that is exactly the principle which Justice Mortimer invoked to justify this non‑indemnification order.  Now, the question as to whether her Honour was empowered to do that, in our submission, is a matter of real and special public importance. 

KIEFEL CJ:   Mr Howe, has this question ever arisen in the context of penalties for contempt of court?

MR HOWE:   It did, your Honour, in a case relied upon by Justice Mortimer but the relevance of which was dismissed by ‑ ‑ ‑

KIEFEL CJ:   That is right, yes.

MR HOWE:   ‑ ‑ ‑ Justice Jessup and that was a fine imposed for contempt and there was, in effect, an order made by the Full Federal Court in that case that the fined party not seek or obtain payment of the fine imposed for contempt and it was criminal contempt.  It was not civil contempt.

KIEFEL CJ:   I just wondered in a case like that if there was a choice for the Court between making an order for penalty or an order for imprisonment – whether or not factors such as whether the penalty was likely to be paid by another party would actually be a relevant factor. 

MR HOWE:   Possibly, your Honour, but can we ‑ ‑ ‑

KIEFEL CJ:   I am not sure how one extrapolates from that to answer the question here, but it seemed to me that it is in areas such as contempt of court where this is likely to be more important.

MR HOWE:   Yes.  Can we respond to that in this way?  Firstly, a trial judge could not, as it were, make a kind of order along those lines – peremptorily, as it were.  There would have to be an application, not only for civil penalties but to have the person dealt with for a contempt.  It would be hard to see how that could ever succeed because at that stage there might be a contumelious disregard of provisions of the Fair Work Act but there will not have been a contumelious disregard of a pre‑existing court order.

So, to arrive at that result, you would require the administration of justice to have civil penalty orders imposed and then an application to have the contravener dealt with for contempt and, perhaps, a fine imposed and then a non‑indemnification order made.  In our submission, given the terms of section 545, a court can make any order it considers appropriate. 

The relevant constraints to guard against the sort of slippery‑slope that has been discussed this morning are to be found in the requirement that the discretion to make what are unambiguously special orders must be exercised judicially and must be sustained by reference to proper and relevant considerations and here ‑ ‑ ‑

GORDON J:   Does that go to the question of the form of the order, though, i.e. the distinction between the order made by Justice Flick and the order made by Justice Mortimer? 

MR HOWE:   Yes, it can because in a particular case a proper exercise of discretion may favour one form of order or another.  We doubt that if special leave is granted the Court will be burdened with a requirement to formulate the outer metes and bounds of section 545 or to come up with a prescription as to the type of order it authorises beyond which no possible order could be authorised.  Rather, we will be seeking to persuade the Court that whatever be the metes and bounds of section 545 in terms of what it omits, if a trial judge is positively satisfied on the basis of relevant evidence, facts and considerations and circumstances that achievement of the deterrent purposes of the civil penalty regime requires a non‑indemnification order, then the section permits it.

Of course, the safeguards are there.  If the discretion miscarries because an irrelevant consideration is taken into account, or a relevant consideration is excluded, and so on, then the decision of the trial judge will be amenable to appeal, not on the basis of some bright line emphatic proposition - no power exists at all under any circumstances whatsoever such as that embraced here by the Full Court but by reference to the usual review of exercises of discretion.

We say that is consonant with the intention of the legislature and, in particular, absent that being the position, then, in effect, the very purposes served by enactment of these provisions, some 40 of them that we can find, would be, according to her Honour Justice Mortimer in this case, fundamentally undermined to the point where the order for payment, the pecuniary penalty would have no real deterrent effect.

That was not disturbed by the Full Court.  That finding was not impugned.  We submit in those circumstances there is a frank, bald question of fundamental importance.  Can a court exercise a power such as that conferred by section 545 at least in circumstances involving a co‑contravener who acts in concert with the particular person who is the subject of the fine and where the court is positively satisfied on the basis of cogent and persuasive evidence that absent such an order deterrents will not be achieved?

KIEFEL CJ:   Yes, thank you, Mr Howe.

MR HOWE:   Thank you.

KIEFEL CJ:   Any reply, Ms Doyle?

MS DOYLE:   Yes, briefly, your Honours.  On the question of whether there is a question of public importance here, with respect, my friend’s submissions drifted into whether or not there is a question in which the public is interested or which has troubled the mind of the legislature.  I say that for this reason. 

As the Chief Justice indicated at paragraph 14 in his Honour’s reasons, if there be such concerns such as those articulated by my friend, then it is a matter for the legislature to increase the penalty.  Justice Jessup said at paragraph 60 of his Honour’s reasons, it is for the legislature, not this Court to devise a better deterrent.  It is in that context then that we agree, or we embrace the reasons of their Honours insofar as it is said this is a question for the legislature and we embrace the observation made by your Honour the Chief Justice.  It is a policy question.

The second point of reply is this.  The regulator’s submissions with respect to the question of whether or not an order would be appropriately made with respect to a union or co‑contravener as opposed to a disinterested third party or a non‑party – all assumed the existence of power and were really a series of submissions about the outer limits of what is appropriate, assuming the existence of a power and although it tended to narrow the question, we would say first of all it did so in a way which was not obvious to us in terms of the manner in which the special leave question was stated at paragraph 4 of our friend’s submissions.

I accept that the special leave question invoked the word, or the phrase “another party” but I must say it was not clear to us that that was confined to a co‑contravener who is a party to the proceeding and did not otherwise invite the broader question with respect to party where “party” simply means a person or an entity. 

So the first difficulty is that my friend’s submissions assumed the existence of power.  The second is that they, at the very least, invite a consideration of what is the specific special leave question which it is sought to be ventilated before the Court.

The final matter, I should note, is that until very shortly before we rose to our feet this morning, I was relying on – with respect to the question of costs – to my friend’s indication at paragraph 44 of his submissions that because section 570 applies to the underlying substantive proceeding the parties would bear their own costs. 

My friend has quite fairly, but very recently, raised with me a question in relation to that with respect to which I have had no time to obtain either instructions or inform myself in relation to a decision that I gather was handed down yesterday.  So it may be that I have to beg the

indulgence of the Court depending on the disposition of the matter with respect to the costs questions.  I thank my friend for raising it but I am not in a position to be able to address it.

KIEFEL CJ:   Yes, thank you.  Mr Howe, in relation to the question of costs if leave were granted - this is something of a test case – would the usual special order be made?

MR HOWE:   Your Honour, we have considered that position and I will not be revealing my hand if I, frankly, concede upfront that if your Honours, as it were, insisted on the attachment of that as a condition to a grant of special leave we would readily agree to it.  But we would simply seek to be heard in opposition to it as a condition for the grant of special leave because the particular features here are a well‑heeled union and so on.

Your Honours probably do not need me to go through them.  But, if your Honours, at the end of the day, would only grant special leave on condition that we agree not only not to seek costs if we are successful but, perhaps, even more ‑ ‑ ‑

KIEFEL CJ:   Not to disturb orders? 

MR HOWE:   Yes.  There will not be any orders below because that is captured by section 570.

KIEFEL CJ:   Yes, that is right – section 570.

MR HOWE:   We would strenuously ask your Honours to resist one aspect of the usual condition with respect to costs attaching to orders ‑ ‑ ‑

GORDON J:   What is that?

MR HOWE:   ‑ ‑ ‑ and that is the second aspect that we fund the costs of the respondents in respect of any appeal.  It is one thing to direct, as it were, or to require as a condition that we not seek to recover our own costs.  But, at the end of day, I have to frankly tell your Honours that if you were minded to impose both aspects of that kind of default position as a condition of grant of leave and would only grant leave on that basis we will, of course, accede to that. 

But we do invite your Honours to at least consider whether it is appropriate in this case to make any such condition at all and if your Honours are persuaded it is, that your Honours at least consider stopping at the first aspect of the usual costs condition, namely, we not seek to recover our costs even if we succeed and not proceed to the second aspect, namely, funding the respondents’ costs.

KIEFEL CJ:   The Court will adjourn briefly to consider the course it will take.

AT 11.33 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.34 AM:

KIEFEL CJ:   On condition that the applicant does not seek an order for costs of the appeal, there will be a grant of special leave.  The Court is not minded to take the question of indemnification further.  Would you ensure that your instructing solicitors obtain a copy of the directions?  A time estimate, Mr Howe?

MR HOWE:   Your Honours, I think very good prospects – half a day – with some possibility of leaching into some half hour or so after lunch.

KIEFEL CJ:   What is you estimate, Ms Doyle?

MS DOYLE:   A day, your Honours.

KIEFEL CJ:   Yes, thank you.  The Court will now adjourn to reconstitute.

AT 11.35 AM THE MATTER WAS CONCLUDED