FEDERAL COURT OF AUSTRALIA

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59

THE COURT ORDERS THAT:

1.    the matter be adjourned until a date to be fixed;

2.    costs be reserved; and

3.    the parties have liberty to apply.

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

REASONS FOR JUDGMENT

THE COURT

INTRODUCTION

1    In these proceedings the applicant (the “Director”) alleges that the first and second respondents (respectively, “CFMEU” and “CEPU”) contravened the Building and Construction Industry Improvement Act 2005 (Cth) (the “BCII Act”) and seeks pecuniary penalties and associated declaratory relief against them. It is accepted that the Director is entitled to seek such relief. The Commonwealth of Australia was granted leave to intervene and was heard in relation to issues arising out of the decision of the High Court in Barbaro v The Queen (2014) 305 ALR 323. The Director, CFMEU and CEPU supported the Commonwealth’s submissions. Counsel were also instructed to appear to contradict the Commonwealth’s position. We will refer to the notional party represented by them as the “Contradictor”. The Court has derived considerable benefit from their submissions.

the primary issue

2    The primary issue addressed in these reasons is a practice which has become common in proceedings for the imposition of a pecuniary penalty. Frequently, submissions are made by the parties, often jointly, nominating the actual figure to be adopted, or the range within which it should fall. In some cases, the parties urge adoption of an agreed figure. In Barbaro the majority of the High Court (French CJ, Hayne, Kiefel and Bell JJ) held at [39] that in criminal sentencing proceedings, the prosecution should not nominate the specific sentencing result or the range within which it should fall. Their Honours’ reasons included considerations related to the proper role of the judge in the sentencing process, including the difficulties inherent in balancing a wide range of considerations, public perceptions and the proper content of submissions.

3    In this case, the parties have agreed upon the penalties which, they consider, should be imposed. In these reasons we consider whether the decision in Barbaro should be applied in this case. Resolution of that question will determine the relevance of the parties’ agreement to the task of fixing the amounts of the penalties. For the reasons which appear below, we have concluded that the reasoning in Barbaro applies to these proceedings, and that we should therefore have no regard to the agreed figures in fixing the amounts of the penalties to be imposed, other than to the extent that the agreement demonstrates a degree of remorse and/or cooperation on the part of each respondent. Our reasons focus upon the similarity between the “instinctive synthesis” necessarily involved in both the sentencing task and the task with which we are faced, the fact that each process involves invocation of the coercive power of the State, the associated public interest and public perceptions as to the judicial process.

THE STATEMENT OF AGREED FACTS

4    The Director and the respondents have filed a document headed “Statement of Agreed Facts” (the “agreed statement”). It is said to have been made for the purpose of disposing of these proceedings and for the purposes of s 191 of the Evidence Act 1995 (Cth). In particular it:

    identifies the parties to these proceedings;

    identifies persons who, at relevant times, and in various capacities, acted as officers or agents of either CFMEU or CEPU;

    identifies four relevant enterprise agreements for the purposes of s 4 of the BCII Act, namely:

•    the “Abigroup Agreement”;

•    the “Building North Agreement”;

•    the “Expanded Agreement”; and

•    the “Watpac Agreement”;

    identifies the relevant employer for each of those enterprise agreements as follows, and respectively:

•    Abigroup Contractors Pty Ltd (“Abigroup”);

•    Laing O’Rourke Australia Construction Pty Ltd (“Laing O’Rourke”); and

•    Watpac Construction (Qld) Pty Ltd (“Watpac”);

    sets out the circumstances of admitted breaches of the BCII Act at each of three development project sites in Brisbane, namely:

•    the Queensland Children’s Hospital project site (the “QCH project site”);

•    the Brisbane Convention and Exhibition Centre project site (the “BCEC project site”); and

•    the Queensland Institute of Medical Research project site (the “QIMR project site”);

    states that in respect of those projects sites, Abigroup was the principal contractor for the QCH project site; Laing O’Rourke was the principal contractor for the BCEC project site; and Watpac was the principal contractor for the QIMR project site;

    states that on each project site the relevant principal contractor and named sub-contractors were engaged in “building work” as defined in the BCII Act, and employed employees to perform such work, the principal contractors, the sub-contractors and such employees being “building industry participants” as defined in s 4 of the BCII Act;

    states that on 24, 25 and 26 May 2011, employees of each employer engaged in unlawful industrial action (as defined in the BCII Act) at each of the QCH, QIMR and BCEC project sites;

    states that named officers or agents of CFMEU engaged in unlawful industrial action in contravention of s 38 of the BCII Act in that each was knowingly concerned in, or party to unlawful industrial action by employees;

    states that as a result CFMEU contravened s 38 of the BCII Act;

    states that named officers or agents of CEPU engaged in unlawful industrial action in contravention of s 38 of the BCII Act in that each was knowingly concerned in, or party to unlawful industrial action by employees; and

    states that as a result, CEPU contravened s 38 of the BCII Act.

5    Whilst the agreed statement alleges “unlawful industrial action” by employees at the QCH and BCEC project sites on 24 – 26 May 2011, para 102 alleges that employees at the QIMR project site failed to perform scheduled work on only 25 – 26 May 2011. However, at paras 96 – 100, the agreed statement alleges that employees stopped work at the QIMR project site on 24, 25 and 26 May 2011. No point was taken concerning this apparent discrepancy. Given the way in which the parties have conducted the case, it may not matter.

6    At paras 114 – 116, under the heading “Agreed declarations and penalties”, the agreed statement asserts:

114.    The Parties consent to and agree to seek from the Court declarations that:

(a)    … (CFMEU) contravened, by operation of section 69(1)(b) of the BCII Act, section 38 of the BCII Act with respect to the Industrial Action on the QCH, BCEC and QIMR Projects on 24 to 26 May 2011; and

(b)    … (CEPU) contravened, by operation of section 69(1)(b) of the BCII Act, section 38 of the BCII Act with respect to the Industrial Action on the QCH and QIMR Projects on 24 to 26 May 2011.

115.    Pursuant to section 49(1)(a) of the BCII Act and the admissions made in [the agreed statement], the Parties consent to and agree to seek from the Court:

(a)    Orders pursuant to section 49(1)(a) of the BCII Act that … (CFMEU) pay a sum of $105,000 by way of pecuniary penalty in respect of the contraventions of section 38 of the BCII Act; and

(b)    Orders pursuant to section 49(1)(a) of the BCII Act that … (CEPU) pay a sum of $45,000 by way of pecuniary penalty in respect of the contraventions of section 38 of the BCII Act.

116.    The parties have agreed that, subject to the discretion of the Court to fix an appropriate penalty:

(a)    The penalty amounts set out above, are satisfactory, appropriate and within the permissible range in all the circumstances; and

(b)    The penalties payable by the Respondents be paid to the Commonwealth pursuant to section 49(5) of the BCII Act.

7    The agreed statement was signed by the solicitors for the parties and dated 29 November 2013. However these proceedings were commenced on 23 May 2013. Hence the relief claimed (including the agreed pecuniary penalties) reflects (or perhaps anticipates) the relief agreed to in the agreed statement. The agreed statement is attached to these reasons.

FIRST INSTANCE PROCEEDINGS IN THE FULL COURT

8    On 10 April 2014 the Chief Justice directed, pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth) (the “Federal Court Act”) that in connection with this application, the original jurisdiction of the Court should be exercised by a Full Court. Such a direction may be given if the Chief Justice considers that the matter is “of sufficient importance” to justify such a direction. Since the publication of the High Court’s decision in Barbaro on 12 February 2014, there has been considerable debate within this Court, and more generally, as to the effect of that decision upon established sentencing practices in criminal matters, and upon the approach taken in this Court to the fixing of pecuniary penalties. Such debate no doubt led to the Chief Justice’s direction. Hence, in these reasons we will initially deal with that question. We will then consider the appropriate relief in this case.

9    We propose to address a number of discrete topics before considering the relevant submissions concerning the decision in Barbaro. Those areas are:

    the history and nature of pecuniary (or civil) penalties;

    pecuniary penalties under the BCII Act;

    the practice allegedly adopted in this Court in fixing pecuniary penalties on the application of a statutory regulator;

    purposes of punishment;

    the role of a prosecutor and/or other prosecuting authority, and the similarities and differences between such role and that of a statutory regulator seeking a pecuniary penalty;

    the effect of the decision in Barbaro;

    cases in which the decision in Barbaro has been considered; and

    evidence from regulators.

THE HISTORY AND NATURE OF PECUNIARY PENALTIES

10    There is a helpful outline of the history of pecuniary penalties in the summary of the Solicitor-General’s submissions in Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 351 – 353. Much of that history is derived from an article by J Randy Beck, published in vol 78 of the North Carolina Law Review at 539, especially at 567. In summary, Beck identifies the use of proceedings for the imposition of pecuniary penalties as an instrument of law enforcement at times when there was limited governmental capacity to provide such enforcement. In effect, private persons were induced to seek the imposition of pecuniary penalties for breaches, in the expectation that they would share in the penalties imposed. Beck identifies examples of such use in Roman and Anglo-Saxon law, and more frequent use in England after the Norman Conquest. Abuses appeared at an early stage. However the practice continued in England until relatively recently.

11    Chapter 4 of the New Zealand Law Commission report entitled Pecuniary Penalties: Guidance for Legislative Design (NZLC R133, 2014), dated August 2014, offers the following helpful summary of the features of pecuniary penalties:

4.11    Pecuniary penalties are sought by the State against its citizens, acting in and on behalf of the public interest (rather than as a litigant in its own interests). In investigating conduct that can result in a pecuniary penalty, State enforcement bodies are armed with intrusive investigative powers to identify and establish breach. For the enforcement bodies in question, those powers are the same as, or may in some ways be more profound than, the powers they use in criminal investigations.

4.12    This has a number of implications for how pecuniary penalties ought to be imposed. In particular, their design needs to give appropriate recognition to the potential imbalance between the parties concerned. In some circumstances, that imbalance will be less acute than others – for example because of the resources that well-funded defendants may have at their disposal. However, while many pecuniary penalty provisions have been designed with large corporate offenders in mind, they can also be imposed on individuals, sole traders, and small- and medium-sized enterprises.

4.13    It is the Commission’s view that procedural protections should not be designed with the best-armed and most capable defendant in mind. Rather, they should protect the potentially vulnerable. As we emphasise repeatedly in this Report, however, this does not mean that the relaxation of procedural protections would never be warranted depending on the particular needs of some regimes.

4.14    For immediate purposes, this feature of pecuniary penalties means that describing them as “civil” is inapt. Adoption of that term has been driven by the fact that the New Zealand court system exhibits a fundamental dichotomy between civil and criminal proceedings. Any matter that is not pursued in criminal proceedings is liable to be branded, by process of elimination, as “civil” within that dichotomy. In reality, the term “civil” relates to matters concerning citizens, and “civil law” is the branch of law that deals with the resolution of legal issues between private parties. Pecuniary penalties do not arise in this context: like criminal offences, they arise within the field of public law, which concerns the relationship between the State and its citizens. Therefore, application of the term “civil” is liable to mislead. In its submission, Bell Gully expressed concern that the use of that label risks encouraging the unthinking application of civil rules, and a perception that pecuniary penalties are an easy way to punish and deter, while neatly sidestepping the rules and protections of the criminal law. We agree that is a risk.

At paras 4.16 – 4.18 the report continues:

4.16    Pecuniary penalties are one of a number of orders on the statute book designed to tackle illegal conduct. Others include: criminal penalties; infringement offences; administrative penalties; compensation orders; management bans; injunctions or cease and desist orders; orders for the disposal of property; the seizure of forfeited goods; and other orders that can follow criminal charges, such as diversion, reparation, and orders that seek to remove the proceeds of criminal offending or strip any financial gain. Those orders serve different purposes and place varying emphasis on the interests of denunciation, deterrence, protection of the public, rehabilitation, reparation of harm, stripping of profit and encouragement of compliance with the law. They have a varying impact on a person’s freedom, solvency, business and property interests, reputation, and employment opportunities. Any policy decision to introduce one or more of these orders into legislation must be taken in light of the purpose they serve, and their design must take account of their varying impacts.

4.17    Pecuniary penalties are primarily concerned with deterring illegal conduct. In general, it can be said that they differ from many criminal offences in this respect because, while the criminal law aims to deter, its greatest emphasis is generally on denunciation. However, this does not mean that pecuniary penalties have no denunciatory impact or purpose. Pecuniary penalties deter by the threat of punishment. They single out a person or entity as having breached the law and inflict a negative consequence. Their purpose is also therefore both deterrent and denunciatory.

4.18    Although they may be used in concert with other measures – for example, compensation orders and management bans – their impact is punitive. The vast majority of penalties play no role in providing compensation for victims or repairing harm. While many have the impact of stripping financial gain, that is not the measure of the penalty. It is clear from policy documentation, legislation and case law that the actual penalty imposed should exceed mere profit-stripping. Pecuniary penalties must also be distinguished from compensatory and profit-stripping measures because they can be imposed whether or not harm has been caused, and whether or not profit has been made as a result of the law-breaking activity. Mere breach is enough.

(Footnote references have been omitted.)

12    The decision in Barbaro concerned criminal proceedings. For present purposes, the question is whether that decision should be applied in proceedings for the imposition of pecuniary penalties. In effect, the majority held that in criminal sentencing proceedings the prosecution should not make submissions as to the appropriate sentencing range or ultimate sentencing outcome. We will say more about that decision at a later stage. The Commonwealth submits that Barbaro should not be applied to these proceedings on the ground that they are civil, not criminal, a proposition which was expressly rejected by the New Zealand Law Commission. We agree with the Commission’s view. In any event the cases do not support such a sharp distinction. In Naismith v McGovern (1953) 90 CLR 336, the High Court was concerned with proceedings at the suit of the Commissioner of Taxation, seeking penalties for “offences” involving alleged understatement of income in a tax return and/or providing a false tax return. The taxpayer sought an order for discovery. At first instance that application was declined upon the basis that discovery would be ordered in civil proceedings, “but not to aid the prosecution of an indictment or information, or to aid the defence to it”. On appeal, the Court (Williams, Webb, Kitto and Taylor JJ), at 340 – 341, considered whether proceedings for the recovery of a penalty should be characterized as being “criminal” or “civil”. Their Honours concluded that:

The most that can be said is that the proceedings being for the recovery of penalties are of a penal nature.

In this context, “penal” presumably means, “[i]nvolving, pertaining to, or characterized by (a) legal punishment”. See The New Shorter Oxford English Dictionary (3rd ed, 1993). Their Honours did not refer to a slightly earlier decision of a Divisional Court (Lord Goddard CJ, Lynskey and Pearson JJ) in Brown v Allweather Mechanical Grouting Co. Ld. [1954] 2 QB 443, which decision was delivered on 5 February 1953. In that case, the Court considered a provision which imposed a penalty for using a motor vehicle for a purpose which attracted a higher rate of duty than that in accordance with which duty had been paid by the user. Although the word “offence” was not used in the sub-section which imposed the penalty, that word was used in subsequent, procedural provisions. At 447 – 448, the Lord Chief Justice said:

I do not think that the mere fact that the word “offence” is used in subsection (2) shows that it is to be regarded as a criminal offence. A failure to do something prescribed by a statue may be described as an offence although Parliament does not impose a criminal sanction upon it, but a merely pecuniary sanction which is to be recovered as a civil debt. Justices, as is well known, have in very many cases power to order the recovery of sums of money. In section 65 of the Excise Management Act, 1827, one finds that excise penalties may always be recovered before justices of the peace, but there is no indication in the section that justices are empowered to imprison or to impose a fine. It simply gives them power to impose penalties. Of course, once penalties have been imposed, if they are not paid there may be proceedings under the Debtors Act and many other Acts, and possibly under the Summary Jurisdiction Acts, and a committal to prison may be made, but that is because the penalty has not been paid. It is not a punishment for the offence itself. It is a punishment for not paying, or a means of endeavouring to compel a defendant to pay a penalty, which is a different matter.

Passages in the judgment of the Master of the Rolls in Attorney-General v Bradlaugh, to which Mr. Brown directed our attention, fully support his argument. The Master of the Rolls points out in that case that where a penalty is imposed for doing a particular act, the penalty is the only sanction, and the recovery of the penalty, if that is the only consequence, does not make the prohibited act a crime. It was far more common in those days than it is nowadays to prohibit certain acts and to impose, as the sanction, the recovery of the penalty, which the Acts very often provided could be recovered by a common informer. There were many Acts of that kind on the statute book till last year, when the Common Informers Act was passed, which abolished that particular form of public nuisance. A well-known example of the type of Act to which I have referred was the Sunday Observance Act, under which, if a person gave a theatrical performance or certain other entertainments on Sunday he was liable to a penalty which could be sued for, and used to be sued for in recent times, by a common informer, but no one ever suggested that a criminal act had been committed.

(Footnote references have been omitted.)

13    Proceedings for the imposition of a pecuniary penalty are “civil” in the sense that the standard of proof is that which generally applies in civil, rather than in criminal proceedings. However, as appears from the decision of the High Court (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129, at least some of the “privileges” which an accused person enjoys in criminal proceedings may also be available to a person against whom the imposition of a pecuniary penalty is sought. Further, at [28] – [38] their Honours point out the difficulties in distinguishing between “punitive” and “protective” proceedings, equating such difficulties to those experienced in trying to classify all proceedings as being either civil or criminal. Their Honours also refer to the reasons of Hayne J (Gleeson CJ and McHugh J concurring) in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 216 CLR 161. His Honour there concluded that arguments as to the appropriate standard of proof, based on classification of the relevant proceeding as either “civil” or “criminal”, “must fail”.

14    We conclude that there is no point in seeking to resolve the present dispute by reference to any such taxonomic exercise. These proceedings are penal in nature. However, as appears from both Labrador and Rich, we should look to the relevant legislation for any guidance as to the conduct of proceedings pursuant thereto.

PECUNIARY PENALTIES UNDER THE BCii ACT

15    Section 3 of the BCII Act provides:

3    Main object of Act

(1)    The main object of this Act is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole.

(2)    This Act aims to achieve its main object by the following means:

(a)    improving the bargaining framework so as to further encourage genuine bargaining at the workplace level;

(b)    promoting respect for the rule of law;

(c)    ensuring respect for the rights of building industry participants;

(d)    ensuring that building industry participants are accountable for their unlawful conduct;

(e)    providing effective means for investigation and enforcement of relevant laws;

(f)    improving occupational health and safety in building work;

(g)    encouraging the pursuit of high levels of employment in the building industry;

(h)    providing assistance and advice to building industry participants in connection with their rights and obligations under relevant industrial laws.

The term “civil penalty provision” is defined to mean:

(a)    a Grade A civil penalty provision; or

(b)    a Grade B civil penalty provision.

The term “Grade A civil penalty provision” means:

(a)    a section of this Act (other than a section that is divided into subsections) that has a note at its foot stating “Grade A civil penalty”; or

(b)    a subsection of this Act that has a note at its foot stating “Grade A civil penalty”.

The term “Grade B civil penalty provision” means:

(a)    a section of this Act (other than a section that is divided into subsections) that has a note at its foot stating “Grade B civil penalty”; or

(b)    a subsection of this Act that has a note at its foot stating “Grade B civil penalty”.

We infer that the use of the word “civil” in the term “civil penalty provision” distinguishes such provisions from provisions which impose criminal liability.

16    Chapter 7 of the BCII Act is headed “Enforcement”. Part 1 is headed “Contravention of civil penalty provisions”. Under that heading ss 48, 49, 50 and 51 relevantly provide:

48    Definitions

(1)    In this Part, unless the contrary intention appears:

appropriate court means:

(a)    for a contravention of section 38—the Federal Court, the Federal Magistrates Court, a Supreme Court of a State or Territory or a District Court, or County Court, of a State; or

(b)    for any other contravention—the Federal Court.

pecuniary penalty order means an order under paragraph 49(1)(a).

person, in relation to a contravention of a civil penalty provision, includes an industrial association.

(2)    For the purposes of this Part, a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision. For this purpose, a person is involved in a contravention of a civil penalty provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced the contravention, whether by threats or promises or otherwise; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    has conspired with others to effect the contravention.

49    Penalties etc. for contravention of civil penalty provision

(1)    An appropriate court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil penalty provision:

(a)    an order imposing a pecuniary penalty on the defendant;

(b)    an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;

(c)    any other order that the court considers appropriate.

(2)    The maximum pecuniary penalty is:

(a)    for a Grade A civil penalty provision—1,000 penalty units if the defendant is a body corporate and otherwise 200 penalty units; and

(b)    for a Grade B civil penalty provision—100 penalty units if the defendant is a body corporate and otherwise 20 penalty units.

(3)    The orders that may be made under paragraph (1)(c) include:

(a)    injunctions (including interim injunctions); and

(b)    any other orders that the court considers necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets.

(4)    If the contravention is a contravention of section 38, then the power of the court to grant an injunction restraining a person (the defendant) from engaging in conduct may be exercised:

(a)    whether or not it appears to the court that the defendant intends to engage again, or to continue to engage, in conduct of that kind; and

(b)    whether or not the defendant has previously engaged in conduct of that kind; and

(c)    whether or not there is an imminent danger of substantial damage to any person if the defendant engages in conduct of that kind.

(5)    A pecuniary penalty is payable to the Commonwealth, or to some other person if the court so directs. It may be recovered as a debt.

(6)    Each of the following is an eligible person for the purposes of this section:

(a)    the ABC Commissioner;

(b)    an ABC Inspector;

(c)    a person affected by the contravention;

(d)    a person prescribed by the regulations for the purposes of this paragraph.

(7)    A regulation prescribing persons for the purposes of paragraph (6)(d) may provide that a person is prescribed only in relation to circumstances specified in the regulation.

50    Multiple proceedings for same conduct

(1)    A court must not make a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.

(2)    Proceedings for a pecuniary penalty order against a person are stayed if:

(a)    criminal proceedings are started or have already been started against the person for an offence; and

(b)    the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention.

The proceedings for the order may be resumed if the person is not convicted of the offence. Otherwise, the proceedings for the order are dismissed.

(3)    Criminal proceedings may be started against a person for conduct that is substantially the same as conduct constituting a contravention of a civil penalty provision regardless of whether an order under this Part has been made against the person.

51    Evidence given in proceedings for penalty not admissible in criminal proceedings

Evidence of information given by an individual, or evidence of production of documents by an individual, is not admissible in criminal proceedings against the individual if:

(a)    the individual previously gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of a civil penalty provision (whether or not the order was made); and

(b)    the conduct alleged to constitute the offence is substantially the same as the conduct that was claimed to constitute the contravention.

However, this does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order.

17    Part 2 of Ch 7 is headed “Compliance etc. powers”. It deals with the powers of the Australian Building and Construction Commissioner and Deputy Commissioners and Australian Building and Construction Inspectors.

18    We infer that the pecuniary penalty regime prescribed by Pt 1 of Ch 7 is designed to contribute to the achievement of the objects identified in s 3, particularly in subss 2(b), 2(c), 2(d) and 2(e). The Director alleges that by virtue of s 48, the respondents breached s 38. Such a breach attracts a Grade A civil penalty. See also s 69.

A PRACTICE FOLLOWED IN FIXING PECUNIARY PENALTIES

19    In Barbaro the appellants argued that in their sentencing proceedings, the sentencing Judge had wrongly refused to allow the prosecution to propose a range within which the sentences should fall. The High Court held that the prosecution had no such duty and, further, that it should not have adopted that course. It is generally accepted that there are at least some similarities between the process by which a criminal sentence is quantified and the process for quantifying a pecuniary penalty. See, for example, the decision of Lander J in Australian Competition and Consumer Commission v Jewellery Group Pty Limited (No 2) [2013] FCA 14 at [39] – [41]. Hence it would be surprising if the High Court’s views in Barbaro were not at least arguably relevant to the process of imposing pecuniary penalties. In the present case a slightly different question arises. The parties have agreed upon the penalties. Thus we must consider the relevance of such agreement in the Court’s performance of its duty to fix penalties. An associated question is whether either party should be permitted to make submissions as to the specific amount of any penalty to be imposed.

NW Frozen Foods

20    The Commonwealth submits that in proceedings for the imposition of pecuniary penalties, there is a practice, “encouraged” by decisions of this Court, at first instance and on appeal, concerning submissions as to penalty. The so-called practice is that, “regulator and respondent make agreed submissions as to what penalty amount would be appropriate”. We accept that such a course has been regularly followed. It has been frequently justified by reference to the decision of the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285. The Court there considered an appeal against a decision imposing a pecuniary penalty which was substantially in excess of that agreed by the parties, such agreed penalty having been communicated to the Judge. At 290 – 291 Burchett and Kiefel JJ said:

The contrast between ss 78 and 79 of the Act makes it quite clear that a penalty imposed under s 76 is a civil penalty, and that a contravention falling within the section is not to be regarded as a criminal offence. At the same time, the seriousness with which the law views the contraventions in question in this case is underlined by the very large sums which the Court is authorised to levy against a contravener. A consequence of the civil nature of a penalty under s 76 is that the onus of proof of the contravention is the civil onus — in contradistinction to the onus of proof beyond reasonable doubt generally borne by the prosecution in a proceeding brought to punish crime.

The Act places on the shoulders of the Court the responsibility to determine the “appropriate” penalty in each particular case, having regard to “all relevant matters” including the matters specified in the section. But effects upon the functioning of markets, and other economic effects, will generally be among the most significant matters to be considered as relevant, so that the Court is likely to be assisted greatly by views put forward by the Australian Competition and Consumer Commission, or by economists called on behalf of the parties. Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd, it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount.

There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case.

21    The above extract identifies the following propositions which we accept as being correct and applicable for present purposes:

    the “responsibility” for fixing the penalty rests with the Court;

    there may be relevant considerations in respect of which expert evidence is necessary;

    such expert evidence may be given by agreed statement;

    the fixing of a penalty is not an “exact science”; and

    the parties may submit statements as to agreed facts and joint submissions.

The questions presently under consideration are whether, in such submissions, the parties may express “views” as to the “effects” of the facts, and as to the appropriate level of penalty.

22    Their Honours also observed that because fixing of the quantum of a penalty “cannot be an exact science”, the Court would, effectively, consider whether any agreed figure could be accepted as appropriate. This approach was said to give effect to an important public policy consideration, namely the public interest in saving resources. The perceived beneficial consequences of agreement as to penalty would, it was said, be jeopardized if corporations were to conclude that “proper settlements” were “clouded by unacceptable risks”. We infer that the last-mentioned proposition implies that such jeopardy would arise if the parties considered that there was any significant possibility that the Court would not adopt the agreed penalty.

23    We make two points concerning this decision. First, the Full Court set aside the decision at first instance but not on the ground that the primary Judge had failed to adopt the agreed penalty. However, in considering the appropriate penalty to be imposed, the Full Court adopted the agreed penalty. Secondly, in NW Frozen Foods there was no challenge to the validity of the practice identified by Burchett and Kiefel JJ.

Mobil

24    The decision in NW Frozen Foods was considered by the Full Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] ATPR ¶41-993. That case concerned the imposition of a penalty pursuant to the Petroleum Retail Marketing Sites Act 1980 (Cth). At first instance, the matter came before Gyles J. The parties submitted a joint statement of facts, joint submissions and an agreed penalty, apparently relying on the decision in NW Frozen Foods. Gyles J noted that some Judges had expressed reservations about that decision and recommended that jurisdiction in the matter be exercised by the Full Court in respect of the following question:

Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?

25    The Chief Justice so ordered. The Full Court (Branson, Sackville and Gyles JJ) permitted appearances by the Public Interest Advocacy Centre (“PIAC”) and the Australian Competition and Consumer Commission (“ACCC”).

26    In examining the decision in NW Frozen Foods and various other decisions, the Court referred in some detail to criminal sentencing, suggesting that the two processes are, in some ways, related. At [74] their Honours said:

Thirdly, just as joint submissions are sometimes made in civil penalty cases, there are circumstances in which a criminal court is faced with what amounts to a joint submission by prosecution and defence as to the appropriate sentence. Often these cases involve a convicted person who has rendered significant assistance to the authorities and seeks a reduced sentence on that account.

Their Honours then discussed a decision of the New South Wales Court of Criminal Appeal, R v Gallagher (1991) 23 NSWLR 220. That case concerned the discounting of a sentence to reflect assistance rendered by the accused to the authorities. At a later stage, we will discuss that case in more detail.

At [77], their Honours continued:

The position of the Court where prosecution and defence agree on the appropriate sentence … has similarities to the position where regulator and contravenor jointly submit that a particular penalty should be imposed in a civil penalty case. Just as the criminal court will take into account the prosecution’s views on the appropriate sentence, so the court in the civil penalty case, as NW Frozen Foods explained, will take account of the regulator’s position. But in neither case is the court relieved from the responsibility of exercising its own judgment as to the appropriate sentence (in criminal cases), or whether the proposed penalty is within the appropriate range for the contravention (in civil penalty cases). In each case, the Court should be satisfied that it is being given accurate, reliable and complete information on critical questions. If not satisfied that it has sufficient information to support the “agreed” approach, the Court can request the parties to provide additional evidence or information. If that information or evidence is not provided, the Court might well decide that it should impose a different sentence or penalty from that proposed by the prosecution or regulator (as the case may be). And, whatever the position in criminal cases, in a civil penalty case where there is no contradictor, the Court may request assistance from an amicus curiae or a potential intervenor pursuant to FCR, O 6 r 17.

27    Curiously, although the Full Court was discussing joint submissions, it seems to have perceived the value of such submissions to lie in the extent to which they reflect the “regulator’s position” rather than the fact of agreement between the parties. This is a matter of some importance. It suggests that the regulator is to enjoy a favoured status in proceedings for the imposition of a pecuniary penalty, to which proceedings it is a party. Such a proposition is extraordinary, particularly as there seems to have been no attempt to justify it by reference to any statutory provision. We should add that we doubt the correctness of the proposition that in criminal proceedings the sentencing judge will, “take into account the prosecution’s views on the appropriate sentence”, at least if it means more than that the Court will take into account submissions properly made by both parties. Of course the content of the prosecution’s submissions is now regulated by the decision in Barbaro.

28    Their Honours then indicated that at least part of the Court’s function was to be, “satisfied that it has sufficient information to support the ‘agreed’ approach” and suggested that if not so satisfied, it might seek further information. We will discuss this proposition at a later stage.

29    We should make a number of other points concerning the Full Court’s observations at [74] – [77]. The passage contains a fairly lengthy consideration of the reasons of Gleeson CJ in R v Gallagher (supra). One of his Honour’s concerns was the difficulties faced by a sentencing court when the prosecution and the defence take a common position which reflects a degree of co-operation on the part of the accused. The majority of the High Court had a similar concern in Barbaro. However Gallagher was not a case in which the prosecution had made submissions as to a range of sentences or an ultimate sentencing outcome. Rather, it had conceded that the accused had provided substantial assistance in other investigations, of which assistance there was some evidence. The prosecution had also agreed that the extent of such assistance would justify a “discount” of “50 per cent”, upon which concession the sentencing Judge acted. On appeal the Court of Criminal Appeal concluded that he had erred in his treatment of the concession. In re-sentencing, the Court rejected it.

30    We do not find, in the decision in Gallagher, any support for the proposition inherent in the observations at [77] in Mobil, that where, in criminal proceedings, the prosecution and defence agree on the appropriate sentence, “… the criminal court will take into account the prosecution’s views on the appropriate sentence”. In any event, in light of the decision in Barbaro, that proposition cannot now be accepted as correct. The discussion, in R v MacNeil-Brown (2008) 20 VR 677, of the prosecution’s role in sentencing prior to that decision, suggests that the proposition was not generally accepted, at least in Victoria. The sentencing Judge’s approach in Barbaro reinforces that view.

The basis for the decision in NW Frozen Foods

31    We acknowledge that the decision in NW Frozen Foods was based upon the approach taken by a number of highly respected former members of this Court. The ultimate source appears to have been the decision of Sheppard J in Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 5) (1981) 60 FLR 38, particularly at 41. In that case his Honour relied upon the first instance decision of Barwick CJ in Chipp (Minister for Customs and Excise) v Campbell Beaumont Trading Pty. Ltd., noted at (1970) 44 ALJR 72. At 41, Sheppard J observed that:

The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. That was the course adopted, perhaps in a less positive way, in a customs prosecution hearing in the original jurisdiction of the High Court: Chipp (Minister for Customs) v. Campbell Beaumont Trading Pty. Ltd. The court there accepted the parties’ view of the matter. This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices.

(Footnote references have been omitted.)

32    We note that Sheppard J proceeded upon the basis that the parties had reached agreement without knowing how the Court would treat their agreement. In that sense, the case was a long way from the position in NW Frozen Foods where it was said to be important that the parties be relieved of “unpredictable risks”.

33    Turning to Campbell Beaumont, in the ALJR note of the decision there is no reference to any submission or agreement as to penalty. However we have obtained a copy of the transcript of the Chief Justice's reasons. His Honour discussed the facts of the case at some length. At pp 11 - 12 he said:

… counsel for the third defendant took the course of suggesting to me a figure for penalty which he submitted I ought to find adequate in all the circumstances. It was a most substantial figure, namely, $1,000,000, which though far short of the maximum penalty possible is about thrice the amount of duty evaded in the transactions under challenge. Counsel for the other defendants concurred in the submission. Counsel for the plaintiff informed me that he had considered this figure, counsel for the third defendant having given him foreknowledge of the intention to propose it for my consideration. Having given the matter some thought counsel for the plaintiff informed me that it was the plaintiff’s view that such a penalty was adequate in all the circumstances. Indeed, counsel with some candour informed me that, had he had need to make a submission in that case, he for his own part doubted whether he would have pressed for any greater penalty if I had been able to find an intent to defraud the revenue.

Without endorsing this view of counsel for the plaintiff – and there is no present need to consider it one way or another – and after a good deal of consideration, I have come to the conclusion that a total penalty of $1,000,200 imposed on each and all the defendants is an adequate penalty both to mark disapproval of the defendants’ course of conduct and to protect the revenue against the evasion of duty and the making of false entries.

His Honour declared that each of the defendants was guilty of an offence under s 234(a) of the Customs Act 1901 (Cth) (the “Customs Act”), and that each defendant was guilty of an “offence” under s 234(d) of that Act. However the Chief Justice then imposed “a total penalty of $1,000,000 in respect of the offences under s 234(d) and a total penalty of $200 in respect of the offence under s 234(a)”. The “offence” under s 234(d) was “making a false entry”. The “offence” under s 234(a) was “evasion of duty”. It seems that each evasion of duty was brought about by the corresponding false entry. The defendants had made numerous false entries and had evaded duty by virtue of those entries. The nature of the relevant misconduct appears on pp 1 and 2 of the reasons. It is difficult to know whether the plaintiff had alleged a large number of separate breaches of each of ss 234 (a) and 234(d), or one breach of each provision with multiple particulars. Both declarations suggest the latter. However, at p 13 in fixing the penalty, Barwick CJ refers to offences “under s 234(d)” but to “the offence” under s 234(a). Given the nature of the case, there must have been the same number of offences under each of the subsections.

34    To the extent that Sheppard J suggested that the proceedings before Barwick CJ were “criminal”, his Honour may have been mistaken. The Chief Justice seems to have had doubts about the matter. The use of inverted commas around the word “convictions” on p 10 of his reasons suggests as much. The relevant provisions of the Customs Act as then in force suggest a distinction between “offences” and conduct contrary to s 234, under which the proceedings were brought. It is not necessary that we finally resolve this question.

35    The most that can be said about the decision is that the Chief Justice was satisfied to impose a penalty which, one suspects, was substantially higher than that expected by the prosecution, and perhaps higher than the figure which his Honour might otherwise have imposed. Whilst the Chief Justice did not treat the suggestion of a specific penalty by defence counsel as being in any way irregular, the statement that counsel, “took the course of suggesting … a figure”, may suggest that it was somewhat unusual. The prosecutor’s statement that he, “doubted whether he would have pressed for any greater penalty”, for a more serious offence may suggest that he might, in those circumstances, have made submissions as to a specific penalty. Alternatively, he may have meant that had the defence made the suggestion in connection with the more serious offence, he would not have submitted that it was inadequate. Clearly, the Chief Justice was not faced with the problems identified by the High Court in Barbaro.

36    Sheppard J seems also to have based his decision on an understanding of a practice in criminal proceedings by which the prosecution accepts a plea to a lesser charge than that initially preferred. However his Honour said nothing about any practice concerning submissions as to sentence.

37    The decisions in Allied Mills and Campbell Beaumont offer little support for the practice discussed in NW Frozen Foods. We have considered some, but not necessarily all of other cases in which Allied Mills was applied prior to the decision in NW Frozen Foods. We have found no further attempts to justify the relevant practice by reference to principle. Counsel have not suggested that any other cases assist in this regard.

Allied Mills and multiple offences

38    The decision in Allied Mills is relevant in one further respect. In these proceedings, the parties have agreed that for all of the numerous breaches established against each respondent, only one penalty should be imposed. It seems that such an approach is not infrequently taken in proceedings for the imposition of pecuniary penalties. The practice may have arisen out of the observation by Sheppard J in Allied Mills at 40, relying on the decision of Kitto J in L. Vogel & Son Pty. Limited v Anderson (1966) 120 CLR 157 at 161 and 164 - 165, that:

Here, more than one breach is alleged and, by reason of the withdrawal of the defence, admitted, but it would not be appropriate to impose substantive penalties for each breach because each arises out of the one transaction, namely, the arrangement or understanding alleged in par. 12 of the amended statement of claim and the particulars appended thereto. That was the approach followed by Kitto J. in imposing penalties for breaches of the Customs Act … , in … Vogel … .

(Footnote references have been omitted.)

39    Sheppard J imposed one penalty for one offence. As he considered that the other offences arose out of the circumstances of that offence, he imposed no other penalty. We note that Sheppard J was counsel for the plaintiff in Vogel. However we are not sure his Honour was correct in his understanding of the approach taken by Kitto J. Kitto J said at 161:

A submission was made on behalf of the defendants that they ought not to be convicted of more than one offence in respect of each evasion of duty. It was said that in each case the importing with intent to defraud the revenue, the presentation of a false invoice as genuine, the making of a false entry and the production of a document or documents containing an untrue statement or untrue statements were merely steps by which the ultimate offence of evading payment of duty was committed. Each step was undoubtedly one of a connected series of steps, but each was a separate and distince (sic) piece of conduct for all that, and each involved its own deliberate contravention of the Act. Moreover, the ultimate step, the successful getting of the goods through the Customs without payment of full duty, far from being merely the sum of the means employed to that end, was itself a separate piece of conduct in furtherance of the general intent, for it resulted from the defendants’ deliberately putting aside the opportunity that still remained to them, even after what they had already done, to pay the full amount of duty.

I therefore convict the defendants of all the offences charged, and must observe the provisions of s. 243 (as it stood when the offences were committed) that the minimum pecuniary penalty for any offence was one-twentieth of the maximum which was prescribed in pounds, that is to say for an offence against s. 234 it was £5 or $10, and for an offence against s. 233 it was £25 or $50.

At 164 – 165 his Honour continued:

Consideration of the maximum penalties in a case to which s. 240 applies gives little assistance, if any, in deciding what penalty is appropriate to particular circumstances. Though the defendants’ fraudulent conduct has been continuous the amounts of duty evaded have varied greatly, being in some instances very substantial and in others comparatively small. All things considered I think that upon each charge of smuggling there should be a penalty of four times the amount of the duty evaded or intended to be evaded, and it will then be sufficient to impose minimum penalties in respect of the other offences. I append a schedule showing the penalty I impose in respect of each charge.

Thus it seems that Kitto J imposed penalties in respect of all offences. However that course appears to have been dictated by the prescribed minimum sentences. For the reasons set out above, we are unsure as to the approach taken by Barwick CJ in Campbell Beaumont. In any event, we consider that in this area, the criminal law now offers guidance.

40    In sentencing for multiple criminal offences, absent any specific statutory provision permitting a single global sentence, the Court must fix a sentence for each contravention. The Court must then consider the “totality principle”: Mill v R (1988) 166 CLR 59 at 63; Pearce v R (1998) 194 CLR 610 at [45] - [49]; Johnson v R (2005) 205 ALR 346 at [18] - [20]. Once an appropriate sentence is fixed for each offence, the Court must determine whether the sentences should be cumulative or concurrent in order to address the principle of totality. In other words once appropriate sentences are determined in relation to each individual offence, the aggregate must be reviewed to ensure that it is just and appropriate for all the offences. If not, the sentence should be adjusted by making some of the sentences concurrent or partly concurrent.

41    The totality principle applies to the fixing of fines: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704; EPA v Barnes [2006] NSWCCA 246 at [43] - [50]. The Court must fix a fine for each offence and then review the aggregate, considering whether it is just and appropriate, as a reflection of the overall criminality. Such consideration may lead to moderation of the fine imposed in respect of each offence: Barnes at [49]. It is at this stage that it is relevant to consider matters such as whether the separate offences were part of a single course of conduct (or whether the offences may be grouped together in some way as representing separate courses of conduct) and whether there is an overlap between the legal elements of some of the offences.

42    There would appear to be no fixed, or single way to adjust fines to reflect the totality of the criminality. However it would, in most cases, be erroneous to select a single offence and fix a penalty for that offence which is appropriate to reflect the total criminality - and then impose nominal or lenient sentences in relation to the balance of the offences: Johnson at [26]; R v Hammoud (2000) 118 A Crim R 66 at [8] - [10]; R v Bahsa (2003) 138 A Crim R 245 at [67]. The reason is that the nominal or lenient sentences for all the other counts would not be appropriate sentences for those charges.

43    In any event, the main point is that, however the sentences are adjusted to take into account the totality of the criminality, a court may not simply impose a single global sentence (in the absence of statutory authority for such a course). Authorities which make this point (in the context of criminal sentencing) include: R v Bibaoui [1997] 2 VR 600 at 603 - 604 (Ormiston JA) and 607 (Tadgell JA); R v Finnie [2002] NSWCCA 533 at [54] - [57]; Thorn v The Queen (2009) 198 A Crim R 135 at [39] - [47].

44    In this case the agreed penalties are based upon the assumption that one penalty may be imposed for numerous infringements. The BCII Act offers no justification for that course. Section 49(1) authorizes the Court to make, “one or more of the following orders in relation to a person … who has contravened a civil penalty provision”. It seems to be accepted that the Court could impose a separate penalty for each infringement. If so, then there is no justification for imposing a penalty for one offence, the amount of which penalty has been inflated by reference to other offences.

45    This question was not addressed fully in argument. Having expressed these views, we also express our willingness to hear further submissions to contrary effect in any subsequent consideration of the appropriate penalties to be imposed in this case. If the Director makes submissions in support of the imposition of a single penalty for each respondent, we would expect that it would explain how that single figure was chosen, and not merely assert that there was a “single course of conduct”. If the relevant infringements really constitute a single course of conduct (which is at least doubtful here), that factor may be relevant to the consideration of the appropriate aggregate or total pecuniary penalty, which consideration might, in turn, lead to an adjustment of the penalties applied to each individual contravention. However we presently doubt whether it would be in accordance with principle to start at a single global figure (the agreed figure) and then work backwards to arrive at appropriate penalties for each contravention. Such an approach would appear to be contrary to the proper approach referred to in Pearce, Johnson and the other authorities in relation to totality.

46    Finally, we note that the “course of conduct” issue has been considered by the Full Court in the pecuniary penalty context: eg. Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1 at [35] - [48]; SingTel Optus v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [51] – [55]. Nothing that we have said is inconsistent with anything said in those cases. However they may have been erroneously interpreted by some as justifying single global penalties where there is a course of conduct.

NW Frozen Foods, Mobil and Barbaro

47    As we understand Barbaro, the High Court was primarily concerned with the permissible content of the prosecution’s submissions as to sentence. In particular the majority held that it was not proper to include in such submissions any suggestion as to the appropriate length of sentence, or the range within which the sentence should fall. Any such suggestion would be merely an opinion. Submissions must address the evidence and the law. The right to make submissions does not include the right to offer opinions as to an appropriate outcome. In NW Frozen Foods Burchett and Kiefel JJ spoke of witnesses, agreed statements and joint submissions, clearly distinguishing between evidence and submissions. However in Mobil the Court spoke of taking account of the prosecution’s views on sentencing and the, “regulator’s position in fixing a pecuniary penalty”. In so doing their Honours seem to have proceeded on the basis that submissions might contain matters of opinion. Clearly, evidence, including expert evidence, may be received in order to inform the Court of relevant considerations concerning penalty. Evidence may be, and frequently is, received by consent. The parties may agree upon some or all of the relevant facts and make combined submissions. However, to the extent that a party wishes to make submissions as to any matter in issue, it must so do upon the basis of the available evidence. The point made by the High Court in Barbaro is that an opinion or view is neither evidence nor submission.

48    In Mobil, their Honours concluded that in criminal proceedings, the Court is not relieved from exercising its own judgment as to the “appropriate sentence” and that, in pecuniary penalty cases, the Court is not relieved from deciding whether the proposed penalty is “within the appropriate range”. One wonders why, in a criminal case, the obligation should be to impose the appropriate sentence whilst, in the case of pecuniary penalty proceedings, the responsibility may be partially transferred to the parties, so that the Court need only determine whether an agreed penalty is within the appropriate range.

49    The Court noted the two aspects of the decision in NW Frozen Foods to which we have already referred, namely:

    that the identified error in the primary Judge’s reasons was not linked to his Honour’s apparent refusal to give effect to the agreed penalty although, in exercising its discretion in fixing a new penalty, the Full Court chose to give effect to it; and

    that there was, in that case, no contradictor.

50    In NW Frozen Foods, the Full Court was not stating a principle, or resolving a matter in dispute between the parties. Rather, it was outlining and explaining an existing practice, the appropriateness of which was not challenged. In Mobil, the Full Court had to determine whether a judge, in imposing a pecuniary penalty, was bound to adopt the practice identified in NW Frozen Foods. The Court had the benefit of submissions from the interveners. However, ACCC broadly supported the decision in NW Frozen Foods, although it accepted that the Court retained a wider discretion than was indicated in that case. In particular ACCC accepted that:

In considering the appropriate penalty, the Court is not confined to considering whether the proposed penalty is within the permissible range in all the circumstances.

Such acceptance was somewhat undermined by the further observation that:

It is appropriate for the Court to approach the exercise of its discretion on the basis that it would be disinclined to depart from the figure identified in a joint submission when that amount is within the permissible range in all the circumstances, “other than in a clear case requiring a different penalty to be imposed”.

(See Mobil at [23].)

It is difficult to understand how, if the proposed penalty is, “within the permissible range in all the circumstances”, there can be a, “clear case requiring a different penalty to be imposed”.

51    In its submissions, PIAC expressed some concerns about the approach taken at first instance but seems to have accepted that the Court could:

•    accept and act upon submissions contained in an agreed statement of facts; and

•    receive joint submissions as to a range of orders that might properly be made on the basis of those admissions.

(See Mobil at [27] and [28].)

52    In Mobil, the Full Court considered numerous decisions in which the approach taken in NW Frozen Foods had been adopted or questioned. It identified the following benefits said to flow from that approach:

    avoidance of clogging of court lists with potentially complicated and lengthy litigation and attendant expense;

    the benefit to the community of early disposal of the proceedings; and

    avoidance of difficulties which the regulator might otherwise experience in proving its case.

Similar considerations are frequently taken into account in criminal sentencing. At [51] the Full Court said:

The following propositions emerge from the reasoning in NW Frozen Foods:

(i)    It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.

(ii)    Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.

(iii)    There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.

(iv)    The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more “subjective” matters.

(v)    In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.

(vi)    Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.

53    In our view, this summary tends to blend propositions which emerge from NW Frozen Foods with inferences which do not necessarily flow from those propositions. We make the following points:

    If it is the Court’s responsibility to determine the appropriate penalty, we cannot see that it discharges that responsibility by considering whether an agreed figure falls within an appropriate range, particularly given the unsatisfactory nature of the concept of “range” as explained by the High Court in Barbaro.

    The determination of quantum of penalty may not be an exact science, but that proposition says nothing about whether the Court may adopt, as its starting point, a “figure chosen by the parties”.

    That there is a public interest in promoting settlement of litigation does not, of itself, justify the presentation to the Court of agreements as to penalty, submissions as to range or submissions as to the precise penalty to be imposed.

    In considering the “views of the regulator”, one must distinguish between evidence and submissions. If the regulator has expertise, then it must be the expertise of its officers and staff. To the extent that such a person is able to assist the Court, he or she should do so in accordance with the law of evidence, whether the information to be provided is “expert” evidence or otherwise. Such evidence may go in by consent, but it should be distinguished from submissions based on the evidence.

    As to the proposition that it may not be useful for the Court to consider whether it would have imposed the precise agreed penalty, the point is that the relevant legislation effectively directs the Court to do so. Such legislation may fix the upper limit, but otherwise leave the penalty to be determined by the Court in the exercise of its discretion. A court does not generally accept that the parties may, by their agreement, limit the exercise of its discretion. An appellate court would generally set aside any exercise of a discretion which reflected the acceptance of a fetter upon such exercise, which fetter was not imposed by the relevant legislation. If it is said that the regulator’s opinion, or an agreement between the parties is relevant to the exercise of the discretion, it can only be because, if required, evidence of such opinion or agreement would be admissible. The Court may not take advice from the regulator as to the exercise of its discretion.

54    At [58] in Mobil their Honours observed:

[T]here is nothing in NW Frozen Foods that is inconsistent with any of the following propositions:

(i)    The Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range.

(ii)    If the absence of a contradictor inhibits the Court in the performance of its duties under s 76 of the TP Act, s 13 of the Sites Act, or similar legislation, it may seek the assistance of an amicus curiae or of an individual or body prepared to act as an intervenor under FCR, O 6 r 17.

(iii)    If the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matter to proceed as a contested hearing.

55    Similar propositions were advanced in argument in the present case. In our view, it is at least unorthodox to suggest that the parties may come to the Court with an agreed penalty, on the basis that if the Court is not willing to adopt it, they can go away and assemble information which may persuade the Court to change its mind. We accept that in practice, such an event occasionally occurs, but the practice should not be encouraged. The parties should not expect that the Court will proceed in that way.

56    The Full Court then considered cases in which the decision in NW Frozen Foods had been criticized, identifying the following concerns:

    the risk of coercion and therefore, injustice;

    that the absence of fully contested hearings on the merits may make it difficult to determine whether an agreed penalty is within the appropriate range; and

    the risk that the Court will be seen to be “rubber-stamping” the agreement.

57    The Court also considered a suggestion that the provision of a “range” would be an acceptable alternative to the approach taken in NW Frozen Foods. The Full Court seems to have derived the relevant criticisms from the reasons of Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR ¶41-815 and those of Weinberg J in Australian Competition & Consumer Commission v Colgate-Palmolive Pty Ltd [2002] ATPR ¶41-880. The Full Court rebutted them in detail. We do not necessarily accept that either these criticisms or the Full Court’s rebuttals are entirely persuasive. We will consider some of them at a later stage. As to the risk of “rubber-stamping”, we understand such concern to focus on public perceptions, particularly the risk that the public will perceive “rubber-stamping”. Although the Full Court dealt in some detail with the risk that a judge would “rubber-stamp” an agreed figure, it seems not to have dealt with the problem of public perceptions.

58    After these reasons had been circulated in draft form our attention was drawn to an article by Ms Samantha Teong entitled, Stamping out rubber-stamp penalties? Determining an appropriate response to agreed penalties in civil penalty settlements (2015) 43 ABLR 48. It offers an insightful analysis of the problems with which we are dealing.

59    We have previously set out the question which was considered by the Full Court in Mobil. At [80] – [82] the Full Court said, concerning that question:

80.    Identifying separate questions for determination in proceedings often gives rise to doubts as to the precise meaning of the question. These are not always profitable to pursue.

81.    An affirmative answer to the Question as framed may imply that a trial Judge is obliged to take the proposed penalty as the starting point for analysis and to limit himself or herself to inquiring whether that particular penalty is within the appropriate range. An affirmative answer to the Question may also imply that the trial Judge is bound to consider the proposed penalty simply on the basis of information provided by the parties. For the reasons we have given, neither of these propositions should be accepted.

82.    In our view, the Question should be answered as follows:

“Where the parties propose an agreed amount to be imposed as a penalty pursuant to s 13 of the Petroleum Retail Marketing Sites Act 1980 (Cth), is the Court bound by the decision in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission … (1996) 71 FCR 285 to consider whether the proposed amount is within the permissible range in all of the circumstances and, if so, impose a penalty of that amount?

Answer: No, but the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission … (1996) 71 FCR 285 disclose no error of principle.”

60    We do not really understand the point being made at [80]. We would have thought that it was for the Court to decide the meaning of the question posed, and then to answer it.

61    The overall effect of the decision in Mobil seems to have been that a Judge could, if he or she thought it appropriate, adopt the approach identified in NW Frozen Foods. Alternatively, he or she might take some other approach. We infer that the Full Court accepted that the parties might properly submit an agreed penalty.

62    We do not doubt that there are benefits in the practice of providing a statement of agreed facts, joint submissions and/or agreement as to penalty. However, whilst the Court should adopt practices designed to achieve efficiency in the dispatch of its work, such practices must not derogate from the proper performance of its duties. Hayne J observed in Labrador (supra) at [126] that there is a difference between matters of practice and procedure (which a court may prescribe) and the standard of proof which, absent statutory authority, a court may not vary. The Court may not, in the interests of efficiency or convenience, allow the exercise of its discretion to be fettered in a way not provided for in the legislation conferring the discretion. Nor may the Court take into account irrelevant considerations. We must decide whether, in this case, we would be performing the duty conferred upon the Court by the BCII Act if we were simply to consider whether the agreed penalty is, “within the permissible range”, even if it is not the penalty which we would have imposed, had there been no such agreement. We must also decide whether the fact of such agreement is, as a matter of law, a relevant consideration in the proper exercise of the Court’s discretion. In considering those matters, we must keep in mind public perceptions, as well as the law concerning the exercise of discretions and the law of evidence.

63    We accept that in NW Frozen Foods, Burchett and Kiefel JJ set out a well-established practice and approved of it. We also accept that in Mobil, the Full Court held that a judge was not bound to adopt the practice approved in the former case. Both cases identify the perceived benefits of such an approach. In Mobil, the Full Court considered some of the criticisms of the practice but did not deal with concerns about public perception. Neither case addresses the extent to which it may be proper for the Court to accept limitations upon the extent of its duty to fix the appropriate penalty in each case.

PURPOSES OF PUNISHMENT

64    The Commonwealth submits that there is a fundamental distinction between criminal punishment and the imposition of a pecuniary penalty. It is said that they serve different purposes. The Commonwealth submits that the distinction reflects a “principle” said to have been established by the decision of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd [1991] ATPR ¶41-076. It submits that the case establishes that the purpose to be served by the imposition of a pecuniary penalty is general and specific deterrence. In that case, French J said at 52,152:

Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV. Nor, if it be necessary to say so, is there any compensatory element in the penalty fixing process — Trade Practices Commission v. Mobil Oil Australia Ltd (1984) 4 FCR 296 at 298 (Toohey J.). 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.

As the High Court pointed out in Veen v The Queen (No 2) (1988) 164 CLR 465 at 476, protection of society is also commonly considered to be a goal of punishment.

65    In CSR, French J was concerned with penalties to be imposed pursuant to Pt IV of the Trade Practices Act 1974 (Cth) (the “Trade Practices Act”). We do not understand his Honour to have said that all pecuniary penalties are imposed purely for the purpose of deterrence. He was speaking solely of penalties imposed pursuant to that legislation and, we suspect, making two points:

    that corporations which breach the provisions of Part IV are likely to be overwhelmingly motivated by commercial considerations; and

    that in order to make potentially profitable, but unlawful conduct unappealing as a business choice, a substantial penalty or threat of such penalty is necessary.

66    We doubt whether French J intended to propound the broad proposition which the Commonwealth advances. Even if his Honour meant that as a matter of statutory construction, the purpose of Pt IV penalties was purely deterrence, there can be no justification for extending that view to all other statutory regimes which provide for such penalties. The relevant legislation will provide the most reliable basis for identifying Parliament’s purpose.

67    At least some of the goals referred to in s 3 of the BCII Act - promoting respect for the rule of law, ensuring respect for the rights of building industry participants and ensuring accountability for unlawful conduct - go beyond mere deterrence. The promotion of respect for the rule of law and the rights of others suggests an element of education and rehabilitation. The term “ensuring accountability” implies recognition of any failure to behave in accordance with the law. Neither the Trade Practices Act (nor its successor) nor the BCII Act operates in isolation from the broader legal system. Respect for the rule of law necessitates a clear expression of the community’s displeasure concerning unlawful conduct. Save in the most trivial of cases, any breach of the law must be seen as an affront to the dignity of the community in which the law operates, and by which it is established. Repeated failure to deal with such breaches may undermine the whole legal system. In marking community displeasure, the imposition of an appropriate penalty is an act of retribution. Similar comments apply to the notions of respect for the rights of building industry participants and accountability for unlawful conduct. Although the goals have been tailored to reflect the subject matter dealt with by the BCII Act, they are based on concepts which are fundamental to respect for, and enforcement of law in any civilized community.

68    In Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [92] – [94], Lander J said:

92    It follows, therefore, that the appellant has succeeded in establishing that the primary judge had regard to matters which were not relevant and failed to have regard to relevant matters such that the discretion which he enjoyed miscarried. In my opinion, it is for this Court then to consider whether the penalty which the appellant and Caelli agreed was appropriate in the circumstances of the case.

93    There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.

94    The individual or personal circumstances of the contravenor must be taken into account as also any relevant matter in mitigation. For a contravention of these sections the minimum penalty which addresses punishment and deterrence, both personal and general, will be appropriate. Where one act may involve a number of contraventions, as in this case, it would be generally inappropriate to impose separate penalties because almost inevitably that would offend against the totality principle as known to the criminal law. The better approach is to assess the culpability of the contravenor and have regard to the number of employees affected by that action.

69    The Commonwealth submits that this view of the purposes to be served by the imposition of a pecuniary penalty is inconsistent with authority. We do not accept the Commonwealth’s criticism. We consider his Honour’s remarks to be entirely orthodox and consistent with common sense. To the extent that the Commonwealth asserts that the reasons of Jessup J in that case offer some support for the proposition that only deterrence is relevant in imposing a civil penalty, it is in error. At [164] Jessup J makes it clear that deterrence is a “significant” consideration, clearly suggesting that there are other considerations.

70    We should add one further comment concerning the remarks by Lander J. It might be thought that the concluding words at [92] suggest acceptance of the proposition that the Court should consider the appropriateness of the agreed penalty, rather than, itself, fix a penalty. As appears at [57] and [58] his Honour was simply adopting the language used by the Full Court in Mobil. It seems that in Ponzio, the appellant accepted the correctness of that approach.

71    In its submissions, the Commonwealth says much about deterrence, and its alleged pre-eminence as a consideration in the imposition of pecuniary penalties. However a pre-eminent purpose need not be the sole purpose. We consider that in any system of penalties the various identified purposes of punishment will have greater or less relative significance, depending upon the type of misconduct in question, its prevalence at a particular point in time, difficulty of detection, potential for causing damage and many other considerations. Further, the peculiar circumstances of a particular example of such misconduct may lead to one aspect of punishment being more important in that case than in other cases of the same kind. We accept that deterrence will frequently be of primary importance in fixing pecuniary penalties. However we do not accept that such pre-eminence provides any basis for applying, or declining to apply the decision in Barbaro for the purposes of these proceedings.

72    The criminal law, as it deals with “white collar” crime, offers some guidance in this area. Many cases stress the importance of deterrence. However the more abstract notion of denunciation is also recognized. In Hili v The Queen (2010) 242 CLR 520 at [63], the High Court said:

The applicants’ offending was sustained over a long time. It was planned, deliberate and deceitful, requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud, which this was, is offending that affects the whole community. As was pointed out in Ruha, the sentences imposed had to have both a deterrent and a punitive effect, and those effects had to be reflected in the head sentences and the recognisance release orders that were made.

(Footnote references have been omitted.)

73    Similarly, in Director of Public Prosecutions (Cth) v Gregory (2011) 250 FLR 169 at [57], the Court of Appeal of Victoria said:

A sentence imposed for fraud upon the taxation revenue, is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system itself fails to achieve its objectives.

74    In Milne v The Queen (2012) 259 FLR 42 at [295] – [297], the Court of Criminal Appeal of New South Wales applied both statements. We have previously referred to the discussion of this question in the New Zealand Law Commission’s report.

75    We will not say anything more about the submission that deterrence is the only purpose to be served by a pecuniary penalty regime. We reject that proposition. It lacks any principled basis. We consider that the purpose to be served by a particular pecuniary penalty regime must be derived from the wording of the relevant statute. We also consider that the relative importance of the recognized goals of punishment will vary from category to category of misconduct, and from case to case. The BCII Act does not prescribe that deterrence be the sole purpose to be served by the imposition of a pecuniary penalty.

THE PROSECUTION

76    In these proceedings, and in some cases in which the decision in Barbaro has been discussed, it has been at least implied that the decision was primarily about the duties of the prosecution, and that such duties should not be imposed upon a regulator. We accept that we should not assume that the prosecution and a regulator necessarily have the same duties, even if in different contexts.

77    Crown prosecutors are often said to be subject to certain constraints in the conduct of prosecutions, which constraints do not apply to defence counsel, and do not generally apply to counsel appearing in civil cases. Thus, for example, a Crown prosecutor has a limited discretion as to the calling of witnesses. See Whitehorn v The Queen (1983) 152 CLR 657 at 663 – 665 and 674 – 675 and The Queen v Apostilides (1984) 154 CLR 563 at 573 – 578. Other special rules are said to include a duty to disclose information or material which may be exculpatory, to formulate and adhere to the case which he or she proposes to advance, not to use inappropriate language or conduct in order to inflame or prejudice the Court against the accused, not to press for a conviction and not to allow the jury to proceed upon a theory which cannot properly be sustained. See Blackmore, Hosking and Watson, Criminal Law NSW (Thomson Reuters, subscription service) at [4.1280] (update 179). See also Carter’s Criminal Law of Queensland (LexisNexis, subscription service) at [618.5] et seq (update 166).

78    On occasions Judges have attempted to apply such constraints to regulators seeking the imposition of pecuniary penalties. See, for example, Australian Securities and Investments Commission v Plymin (2003) 175 FLR 124 at 258 – 259. In Morley v Australian Securities and Investments Commission (2010) 247 FLR 140 the Court of Appeal of New South Wales held that a regulator seeking a pecuniary penalty was not subject to the duty imposed on a prosecutor in connection with the calling of witnesses, although it was under a duty to act fairly. Nonetheless the Court considered that at least some of the considerations which lead to the imposition of the relevant duty on a prosecutor are also present when the State seeks to enforce the law by seeking a pecuniary penalty. The Court concluded that when a regulator fails to call a witness, such conduct may constitute, “a breach of the obligation of fairness”. See [728].

79    On appeal to the High Court (sub nom ASIC v Hellicar (supra)) the majority accepted that, “courts and litigants rightly expect that [the Australian Securities and Investments Commission (“ASIC”)] will conduct any litigation in which it is engaged fairly”. See [147]. Their Honours assumed, without deciding, that ASIC is subject to, “some form of duty, even if a duty of imperfect obligation”. See [152]. Heydon J seems generally to have adopted the same approach. In the end the High Court reversed the decision of the Court of Appeal, substantially upon the basis that it had incorrectly concluded that ASIC’s failure to call a witness positively undermined the weight which could properly be attributed to other evidence. Two propositions contained in the reasons of the majority are presently relevant. At [140] their Honours observed:

The Court of Appeal concluded that it would not be appropriate to reason by analogy from criminal procedure. The Court of Appeal noted that s 1317L of the Corporations Act provided that “[t]he Court must apply the rules of evidence and procedure for civil matters when hearing proceedings for … a declaration of contravention; or … a pecuniary penalty order”. The Court of Appeal correctly observed that it follows that a prosecutor’s duty to call material witnesses at a criminal trial … had no direct application to the proceedings ASIC had brought.

(Footnote references have been omitted.)

80    At [153] their Honours observed that, “the duty of a Crown prosecutor in relation to the calling of evidence must be understood in the light of a number of relevant considerations”. The first such consideration was that:

[A] criminal trial is an accusatorial process in which the prosecution bears the burden of proving its case beyond reasonable doubt. The prosecutor’s duty stems from the very nature of the proceedings.

(Footnote references have been omitted.)

81    We understand their Honours to have meant that the failure by a prosecutor to call an apparently material witness would almost inevitably undermine the possibility that the jury could be satisfied beyond reasonable doubt as to guilt. Such failure will generally be of much less significance when the case is to be proven only to the civil standard.

82    We accept that the duties of the prosecution are not simply to be imposed upon a regulator. However it does not follow that the decision in Barbaro has no relevance to the conduct of pecuniary penalty proceedings. That decision concerns the proper content of submissions, having regard to the nature of the discretion to be exercised, the mechanics by which such discretion is to be exercised, the public interest and public perceptions.

THE EFFECT OF THE DECISION IN barbaro

83    The decision in Barbaro must be considered in light of the earlier decision of the Victorian Court of Appeal in MacNeil-Brown (supra). In that case, a specially constituted Court of five Judges considered two appeals against sentence. In each case the sentencing Judge had sought assistance from the prosecution, leading it to make submissions, in one case as to the sentencing range and in the other, as to the particular sentence. In each appeal, it was submitted that the prosecution ought not to have responded to the Judge’s request for assistance. The Court of Appeal considered that it was inappropriate for the prosecution to have advanced a particular sentence, but for present purposes, the more important aspect of the decision is the way in which the Court dealt with submissions as to the sentencing range. In the end, the appellants submitted that the prosecution should not have made submissions as to such range because:

    it was impossible for the prosecution to do so (apparently because any such submission would be a mere opinion);

    it created the appearance that the prosecution was interfering with the sentencing discretion;

    it involved actual interference with that discretion; and

    it put at risk the “instinctive synthesis” by which a sentencing judge arrives at a sentence.

84    The majority:

    concluded that a submission on sentencing range was as to a matter of law, identifying the “ambit” within which the sentencing discretion might lawfully fall;

    rejected the suggestion that such a submission might lead a sentencing judge to impose a particular sentence in order to avoid the risk of appeal;

    considered that the making of submissions as to range caused no risk of actual or apparent interference in the sentencing process;

    considered that even if such submissions created the identified risks, they were primarily as to perceptions rather than substance;

    considered that such risks were, “demonstrably outweighed by the manifest public benefit in promoting consistency of sentencing and minimising appealable error” (see [49]);

    referred to the position in other jurisdictions, concluding that prosecutors made submissions on range in all states and territories other than South Australia, and in New Zealand; and

    concluded that if a sentencing judge requests assistance, he or she might reasonably expect that such assistance would be forthcoming.

85    Buchanan and Kellam JJA dissented. Buchanan JA outlined the wide range of factors to be considered in the sentencing process, and the process of instinctive synthesis by which an appropriate sentence is identified. His Honour considered that submissions as to range could be of no assistance because it is not possible to explain, in a comprehensible way, the process by which any suggested range has been identified. Buchanan JA also considered that submissions as to range could only be expressions of opinions and therefore irrelevant. At [130] his Honour said:

In my opinion, counsel can best assist a sentencing judge, not by advancing what they consider to be sentences at the lower or upper limits of a sound sentencing discretion, but by making submissions as to the existence and nature of aggravating and mitigating circumstances and providing some guide to the manner in which other judges have approached like cases by supplying sentencing statistics and citing passages from decided cases which bear upon aspects of the instant case. The synthesis of the raw material is the task of the sentencing judge, not counsel.

(Footnote references have been omitted.)

86    At [141] Kellam J said:

The lack of usefulness in having the prosecution make such a submission as to range is demonstrated by the nature of the task of sentencing which I have set out above. It is clear from a number of authorities that the exercise of the sentencing discretion involves value judgments with no opinion being uniquely right. Having undertaken the intuitive synthesis required, the sentencing judge forms an opinion as to the correct sentence to be imposed and sentences accordingly. As pointed out above, I consider it to be highly unlikely that the prosecutor will have, or indeed will be able, to accord the appropriate consideration to the sentencing process which is required of the judge. I agree with the submission of the director that the view of the individual prosecutor in such circumstances would be irrelevant, it being no more than an expression of the opinion of a prosecutor who has determined what submission should be made as to the range of sentences applicable in a particular case. I do not agree that such a submission is a submission of law. Indeed, if I am incorrect in that regard, and such a submission can be seen as a submission of law it would be incumbent upon the sentencing judge to give reasons why such a submission should be accepted or rejected. That is not a burden which should be imposed on sentencing judges who are engaged in a process of intuitive synthesis.

(Footnote references have been omitted.)

87    In Barbaro, the appellants had pleaded “guilty” to serious drug-related offences. Before they indicated that they would so plead, the prosecution and defence lawyers had conferred concerning the charges to be preferred. In the course of discussion the prosecution told the defence lawyers that the “sentencing range” for Barbaro was a head sentence of 32 - 37 years, with a non-parole period of 24 – 28 years. For the other appellant, Zirilli, the range was said to be 21 – 25 years, with a non-parole period of 16 – 19 years. At the commencement of the sentencing proceedings, the sentencing Judge indicated that she would not request the parties to offer their views as to sentencing ranges. Nonetheless, in the course of submissions, counsel for Zirilli informed her Honour of the sentencing range for his client, as previously suggested by the prosecution. The prosecution made no submission concerning the range of sentences. In the course of the hearing, her Honour told counsel for Barbaro that she was considering a life sentence and subsequently imposed that sentence, with a non-parole period of 30 years. In Zirilli’s case her Honour imposed a sentence of 26 years, with a non-parole period of 18 years.

88    On appeal to the High Court, the appellants submitted that the sentencing hearing was unfair because her Honour had refused to receive submissions from the prosecution as to range of sentences, thereby precluding herself from taking account of a relevant consideration. The appellants did not submit that the sentences imposed were manifestly excessive. They rather submitted that:

    the prosecution should have been permitted or required to make such submissions;

    there had been plea agreements which “settled” the matter; and

    the appellants could have used the prosecution’s views to their advantage in the sentencing process.

89    The majority of the High Court concluded that the prosecution was not permitted or required to provide to a sentencing judge its view as to the bounds of the range of sentences to be imposed. Further such a submission was not a submission of law, but a statement of opinion. At [7] their Honours said:

The prosecution’s statement of what are the bounds of the available range of sentences is a statement of opinion. Its expression advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed. That being so, the prosecution is not required, and should not be permitted, to make such a statement of bounds to a sentencing judge.

90    The majority noted that following the decision in MacNeil-Brown, a practice had arisen in Victoria by which the prosecution provided submissions as to the bounds of the available range of sentences. At [23] the majority concluded that to the extent that the decision in MacNeil-Brown was authority for that practice, it should be overruled, and that the practice should cease.

91    The majority considered that the concept of an “available range” of sentences was derived from the practice of courts of criminal appeal hearing appeals against sentence. In accordance with the decision in House v The King (1936) 55 CLR 499 an appellate court may infer that a manifestly excessive, or manifestly inadequate sentence bespeaks a miscarriage of the sentencing discretion. Frequently, it is said that such a sentence is outside of the range which could have been imposed if proper principles were applied. In other words, to set aside a sentence as manifestly excessive or manifestly inadequate is to identify a “substantial wrong” which has occurred in the sentencing process. In Barbaro the majority considered that the “essentially negative” proposition, that a sentence is so wrong that there must have been some misapplication of principle, cannot be safely transferred into a positive statement as to the upper and lower limits within which a sentence should properly be imposed. In any event the process by which an appellate court determines whether there has been error, “neither permits nor requires setting the bounds of the range of sentences within which the sentence should (or could) have fallen”. See [28]. Neither does the appellate court’s duty to fix a proper sentence permit or require such an enquiry.

92    The majority considered that:

    the MacNeil-Brown practice assumed that the prosecution’s proffering of a range would assist the sentencing judge, “to come to a fair and proper result” (see [29]);

    the accuracy of that assumption depended upon the assumption that in fixing the range, the prosecution would act “dispassionately”, that is fairly, as if it were in the position of the judge;

    the prosecution’s role is not that of a judge;

    frequently, sentencing judges are faced with submissions which invite leniency because of assistance provided to investigating authorities by the prisoner and/or because an early plea has avoided a long and costly trial;

    such invitation frequently comes from the prosecution and the defence, there being no party to put the case against leniency; and

    whilst the prosecution may be bound to advance such a submission, the view so advanced is not dispassionate.

93    At [33] their Honours observed, concerning the extent to which co-operation or an early plea should be taken into account in sentencing:

The statement by the prosecution of the bounds of an available range of sentences may lead to erroneous views about its importance in the process of sentencing with consequential blurring of what should be a sharp distinction between the role of the judge and the role of the prosecution in that process. If a judge sentences within the range which has been suggested by the prosecution, the statement of that range may well be seen as suggesting that the sentencing judge has been swayed by the prosecution’s view of what punishment should be imposed. By contrast, if the sentencing judge fixes a sentence outside the suggested range, appeal against sentence seems well-nigh inevitable.

94    The majority considered that:

    fixing the bounds of a range within which a sentence should fall suggests that sentencing is a “mathematical exercise”, (an approach which the High Court has previously rejected);

    any range of sentences must necessarily reflect conclusions or assumptions concerning findings about, and weight to be given to the relevant sentencing considerations in formulating the range; and

    in effect, the person formulating the range would have to predict the sentencing judge’s findings of fact.

95    At [38] – [41], their Honours concluded:

[38]    If a sentencing judge is properly informed about the parties’ submissions about what facts should be found, the relevant sentencing principles and comparable sentences, the judge will have all the information which is necessary to decide what sentence should be passed without any need for the prosecution to proffer its view about available range. If the judge is not sufficiently informed about what facts may or should be found, about the relevant principles or about comparable sentences, the prosecution’s proffering a range may help the sentencing judge avoid imposing a sentence which the prosecution can later say was manifestly inadequate. But it will not do anything to help the judge avoid specific error; it will not necessarily help the judge avoid imposing a sentence which the offender will later allege to be manifestly excessive. Most importantly, it will not assist the judge in carrying out the sentencing task in accordance with proper principle.

[39]    What is more, unless the sentencing judge gives some preliminary indication of the sentence which he or she intends to impose, there can be no occasion for the prosecution to anticipate possible error and make some correcting submission. Even in a case where the judge does give some preliminary indication of the proposed sentence, the role and duty of the prosecution remains the duty which has been indicated earlier in these reasons: to draw to the attention of the judge what are submitted to be the facts that should be found, the relevant principles that should be applied and what has been done in other (more or less) comparable cases. It is neither the role nor the duty of the prosecution to proffer some statement of the specific result which counsel then appearing for the prosecution (or the Director of Public Prosecutions or the Office of Public Prosecutions) considers should be reached or a statement of the bounds within which that result should fall.

[40]    The setting of bounds to the available range of sentences in a particular case must, however, be distinguished from the proper and ordinary use of sentencing statistics and other material indicating what sentences have been imposed in other (more or less) comparable cases. Consistency of sentencing is important. But the consistency that is sought is consistency in the application of relevant legal principles, not numerical equivalence.

[41]    As the plurality pointed out in Hili, in seeking consistency sentencing judges must have regard to what has been done in other cases. Those other cases may well establish a range of sentences which have been imposed. But that history does not establish that the sentences which have been imposed mark the outer bounds of the permissible discretion. The history stands as a yardstick against which to examine a proposed sentence. What is important is the unifying principles which those sentences both reveal and reflect. And as each of Buchanan JA and Kellam JA rightly observed in MacNeil-Brown, the synthesis of the “raw material” which must be considered on sentencing, including material like sentencing statistics and information about the sentences imposed in comparable cases, is the task of the sentencing judge, not counsel.

    (Footnote references have been omitted.)

96    In effect, the majority considered that the necessarily non-mathematical approach to the fixing of a sentence cannot be described so as accurately to demonstrate the conclusions and assumptions upon which it is based. In the absence of such information, the judge will not be able to assess any opinion offered by the prosecution as to appropriate range of sentences. At [42] – [43] their Honours set out their reasons for concluding that a statement of available range is merely an opinion as follows:

[42]    Contrary to the view of the majority in MacNeil-Brown, the prosecution’s conclusion about the bounds of the available range of sentences is a statement of opinion, not a submission of law. A statement of the bounds of the available range of sentences is a conclusion which depends upon identifying (and in many cases assuming) the facts and circumstances relevant to the offence and the offender and striking a balance between the many competing considerations which may bear upon the sentence.

[43]    A statement of bounds, on its face, purports to identify the points at which conclusions of manifest excess and manifest inadequacy of sentence become open. Leaving aside the evident difficulties which attend such pretended accuracy, it is important to recognise that manifest excess or manifest inadequacy of sentence founds an inference of error in the exercise of the sentencing discretion. But the nature of the error that has been made is not, and cannot be, identified. All that is known is that, because the result “upon the facts … is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance”. Hence, stating the bounds of the available range of sentences states no proposition of law.

(Footnote references have been omitted.)

97    At [47] – [49], their Honours said:

[47]    To describe the discussion between the prosecution and lawyers for the applicants as leading to plea agreements (or “settlement” of the matters) cannot obscure three fundamental propositions. First, it is for the prosecution, alone, to decide what charges are to be preferred against an accused person. Second, it is for the accused person, alone, to decide whether to plead guilty to the charges preferred. That decision cannot be made with any foreknowledge of what sentence will be imposed. Neither the prosecution nor the offender’s advisers can do anything more than proffer an opinion as to what might reasonably be expected to happen. Third, and of most immediate importance in these applications, it is for the sentencing judge, alone, to decide what sentence will be imposed.

[48]    The applicants’ allegations of unfairness depended upon giving the plea agreements and the prosecution’s expression of opinion about sentencing range relevance and importance that is not consistent with these principles. The prosecution decided what charges would be preferred against the applicants. The applicants decided whether to plead guilty to those charges. They did so in light of whatever advice they had from their own advisers and whatever weight they chose to give to the prosecution’s opinions. But they necessarily did so knowing that it was for the judge, alone, to decide what sentence would be passed upon them.

[49]    The applicants’ arguments that the sentencing judge ignored a relevant consideration in sentencing the applicants must also be rejected. Once it is understood that a submission by the prosecution about the bounds of the available range of sentences is no more than a statement of opinion, it follows that the sentencing judge need not, and should not, take it into account in fixing the sentences to be imposed.

    (Footnote references have been omitted.)

98    The following propositions emerge from the majority’s reasons:

    Any proposed range of sentences will either reflect the reliance and weight attributed to each relevant factor by the person proposing it, or that person’s prediction of the relevance and weight which will be attributed to it by the sentencing judge.

    Such a range may also reflect the weight attributed by the prosecution to factors of particular importance to the prosecuting authority, so that the formulation of the range may not be dispassionate.

    It will never be practicable to inform the judge of the weight and reliance attributed to the relevant sentencing considerations in order to explain the process by which any range has been determined.

    The expression of an identified range can never be more than an opinion.

    A sentencing judge need not, and should not take such an opinion into account.

    The choice of a range must be distinguished from the “proper and ordinary” use of sentencing statistics and information concerning sentences imposed in other, more or less comparable cases. Such cases provide a yardstick against which to measure a proposed sentence, rather than a basis for formulating the outer bounds of the permissible discretion.

    Consistency in sentencing is important, but the consistency sought is consistency in the application of relevant legal principles, not numerical equivalence.

    Notwithstanding any plea agreement (or “settlement”) it remains the prosecutor’s duty to decide upon the charge to be preferred.

    It is for the accused alone to decide whether to plead guilty to a preferred charge, which decision will be made without knowledge of the sentence which will be imposed.

    It is for the judge, alone, to fix the sentence.

Out of an abundance of caution we point out that the majority stated, at [39], that it is neither the role nor the duty of the prosecution, “to proffer some statement of the specific result which counsel then appearing for the prosecution … considers should be reached or a statement of the bounds within which that result should fall”. We stress the importance of this passage in answer to a submission that the decision in Barbaro applies only to submissions as to range, and not to submissions as to a specific outcome.

CASES CONSIDERING BARBARO

99    Since the judgment in Barbaro was delivered, it has been considered by the Victorian Court of Appeal and by various Judges of this Court and of the New South Wales, Victorian and Western Australian Supreme Courts. It has also been cited by the High Court. We will first consider the decision of the Victorian Court of Appeal. In Matthews v R [2014] VSCA 291, the Court (constituted by five Judges) heard three appeals against sentence. Each appellant sought to have his or her sentence set aside upon a ground which related to the suggestion by the prosecution of an appropriate range of sentences, each appellant claiming to rely upon the decision in Barbaro as demonstrating that the relevant submissions should not have been made. The appellant, Matthews’ ground of appeal was that:

The learned sentencing judge erred in taking the prosecution range into account as a sentencing consideration.

100    The appellant, Vu’s ground was that:

The sentencing judge erred in requesting a range from prosecuting counsel in response to receiving a range from defence counsel in her written submission; … .

101    The appellant, Hashimi’s ground was that:

The sentencing judge erred in law in taking into account the inadmissible submission of the prosecution on the sentencing range.

102    The Court unanimously dismissed each of these grounds of appeal. In Matthews’ case the Court concluded that the sentencing Judge had not allowed the submission as to range to fetter his discretion or, if he had, the Court would not intervene on appeal because it would not have passed a different sentence. In Vu’s case, the Court saw no basis for concluding that the sentencing Judge had, “abrogated his … responsibility to come to an independent decision regarding the appropriate sentencing range”. See [95]. In Hashimi’s case the Court was not persuaded that the sentencing Judge, “… took the range into account in a material way …”. See [138]. We have drawn this summary from the reasons of the majority (Warren CJ, Nettle and Redlich JJA). However, at [140] and [154], the other members of the Court (Priest JA and Lasry AJA) indicated that they concurred in these aspects of the majority’s reasons.

103    Notwithstanding unanimity as to outcome, there was an apparently significant difference of opinion as to the effect of the decision in Barbaro. The majority understood the appellants to submit that:

[A]lthough the receipt of a quantified range may not of itself amount to taking into account an irrelevant consideration, it should be inferred from the fact that a judge has sought and received a quantified range submission that the judge has allowed himself or herself to be swayed by the fact that it is the Crown’s view of the punishment which should be imposed.

(See Matthews at [17].)

The thrust of this submission seems to have been that each sentencing Judge took into account an irrelevant consideration.

104    The majority distinguished between, on the one hand, considerations which are relevant to a proper exercise of the sentencing discretion and, on the other, submissions on behalf of each party as to the outcome which, that party submits, ought to follow from an appropriate assessment of all relevant considerations. We understand this to be the meaning of the statement by the majority at [8] that:

As we understand it, a quantified range is not a finding of fact or law on which is based a sentencing decision. It is rather a proposed range for the sentence ostensibly derived from the synthesis of its own considerations.

The majority used the term “quantified range” to describe the outcome of the instinctive synthesis approach to sentencing, rather than a consideration to be taken into account in that process. In so doing the majority may have been seeking to avoid the conclusion that, in each case, the sentencing Judge had taken into account an irrelevant consideration. Such a deficiency may have been more likely to ground a successful appeal than would consideration of an irrelevant submission, the discounting of irrelevant submissions being a regular aspect of the judicial function. The minority seems to have been concerned that the distinction drawn by the majority might detract from the universal application of the decision in Barbaro. At [141] – [143] their Honours said, concerning the majority’s view:

141    To the extent that their Honours’ reasons might be understood as concluding that for a sentencing judge to take into account a submission advanced by the prosecution as to the range of sentences open to be imposed — colloquially, a MacNeil-Brown range — is not to take into account an irrelevant consideration, with respect, we cannot agree. It is necessary that we set out our reasons for that disagreement.

142    Warren CJ, Nettle and Redlich JJA concluded that a MacNeil-Brown range is not a consideration; that is, it is not a finding of fact or law which are the bases of a sentencing decision. Their Honours held that a MacNeil-Brown range is a proposed range for the sentence ostensibly derived from the synthesis of its own consideration. Moreover, it appears that their Honours do not understand the High Court in Barbaro to be saying that to take into account a MacNeil-Brown range is to take an irrelevant consideration into account. Rather, their Honours’ view is that the essence of the majority decision in Barbaro is that the practice of giving a MacNeil-Brown range should cease because of the risk of it leading judges into error. We respectfully disagree with these propositions.

143    In light of Barbaro it must now be accepted that a submission concerning range is the expression of an opinion proffered in order to influence the sentence to be imposed. It is put forward to persuade a judge that the exercise of the sentencing discretion will only be sound if the sentence the judge imposes falls within the range advanced. It is an opinion which is irrelevant to the exercise of the sentencing discretion. It advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principle of law or applying those principles to the facts in order to arrive at the sentence to be imposed. It is for that reason that the High Court concluded that such a ‘statement of bounds’ should not be permitted to be made. An error in principle had been exposed such that the decision in MacNeil-Brown should be overruled.

    (Footnote references have been omitted.)

105    At [144] their Honours stressed that they used the term “MacNeil-Brown range” to describe a range of sentences of imprisonment expressed in numerical terms, and not the available range of sentencing options, of which imprisonment is only one.

106    Whether or not the distinction drawn by the majority is valid or has real purpose, we consider that the statement by the minority at [141] – [143] accurately reflects the reasoning of the majority in Barbaro. In effect Priest JA and Lasry AJA seem to have understood the majority in Matthews et al to have attributed the decision in Barbaro to the High Court’s concern that to allow the prosecution to proffer a sentencing range might lead a sentencing judge into error. It might follow from that proposition that the prosecution could seek to identify a range in a way which, in its submission, obviated the risk identified by the High Court. However, if the decision in Barbaro establishes that the prosecution’s opinion as to sentencing range is irrelevant to the sentencing process, (as the minority in Matthews concluded and we accept), then it should not be part of the prosecution’s submissions, whether or not there is any real risk of leading the judge into error.

107    We turn to the decisions at first instance which have dealt with Barbaro. Apart from the decisions of Judges of this Court, the question was considered by Beech J of the Western Australian Supreme Court in Commissioner for Consumer Protection v Susilo [2014] WASC 50, by Cavanough J of the Victorian Supreme Court in Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134 and by Brereton J of the New South Wales Supreme Court in In the matter of Vault Market Pty Ltd [2014] NSWSC 1641.

108    In Susilo Beech J considered an application for relief, including the imposition of pecuniary penalties, for misleading and deceptive conduct contrary to the Australian Consumer Law. Before the hearing the regulator had filed submissions which set out a range within which, as it submitted, the proposed penalties should fall. The decision in Barbaro was delivered shortly before the hearing. At the hearing counsel for the regulator emphasized that her submissions were not statements of the available range or bounds but, “the view or submission of [the] specialist regulator as to the outcome of the application of the various penalty factors to determine the penalty for this case”. See [115]. The regulator also submitted that her role differed from that of the prosecutor in criminal proceedings and that, in particular, the relevant rules of court required that the relief or remedy sought in the proceedings be identified in the originating process. Beech J noted that decisions in this Court supported the receipt of such submissions. His Honour found it unnecessary to decide any question arising out of the decision in Barbaro.

109    In Grocon, Cavanough J was considering penalties for contempt of court. The parties had filed submissions as to the appropriate amounts to be imposed as fines. At [70] his Honour observed:

Subsequently, as I have indicated, the decision of the High Court in Barbaro was published. All parties have now agreed with my provisional conclusion that Barbaro requires me to disregard completely all submissions that suggested particular figures or ranges for the penalty to be imposed.

110    The judgment in Grocon was published on 31 March 2014. Hence we do not know whether the decision in Matthews (published on 19 November 2014) would have affected it in any way. It has been suggested that as Grocon involved proceedings for contempt (both civil and criminal) the considerations raised in Barbaro are more readily applied to it than they may be to the present case.

111    In Vault Market Brereton J referred to some of the cases at first instance in this Court and suggested that the “prevailing view” was that Barbaro did not apply to civil penalty proceedings.

112    We turn to first instance decisions in this Court. In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160, White J considered the effect of Barbaro on pecuniary penalty proceedings pursuant to the Fair Work Act 2009 (Cth). The parties proferred agreed penalties. His Honour referred to NW Frozen Foods, Mobil and Australian Securities and Investments Commission v Ingleby (2013) 275 FLR 171 and said at [27] – [31]:

27    Although the decision in Barbaro concerns sentencing in the criminal courts, the reasons of the High Court appear also to have relevance to the imposition of civil penalties. They may require this Court to review the approach set out in NW Frozen Foods and Mobil Oil.

28    However, I consider that such a view is neither necessary nor appropriate presently. In the first place, the decisions of the Full Court, even if not strictly binding, are of considerable persuasive value and should, in my opinion, be followed in the circumstances of this case.

29    Secondly, the parties have not made any submission as to the effect of Barbaro in the present context.

30    Thirdly, the submissions as to the agreed penalties have been made. There are practical difficulties in the submissions being withdrawn. It could be ignored and the parties then given the opportunity to be heard further. However, that is unnecessary because, as will be seen, I consider that the penalties of the order proposed by the parties are, in any event, appropriate.

31    This means the implications of the decision in Barbaro in relation to the imposition of civil penalties need not be addressed presently.

113    We should say something about the decision of the Victorian Court of Appeal in Ingleby. The case concerned the imposition of a pecuniary penalty pursuant to the Corporations Act 2001 (Cth) (the “Corporations Act”). The Court (Weinberg and Harper JJA, Hargrave AJA) refused to follow NW Frozen Foods and Mobil, Weinberg J referring to his own earlier decision as a member of this Court in Colgate-Palmolive (supra). At [29] his Honour indicated that he considered the two decisions to be wrong, “because they treat the trial judge, who is to impose the pecuniary penalty, as though he or she is exercising an appellate role”. Such an approach constituted a “fundamental departure from the judicial function in relation to sentencing, and one that simply ought not to be countenanced”.

114    It is fair to say that his Honour’s remarks anticipated at least part of the reasoning of the High Court in Barbaro. However his Honour went on to say at [30]:

That is not to say that a judge faced with a negotiated settlement in a pecuniary penalty matter should not give due weight to any agreed figure, if one happens to be put forward. However, that figure should be regarded as nothing more than a submission. It should have no binding force of any kind, even if it happens to fall “within the range”.

In a footnote, his Honour asserts that the “better course” is to offer a sentencing range.

115    The decision in Ingleby, of course, preceded the decision in Barbaro. It will be clear by now that we understand the decision in Barbaro to exclude submissions as to the appropriate outcome or range within which such outcome should fall. We also consider that the fact of an agreed penalty is generally irrelevant to the process of quantifying a pecuniary penalty, other than to the extent that it may be relevant to questions such as contrition or cooperation.

116    In Australian Competition and Consumer Commission v Flight Centre Limited (No 3) [2014] FCA 292, Logan J considered the imposition of pecuniary penalties pursuant to Part IV of the Trade Practices Act. At [56] his Honour noted that the parties had made submissions suggesting ranges of penalties. His Honour considered that the decision in Barbaro should be applied by analogy to the fixing of civil penalties, and so declined to act upon the submissions as to range.

117    There have been at least 13 other decisions at first instance in this Court, in which Barbaro has been considered. However the case was discussed in detail in only two of them, by Middleton J in Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2014] ATPR ¶42-469, and by McKerracher J in Australian Competition and Consumer Commission v Mandurvit Pty Ltd [2014] FCA 464. In the other cases, the Judges have adopted the reasons of Middleton J in Energy, or those of McKerracher J in Mandurvit. Alternatively, they have considered themselves to be bound by the decisions in NW Frozen Foods and Mobil. Hence it is necessary only that we examine the reasons in Energy and in Mandurvit.

118    Energy concerned the imposition of pecuniary penalties pursuant to the Competition and Consumer Act 2010 (Cth) (the “Competition and Consumer Act”). The parties had agreed upon appropriate orders, including the amounts of pecuniary penalties to be imposed. Middleton J, after a detailed examination of the case, concluded at [105] that he was satisfied, “that the penalties suggested are within the permissible range of penalties for breaches of the kind made by the relevant respondents, and independently are the appropriate penalties in respect of each relevant respondent”. His Honour then dealt with the decision in Barbaro, concluding at [150] as follows:

In light of the above observations, I do not consider that the High Court intended to exclude, in a civil context, the making of submissions (joint or otherwise) by the parties as to appropriate orders to make (not just as to penalty, but also as to injunctions and disqualification orders). Without specific mention and consideration, I do not conclude that the High Court implicitly overruled the earlier Full Court decisions in NW Frozen Foods and Mobil Oil.

119    His Honour then referred to the decisions in Flight Centre and Grocon, observing that they did not persuade him to change his view, particularly as he was, in any event, bound by NW Frozen Foods and Mobil.

120    Middleton J considered that the “main focus” of the decision in Barbaro was the practice of making submissions as to the range of sentences, which practice was approved in MacNeil-Brown, and there said to be part of a prosecutor’s duty. His Honour noted that:

    in Barbaro the High Court considered a submission that the appellant had been denied procedural fairness as a result of the sentencing Judge having refused to receive and act on submissions as to sentencing range;

    the majority in Barbaro did not hold that a judge would err if he or she received and acted upon submissions as to range; and

    the majority was only concerned with the refusal of the sentencing Judge to receive and act upon such a submission.

121    His Honour then referred to the majority’s reasoning in Barbaro at [36] - [38], where their Honours pointed out that necessarily, agreed submissions either made undisclosed assumptions as to findings of fact, and attributions of weight to the various relevant considerations, or attempted to predict how the judge would deal with those matters. At [125], Middleton J observed:

I do not consider the ratio or any seriously considered dicta in Barbaro require that I depart in this civil penalty proceeding from the approach previously taken in this Court as to the receipt and taking into account of submissions made by the regulator (or for that matter another party) as to the appropriate penalty.

122    Middleton J seems to have assumed that the problems in the use of MacNeil-Brown submissions, identified by the majority in Barbaro, have no relevance to proceedings for the imposition of pecuniary penalties. His Honour also considered that the decision in Barbaro dealt with a very specialized set of facts. The circumstances of the case were, undoubtedly, unusual. However the majority concluded that the sentencing Judge had acted properly in refusing to receive and consider submissions as to ranges. In so doing their Honours necessarily, and expressly rejected the reasoning in MacNeil-Brown.

123    Middleton J considered that criminal sentencing principles might have some application in fixing pecuniary penalties, but that such principles must be, “applied to give effect to the purpose of the [relevant] legislation”. See [129]. His Honour did not go on to demonstrate any such statutory purpose or how it may have affected the application of sentencing principles in the case under consideration.

124    His Honour then pointed out that he had not been supplied with, “a ‘bare’ statement [as to the] range of penalties, or [a] specific penalty”, which said nothing about the conclusions or assumptions upon which the statement was based. See [130]. He said that he had the benefit of submissions and an agreed statement of facts, which he considered to be sufficient for his purposes. His Honour’s emphasis upon the word “bare”, is, we think, misconceived. He seems to have been referring to the passage in Barbaro at [37] where the majority observed that:

This serves to demonstrate that bare statement of a range tells a sentencing judge nothing of the conclusions or assumptions upon which the range depends.

125    In effect their Honours considered that it was not reasonably practicable for the prosecution to provide a detailed explanation of the process by which a range had been identified. As we understand it, their Honours concluded that submissions which address the evidence, the relevant principles and comparable decisions are permissible, and that any statement of opinion, based upon such considerations is impermissible (being an opinion) and unnecessary.

126    Middleton J then pointed out that the decisions in NW Frozen Foods and Mobil were binding on him, and that they supported the practice by which a regulator made submissions as to the amount of any civil penalty to be imposed, based upon agreed facts and joint legal submissions. One wonders why a regulator should, as a party, be put in a special position, at least in the absence of some statutory authority to that effect. After all, many litigants would claim to have expertise in the subject matter of their litigation, in some cases justifiably.

127    Ethical rules forbid a barrister from, in his or her submissions, offering a personal opinion as to the case. See GN Williams, Harrison’s Law and Conduct of the Legal Profession in Queensland (2nd ed) at 57. At least to some extent, this rule is based upon the view that counsel should not become personally involved in the matter in dispute. As we understand it, counsel’s submissions are to be based upon the evidence, not on his or her opinions or those of the party for whom he or she appears. Such opinions are irrelevant. If a party has particular expertise which leads to its having a relevant opinion concerning some aspect of the case, then it should be put into evidence so that it can be tested if necessary. We do not exclude the possibility that such evidence may be received by consent. It may also be possible for aspects of expert evidence (including opinions) to be simply admitted by the parties as facts. However the evidence must be relevant. A mere opinion, not admissible as an expert opinion, would not be relevant to the discharge by a judge of his or her duty to fix and impose a pecuniary penalty.

128    In Energy Middleton J asserted at [137] et seq that there were, “important differences between the criminal sentencing context and the civil penalty context, and the position of the crown prosecutors and regulators.” We accept that there are such differences. His Honour pointed out that in criminal sentencing, the prosecution does not seek a particular outcome. We consider that the current position is more accurately described at [4.5500] (update 254) of Watson Blackmore and Hosking (supra) as follows:

Comments by either side on the evidence must be reasonable and proper. Counsel should not make a submission not supported by the evidence. The role of counsel is to make submissions and not to express personal opinions. Whether and to what extent the judge should intervene during improper matters put in address is very much a matter of discretion.

…

As the relevant Bar rules and DPP prosecution guidelines recognise, a prosecutor must not press the prosecution case for conviction beyond a full and firm presentation of that case or, by language or other conduct, seek to inflame or bias the court against the accused. Many cases support this point. However, prosecutors are not required to be passionless or prohibited from appealing to emotion; it is undue prejudice or emotion which is to be avoided. What may be appropriate in the “feel and atmosphere” of one trial, may be inappropriate in another. … Criminal trials are adversarial in nature. “If, in the course of a trial, the defence takes a particularly forceful and strong line of attack on the prosecution case … in a responsible way, it is quite appropriate for the prosecution in its closing address to take an equally strong line of attack on the defence case in a responsible way so that both sides of the case are presented in balance to the jury.”

The US Supreme Court commented, “[a prosecutor] may prosecute with earnestness and vigour – indeed, he should do so. But while he may strike hard blows, he is not at liberty to strike fouls ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one”.

(Footnote references have been omitted.)

129    Although these comments relate specifically to addresses, we understand them to reflect generally the duty of the prosecution in the conduct of a criminal trial.

130    We accept that a regulator may have, and pursue a particular view as to the appropriate outcome of the proceedings. However it does not follow that its particular interest in the proceedings gives any more weight to its opinion than that attributable to those of any other party, nor does it make such opinions permissible in, or relevant to the proceedings. If its expertise provides a basis for the receipt of a relevant opinion, then it should be properly evidenced, so that it can be the subject of counsel’s submissions.

131    Middleton J then referred to the proposition that deterrence is the primary purpose to be served by the imposition of a pecuniary penalty. We have previously given our views concerning that proposition.

132    At [149], Middleton J observed:

The acceptance of agreed penalty amounts (providing always that the Court undertakes its duty to fix the appropriate penalty) increases the certainty of outcome for regulators and wrongdoers. This increases the predictability of outcomes for regulators and respondents and makes it more likely that proceedings will be resolved by agreement in an appropriate way and under the supervision of the Court. This in turn improves deterrence by encouraging the implementation of corrective measures and freeing up the resources of the regulator.

133    It became obvious in the course of oral submissions before us that the perceived importance of “certainty” lay at the heart of the concern being expressed by the Director and the respondents as to the possible application of Barbaro in this case. However the obvious response to such concern, is that such certainty could only be achieved if there were a very high level of expectation that the Court would adopt the agreed outcome. Such an expectation would belie the pious assertion, frequently made, that it is for the Court to make the final decision. It is not clear to us that it is possible to maintain the public perception that the Court imposes the penalty and, at the same time, lead the parties to believe that their agreement will probably be adopted.

134    With all respect to Middleton J we conclude that his reasons do not offer a viable basis for limiting the applicability of the decision in Barbaro to criminal sentencing.

135    We turn to the decision of McKerracher J in Mandurvit. That case also arose under the Competition and Consumer Act. Again the parties had agreed on proposed orders, including the imposition of a pecuniary penalty in an identified amount. His Honour considered the decisions in Barbaro, NW Frozen Foods, Mobil and many others cases. Initially, his Honour accepted that certain statements of principle in Barbaro were capable of wider application. However his Honour pointed out that the reasoning in that case, “does not indicate that application of this principle to civil pecuniary penalty cases was an intended consequence of the statement”. See [48]. At [7] in Barbaro, the majority advanced two propositions, namely:

    a prosecution statement as to a range of sentence is a matter of opinion; and

    for that reason, the prosecution should not be permitted to make such a statement.

136    We suggest that it is entirely orthodox for any court, including an ultimate court of appeal, to limit its reasoning to the case in hand. We see no significance in the fact that the High Court did not seek to explain the possible application of the decision to cases other than sentencing cases. As we understand the High Court’s reasoning, the expression of such an opinion should not be permitted because it advances no proposition of law or fact. Absent any statutory provision to the contrary, such opinion is not properly the basis of submissions. Of course, that conclusion says nothing about the possibility that a relevant expert opinion may be received into evidence, by consent or otherwise, and then be the subject of comment in addresses.

137    McKerracher J rejected arguments based upon the fact that members of the High Court who participated in the decision in Barbaro had, as members of this Court, followed or approved the practice with which we are presently concerned. His Honour was plainly correct to do so. His Honour also correctly rejected the submission that anything could be inferred from the fact that the High Court had not previously criticised the practice in cases where it may have been able to do so. His Honour seems to have accepted that he was effectively bound by the decision in NW Frozen Foods. McKerracher J also agreed with observations made by Middleton J in Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] ATPR ¶42-449 at [42], a decision which predated Barbaro and, to some extent, anticipated the problems identified by the High Court in that case. The views there expressed by Middleton J are similar to those which his Honour expressed in Energy.

138    The parties in Mandurvit sought to draw a distinction between defining an available range, as approved in MacNeil-Brown, and presenting an agreed penalty, particularly if ACCC, as a specialist regulator, explains why the proposed pecuniary penalty would have the necessary deterrent effect. It was submitted that such a process did not involve ACCC, “stepping into the shoes of the Judge to identify the outer limits of a permissible penalty”. See [62]. This argument assumes that the real vice in MacNeil-Brown was the usurpation by the sentencing Judge of the appellate role, which role involved the formulation of a range. However the High Court did not consider that the formulation of a range was necessarily part of the appellate process. The High Court’s concern was rather that whilst such an approach might be appropriate in the detection of latent error, it did not follow that it was capable of adaptation so as to provide a relevant sentencing guide. The mischief of applying such an approach in fixing a sentence is that it leads to an arbitrary limit upon the sentencing discretion. It does so because choice of the range necessarily depends upon the assumption that circumstances leading to the imposition of penalties in earlier cases can be objectively compared with those of the case in hand, so as to produce a range expressed in quantitative terms. However, as the majority explained in Barbaro, the process of instinctive synthesis does not permit such an approach.

139    The parties in Mandurvit submitted that there was a difference between fixing a range and agreeing to a proposed penalty. If, as they submitted, the vice identified in Barbaro was attributable to the notion that in MacNeil-Brown, the Victorian Court of Appeal, had, in effect, counselled the application of an approach reserved for use in appeals, the High Court’s view that such approach was erroneous would not lead to the conclusion that an agreement as to a penalty (as opposed to a range) was also erroneous. However, as we have previously observed, it is clear that the majority in Barbaro considered that the prosecution should not, in submissions, identify either a specific outcome or a range within which such outcome should fall. See Barbaro at [39]. Any agreed penalty is, at best, a shared opinion as to the effect of previous, more or less comparable penalties, having regard to the circumstances of the case in hand. However it is likely that an agreed sentence will also reflect the particular interests of the regulator and the respondent in question, leading to the real possibility, or perhaps probability, that the opinion is not based on a dispassionate view of all of the circumstances. The agreed figure may simply reflect the point at which each party considers that is in its best interests to agree. Further, such an approach invites the Court to start with the agreed penalty, rather than with its instinctive synthesis of the relevant circumstances. Analysed in this way, we see no merit in the argument which appears at [62] – [64] of the reasons in Mandurvit.

140    McKerracher J then dealt with a submission that there is an “important” and “relevant” difference between the objects of civil and criminal penalties, and between the respective roles of criminal prosecutors and regulators seeking pecuniary penalties. We have already dealt with this matter.

141    As to the difference between the roles of the prosecution and regulators, we accept that there is a distinction. Whilst in Mandurvit various differences were identified, none offered a principled basis for declining to apply the reasoning in Barbaro to proceedings for the imposition of a pecuniary penalty. Although Barbaro arose in the context of a misguided assertion as to the prosecution’s duty, the majority’s reasons were not only about such duty. Their Honours rejected the proposition that the prosecution had a duty to offer a range of sentences, but such rejection was based upon the view that it would, in any event, be inappropriate for the prosecution to do so. In particular, at [29] – [33] the Court indicated that the prosecution’s view may not be “dispassionate” because of concerns of the kind outlined in those paragraphs. The increased involvement by a regulator in such matters, and in the original investigation, as set out at [71] of the reasons in Mandurvit, would suggest that any view expressed by a regulator is also unlikely to be dispassionate, in the sense in which the High Court used that term. Further, a regulator has neither the history of independence nor detachment from the investigation which are generally characteristics of prosecuting authorities. These considerations suggest that a regulator is less likely to be dispassionate than the prosecution in a criminal case.

142    Since writing and circulating the above consideration of the cases in which the decision in Barbaro has been considered, our attention has been drawn to the decision of the Court of Appeal of the Australian Capital Territory in Ojielumhen v The Queen [2014] ACTCA 28 and the decision of the Court of Appeal of Western Australia in Legal Profession Complaints Committee v Love [2014] WASC 389. As to the former case, the Court of Appeal seems simply to have applied the decision in Barbaro. As to the latter, we have dealt with most of the issues raised by the Court of Appeal. It seems that the decision was based upon:

    the distinction between protective and penal proceedings (see [75]); and

    proceedings in a non-judicial tribunal which is empowered to give effect to settlements (see [78]).

The case has no real relevance for present purposes.

Conclusions regarding decisions considering Barbaro

143    For present purposes, we derive from these cases only the proposition that Judges at first instance have not applied Barbaro in pecuniary penalty proceedings because they believe that they are bound by the decisions in NW Frozen Foods and Mobil, or at least that those decisions are highly persuasive. To the extent that Judges have so proceeded, we accept that they have performed their duty. Whether we should, in this case, proceed in the same way depends upon our view of the decision in Barbaro. For present purposes the issue is as to the extent to which an opinion as to range of penalty, actual outcome, or the fact of an agreed penalty should be disclosed to the Court and taken into account by it in fixing a pecuniary penalty. Relevant questions concern:

    the distinction between evidence and submissions;

    the relevance of opinions held by a regulator and/or other parties;

    the mechanism for fixing a penalty, using the process of instinctive synthesis recognized by the High Court as applicable in criminal cases; and

    the extent to which identification of a range of penalties or a suggested outcome or an agreed penalty, advances or compromises the performance by the Court of its functions.

In addressing these matters, we must keep in mind the importance of public perceptions and the public interest.

144    On 11 March 2015, the High Court published its reasons in CMB v Attorney General for New South Wales (2015) 317 ALR 308. That was an appeal from a decision of the Court of Criminal Appeal of New South Wales. The Attorney General had appealed to that Court against a sentence imposed in the District Court. On the hearing of the appeal, the Attorney General sought to depart from the position adopted by the prosecution at the sentencing hearing. On appeal to the High Court, Kiefel, Bell and Keane JJ said at [64], citing Barbaro (inter alia), that:

The determination of the appropriate sentence is one that rests solely with the court. The public interest in the sentencing of offenders does not permit the parties to bind the court by their agreement. Nonetheless, the prosecutor is under a duty to assist the court to avoid appealable error. Where the sentencing judge indicates the form of proposed sentencing order and the prosecutor considers that such a penalty would be manifestly inadequate, the prosecutor discharges his or her duty to the court by so submitting. The failure to do so is a material consideration in the exercise by the Court of Criminal Appeal of the residual discretion. The weight of that consideration will depend upon all of the circumstances. A prosecution concession that a non-custodial sentence is an available disposition is a powerful consideration weighing against intervening to impose a sentence of imprisonment on appeal.