Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission

[2007] FCAFC 132

FEDERAL COURT OF AUSTRALIA

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132

TRADE PRACTICES — restrictive trade practices — appeal against finding that union was liable as an accessory under s 76(1) of Trade Practices Act 1974 (Cth) to company’s contraventions of ss 45E and 45EA — whether primary judge erred in finding contract, arrangement or understanding between company and union contravened s 45E — whether primary judge erred in drawing certain inferences — whether primary judge erred in finding alternative case of Australian Competition and Consumer Commission made out — whether primary judge erred in finding union had knowledge of all elements required by s 45E(3)

TRADE PRACTICES — restrictive trade practices — proper construction of s 45E(3) of Trade Practices Act — whether ‘purpose’ for the inclusion of a provision is objective or subjective — whether ‘purpose’ to be common intention of parties — whether ‘purpose’ must be the only purpose or an operative purpose — whether union can be liable as an accessory to a corporation’s contravention of s 45E(3) — whether ‘second person’ must be a particular identified person — whether sufficient to identify a class of persons

TRADE PRACTICES — appeal against pecuniary penalty imposed on union for accessorial liability — whether pecuniary penalty excessive — standard of proof for pecuniary penalties under s 76

WORDS AND PHRASES — ‘purpose’

Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB(1), 15AB(2)(f)
Evidence Act 1995 (Cth) ss 140, 140(2)
Federal Court of Australia Act 1976 (Cth) ss 24, 24(1), 27, 28, 28(1)(b), 28(1)(f),
Trade Practices Act 1974 (Cth) ss 4F, 4F(1), 4F(2), 45E, 45E(3) 45EA, 76, 76(1), 76(2), 88(7A)

Adler v Australian Securities and Investments Commission (2003) 179 FLR 1 discussed
Ahern v The Queen (1988) 165 CLR 87 discussed
ASX Operations Pty Ltd v Pont Data Pty Ltd (No 1) (1990) 27 FCR 460 discussed
Atcheson v Everitt (1776) 1 Cowp 382 [98 ER 1142] discussed
Australian Competition and Consumer Commission v IPM Operation and Management Loy Yang Pty Ltd (2006) 157 FCR 162 affirmed
Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 affirmed
Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 discussed
Briginshaw v Briginshaw (1938) 60 CLR 336 considered
Bullock v Federated Furnishing Trades Society of Australasia (1984) 58 ALR 364 discussed
Bullock v Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 discussed
Chamberlain v The Queen(No 2) (1984) 153 CLR 521 discussed
Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 216 CLR 161 discussed
Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 discussed
Cooper v Slade (1858) 6 HLC 746 at 747 [10 ER 1488] discussed
Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 discussed
Doney v The Queen (1990) 171 CLR 207 discussed
Federal Commissioner of Taxation v Investments Pty Limited (1978) 140 CLR 434 discussed
Gibbins v Australasian Meat Industry Employees’ Union (1986) 12 FCR 450 discussed
Hamilton v Whitehead (1988) 166 CLR 121 discussed
Jones v Dunkel (1958) 101 CLR 298 considered
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 21 CLR 181 discussed
Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 discussed
Murray v Murray (1960) 33 ALJR 521 discussed
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 discussed
News Ltd v South Sydney District Rugby League Football Club (2003) 215 CLR 563 discussed
R v Hillier (2007) 233 ALR 634 discussed
Reg v Sharmpal Singh [1962] AC 188 discussed
Rejfek v McElroy (1965) 112 CLR 517 discussed
Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 discussed
Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 discussed
Stead v State Government Insurance Commission (1986) 161 CLR 141 considered
The King and The Attorney-General of the Commonwealth v Associated Northern Collieries (1911) 14 CLR 387 discussed
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 42 FLR 331 discussed
Tripodi v The Queen (1961) 104 CLR 1 discussed
United States v Regan 232 US 37 (1914) discussed
Water Board v Moustakas (1988) 180 CLR 491 discussed

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

VID 68 OF 2007

WEINBERG, BENNETT AND RARES JJ
17 AUGUST 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 68 OF 2007

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

BETWEEN:	COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA Appellant
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Respondent

JUDGES:	WEINBERG, BENNETT AND RARES JJ
DATE OF ORDER:	17 AUGUST 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed with costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 68 OF 2007

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

BETWEEN:	COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA Appellant
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Respondent

JUDGES:	WEINBERG, BENNETT AND RARES JJ
DATE:	17 AUGUST 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

ISSUES IN THE APPEAL........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... [10]
THE RELEVANT PROVISIONS OF s 45E........ ........ ........ ........ ........ ........ ........ ........ ........ ... [11]
THE NATURE OF PROCEEDINGS UNDER s 76 OF THE TRADE PRACTICES ACT 1974 [19]
STANDARD OF PROOF........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....... [29]
THE FACTS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ... [40]
THE EVENTS OF 9 AUGUST 2001........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... [44]
THE EVENTS OF 10 AUGUST 2001........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... [52]
THE EVENTS OF 12 AUGUST 2001........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... [57]
THE 13 AUGUST MEETING WITH MR NABULSI........ ........ ........ ........ ........ ........ ........ ..... [59]
THE 13 AUGUST LETTER FROM MR SUTHERLAND TO MR MIGHELL........ ........ ....... [63]
THE MEMORANDUM OF UNDERSTANDING DATED 15 AUGUST 2001........ ........ ..... [90]
THE 16 AUGUST EDISON TEAM LEADERS’ MEETING........ ........ ........ ........ ........ ........ [114]
THE PREPARATION OF HEADS OF AGREEMENT BETWEEN EDISON AND THE CEPU [115]
THE FINALISATION OF THE HEADS OF AGREEMENT ON 23 AUGUST 2001........ .. [121]
THE HEADS OF AGREEMENT........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .. [125]
LATER EVENTS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .. [129]
THE ROLE OF THE HEADS OF AGREEMENT........ ........ ........ ........ ........ ........ ........ ........ . [133]
THE ACCC’s ALTERNATIVE CASE........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .. [168]
THE PROPER CONSTRUCTION OF s 45e(3)........ ........ ........ ........ ........ ........ ........ ........ ... [175]

(A)........ ..... Is the purpose for including the provision subjective or objective?........ ......[175]
(B)........ . Can the CEPU be liable under s 45E or s 76?........ ........ ........ ........ ........ .......[183]
(C)........ .. Is the purpose the only or an operative purpose?........ ........ ........ ........ ........ ..[192]
(D)........ .... Must the ‘second person’ be identified as a particular person?........ ........ ....[199]

WAS THE CEPU LIABLE?........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .. [211]
WAS THERE ANY ERROR IN THE IMPOSITION OF THE PENALTY?........ ........ ........ . [225]
CONCLUSION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... [236]

WEINBERG, BENNETT AND RARES JJ

1. In August 2001 Edison Mission Operation and Maintenance Loy Yang Pty Limited and its related companies were involved in developing and constructing a new gas fired electricity generation plant, known as a peaker plant, in the Latrobe Valley for the State Government of Victoria.  The Edison group already operated the existing Loy Yang B power station in the Latrobe Valley.  A related company of Edison, Valley Power Pty Limited, had agreed to acquire land from the State on which the new plant was to be built.  The Edison group’s agreements with the State required the new plant to be completed and operating by early 2002, failing which Valley Power would lose its interest in the land and the Edison group’s overall investment in the peaker plant would also be at risk.

2. By early August 2001 a number of key unions, including the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (‘the CEPU’), had not finalised a site agreement with Simon Engineering Pty Ltd, Edison’s head contractor for the construction of the plant.  On 9 August 2001 a meeting of those involved was called by Industrial Relations Victoria.  There, Dean Mighell, the State Secretary of the Electrical Trades Union (‘the ETU’), a division of the CEPU, put its demands as conditions which had to be met before the CEPU would sign the site agreement.  One demand was that Edison had to agree that electrical contractors who performed work at the Loy Yang B site, which included the peaker plant site, must have an enterprise bargaining agreement or EBA with the CEPU.  The next day Edison made a decision to agree to that demand.  It did a number of things to give effect to the decision. 

3. DJN Electrical and Instrumentation Pty Limited (‘DJN’) was an electrical contractor which had worked for Edison at the Loy Yang B site on a regular basis. Before August 2001 Edison had a policy of not interfering with relations between contractors in DJN’s position at Loy Yang B and any union. DJN had never had a certified agreement or enterprise bargaining agreement with the CEPU. On 13 August 2001 DJN’s sole director, David Nabulsi, was told by one of Edison’s employees, Wayne Buckley, that Edison would no longer be utilising DJN’s services since DJN had declined to enter into a certified agreement with the CEPU under Div 4 of Pt VIB of the Workplace Relations Act 1996 (Cth) in its then form. (At the trial and on appeal the expressions ‘certified agreement’, ‘enterprise bargaining agreement’ and ‘EBA’ were used interchangeably as synonyms. For the purposes of these proceedings nothing turns on the accuracy of that usage and we have also used the expressions as synonyms.) Mr Buckley held the position of maintenance coordinator at Loy Yang B. Mr Buckley also told Mr Nabulsi that Edison had a verbal agreement with the CEPU.

4. The primary judge found that Colin Sutherland, a senior executive of Edison, sent a letter to Mr Mighell on 13 August 2001 expressly agreeing to the union’s demand.  That finding is a major issue in this appeal for, apart from this letter, there was no direct evidence of any communication by Edison to the CEPU agreeing to the terms of Mr Mighell’s demand.  But there was substantial circumstantial evidence that an arrangement or understanding existed between Edison and the CEPU to that effect.

5. On 23 August 2001 Edison and the CEPU agreed to enter into heads of agreement that provide that Edison would ‘request’ that electrical contractors at Loy Yang B have, among other things, an EBA with the CEPU.

6. Until the Australian Competition and Consumer Commission (‘the ACCC’) wrote to Edison in October 2003 suggesting that a contravention of s 45E of the Trade Practices Act 1974 (Cth) had occurred, Edison had never sought to have DJN perform any further work for it. After that, Edison again engaged DJN to perform electrical contracting services at Loy Yang B.

7. The primary judge found that Edison and the CEPU had entered into a ‘contract, arrangement or understanding’ that required each electrical contractor engaged by Edison to have an enterprise bargaining agreement with the CEPU. He concluded that this amounted to a contravention of s 45E(3) by Edison, to which the CEPU was an accessory pursuant to s 76(1) of the Act. He held that this occurred in the week of 13 August 2001; that is prior to the making of the heads of agreement on 23 August 2001 (Australian Competition and Consumer Commission v IPM Operation and Management Loy Yang Pty Ltd (2006) 157 FCR 162). He based the finding of the earlier contract, arrangement or understanding on a memorandum of understanding which the CEPU had signed with Simon Engineering on 15 August 2001. However, the ACCC never pleaded or particularised such a case and neither party had referred at any time to the memorandum of understanding. The CEPU complains that his Honour denied it natural justice in the way in which he used the evidence of the memorandum of understanding made on 15 August 2001. Neither counsel had referred to that document in addresses nor was it referred to in any pleading or particulars. A principal question in the appeal is whether the primary judge was correct in that finding of an earlier contract, arrangement or understanding.

8. The primary judge also found that the heads of agreement on their proper construction gave effect to the CEPU’s demand. The CEPU also challenges that finding. It was common ground that the contract, arrangement or understanding between Edison and the CEPU found by the primary judge had the effect that Edison was hindered or prevented from acquiring services from DJN until Edison’s change of practice in late 2003. There was, however a dispute as to whether that consequence was sufficient to establish a contravention of s 45E either by Edison as a principal or the CEPU as an accessory pursuant to s 76(1) of the Act.

9. Thus the primary judge found such a contravention occurred in two ways, one of which was claimed on appeal to have been outside the pleadings.  In a later judgment he imposed a pecuniary penalty of $125,000 on the CEPU and granted an injunction restraining any future conduct of this kind for three years (Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 (‘penalty judgment’)). The CEPU has appealed against his Honour’s findings on liability and, if that be unsuccessful, on penalty.

   ISSUES IN THE APPEAL

10. The CEPU originally raised 51 grounds of appeal, narrowing these to only 46, excluding multiple subparagraphs, during the course of argument.  The following issues arise on the grounds of appeal pressed at the hearing:

    1.Was it open, on the ACCC’s pleaded and particularised case, to his Honour to find, as he did, that the contract, arrangement or understanding contravened s 45E of the Act? In particular, did he err in using the memorandum of understanding as he did? This issue also involves considering both the strength of the evidence and the relevance of the events leading up to Edison’s acceptance of the final version of the written heads of agreement with the CEPU on 23 August 2001.

    2.Did his Honour err in finding that the alternative case of the ACCC had been established?  This construed cl 4.1 of the heads of agreement as a contractual term with the same effect as the contract arrangement or understanding which he had found to exist.

    3.What is the proper construction of s 45E(3)? This involves determining whether:

    (a)in relation to cl 4.1, when s 45E(3) refers to the inclusion of a provision for a ‘purpose’ that purpose is an objective or a common subjective intention of both parties or just Edison’s purpose;

    (b)the purpose identified in answer to (a) is the only purpose, or just an operative purpose which the party or parties had for the inclusion of cl 4.1;

    (c)ss 45E(3) and 76 evince a legislative intention that a union cannot be liable as an accessory to a corporation’s contravention of s 45E(3); and

    (d)the second person (or target) referred to in s 45E must be a particular identified person or whether it is sufficient to identify a class of persons.

    4.If the CEPU is capable of being found to be an accessory of Edison in entering into the contract, arrangement or understanding, did it have knowledge of all the material ingredients of the contravention of s 45E(3) by Edison? This involves an issue as to the sufficiency of the evidence led at the trial to show that the CEPU knew that Edison had been accustomed to acquire services of electrical contractors from either DJN or a class of persons of which DJN was a member within the meaning of s 45E(3) and (7).

    5.Was the decision of the primary judge to impose a pecuniary penalty on the CEPU of $125,000 affected by any error?

    THE RELEVANT PROVISIONS OF S 45E

11. The pertinent provisions of s 45E are:

    ‘(1)     This section applies in the following situations:

    ...

    (b)an “acquisition situation” – in this situation, a person (the “first person”) has been accustomed, or is under an obligation, to acquire goods or services from another person (the “second person”).

    Despite paragraphs (a) and (b), this section does not apply unless the first or second person is a corporation or both of them are corporations.

    ...

    (3)In an acquisition situation, the first person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of:

    (a)preventing or hindering the first person from acquiring or continuing to acquire such goods or services from the second person; or

    (b)preventing or hindering the first person from acquiring or continuing to acquire such goods or services from the second person, except subject to a condition:

    (i)that is not a condition to which the acquisition of such goods or services by the first person from the second person has previously been subject because of a provision in a contract between those persons; and

    (ii)that is about the persons to whom, the manner in which or the terms on which the second person may supply any goods or services.

    (4)Subsections (2) and (3) do not apply to a contract, arrangement or understanding if it is in writing and was made or arrived at with the written consent of the second person.

    ...

    (7)In this section, a reference to a person who has been “accustomed to acquire” goods or services from a second person includes (subject to subsection (8)):

    (a)a regular acquirer of such goods or services from the second person; or

    (b)a person who, when last acquiring such goods or services, acquired them from the second person; or

    (c)a person who, at any time during the immediately preceding 3 months, acquired such goods or services from the second person.

    (8)      If:

    (a)goods or services have been acquired by a person from a second person under a contract between them that required the first person to acquire such goods or services over a period; and

    (b)       the period has ended; and

    (c)after the end of the period, the second person has refused to supply such goods or services to the first person;

    then, for the purposes of the application of this section in relation to anything done after the second person has refused to supply goods or services as mentioned in paragraph (c), the first person is not to be taken to be a person who has been accustomed to acquire such goods or services from the second person.’

1. Here, in August 2001, Edison and DJN were in an acquisition situation as defined in s 45E(1) because each was a corporation and over the preceding two years Edison had been accustomed to acquire DJN’s services as an electrical contractor at the Loy Yang B site.

2. In approaching the construction of s 45E it is important to bear in mind the following:

   ·The deeming provisions of s 4F do not apply for the purposes of s 45E(3) to establish whether a provision of the contract, arrangement or understanding has any particular purpose. This is by force of the exception in s 4F(2).

   ·It is possible for persons who would otherwise contravene s 45E to obtain from the ACCC an authorisation to engage in the conduct concerned: s 88(7A).

   ·The concepts in s 45E are not defined. Those concepts bear similarities with other provisions of the Act, so in construing the section it is appropriate to have regard to the ordinary principles of statutory construction, informed, but not governed, by decisions on other provisions in the Act which employ similar concepts. This is reinforced by, for example, the exclusion of the deemed operation of s 4F(1) which would otherwise have provided assistance in ascertaining the proper construction of the ‘purpose’ or ‘purposes’ referred to in s 45E(3).

3. After an extensive review of the authorities, the primary judge concluded (at [112]) that the composite phrase ‘contract, arrangement or understanding’ in ss 45E and 45EA should be read in a similar way to that phrase as used in s 45 of the Act. He followed the decisions of Heerey, Hely and Gyles JJ in Apco Service Station Pty Limited v ACCC (2005) ATPR ¶42-078 at 43,234-43,235 and Sackville J in Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 at 359-360 [75].

4. The primary judge said that ‘an arrangement’ or ‘understanding’ for the purposes of ss 45E and 45EA had to be proved by evidence of a consensus or meeting of minds between Edison and the CEPU under which one party or both parties committed to a particular course of action. It was not sufficient that there was a mere expectation that a party or parties would act in a certain way. The CEPU did not challenge that finding.

5. During the course of argument, reference was made to Federal Commissioner of Taxation v Investments Pty Limited (1978) 140 CLR 434 at 443-444 where Gibbs and Mason JJ, with whom Murphy J agreed, discussed the similar phrase ‘agreement or arrangement’ in the then provisions of s 44(2D) of the Income Tax Assessment Act 1936 (Cth). There, the legislation expressly referred to ‘an agreement or arrangement, whether oral or in writing … that had the purpose, or purposes that included the purpose …’. Obviously, the statutory language is different to that used in the Trade Practices Act.  However, their Honours said that the qualification ‘whether oral or in writing’ did not imply that the agreement or arrangement must be wholly one or the other, thereby excluding one which was partly oral and partly written.  They said that no rational purpose would be served by such an exclusion and then continued:

   ‘But what of an arrangement which is implied or inferred from the circumstances or conduct of the parties?  Is it excluded?  We do not think so.  Counsel for the [taxpayer] conceded that one can infer an agreement or arrangement so long as it is written or oral.  We would go further and say that the words are words of extension, not of limitation.  They were so regarded in Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 8; [1958] AC 450 at 465.

   In the context of s 260 an arrangement is something less than a binding contract or agreement, something in the nature of an understanding which may or not be enforceable at law … It is, however, necessary that an arrangement should be consensual, and that there should be some adoption of it.But in our view it is not essential that the parties are committed to it or are bound to support it.  An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it.’  (emphasis added)

6. The primary judge noted (at [106]) that their Honours’ formulation in Lutovi 140 CLR at 434 has been applied in the context of ‘arrangement or understanding’ in s 45 of the Trade Practices Act. Similarly, that concept has been applied to the definition of a ‘relevant agreement’ (defined in s 9 of the Corporations Act 2001 (Cth) and its predecessor, the Corporations Law, as ‘an agreement, arrangement or understanding’) in Edensor Nominees Pty Ltd v Australian Securities and Investments Commission (No 2) (2002) 120 FCR 78 at 88 [16], 95 [31] per Hill, Sundberg and Mansfield JJ upholding Merkel J (Australian Securities and Investments Commission v Yandal Gold Pty Limited (1999) 32 ACSR 317 at 333-334 [69]).

7. In Lutovi 140 CLR at 444-445 Gibbs and Mason JJ found that when directors of a company passed a resolution approving a proposal for the consolidation and reduction of its capital, the making of a bonus issue and directing the convening of an extraordinary general meeting to consider and, if thought fit, pass those resolutions, they entered into an arrangement. The directors, or a majority of them, had assented to a plan involving a series of steps. Gibbs and Mason JJ said that neither the fact that the resolution was a decision of the board, as an organ of the company, nor the circumstances that they were then acting in their capacity as directors having fiduciary responsibilities, altered the circumstance that the proposal put to the directors was adopted by them. Their Honours held that the legislation applied to any arrangement of the kind which had the purpose described.

   THE NATURE OF PROCEEDINGS UNDER S 76 OF THE TRADE PRACTICES ACT 1974

8. If the executive branch of government brings proceedings to recover pecuniary penalties imposed by legislation, the matter will often involve consequences which are analogous to those in criminal proceedings.  After all, the imposition of a fine for conduct which contravenes legislation has all the characteristics of a punishment.  Likewise a civil penalty, imposed for a contravention of a law, can be seen to have similar characteristics.  Nonetheless, the Parliament deliberately distinguished between the procedures by which civil penalties might be recovered under the Act as compared with the way in which fines may be recovered on conviction for the commission of a criminal offence. 

9. The use of civil proceedings in which the executive may recover pecuniary penalties has been a legislative device adopted to facilitate, among other things, the proof of what is necessary in order to be able to establish the liability of the alleged contravener.  This mixture of legislative purposes requires the Court to strike a balance between the application of the less rigorous civil standard of proof on the balance of probabilities and the forensic consequence of successfully prosecuted civil penalty proceedings.  That consequence is that the defendant or respondent may be found liable to pay a pecuniary penalty to the Commonwealth or government agency administering the legislation which has imposed it. 

10. There is something less than a bright line that divides the terms ‘civil’ and ‘criminal’ in relation to the nature of proceedings or the process by which persons are brought before courts (Dalton v New South Wales Crime Commission (2006) 226 ALR 570 at 577 [27] per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ). Indeed as Gummow J pointed out in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 216 CLR 161 at 172-173 [29] (and see too per Hayne J at 195 [107]) there is danger in utilising a system of classification containing only the two classes, civil and criminal. He referred to what Frankfurter J had said in United States ex rel Marcus v Hess 317 US 537 (1943) at 554:

    ‘Punitive ends may be pursued in civil proceedings, and, conversely, the criminal process is frequently employed to attain remedial rather than punitive ends.’

11. Likewise in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129 at 146 [35], Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ observed that just as a law may bear several characters, a proceeding may seek relief which, if granted, would protect the public, but would also penalise the person against whom it is granted. The fact that a proceeding may bear several characters does not deny that it bears each of those characters. And, they cautioned that ‘those who seek the “essential character” of statutory provisions do not proffer explanations of that process of distillation’, relying on what Hayne J had said in Labrador Liquor 216 CLR at 205-206 [136].

12. Recently, Finkelstein J observed that ‘the reasonably clear line between the civil and criminal law has been collapsing’ (Australian Securities and Investments Commission v Petuas (2005) 23 ACLC 269 at [1]). However, as Isaacs J said in The King v Associated Northern Collieries (1910) 11 CLR 738 at 742: ‘An action is none the less civil merely because it is penal’. He referred to Atcheson v Everitt (1776) 1 Cowp 382 at 391 [98 ER 1142]. There, Lord Mansfield CJ, delivering the judgment of the Court of King’s Bench, said:

    ‘Now there is no distinction better known, than the distinction between civil and criminal law;  or between criminal prosecutions and civil actions. 

    Mr Justice Blackstone, and all modern and ancient writers upon the subject distinguish between them.  Penal actions were never yet put under the head of criminal law, or crimes.’  (emphasis in original)

13. Lord Mansfield described the action, which was for debt on a statutory cause of action for bribery, as ‘not only given to recover a penalty, but it is attended likewise with disabilities’, (the latter being seemingly the rights to imprison for debt and the loss of the right to vote: see 1 Cowp at 382, 383, 387). He noted that this made the proceedings similar to a criminal cause. The subject matter (bribery) was also an indictable offence at common law (see 1 Cowp at 384). Lord Mansfield held that an action to recover a penalty was as much a civil action as an action for money had and received. He observed that it had never been held that a penal action was a criminal case (Atcheson 1 Cowp at 391, 392). In Wilson v Rastall (1792) 4 TR 753 at 758 Lord Kenyon CJ also held that an action to recover penalties under a statute for bribing voters was a civil action. In Cooper v Slade (1858) 6 HLC 746 at 747 [10 ER 1488 at 1489] the House of Lords dealt with an action to recover penalties on the basis that it was a civil proceeding notwithstanding that the statute under which it was brought also created a criminal offence for the same conduct.

14. Indeed, in Cooper 6 HLC at 772-773; 10 ER at 1499 Willes J advised the House of Lords that in a case to recover a penalty for election bribery the jury may found their verdict upon that which appeared to be most probable. Lord Cranworth put the issue as whether ‘… there was evidence from which the jury might reasonably infer, if not contradicted …’ that the defendant (a Mr Slade QC) had authorised the bribe (6 HLC at 787; 10 ER at 1504 and see too at 6 HLC 792-794; 10 ER at 1506-1507 per Lord Wensleydale).

15. An action to recover a civil penalty attracts the privilege against exposure to penalties (Rich (2004) 220 CLR 129). This is an incident of the inherent character of a class of civil proceedings which Isaacs J described in Associated Northern Collieries 11 CLR at 742 as involving the infliction of a penalty, in contrast to the class of civil proceedings which involve preventing or redressing a civil injury (see too Rich 220 CLR at 143 [26] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

16. The Supreme Court of the United States has maintained a clear distinction between the protections for an accused in a criminal trial contained in the Bill of Rights to the Constitution of the United States, including a trial at which the accused may be found liable to criminal pecuniary penalties, and those protections that obtain in proceedings to recover civil penalties.  An action to recover customs penalties was held to be a civil action in Stockwell v United States 13 Wall 531; 80 US 531 (1871) at 543. In United States v Regan 232 US 37 (1914) at 43-45 van Devanter J, delivering the opinion of the Court, referred with apparent approval to Atcheson 1 Cowp 382 and Ratsall 4 TR 753. Van Devanter J said that the Congress could authorise the enforcement of a penalty by either a criminal prosecution or a civil action and that there the Congress had chosen to create the latter. In the absence of any statutory requirement to the contrary, the Supreme Court held that the action was to be conducted and determined according to the same rules and with the same incidents as attached to other civil actions (Regan 232 US at 46-47). In United States v Ward 448 US 242 (1980) at 253, Rehnquist J, giving the opinion of the Court, said that Regan 232 US 37 was authority for the proposition that in a civil penalty case the government did not have to prove the case beyond a reasonable doubt (see too: Wigmore on Evidence Vol 1 §7.2 n 22 at pp 529-530).

17. Here, the Parliament was entitled to select the method of trial by which a penalty could be imposed on a person who contravened s 45E of the Act. The Parliament chose to create a pecuniary penalty under s 76 as one means of vindicating the observance of the statutory proscription in s 45E. It did this by providing in s 78 that criminal proceedings do not lie against a person by reason only that the person has contravened a provision of Part IV (including s 45E) or been an accessory to such a contravention or party to a conspiracy to contravene it. And, s 77(1) created a cause of action in the ACCC to institute proceedings for the recovery, on behalf of the Commonwealth, of a pecuniary penalty under s 76. As Pincus J with the concurrence of Lockhart and Wilcox JJ said, in The Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153 at 160 (see too at 154), ‘…the Act clearly characterises proceedings under s 76 as civil’ so that the civil standard of proof applies.

    STANDARD OF PROOF

18. It follows that proceedings for recovery of pecuniary penalties under the Act are civil proceedings. Accordingly, s 140 of the Evidence Act 1995 (Cth) requires the Court in such proceedings to apply the civil standard of proof on the balance of probabilities. In arriving at a conclusion of satisfaction that a case has been proved on the balance of probabilities, s 140(2) of the Evidence Act provides:

    ‘(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

    (a)the nature of the cause of action or defence;  and

    (b)the nature of the subject-matter of the proceeding;  and

    (c)the gravity of the matters alleged.’

19. The mandatory considerations which s 140(2) specifies reflect a legislative intention that a court must be mindful of the forensic context in forming an opinion as to its satisfaction about matters in evidence. Ordinarily, the more serious the consequences of what is contested in the litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion.

20. Even though he spoke of the common law position, Dixon J’s classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363 of how the civil standard of proof operates appositely expresses the considerations which s 140(2) of the Evidence Act now requires a court to take into account.  Dixon J emphasised that when the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found.  He pointed out that a mere mechanical comparison of probabilities independent of any belief in its reality, cannot justify the finding of a fact.  But he recognised that:

    ‘No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency.’  (Briginshaw 60 CLR at 361-362)

21. Dixon J also pointed out that the standard of persuasion, whether one is applying the relevant standard of proof on the balance of probabilities or beyond reasonable doubt, is always whether the affirmative of the allegation has been made out to the reasonable satisfaction of the tribunal.  He said that the nature of the issue necessarily affected the process by which reasonable satisfaction was attained.  And, so, he concluded that in a civil proceeding, when a question arose whether a crime had been committed, the standard of persuasion was the same as upon other civil issues.  But he added, weight must be given to the presumption of innocence and exactness of proof must be expected (Briginshaw 60 CLR at 362-363).

22. In Rejfek v McElroy (1965) 112 CLR 517 at 520, Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ held that the criminal standard of proof was inappropriate to the determination of any fact in any civil action tried in any court in Australia where there are no statutory provisions to the contrary. They followed Helton v Allen (1940) 63 CLR 691. They said that the ‘clarity’ of the proof required, where a serious matter such as fraud was to be found, was an acknowledgement that the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved (Rejfek 112 CLR at 521). The Court held that it was an error of law for the trial judge to have applied the criminal standard of proof in a civil case. They continued:

    ‘The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words:  it is a matter of critical substance.  No matter how grave the fact which is to be found in a civil case, the mind has only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction on a criminal charge.’
    (Rejfek 112 CLR at 521-522)

23. An illustration of the application of the principle occurred a few years earlier in Murray v Murray (1960) 33 ALJR 521. In that case Dixon CJ had further explained what he had said in Briginshaw 60 CLR 336. He said that the civil standard of proof required that the tribunal of fact should be ‘satisfied’ or ‘reasonably satisfied’, both expressions meaning the same thing. He said of the adjective ‘reasonably’ in the latter expression:

    ‘However, its use as a qualifying adjective seems to relieve lawyers of a fear that too much unyielding logic may be employed.  But the point is that the tribunal must be satisfied of the affirmative of the issue.  The law goes on to say that he [ie the judge] is at liberty to be satisfied upon a balance of probabilities.  It does not say that he is to balance probabilities and say which way they incline.  If in the end he has no opinion as to what happened, well it is unfortunate but he is not “satisfied” and his speculative reactions to the imaginary behaviour of the metaphorical scales will not enable him to find the issue mechanically.’    (Murray 33 ALJR at 524)

1. What is more, Dixon CJ recognised in Murray 33 ALJR at 525, that the proof of what was then a serious allegation of adultery did not require direct evidence from ‘occular witnesses’. In that case, a number of unsuccessful attempts had been made to catch the respondent and co-respondent in compromising circumstances. In the end, the High Court reversed the trial judge and found that the nature of their relationship justified the inference that adultery had taken place. This was because ‘… the circumstances [were] such as would lead the guarded discretion of a reasonable and just man to the conclusion’ (Murray 33 ALJR at 525 per Dixon CJ, and at 526 per Menzies J both citing Sir William Scott in Lovenden v Lovenden (1810) 2 Hag Con 1 at 2; [161 ER 648] (Taylor J agreed with Dixon CJ and Menzies J)).

2. Mason CJ, Brennan, Deane and Gaudron JJ said in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 450 the strength of the evidence necessary to establish a fact or facts on the balance of probabilities at common law may vary according to the nature of that which is sought to be proved. They pointed out that statements in the cases requiring clear, cogent or strict proof as being necessary where a serious matter, such as fraud, is to be found were not to be understood as directed to the standard of proof. They said, rather, those statements should be understood as merely reflecting a conventional perception that members of our society

   ‘… do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct’. (Neat Holdings 110 ALR at 450, footnotes omitted). 

   Their Honours also said that there were circumstances in which generalisations about the need for clear and cogent evidence to prove matters of the gravity of fraud or crime can be unhelpful or misleading (Neat Holdings 110 ALR at 450).

3. In approaching our assessment of the evidence we have borne these principles in mind and have taken into account the matters specified in s 140 of the Evidence Act. The trial judge did so too. Counsel for the CEPU, properly, reminded us of the seriousness of the consequences of a finding that ss 45E(3) and 76(1) of the Trade Practices Act 1974 (Cth) had been contravened, the imposition of a pecuniary penalty and the grant of other forms of relief provided by the Act. We have taken this into account in assessing the evidence and making our findings.

4. Ultimately, because this is a civil, not criminal, proceeding the civil standard of proof applies. Thus, the ACCC had to establish that the circumstances appearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferences of equal degrees of probability, that Edison and the CEPU had made a contract or arrangement or arrived at an understanding within the meaning of s 45E(3) (Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 224 ALR 280 at 288 [34] per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; see too Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 per Dixon, Williams, Webb, Fullagar and Kitto JJ).

5. We are reasonably satisfied on the balance of probabilities, having regard to these matters, of each of the findings of fact which we have made in these reasons.

   FACTS

6. The trial judge made detailed findings of fact, many of which were uncontroversial in the appeal.  In doing so, he made findings about some unsatisfactory oral evidence given by Mr Sutherland, who was one of the witnesses called by the ACCC.  He was a general manager of Edison Mission Energy Australia Pty Ltd (‘EME’), and a director of Edison Mission Operation & Maintenance Loy Yang Pty Ltd and certain of its related entities including Valley Power.  The CEPU called no witnesses and tendered no evidence at the close of the ACCC’s case.  The following account is largely taken from his Honour’s findings.

7. The operating company of the existing plant at Loy Yang B was EME.  The primary judge found (at [4]) that nothing in the case turned on any distinctions between the various corporate entities within the Edison group and he simply referred to them generically, as will we, as ‘Edison’.

8. DJN had been providing electrical contracting services to Edison at Loy Yang B under agreements made for terms of 12 months ending respectively on 21 July 2000 and 2001.  On 19 June 2001 Edison had written to DJN advising it that the service agreement was due to expire on 21 July 2001 and seeking DJN’s assent, subject to agreement on price, to a further term of three years.  However, the documents were never signed. 

9. On 8 August 2001, Mr Sutherland drafted a media release which, in the event, was not released.  It referred to the threat to the peaker plant project caused by the delay of the ETU (which, as already indicated, was a division of the CEPU) and the Australian Manufacturers Workers Union (‘the AMWU’) in finalising a site agreement for the plant’s construction.  The draft release recorded that the leaders of the ETU and the AMWU were refusing to sign the site agreement which had been negotiated by local union officials.  The parties accepted that the draft release set out the background against which later events took place.

   THE EVENTS OF 9 AUGUST 2001

10. As indicated above, on 9 August 2001 Industrial Relations Victoria convened a meeting to attempt to resolve the impasse to the unions’ signing of that site agreement.  Two representatives from Industrial Relations Victoria together with a representative of the State Treasurer attended that meeting.  Mr Sutherland and Paul Burns attended as representatives of Edison.  Mr Burns was the manager of community and employee relations of Edison and was stationed at Loy Yang B.  Mr Mighell, the State Secretary of the ETU’s Victorian Branch, attended as a representative of the CEPU.  Only Mr Sutherland and Mr Burns gave evidence about the meeting, Mr Burns being assisted by his own handwritten notes of the meeting.

11. The primary judge accepted Mr Burns’ evidence that Mr Sutherland had spoken first at the meeting and then Mr Mighell had raised issues upon which the CEPU wanted an agreement.  He found that Mr Mighell said that Edison was aware of the problems as the issues had been raised before.  Mr Mighell then said that the CEPU wanted:

    ·access to the Loy Yang B site for the purposes of interviewing its members working there; and

    ·EBAs with the CEPU to be in place for contractors at the Loy Yang B site who were engaged in ongoing electrical works as well as planned outages.  (An ‘outage’ is a period when a power generating plant is not working.  So it is critical that it be repaired or the maintenance be done as quickly as possible in order to minimise any chance of disruption to power supplies, eg if another plant breaks down during the outage.)

12. Mr Sutherland said that Edison would consider the site access issue and the electrical contractors issue internally and that he, Mr Sutherland, would respond to Mr Mighell on the electrical contractors issue and Mr Burns would respond on the site access issue. 

13. Significantly, his Honour found that Mr Sutherland’s evidence generally tended to be vague and somewhat obfuscatory in relation to key events (at [26]) and that at times was far from satisfactory (at [46]).  In the end, his Honour placed no reliance on Mr Sutherland’s evidence generally.  On appeal, neither side challenged his Honour’s assessment that Mr Sutherland’s evidence was unsatisfactory, sometimes unlikely and unreliable.  We have reviewed the transcript and are satisfied that his Honour’s assessment was not only open to him, but correct.

14. Later, on 9 August 2001, Mr Burns dictated a clause which he understood amounted to the gist of what Mr Mighell had requested at the meeting about electrical contractors.  The draft clause was as follows:

    ‘All Contractors performing work at (insert Company name) under the scope of the Electrical, Communications Contracting Industry Award, shall have a current certified Agreement with the CEPU Electrical Division, Victorian Branch prior to commencing work at (insert Company name).’

15. Mr Burns observed, in his email conveying his draft, that the correct title of the award might be ‘National Electrical, Electronic and Communications Contracting Industry Award 1998’.  Mr Sutherland received Mr Burns’ email with that clause later on 9 August and did not raise any objection to it.

16. A telephone conference also took place later that afternoon between several Edison personnel to discuss the group’s response to the issues raised by Mr Mighell earlier that day.  The participants were Mr Sutherland, Mr Burns, Barry Warrillow, Mark Pearson and Mr Buckley.  Mr Warrillow was the Loy Yang B plant manager.  Mr Pearson was the maintenance manager there.  Mr Buckley reported directly to Mr Pearson.  During the teleconference Mr Burns advised the others that Edison was negotiating with Mr Mighell to try to resolve issues relating to the construction of the peaker plant and the finalisation of the site agreement.  He said that one of the issues related to Edison’s practice of engaging electrical contractors who did not have a certified agreement (or EBA) with the CEPU.

17. Either during the teleconference, or immediately afterwards, Mr Pearson and Mr Buckley were instructed to look at the implications of Edison entering into any agreement with the CEPU and to identify which contractors were likely to be affected by such an agreement if it were made.  Shortly after 4.00pm on 9 August, Mr Pearson sent an email to Messrs Warrillow, Burns and Buckley.  That email reviewed which contractors did and did not have EBAs.  It identified DJN as a contractor without an EBA who carried out smaller electrical works on site under the National Electrical, Electronic and Communications Contracting Industry Award 1998.

    THE EVENTS OF 10 AUGUST 2001

18. Around 2.00pm on 10 August, another teleconference was held within Edison to discuss the CEPU situation.  Messrs Warrillow, Pearson, Buckley and Burns were in Mr Warrillow’s office at Loy Yang B.  Mr Sutherland was in the Melbourne office.  Robert Driscoll, the vice president of Edison in California and Joseph Bacchi, its regional operations manager in the Asia Pacific region, also participated from elsewhere.  Mr Burns again took a file note.  Mr Sutherland outlined what had happened at the 9 August meeting called by Industrial Relations Victoria and proposed that the issues be settled.  A general discussion occurred about the two issues which the CEPU had asked Edison to address (viz:  site access and EBAs).

19. The primary judge found (at [44]) that the discussion was to the effect that Edison would agree with the CEPU’s demand that it would only engage electrical contractors who had a certified EBA in place with the union to perform work at the Loy Yang B site.  Critically, he found that Mr Driscoll instructed Mr Sutherland, Mr Burns and others to ensure that such an agreement was made as quickly as possible.  There was no discussion about what steps would be taken to give effect to any agreement with the CEPU.  It was agreed that DJN was the only contractor that seemed to be affected.  DJN would be allowed to continue and finish the work which it already had been commissioned to do.  Mr Burns’ file note referred to this by the words ‘Grandfather existing contracts’.  The decision to permit DJN to finalise its existing contracts as found by his Honour and as recorded in Mr Burns’ note is explicable only on the basis of Mr Driscoll’s instruction to Mr Sutherland, Mr Burns and the others to ensure that Edison agree to the CEPU’s demands at once.

20. The primary judge found that the discussion during the teleconference on 10 August made it very clear that the reason for proposing an agreement with the CEPU of the kind discussed was to get the site agreement signed, thus enabling the construction of the peaker plant to proceed without further delay.  His Honour’s findings about this teleconference were not challenged.  We agree with them.

21. Immediately after the teleconference concluded, Mr Sutherland arranged an urgent meeting with Mr Mighell at the CEPU’s offices in Carlton, Melbourne.  They met at 3.00pm.  The primary judge found that Mr Sutherland’s evidence about this meeting was unsatisfactory.  So do we.  But the consequence, as his Honour found, was that there was no direct evidence that at their 10 August meeting Mr Sutherland had told Mr Mighell that Edison intended, or at least was disposed, to enter into an agreement with the CEPU to the effect that it would not engage electrical contractors to carry out work at the Loy Yang B site if they had not entered into an EBA with the CEPU.  No findings based on direct evidence can be made about what was said on that occasion.

22. Also, later on 10 August, emails circulated among Messrs Warrillow, Burns, Buckley and Pearson containing a financial analysis of the rates paid to certain contractors, including DJN.  The analysis assessed the financial impact if Edison increased pay rates to the level prescribed in EBAs which had been signed by electrical contractors with the CEPU.  The emails identified DJN as the only electrical contractor concerned.

    THE EVENTS OF 12 AUGUST 2001

23. On Sunday, 12 August, Mr Burns sent a number of emails to other Edison staff in relation to the site access issue.  He prepared a draft letter to Mr Mighell dealing with that issue.  He suggested that it be sent first thing on Monday, 13 August and noted that he had left a signed version of the letter under Mr Warrillow’s door in case he and Mr Sutherland agreed that it should be sent to the CEPU.  He also said that, if the others agreed, he would arrange a meeting with Peter Mooney of the CEPU to agree on a protocol for site access which could take place on Tuesday morning.  Mr Mooney was a State organiser of the CEPU with duties that included organising in the Latrobe Valley on behalf of the ETU.  Later that day Mr Burns sent another email to Messrs Sutherland and Warrillow with a slightly revised draft of the letter to Mr Mighell in relation to site access.  Mr Burns’ draft letter was addressed to Mr Mighell as secretary of the CEPU at 139-155 Queensberry Street, Carlton South, which he believed was the CEPU’s address.

24. The primary judge made no finding as to whether any final version of Mr Burns’ letter was sent or received and this question played no part in the arguments put on the appeal.  However, another letter, similarly addressed but dealing with the EBA issue, assumed central importance at the trial and on the appeal.  Before turning to it, we will consider another significant event which occurred on 13 August.

    THE 13 AUGUST MEETING WITH MR NABULSI

25. On 13 August 2001 Mr Nabulsi of DJN met with Mr Buckley at Loy Yang B.  Mr Buckley had arranged the meeting.  He recalled that after the teleconference of 10 August, he had been directed by someone, within Edison, to contact Mr Nabulsi.  Mr Buckley knew that Mr Nabulsi had determined previously not to enter an EBA or certified agreement with the CEPU.  The two had discussed the issue on an earlier occasion.  On 13 August, Mr Buckley asked Mr Nabulsi whether DJN still intended not to enter into a certified agreement with the CEPU.  Mr Nabulsi reiterated DJN’s position that it would not sign an EBA with the CEPU.  Mr Buckley then told him that DJN’s services would no longer be utilised because Edison had been asked by the CEPU not to engage the services of contractors who did not have an EBA with the CEPU.  Mr Buckley also told Mr Nabulsi that he understood that Edison had a verbal agreement with the CEPU although, in evidence, he could not recall what led him to believe that. 

26. The CEPU challenged the primary judge’s findings in relation to this meeting between Mr Nabulsi and Mr Buckley.  In our opinion, his Honour’s findings were open to him.  We agree with those findings.  His Honour had the advantage of oral evidence from both Mr Buckley and Mr Nabulsi.  The CEPU argued that Mr Buckley’s evidence was too vague and uncertain.  However, in our opinion it is likely that Mr Buckley’s communication of Edison’s stance on 13 August occurred since it reinforced the urgency with which Edison was then acting.  In cross-examination he said that, although he could not recall why, he understood that Edison and the CEPU had a verbal agreement in place on 13 August before he spoke with Mr Nabulsi.  This accorded with the decision taken by Mr Driscoll at the teleconference on 10 August and his instructions to implement it.  Moreover, the action of Mr Buckley in telling Mr Nabulsi that DJN’s services would no longer be utilised by Edison, coupled with the explanation he gave Mr Nabulsi, provide cogent evidence that by then Edison had adopted the CEPU’s demand communicated by Mr Mighell on 9 August.

27. At their meeting Mr Buckley was neither secretive nor tentative with Mr Nabulsi about Edison’s position.  And, as Mr Nabulsi said in his evidence, when ‘you get news like that on site, everyone has a yack about it’.  Mr Nabulsi said that he could not recall to whom he spoke but he probably spoke to a lot of people about it.

28. The CEPU also argued that the primary judge’s finding about Mr Buckley’s evidence of this meeting was inconsistent with his finding that, later, on 16 August, Mr Buckley and Mr Pearson identified DJN to Edison’s team leaders at Loy Yang B ‘as the contractor likely to be excluded by the arrangement’.  This argument has no substance.  Both Mr Buckley and Mr Pearson gave evidence that they said DJN would be excluded.  Mr Buckley also gave evidence that he had told Mr Nabulsi it was unlikely DJN would be engaged again as a consequence of DJN not having an EBA with the CEPU.  In this context the word ‘unlikely’ did not suggest any real uncertainty.  His Honour’s use of the word ‘likely’ in this part of his reasons, when read with the reasons and evidence as a whole, did not indicate a rejection of their evidence, or a qualified finding about it.

    THE 13 AUGUST LETTER FROM MR SUTHERLAND TO MR MIGHELL

29. The CEPU argued that the primary judge erred in making a critical finding that Edison had sent, and the CEPU had received, a letter dated 13 August.  A copy of the letter was in evidence.  It was signed by Mr Sutherland.  He did so, as the letter records, apparently on behalf of Mr Burns, whose typed name and title appeared at the foot of the letter.  The letter was typed on EME letterhead and read as follows:

    ‘Mr D Mighell
    Secretary
    CEPU
    139-155 Queensbury [sic] Street
    CARLTON SOUTH VIC 3053

    Dear Mr Mighell

    CONTRACTORS AT LOY YANG B POWER STATION

    Further to our discussions last week, I am able to confirm the proposal concerning contract work being undertaken at Loy Yang B Power Station.

    We propose the parties (EME and CEPU) agree to the following position.

    All Contractors performing work at Loy Yang B power station under the scope of the Electrical, Communications Contracting Industry Award, shall have a current certified Agreement with the CEPU Electrical Division, Victorian Branch prior to commencing work for their respective contractor at the site.

    Please indicate your acceptance of this position on behalf of the CEPU

    Yours sincerely

    [Mr Sutherland’s signature]

    for

    ……………………………  …………………………

    Paul Burns  Dean Mighell

    Manager of Community/Employee Relations       Secretary, CEPU Victoria’

30. The CEPU accepted before his Honour and us that on its face this letter amounted to a complete acceptance of Mr Mighell’s demand at the 9 August meeting in relation to EBAs.  Hence, the CEPU sought to persuade his Honour and us that no finding should be made that the letter was sent or, if it were, that it was received by Mr Mighell.

31. There was little direct evidence as to how the 13 August letter was created or despatched.  His Honour found that Mr Sutherland created the letter by cutting and pasting sections of its text from two documents which had been provided to him by Mr Burns.  The first source was the draft clause Mr Burns had emailed to him on 9 August.  The second was Mr Burns’ draft letter concerning site access which he had emailed on 12 August.  The address of the CEPU at the top of each of the letters is substantially the same.  The signature block at the end of Mr Burns’ draft letter on site access was replicated at the bottom of the 13 August letter signed by Mr Sutherland – hence Mr Sutherland signing ‘for’ Mr Burns.  The original of the letter was not tendered in evidence.  There was no evidence from any employee of the CEPU that the letter had not been received.  Mr Sutherland’s evidence, which on this issue was accepted by his Honour (and is clearly commonsense), was that, in the ordinary course, a letter signed by him would be posted by his secretary.

1. The CEPU called in aid the principles explained by Dixon J in Briginshaw 60 CLR 361-363. It submitted that on the civil onus of proof, in a case in which the CEPU was at risk of being found liable to pay pecuniary penalties under s 76(1) of the Act, the Court should proceed to make findings against it only if the evidence was clear. The CEPU argued that the Court should be wary of drawing inferences against it where the ACCC’s witnesses had left gaps in their oral evidence.

2. In its approach to criticising the findings of the primary judge, the CEPU examined each of his Honour's major findings of fact as if it had to be arrived at independently from the findings about other facts.  The CEPU argued that his Honour had erred in basing his findings that the 13 August letter had been both sent to and received by Mr Mighell upon inferences drawn from other evidence.  It then argued that such inferences were not available.  This was because, it said, the evidence which his Honour took into account gave rise to no more than conflicting inferences of equal degrees of probability, so that the choice between the two was mere conjecture, relying on what Dixon CJ had said in Jones v Dunkel (1958) 101 CLR 298 at 304-305.

3. The CEPU argued that his Honour erred because he criticised Mr Sutherland's evidence even though he had not been cross-examined on it.  His Honour said it was improbable that nothing happened on 10 August when Mr Sutherland met with Mr Mighell at an urgently convened meeting other than, as Mr Sutherland sought to suggest in his evidence, that he asked Mr Mighell to repeat the demands the latter had made at the 9 August meeting.  His Honour did not accept Mr Sutherland's evidence but made no findings as to what occurred at the meeting.  He accepted (at [156]) that Mr Sutherland's evidence left open the possibility that other discussions occurred with him and Mr Mighell between 9 and 13 August.  It was for his Honour to determine whether or not he found Mr Sutherland’s evidence reliable.  The primary judge gave reasons why he found it was unreliable.  Those reasons were open to him and no error has been shown in his findings.  Indeed, we agree with them, having ourselves considered Mr Sutherland's evidence in the transcript, without the advantage his Honour had of seeing and hearing him.

4. The CEPU submitted that his Honour wrongly applied Jones v Dunkel 101 CLR 298. We see no error in his Honour's approach. He did say that the absence of evidence from the CEPU allowed him to conclude, more confidently, that by 15 August Edison had communicated to the CEPU the fact that it had acceded to the demands.

5. It is not an error, even in proceedings in which the criminal standard of proof applies, for a judge to draw inferences from events and circumstances of the case in the absence of any countervailing evidence that might have been given by the respondent.  Thus, if a respondent to a charge of contempt of a court order fails to give evidence that he or she did not know of orders made on his or her own application, the absence of that evidence is a fact that a judge could hardly ignore.  A judge is entitled to point to the fact that the evidence upon which he or she has to decide the case was adduced by the applicant and then ask what the inference to be drawn was in that state of affairs (Mead v Mead [2007] HCA 25 at [13] per Gleeson CJ, with whom Hayne, Callinan, Heydon and Crennan JJ agreed).

6. As Windeyer J observed in Jones vDunkel 101 CLR at 319, it is important not to confuse mere conjecture by a tribunal of fact with reasoned conclusion. In that case, after two trucks collided, one driver died and the other, the defendant’s employee, did not give evidence. The majority (Kitto, Menzies and Windeyer JJ) held that there were sufficient primary facts on which the jury could have drawn the inference that the collision occurred on the defendant’s truck’s incorrect side of the road. Therefore, it was open to the jury to infer that the collision was a result of negligent driving by the defendant’s employee (Jones v Dunkel 101 CLR at 306, 310, 320).

7. In that state of affairs, the jury should have been instructed that any inference favourable to the plaintiff for which there was ground in the evidence might more confidently be drawn when a person, presumably able to put a true complexion on the facts relied on as the grounds for the inference, has not been called as a witness by the defendant and the evidence provides no sufficient explanation of the witness’ absence (Jones v Dunkel 101 CLR at 308 per Kitto J, 312 per Menzies J). Windeyer J relied on the well-known authority of R v Burdett (1820) 4 B & Ald 95 at 122 and 161 to support the capacity of the jury to draw an inference that an unexplained failure of a party to call evidence may lead rationally to an inference that the evidence would not help the party’s case (Jones v Dunkel 101 CLR at 321).

8. Of course, it is seldom, if ever, reasonable to conclude that an accused in a criminal trial would be expected to give evidence (RPS v The Queen (2000) 199 CLR 620 at 632-633 [26]-[28]; Dyers v The Queen (2002) 210 CLR 285 at 292 [9]). This is because in an accusatorial trial, an accused is not required to explain or contradict matters which are already the subject of evidence at the trial. Those matters must be assessed by the jury against the requisite standard of proof without regard to the fact that the accused did not give evidence, as Gaudron, Gummow, Kirby and Hayne JJ explained in Azzopardi v The Queen (2001) 205 CLR 50 at 74 [64]. But, as the learned author of Cross on Evidence (7^th Aust ed) at 48 [1220] observed, the modern High Court authorities regulate what the jury may be told but do not appear to regulate how a jury, trial judge or an appellate court may reason.  The learned author said that therefore the following reasoning of the Privy Council in Reg v Sharmpal Singh [1962] AC 188 at 198 (an appeal in a case involving a trial before a judge and three assessors), per Lord Devlin, appears open in appropriate cases:

   ‘How did he come to squeeze his wife’s throat?  When the prisoner, who is given the right to answer this question, chooses not to do so, the court must not be deterred by incompleteness of the tale from drawing the inferences that properly flow from the evidence it has got nor dissuaded from reaching a firm conclusion by speculating upon what the accused might have said if he had testified.’

9. In Adler v Australian Securities and Investments Commission (2003) 179 FLR 1 at 146-149 [655]-[658]; [2003] NSWCA 131, Giles JA with whom Mason P and Beasley JA agreed, held that a Jones v Dunkel 101 CLR 298 inference was available in civil penalty proceedings under the Corporations Act 2001 (Cth). Giles JA pointed out that it was necessary to focus on the statutory regime, rather than some general class of civil penalty proceedings (Adler 179 FLR at 147 [659]). And he said that, more importantly, civil penalty proceedings under the Corporations Act were expressly to be maintained by civil law processes, not by a criminal trial with its fundamental features.

10. Nonetheless, the privilege against exposure to penalties serves the purpose of ensuring that those who allege criminality or conduct attracting liability to civil penalties should prove it without being able to require the defendant or respondent to provide evidence against himself or herself.  That privilege is not now available to corporations (Daniels Corporation v Australian Consumer and Competition Commission (2002) 213 CLR 543 at 559 [31] per Gleeson CJ, Gaudron, Gummow and Hayne JJ).

11. Adler 179 FLR 1 was decided before Rich 220 CLR 129 at 147 [37] held that the element of protection of the public which was engaged in proceedings under the Corporations Act was also a penalty.  Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said that the fact that the penalty was not exacted in the form of a money payment did not deny that conclusion.  Rich 220 CLR 129 at 148 [39] also decided that an order for discovery which, of course, is only available in civil proceedings, should have been refused because the proceedings exposed the defendant to a penalty. However, there is no reason in civil proceedings for pecuniary penalties to deny the applicability of the principles in Jones v Dunkel 101 CLR 298, provided that in doing so the court proceeds in accordance with the principles we have discussed above in relation to s 140 of the Evidence Act .

12. Mr Mighell was the State Secretary of the ETU whose office was located at 516-520 Swanston Street, Carlton South.  He was also an officer of the CEPU.  His Honour found (at [62]) that the CEPU and ETU office was at the corner of Queensberry and Swanston Streets in Carlton South and that the entrance to the part of the office occupied by the ETU was in Swanston Street.  He said that there was no reason to suppose that a letter, correctly addressed to the CEPU at 139-159 Queensberry Street, would not reach Mr Mighell in his capacity as State Secretary of the ETU.

13. The CEPU submitted to his Honour and on appeal that it was not a reasonable conclusion to think that the letter, being, so it said, incorrectly addressed to Mr Mighell at the CEPU, would actually reach him.  In our opinion the submission has no substance.  Given that the ETU was a division of the CEPU and that they shared the same office building, albeit with different street frontages, it is improbable that a letter addressed to the State Secretary of the ETU would not have reached him, whether it was addressed to the CEPU’s side of the building or the ETU’s. 

14. The CEPU went so far as to argue that because the letter did not have Mr Mighell’s exact address and title, he would not have received it.  Given his position as State Secretary of the ETU and as an officer of the CEPU itself, the submission has an air of unreality.  Employees of the CEPU at its office would be likely to recognise the name of a senior official of one of its divisions, such as Mr Mighell.  Given that the CEPU and ETU offices were in the same building, in the absence of evidence that mail went astray which was addressed in the way Mr Sutherland’s letter was, it is very probable that Mr Mighell received it.

15. His Honour rejected the CEPU’s argument, repeated before us, that because of the subsequent conduct of the parties it would not be possible or correct to infer that the letter was sent.  In particular, the CEPU asserted that the communication which the letter, if sent, would have conveyed was inconsistent with Edison instructing Corrs Chambers Westgarth (‘Corrs’), solicitors, around 13 August 2001, to prepare a draft agreement with the CEPU.

16. The primary judge found that Mr Sutherland decided to instruct Corrs to act on Edison’s behalf shortly after 13 August and that thereafter he alone dealt with the solicitors.  His Honour rejected Mr Sutherland’s attempt to assert that Mr Burns had made the initial contact with Corrs albeit that he, Mr Sutherland, was also involved in the initial meeting.  He accepted (at [160]) Mr Burns’ evidence that he had no involvement in giving instructions to Corrs.  No challenge was made to those findings.

17. The first version of Corrs’ draft heads of agreement between Edison and the CEPU was only communicated to the CEPU by Mr Sutherland on 20 August 2001.  However, it is significant that on 13 August Mr Buckley had carried out his instruction to meet with Mr Nabulsi and, in effect, to ensure that Edison had complied with the CEPU’s demand.

18. The CEPU argued that in cross-examination Mr Sutherland had agreed that:

    ·the 13 August letter would be a strange letter to send to Mr Mighell if Mr Sutherland had just determined on the preceding working day that he was going to get solicitors to prepare something else for him; and

    ·he did not know whether the 13 August letter had actually been sent.

19. This argument founders on the finding that Mr Sutherland only instructed Corrs after the date of the 13 August letter.  And, as his Honour noted, there were several matters not addressed in evidence.  One of these was that Mr Sutherland was not asked in chief or otherwise about the statement in the first sentence of the letter that he was ‘…able to confirm the proposal concerning contract work being undertaken at Loy Yang B power station’.  Since no proposal had been put on 9 August, that left open the question as to whether one had been put on 10 August when Mr Sutherland met Mr Mighell, following the instructions given by Mr Driscoll to accept the CEPU’s demands and fix the problem as quickly as possible.  However, Mr Sutherland’s account of that meeting was not accepted by his Honour. 

20. Of more significance, as the primary judge noted, there was no evidence that Mr Sutherland’s instructions from Mr Driscoll changed after the teleconference of 10 August.  Those instructions were unequivocal.  They were to ensure that Edison agreed with the CEPU’s demands as quickly as possible.  The terms of the letter of 13 August gave effect to those instructions, as one would expect.  The commercial urgency was reflected not only in Mr Driscoll’s instructions, but also in the contemporaneous activities of other Edison employees.  Mr Burns worked on his task to do with site access on Sunday, 12 August.  Mr Buckley implemented the instructions on 13 August when he told Mr Nabulsi of DJN that its refusal to sign an EBA with the CEPU had the result that its services would no longer be utilised.  And, Mr Sutherland signed the letter of 13 August himself.  He had no reason to do so, if, as he asserted, he had decided previously to seek legal advice from Corrs before proceeding.  The contemporaneous actions of other Edison staff, subordinate to Mr Sutherland, in implementing Mr Driscoll’s instructions immediately were consistent with the very terms of the 13 August letter.  Mr Sutherland took the trouble to create the letter on 13 August mainly by cutting and pasting from Mr Burns’ emails of 9 and 12 August.

21. Moreover, the letter opens with a reference to the discussions of the previous week and immediately says:

    ‘I am able to confirm the proposal concerning contract work being undertaken at Loy Yang B Power Station.’  (emphasis added)

    The reference to confirmation which we have emphasised suggests that after Mr Driscoll gave instructions to his subordinates, including Mr Sutherland, to agree to the CEPU’s demands on 10 August, Mr Sutherland did just that at his meeting with Mighell which followed.  Although Mr Sutherland’s evidence of the meeting was quite unsatisfactory, the letter he drafted and signed on 13 August 2001 is evidence that he told Mr Mighell before writing it that Edison had accepted the CEPU’s demands.  He had no reason to ‘confirm’ anything which he had not already told Mr Mighell.  We find that Mr Sutherland had told Mr Mighell on or before 13 August that Edison would agree to the CEPU’s demands.  That, however, fell short of any precise agreed position because Mr Sutherland still had to provide a form of wording to the CEPU, hence the letter.

22. We are comfortably satisfied that it is reasonable to infer that the letter was prepared by Mr Sutherland, signed by him and despatched to the CEPU.  We find that Mr Sutherland acted urgently on Mr Driscoll’s instructions and caused the 13 August letter to be sent on that day to Mr Mighell.  And there is no reason to suppose that it was not received by its addressee in the ordinary course of the post at the CEPU and ETU offices.  We find that the 13 August letter signed by Mr Sutherland was received by Mr Mighell in the ordinary course of the post by 15 August.

23. Next the CEPU argued that his Honour should not have rejected its arguments about the 13 August letter because his conclusion was at odds with the pleaded case of the ACCC, which alleged only that a contract or arrangement had been made or an understanding arrived at on or about 24 August 2001, not a week earlier.  The primary judge reasoned (at [164]-[168]) that some agreement or arrangement or understanding existed between Edison and the CEPU in the week commencing 13 August.  The CEPU had argued before his Honour, and before us, that if this were so it meant that the heads of agreement entered into on 23 August were a sham.  The CEPU drew support from the wording of the heads of agreement both in its 20 and 23 August versions because that wording did not reflect fully the demands which Mr Mighell had made or the steps which Edison had already taken to give effect to the demand.

24. We do not agree.  The objective facts (without having any regard to the memorandum of understanding of 15 August) point to the adoption during the week of 13 August by both Edison and the CEPU of the arrangement proposed by the CEPU’s demands.  Mr Sutherland composed and signed the letter of 13 August.  The letter was received by Mr Mighell.  On the same day, Mr Buckley communicated to Mr Nabulsi of DJN the same position as in that letter.  That position represented a change in Edison’s previous policy.  Three days later, Edison's team leaders were told the same thing.  Each of these steps conformed to Mr Driscoll’s instruction to agree to the CEPU’s demands.  At the same time, there was no evidence that the CEPU’s demands remained an issue halting progress on the signing of the site agreement.  These objective facts all point to the conclusion that Edison had adopted the CEPU’s demands.  The wording of the heads of agreement is not inconsistent with Edison having adopted the CEPU’s demand.  Indeed, one natural and ordinary meaning of ‘request’ can include insistence, such as when an unwelcome visitor is ‘requested’ to leave the premises.  Context may show that such a ‘request’ is, in fact, a demand.  As it appears in the heads of agreement, if one were ignorant of the context, the word ‘request’ would not convey the meaning of ‘demand’.  We will return to the issue of construction later in these reasons. 

    THE MEMORANDUM OF UNDERSTANDING DATED 15 AUGUST 2001

25. An important issue in the appeal was his Honour’s use of the memorandum of understanding dated 15 August 2001 between Simon Engineering and four unions, including the CEPU and AMWU.  The memorandum of understanding had been signed by Mr Mooney on behalf of the CEPU.  It was attached as the final page of a bundle of documents, tendered at the trial, which were filed with the Australian Industrial Relations Commission (‘the AIRC’) consisting of a statutory declaration by Mr Mighell of 23 August 2001, the site agreement and its certification on 12 December 2001 by Vice President Ross, of the AIRC.

26. The memorandum of understanding had not been referred to in the pleadings or the particulars.  Nor had any mention of it been made during the trial.  The first time that the CEPU became aware that it had any relevance to the issues in the proceedings below was when it appeared in his Honour’s reasons for judgment.

27. The memorandum of understanding confirmed that at a meeting on 15 August the parties had reached agreement on the site agreement.  It noted that they all agreed that there were no further issues or claims and that the words of the site agreement, together with the wages and conditions in it, were the final understanding of what they had agreed.  The memorandum went on to provide that the unions undertook to forward the site agreement to their respective secretaries with ‘… a recommendation for Signature’.  Simon Engineering undertook to arrange for statutory declarations to be made and then lodgement of the site agreement with the AIRC so that it could be certified. 

28. His Honour said that, although it was in evidence, counsel for the parties had not referred to the memorandum of understanding at the hearing.  He took the view that the document was a business record which evidenced that a meeting took place on 15 August 2001 at which Simon Engineering, together with the CEPU, reached agreement on the site agreement for the construction of the peaker plant.  The primary judge then drew the inference from the whole of the evidence that the CEPU would not have entered into that memorandum of understanding unless it had first been notified by Edison that Edison had agreed to its demand that electrical contractors performing work at Loy Yang B power station had to have an EBA with the CEPU prior to commencing work at the site.  And so, he held, that this was an arrangement or understanding between Edison and the CEPU which was in place by 15 August.

1. The primary judge concluded (at [126]) that there was no relevant disparity between the subjective purposes of each of the CEPU and Edison in including the impugned provision.  He found (at [180]) that the CEPU was aware that DJN performed work at Loy Yang B, that it did not have an EBA with the CEPU, and that the provision would exclude DJN from working at Loy Yang B if it did not enter into an EBA with the CEPU.  We agree with these findings. 

2. There was no ambiguity about the end which the provision sought to accomplish.  By the time of the teleconference of 10 August, Edison knew that if it agreed to the CEPU’s demand, it would be prevented from acquiring services in the future from DJN, its existing contractors.  And, Edison’s practice prior to August 2001 had been not to insist that contractors, such as DJN, have a certified agreement or EBA with a union.

3. DJN had been performing electrical contracting work for Edison at the Loy Yang B site for over two years prior to August 2001, without an EBA.  Mr Nabulsi had had two discussions with Mr Mooney, the CEPU’s Latrobe Valley region (which included the Loy Yang B site) organiser about DJN entering into an EBA with the CEPU.  The first discussion was in about 1998 or 1999 and, in the end, DJN chose not to sign an EBA.  The second discussion was one or two years later (ie around 2000 or 2001).  Mr Nabulsi enquired whether the CEPU’s EBA had changed or if it were prepared to negotiate amendments with DJN.  Mr Mooney said that the ETU was not prepared to sign any agreement with DJN outside its pattern agreement.  Mr Nabulsi said DJN would not sign on those terms.

4. Over the years preceding August 2001 Edison’s Mr Burns had had a number of meetings with Mr Mooney and other local union officials concerning contractors at the Loy Yang B site having EBAs with the unions.  The occasion for these meetings was when Edison was planning for work to be done during an ‘outage’.  During those meetings, Mr Burns explained how Edison planned to run the ‘outage’, the processes it had in place for safe work practices and, significantly, he nominated the contractors which were going to be employed on the ‘outage’.

5. Although he could not recall any precise conversations, Mr Burns gave this evidence of those meetings:

   ‘Did Mr Mooney ever raise with you the question whether contractors did or did not [have] EBAs with the union?--- Yes, in the context of - we were always, at the time of an outage, very keen to ensure that the outage would be able to proceed appropriately and that should a dispute arise that there were appropriate mechanisms for dispute settlement.  So in that context, yes, we would have had conversations about the contractors that we proposed to use;  whether they had EBAs or not.’

6. The primary judge also found (at [180]) that Mr Mooney was in close discussion with Mr Sutherland and Mr Burns during the period between 13 and 23 August 2001.

7. Based on this evidence we find that in August 2001 Mr Mooney knew that:

   ·Edison had been accustomed to acquire electrical contracting services from DJN at Loy Yang B for some years past;

   ·DJN did not have, and did not want to have, an EBA with the ETU or CEPU;

   ·Edison had a policy of not requiring contractors, including DJN, to have an EBA with a union before engaging them to provide services at Loy Yang B;

   ·the CEPU, or Mr Mighell on its behalf, was not prepared to sign the site agreement unless Edison agreed to require electrical contractors engaged at Loy Yang B to have EBAs with the CEPU;

   ·if Edison agreed to the CEPU’s position on EBAs for electrical contractors at the Loy Yang B site, which Mr Mooney’s superior, Mr Mighell, had repeated at the 9 August meeting, Edison would be prevented or hindered from acquiring services from DJN;

   ·DJN was an electrical contractor which would be affected if the CEPU’s demand was met by Edison and DJN continued to refuse to sign an EBA (based on Edison’s investigations on 9 and 10 August 2001 and the fact that Mr Burns and Mr Mooney had previously identified the electrical contractors who worked at Loy Yang B and did not have an EBA with the ETU or CEPU).

8. It follows that the end which each of Edison and the CEPU sought to achieve by including the provision in their contract, arrangement or understanding was to prevent or hinder Edison from acquiring electrical contracting services from DJN.

9. The CEPU said that despite the judge’s finding that the parties knew that DJN, in particular, would be prevented from supplying services to Edison under the arrangement, none of the witnesses had been asked directly about any communication or facts to show that Mr Mooney had been aware of DJN’s presence at the site at the relevant time.  Moreover the CEPU argued that the evidence showed DJN continuing to work at the site after 23 August 2001 without any objection being raised by the CEPU.  This, it argued, showed that there was no or insufficient evidence on which to draw the inference, relying on Chamberlain (No 2) 153 CLR 521.

10. In our opinion these arguments should be rejected.  As we have pointed out in the passages cited above from Chamberlain (No 2) 153 CLR at 535-536 and Hillier 223 ALR at 646-647, in a civil case the circumstances must raise a more probable inference in favour of what is alleged (per Gibbs CJ and Mason J in Chamberlain (No 2) 153 CLR at 536). But, it is not necessary to exclude any hypothesis consistent with innocence, even though the issue to be determined is whether a pecuniary or civil penalty should be imposed on the CEPU under s 76 of the Act (Doney 171 CLR at 211). And, as the High Court noted, in a criminal case corroborative evidence, standing alone, need not establish any proposition beyond reasonable doubt. Corroborative evidence can strengthen other evidence by confirming or tending to confirm the matter for which it is tendered. The Court said that the essence of corroborative evidence is that it confirms, supports or strengthens other evidence in the sense that it renders that other evidence more probable (Doney 171 CLR at 211).

11. And, as Mr Burns explained, he could not recall specific conversations when giving evidence over five years after the events in question took place.  Nonetheless, his evidence as to Edison’s practice of negotiating with the relevant unions about the contractors who would be engaged on any ‘outage’ was significant.  His evidence also showed that on those occasions there were regular discussions about Edison’s policy in relation to whether the contractors to be used in the outage work had an EBA.   That topic was evidently one of recurrent interest for Edison and the unions.  This evidence supported the inference which his Honour drew, and which we have also, and separately, drawn, that Mr Mooney and thus the CEPU was aware that DJN would be affected by the arrangement.

12. In our opinion, the arrangement or understanding reflected in the letter of 13 August 2001, Edison’s conduct at the meetings of 13 and 16 August and, on our construction, the heads of agreement, was included for the purpose of, or purposes including, preventing or hindering Edison from acquiring or continuing to acquire services from DJN itself (because of the inferences we have drawn as to the knowledge of the parties about DJN’s particular position) as well as the class of electrical contractors who did not have EBAs with the CEPU, of which class DJN was a member (whether or not either or both of the parties intended it to be affected by the making of the arrangement or the arriving at the understanding).  And, it follows that Edison was prevented or hindered from acquiring services from DJN in the future because DJN did not have and was not prepared to have an EBA with the CEPU.

13. Nor does it matter that Edison allowed DJN to continue to fulfil the contract which it was performing in August 2001.  The evidence of Edison’s witnesses showed that Edison wished that to occur.  It is the nature of arrangements and understandings that they are not legally binding and that the parties can allow for exceptions or derogations from them while maintaining their general effect.

14. Given that the CEPU had achieved substantially what it had set out to gain, it is not inconsistent with the adoption of the arrangement or understanding that it accepted that DJN should be permitted to fulfil its remaining contractual obligations.  After all, what the CEPU was seeking was an arrangement or understanding about the future engagement of electrical contractors at the Loy Yang B site, rather than interfering with the current works.  We are of the opinion that there is nothing inconsistent in DJN being allowed to finish the work it was performing in August 2001 and the making of the arrangement or understanding which we have found.

    WAS THERE ANY ERROR IN THE IMPOSITION OF THE PENALTY?

15. In approaching the question whether his Honour’s discretion miscarried in imposing the penalty, the principles in House v The King (1936) 55 CLR 499 at 504-505 apply. There Dixon, Evatt and McTiernan JJ pointed out that when a judicial discretion is exercised to impose a penalty, established principles govern the capacity of a court on appeal to interfere with that exercise of the discretion. They noted, in a passage too famous for repetition, that it is not enough that the appellate court considers that if they had been in the position of the primary judge they would have taken a different course. It is necessary that some error appears in the making of the decision to exercise the discretion in a particular way. The question for us is whether the primary judge acted upon a wrong principle, took into account extraneous relevant matters, mistook the facts or failed to take into account a relevant consideration.

16. After giving the parties an opportunity to consider his findings on liability and address him on penalty, the primary judge imposed a pecuniary penalty of $125,000. The CEPU argued that his Honour’s decision to do so was affected by error.  It pointed to his Honour’s finding, in the penalty judgment, that the provision had the potential to prevent any electrical contractor from performing work at Loy Yang B if they did not have an EBA.  The CEPU argued that this was erroneous and caused the discretion to miscarry.

17. His Honour was correct to find that the impact of the arrangement was as wide as he described.  However, he did not address in this regard the impact of the contravention, as opposed to the arrangement. The contravention as found only applied to electrical contractors from whom Edison, as at August 2001, had been accustomed to acquire services within the meaning of s 45E. A potential for further harm existed because, as at August 2001, there were three other Edison contractors which fell within the description of ‘second person’ and which had EBAs with the CEPU. There was no certainty that those EBAs would continue indefinitely in place. If for any reason any of those contractors had ceased to have an EBA with the CEPU, the arrangement would then apply to it. The potential harm was that the arrangement would then have prevented Edison from acquiring services from that contractor to the extent that Edison had adhered to it. We see no error in his Honour’s approach.

18. His Honour noted (at penalty judgment [53]) that it was accepted by the ACCC that there was no evidence that any other electrical contractor had been adversely affected by the contravening conduct. We were informed that s 170LX of the Workplace Relations Act 1996 (Cth), as in force prior to March 2006, provided that once an EBA had been entered into, it continued in force until terminated by the AIRC or was replaced by a new one. Even so, knowledge of the existence of the arrangement or understanding which Edison had reached with the CEPU could affect a decision by a contractor to apply to the AIRC to terminate its EBA. It was open to his Honour to have regard, as he did, to the potential for the arrangement to have a wider impact than beyond the relationship between Edison and DJN.

19. The CEPU then submitted that the primary judge erred in accepting the ACCC’s submission that Edison’s actions giving effect to the provision must have caused some loss or damage to DJN although that could not be quantified.  He noted the CEPU’s submission that this was mere speculation and unhelpful, but he disagreed.  He inferred that DJN suffered some loss or damage by reason of its exclusion from work at Loy Yang B between August 2001 and November 2003.  However, his Honour said (at penalty judgment [52]) that in the absence of evidence he was not prepared to make the assumption that the loss or damage that DJN suffered was substantial.

20. The CEPU noted that Mr Nabulsi was called as a witness and could have given evidence if DJN had suffered any loss or damage.  He was not asked about this topic.  His Honour found Mr Nabulsi to be a frank and direct witness.  In those circumstances there was no reason why Mr Nabulsi could not have been expected to give evidence, if there were any, to establish any actual loss or damage suffered by DJN.  In Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418E Handley JA said that the Court should not draw inferences favourable to an insured where it was claiming on its insurer but had made no attempt to prove particular matters by direct evidence. He said this should be the position when no relevant questions had been asked of a witness who was called and could have given that evidence. Handley JA held that the principles in Jones v Dunkel 101 CLR 298 should be extended to apply when a party by failing to examine a witness in chief on some topic, ‘… indicates “as the most natural inference that the party fears to do so”’. This fear is then ‘some evidence’ that such examination in chief ‘would have exposed facts unfavourable to the party’ (Ferrcom 22 NSWLR at 418F-G; see too: Braverus Maritime Inc v Port Kembla Coal Terminal Ltd (2005) 148 FCR 68 at 112 [159]-[160] per Tamberlin, Mansfield and Allsop JJ; Puels v Excelerate Funding Pty Ltd [2005] FCAFC 38 at [38] per Lander J with whom Weinberg and Jacobson JJ agreed).

21. Proceedings for a pecuniary penalty in a case like the present could raise potentially quite difficult questions about the approach to quantifying any loss a person in the position of DJN may have suffered. One ‘loss’ DJN clearly suffered was of the right to be considered by Edison for work during the period in which the arrangement or understanding with the CEPU remained on foot. On the evidence, or lack of it, we infer that Mr Nabulsi and DJN were unable to prove that DJN suffered any economic loss. In that context, his Honour was correct to say that whatever loss or damage DJN suffered could not be regarded as substantial. Nonetheless, the arrangement or understanding was unlawful. It was a contravention of s 45E which directly affected DJN. There is no doubt that DJN was prepared to work for Edison, both before and after the arrangement was in force. It was only prevented from doing so during the period in which the arrangement was in force because of its impact.

22. It was in this context that his Honour made reference to inferring some loss or damage by reason of DJN’s exclusion from new work at Loy Yang B during the period between August 2001 and November 2003.  We do not see any error in that approach.  The primary judge could have regard to the fact that although DJN did not have a legal right to require Edison to engage it, nonetheless there was some, but not substantial, loss or damage suffered by it through a contravention of the Trade Practices Act directly affecting it.

23. Had DJN wanted to assert its rights, it would have had to take the expensive and uncertain step of commencing its own proceedings seeking relief under the Act. Had it done so and established what the primary judge and we have found in these proceedings, DJN could have sought relief under s 87(1) of the Act in addition to relief by way of injunction under s 80. The concept of loss or damage in Pt VI of the Act cannot be given any narrow meaning, as Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ observed in Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 at 407 [45]. They said that loss or damage spoken of in ss 82 and 87 of the Act is not confined to economic loss and the ascertainment of detriment may raise further difficult questions. And as the Court said in Murphy 216 CLR at 408 [47]:

    ‘Section 87 invites attention to whether any of a wide range of orders might be made to compensate, in whole or in part, for the loss or damage or to prevent or reduce the loss or damage.’

    Ultimately the primary judge granted injunctions under s 80 prohibiting the CEPU from engaging in similar conduct with other persons who may be accustomed to acquire services from electrical contractors (which included, as a member of the class, DJN).

24. In our opinion the way in which his Honour reasoned was simply a matter of common sense, namely that the arrangement or understanding he found was a contravention of the Act that affected DJN, but that it did not cause it substantial damage.  Nonetheless, DJN was a target of the contravening conduct and it suffered in the sense that it got no work from Edison for over two years, albeit that that did not translate into a definite or substantive amount of loss or damage.  There was an infraction of DJN’s legal rights so that it was open to infer that it suffered some damage, albeit in this case not substantial damage.  The absence of any evidence of substantial or other loss or damage serves to justify the approach his Honour took of noting DJN’s rights but finding that it had not suffered substantial loss.  Mere difficulty in estimating damages does not deny a party with a right to an award from having them assessed (see for an example RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) 41 FCR 164 at 179 per Beaumont and Spender JJ, with whom Davies J agreed: see too The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 per Mason CJ and Dawson J, 119 per Deane J and 138 per Toohey J).

25. The CEPU also argued that the penalty was manifestly excessive. In our opinion this submission is without substance. Indeed, had the matter been open to us to review because of error by the primary judge, we would observe the penalty was at the lower end of the range for behaviour of the kind in which the CEPU engaged in relation to Edison and DJN at and after the meeting of 9 August 2001. The CEPU was threatening to delay or imperil a very substantial project unless Edison complied with its demands to require electrical contractors, in particular DJN, engaged by Edison to have EBAs. That conduct constituted a serious contravention of s 45E(3). In our view, the contravention involved the CEPU engaging in anti-competitive conduct by coercing Edison into a position to exclude DJN, and others in its position, from undertaking further work for Edison. The maximum penalty under the Trade Practices Act for such a contravention is $750,000.  Conduct of the nature engaged by Edison and the CEPU should be deterred by the imposition of appropriately substantial penalties when contraventions have been established.

    CONCLUSION

26. For the above reasons, the appeal should be dismissed with costs.

I certify that the preceding two hundred and thirty-six (236) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Weinberg, Bennett and Rares.

Associate:
Dated:        17 August 2007

Counsel for the Appellant:	Mr H Borenstein SC with Mr D G Guidolin
Solicitor for the Appellant:	Geoffrey Borenstein
Counsel for the Respondent:	Mr N O’Bryan SC with Ms V Priskiuh
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	14, 15 and 16 May 2007
Date of Judgment:	17 August 2007