FEDERAL COURT OF AUSTRALIA

General Manager of the Fair Work Commission v Thomson (No 4)

[2015] FCA 1433

THE COURT ORDERS THAT:

1.    Subject to Order 3 below, each penalty set out in the third column in the table in the Schedule to these orders be imposed on the respondent in respect of the conduct correspondingly set out in the second column in the table engaged in, in contravention of the provision –

    where the conduct occurred between 12 May 2003 and 26 March 2006, of Schedule 1B to the Workplace Relations Act 1996 (Cth);

    where the conduct occurred between 27 March 2006 and 30 June 2009, of Schedule 1 to the Workplace Relations Act 1996 (Cth) –

correspondingly set out in the fourth column in the table.

2.    To the extent that Order 1 relates to a contravention numbered by an Arabic numeral in the first column in the said table, the operation of that order be stayed for 60 days.

3.    To the extent that Order 1 relates to a contravention numbered by a Roman numeral in the first column in the said table, the operation of that order be stayed for 74 days.

4.    Upon the payment, within 74 days, of the penalty for a contravention numbered by an Arabic numeral in the first column in the said table, the operation of Order 1 be permanently stayed to the extent that it relates to the contravention or contraventions numbered by the Roman numeral or numerals of the same value in that column.

5.    Within 74 days, the respondent pay to the Health Services Union:

(a)    compensation in the sum of $231,243.42; and

(b)    pre-judgment interest in the sum of $146,937.16.

Schedule

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 11 September 2015, I made findings in this proceeding under ss 285, 286 and 287 of the “Registration and Accountability of Organisations” schedule (“the schedule”) to the Workplace Relations Act 1996 (Cth). I then reserved for further consideration the questions of the penalties, if any, that should be imposed, and the compensation, if any, that should be paid, in consequence of those findings. I have since received submissions from the applicant, the respondent and the Health Services Union (“the HSU”) on those questions. The reasons which follow answer those questions, and the orders made today are based on those reasons.

2    With respect to penalties, the starting point is s 306(1) of the schedule (now the Fair Work (Registered Organisations) Act 2009 (Cth)), which reads:

… [I]n respect of conduct in contravention of a civil penalty provision, the Federal Court may make an order imposing on the person or organisation whose conduct contravened the civil penalty provision a pecuniary penalty of not more than:

(a)    in the case of a body corporate—300 penalty units; or

(b)    in any other case—60 penalty units.

At the time of the respondent’s contraventions of ss 285, 286 and 287, the maximum penalty that might be imposed on an individual under s 306(1)(b) was 20 penalty units. However, by item 8 of Sch 1 to the Fair Work (Registered Organisations) Amendment Act 2012 (Cth), that was amended to 60 penalty units and, by item 10 thereof, that amendment applied to orders made on or after the commencement of that item. The result is – and this is common ground – that the maximum penalty for each contravention found by the court on 11 September 2015 is $6,600.

3    Presently, I shall address the respondent’s contraventions of ss 285, 286 and 287 of the schedule individually, or in groups, and conclude by giving consideration to the totality principle. I commence, however, with some matters of general application.

4    It has been repeatedly held that an important purpose of the imposition of a civil penalty upon a person for a breach of a statutory norm of conduct is deterrence. It has, for example, recently been stated by French CJ, Kiefel, Bell, Nettle and Gordon JJ in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (“Fair Work Building”) at [55] that “the purpose of a civil penalty … is primarily if not wholly protective in promoting the public interest in compliance”. Their Honours endorsed what had been said by French J in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152:

The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.

Laws are enacted to be observed, that is to say, to cause those in the relevant area of human activity to modify what would, or might, otherwise be their behaviour to bring it into line with community norms. What is referred to as general deterrence is the means by which the imposition of penalties in one case is assumed likely to have a salutary impact upon the behaviour of others. The point is that those others, noting how the instant contravenor has been dealt with, should be strongly disinclined to follow his or her bad example. The community’s establishment of norms of conduct will, if a penalty has this deterrent effect, be the more effective.

5    The significance of general deterrence is, if anything, somewhat magnified in the circumstances of the present case, for two reasons. First, the respondent’s position was a very senior one in a national union. Subordinate officials, and members, of the HSU would inevitably have regarded him as an example to be followed, most particularly in the areas of honesty and loyalty to the organisation which he served. Secondly, as stressed in my reasons of 11 September 2015, the respondent worked in an environment where he was subject to little or no supervision, nor even surveillance, by other officers of the HSU. These considerations reflect on the inherent gravity of his contraventions, of course, but they also add relevance to the matter of general deterrence: how the court is prepared to deal with a contravenor in the position of the respondent should, in the perception of others in like positions, be the subject of no ambiguity.

6    The respondent is no longer in a position to which the obligations under ss 285, 286 and 287 would have relevance. In the circumstances, the applicant accepted that there was no occasion to assign weight to the matter of specific deterrence, and I do not do so.

7    There is no suggestion that the respondent has previously contravened the provisions of the schedule upon which the applicant relied. But the impact of this consideration, which might of itself be regarded as mitigatory, is muted in the present case because of two factors. First, the fact that the respondent has come before the court once only is largely the result of the circumstance that, of their nature, the acts and omissions which led to the court’s findings of contraventions involved concealments on his part. He has left it to others to investigate his conduct and to join the necessary dots. The acts and omissions were many, and occurred over a number of years. Any one or more of them could not, therefore, be regarded as isolated, and it would be unrealistic to treat the respondent’s record as clear of any relevant blemishes simply because, as things have turned out, all of these acts and omissions have become the subject of a single proceeding. Secondly, the respondent has shown no contrition, nor even, at this late stage, any appreciation of the seriousness of the matters found against him. The denials contained in his Defence have never been withdrawn or qualified. Quite clearly, there is no basis for treating him compassionately on the ground that he has learned his lesson.

8    As will be apparent, there were many contraventions of ss 285, 286 and 287 of the schedule in the facts leading to this proceeding. This gives rise to issues of two kinds. The first relates to a situation in which contraventions of more than one of these provisions arose out of the one episode or course of conduct. It was accepted, indeed submitted, by the applicant that it would be neither just nor appropriate for the respondent to be required to pay more than one penalty in those circumstances. On the other hand, she submitted that a principled approach to the imposition of penalties in such a situation would be one which involved the imposition of the appropriate penalty for each contravention. I was told that, although there have been different approaches to this issue taken by courts over the years, there has never been an authoritative ruling that any single approach is the correct one.

9    One approach, it seems, has been to impose a penalty in respect of what may appear to be the most serious contravention, and to impose no penalty, or a much reduced penalty, in respect of other contraventions. There is a view, which attracted itself to the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331, 350-351 [42] by analogy with the sentencing principles laid out in Pearce v The Queen (1998) 194 CLR 610, 623-624 [45], that this approach would involve the court turning its back on its statutory obligation to follow a finding of contravention with the determination of what was an appropriate penalty for that contravention, considered as an entity in its own right (save in a situation where the contravenor would thereby be “doubly punished … for a single act”: Pearce at 624 [49]). I recognise, of course, that, after Fair Work Building, the judgment of the Full Court is no longer binding on the court as presently constituted, but the concern to which their Honours adverted remains.

10    Another approach which is occasionally seen has been to impose a single penalty in respect of a duality, or multiplicity, of contraventions. That appears to have been the approach taken by the magistrate in the proceeding from which the appeal which led to the judgment of the Full Court in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 was brought. Although their Honours held that proper effect had not been given to the totality principle in that case, they did not, it seems, interfere with the omnibus approach to the determination of penalties which had been taken by the magistrate. In my respectful view, the difficulty with such an approach is that, by taking it, the court would be failing to engage directly and specifically with the consequences of the contravention of each statutory norm.

11    A third approach, which I do not believe has hitherto been taken but which would avoid the conceptual issues to which I have referred, is suggested by the analogy of concurrent sentences. Under this approach, a penalty would be imposed in respect of each contravention considered as an entity in its own right, then a further order would be made that, upon payment of one of the penalties in each group within a time limited by the court, the operation of the order imposing penalties in respect of the other contraventions in the same group be permanently stayed. That is the approach which I propose to take in the present case.

12    The second issue relates to the application of the totality principle. I mention it here only for the purpose of making clear that it is a separate matter from that with which I have just dealt. I shall turn to it towards the end of these reasons.

13    The respondent’s asset position is not the subject of evidence before the court. In a short affidavit affirmed on 10 November 2015, the respondent said that he had no job and no money. While the determinations referred to below are made against that background, I do not consider that the respondent’s general financial circumstances are sufficiently disclosed by the evidence to require them to be taken into account one way or the other.

14    Turning to the contraventions as such, I commence with those referred to in paras 23-28, 29-34, 35-39, 49-55 and 56-61 of my reasons of 11 September 2015. In each case, there was a contravention of ss 286(1) and 287(1) of the schedule. Although there is a commonality of context and culpability in these five pairs of contraventions, they occurred on widely separated occasions and arose from five distinct, wilful, activities on the part of the respondent. There were, therefore, five separate instances of contravening conduct. The five could not, on any view, be treated as but a single, ongoing, instance of culpable conduct.

15    It was accepted by the respondent (who was professionally represented on this occasion) that the conduct involved in these contraventions could not be justified, excused or rationalised. There was no basis upon which even the respondent himself might have portrayed this conduct as being in the interests of the HSU or its members.

16    I consider that each contravention of s 287(1) should attract a penalty of $4,800 and that each contravention of s 286(1) should attract a penalty of $4,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under s 286(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalties, the operation of the order to the extent that it relates to the penalties under s 286(1) be permanently stayed.

17    I consider next the contraventions referred to in paras 40-47 of my reasons of 11 September 2015. As there found, there was a single contravention of each of ss 286(1) and 287(1) of the schedule. It was submitted on behalf of the respondent that the findings then made did not positively exclude the prospect that the respondent might have used his travel to Sydney and the Central Coast to undertake some work for the HSU, albeit that no such work was apparent in the evidence before the court. For that reason, the respondent’s conduct was not to be viewed as so egregiously to his own advantage as the conduct involved in the first five groups of contraventions to which I have referred. I reject that submission. If there were some dimension of the respondent’s activities which required him to be where he was, and to be spending the funds that he did, over the period 16-19 September 2005, the time for him to have led the necessary evidence was during the trial of this proceeding. The court’s findings having been made, the penalties now to be imposed must be referrable to those findings, unembellished by unproven speculations about other facts or circumstances.

18    I consider that this contravention of s 287(1) should attract a penalty of $4,800 and that the contravention of s 286(1) should attract a penalty of $4,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalty under s 286(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalty under s 286(1) be permanently stayed.

19    I consider next the contraventions referred to in paras 62-84 of my reasons of 11 September 2015. For the respondent, it was pointed out that I stopped short of finding that none of Ms Stevens’ time or work had been properly devoted to her duties to her employer, the HSU. That is true, but, for reasons which I gave in paras 74-78 of my reasons, there were contraventions of the provisions on which the applicant relied nonetheless. I need not repeat what I then said.

20    There is a sense in which the conduct involved in these contraventions might be viewed as less conspicuously self-indulgent than other conduct in which the respondent has been found to have engaged. But, overall, I do not regard these contraventions as any less serious than those others. Although, following the way the applicant’s case was presented, I found that there had been a single contravention of each of ss 285(1), 286(1) and 287(1) of the schedule, each such contravention involved conduct which, to varying degrees as time progressed, was engaged in over a period of about two years. The respondent’s conduct in this area involved no momentary lapse in judgment: rather, it involved a consistent, focussed and, one would have to say, businesslike diversion of the services of an employee of the HSU to activities which were to the advantage of the respondent. There is no way in which this conduct could be dressed up to present a persuasive case for leniency.

21    I consider that this contravention of s 287(1) should attract a penalty of $5,500, that the contravention of s 286(1) should attract a penalty of $5,000 and that the contravention of s 285(1) should attract a penalty of $3,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

22    I consider next the contraventions referred to in paras 85-88 of my reasons of 11 September 2015. Those contraventions fall into two groups: those which relate to the period of Mr Burke’s employment by the HSU (including the commencing period before he was put on the payroll), and those, mentioned in para 88, which relate to the later period when, although no longer employed by the HSU, he was supplied with, and used, the Diners Club card. In relation to the first group of contraventions, I can perceive no useful point of difference between Mr Burke’s situation and Ms Stevens’, with which I have dealt above, and I shall impose the same penalties. In relation to the second group of contraventions, I shall impose slightly lower penalties than I would otherwise have imposed in recognition of the connection between the two groups.

23    In relation to what I have described as the first group of contraventions, I consider that the contravention of s 287(1) should attract a penalty of $5,500, that the contravention of s 286(1) should attract a penalty of $5,000 and that the contravention of s 285(1) should attract a penalty of $3,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

24    In relation to the second group of contraventions, I consider that the contravention of s 287(1) should attract a penalty of $5,000, that the contravention of s 286(1) should attract a penalty of $4,500 and that the contravention of s 285(1) should attract a penalty of $2,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

25    I consider next the contraventions referred to in paras 89-99 of my reasons of 11 September 2015. As I explained, the contraventions relate to the respondent’s use of the HSU’s funds to meet the expenses of Coastal Voice. Taking into account the relatively modest amount of the expenditure involved – a total of slightly less than $3,750 – I consider that the contravention of s 287(1) should attract a penalty of $2,500, that the contravention of s 286(1) should attract a penalty of $2,000 and that the contravention of s 285(1) should attract a penalty of $1,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

26    I consider next the contraventions referred to in paras 101-103 of my reasons of 11 September 2015. Although the contraventions occurred on two occasions about five months apart, they could, in the submission of the applicant, be treated as the one instance of contravening conduct. That reflected the approach which I took in para 103 of my reasons, and I shall proceed likewise here. The sum involved was $3,500. I consider that the contravention of s 287(1) should attract a penalty of $2,500, that the contravention of s 286(1) should attract a penalty of $2,000 and that the contravention of s 285(1) should attract a penalty of $1,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

27    I consider next the contraventions referred to in paras 104-106 of my reasons of 11 September 2015. Although the sum involved here was, according to the applicant’s arithmetic, only $4,103, the activities constituting the contraventions as found were systematic and businesslike, and occurred more or less consistently over a period of about seven months. The respondent was, in effect, running his own electoral enterprise at the expense of the HSU. As I implied in para 105 of my reasons, by no process of rationalisation could any justification be found for conduct of this character. In this part of the case, I consider that the contravention of s 287(1) should attract a penalty of $4,000, that the contravention of s 286(1) should attract a penalty of $3,500 and that the contravention of s 285(1) should attract a penalty of $3,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

28    I consider next the contraventions referred to in paras 107-109 of my reasons of 11 September 2015. This expenditure fell into the same category as that referred to in the previous paragraph, but the sum involved was only about $1278 and, in recognition of the common context which these contraventions shared with the matters there referred to, I consider that somewhat lower penalties would here be appropriate. The contravention of s 287(1) should attract a penalty of $3,000, the contravention of s 286(1) should attract a penalty of $2,500 and the contravention of s 285(1) should attract a penalty of $2,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

29    I consider next the contraventions referred to in paras 110-113 of my reasons of 11 September 2015. This expenditure fell into the same category as that referred to in the previous two paragraphs, the sum involved here being a little more than $7,250. Taking that into account, and recognising the common context which these contraventions shared with the matters referred to in those paragraphs, I consider that the contravention of s 287(1) should attract a penalty of $3,250, that the contravention of s 286(1) should attract a penalty of $2,750 and that the contravention of s 285(1) should attract a penalty of $2,250. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

30    I consider next the contraventions referred to in paras 114-118 of my reasons of 11 September 2015. As mentioned in para 114, the amount involved was $12,511.40. Taking that into account, and recognising the common context which these contraventions shared with the matters referred to in the three previous paragraphs, I consider that the contravention of s 287(1) should attract a penalty of $3,500, that the contravention of s 286(1) should attract a penalty of $3,000 and that the contravention of s 285(1) should attract a penalty of $2,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

31    I consider next the contraventions referred to in paras 119-121 of my reasons of 11 September 2015. As mentioned in para 119, the amount involved was $18,733. Taking that into account, and recognising the common context which these contraventions shared with the matters referred to in the four previous paragraphs, I consider that the contravention of s 287(1) should attract a penalty of $3,500, that the contravention of s 286(1) should attract a penalty of $3,000 and that the contravention of s 285(1) should attract a penalty of $2,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

32    I consider next the contraventions referred to in paras 122-123 of my reasons of 11 September 2015. As mentioned in para 122, the amount involved was $10,763. Taking that into account, and recognising the common context which these contraventions shared with the matters referred to in the five previous paragraphs, I consider that the contravention of s 287(1) should attract a penalty of $3,500, that the contravention of s 286(1) should attract a penalty of $3,000 and that the contravention of s 285(1) should attract a penalty of $2,500. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

33    I consider next the contravention referred to in paras 124-128 of my reasons of 11 September 2015. According to the applicant’s arithmetic, the total cost to the HSU of the respondent’s contract with Central Coast Rugby League, before GST, was $96,721.12. That circumstance, and the considerations to which I referred in para 127, including the fact that it is not known whether the HSU actually derived any benefit from the contract, and if so of what order, lead to the conclusion that this contravention of s 285(1) should attract a penalty of $3,500.

34    I consider next the contravention referred to in paras 129-130 of my reasons of 11 September 2015. On any view, this contravention is not as serious as most of the others with which I have dealt and would warrant, in my view, the imposition of a penalty of $750.

35    I consider next the contraventions referred to in paras 131-135 of my reasons of 11 September 2015. As I implied in those reasons, there is a view that this was a worthy cause in which the respondent involved the HSU, albeit that it involved a conflict of interest on his part. But the sum involved was not insubstantial. I consider that the contravention of s 287(1) should attract a penalty of $1,250, that the contravention of s 286(1) should attract a penalty of $1,000 and that the contravention of s 285(1) should attract a penalty of $750. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

36    I consider next the contraventions referred to in paras 136-137 of my reasons of 11 September 2015. In principle, I can see no convincing reason to treat these contraventions differently from those referred to in paras 101-103 of my reasons. As there, in this instance too I consider that the contravention of s 287(1) should attract a penalty of $2,500, that the contravention of s 286(1) should attract a penalty of $2,000 and that the contravention of s 285(1) should attract a penalty of $1,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

37    I consider next the contraventions referred to in paras 138-139 of my reasons of 11 September 2015. In the view I take, the only point of distinction between these contraventions and those referred to in paras 131-135 of my reasons is that here the amount involved was $10,000 (in total) rather than $5,000. Taking that into account, I consider that the contravention of s 287(1) should attract a penalty of $1,500, that the contravention of s 286(1) should attract a penalty of $1,250 and that the contravention of s 285(1) should attract a penalty of $1,000. I shall stay the operation of the relevant order for a period of 60 days, stay the operation of that order to the extent that it relates to the penalties under ss 286(1) and 285(1) for a further period of 14 days, and order that, upon the payment, within that total 74-day period, of the s 287(1) penalty, the operation of the order to the extent that it relates to the penalties under ss 286(1) and 285(1) be permanently stayed.

38    The question now arises whether imposition of the penalties at which I have arrived would offend the totality principle in the sense that they would be disproportionately punitive having regard to the relationships between the various instances of contravening conduct for which those penalties are to be imposed. As I see it, there are two matters which need to be considered in this compartment of the case. The first is whether the total of the penalties imposed in respect of separate contraventions, as between which there is some relation in the way of context, purpose or the like, is disproportionate to the seriousness of the conduct involved in those contraventions, considered as a whole. The second is whether the penalties imposed on the respondent in this proceeding would involve the imposition of a crushing burden on the respondent out of all proportion to his overall culpability.

39    Taking the approach that the respondent will, responsively to the way I propose to structure the orders to be made herein, pay only one penalty in respect of each instance, or course, of conduct, I commence with the total penalties to be imposed on the respondent in respect of his use of HSU funds to pay for the services of escorts and the like. They would amount, in total, to $24,000. The respondent’s use of HSU funds to pay for his weekend on the Central Coast is, in the way I have treated it, a stand-alone contravention, for which the penalty would be $4,800. The contraventions which relate to the services, and the outgoings, of Ms Stevens and Mr Burke would attract total effective penalties of $16,000. The Coastal Voice issues have been treated as a stand-alone contravention, for which the penalty would be $2,500. The respondent’s use of HSU funds to meet the expenses of his election campaign, the subject of paras 27-32 above, would attract effective penalties, in total, of $23,250. The Rugby League contract has been treated as involving a stand-alone contravention, for which the penalty would be $3,500. The various donations dealt with towards the end of my reasons above would attract effective penalties, in total, of $6,000. In every instance, these penalties are, in my assessment, consistent with the totality principle, and require no further adjustment.

40    As to the second matter referred to in para 38 above, the overall result of the imposition of the penalties referred to above would be that, assuming that he paid them in a timely way, the respondent would be required to pay effective penalties amounting, in total, to $80,050. That would not, in my view, give rise to a financial obligation on the respondent out of all proportion to his overall culpability.

41    I propose to impose the penalties referred to above in these reasons.

42    With respect to the terms of the order to be made by the court in consequence of my reasons of 11 September 2015, and of these reasons, the approach which the applicant pressed upon me would involve the court making a declaration with respect to each contravention of the schedule found to have been committed by the respondent, and then imposing a penalty for each such contravention as so declared. While I recognise that the making of declarations in situations such as that with which I am confronted is now to be regarded as regular, and has become commonplace, it has yet to become mandatory (cf s 1317E of the Corporations Act 2001 (Cth)). The content of the respondent’s contraventions will be explicitly laid out in the penal orders which I propose to make. Having taken that step, I can see no utility in granting, additionally, the declaratory relief which the applicant seeks.

43    The applicant applied for an order that the respondent be required to pay compensation to the HSU, pursuant to s 307 of the schedule, for its losses referred to in the following paragraphs of my reasons of 11 September 2015:

    Paras 24-25: $2,475.00

    Paras 32-33: $770.00

    Paras 37-38: $418.00

    Paras 44-45: $3,575.67

    Paras 53-54: $660.00

    Paras 59-60: $770.00

    Paras 62-84: $145,684.12

    Paras 85-86: $29,551.23

    Para 88: $10,120.37

    Paras 92-93: $3,747.85

    Para 101: $3,500.00

    Para 104: $4,103.00

    Para 107: $1,277.96

    Para 110: $7,253.17

    Paras 114-116: $12,511.40

    Para 119: $18,733.00

    Para 122: $10,763.00

    Para 136: $2,050.00

A total of $257,963.77.

44    Having regard to the observations which I made in para 59 of my reasons, I am not satisfied that it would be just to require the respondent to compensate the HSU for the full outlay of $770 which appeared on the credit card in respect of the transaction or transactions on 16 August 2007. I shall allow $385 only for that item.

45    The figure of $145,684.12 related to the whole of the cost of employing Ms Stevens and to the whole of the outlays which she made using her Diners’ Club card. I am not satisfied that the HSU is entitled to be compensated to this extent. I did not find that the whole of her time was occupied on non-HSU work, and presumably her credit card outlays included some that were legitimately referable to the HSU. As a fiduciary, it was, of course, for the respondent to account to the HSU for the extent to which Ms Stevens’ services were deployed on non-HSU work, and her outlays were for purposes outside the scope of her employment. He has not done so, but, technically, this is not a proceeding by which a fiduciary is required to account. The question is how much the respondent should be required to pay the HSU to compensate it for the contraventions I have found in relation to Ms Stevens. Beyond that, all I can say is that, since the respondent himself has chosen not to assist the court in the matter of apportionment, I should be careful not to err in his favour.

46    From all of the evidence I have on the subject, I would estimate that, over the whole of the period of her employment by the HSU, including the period after the respondent became the endorsed ALP candidate for Dobell, Ms Stevens was occupied on non-HSU work for about 85% of her time. I would also use that figure as a rule of thumb to allocate, as between the respondent and the HSU, the outlays which Ms Stevens made using her Diners’ Club card. It follows that I would require the respondent to compensate the HSU to the extent of $123,800 in place of the figure of $145,684.12 proposed by the applicant.

47    The figure of $29,551.23 related to the whole of the cost of employing Mr Burke. On the limited evidence, the best I can do to apportion this as between the respondent himself and the HSU is to use the 85% estimate which I used in the case of Ms Stevens. Accordingly, in place of that figure, I shall use the figure of $25,100 in my calculation of the compensation payable to the HSU. The figure of $10,120.37 represents the outlays for which Mr Burke paid on his credit card after he left the employ of the HSU. On no view should the HSU be required to carry the burden of these outlays.

48    Otherwise, the compensation figures proposed by the applicant admit of no debate.

49    In the result, the amount of compensation which I propose to order under s 307 of the schedule will be $231,243.42, before interest.

50    With respect to interest, the applicant presented a table of calculations of interest under s 51A of the Federal Court of Australia Act 1976 (Cth) from which counsel for the respondent, at least as a matter of arithmetic, did not demur. The applicant’s workings require some recalculation to accommodate the circumstance that I have reduced the sum which the respondent will be required to pay in the way of compensation. In the result, the orders I make will include pre-judgment interest in the sum of $146,937.16.

51    The applicant also sought an order requiring the respondent to pay post-judgment interest to the HSU under s 52 of the Federal Court Act 1976 (Cth). I do not, however, consider that that section requires the court to make an order. It operates of its own force.

Associate:

Dated:    15 December 2015