FEDERAL COURT OF AUSTRALIA

Bragdon v Director of the Fair Work Building Industry Inspectorate

[2016] FCAFC 64

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The declarations and orders made on 10 September 2015 in NSD 180 of 2014 be set aside and in lieu thereof it be ordered that:

The application filed on 21 February 2014, as amended on 8 August 2014, be dismissed.

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 the first judgment from which the present appeal has been brought (Director of the Fair Work Building Industry Inspectorate v Bragdon [2015] FCA 668; (2015) 147 ALD 373), the primary judge found that each of the first, second and third appellants had contravened civil penalty provisions of the Fair Work Act 2009 (Cth) (“the FW Act”). In the second judgment from which the present appeal has been brought (Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998), the primary judge made declarations to give effect to those conclusions and made orders imposing civil penalties.

2    One further order was to the effect that the first and second appellants must personally pay the penalties imposed on them and not seek or receive reimbursement from any of the other appellants, or cause any of them to pay the penalties.

3    The present appeal puts in issue the liability of the appellants, the amount of the penalty orders and the appropriateness of the orders for personal payment.

Background Facts

4    On 6 June 2013, Chad Bragdon (the first appellant) and Anthony Kong (the second appellant) were employed as organisers for either the fourth or fifth appellant. Any uncertainty about this issue need not be resolved on the present appeal. The fourth and fifth appellants are unions based in Queensland. The services of Mr Bragdon and Mr Kong were available to the third appellant (the Construction, Forestry, Mining and Energy Union (“CFMEU”) which is a federal organisation). The CFMEU admits that it is liable for conduct by Mr Bragdon and Mr Kong, as referred to hereunder, which might be confirmed on this appeal to have breached particular provisions of the FW Act.

5    The respondent (“the Director”) is a statutory office holder under the Fair Work (Building Industry) Act 2012 (Cth).

6    The relevant events occurred on 6 June 2013 at a construction site connected with the parking facilities for the domestic terminal at Sydney Airport where the head contractor was Abigroup Contractors Pty Ltd (“Abigroup”).

7    On 6 June 2013, Mr Bragdon and Mr Kong each held an “entry permit” within the meaning of s 512 of the FW Act, and also a Queensland entry permit under s 134 of the Work Health and Safety Act 2011 (Qld). Neither held a “WHS entry permit” under the Work Health and Safety Act 2011 (NSW) (“the NSW WHS Act”), a matter which is significant for the present appeal.

8    On 6 June 2013, between about 6.30 am and 7.10 am, Messrs Bragdon and Kong arrived at the site with an organiser of the CFMEU, Mr Antonio Vicente. It is a matter of central importance to the present appeal that it was alleged, in the further amended statement of claim:

15.    The purpose of the First and Second Respondent’s [ie. Mr Bragdon and Mr Kong’s] entry on 6 June 2013 was for work health and safety purposes.

and that the primary judge found that, when they entered the site and thereafter, Messrs Bragdon and Kong “purported” to exercise rights under the NSW WHS Act (as referred to in Part 3-4 of Chapter 3 of the FW Act) for which, as we have said, neither held a NSW WHS entry permit.

The statutory provisions

9    Before we deal further with the facts, the allegations and the findings of the primary judge it will be useful to set out the statutory scheme in a little detail.

10    Part 3-4 of Chapter 3 of the FW Act deals with “Right of entry”. In the Division of Part 3-4 with which the present appeal is concerned (Division 3), the FW Act deals with “State or Territory OHS rights” and in Division 4 of Part 3-4 some “Prohibitions” are stated.

11    The opening section in Division 3 is s 494. It provides, by s 494(1):

494    Official must be permit holder to exercise State or Territory OHS right

Official must be permit holder

(1)    An official of an organisation must not exercise a State or Territory OHS right unless the official is a permit holder.

Note:    This subsection is a civil remedy provision (see Part 4-1).

(Emphasis added.)

12    The meaning of “State or Territory OHS right” is given by s 494(2). It is a relevantly defined as a right to enter premises that is “conferred by a State … OHS law” in respect of premises under the control of a “constitutional corporation”, such as Abigroup. The NSW WHS Act is such a law and under ss 117(1) and 121(1) of it such a right is conferred on “a [NSW] WHS entry permit holder”.

13    It is necessary to repeat that neither Mr Bragdon nor Mr Kong held a NSW WHS entry permit under the NSW WHS Act and, accordingly, neither could exercise a State or Territory OHS right, even though each was a “permit holder” i.e. the holder of an entry permit under the FW Act (s 12).

14    The evident purpose of s 494 is to ensure that an official does not exercise any State or Territory OHS right which that official might have unless the official also holds an entry permit under the FW Act. This correlates with a provision in the NSW WHS Act to similar effect (s 124: see below at [24]). Thus, although Mr Bragdon and Mr Kong each held a federal entry permit, neither was entitled to exercise a State OHS right in New South Wales.

15    If either Mr Bragdon or Mr Kong had been entitled to exercise a State or Territory OHS right on 6 June 2013, the following further restrictions in the FW Act would have applied to them.

16    They could not (i.e. must not) have exercised a State or Territory OHS right to inspect or otherwise access an employee record without having given 24 hours written notice (FW Act, s 495). They could not exercise a State or Territory OHS right, if asked to produce their entry permit (i.e. the federal entry permit), unless the permit was produced (FW Act, s 497). There are similar requirements in Part 7 Div 4 of the NSW WHS Act (for example, see s 122 below at [23]).

17    They might only exercise a State or Territory OHS right during working hours (FW Act, s 498), they must not contravene a condition on the entry permit (FW Act, s 496) and they must comply with reasonable requests to comply with the occupational health and safety requirements applying to the premises (FW Act, s 499).

18    In addition, the prohibitions in Division 4 would have applied, including:

500    Permit holder must not hinder or obstruct

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.

Note 1:    This section is a civil remedy provision (see Part 4-1).

Note 2:    A permit holder, or the organisation to which the permit holder belongs, may also be subject to an order by the FWC under section 508 if rights under this Part are misused.

Note 3:    A person must not intentionally hinder or obstruct a permit holder, exercising rights under this Part (see section 502).

…

503    Misrepresentations about things authorised by this Part

(1)    A person must not take action:

(a)    with the intention of giving the impression; or

(b)    reckless as to whether the impression is given;

that the doing of a thing is authorised by this Part if it is not so authorised.

Note:    This subsection is a civil remedy provision (see Part 4-1).

(2)    Subsection (1) does not apply if the person reasonably believes that the doing of the thing is authorised.

19    Correspondingly, they would have enjoyed the following protections as permit holders:

501    Person must not refuse or delay entry

A person must not refuse or unduly delay entry onto premises by a permit holder who is entitled to enter the premises in accordance with this Part.

Note:    This section is a civil remedy provision (see Part 4-1).

502    Person must not hinder or obstruct permit holder

(1)    A person must not intentionally hinder or obstruct a permit holder exercising rights in accordance with this Part.

Note:    This subsection is a civil remedy provision (see Part 4-1).

(2)    To avoid doubt, a failure to agree on a place as referred to in paragraph 483(5)(b), 483C(6)(b) or 483E(6)(b) does not constitute hindering or obstructing a permit holder.

(3)    Without limiting subsection (1), that subsection extends to hindering or obstructing that occurs after an entry notice is given but before a permit holder enters premises.

20    In the NSW WHS Act, the following provisions require mention: ss 117, 118, 121, 122 and 124.

21    Section 117 provides:

117    Entry to inquire into suspected contraventions

(1)    A WHS entry permit holder may enter a workplace for the purpose of inquiring into a suspected contravention of this Act that relates to, or affects, a relevant worker.

(2)    The WHS entry permit holder must reasonably suspect before entering the workplace that the contravention has occurred or is occurring.

22    Section 118 states the rights which may be exercised under the Division (Division 2 of Part 7 of the NSW WHS Act) in which s 117 appears.

23    Sections 121 and 122 (in Division 3) provide:

121    Entry to consult and advise workers

(1)    A WHS entry permit holder may enter a workplace to consult on work health and safety matters with, and provide advice on those matters to, one or more relevant workers who wish to participate in the discussions.

(2)    A WHS entry permit holder may, after entering a workplace under this Division, warn any person whom the WHS entry permit holder reasonably believes to be exposed to a serious risk to his or her health or safety, emanating from an immediate or imminent exposure to a hazard, of that risk.

122    Notice of entry

(1)    Before entering a workplace under this Division, a WHS entry permit holder must give notice of the proposed entry to the relevant person conducting a business or undertaking.

(2)    The notice must comply with the regulations.

(3)    The notice must be given during the usual working hours at that workplace at least 24 hours, but not more than 14 days, before the entry.

24    Section 124 provides:

124    WHS entry permit holder must also hold permit under other law

A WHS entry permit holder must not enter a workplace unless he or she also holds an entry permit under the Fair Work Act or the Industrial Relations Act 1996.

WHS civil penalty provision.

Maximum penalty: $10,000.

Further factual matters

25    Before we deal further with the application or engagement of the two statutory schemes, the facts should be further recounted. It is possible to do so from the facts found by the primary judge.

26    When they arrived at the site, Messrs Bragdon and Kong did not assert that they were exercising any rights under the FW Act or the NSW WHS Act, and they had not given notice that they would seek to do so. As we have said, they did not, in any event, have any rights under the NSW WHS Act or any rights under Division 3 of Part 3-4 of Chapter 3 of the FW Act which they were entitled to exercise.

27    Messrs Bragdon, Kong and Vicente were met by Mr John Campanaro, the Abigroup Safety Co-ordinator. The primary judge described the meeting in the following terms (at [24]):

24    … Mr Vicente introduced Mr Bragdon and Mr Kong – but Mr Campanaro did not then “catch” Mr Kong’s name. It was only after they had left the site that Mr Campanaro learnt of his identity. It was nevertheless after the introductions that the following conversation occurred:

Vicente :    “They’ve come to look at the site.”

Campanaro:    “OK, Tony you know that Abigroup has a policy about PPE on site. Do you have safety gloves and glasses?”

Mr Bragdon and Mr Kong stated that they had gloves [glasses] but did not have gloves. The conversation continued:

Campanaro :    “Ok that’s fine, just stay here (in the car park) and I’ll get you some gloves and we’ll walk in (to the site) together.”

Mr Campanaro maintained that they all agreed. Mr Campanaro then left them and went to the site office which is adjacent to the car park to collect some safety gloves

(Emphasis in original.)

28    At [18] to [23] the primary judge also examined the dealings that had occurred between Mr Vicente and Mr Campanaro in the days immediately before 6 June but found nothing of relevance to their entry on that date.

29    The primary judge found:

25    … Neither during that conversation, nor at any other point of time during their visit, did Mr Campanaro ask them to produce any entry permit or ask them to leave the site. …

…

31    … Mr Campanaro did not require either Mr Bragdon or Mr Kong to produce an entry permit at the outset and did not require them to exercise any statutory right of entry.

30    However, Messrs Bragdon and Kong did not wait until the provision of additional (required) safety gear. They went immediately, and unaccompanied, “upstairs” to a “deck” where concrete was being poured and, in firm tones, directed workers to stop the pour and leave the deck because it was “unsafe”.

31    A meeting of the safety committee was then convened by management and the committee approved the existing arrangements. About this time, requests were made for Messrs Bragdon and Kong to each produce an entry permit, but the requests were deflected with promises that permits would be provided later.

32    The following facts were agreed for the purpose of the trial:

18.    Whilst on the Site, the First respondent identified and referred to alleged safety concerns and breaches of safety legislation.

19.    Whilst on the Site, the Second Respondent was requested to produce his entry permit/s on three occasions by a representative of Abigroup, Mr Shane Tozer.

20.    The Second Respondent did not produce his entry permit/s for inspection when requested to do so by Mr Tozer.

21.    When requested to show his entry permit/s the Second Respondent did not tell Abigroup that he did not hold an entry permit under the NSW WHS Act.

22.    When requested to show his entry permit/s the Second Respondent said he would provide his permit/s later.

23.    The Second Respondent, despite failing to produce any entry permit/s, remained on the Site.

24.    On 6 June 2013 the Second Respondent did not have an entry permit under the NSW WHS Act and was therefore not authorised to exercise a right of entry for work health and safety purposes under the FW Act and the NSW WHS Act to enter, and remain on, the Site that day.

25.    Whilst on the Site, the Second Respondent was asked to identify himself to Mr Tozer. The Second Respondent identified himself as “Steve Irwin”.

26.    The Second Respondent is not “Steven Irwin”.

27.    Whilst they remained on the Site, the First Respondent continued to raise and discuss alleged safety issues.

Section 497 of the FW Act

33    It was critical to the conclusions of the primary judge that, notwithstanding the facts above, he found (at [69]):

•    the fact that neither Mr Bragdon nor Mr Kong possessed a State entry permit does not preclude a conclusion that each was nevertheless “exercise[ing] a State or Territory OHS right…”.

34    That conclusion was stated in connection with an allegation that each of Mr Bragdon and Mr Kong had breached s 497 of the FW Act. We referred earlier to s 497, but did not set it out. Section 497 provides:

497    Producing entry permit

A permit holder must not exercise a State or Territory OHS right unless the permit holder produces his or her entry permit for inspection when requested to do so by the occupier of the premises or an affected employer.

Note:    This section is a civil remedy provision (see Part 4-1).

35    The findings of the primary judge about those particular allegations were reflected in the following declarations:

1.    The First Respondent, Chad Bragdon, contravened s 497 of the Fair Work Act 2009 (Cth) (FW Act), on 6 June 2013, by refusing to comply with repeated requests to produce his federal entry permits for inspection while at a construction site located on Seventh Street in Mascot, NSW (the Site) at which Abigroup Contractors Pty Ltd (Abigroup) was the head contractor and occupier of the premises.

…

6.    The Second Respondent, Anthony Kong, contravened s 497 of the FW Act, on 6 June 2013, by refusing to comply with repeated requests to produce his federal entry permits for inspection while at the Site.

(Bold in original.)

36    Before we return to whether the facts (as found or accepted by the primary judge) will sustain those two declarations, it is instructive to refer to the pleaded case advanced by the Director. That case asserted (in relevantly identical terms) that each of Messrs Bragdon and Kong:

    entered the site in an exercise of right to do so under Part 3-4 of the FW Act and the NSW WHS Act;

    was requested to provide his “entry permits” on three occasions;

    did not produce them when requested to do so;

    thereafter remained on site;

    accordingly, contravened s 497 of the FW Act.

37    In our view, the first of those assertions was not established on the evidence; indeed, the evidence disproved it. We will need to return to that issue shortly.

38    The declarations made refer to refusals to provide entry permits, not merely failures to do so. That is contrary to the evidence (and contrary to the findings of fact of the primary judge). Senior counsel for the Director sought to suggest that the distinction was relatively unimportant but that submission should not be accepted.

39    Even if the submission was to be accepted, the case asserted by the Director did not, in our respectful view, engage s 497 of the FW Act at all.

40    Section 497 is not infringed by a failure or refusal to produce an entry permit. Such a circumstance operates as a bar to the exercise of a State or Territory OHS right, but it does not provide a separate or independent foundation for the imposition of a civil penalty under the FW Act. In our view, the pleaded case under s 497 was defective and liable to dismissal for that reason.

41    More fundamentally, neither Mr Bragdon nor Mr Kong exercised a State or Territory OHS right, nor sought to do so.

42    The primary judge concluded that each “purported” to exercise such a right, but in our respectful view neither the facts nor the proper construction of the relevant provisions of the FW Act support that conclusion.

43    The findings of the primary judge depended on attributing that character to the conduct of Messrs Bragdon and Kong based on their actions after entering the site, because they “quickly … became focussed upon matters of safety” and their purpose, from shortly after entry, “was manifestly to address what they asserted were safety concerns”. The primary judge saw support for this approach in a judgment of Merkel J in Pine v Doyle (2005) 222 FCR 291. We shall return to it in a moment.

44    Neither Mr Bragdon nor Mr Kong could, nor in our view did, nor purported to, rely on the NSW WHS Act or Part 3-4 of the FW Act. At the time they attended to enter the site there was no discussion about why they were there, they merely asked to have a “look at the site”. They were not asked why they wanted to do that and there was no discussion about safety, or either the NSW WHS Act, or the FW Act, nor any related topic. Disruptive and abusive as it clearly was once they entered the site, their conduct was outside those legal arrangements. Abigroup was not obliged to allow them to enter the site, nor to remain. They could have been asked to leave at any time. Failure or refusal to do so would be criminal conduct (see Inclosed Lands Protection Act 1901 (NSW), s 4) and no doubt a trespass. If so, they could have been prosecuted accordingly.

45    Engagement of the right of entry provisions in the FW Act or the NSW WHS Act, as they are civil remedy provisions, was required to be clearly established against Messrs Bragdon and Kong, regardless of the inappropriate nature of their conduct. The evidence did not serve to do that. Put simply they were pursued under an inappropriate statutory regime.

46    In Pine v Doyle, Merkel J dealt with a case where an organiser re-entered a site, relying on a right of entry permit held by him, in circumstances where Merkel J held that a professed purpose of holding discussions with employees masked a different agenda (conducting a safety inspection, the power for which was not conferred under the statutory authority). Merkel J found (at [14]-[15] and [18]):

14        … It is clear that the respondent was not entitled to exercise his power of entry under s 285C. …

15        However, it does not follow that, for the purposes of s 285E(1), the power was not exercised at all. In my view, s 285E(1) requires that the power of entry be exercised as a matter of fact, rather than as a matter of law. …

…

18        Accordingly, I regard the question mandated by s 285E(1) to be whether the person entering the premises in question is exercising the power of entry as a matter of fact, rather than as a matter of law. For the reasons given above I am satisfied that the respondent was exercising his power of entry under s 285C during his visit to the site on 18 February 2004.

47    In essence, Merkel J acted upon the claims of reliance on the right of entry power to prevent its abuse. That is not this case. Neither had a NSW WHS permit. Neither had given notice and neither produced an entry permit on request. If the first of those latter conditions had been able to be satisfied, the second would bring their rights to a speedy end if they had any.

48    In John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union (New South Wales Branch) (2009) 178 FCR 461 (“John Holland”), Moore J discussed Pine v Doyle and distinguished it. Moore J found that two union organisers did not have relevant entry permits under the Occupational Health and Safety Act 2000 (NSW). In those circumstances, his Honour found (at [50]):

50        In my opinion, there are material differences between the provisions Merkel J considered in Pine and those that arise in the present case. Section 756 identifies a class of union official upon whom Div 5 operates with the effect of the Division being to impose conditions on the exercise of the right of entry and to prohibit certain conduct when exercising it. That class of union official is constituted by those who hold a permit under Pt 15 and have a right to enter under an OHS law. The existence of the right to enter under an OHS law confers a legal status on the permit holder which engages various provisions in Div 5. It is unlikely that the provisions which limit the way in which the right of entry might be exercised were intended to operate in relation to a union official who did not have that status because they did not have (though they may have mistakenly believed they did) a right to enter under an OHS law. In particular, s 758 is not intended to operate on a permit holder who does not have a right of entry under an OHS law. The section contemplates that the person on whom it operates might enter or might remain on premises “under an OHS law” but shall not enter or shall not remain if a reasonable request is made by the occupier. If the request is not complied with then the permit holder contravenes the section. In my opinion, there was no contravention of s 758 by either respondent.

49    His Honour went on (relevantly to matters to be discussed shortly):

51        This leads to a consideration of whether there was contravention of s 767 which provides:

(1)    A permit holder exercising, or seeking to exercise, rights:

(a)    under section 747, 748 or 760; or

(b)    under an OHS law in accordance with section 756 or 757;

must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.

(2)    Subsection (1) is a civil remedy provision.

Note: See Division 8 for enforcement.

(3)    …:

52        The applicants contend that the second and third respondents acted in an improper manner by entering the premises when permission to enter was denied and remaining on the premises when requested to leave. It can be seen that a permit holder can contravene this section by intentionally hindering or obstructing a person or acting in an improper manner in exercising or seeking to exercise rights under an OHS law in accordance with, relevantly, s 756. But as just discussed, s 756 operates on a person who has a right under an OHS law and, in that sense, identifies a person with a particular status on whom Div 5 operates. In my opinion it necessarily follows that the prohibition on, amongst other things, acting in an improper manner, concerns only a person with that status.

53        I accept that this construction of ss 756, 758 and 767 results in the various prohibitions or limitations not providing the complete protection of the type discussed by Merkel J in Pine (at [16] set out above). However in that matter the critical expression was “[a] a person exercising powers under [various provisions]”. His Honour was able to conclude that a person can be exercising those powers even if they were mistaken in believing that the power had been lawfully conferred by those other provisions. In the present case the language and structure of the various provisions are different. A person is given a status by virtue of having a right conferred by state law. It is only then that various consequential provisions are engaged.

54        In my opinion the second and third respondents could not have contravened and did not contravene ss 758 and 767 because neither had a right to enter premises under an OHS law.

50    A similar approach may be seen in the analysis in different proceedings in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 (per Spender J at [12], per Dowsett J at [41]).

51    In the present case the primary judge expressly preferred the approach taken by Merkel J in Pine v Doyle, to that of Moore J in John Holland. In our respectful view, that was an error.

52    We are bound to say, moreover, that the discussion of this issue seems closer to us to the questions raised by s 500 of the FW Act, than to those raised by s 497. We shall take the matters above into account in that context also.

53    In the present case the provisions of s 497 were not engaged. Even if they were, they were not infringed.

54    Declarations 1 and 6 should be set aside.

Section 500 of the FW Act

55    We set out earlier the terms of s 500. The declarations made by the primary judge were as follows:

2.    The First Respondent, Chad Bragdon, contravened s 500 of the FW Act, on 6 June 2013, when hindering workers on the Site while seeking to exercise rights in accordance with Part 3-4 of the FW Act.

3.    The First Respondent, Chad Bragdon, contravened s 500 of the FW Act, on 6 June 2013, by acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act, by directing workers to cease work when he had no authority or power under the FW Act and the Work Health and Safety Act 2011 (NSW) (NSW WHS Act) to issue such direction;

…

7.    The Second Respondent, Anthony Kong, contravened s 500 of the FW Act on 6 June 2013, by acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act, by falsely identifying himself as “Steve Irwin” when asked by Agibroup who he was, in the circumstances that he was not “Steve Irwin”.

8.    The Second Respondent, Anthony Kong, contravened s 500 of the FW Act, on 6 June 2013, when hindering workers on the Site while seeking to exercise rights in accordance with Part 3-4 of the FW Act.

9.    The Second Respondent, Anthony Kong, contravened s 500 of the FW Act, on 6 June 2013, by acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act, by directing workers to cease work when he had no authority or power under the FW Act and the NSW WHS Act to issue such direction.

(Bold in original.)

56    The pleaded case for the Director proceeded upon the premise that each of Mr Bragdon and Mr Kong had directed a cessation of work when they had no authority under the NSW WHS Act to do so. It was admitted that they had no such authority. Even if they had held NSW WHS permits they would not have such authority.

57    Regrettably, the primary judge was misdirected by the Director’s pleadings and case about the possible source of authority in the NSW WHS Act, had it applied.

58    It was pleaded:

13.    Pursuant to section 117 of the NSW WHS Act, the First and Second Respondents could not enter the Site without a NSW entry permit.

59    It was not suggested by the further amended statement of claim, or by the Director’s case at trial, that s 121 of the NSW WHS Act was the (or a) relevant provision to consider. The primary judge, apparently therefore, concentrated his attention upon s 117 and s 118 of the NSW WHS Act. Nevertheless, on the appeal, the Director abandoned reliance on s 117 (implicitly criticising the primary judge for having taken it into account) and recast the case relying on s 121, arguing that it made no difference to the outcome.

60    We would not accept this approach; it is unfair to the primary judge and unhelpful. In any event, it is misconceived.

61    In our view, it was not established that Mr Bragdon and Mr Kong were exercising rights under Part 3-4 (i.e. a State or Territory OHS right); they clearly were not. Neither, in our respectful view, was it established that they were “seeking to exercise” rights which they did not have.

62    It is at this point that the issues discussed above (commencing with Pine v Doyle) become particularly relevant. Pine v Doyle can be of no real assistance in understanding the operation of s 500 (although John Holland is) because the legislation did not then refer to “seeking to exercise” powers.

63    In the present case it was not necessary for the primary judge to be concerned with whether Messrs Bragdon and Kong were “purporting” to exercise a State or Territory OHS power (at least not so far as s 500 is concerned) because s 500 states its own criteria for engagement (i.e. exercise or seeking to exercise). In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293, White J explained the second element of s 500 (in a way ultimately consistent with the underlying approach in Pine v Doyle) as follows:

76    It is appropriate to keep in mind that the second element of a s 500 contravention requires proof that the permit holder was exercising, or seeking to exercise, rights in accordance with Pt 3-4 of the FW Act. This means that the second element will be established if the permit holder was, as a matter of fact, exercising (relevantly) the s 484 right or seeking to exercise that right. Permit holders may seek to exercise the s 484 right even though they are mistaken in their belief that there are employees on the site at the time of the entry, or that there are on the site employees whose industrial interests the permit holder’s organisation is entitled to represent, or that persons answering that description do wish to participate in discussions with them. Proof that each of the elements listed in s 484 pertained at the time of the official’s entry is not required, at least in respect of an allegation that the permit holder was seeking to exercise rights under Pt 3-4.

(Emphasis in original.)

64    Nevertheless, such a case must be proved. In our view, neither Mr Bragdon nor Mr Kong was exercising any State or Territory OHS right and nor were they “seeking to exercise” any such right. They did not have such a right and they did not proceed under any mistaken belief about their rights.

65    Declarations 2, 3, 7, 8 and 9 should be set aside.

Section 503 of the FW Act

66    In this part of the case the Director pleaded against Mr Bragdon (and substantially to the same effect against Mr Kong):

37.    The First Respondent:

(a)    entered the Site at about 7:10am on 6 June 2013;

(b)    was wearing a hard hat with CFMEU and or BLF stickers on it;

(c)    walked into the Site and straight to the work area where a concrete pour was occurring;

(d)    issued directions/instructions to workers at the Site to cease work;

(e)    identified and referred to alleged safety concerns and breaches of safety legislation;

(f)    when requested to show his entry permits he did not tell Abigroup that he did not hold an entry permit under the NSW WHS Act but rather said he would provide his permits later thereby implying he had current permits;

(g)    remained on Site after being requested to show his entry permits;

(h)    continued to raise and discuss alleged safety issues; and

(i)    provided a safety report to Abigroup on 7 June 2013.

38.    On 6 June 2013 the First Respondent did not have an entry permit under the NSW WHS Act and was therefore not authorised to exercise a right of entry for work health and safety purposes under the FW Act and the NSW WHS Act to enter, and remain on, the Site that day.

39.    At all times on 6 June 2013, whilst at the Site and purporting to be exercising a right of entry, the First Respondent knew that he was not authorised to exercise a right of entry for work health and safety purposes under the FW Act and the NSW WHS Act to enter, and remain on, the Site that day.

40.    The action taken by the First Respondent as pleaded in paragraph 37 of this Claim above, and in the circumstances pleaded at paragraphs 38 and 39 of this Claim, was undertaken with the intent of giving the impression that he was authorised to exercise a right of entry for work health and safety purposes under the FW Act and the NSW WHS Act when he was not. Such conduct contravened section 503(1) of the FW Act.

41.    Alternatively, the action taken by the First Respondent as pleaded in paragraph 37 of this Claim above, and in the circumstances pleaded at paragraphs 38 and 39 of this Claim, was reckless as to whether the impression was given that he was authorised to exercise a right of entry for work health and safety purposes under the FW Act and the NSW WHS Act when he was not. Such conduct contravened section 503(1) of the FW Act.

…

46.    The First Respondent was not authorised under the FW Act and the NSW WHS Act to direct the cessation of work.

47.    The First Respondent knew that he was not authorised under the FW Act and the NSW WHS Act to direct workers to cease work.

48.    The action taken by the First Respondent, in directing workers to cease work, was deliberate, and done with the intention of giving the impression that he was authorised to direct workers to stop work when he was not. Such conduct contravened section 503(1) of the FW Act.

49.    In the alternative, the First Respondent was reckless as to whether he gave the impression he was authorised to direct workers to stop work when he was not. Such conduct contravened section 503(1) of the FW Act.

67    The assertions in [46] and [47] were admitted. Those in [48] and [49] were denied. They therefore required proof to the requisite standard. The Director bore the onus.

68    Where intention is an element of an offence, it must be proved. It is not sufficient to rely on “foreseeability, likelihood and probability”. It must be affirmatively established that the offender “meant to produce the particular result” (see Zaburoni v The Queen [2016] HCA 12 at [13] and [15]).

69    In our view, there was no evidence sufficient to sustain a conclusion that, as pleaded, either Mr Bragdon or Mr Kong intended to give an impression that he was authorised under the NSW WHS Act to take any particular action, or that he was authorised under that Act, or the FW Act, to direct people to cease work.

70    The case about reckless indifference is not quite so easily dismissed but, in our view, is also unsustainable. Neither Mr Bragdon nor Mr Kong asserted or volunteered for the purpose of the visit that he possessed, or relied upon, an entry permit, much less a NSW WHS entry permit. There were many responses (and questions) available to Abigroup, but none was employed in a way which elicited sufficient evidence of the reckless indifference upon which the allegation in the case depended.

71    The primary judge (at [103]-[107]) rejected a particular submission in defence and then concluded:

108    In the absence of any other defence being raised to the contraventions alleged contrary to s 503, these further contraventions are also found to have been made out.

72    In our respectful view, this approach did not sufficiently address whether the Director’s case had been proved. In our view, it had not.

73    There were no other findings stated by the primary judge which might support the conclusion urged by the Director.

74    The primary judge made the following declarations:

4.    The First Respondent, Chad Bragdon, contravened s 503(1) of the FW Act, on 6 June 2013, by acting in a manner with the intent of giving the impression, or being reckless as to whether the impression was given, that he was authorised to enter the Site and exercise right of entry powers under the FW Act and NSW WHS Act;

5.    The First Respondent, Chad Bragdon, contravened section 503(1) of the FW Act, on 6 June 2013 by acting in a manner with the intent of giving the impression, or being reckless as to whether the impression was given, that he was authorised to direct that workers cease work under the FW Act and the NSW WHS Act.

…

10.    The Second Respondent, Anthony Kong, contravened s 503(1) of the FW Act, on 6 June 2013, by acting in a manner with the intent of giving the impression, or being reckless as to whether the impression was given, that he was authorised to enter the Site and exercise right of entry powers under FW Act and NSW WHS Act.

11.    The Second Respondent, Anthony Kong, contravened section 503(1) of the FW Act by acting in a manner with the intent of giving the impression, or being reckless as to whether the impression was given, that he was authorised to direct that workers cease work under the FW Act and the NSW WHS Act.

75    In our respectful view, those declarations are not able to be supported by the primary judge’s reasons. The evidence did not establish the necessary intent and a conclusion that Mr Bragdon and Mr Kong were reckless about the impression they gave was not the only conclusion available from rejection of the other line of defence discussed by the primary judge in [103]-[107]. Nor was it more probable than not. This aspect of the case was also not proved by the Director to the necessary standard, in our view.

76    As a consequence, Declarations 4 and 10, together with Declarations 5 and 11, should be set aside.

Vicarious liability – FW Act s 793

77    The liability of the third appellant (the CFMEU), was declared as follows:

12.    By reason of s 793 of the FW Act, the Third Respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened sections 497, 500 and 503 of the FW Act by the conduct of its officers constituting their respective contraventions in Declarations 1 to 11 hereof.

(Italics in original.)

78    As no preceding declaration should remain, this declaration also should be set aside.

Penalties

79    The primary judge stated the maximum penalties relevant to his findings, as follows:

17    Applied to the circumstances of the present proceeding, the following table sets forth the contraventions that have been found and the maximum penalty that may be imposed for each contravention:

80    His Honour awarded total penalties against Mr Bragdon, Mr Kong and the CFMEU of $20,000, $27,500 and $225,000 respectively (representing 39.2%, 45% and 40% of the maximum available penalties).

81    Various attacks were made upon the approach of the primary judge to fixing the penalties, including that they were, in some respects, manifestly excessive because the primary judge did not recognise the actions of Messrs Bragdon and Kong as ones arising, in large part at least, from a “course of conduct”.

82    The primary judge explained why he thought sufficiently different elements were involved to justify considering each of the contraventions found as separate in character and effect. If we had concluded that all of the preceding challenges should be dismissed we would not have interfered with that approach. Otherwise, any discussion about the matter to consider various intermediate positions seems unproductive in light of our conclusion that all the declarations should be set aside and the proceedings commenced by the Director should be dismissed in their entirety.

Personal payment

83    There is one feature of the penalty orders made by the primary judge which should be separately mentioned. The primary judge made the following two orders:

4.    The First Respondent personally must pay the pecuniary penalty the subject of Order 1, and is not to seek or receive reimbursement (in whole or in part) of any monies from the Third or Fourth or Fifth Respondents (or any related entity), or to cause or occasion such penalty to be paid, either directly or indirectly, by the Third or Fourth or Fifth Respondents (or any related entity).

5.    The Second Respondent personally must pay the pecuniary penalty the subject of Order 2, and is not to seek or receive reimbursement (in whole or in part) of any monies from the Third or Fourth or Fifth Respondents (or any related entity), or to cause or occasion such penalty to be paid, either directly or indirectly, by the Third or Fourth or Fifth Respondents (or any related entity).

(Italics in original.)

84    His Honour’s reasoning included:

25    It is concluded that the power to impose a penalty on an “individual” includes a power to ensure that the penalty is in fact paid personally by the “individual” and that he is not reimbursed – either directly or indirectly – by any union of which he is a member or by any associated entity. That conclusion is founded upon the natural and ordinary meaning of the relevant statutory provisions, the object and purpose sought to be achieved by the Legislature in providing for the imposition of penalties on “individuals” and by reference to prior judicial considerations of the principles to be applied.

26    Any other conclusion, it is respectfully concluded, would be to embrace the proposition that the Court lacks power to ensure that any penalty imposed upon an “individual” can truly act as a deterrent to that “individual”. A penalty, if it were to be paid or reimbursed by an employing union, would cease to act as a deterrent to the contravening “individual”. An “individual” so reimbursed could act with impunity in full knowledge that his employing union conferred what could be seen as a licence for him to continue his past transgressions. The legislative power to revoke or suspend (for example) an entry permit should not be seen as a constraint upon the power conferred by ss 545 and 546 to ensure that a penalty imposed upon an “individual” acts truly as a deterrent.

(Italics in original).

85    The primary judge rejected submissions that the Court lacked power to make such orders.

86    In Australian Building Construction Employees’ and Builders Labourers’ Federation v Minister of State for Industrial Relations (1982) 43 ALR 189, a Full Court approved an order to similar effect against a union (at 214). The purpose of the order was apparently to address statements of open defiance of the Court’s authority, to the effect that stoppages of work would effectively compel someone other than the union to make, or appear to make, payments of the fine. The case was a special one in that respect and, despite the apparent encouragement of the Full Court that the approach was a “model”, the practice has not become established.

87    In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1173, Jessup J was asked to make orders similar to those made by the primary judge, but declined to do so. His Honour said:

35    The applicant submitted that I should make an order in terms corresponding to those made by Flick J in Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998:

The [individual] Respondent personally must pay the pecuniary penalty the subject of Order 1, and is not to seek or receive reimbursement (in whole or in part) of any monies from the [union] Respondents (or any related entity), or to cause or occasion such penalty to be paid, either directly or indirectly, by the [union] Respondents (or any related entity).

Counsel for the respondents submitted that the court did not have power to make such an order, at the same time informing me that an appeal had been lodged from the judgment in Bragdon. He invited me, alternatively to departing from the view as to power taken by Flick J, to adjourn further consideration of this aspect of the applicant’s case pending the hearing and determination of that appeal.

36    Under the circumstances, it would be wrong for me, sitting as a single Judge, to depart from the view taken in Bragdon as to the availability of an order of the kind made by Flick J in an appropriate case. Neither, however, do I propose to adjourn consideration of this aspect of the applicant’s case.

37    During the hearing of the case, it became apparent that little or no thought had been given, on behalf of the applicant, to the practicalities of the enforcement of an order in the terms proposed. Specifically, it was made quite clear that the applicant had no intention of monitoring the doings of Mr Myles and the Union over the next month, year or decade, for example, to ensure that any request by Mr Myles for reimbursement, or any payment to him by the Union which could be characterised as a reimbursement, was brought to light and made the subject of an enforcement proceeding. In the conventional case, at least one of the parties to litigation will have it in his or her interests to ensure that court orders are complied with by the other party; and, furthermore, by being affected, will know when they have not been. In the case contemplated by the order sought by the applicant, it would be in the interests of neither of the parties presumptively involved in a contravention of the order to draw that circumstance to the attention of the court, much less to take enforcement proceedings. While I assume, of course, that all court orders will be observed, practical considerations of the kind referred to must be regarded as relevant in a situation in which the court is being asked, in its discretion, to step outside the bounds of conventional process.

38    Responsively to concerns of these kinds, counsel for the applicant indicated that his client would be content with a modified form of Bragdon order, one which specifically required Mr Myles to pay any penalty personally, ie rather than have someone else pay it on his behalf. This would avoid the problem of reimbursement, but, ultimately, I have come to the view that practical issues of the kind referred to would remain. As I understand the applicant’s position, the order he seeks should be such that payment from any source other than a fund to which Mr Myles is solely beneficially entitled would be prohibited. The potential for such an order to open up a previously undisturbed can of worms, as it were, is all too obvious. Anyone may act by an agent. Where Mr Myles would source the funds to meet any penal obligation imposed on him is not, in my view, a matter with which the court should concern itself.

39    While these reasons should not be understood as casting any doubt upon the existence of a power to make an order of the kind sought by the applicant, in my view the exercise of such a power would be problematic in the absence of some greater legislative definition of the procedures and protocols that would provide the necessary support for the effectiveness of such an order.

88    We see considerable force in the reservations also expressed by Jessup J about the practical exercise of such a power, assuming it to exist, to which we would add the following further observations.

89    In Lamb v Cotogno (1987) 164 CLR 1, the High Court rejected an argument that exemplary damages (one object of which is deterrence) should not be awarded against a person insured against that contingency, saying (at p 10):

So far as the object of deterrence is concerned, not only does it extend beyond the defendant himself to other like-minded persons, but it also extends generally to conduct of the same reprehensible kind. Whilst an award of exemplary damages against a compulsorily insured motorist may have a limited deterrent effect upon him or upon other motorists also compulsorily insured, the deterrent effect is undiminished for those minded to engage in conduct of a similar nature which does not involve the use of a motor vehicle. Moreover, whilst the smart or sting will obviously not be the same if the defendant does not have to pay an award of exemplary damages, it does serve to mark the court’s condemnation of the defendant’s behaviour and its effect is not entirely to be discounted by the existence of compulsory insurance.

90    Leave to re-open the question was refused in Gray v Motor Accident Commission (1998) 196 CLR 1 at [32]-[37].

91    For similar reasons, the deterrent aspect of industrial penalties is not removed (even if it might be eroded) by the prospect that the penalty will ultimately be paid, or reimbursed, by a union. The individual wrongdoer is the person liable in law for the payment of a penalty, and to the consequences for non-payment.

92    There may also be a wider context to take into account. An unpaid fine becomes recoverable as a debt (FW Act, s 546(4)). As a debt, it might normally be satisfied by a third party if debt recovery proceedings were commenced, or if a judgment debt set the matter on a course towards bankruptcy. The orders involved no express prohibition on third parties, even the other appellants, making payments of the penalty. We doubt that the Commonwealth could refuse a tender of payment from a third party with respect to either the penalty or a debt. If the penalty was paid, or a claimed debt was satisfied, the Commonwealth would be in no position to claim, or even accept, personal payment again under the orders.

93    Beyond expressing those additional reservations, it is not necessary to deal further with this issue, given that in our view the proceedings should have been dismissed.

94    We uphold the appeal, set aside the declarations and other orders made by the primary judge and order instead that the proceedings be dismissed.

Associate:

Dated:    28 April 2016