Mudginberri Station Pty Ltd v The Australasian Meat Industry Employees Union

Re: MUDGINBERRI STATION PTY. LTD.
And: THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION; JACK O'TOOLE; TREVOR
SURPLICE; DICK ANNEAR; PAT ROUGHAN; MEAT INSPECTORS ASSOCIATION; GORDON McCOLL
and ALEX THOMPSON
No. G 123 of 1985
Contempt of Court
13 IR 408

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.

CATCHWORDS

Contempt of Court - Trade Practices - Secondary boycott - breach of orders of Court restraining the AMIEU from maintaining a picket line in contravention of sub-s. 45D(1) of the Trade Practices Act 1974 - order of sequestration of the Union's assets and imposition of a fine - costs as between solicitor and client.

Trade Practices Act 1974 - s. 45D

HEARING

MELBOURNE
#DATE 11:9:1985

ORDER

The first respondent, The Australasian Meat Industry Employees Union, be fined $100,000 in respect of its breach of the orders of this Court made on 12 July 1985;
The said fine be paid to the Registrar of this Court within seven days of service of this order upon the first respondent;
A writ of sequestration issue against the first respondent in accordance with the form set forth in the Schedule hereto;
The writ of sequestration shall lie in the office of the Registrar of this Court until the earlier writ of sequestration issued against the first respondent pursuant to the order of this Court of 18 July 1985 has ceased to operate WHEREUPON the writ of sequestration hereby authorised shall be executed forthwith;
The first respondent pay to the applicant its costs of the proceedings for contempt of the order of the Court of 12 July 1985, the said costs to be taxed as between solicitor and client; and
Liberty is reserved to the applicant and to the first respondent to apply on two days notice generally and in particular in respect of any matter or problem that may arise in relation to the execution or working out of these orders.

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

JUDGE1

Disobedience of orders of courts is a serious matter. It invariably affects the rights of litigants; moreover it may challenge the authority of the Courts themselves and undermine public confidence in the administration of justice. The present case wears both aspects.

A litigant who succeeds in establishing his rights before the Courts of our country is entitled to have them enforced. In most cases the unsuccessful party, having lost the battle, accepts the decision of the Courts so that there is no necessity for the successful party to resort to the processes of the Courts to enforce the orders made in his favour vindicating his rights. Doubtless the unsuccessful party does not wish to surrender to his opponent the fruits of victory; but fortunately most people realise and accept that for a civilised society to survive it is necessary that the umpire's decision be accepted. Also, everybody knows that, in the end, they may be punished for disobeying orders of Courts and that there is machinery available to ensure compliance with them.
A right to a litigant is valueless unless there is a remedy to enforce it and machinery available to ensure that the remedy is effective. Contempt proceedings are the ultimate sanction against a person who refuses to obey orders of the Court. In Australia the sanction may take various forms including imprisonment or, in the case of a corporation, sequestration of its property. These coercive instruments are designed to assist a litigant to enforce his remedy; but there is more to it than that. If orders of the Courts of justice could be disregarded with impunity there would be little confidence in the administration of justice; and respect for law and order would be seriously eroded. None of us want to be litigants; but we all know that the affairs and vicissitudes of life may involve us, at one time or another, in the processes of the law. We all hope that the judicial system is not only fair, but in the end has real remedies to ensure compliance with its orders. One day we may all need them.
What is not generally understood is that the Courts are part of Government. There are three arms of government: Parliament, the Executive and the Judiciary. Each performs a different role; but the functions of each are related and, to an extent, dependant on each other. The independence of the Judiciary from unwarranted interference from the other two arms of Government is essential to the preservation of the liberty of each person in our community; but the enforcement of the orders of the Courts ultimately rests to a large degree upon the will of the Executive to support the Judicial arms of Government and to lend its might to the preservation of law and order.
Parliament passes statutes, the Executive administers them and Courts interpret them and decide the rights of litigants under them. Our social fabric is strong but at the same time delicate; strong, if the arms of Government work together yet with each respecting the independence of the others; weak, if one arm fails to support another. The present case is a useful illustration. Section 45D of the Trade Practices Act 1974 ("the Act") was introduced by Parliament to outlaw secondary boycotts, i.e. to prohibit people from unlawfully acting together to hinder or prevent others from supplying goods or services to some third person where the conduct is engaged in for the purpose or is likely to have the effect of causing substantial loss or damage to the third person's business. That is the law of the Parliament of this nation. It remains in force. It must be observed by all.
I shall state the relevant facts. The applicant conducts an abattoir and meat processing works at Mudginberri Station, near Jabiru, approximately 200kms east of Darwin. It sells mainly on the export market. Because of the wet and dry seasons the abattoir's operations are confined generally to the dry season - May to November. Prior to 1984 the majority of the workers at the abattoirs were members of the Australasian Meat Industry Employees Union, the first respondent ("the Union"). The members of the Union employed by the applicant were expelled from the Union in 1984 because of their unwillingness to join in an industrial ban then placed upon the applicant by the Union.
In June 1984 the Union established a picket line on the road leading to Mudginberri Station. Due to the presence of the picket, members of the Meat Inspectors Association ("M.I.A.") refused to enter the abattoirs to perform their duties and as a result production ceased at the abattoir. In July 1984 the applicant sought and obtained from this Court orders under s. 45D of the Act.
Mr. Pendarvis, the managing director of the applicant, explored the possibility of resolving the dispute between the applicant and the Union. The dispute arose out of the Union's claim that employees at Mudginberri should be paid in accordance with a wage system known as the "tally system" which is the basis for payment of meatworkers under some State awards including awards in Queensland and Western Australia. In 1984 Mr. O'Toole, the Federal Secretary of the Union, told Mr. Pendarvis that the applicant must accept the tally system as prescribed in the Queensland Meat Industry Award and that, if it did not, the abattoir would not be allowed to open.
After the orders were made by this Court in July 1984 the picket line was disbanded. Subsequently the Conciliation and Arbitration Commission heard an application by the Union for an award to cover meat industry employees in the Northern Territory. The Union sought the adoption of the tally system of remuneration as the basis for payment of meatworkers. The respondents to the application before the Commission opposed the adoption of that system and sought the retention of the system whereby meatworkers at Mudginberri and at other abattoirs in the Northern Territory had for many years been remunerated, namely, a system based on productivity - a method of payment by results.
On 29 April 1985 the Commission published the Northern Territory Meatworkers Award which came into force on 2 May 1985. It did not adopt a tally system; but instead adopted a system enabling the use on certain conditions of payment by results. Pursuant to clause 33 of the Award it was provided that the system of payment by results should be such as to enable a weekly employee to earn no less for the work actually performed than the remuneration that he would otherwise be entitled to receive under the Award, plus 20 percent. The Award provided that the terms of any such system should be established by negotiation and agreement between the employer and the majority of employees concerned or their nominated representatives.
Shortly after the making of the Award the applicant negotiated an agreement with its employees in accordance with clause 33 of the Award. The employees were not represented in the negotiations by the Union. The agreement was reduced to writing and appears to have been signed by each employee before commencing work.
On 9 May 1985 the applicant commenced its operations at Mudginberri for the 1985 season. The following day the picket line was established and was maintained thereafter. The applicant commenced proceedings in this Court to restrain the Union and certain of its officers and members from maintaining the picket line.
The Courts have designed a process to enable persons whose rights are in immediate jeopardy to be protected until the dispute can be finally determined following careful consideration of all the evidence that each party wishes to put forward. A Judge of this Court (Beaumont J.) heard an urgent application by the applicant for orders restraining the Union from maintaining the picket line until the case could be finally determined. On 12 June 1985 his Honour granted interlocutory injunctions restraining the Union and certain of its officers from engaging in the maintenance of the picket line, that is, in effect, prohibiting the conduct proscribed by s. 45D of the Act. His Honour held that there was a serious question to be tried between the parties and that the overwhelming balance of convenience required the preservation of this position until the issues could be determined at a final hearing. His Honour therefore granted interlocutory injunctions for the purpose of permitting the abattoir to operate and of removing the picket line pending the final hearing.
The Union and certain of its officers disobeyed the Court's order and the applicant thereupon applied to the Court for orders punishing the Union and certain of its officers for contempt of court. The motion for contempt was heard by Bowen C.J. who found that there had been a clear breach of Beaumont J.'s order. His Honour ordered that the Union, in respect of its breach, be fined the sum of $10,000 and that from the service of the order onwards there be a further fine of $2,000 a day should that breach continue.
The next stage of the drama unfolded in Darwin where another Judge of the Court (Morling J.) heard an application by the applicant for final orders to restrain the Union and its officers from contravening s. 45D. On 12 July 1985 Morling J. held that the Union, Mr. O'Toole and certain of its officers were, in concert with each other, engaging in conduct that hindered or prevented the supply of services by Government meat inspectors to the applicant and that such conduct was engaged in for the purpose and was likely to have the effect of causing substantial loss or damage to the applicant's business, and that in the result their conduct infringed sub-s. 45D(1) of the Act.
The real issue before his Honour was whether the conduct of the Union and its officers was protected by sub-s. 45D(3), that is, whether the conduct in which they were engaged was in concert with some of the applicant's employees and, if it was, whether it had as its dominant purpose and was substantially related to the remuneration, conditions or employment or working conditions of those employees.
His Honour held that the conduct of the Union and its officers was not protected by sub-s. 45D(3) because its dominant purpose was not substantially related to the remuneration, conditions of employment, hours of work or working conditions of any of the applicant's employees.
His Honour said that the evidence led:

"to the irresistible inference that the real reason why the picket line is being maintained is unrelated to the remuneration, conditions of employment, hours of work or working conditions of the applicant's employees. It is related to the general policy of the union that all meat workers in the Northern Territory should be paid according to the tally system notwithstanding the terms of the award handed down on 20 April 1985."

His Honour also held that the evidence did not estabish that the conduct then being engaged in by the Union and its officers was being engaged in by them in concert with any of the applicant's employees.
Morling J. granted permanent injunctions against the Union and certain of its officers restraining them in terms broadly similar to the terms of the interlocutory injunctions granted by Beaumont J.
A notice of motion was then issued by the applicant against the Union seeking the issue of a writ of sequestration of the Union's property. That motion was heard by Bowen C.J. who found that the fine of $10,000 imposed on the Union on 21 June 1985 had not been paid in accordance with the order; that it was proved to his Honour's satisfaction that the Union maintained the picket in place between the hearing before him on 21 June 1985 and the hearing before him on 15 and 16 July 1985 (i.e. the hearing relating, amongst other things, to the issue of a writ of sequestration). His Honour also found that the fine of $2,000 a day had been incurred but had not been paid and that the total amount of unpaid fines was $44,000.
His Honour said in his reasons for judgment:

"Not only has the AMIEU continued to breach the interim injunction up to the time it was dissolved, its secretary has, according to the evidence, publicly stated that the AMIEU will not pay the fine ... The time has come for the Court to consider what further step, if any, should be taken against the AMIEU in respect of its deliberate and continued disobedience of the Court's order of 12 June 1985 up to the time that order was dissolved and in respect of its refusal to pay the fines imposed."

It should be noted that the Chief Judge was considering the question of contempt in relation to an order of the Court granting interlocutory injunctions which expired upon the making by Morling J. of permanent injunctions on 12 July 1985.
The Chief Judge said later in his reasons for judgment:

"As to the AMIEU, it appears to me that in the exercise of my discretion I should order a writ of sequestration. A final hearing of the proceeding under s. 45D of the Trade Practices Act has now been had. Morling J. on 12 July 1985 held that the AMIEU had not made out a case under sub-s. 45D(3) and was in breach of sub-s. 45D(1). It is clear from the evidence that the AMIEU has engaged in a course of public defiance of the Court's order of 12 June 1985. The organization has had every opportunity to consider its position and to cease its contempt of the Court's order. It has not ceased ... I have considered the importance of the organization's position under the Conciliation and Arbitration Act and the related matters referred to earlier in these reasons. I have considered also the need to take steps to preserve respect for the orders of this Court. The fine of $10,000 and the fine of $2,000 per day incurred in respect of 17 days now totalling $44,000 remain unpaid. The AMIEU through its Secretary asserts this will not be paid."

His Honour then ordered that the writ of sequestration should issue.
The applicant subsequently applied to this Court for orders dealing with the Union and certain of its officers for their alleged contempt of the permanent injunctions of Morling J. granted on 12 July 1985. That notice of motion came before me and I held on 16 August 1985 that the Union was instrumental and responsible for establishing and maintaining the picket line at all relevant times. I held that the Union was in contempt of the Court's order of 12 July 1985. My task is now to decide the appropriate orders to be made to deal with that contempt.
The Union has adopted the stance that it is above the law of the land. The system of industrial conciliation and arbitration produced a result that the Union did not like. It should have observed the award made by the Commission but it did not. Our society simply cannot function if individuals, corporations or unions take this approach. It shows contempt for the institutions that society has created to resolve its disputes. If conduct of this nature is permitted to continue it must result in the erosion of public confidence in law and order and the administration of justice. It will inevitably mean that people will think that there is one law for a trade union and another law for everyone else. The result, if unchecked, would be anarchy.
In the past, when industrial distrubances have reached dangerous peaks good sense has generally prevailed and ultimate confrontation has been avoided. That time is overdue in this case. All citizens of Australia are governed by and must obey the law of the land. The Union plainly does not like the result of the industrial proceedings before the Conciliation and Arbitration Commission, and it refused to accept the ruling of that body. It has gone considerably further and now breached two separate orders of this Court. The Union thus embarked upon a collision course with the law and institutions of this country. It contravened sub-s. 45D(1) of the Act - an Act passed and retained by the Parliament of Australia. It may be a good or a bad law; it is not for me to pass judgment on that question. The fact is that it is the law of the land and it has been disobeyed by the Union. The Union has disobeyed lawful orders of this Court, the institution established by Parliament pursuant to the Australian Constitution and charged with the task of enforcing Parliament's laws.
Disobedience of orders of courts does not generally constitute criminal contempt, but it may be accompanied by such defiance on the part of the party against whom the proceedings for contempt are brought as manifests a criminal as well as a civil contempt. This case is as plain an example of criminal contempt as there can be. The orders which I propose to make shall reflect the Court's intention to oblige the Union to obey the laws of the land and to punish it for its criminal contempt.
I propose to impose a substantial fine upon the Union and to order that a writ of sequestration issue against it. The writ of sequestration will command the four persons who have agreed to act as sequestrators to take possession of and to receive all the property and income of the Union and to pay into court out of the Union's property and income the amount of the fine and the costs and expenses of the sequestrators and to retain the property and income received by the sequestrators in their hands until this Court orders that they be released.
There is no evidence before the Court that the picket line has been removed or that the Union intends to remove it. However, there has recently been publicity in the daily press and elsewhere stating that the picket line is to be removed or has just been removed. As I propose to fine the Union and to order that a writ of sequestration issue against it, it will be open to the Union, after the fine has been paid or recovered, to move the Court for an order that the Union's property and income be released. If there is evidence that the picket line has been removed that would be an important, but not the sole, consideration in favour of such an order being made. As the writ of sequestration serves at least the purpose of securing payment of the fine it will issue anyhow. It lies in the Union's hands to purge its contempt.

I am aware that the funds of a trade union may consist largely of the contributions of its members and that a union represents its members and performs important functions in our society. To order the issue of a writ of sequestration against a union or any other organisation or corporation is not a step to be taken lightly. It is not the Court's intention to interfere with the Union and its activities more than is necessary. However, serious and continued breaches of this Court's orders strike at the heart of a civilised and orderly society.
The writ of sequestration which was issued against the Union pursuant to the order of Bowen C.J. of 18 July 1985 is still in operation. Once that writ ceases to operate the writ which I propose to authorise may be executed. It may issue but lie in the office of the Registrar of this Court in the meantime.
Counsel for the applicant has asked for an order that its costs be paid by the Union on a solicitor and client basis. This is a form of order commonly made in proceedings for contempt of orders of courts. This is a proper case for the making of such an order.
The Court orders that:-

1. The first respondent, The Australasian Meat Industry Employees Union, be fined $100,000 in respect of its breach of the orders of this Court made on 12 July 1985;
2. The said fine be paid to the Registrar of this Court within seven days of service of this order upon the first respondent;
3. A writ of sequestration issue against the first respondent in accordance with the form set forth in the Schedule hereto;
4. The writ of sequestration shall lie in the office of the Registrar of this Court until the earlier writ of sequestration issued against the first respondent pursuant to the order of this Court of 18 July 1985 has ceased to operate WHEREUPON the writ of sequestration hereby authorised shall be executed forthwith;
5. The first respondent pay to the applicant its costs of the proceedings for contempt of the order of the Court of 12 July 1985, the said costs to be taxed as between solicitor and client; and
6. Liberty is reserved to the applicant and to the first respondent to apply on two days notice generally and in particular in respect of any matter or problem that may arise in relation to the execution or working out of these orders.

[1985] FCA 457

11 SEPTEMBER 1985