Construction Forestry Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd & Ors; Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd & Ors (No 2) [2014] VSCA 298 (21 November 2014)

Last Updated: 21 November 2014

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCR 2014 0072

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION	Applicant
v
GROCON CONSTRUCTORS (VICTORIA) PTY LTD (ABN 98 148 006 624) and OTHERS (according to the Schedule attached) (No 2)	Respondents

- and –

S APCI 2014 0040

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION and OTHERS (according to the Schedule attached)	Appellants
v
GROCON CONSTRUCTORS (VICTORIA) PTY LTD (ABN 98 148 006 624) and OTHERS (according to the Schedule attached) (No 2)	Respondents

- and –

S APCI 2014 0038

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION	Applicant
v
BORAL RESOURCES (VIC) PTY LTD (ACN 004 620 731) and OTHERS (according to the Schedule attached) (No 2)	Respondents

COSTS JUDGMENT

---

JUDGES:	ASHLEY, REDLICH and WEINBERG JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	25 and 28 July 2014
DATE OF JUDGMENT:	21 November 2014
MEDIUM NEUTRAL CITATION:	[2014] VSCA 298
JUDGMENTS APPEALED FROM:	Grocon & Ors v Construction, Forestry, Mining and Energy Union & Ors (No 2) [2014] VSC 134 (Cavanough J) Boral Resources (Vic) Pty Ltd & Ors v CFMEU & Anor [2014] VSC 120 (Digby J)

---

COSTS – Civil contempt – Whether indemnity costs should necessarily be awarded at appellate level – Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15 – Costs to be assessed on standard basis.

COSTS – Criminal contempt – Section 409 of the Criminal Procedure Act 2009, discussed – Whether power to order costs – No costs order made.

---

APPEARANCES:	Counsel	Solicitors
Grocon (S APCR 2014 0072)
For the Applicants	Mr P J Morrissey SC with Ms R Shann and Mr G Boas	Slater & Gordon Limited
For the Respondents	Mr M P McDonald SC with Mr P J Wheelahan	Herbert Smith Freehills
For the Attorney-General	Mr S J Wood QC with Mr E Gisonda and Mr B Jellis	Victorian Government Solicitor
Grocon (S APCI 2014 0040)
For the Appellant	Mr P J Morrissey SC with Ms R Shann and Mr G Boas	Slater & Gordon Limited
For the Respondent	Mr M P McDonald SC with Mr P J Wheelahan	Herbert Smith Freehills
For the Attorney-General	Mr S J Wood QC with Mr E Gisonda and Mr B Jellis	Victorian Government Solicitor
Boral (S APCI 2014 0038)
For the Applicant	Mr P J Morrissey SC with Ms R Shann and Mr G Boas	Slater & Gordon Limited
For the Respondents	Mr S J Wood QC with Mr J L Snaden and Mr D Ternovski	FCB Workplace Lawyers And Consultants
For the Attorney-General	Mr J B Davis with Ms R W Sweet	Victorian Government Solicitor

ASHLEY JA

REDLICH JA

WEINBERG JA:

1 On 24 October 2014, we delivered judgment (‘principal judgment’) in three separate proceedings.

2 In Construction Forestry Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (S APCI 2014 0040) (‘the Grocon Civil Appeal’), an appeal brought in reliance upon s 10 of the Supreme Court Act 1986 and O 64 of ch 1 of the Supreme Court (General Civil Procedure) Rules 2005, we held that the appeal was incompetent.

3 In Construction Forestry Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (S APCR 2014 0072) (‘the Grocon Criminal Appeal’), we granted leave to appeal on one ground, refused leave to appeal on the remaining grounds, and ordered that the appeal itself be dismissed.

4 In Construction Forestry Mining and Energy Union v Boral Resources (Vic) Pty Ltd (S APCI 2014 0038) (‘the Boral Application’), we refused leave to appeal.

5 In each instance, we reserved costs. We gave the parties the opportunity to make written submissions. The parties have now taken that opportunity. In short, Grocon seeks costs in the Grocon civil matter on an indemnity basis, Boral seeks costs in the Boral application, the Attorney-General seeks no costs in the Grocon or the Boral matters, and the CFMEU resists any award of costs against it.

6 As will be apparent from that brief summary, Grocon does not apply for costs in the Grocon Criminal Appeal. It apparently accepts that the mandatory language of s 409 of the Criminal Procedure Act 2009 (‘the Act’) precludes any order for costs in its favour. The section relevantly provides that no costs are to be allowed to a party to an appeal under pt 6.3 of that Act. As we noted at [6] in our principal judgment, the Grocon criminal appeal was a proceeding under pt 6.3.

7 Because of the concession made by Grocon, we have not had the benefit of argument as to the scope of s 409. Nonetheless it appears clear to us that s 409 does deny a successful private respondent its costs of an appeal in the case of a criminal contempt. We should not allow the occasion to pass without noting the absurdity of that situation. On an unsuccessful appeal against a finding of civil contempt arising out of a breach of court orders, there seems no reason why an order for costs should not be made against the contemnor. But contrast the position where the contemnor’s breach of court orders has been contumacious, for which reason the contemnor has been punished for a criminal contempt. It seems clear, despite the absence of argument that s 409 precludes the making of an order for costs on an unsuccessful appeal by the contemnor. Thus the contemnor benefits from its more egregious conduct by escaping an order for costs when the contempt has become a criminal contempt. This absurdity could be addressed by appropriate amendment to the provisions of the Act.

8 So far as the Grocon Civil Appeal is concerned, the matter is more complex. Grocon not only seeks the costs of that proceeding, but submits that those costs should be assessed on an indemnity basis.

9 In support of that submission, Grocon points out that, in his ‘penalty judgment’[1], Cavanough J awarded costs against the CFMEU on an indemnity basis. His Honour explained that he did so, essentially, in accordance with the reasoning of Dixon J in Commissioner of Taxation v Gashi (No 3),[2] where it was said that ‘taxation of costs on an indemnity basis is proper in the circumstances of contempt proceedings’.[3] Cavanough J expressed the view that ‘indemnity costs should generally be ordered in favour of a successful applicant in contempt proceedings’, noting that any fine imposed upon the CFMEU would be payable not to the Grocon plaintiffs but to consolidated revenue.[4]

10 Grocon also submits that it would be appropriate to order costs on an indemnity basis in recognition of its role in seeking to uphold the administration of justice, and, in effect, the rule of law. It argued that we should approach the matter of costs in respect of the Grocon Civil Appeal in the same manner as Cavanough J had done at first instance.

11 The CFMEU submits that it should not be required to pay any of the costs associated with the Grocon Civil Appeal. It argues that the points raised in that proceeding were the same as those sought to be argued in the Grocon Criminal Appeal. The civil appeal had only been filed, as a form of ‘insurance’, because there was some uncertainty as to the basis upon which the judgment below could be brought before this Court. It became apparent, well before the hearing of these proceedings, that the civil appeal was incompetent, and it was made entirely clear that it would not be pursued. The CFMEU submits that, in those circumstances, Grocon should not be permitted to circumvent the operation of s 409 of the Act by being awarded any costs, still less costs on an indemnity basis.

12 In our opinion, there is some force in the CFMEU’s submission regarding this matter. Although we consider that Grocon is entitled to recover its costs thrown away by reason of the institution of the Grocon Civil Appeal, it should only recover such costs as are additional to those that would otherwise have been incurred in responding to the Grocon Criminal Appeal. To permit Grocon to do otherwise would have the effect of defeating what Grocon appears to have conceded was the statutory purpose underlying s 409, namely that proceedings brought under pt 6.3 of the Act should not be the subject of any order as to costs.

13 Moreover, we consider that notwithstanding the fact that costs below were ordered on an indemnity basis, it does not follow that the limited order we make as to costs in the Grocon Civil Appeal should also be awarded on that basis. The appeal itself was conducted in a perfectly proper manner, and raised at least one point of real difficulty. It cannot be said that the CFMEU’s submissions in relation to the one ground upon which we granted leave were unarguable. The fact that indemnity costs are ordinarily awarded in contempt proceedings for breach of court orders, if that is indeed the case, does not mean that the same result will automatically follow at the appellate level.

14 In Hinch v A-G (Vic),[5] which was of course a case involving a conviction for criminal contempt, the High Court had this to say regarding the matter of costs:

The appellants submit that in the exercise of its discretion the Court should not make any order for costs. An analogy is sought to be drawn between the present case and an application for special leave to appeal following a trial on indictment for a criminal offence. In the later kind of case, the established practice of the Court is not to make any order for costs, save where the Crown is an unsuccessful applicant: Reg v Martin.

However, is our view, the analogy which the appellants seek to draw is not apt for present purposes. Notwithstanding that a contempt may be described as a criminal offence, the proceedings do not attract the criminal jurisdiction of the court to which the application is made. On the contrary, they proceed in the civil jurisdiction and attract the rule that ordinarily applies in that jurisdiction, namely, that costs follow the event. There are many instances of the application of this rule to cases of contempt of court in this Court, including Consolidated Press Ltd. v McRae, John Fairfax & Sons Pty Ltd v McRae, James v Robinson and Doyle v The Commonwealth: see also R v Taylor; Ex parte Roach. The distinction between an appeal following a trial on indictment and proceedings for contempt of court has been acknowledged by the Judicial Committee of the Privy Council. In Shamdasani v King-Emperor, Lord Goddard, delivering the decision of their Lordships, said:

Where the Crown appears to uphold a conviction in a criminal case it is not the practice to award costs to the appellant in the event of the appeal succeeding. Although this matter is one which is known as a criminal contempt it obviously is in a different category from an ordinary criminal case.

See also Perera v The King.

In every case, it comes down to a question of discretion. The Court has considered the circumstances of the present case and the submissions advanced for the appellants but sees no reason why the ordinary rule should not apply. The appellants must therefore pay the costs of the respondent in each case.^[6]

15 There are two things to note from this passage. First, unlike the present case, the Hinch matter had been dealt with throughout within the civil jurisdiction of this Court, en route to the High Court. There was no bar to the invocation of the civil appeal process, as there now is through the provisions of the Criminal Procedure Act 2009. There was no equivalent to s 409 of that Act standing in the way of an order for costs both before the Full Court, and, of course, before the High Court. Secondly, there is nothing to suggest that costs awarded on appeal against an unsuccessful contemnor should necessarily be awarded on an indemnity basis, irrespective of what might have been done at first instance.[7]

16 For these reasons, we will order that the CFMEU pay Grocon any costs additionally incurred, beyond those incurred in responding to the Grocon Criminal Appeal, but that those costs be paid on a standard basis.

17 Finally, although the CFMEU submitted it should not be required to pay Boral its costs in respect of the Boral Application (seemingly on the basis that what Boral is seeking is, in effect, a conviction for criminal contempt), we reject that contention. The Boral Application involved a challenge to an order for discovery. That order was made in the ordinary course of what is, still at this stage, in every relevant sense, a civil proceeding — albeit, as we observed at [374]–[375] in our principal judgment, that there can be no doubt that Boral is seeking to have the CFMEU punished for criminal contempt. The Union’s application did not involve pt 6.3 of the Act. Its interlocutory appeal was incapable of falling within div 4 of pt 6.3.

18 Accordingly, we consider it appropriate to order the CFMEU to pay Boral’s costs of and incidental to the Boral Application. Those costs should be assessed on the standard basis.

- - - - -

---

^[1] That being the term we used, in our principal judgment, in distinguishing his Honour’s judgment on liability from that which concerned the appropriate penalty to be imposed for the CFMEU’s criminal contempt.

^[2] [2011] VSC 448.

^[3] Commissioner of Taxation v Gashi (No 3) [2011] VSC 448, [21].

^[4] Grocon and Ors v Construction, Forestry, Mining and Energy Union and Ors [2014] VSC 134, [209].

^[5] [1987] HCA 56; (1987) 164 CLR 15.

^[6] [1987] HCA 56; (1987) 164 CLR 15, 89–90 (citations omitted).

^[7] We note also that subsequently, in other cases involving criminal contempt, where the High Court has ordered costs against the unsuccessful applicant challenging that finding, it appears to have done so on a party and party rather than indemnity basis. See, for example, Re Colina ex parte Torney [1999] HCA 57; (1999) 200 CLR 386.