FEDERAL COURT OF AUSTRALIA Australian Industrial Group v Automotive, Food, Metals, Engineering, Printing and Kindered Industries Union of Australia & Ors [2001] FCA 774 PRACTICE AND PROCEDURE – contempt – enforcement of an order to pay a fine – whether Attorney-General, District Registrar or moving party should enforce the order - consideration of role of Attorney-General in contempt matters Australian Meat Industry Employee's Union v Mudginberri Station Proprietary Limited (1986) 161 CLR 98 - considered Witham v Holloway (1995) 183 CLR 525 - considered Attorney-General v Times Newspapers [1974] AC 273 - cited United Telecasters Sydney v Hardy (1991) 23 NSWLR 323 - cited Con-Mech (Engineers) Ltd v Amalgamated Union of Engineering Workers (Engineering Section) (1973) ICR 620 - considered Seaward v Paterson (1897) 1 Ch 545 - considered AUSTRALIAN INDUSTRIAL GROUP v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDERED INDUSTRIES UNION OF AUSTRALIA AND OTHERS N1357 of 1999 JUDGE: MERKEL J DATE: 22 JUNE 2001 PLACE: MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY N1357 OF 1999 BETWEEN: THE AUSTRALIAN INDUSTRY GROUP APPLICANT AND: AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDERED INDUSTRIES UNION OF AUSTRALIA FIRST RESPONDENT AUSTRALIAN WORKERS' UNION SECOND RESPONDENT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, P LUMBING AND ALLIED SERVICES UNION OF AUSTRALIA THIRD RESPONDENT CRAIG JOHNSTON FOURTH RESPONDENT DEAN MIGHELL FIFTH RESPONDENT CESAR MELHEM SIXTH RESPONDENT JUDGE: MERKEL J DATE: 22 JUNE 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 29 May 2000 I imposed fines of $20,000 on the fourth respondent, Craig Johnston, and the fifth respondent, Dean Mighell, as punishment for contempt of court. The fines were ordered to be paid to the District Registrar within 30 days. The conduct that constituted the contempt was the wilful disobedience and public defiance of an order of the Court. In imposing the fines (see [2000] FCA 708) I said at [15]: "15. …I propose to order that Mighell and Johnston be punished for their contempt by the imposition of a fine upon each of them in the sum of $20,000. The fines are to be paid to the District Registrar of the Court within 30 days (see O 35 R 5(1)). I do not regard it as appropriate that I order that, in default of payment, a term of imprisonment be served. There are adequate enforcement procedures for the recovery of a fine imposed by the Court (see s 53 of the Federal Court of Australia Act 1976 (Cth), O 37 R 7 and R 8 of the Rules of the Federal Court, O 66 of the Rules of the Supreme Court of Victoria and Guthrie v Robertson (1987) 13 FCR 336)). I should indicate that, in fixing the amount of the fines I have taken into account the financial means of Mighell and Johnston, including their current respective gross salaries as union officials (which exceeds $50,000 in the case of Mighell and which, currently, is "around" $50,000 in the case of Johnston), and the fact that the enforcement procedures available include orders for the attachment of earnings (see O 72 of the Rules of the Supreme Court of Victoria). 16. I propose to reserve liberty to apply to resolve any difficulties that may arise in relation to enforcement. In that regard I note that O 37 R 8 of the Rules of the Federal Court permits a "party interested in the execution or enforcement of an order" to apply to the Court ex parte for directions as to its execution or enforcement." 2 Mr Mighell paid his fine but Mr Johnston did not. Because Mr Johnston did not pay his fine an issue arose whether any and, if so, which of the persons interested in the enforcement of the penalty order should take steps to enforce it. 3 The position taken by the District Registrar, to whom the fine was payable, was that the applicant ("AIG") should assume responsibility for enforcement of the penalty order, and that AIG should apply to the Court for such directions or further orders as may be appropriate. AIG's position was that although it was the moving party that had obtained the penalty order it was under no obligation to enforce payment of the penalty which would be paid into Consolidated Revenue. 4 AIG requested the Attorney-General of the Commonwealth to assume responsibility for the enforcement of the penalty order. The request met with a negative response. The Attorney-General's view was that the matter concerned "private interests". The Attorney-General, through his adviser, wrote to AIG's solicitors as follows: "The proceedings in which your client has been involved concern the private interests of your client and the respondents rather than those in which the Commonwealth has a direct interest. I have noted your comments about the public interest involved but it is not appropriate for the Attorney-General to intervene in private proceedings before the Federal Court unless there are special circumstances where the decision of the Court could impact on the legislative or executive powers or other direct interests of the Commonwealth. I note that the District Registrar has advised you that your client should apply to the Court for such further orders as it thinks appropriate to enforce the order of the Court. In these circumstances, where there are adequate enforcement procedures available to the applicant, the Attorney-General does not propose to intervene in this matter." 5 While there might be an issue whether the Attorney-General, rather than AIG or the District Registrar, has any duty to take steps to enforce the order, it is surprising that the Attorney-General has taken the view that a proceeding for punishment for contempt of the Federal Court is a "private proceeding" in relation to "private interests" and that when there is continuing wilful disobedience and public defiance of an order of the Federal Court that is not a matter that impacts on any "direct" interest of the Commonwealth. 6 The Attorney-General's view is at odds with decisions of the High Court, which accept that contempts of this kind are criminal in nature. In Australian Meat Industry Employees' Union v Mudginberri Station Proprietary Limited (1986) 161 CLR 98 at 107 ("Mudginberri") Gibbs CJ, Mason, Wilson and Deane JJ referred to the "public interest in the exercise of the contempt power in cases of disobedience to an order". Their Honours observed (at 108) that where disobedience is accompanied by public defiance, the "public injury…calls into play a penal or disciplinary jurisdiction" to vindicate the court's authority. 7 In Witham v Holloway (1995) 183 CLR 525 Brennan, Deane, Toohey and Gaudron JJ observed (at 533) that: "…the public interest in the administration of justice requires compliance with all orders and undertakings, whether or not compliance also serves individual or private interests." McHugh J (at 539) stated: "However, it is difficult to accept the claim that the disobedience of a court order is a matter that concerns only the parties to the action. An order by way of fine, committal or sequestration of property for disobeying a court order cannot be regarded as a matter that concerns only the parties to the action. The fine, committal or sequestration vindicates the authority of the court and deters other suitors from disobeying the orders of the courts. Whether the object of particular civil proceedings is coercive, remedial or purely punitive, an order fining or imprisoning the contemnor or sequestrating the property of that person serves the public interest in maintaining the authority of the courts of justice." 8 The Attorney-General's view of his role in relation to the judicial power of the Commonwealth is also at odds with long standing authority that the Attorney-General is the appropriate officer of the state to represent and safeguard the public interest in vindicating the authority of its courts. In an often cited passage in Attorney-General v Times Newspapers [1974] AC 273 at 311, Lord Diplock stated: "[T]he Attorney-General accepts the responsibility of receiving complaints of alleged contempt of court from parties to litigation and of making an application in his official capacity for committal of the offender if he thinks this course to be justified in the public interest. He is the appropriate public officer to represent the public interest in the administration of justice. In doing so he acts in constitutional theory on behalf of the Crown, as do Her Majesty's judges themselves; but he acts on behalf of the Crown as 'the fountain of justice' and not in the exercise of its executive functions." In United Telecasters Sydney Ltd v Hardy (1991) 23 NSWLR 323 at 330 Samuels AP, citing the above passage, commented upon the "unique position" occupied by an Attorney-General in the Australian legal system. 9 It is also difficult to understand how the Attorney-General could form the view that the failure to pay a $20,000 fine to the benefit of the Consolidated Revenue does not directly affect the interests of the Commonwealth. 10 As a result of the continuing failure of Mr Johnston to pay the fine imposed upon him, and the failure of any person who has an interest in the enforcement of the penalty to take any steps to enforce it, the District Registrar requested the matter be listed for directions. A letter in the following terms was sent to all interested persons: "At the request of the District Registrar the above matter has been listed for directions before Justice Merkel at 10.15 am on 20 June 2001. His Honour has requested that the persons that have an interest in the enforcement of the orders made on 29 May 2000 in relation to the fourth respondent, Craig Johnston, be informed of the hearing. Those persons appear to include Mr Johnston, the District Registrar, AIG and the Attorney-General of the Commonwealth. Without in any way limiting the matters that any of those persons may wish to address on 20 June his Honour has requested that the following matters be addressed: · whether a duty exists in relation to seeking enforcement of the orders and, if so, by whom is the duty owed; · if a duty exists, the steps (if any) the Court ought to take in the events that have occurred; · if no duty exists, the steps (if any) that ought to be taken in respect of the enforcement of the orders; · whether it is arguable that a further contempt might have occurred in connection with the failure to comply with the orders or to seek to enforce them; · the directions (if any) that are appropriate for the further conduct of the matter. Anyone wishing to make submissions concerning the above matters are directed by his Honour to file with the Court and serve on the other interested persons identified above a short outline of those submissions by 5.00 pm on Tuesday, 19 June 2001." 11 The Attorney-General, consistently with the mistaken view he has taken of his role and of the interest of the Commonwealth, stated through the Australian Government Solicitor that he did not "see a need to be involved in the Directions hearing". AIG, consistently with its position, submitted that it did not regard itself as under a duty to enforce the penalty order and that any further directions were a matter for the Court. 12 There is some support for the position taken by AIG. In Con-Mech (Engineers) Ltd v Amalgamated Union of Engineering Workers (Engineering Section) [1973] ICR 620 ("Con-Mech") the National Industrial Relations Court (presided over by Sir John Donaldson) considered the practical problems that exist in the field of industrial relations in the penalty enforcement process. Con-Mech concerned an order sequestrating a union's assets to pay a fine for breach of a court order. The court stated at 625: "As between the immediate parties the dispute may seem to be of a private nature, but it is rare indeed that it does not affect a large number of other people. In some cases it affects the community as a whole. Furthermore, far from the parties intending to avoid each other after the conclusion of the litigation, the whole context of the dispute will almost invariably concern the terms on which they shall work together in the future. In such circumstances, an aggrieved party to the dispute may well be prepared to seek an order of the court in support of his rights. But if that order is not at first effective, he is most loth further to exacerbate relations by bringing proceedings for contempt of court. It is at this point that the public interest is involved to a much greater extent than is the case in non-industrial disputes. Voluntary forbearance by a litigant to enforce compliance with a court order in a non-industrial context will not usually undermine the authority of the court. In the industrial context, such forbearance, which may well result from industrial pressure, will quickly give rise to a general belief that the orders of the court are unforceable. Such a result would be gravely injurious to the authority of any court and thus to the public interest. With a view to avoiding such a situation and at the same time relieving the complainant of any opprobrium which might otherwise attach, this court has always imposed a duty on those who obtain injunctive orders of reporting any breach of those orders. But hitherto, if it became necessary to issue writs of sequestration, the complainant was required to procure their issue himself, thus following the High Court practice. This close association of the complainant with enforcement procedures seems to us to be highly undesirable in an industrial context. In such a context the interest in enforcement is primarily that of the public and not of the complainant. We have therefore considered whether there may not be jurisdiction for the court to issue the writs of its own motion upon being satisfied that contempt of court is proved." The court concluded that it had an inherent jurisdiction to act in the public interest by itself assuming responsibility for issuing writs of sequestration in respect of the union's assets. 13 The District Registrar, represented by counsel, submitted that the District Registrar is not responsible for enforcement of the penalty order and he is not a party or a person interested in its execution or enforcement. Counsel for the District Registrar submitted: "Where (as here) the Order imposing the fine does not have a default provision and the Court determines to take action to recover the unpaid fine, the Court is able to authorise or direct the District Registrar to enforce a judgment (or order) for the payment of money into court by one or more of the means specified in Order 66 Rule 2(1) of the Rules of the Supreme Court of Victoria: s 53 of the Federal Court Act; Order 37 Rule 7 of the Federal Court Rules and Order 66.02(4) of the Rules of the Supreme Court and Guthrie, supra. If any such authorisation or direction was given, then the authorisation or direction: (1) ought comply with the requirements of Order 66 of the Supreme Court Rules and, where relevant, the other relevant Orders, namely Order 71 or Order 72; (2) should include a direction that any proceeding, step or other process undertaken by the District Registrar pursuant to that authorisation or direction should be made returnable before a Judge. If directed, the District Registrar would obey any such authorisation of direction." 14 The passage cited above in Con-Mech offers some support for those submissions. Although the court did not consider the role of the Attorney-General, which was subsequently clarified in Attorney-General v Times Newspapers Ltd, it saw enforcement of its contempt jurisdiction as being in the public rather than the parties' interest. Con-Mech is also an example of the flexibility of the orders available to a court in the exercise of its contempt jurisdiction: see Mudginberri at 114. 15 In one sense the enforcement issues described above ceased to be a problem because shortly before the hearing Mr Johnston paid his fine. However, the underlying problem of responsibility for enforcement of a court order punishing a person for contempt remains. 16 If a person wilfully disobeys and publicly defies an order to pay a fine imposed for contempt, the disobedience and defiance may constitute a further contempt. Further, conduct calculated to defeat the effect of a court order and treating the order as unworthy of notice may also constitute a contempt: see Seaward v Paterson [1897] 1 Ch 545 at 554-555 per Lord Lindley. For example if a person, such as an Attorney-General, has a duty to enforce a penalty order (which may also include committal to prison in default of payment) and refuses to discharge that duty, with the consequence that there will be no enforcement of the order, a serious issue of obstructing the course of justice may arise. 17 I have made the above observations as it is clear that, in future, a court ought to make specific provision for enforcement of any order punishing a person for contempt. Plainly, if the position taken by the Attorney-General is maintained, it will be necessary for the Court in its order to make provision for the enforcement of that order. In most cases it will be sufficient if the order provided that, in default of payment, the District Registrar must apply to the Court for directions concerning the enforcement of the order. 18 The failure by all persons interested to seek to enforce the penalty order punishing Mr Johnston for his wilful contempt of court had the potential to bring the administration of justice into disrepute. That is especially so in view of Mr Johnston's continuing wilful and public defiance of the order. However, as the fine has now been paid, albeit one year late, and there was an unresolved difference of view as to who was responsible for its enforcement, it is not appropriate to take any further action. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Associate: Dated: 22 June 2001 Counsel for the Applicant: Mr Frank Parry Solicitor for the Applicant: Cutler Hughes Counsel for the Respondent: Mr Mordy Bromberg Solicitor for the Respondent: Maurice Blackburn Cashman Appearing for the Ms Michelle Gordon District-Registrar: Date of Hearing: 20 June 2001 Date of Judgment: 22 June 2001