FEDERAL COURT OF AUSTRALIA

Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177

Appeal from:

Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654

File number:

VID 1220 of 2019

Judges:

ALLSOP CJ, BESANKO, WHITE, WIGNEY AND BROMWICH JJ

Date of judgment:

16 October 2020

Catchwords:

INDUSTRIAL LAW – civil penalties – agreed contraventions – false or misleading statement about an obligation to engage in “industrial activity” – determination of appropriate penalty – principles relating to imposition of pecuniary penalties – whether principle of proportionality, drawn from criminal law, is applicable – discussion of principle of proportionality as applied in criminal law – whether history of contravening should inform the court’s assessment of an appropriate penalty in the instant case – whether imposition of maximum penalties to serial recidivist justified – whether total penalty manifestly excessive – whether cooperation can be treated as a factor in mitigation warranting a discount on penalty where unaccompanied by contrition

Legislation:

Fair Work Act 2009 (Cth) ss 347(a), 349(1), 363, 545, 546, 547

Cases cited:

A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466

Amos v McCarron [2017] ACTSC 6

Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 267 FCR 268

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; 249 FCR 458

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262

Australian Building and Construction Commissioner v Hassett [2019] FCA 855

Australian Building and Construction Commissioner v Powell [2019] FCA 972

Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383; ATPR ¶41-815

Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2016] FCA 1516; 118 ACSR 124

Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; 258 FCR 312

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) [2007] FCAFC 146; 161 FCR 513

Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd (No 2) [2016] FCA 698

Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (No 5) [1998] FCA 310; ATPR ¶41-628

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640

Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560

Australian Securities and Investment Commission v Adler [2002] NSWSC 483; 42 ACSR 80

Barbaro v The Queen [2014] HCA 2; 253 CLR 58

Baumer v The Queen [1988] HCA 67; 166 CLR 51

Bensegger v The Queen [1979] WAR 65

Benter v Western Australia [2005] WASCA 245

Birch v Fitzgerald (1975) 11 SASR 114

Bugmy v The Queen [1990] HCA 18; 169 CLR 525

Cain v Glass (No 2) (1985) 3 NSWLR 230

Cassell & Co Ltd v Broome [1972] AC 1027

Chester v The Queen [1988] HCA 62; 165 CLR 611

Comcare v Banerji [2019] HCA 23; 372 ALR 42

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; 265 FCR 208

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner & Anor [2018] HCASL 380 (5 December 2018)

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97; 264 FCR 155

Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner [2016] FCAFC 184; 247 FCR 339

Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461

Dirbass v The Queen [2018] VSCA 272

Director of Public Prosecutions v Ottewell [1970] AC 642

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436

Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525; 241 FCR 338

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331

Dixon v Price (1996) 135 FLR 27

Dobson v Tasmania [2017] TASCCA 19; 269 A Crim R 222

Eldridge v Bates [1989] SASC 1268; 51 SASR 532

Elhassan v The Queen [2018] NSWCCA 118

Elias v The Queen [2013] HCA 31; 248 CLR 483

Ellis v The Queen [2005] NTCCA 1; 154 A Crim R 450

Flight Centre Limited v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68

Gapes v Commercial Bank of Australia Ltd [1979] FCA 62; 38 FLR 431

Gilshenan v The Queen [2019] NSWCCA 313

Gommesen v The Queen [2012] NSWCCA 226

Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462

Hili v The Queen [2010] HCA 45; 242 CLR 520

Hillier v Director of Public Prosecutions (NSW) [2009] NSWCCA 312; 198 A Crim R 565

Hoare v The Queen [1989] HCA 33; 167 CLR 348

Ibbs v The Queen [1987] HCA 46; 163 CLR 447

Keating v Western Australia [2007] WASCA 98; 35 WAR 1

Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14

Magaming v The Queen [2013] HCA 40; 252 CLR 381

Markarian v The Queen [2005] HCA 25; 228 CLR 357

Marshall v Llewellyn (1995) 79 A Crim R 49

Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33; 248 FCR 1

Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; 256 CLR 104

NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285

Papaconstuntinos v Holmes à Court [2012] HCA 53; 249 CLR 534

Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39

Police v Cadd [1997] SASC 6187; 69 SASR 150

Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543

R v Baumer (1989) 40 A Crim R 74

R v Bukvic [2010] SASC 195; 107 SASR 405

R v Dole [1975] VR 754

R v Haji-Noor [2007] NTCCA 7; 21 NTLR 127

R v Kilic [2016] HCA 48; 259 CLR 256

R v McInerney (1986) 42 SASR 111

R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566

R v Mulholland (1991) 1 NTLR 1; 102 FLR 465

R v O’Brien [1997] 2 VR 714

R v Omar (1991) 55 A Crim R 373

R v Tait [1979] FCA 32; 46 FLR 386

R v Thompson (1975) 11 SASR 217

R v Tyday [2006] NTSC 29

R v Way [2004] NSWCCA 131; 60 NSWLR 168

R v Young [1990] VR 951; 45 A Crim R 147

Reynolds v Wilkinson (1948) 51 WALR 17

Ryan v The Queen [2001] HCA 21; 206 CLR 267

Scott v Davis [2000] HCA 52; 204 CLR 333

Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249

Smith v The Queen [2011] NSWCCA 163

Stokes v The Queen [2020] SASCFC 9

Sultan v Svikart (1989) 96 FLR 457; 42 A Crim R 15

Tabbah v The Queen [2019] NSWCCA 324

Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR ¶41-076

Trade Practices Commission v Mobil Oil Australia Limited [1984] FCA 403; 4 FCR 296

Transport Workers Union of Australia v Registered Organisations Commissioner [2018] FCAFC 203; 267 FCR 40

Veen v The Queen [1979] HCA 7; 143 CLR 458

Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465

Walden v Hensler [1987] HCA 54; 163 CLR 561

Wardrop v The Queen (unreported, High Court of Australia, Barwick CJ, 23 May 1979)

Weininger v The Queen [2003] HCA 14; 212 CLR 629

Wong v The Queen [2001] HCA 64; 207 CLR 584

Division:

Fair Work Division

Registry:

Victoria

National Practice Area:

Employment and Industrial Relations

Number of paragraphs:

234

Date of hearing:

30 July 2020

Counsel for the Appellants:

Ms R Doyle SC with Mr P Boncardo

Counsel for the Respondent:

Mr J L Bourke QC with Mr M Follett

Solicitor for the Respondent:

MinterEllison

ORDERS

VID 1220 of 2019

BETWEEN:

KEVIN PATTINSON

First Appellant

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Second Appellant

AND:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Respondent

JUDGES:

ALLSOP CJ, BESANKO, WHITE, WIGNEY AND BROMWICH JJ

DATE OF ORDER:

16 October 2020

THE COURT ORDERS THAT:

1.    The appeal be allowed and the Notice of Contention be dismissed.

2.    Orders 1 and 2 of the Court made on 14 October 2019 be set aside and in lieu thereof it be ordered that:

(a)    The first respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act 2009 on 13 September 2018 in the sums of $4,000 and $500.

(b)    The second respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act 2009 on 13 September 2018 in the sums of $38,000 and $2,000.

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

REASONS FOR JUDGMENT

ALLSOP CJ, WHITE AND WIGNEY JJ:

Introduction

1    This appeal raises a number of important questions as to the proper approach to the determination of the appropriate level of civil penalties in any particular case, in particular the proper approach where a contravenor can, from the relevant circumstances, including its record of prior contraventions, be inferred to have demonstrated an unwillingness to obey a statute, whether generally, or in relation to certain provisions.

2    The primary judge approached the imposition of civil penalties perceiving a difference in operative principle as expressed in a number of Full Court decisions. In particular, he perceived error in the expression of principle by Besanko and Bromwich JJ in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39 (with which expression of principle Reeves J agreed), and in the expression of principle by Bromwich J in dissent in an earlier Full Court appeal of Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Broadway on Ann) [2018] FCAFC 126; 265 FCR 208. The primary judge saw the correct approach exhibited in the reasons of the majority in Broadway on Ann (Tracey and Logan JJ) in preference to the approach of Bromwich J in dissent in the outcome of the appeal, and in preference to the most recent considered Full Court decision in Parker.

3    The first and substantive ground of the appeal was that the primary judge erred by failing to approach the imposition of civil penalties on the second appellant (the union) by characterising the nature, seriousness or gravity of the instant contraventions by reference only to the objective characteristics of the contraventions and without regard to the union’s history of contravention of the statute. The error, it was submitted, was to be found in a misunderstanding by the primary judge of the relevant principle drawn from sentencing in the criminal law, and by reason of that misunderstanding a penalty was imposed that was disproportionate to the nature and gravity of the contravention in question.

4    In a notice of contention, on the hypothesis that the second appellant’s approach to assessing the appropriate penalty was correct, by reference to existing principle, the Commissioner sought to have recast the relevant operative principle to remove entirely, or to subordinate, any such principle of proportionality.

5    Both the notice of appeal and notice of contention require the addressing of matters of general principle in their historical development, the examination of the statutory provisions in question, and the examination, largely chronologically, of decisions of the Court relevant to the resolution of the arguments.

6    Importantly in the above, and not just as part of dealing with the notice of contention, it will be necessary to consider the place of the statutorily mandated maximum penalty in the light of the object of civil penalties, and in the context of what might be called the “recidivist” contravenor.

The primary judgment and the debate about proportionality in the Court

7    Arising from what has been seen as a difference in approach in Broadway on Ann compared to cases such as Parker, generated by the judgment below, a difference of opinion amongst judges of the Court has been expressed as to the place of the principle of proportionality in the imposition of civil penalties. Involved in this difference of opinion are different understandings and applications of what such a principle involves. It is therefore necessary to be cautious as to the use of the expression lest it become a label and distract analysis, and the proper explication, of principle.

8    The question said to be raised by the appeal is whether a contravenor’s history of contraventions can be taken into account in assessing the gravity of the contravention. That is important because it was submitted by the second appellant that it is from the assessment of the gravity of the contravention (objectively assessed) that the range of possible proportionate penalties is obtained, within which range the contravenor is placed according to considerations relevant to him, her, or it, such as prior offending and an apparent unwillingness to comply with the law.

9    A brief discussion of the judgment below suffices for present purposes to reveal the issue on appeal. The events in question occurred in September 2018 at a building site in Frankston, Victoria, which was occupied by a contractor (Multiplex) in charge of a project to build accommodation for Monash University.

10    Mr Pattinson was an employee of Multiplex who worked on the site. He was also an officer of the second respondent, the union (the CFMMEU), and was the union delegate on the site.

11    In September 2018, a subcontractor was engaged to install solar panels at the site. Two employees of the subcontractor attended the site to carry out the necessary work. On that day (13 September) Mr Pattinson spoke to the subcontractor’s employees in substance as recounted by the primary judge at [15]–[16] of his reasons:

15 They arrived early that morning, whereupon they attended an induction session overseen by Mr Pattinson (in his capacity as a delegate of the Union’s at the Site). During the course of that session, Mr Pattinson enquired of one of the SEA employees, “Are you union? Do you have a ticket for your fees? Have you paid your fees?” or words to that effect. The SEA employee replied, “No, we’re not a union-based company so we don’t have our ticket,” or words to that effect. It is not in dispute that neither of the SEA employees was, in fact, a member of the Union.

16 Mr Pattinson then spoke to the SEA employees about their obligation to join an industrial association. The Commissioner’s amended statement of claim dated 5 June 2019 contains detailed particulars of that conversation. The respondents’ amended defence admits the effect of what was said but, as is to be expected, is silent as to whether or not the particulars are accurate. It is accepted that the effect of the discussion was that Mr Pattinson represented to each of the SEA employees that, in order to perform the work that they were at the Site to perform, they had to become a member of an industrial association

12    The two subcontractor employees did not work on the site on that day, inferentially and uncontroversially, because of what Mr Pattinson had said. Before the primary judge, the statements were accepted by the appellants to be misrepresentations knowingly or recklessly made that were false or misleading and contrary to s 349(1)(a) of the Fair Work Act 2009 (Cth), the terms of that section being as follows:

(1)    A person must not knowingly or recklessly make a false or misleading representation about either of the following:

(a)    another person’s obligation to engage in industrial activity;

13    It was accepted that by this body of events there were two contraventions (one for each of the employees) by both Mr Pattinson and by the union, as to the latter by the operation of s 363(1)(b) and s 363(3) of the Fair Work Act.

14    The admission as to liability by the appellants is to be understood by reference to the combined operation of s 349(1)(a) and s 347(a) which provide relevantly that a person engages in industrial activity if he or she becomes or does not become a member of an industrial association. Thus, to tell the two employees that they were obliged to join the union if they were to work on the site was false or misleading for the purposes of s 349(1)(a). The contravening conduct can be seen as in furtherance of the union’s preference for work sites to be “no ticket, no start” sites: that is all workers on site being union members.

15    The question before the primary judge was the appropriate penalties to be imposed upon Mr Pattinson and the union. The maximum penalties for each contravention were 60 penalty units ($12,600) for Mr Pattinson and 300 penalty units ($63,000) for the union.

16    The primary judge described the contentions of the parties in [25] of his reasons as follows:

The Commissioner contends that the [contraventions] should attract penalties at or approaching the maximum in respect of the Union (that is, a total of, or near, $126,000.00), and of between $4,000.00 and $6,000.00 per contravention ($8,000.00-$12,000 in total) for Mr Pattinson. The respondents contend that they should attract penalties “…proportionate to contraventions that are objectively below the mid-range of seriousness.”

17    In submissions before this Court senior counsel for the appellants more fully described the submissions made below as follows:

The appellants submitted that the objective seriousness of the contravening conduct fell below the middle of the spectrum of seriousness. The contravening conduct involved a single representation; was not systematic or part of a wider campaign; was deliberate but not pre-planned; and did not result in any economic or other material loss to anyone. The appellants accepted that the CFMMEU’s history of contravening conduct heightened the need for deterrence, but submitted that it did not bear on the assessment of the objective gravity of the instant contraventions, nor did it operate to transform the character of those contraventions. The utilitarian value of the appellants’ cooperation with the respondent in resolving the matter at an early stage was pointed to as a matter in mitigation.

18    The last sentence of this submission (the utilitarian discount) is the subject of the second ground of appeal.

19    The primary judge accepted that there was no evidence of any economic loss or any material loss arising from the contraventions. His Honour also concluded that the contravening conduct was not at the upper end of a scale of seriousness if assessed independently of the union’s history. The parties were in agreement on this last point. The primary judge concluded that the union’s history was relevant in assessing the gravity or seriousness or nature or character of the contravention. Having regard to the union’s recidivism, the instant contraventions were, in his Honour’s view, contraventions of the gravest kind. At [71]–[72] and [83]–[86] of his reasons the primary judge stated the following:

71 Civil penalties have only one objective: deterrence. The court is charged, simply enough, with fashioning a penalty that serves to deter, both generally and specifically, the conduct in respect of which it is levelled.

72 If the only way to deter even the most objectively inoffensive conduct (so assessed without reference to historical context) is to impose a penalty at or approaching the maximum amount available, then the imposition of anything less would necessarily result in a failure to achieve the only object to which the imposition of civil penalties is directed. That acknowledged, it is not apparent to me how a civil penalty that is fashioned at (and not beyond) a level that is necessary in order to deter the repetition of particular conduct might ever be impugned as disproportionate to its nature or gravity (or seriousness or character). To phrase that proposition as a question: how can a penalty be disproportionate to the nature or gravity of the conduct in respect of which it is imposed if it is no more than what is necessary to achieve the only objective that its imposition is meant to achieve?

83 It follows, in my view, that in assessing the nature, character and seriousness (and/or gravity) of the Union’s Agreed Contraventions, regard may properly be had to its history of contravening conduct. That history is, on any view, not flattering. Many judges of this court have commented upon it: often in unambiguously scathing terms; always, it seems, to little if any avail. I do not relish the prospect of adding my name to the long list of judicial officers whose exasperated admonitions appear to have been met with studied indifference; and, perhaps on one occasion, with public dismissal as the invalid mutterings of snobbish hypocrites who “call us criminals [and] all sorts of things [and] fine us millions of dollars [despite having] probably never done a day’s work in their li[ves]”: Victoria International Container Terminal Ltd (t/as VICT) v Maritime Union of Australia [2017] VSC 762, [21] (McDonald J).

84 Regardless, I should make clear that I regard the Union’s Agreed Contraventions—viewing them, as I do, against the backdrop of its sorry record of statutory contravention—as very much of the gravest, most serious kind. It is bad enough that it should so casually intrude upon rights of free association so valued by societies of conscience; much worse that it should do so, yet again, in deliberate defiance of the law that it has been told time and time again that it must obey. Its behaviour in this case—and many others before it—admits only of the following conclusions, namely that:

(1)    it favours a policy of “no ticket, no start” and holds that philosophy (if not the achievement of its industrial objectives more broadly) as preferable to the law of the land—see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235, [23], [28] (Tracey J);

(2)    it appears to be wholly unmoved by the prospect that it might be forced yet again to dig into its members’ “big pots of gold” in the name of “fight[ing] the good fight”—to use the terminology that features in Victoria International Container Terminal Ltd (t/as VICT) v Maritime Union of Australia & Anor [2017] VSC 762, [23] (McDonald J); and

(3)    it regards doing so as an acceptable cost of the way that it conducts its affairs—the misconduct in this case is but the latest example of the Union’s strategy “…to engage in whatever action, and make whatever threats, it wishes, without regard to the law, and then, once a prosecution is brought, to seek to negotiate its way into a position in which the penalties for its actions can be tolerated as the price of doing its industrial business”: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436, [142] (Mortimer J).

85 The position of Mr Pattinson is not as repellent. As is recorded above, Mr Pattinson has not previously been found to have contravened the FW Act or its predecessors. Unlike some of his colleagues, he is not—and, one hopes, will not soon become—a recidivist who thumbs his nose at the requirements of the law. Nonetheless, given his long-held position and rank within the Union, it is patently absurd to conclude anything other than that he did what he did out of fealty to his Union’s policy of enforcing a “no ticket, no start” regime at the construction sites over which it wields influence. That he embarked down the path that he did reflects poorly upon him.

86 Those conclusions stated, Mr Pattinson’s Agreed Contraventions were much more serious than what might otherwise call for a proverbial slap on the wrist. Mr Pattinson is merely the latest foot soldier in what seems to be the Union’s war against free association on Australian building sites. There have been others like him—the Commissioner referred to them, fairly and pithily, as “institutionalised human agents”—who, in the past, have stood ready to do as he did (and worse). One might be forgiven for doubting that there might not be others who stand ready to do similar things in the future. It is important that the penalty that is imposed upon Mr Pattinson is fashioned at a level that is sufficient to deter repetition of the conduct not only by Mr Pattinson but also by the network of other delegates and officers of the Union who might themselves be minded to enforce its anachronistic “no ticket, no start” philosophy.

20    The appellant agreed with the conclusion of the primary judge that he was faced with conflicting authority, but submitted that he should not have departed from cases such as Parker, that Broadway on Ann was incorrect as a matter of principle, and that the history of contraventions could not be taken into account in assessing the nature and gravity of the contravention in question. There were no grounds of appeal upon the reasoning or findings that his Honour made, which were extensive, as to what could be drawn from the prior contravening of the union. For instance, there was no appeal from findings of the kind made in [84(1)], [84(2)] and [84(3)] above about the union’s attitude to the law. The appeal was concerned with the approach in assessing the gravity of the contravening and the misuse of the principle of proportionality and also whether the penalty imposed on the union was excessive. Ground 1 of the notice of appeal was as follows:

1.    The primary judge erred in so far as his Honour:

1.1    held (J[82], [83]) that the Court could take into account the second appellant’s history of contravening conduct in determining the nature, character, seriousness and / or gravity of the instant contraventions;

1.2     failed to first identify the applicable range of penalties for the instant contravention, without regard to the second appellant’s history of contraventions, before next taking into account that history for the purpose of assessing where, within that applicable range, the penalty should fall;

1.3     held that the second appellant’s history of contravening conduct may convert contraventions that the parties had agreed (J[68]) and the Court had found were not at the upper end of the scale of seriousness, to contraventions the nature, character and seriousness of which was “very much the gravest, most serious kind” (J[84]);

1.4     failed to follow and apply Full Court authority that was binding on him, namely the decision in Parker v ABCC (2019) 365 ALR 402;

1.5     held that it was open to him (J[69]) to decide for himself which of the competing analyses of the Full Court to prefer, and in so doing, concluded that the reasoning of the majority in The Broadway on Ann Case [2018] FCAFC 126 was to be preferred to the decision in Parker v ABCC (2019) 365 ALR 402;

1.6     held that a penalty at or close to the maximum was appropriate with respect to the second appellant;

1.7     imposed a penalty on the second appellant which was manifestly excessive in all the circumstances.

21    We will defer an examination of the primary judge’s treatment of Broadway on Ann and Parker until after we have discussed those cases.

Preliminary comment

22    Notwithstanding that these reasons will, of necessity, examine closely the reasons of a number of judgments, it should be borne in mind at all times that reasons of judges are not words of a statute, and the warning of Lord Reid in Cassell & Co Ltd v Broome [1972] AC 1027 at 1085 of the danger of placing reliance on the literal words of particular judgments instead of searching for the applicable principle should be heeded: see Cain v Glass (No 2) (1985) 3 NSWLR 230 at 248; Scott v Davis [2000] HCA 52; 204 CLR 333 at 370 [108]; Ryan v The Queen [2001] HCA 21; 206 CLR 267 at 272 [15]; Papaconstuntinos v Holmes à Court [2012] HCA 53; 249 CLR 534 at 548 [29]; and Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33; 248 FCR 1 at 17 [57].

The importance of the statute

23    It is necessary to bear in mind at all times two propositions that cannot be, and were not, in contest. First, the now familiar regulatory remedy of the civil penalty is a creature of statute. The Court has no power to impose a penalty as a remedy for a breach of a legislative provision without statutory authority. Secondly, the scope of the Court’s power and the subject of the penalty are matters of statutory construction.

24    These propositions, especially the second, are not merely concerned with meaning and text. They involve the recognition that Parliament invests the courts with authority to impose penal sanctions on persons in aid of a statutory object based on principles of application whether contained within the statute or in the law against the background of which the statute can be seen to be enacted.

The clarification by the High Court of the object of civil penalties

25    To these two propositions can be added a third, derived from the reasons for judgment of French CJ, Kiefel, Bell, Nettle and Gordon JJ in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Agreed Penalties Case (HC)). There, in distinguishing the proper approach to the determination of civil penalties from sentencing under the criminal law, and in particular the lack of relevance of Barbaro v The Queen [2014] HCA 2; 253 CLR 58 to the process of the imposition of civil penalties, their Honours adopted what had been said by the Chief Justice when a judge of this Court in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076 at 52,152, to the effect that the principal, if not only, object of penalties was “to deter repetition by the contravenor and by others who might be tempted to contravene the Act”. In CSR, French J was referring to the Trade Practices Act 1974 (Cth) and the provisions there (in Pt IV) dealing with economic regulation. The Court in the Agreed Penalties Case (HC) was applying the proposition to penalties under a statute concerned with industrial relations, the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act). As the plurality in the Agreed Penalties Case (HC) said at 258 CLR 506 [55] “the purpose of a civil penalty … is primarily if not wholly protective in promoting the public interest in compliance [with the statute].

26    This third proposition derived from the Agreed Penalties Case (HC) settled what had been perceived to be a difference of view in this Court as to the object of the imposition of civil penalties. That difference of view was discussed by Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383; ATPR 41-815 at [4]–[13], in particular at [7] where his Honour said:

The third matter concerns the purpose of imposing penalties. There is as yet no concluded view on the object of the imposition of penalties for a contravention of Pt IV. It is only when this issue is finally resolved that there can be a degree of certainty in deciding the appropriate level of penalty in a particular case. At the moment there are two competing views, although the application of the principles of each school of thought may overlap. Some favour the view that deterrence, either specific or general, is the sole criterion. Others say that retribution is an important element.

27    The view that deterrence was the sole object of the imposition of the penalty was attributed by Finkelstein J to French J in CSR in the passage approved in unqualified terms by the plurality in the Agreed Penalties Case (HC) 258 CLR at 506 [55] where the plurality stated:

No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:

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 [of the Trade Practices Act] … 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.

(Footnotes omitted.)

28    The view that retribution was relevant as one of the objects of the imposition of a civil penalty could be seen in a number of cases. For example, in Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (No 5) [1998] FCA 310; ATPR 41-628, Heerey J said that while deterrence was a primary object of the imposition of civil penalties, concepts of moral responsibility long known to the criminal law were involved. His Honour said at 40,891:

While there has been a clear policy decision by Parliament that contraventions of the laws against anti-competitive conduct contained in Pt IV are not criminal offences, nevertheless s 76 imports into the penalty fixing process concepts of moral responsibility long known to the criminal law. In other words, the sources of the substantive provisions of Pt IV are doubtless economic policy and theory, but the penalties for contraventions are to be applied in a moral universe. Sheppard J said in Trade Practices Commission v Axive Pty Ltd (1994) ATPR 41-368 at 42,974 that:

… ordinary sentencing principles … apply notwithstanding that this is not a criminal prosecution.

By moral considerations I do not mean some kind of saccharine piety. The marketplace is, and is meant to be, a tough place. But the norms imposed by Pt IV, and in particular the prohibition of price-fixing, by now are to be seen as part of fair, honest and ethical business behaviour. Price-fixing, and in particular the kind of collusive bidding which was attempted in the present case, is a form of cheating. There is no reason why this aspect of the contravening conduct does not form part of the nature and extent of the act within the meaning of s 76(1). Also relevant is the conduct of those involved insofar as it involves factors like deliberation, knowledge of wrongdoing and concealment. Most if not all of these factors would fall within a consideration of the nature and extent of the act or the circumstances in which the act took place.

29    Further, in Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543, Lander J (with whom Jessup J agreed) said the following at 559–560 [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.

30    The Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331 (Agreed Penalties Case (FC)) sought at 357–359 to reconcile the views of French J in CSR and Lander J in Ponzio. Importantly, the Full Court qualified what French J had said, restricting it to penalties under the Trade Practices Act, saying the following at 229 FCR 357 [65]–[66]:

65 In CSR, French J was concerned with penalties to be imposed pursuant to Pt IV of the Trade Practices Act 1974 (Cth). 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.

31    The submissions put by the Commonwealth to which the Full Court was referring was recorded by the Court at [64], as follows:

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.

32    The Agreed Penalties Case (FC) (and the High Court on appeal) was concerned with the BCII Act (for present purposes, a statute that can be seen as cognate with the Fair Work Act as involving industrial relations). The Full Court in the Agreed Penalties Case (FC) saw in the relevant statute considerations that made retribution and rehabilitation relevant. Before citing Ponzio 158 FCR at 559–560 [92][94] with approval, the Full Court said the following at 229 FCR 357358 [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.

33    The Commonwealth had submitted that Ponzio 158 FCR at 559–560 [92]–[94] was wrong. That submission was rejected by the Full Court, the Court saying at 229 FCR 359 [71]:

However, a pre-eminent purpose [deterrence] need not be the sole purpose. We consider that in any system of penalties the various identified purposes of punishment [retribution, rehabilitation and deterrence] 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.

34    It is to be noted that in Ponzio at [93], Lander J referred to punishment (as well as deterrence and rehabilitation) as a purpose for imposing a penalty (thereby equating punishment with retribution), whereas the Full Court in the Agreed Penalties Case (FC) at [71] referred to the purposes of punishment in any system of penalties as including retribution (as well as deterrence and rehabilitation).

35    The High Court rejected the Full Court’s views, and stated, with clarity, that retribution and rehabilitation have no part to play as objects of the imposition of civil penalties: the object of civil penalties being entirely protective in promoting compliance, through deterrence (specific and general).

36    The questions of moral responsibility (“long known to the criminal law” as Heerey J said in McPhee) are bound up with notions of retribution and denunciation by the characterisation of the morality of the wrong as relevant to the appropriate nature of the response in punishment for the contravention (and in this sense, offending). The inaptness of the intrusion of moral judgments beyond the content of the relevant statute in the context of the imposition of civil penalties was commented upon by French J in CSR at 52,151 when his Honour said the following in relation to s 46 of the Trade Practices Act:

But characterisation of contravening conduct in terms of a morality larger than that which is defined by the legislative purpose is misplaced.

37    It is unnecessary to dwell further on these matters beyond saying that it is of some importance in the dispassionate and independent discharge of the court’s function in the resolution of disputes and the administration of justice that the exercise of judicial power does not appear to be clouded or compromised by the use of language foreign to the task of deterrence, involving expressions of moral denunciation that are not drawn from the statute and that the High Court has said are foreign to the judicial task of assessing and imposing an appropriate penalty.

The place of punishment

38    The terms of the High Court’s reasons have led to some discussion as to whether civil penalties are to be characterised as punishment: see the cases to which the Court referred in the Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (Queensland Infrastructure Case) at [99] set out below at [110]. The discussion has both a substantive and a semantic perspective. As a matter of substance, if by the word “punishment” is meant retribution, the plurality was clear. It is a consideration foreign to the relevant purpose or object of the imposition: protection of the public interest by promoting compliance with the statute by deterrence. As a matter of semantics, the remedy is penal: a penalty, albeit civil in character. The ordinary meaning of the word “penalty” includes “a punishment imposed for breach of law, rule, or contract” and of “penal” includes “punitive; prescribing or enacting the punishment of an offence or transgression”: The Shorter Oxford English Dictionary on Historical Principles (3rd ed, Oxford Clarendon Press, 1986) at 1542–1543.

39    If one recognises that the imposition of the civil penalty or the imposition of punishment in the nature of a civil penalty has only one object or purpose: the protection of society in promoting the public interest by compliance with the relevant law by putting a price on contravention sufficiently high to deter repetition by the contravenor or by others who might be tempted to contravene, then perhaps little utility and no error can be seen in viewing a civil penalty as a form of punishment. Given, however, the clarity of the view of the majority in the Agreed Penalties Case (HC) as to the object of imposition of a civil penalty, to avoid confusion and the risk of error, it is better not to describe the function of the imposition of a civil penalty as punishment, lest notions of retribution intrude. Also, the nature of the provision, contravention of which may result in the imposition of a civil penalty, is relevant to consider. As French J said in CSR at 52,151 the provisions of Pt IV of the Trade Practices Act are “of a regulatory rather than penal character”. Whilst the remedy is a penalty, and so correctly to be called penal, the purpose or object of its imposition is protective to bring about regulatory compliance by deterrence. The same may be said about the substantive provisions of industrial relations legislation, such as the Fair Work Act, as Parliament’s expression of the appropriate rules of engagement of the community in the labour market, to be regulated in accordance with the statute.

Principles of sentencing in crime

40    Sentencing principles attending the imposition of punishment for breach of the criminal law have, for many years, played an important part in the development and application of principle concerned with the imposition of civil penalties, in particular the principle of proportionality as discussed most notably in Veen v The Queen [1979] HCA 7; 143 CLR 458 (Veen (No 1)) and Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 (Veen (No 2)) and the method of reaching the relevant amount of the penalty by a process of evaluation in the nature of an “instinctive synthesis”: Markarian v The Queen [2005] HCA 25; 228 CLR 357. The extent to which principles of sentencing in criminal law are applicable, or properly adapted, to the imposition of civil penalties depends upon both the content of the statutory provisions providing for the civil penalty and upon the consequences of the different objects and purposes served by punishment for crime and imposition of civil penalties.

The principle of proportionality, retribution, and the humanising of criminal sentencing

41    An understanding of Veen (No 2) and related cases is critical to understanding the principle of proportionality in criminal sentencing and is important to the resolution of this appeal. Before coming to Veen (No 2), it is instructive to say something of “retribution” and its place in criminal sentencing. Justice French in CSR referred to “the Old and New Testament moralities that imbue much of our criminal law”. What is “retribution”? It is defined by the Macquarie Dictionary (rev ed, Macmillan Publishers, 1985 (1981)) as “1. requital according to merits or deserts, esp for evil. 2. Something given or inflicted in such requital. 3. Theological the distribution of rewards and punishments in a future life.” The Shorter Oxford English Dictionary defines “retribution” as:

1. Repayment, recompense, return, for some service, merit etc. Now rare. 2. Day of r., the day on which divine reward or punishment will be assigned to men …; also generally any day of punishment …; Recompense, in another life, for one’s good or bad deeds in this world. 3. A recompense for, or requital of, evil done; return of evil

42    One can see in those meanings the elements of a notion of proportionality: “according to merits or deserts”. Indeed, in modern times, the notion of retribution became a feature of English law of punishment for crime to civilise or make more humane the perceived evils of a system of punishment based on what Radzinowicz and Turner referred to as “a crude utilitarianism aiming at the reduction of crime through terror”: Radzinowicz L and Turner JWC,Punishment (1) Outline of Developments Since the 18th Century” in Radzinowicz L and Turner JWC (eds), The Modern Approach to Criminal Law: Collected Essays (MacMillan & Co, 1945) p 39. The terror to which they referred was real. In its form in the late eighteenth century and early nineteenth century the object of deterrence through terror was captured in a work of history (Mackenzie, History of the Nineteenth Century, 10th ed, pp 77–78) to which Radzinowicz and Turner referred at op cit p 39:

If a man injured Westminster Bridge, he was hanged. If he appeared disguised on a public road, he was hanged. If he cut down young trees; if he shot rabbits; if he stole property valued at five shillings; if he stole anything at all from a bleach field; if he wrote threatening letters to extort money; if he returned prematurely from transportation; for any of these offences he was immediately hanged.

43    Thus, the place of retribution in criminal sentencing is not to be seen necessarily as some harsh moralistic feature of the law embodying revenge, whether, as French J said in CSR, “within the sense of the Old and New Testament moralities that imbue much of our criminal law”, or otherwise. Rather, as Radzinowicz and Turner say at op cit p 40:

Speaking generally, the study of this first stage of our criminal policy establishes the conclusion that there was no acceptance of any principle that the severity of punishment should be equated to the gravity of the offence. This principle became prominent in the second stage, when the doctrine of retribution took a leading place in contemporary thought on penal questions, and therefore it was felt that the crimes had to be graded according to their gravity and the punishments correspondingly graded so as to fit the crime in each case. The major assumption on which this conception rests is that every individual in the State has certain fundamental rights as a human being, which should not be forfeited by the fact that he may have committed a crime.

44    One can see in such a discussion the foundation of a principle of proportionality in sentencing for crime. The retributive element in a sentence may, however, also reflect “the community’s expectation that the offender will suffer punishment and that particular offences will merit severe punishment”: Ryan 206 CLR at 283 [46] (per McHugh J). The proper recognition of this retributive element may also be seen to be related to maintaining public confidence in the administration of justice: R v Dole [1975] VR 754 at 769 and Ryan 206 CLR at 283 [46]. It is a form of justice based on equality: cf Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462.

45    As discussed below, that retribution can be seen as the (or a) source of the principle of proportionality does not necessarily lead to a conclusion that it is the only source of a principle based on reasonableness and proportion of response in the infliction of penal consequences for a statutory wrong.

The principle of proportionality in the criminal law and Veen (No 1) and Veen (No 2)

46    The principle of proportionality, its meaning and its difficult practical application can be seen in Veen (No 1) and Veen (No 2). The facts and circumstances of these cases are a tragic and brutal world away from the imposition of civil penalties to deter non-compliance with regulatory provisions in industrial relations or economic life. That difference in context does not, however, make applicable principle derived from Veen (No 2) any less binding; but it does assist in appreciating the caution required in transplanting words in reasons for judgment from one context to another.

47    In February 1975, Mr Veen, then twenty years of age, killed a man by repeated stabbing. He was convicted of manslaughter on the ground of diminished responsibility. The circumstances of the human tragedy of the crime, and of Mr Veen’s life, need not be recited in full detail, beyond saying that he had experienced a deprived life as an Aboriginal man who from childhood had suffered physical and sexual abuse, and from alcohol addiction. His abnormality of mind and reduced emotional control brought about by alcohol abuse were heightened when he was provoked or took alcohol. The fatal incident arose after the victim made a racial insult after having sexual relations with Mr Veen, who was working as a prostitute. The victim was ferociously and repeatedly stabbed. Mr Veen was sentenced to life imprisonment, the sentencing judge saying that he had “to be imprisoned for the protection of the community from his own uncontrollable urges”: see Veen (No 1) 143 CLR at 459. The High Court overturned the Court of Criminal Appeal’s refusal to interfere with Mr Veen’s sentence. The High Court (by majority) in Veen (No 1) allowed the appeal and substituted a sentence of 12 years imprisonment (his incarceration having commenced in 1975). Mr Veen was released on licence in January 1983, having been a model prisoner (a good worker; very quiet, never a problem: Veen (No 2) 164 CLR at 469). In October 1983 (but nine months after his release), Mr Veen repeatedly stabbed another man in similar circumstances. Once again, he was convicted of manslaughter by reason of diminished responsibility and once again he was sentenced to life imprisonment. Once again the Court of Criminal Appeal dismissed an appeal against sentence. This time, the High Court, by majority in Veen (No 2), dismissed the appeal.

48    At the centre of the debate in both Veen (No 1) and Veen (No 2) was the inter-relationship between the operation of the principle of proportionality and the protection of the community, and whether to sentence Mr Veen to life imprisonment could be seen as proportionate to his crime, or whether it could only be seen, in all the circumstances, as preventative detention without statutory warrant. Thus, it was not a question of specific or general deterrence, but protection of society by preventative detention that concerned the Court.

49    In Veen (No 2) Mason CJ, Brennan, Dawson and Toohey JJ at 164 CLR 473–474 referred, in the context of explaining proportionality, to the “illuminating controversy” in Res Judicatae, vol 6 (1953) between Mr CS Lewis, Dr Norval Morris, Dr Donald Buckle and Prof JJC Smart. As their Honours said at 473, the thesis advanced by CS Lewis “was that the retributive theory of punishment – punishing an offender because he deserves it – prevents the injustices which may be involved in detaining an offender in order … to protect society or to reform the offender”.

50    The majority said the following about the status of the principle at 472:

The sentencing principle which his Honour laid down [speaking of the sentencing judge in Veen (No 1)] is that a sentence should be “proportionate to the gravity of the offence” unless, perhaps, the applicant’s history warrants some departure from the principle. He then determined the appropriate proportionate sentence by reference to all the circumstances of the case. The principle of proportionality was not the point of divergence between the majority and minority [in the High Court in Veen (No 1)], however, for that principle was embraced expressly by Mason J (with the agreement of Aickin J). The majority decision in Veen [No. 1] reflected their Honours’ assessment of the particular circumstances of the case; ...

The principle of proportionality is now firmly established in this country. It was the unanimous view of the Court in Veen [No.1] that a sentence should not be increased beyond what is proportionate to the crime in order merely to extend the period of protection of society from the risk of recidivism on the part of the offender

(Footnotes omitted.)

51    Veen (No 2) reveals the subtlety and importance of the inter-relationship between propensity, past offending and a proportionate sentence. After rejecting, at 472473, the English approach of permitting a sentence greater than the principle of proportionality would allow in certain circumstances if the protection of the community warranted it, the majority said the following at 164 CLR 473:

It is one thing to say that the principle of proportionality precludes the imposition of a sentence extended beyond what is appropriate to the crime merely to protect society; it is another thing to say that the protection of society is not a material factor in fixing an appropriate sentence. The distinction in principle is clear between an extension merely by way of preventive detention, which is impermissible, and an exercise of the sentencing discretion having regard to the protection of society among other factors, which is permissible.

52    It was at this point in their reasons that the majority referred to the “illuminating controversy (see [49] above) and the place of the retributive theory of punishment as the source of the principle of proportionality. At 474, the majority referred to the “plea” of CS Lewis in the concluding reply set out at 164 CLR 473474 expressed in CS Lewis’ rich language:

All I plead for is the prior condition of ill desert; loss of liberty justified on retributive grounds before we begin considering the other factors. After that, as you please. Till that, there is really no question of ‘punishment’. We are not such poltroons that we want to be protected unconditionally, though when a man has deserved punishment we shall very properly look to our protection in devising it.

53    The majority then continued at 474:

The plea has been heard by the courts of this country, by adopting the principle of proportionality and by having regard to the protection of society as a factor in determining a proportionate sentence. It must be acknowledged, however, that the practical observance of a distinction between extending a sentence merely to protect society and properly looking to society's protection in determining the sentence calls for a judgment of experience and discernment.

The basic difference between the majority and the minority in Veen [No. 1] lay in the differing assessments of what was the appropriate proportionate sentence. No judgment would have given support to a sentence exceeding what was truly proportionate.

54    The derivation of the principle of proportionality from the retributive object of punishment is seen in Veen (No 2) 164 CLR at 473474.

55    The majority in Veen (No 2) at 477478 dealt with two further (and related) principles, described as subsidiary for the resolution of that appeal, which are of central importance to this appeal: the antecedent criminal history (here, antecedent contraventions) and the place of the maximum penalty.

56    As to antecedent criminal history of an offender, the principle of proportionality played the same important role. It is necessary to set out the whole passage on this first (subsidiary) principle at 164 CLR 477478:

[T]he antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell [[1970] AC 642 at 650]. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner’s claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community’s understanding of what is relevant to the assessment of criminal penalties.

57    In Director of Public Prosecutions v Ottewell [1970] AC 642 at 650, Lord Donovan said “Or, it may be that repetition has itself increased the gravity of the offence.” These passages from Veen (No 2) are a clear statement that the consideration of prior offending or propensity is not limited to limiting or refusing any claim for leniency. Such prior offending may show moral culpability or propensity to offend or a continuing attitude of disobedience to the law, and so reveal the need for specific deterrence. Such an attitude of continuing disobedience may warrant, through retribution, deterrence and protection of society, a “more severe penalty”. But it is retribution, deterrence and protection from “offences of a like kind”. Such factors cannot be given such weight as to lead to a penalty “disproportionate to the gravity of the instant offence”. As seen below these passages have given rise to a difference of view as to whether prior offending can affect the assessment of the gravity of the offending, or whether it is a matter going to punishment of the offence, the gravity of which is assessed without regard to prior offending. The difference of view (in the context of sentencing in crime) reflects the central debate in this appeal.

58    What was said as to the first subsidiary principle was reinforced by the place of the maximum penalty. The majority said at 164 CLR 478:

The second subsidiary principle material to this case is that the maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is prescribed: Ibbs v. The Queen [(1987) 163 CLR 447 at 45152]. That does not mean that a lesser penalty must be imposed if it be possible to envisage a worse case; ingenuity can always conjure up a case of greater heinousness. A sentence which imposes the maximum penalty offends this principle only if the case is recognizably outside the worst category.

59    The “worst type of case” was expressed in Ibbs v The Queen [1987] HCA 46; 163 CLR 447 at 451452 by Mason CJ, Wilson, Brennan, Toohey and Gaudron JJ by reference to the reasons of Brennan, Deane and Gallop JJ in the Full Court of this Court on appeal from the Supreme Court of the Northern Territory in R v Tait [1979] FCA 32; 46 FLR 386. In expressing the principle by reference to two decisions of Dwyer CJ and Burt CJ in Reynolds v Wilkinson (1948) 51 WALR 17 and Bensegger v The Queen [1979] WAR 65, respectively, Brennan, Deane and Gallop JJ said at 46 FLR 398 (in a passage recently restated by the High Court in R v Kilic [2016] HCA 48; 259 CLR 256 at 265 [18]):

That principle requires that both the nature of the crime and the circumstances of the criminal be considered in determining whether the case is of the worst type.

(Emphasis added.)

60    As to the maximum penalty see also Elias v The Queen [2013] HCA 31; 248 CLR 483 at 494495 [27].

61    Running throughout Veen (No 2) is the place of proportionality. Its source lies in the place of retribution for the gravity of the offending. The appropriate sentence, for the instant offence, is reached by a process which may have regard to prior offending in what it demonstrates about culpability, an attitude of disobedience to the law and the extent to which the community needs to be protected or the offender deterred. Such considerations are relevant to a sentence proportionate to the kind of case, judged by the nature of the offending and the circumstances of the offender.

62    The maximum penalty is not just a limit on power, it provides a statutory indication of the punishment for the worst type of case, by reference to which the assessment of the proportionate penalty for other offending can be made, according to the will of Parliament.

63    The passages in Veen (No 2) at 477478 are at the centre of the disagreement in this case. They must be understood by reference to, and in the light of, contemporaneous and later High Court decisions. They have not been free from disagreement otherwise in the criminal sentencing context. It is appropriate to spend a little time examining that disagreement because it mirrors the points of disagreement in the arguments on appeal, albeit in the context of the imposition of the civil penalty.

64    Nine months after delivery of Veen (No 2), in Baumer v The Queen [1988] HCA 67; 166 CLR 51 (Baumer (HC)) the Court (Mason CJ, Wilson, Deane, Dawson and Gaudron JJ, all of whom had sat in Veen (No 2)) dealt with the subject of the relevance of prior convictions in the context of a dangerous driving offence in the Northern Territory. The sentencing judge (Asche J) had said, “What increases the seriousness of this particular offence is the literally appalling record of the accused as far as prior offences in relation to driving are concerned.” He had then observed that people with the propensity of the applicant to continue to commit driving offences must be “kept away” for the protection of society: see 166 CLR at 53. The Court in allowing the appeal and setting aside the order of the Court of Criminal Appeal that had dismissed the appeal said at 5758:

In the present case, therefore, the task of the sentencing judge was to evaluate the circumstances of the offence in their entirety, including the influence of alcohol, and to determine an appropriate term of imprisonment having regard to the prescribed maximum of eleven years and to the possible range of offences to which it applied. His Honour purported to proceed in this way. However, the manner in which his Honour performed the task is open to question in two respects. We have already referred to his Honour’s observation that “the literally appalling record” of the applicant increased the seriousness of the offence. If this means no more than that such a record would make it difficult to view the circumstances of the offence or of the offender with any degree of leniency then, of course, such a remark would be understandable and unobjectionable. It would clearly be wrong if, because of the record, his Honour was intending to increase the sentence beyond what he considered to be an appropriate sentence of the instant offence. Similarly, his Honour’s observation that people with the propensity of the applicant to continue to commit driving offences must be “kept away” for the protection of the public is open to misunderstanding. Propensity may inhibit mitigation but in the absence of statutory authority it cannot do more. In applying a section like s. 154, the sole criterion relevant to a determination of the upper limit of an appropriate sentence is that the punishment fit the crime. Apart from mitigating factors, it is the circumstances of the offence alone that must be the determinant of an appropriate sentence.

(Emphasis added.)

65    Six months later, in Hoare v The Queen [1989] HCA 33; 167 CLR 348 at 354 in a South Australian appeal involving an offence of armed robbery, the Court (Mason CJ, Deane, Dawson, Toohey and McHugh JJ) said:

[A] basic principle of sentencing law is that a sentence of imprisonment imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances

(Emphasis in original.)

66    This proposition just referred to in Hoare was footnoted by reference to Veen (No 2) at 472 (the plurality), 485486 (Wilson J), 490491 (Deane J) and 496 (Gaudron J): that is, the whole Court. To similar effect see Chester v The Queen [1988] HCA 62; 165 CLR 611 at 618 (citing Veen (No 1) 143 CLR at 467, 468, 482–483 and 495, Veen (No 2) 164 CLR at 472–474 and 485–486, and Walden v Hensler [1987] HCA 54; 163 CLR 561) where the need for sentences for criminal offences to be proportionate to the circumstances of the offence was described as a “fundamental principle”, as it was by McHugh J in Markarian 228 CLR at 385 [69] and in Ryan 206 CLR at 283 [48].

67    In Weininger v The Queen [2003] HCA 14; 212 CLR 629 at 640 [32] Gleeson CJ, McHugh, Gummow and Hayne JJ said:

A person who has been convicted of, or admits to, the commission of other offences will, all other things being equal, ordinarily receive a heavier sentence than a person who has previously led a blameless life. Imposing a sentence heavier than otherwise would have been passed is not to sentence the first person again for offences of which he or she was earlier convicted or to sentence that offender for the offences admitted but not charged. It is to do no more than give effect to the well-established principle (in this case established by statute) that the character and antecedents of the offender are, to the extent that they are relevant and known to the sentencing court, to be taken into account in fixing the sentence to be passed. Taking all aspects, both positive and negative, of an offender's known character and antecedents into account in sentencing for an offence is not to punish the offender again for those earlier matters; it is to take proper account of matters which are relevant to fixing the sentence under consideration.

68    In Markarian 228 CLR at 389390 [83], McHugh J said:

in Veen [No 2], as I have indicated, this Court affirmed that the ultimate control on the judicial sentencing discretion is the requirement that the sentence be proportionate to the gravity of the offence committed. In pursuit of other sentencing purposes, a judge may not impose a sentence that is greater than is warranted by the objective circumstances of the crime.

69    In Magaming v The Queen [2013] HCA 40; 252 CLR 381 at 397 [51] French CJ, Hayne, Crennan, Kiefel and Bell JJ said:

The sentence imposed must be proportionate in the sense that it properly reflects the personal circumstances of the particular offender and the particular conduct in which the offender engaged when those circumstances and that conduct are compared with other offenders and offending.

70    From the above, there may possibly be seen to be a distinction between the “gravity” or seriousness of the offence and the “objective circumstances of the offence: see Odgers S, Sentence (2nd ed, Longueville Media, 2013) at 112–118 [3.79]–[3.85]. The existence of the distinction may depend on the meaning of objective circumstances, as to which see R v Mulholland (1991) 1 NTLR 1; 102 FLR 465 at 478791, referred to below. In any event, if the criminal history of an offender can increase the seriousness or gravity of the offence by illumination of moral culpability or a continuing attitude of disobedience to the law, it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the crime considered in the light of its objective circumstances: Veen (No 2) 164 CLR at 477 and Hoare 167 CLR at 354. So, even if the gravity of the crime can be affected by antecedent criminal history on one reading of Veen (No 2) (at 477 (including but not limited to the approval of Ottewell [1970] AC at 650) and at 478 by reference to Ibbs and through it Tait) would indicate, the sentence must be proportionate to that gravity considered in the light of the objective circumstances. Thus, the prior offending cannot unmoor or untether the sentence from the crime’s objective circumstances.

71    The view has been taken in New South Wales, by Spigelman CJ writing for the New South Wales Court of Criminal Appeal in R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566 at 573 [22] (McClellan CJ at CL, Grove, Barr and Bell JJ concurring) that (notwithstanding considerations of the kind referred to above in the preceding paragraph) “prior convictions do not themselves play a role in determining the ‘gravity of the offence’ which, as Hoare confirms, turns on the ‘objective circumstances’ of the offence. This understanding is confirmed in Baumer.” This appears to be the accepted view in New South Wales: Gommesen v The Queen [2012] NSWCCA 226 at [1], [2] and [50]; Hillier v Director of Public Prosecutions (NSW) [2009] NSWCCA 312; 198 A Crim R 565 at [8][20]; Smith v The Queen [2011] NSWCCA 163 at [1], [26] and [72] (a case concerned with offences committed whilst the offender was on bail); Elhassan v The Queen [2018] NSWCCA 118 at [1], [2] and [13][14]; Tabbah v The Queen [2019] NSWCCA 324 at [1], [105] and [146]; and Gilshenan v The Queen [2019] NSWCCA 313 at [60] where the matter was put with clarity by Johnson J (on behalf of the Court, Macfarlan JA and Cavanagh J concurring):

The principles in Veen v The Queen (No. 2) and Baumer v The Queen (1988) 166 CLR 51; [1988] HCA 67 at [13]-[14] have been taken to establish that the principle of proportionality requires the upper boundary of a proportionate sentence to be set by the objective circumstances of the offence which circumstances do not encompass prior convictions: R v McNaughton (2006) 66 NSWLR 566; [2006] NSWCCA 242 at [24]. However, as was said in Veen v The Queen (No. 2), an antecedent criminal history is not relevant only to an offender’s claim of leniency. If an offender manifests in the commission of the offences for which sentence is to be passed “a continuing attitude of disobedience of the law”, then “retribution, deterrence and protection of society” play a part on sentence, although not in a manner which allows imposition of a sentence which is disproportionate to the objective gravity of the offences.

72    There was a clear disagreement with the above by RS Hulme J in Hillier at [107][110]. His Honour’s views that the record of prior offences could be taken into account in assessing the gravity of the offending were more in line with some of the cases referred to below, such as R v Omar (1991) 55 A Crim R 373, Mulholland and R v Young [1990] VR 951; 45 A Crim R 147. That disagreement recognised, however, that the relevance of the past offending could not take the sentence beyond the gravity judged by relevant factors which must (given Hoare) be considered in the light of the crime’s objective circumstances.

73    It may be thought, however, that merely to refer to “prior convictions” may mask the more relevant, and a more nuanced, question (being the one to which the plurality in Veen (No 2) at 477 referred) as to whether “antecedent criminal history is relevant … to show … whether the offender has manifested in [the] commission of the instant offence a continuing attitude of disobedience to the law”. The characterisation of such a consideration as not related to the gravity of the offence does not strike one as necessarily self-evident.

74    The view expressed in McNaughton, and the other New South Wales cases reflects the views of respected commentators: Fox R and Freiberg A, Sentencing: State and Federal Law in Victoria (2nd ed, Oxford University Press, 1999) at 227 [3.510] and the position in Victoria: R v O’Brien [1997] 2 VR 714 at 718 and Dirbass v The Queen [2018] VSCA 272 at [47][55].

75    A different approach to McNaughton has arisen from a wider view as to the meaning of the phrase “objective circumstances” in this context (reflecting perhaps what Wilson J said in Veen (No 2) at 48687: “the ease with which obscurity of meaning can infect this area of discourse). In this respect, the views of the Victorian Court of Criminal Appeal in Young [1990] VR 951 and the Northern Territory Court of Criminal Appeal in Mulholland (1991) 102 FLR 465 are relevant. In Young the Court (Young CJ, Crockett and Nathan JJ) rejected a two-stage approach based on a first stage excluding matters personal to the offender: see [1990] VR 954960, especially 960. This rejection was not disapproved by Dawson, Toohey and Gaudron JJ in Bugmy v The Queen [1990] HCA 18; 169 CLR 525 at 535536. That discussion by the Victorian Court of Criminal Appeal carried with it an implicit rejection of the proposition that the seriousness or gravity of the offending could be assessed without regard to considerations that were personal to the offender and which bore upon culpability: see [1990] VR at 960. In Mulholland, Angel J (with whom Asche CJ agreed) rejected the proposition that the circumstances of the instant offence which bore upon its gravity did not include prior offending. This view reflected the proposition that the circumstances of the crime, whether one calls them objective or not, include matters personal to the offender which can be seen to bear upon the gravity of the crime. The relevance of such matters was expressed as follows at 102 FLR 477478 in rejecting a submission that prior offences could not be looked at in coming to a proportionate sentence from the objective circumstances of the offending:

I think there is an error in the submission and I think it is this: it overlooks that the previous offence of the respondent is a circumstance of the instant offence which bears upon the gravity of the instant offence.

Had a hypothetical disinterested bystander witnessed the respondent’s actions, his actus reus, he might have observed little different to the actus reus of the previous offence of the respondent. However, to say the hypothetical disinterested bystander observing only the actus reus, observes the circumstances of the offence is to ignore circumstances relevant to the criminal intent, the mens rea, of the respondent. The fact that the respondent was a convicted rapist at the time of the instant offence demonstrates, prima facie, an increased animus and culpability for the instant offence which ipso facto is deserving of greater punishment – and this is so quite apart from any question of a general propensity to re-offend after the time of sentencing. To impose a higher punishment a second time round is not a matter of adding anything to a so-called objective sentence; it is not a matter of punishing twice for the earlier offence: it is merely recognising that the prior offence is a circumstance relevant to the mens rea of the offender in committing the instant offence and that there is prima facie increased criminal culpability pertaining to the instant offence. The instant offence demonstrates an added disregard for the law, an added disregard for society in general and a further disregard for a particular member of society (the new victim) in particular. These matters reflect, in the absence of particular exculpatory facts, a more calculated animus in the case of the instant offence, and as I have said, this is so quite apart from any question of propensity to re-offend yet again. When courts speak of the circumstances of the offence they do not mean what the hypothetical disinterested bystander sees and hears at the scene. That is not exhaustive of the circumstances of the offence. The offence is constituted by the actus reus and the mens rea of the offender. So far as consideration of the mens rea of the offender is concerned, the hypothetical disinterested bystander is confined to what is said and done in his presence. There can be many factors relevant to the mens rea that are disclosed to the hypothetical disinterested bystander. The offender’s mental state at the time of the actus reus is not only to be inferred from the actus reus itself. It can be inferred as much from a proven pre-existing propensity to commit the offence as from a previously stated intention, made elsewhere, to commit the offence. When it is said the punishment must fit the crime, the punishment must fit both the actus reus and the mens rea constituting the crime. A pre-existing propensity to commit a like offence is relevant to the issue of mens rea of the instant offence. A propensity to re-offend in like manner yet again, attracts additional but different considerations apropos the protection of the public.

76    Justice Angel saw this approach as supported by Veen (No 2) at 477478 and did not consider that anything in Baumer (HC) or Hoare was intended to qualify what had been said in Veen (No 2) at 477478. In this respect Angel J disagreed with what Kearney J had said in Sultan v Svikart (1989) 96 FLR 457; 42 A Crim R 15 (see below). Justice Angel also drew support from Young [1990] VR at 960.

77    The above approach has not been reflected uniformly in the Northern Territory. Before Mulholland, in the remitted appeal of Mr Baumer in the Court of Criminal Appeal (R v Baumer (1989) 40 A Crim R 74 (Baumer (CCA))), Nader J expressed the matter in a manner conformable with the views of Angel J in Mulholland at 79:

It is permissible when considering the gravity of the offence itself to have regard to the appellant’s criminal record, not so as to increase an otherwise proper sentence, but as revealing, to some extent, the appellant’s state of mind at the time of the commission of the offence. His record tends to show him as a person who, when he offended, was somewhat contemptuous of any law to the contrary.

78    Justice Kearney, however, after referring to what the High Court had said in Baumer (HC), expressed the matter conformably with the New South Wales cases, as follows at 40 A Crim R 8485:

It follows as a corollary that it is improper to increase a sentence beyond the upper limit called for by the circumstances of the crime, because of an accused’s criminal record. It is unjust to do so, because the accused would thereby be punished again for offences for which he had already been punished. However, the fact that an accused has a criminal record is a ground for refusing to mitigate the sentence called for by the circumstances of the offence; the rationale is that by his persistence in criminal conduct he may be regarded as not having responded to previous punishment, his prospects for rehabilitation may thus be regarded as poor, and the deterrent effect of some more moderate punishment negligible. An accused’s criminal record may also be treated as evidence of his character – a matter always in issue – and thus indicative of the extent to which society needs to be protected from him; it may also be treated as evidence of the nature and extent of any relevant intention.

I consider that his Honour’s observation that the appellant’s record “increases the seriousness of this particular offence” may fairly be construed in its context as indicating an approach to sentencing in which the appellant’s record was treated as a factor which increased the seriousness of the crime beyond that warranted by the circumstances of its commission. In the light of what the High Court said (Baumer at 345) such an approach involves appealable error in terms of House (1936) 55 CLR 499 at 505, vitiates the exercise of his Honour’s sentencing discretion, and enables this Court to exercise its own discretion in substitution.

79    After Baumer (CCA), Kearney J reiterated his views in Sultan v Svikart 96 FLR at 461462, with which Angel J (and Asche CJ) disagreed in Mulholland. Justice Kearney maintained his views in Marshall v Llewellyn (1995) 79 A Crim R 49 at 53, saying:

It follows, I think, from the passage emphasised above that “the gravity of the instant offence’ which, in accordance with the proportionality principle stated in Veen (No 1) (1979) 143 CLR 458 controls the upper limit of the sentence which may be imposed, is to be assessed without taking into account “the antecedent criminal history of [the] offender”. The gravity of an offence is assessed by reference to its “objective circumstances”; see Hoare (1989) 167 CLR 348 at 354. They set the limit to the sentence which may be imposed; within that limit:

the interplay of other relevant favourable and unfavourable factors – such as good character, previous offences, repentance, restitution, possible rehabilitation and intransigence – will point to what is the appropriate sentence in all the circumstances of the particular case

as Deane J put it in Veen (No 2) at 491; 249.

The “objective circumstances” exclude matters personal to the offender such as his prior criminal history. Insofar as the analysis by Angel J in Mulholland (1991) 102 FLR 465 at 477-479, with which Asche CJ agreed, may involve treating a prior criminal record as one of the “objective circumstances” of an offence, thereby raising the upper limit of the sentence which may be imposed, I respectfully disagree with it.

80    In reaching those views Kearney J drew support from King CJ in R v McInerney (1986) 42 SASR 111 at 113 and disagreed with the Full Court of this Court (Morling, Neaves and Foster JJ) in R v Omar (1991) 55 A Crim R 373 at 379380, on appeal from the Supreme Court of the Australian Capital Territory, which had stated at 379:

Furthermore, Omar’s prior criminal record was relevant to an evaluation of the seriousness of the offence in respect of which sentence was being imposed. It was not relevant merely to subjective considerations weighing for or against leniency. It has been made clear in Veen (No 2) (1988) 164 CLR 465; 33 A Crim R 230 that this is the correct approach.

81    In Dixon v Price (1996) 135 FLR 27 at 3031 Mildren J disagreed with Kearney J relying on Veen (No 2) at 477478, saying:

In my view, it is entirely artificial to assess the criminality of an offender by excluding from the objective circumstances prior offences, where they illuminate the offender’s moral culpability for the instant offence. Indeed, it is common for the legislature in this Territory and elsewhere to prescribe higher maximum penalties where the offender has a prior conviction for the same offence. The moral culpability of this offender is, in my view, illuminated by the fact that he has five prior convictions for the same offence over a very short period and for which he has received sentences of imprisonment (including the maximum penalty) in the past.

The fact that a prisoner has a prior conviction for the same offence may be treated as part of the objective circumstances of the offences is recognised not only in Mulholland and Omar to which Kearney J referred, but also by the Court of Criminal Appeal when re-sentencing in R v Baumer (1989) 40 A Crim R 74 per Nader and Kearney JJ.

82    In Ellis v The Queen [2005] NTCCA 1; 154 A Crim R 450 at 455, R v Tyday [2006] NTSC 29 at [12] and R v Haji-Noor [2007] NTCCA 7; 21 NTLR 127, Angel J maintained his views.

83    In South Australia, the New South Wales position has been followed in Stokes v The Queen [2020] SASCFC 9 at [80] with express citation of, and agreement with, Gilshenan at [60] by Lovell J, with whom Peek J agreed. Absent statute, the position in South Australia was expressed before Veen (No 2) by King CJ in McInerney 42 SASR at 113, as follows:

The cardinal rule is that while good character may operate to reduce the sentence which the facts of the crime would otherwise attract, bad character cannot increase it. A person is not to be punished, or punished again, for crimes other than the crime for which sentence is being passed. Offences committed prior to sentence for the offence under consideration may affect the sentence in two ways. They may diminish or abrogate any leniency by reason of good character. They may, moreover, lead to a greater sentence than would otherwise be imposed, although within the proper limits indicated by the facts of the immediate crime, for the purpose of personal deterrence; the prisoner's record may indicate that greater punishment is needed to protect the public by deterring him from further crime. Where the other offences have been committed before the commission of the immediate offence, their relevance is clear in the generality of cases. The offender has committed the offence not as a first offender but as a person whose character is affected by previous offending. He must be sentenced against the background of his record The effect of the prior offences is more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies.

(Footnote omitted.)

84    The position of recidivism or serious repeat offending in South Australia is now provided for in s 54 of the Sentencing Act 2017 (SA) which specifically removes the requirement to impose a proportionate sentence.

85    In Western Australia, the relevant sentencing legislation (s 7(2) of the Sentencing Act 1995 (WA)) provides that an offence is not aggravated by a prior record. The expression of principle in the light of the provision has been in conformity with the approach in the New South Wales cases: Keating v Western Australia [2007] WASCA 98; 35 WAR 1 at 1112 [35][36]; and Benter v Western Australia [2005] WASCA 245 at [30].

86    In Queensland, the relevant statutory provisions (ss 9 and 11 of the Penalties and Sentencing Act 1992 (Qld)) permit prior convictions to be used as an aggravating factor.

87    In Tasmania, the position is equivocal: Dobson v Tasmania [2017] TASCCA 19; 269 A Crim R 222 at 233235 [28][34].

88    In the Australian Capital Territory, McNaughton is applied: Amos v McCarron [2017] ACTSC 6 at [72].

89    The elusiveness of the distinction between factors relevant to the offending and to the offender in assessing the seriousness or gravity of the crime was helpfully discussed by the New South Wales Court of Criminal Appeal (Spigelman CJ, Wood CJ at CL and Simpson J) in R v Way [2004] NSWCCA 131; 60 NSWLR 168 at 186188 [86][99], albeit in the context of statutory standard non-parole periods. The Court recognised that some circumstances that go to the seriousness of the offence will be personal to the offender, but can nevertheless be said objectively to affect the seriousness of the offence because of their causal connection with its committal, such as motivation, duress, mental illness or disability, but “[o]ther matters which may be said to explain or influence the conduct of the offender or otherwise impinge on her or his moral culpability are more accurately described as circumstances of the offender and not the offence: 60 NSWLR at 187 [86]. The Court drew a distinction (eschewing the word “objective”) between “circumstances which go to the seriousness of the offence considered in a general way, and matters that are more appropriately directed to the objectives of punishment”: 60 NSWLR at 187 [90]. The Court viewed prior offences as more relevant to punishment: 60 NSWLR at 187 [92]. Though these matters were generally expressed the Court was dealing with statutory provisions dealing with standard non-parole periods. That meant the issue for general sentencing principles did not need to be settled; but the following comment was made (60 NSWLR at 188 [98]) that is of some importance:

Prior to enactment of legislation of the kind which is seen in Div 1A of Pt 4 [the standard non-parole provisions] it was probably not necessary for any strict line to be drawn between matters which related to the offence, and to the offender, respectively, since the focus was placed upon the question of setting a sentence that reflected the overall criminal culpability involved.

90    This rejection of the likely practical necessity to resolve a taxonomical debate parsing the words of Veen (No 2) recognises that, even if prior convictions can be taken into account in assessing the gravity or seriousness of the offending, the sentence is set by reference to all the circumstances, including the outward objective circumstances of the commission of the offence: that is, what happened. Thus prior convictions cannot distort the sentence to that which is disproportionate in the light of such objective circumstances of the offending (as opposed to the offender). The same point was made by Kourakis J (as the Chief Justice then was) in R v Bukvic [2010] SASC 195; 107 SASR 405 at 421 [75][76].

91    As pointed out by Mortimer J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436 at [77], the emphasis in criminal law for close correlation between the objective seriousness of the offending conduct and the proportionate response of the state in punishment is easily understood in the context of the deprivation of liberty by a term of imprisonment. As is discussed later, the context of monetary penalties used in a regulatory context to extract compliance with a statute by deterrence may allow for a wider notion of what is considered to be proportionate or appropriate.

92    Before turning to the statute, it should be noted that the principle of proportionality in Veen (No 2) can be seen to have two informing considerations that were not tied to retribution (as distinct from deterrence): first, the deterrence was in respect of offences “of a like kind”: 164 CLR at 477; and, secondly, the maximum penalty assisted to shape the punishment for such kind of offending. These two features were not wholly dependent upon the retributive source or upon a source of moral delinquency. They can be seen to survive the rejection of retribution as an object of the imposition of civil penalties. They can be seen as part of the reasonableness of the response of state power under statute to regulate conduct, deriving from the content of the statute authorising lawful (judicial) power to impose penal consequences to deter prohibited conduct.

93    In the criminal law, the principle of proportionality remains relevant even when the principle purpose of the sentence being imposed is deterrence: Eldridge v Bates [1989] SASC 1268; 51 SASR 532 at 533–534 (King CJ), discussed by the Full Court in Police v Cadd [1997] SASC 6187; 69 SASR 150; Birch v Fitzgerald (1975) 11 SASR 114 at 116117 (Bray CJ); and R v Thompson (1975) 11 SASR 217 at 222 (Bray CJ).

The statutory provisions

94    The source of the court’s power to impose a penalty is s 546 of the Act. Section 546 finds its place in Subdiv B of Div 2 of Pt 41 of Ch 4 of the Act, which is constituted by ss 545, 546 and 547, which relevantly are as follows:

545     Orders that can be made by particular courts

Federal Court and Federal Circuit Court

(1)    The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

(2)    Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:

(a)    an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;

(b)     an order awarding compensation for loss that a person has suffered because of the contravention;

(c)     an order for reinstatement of a person.

Eligible State or Territory courts

(3)    An eligible State or Territory court may order an employer to pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that:

(a)     the employer was required to pay the amount under this Act or a fair work instrument; and

(b)    the employer has contravened a civil remedy provision by failing to pay the amount.

(3A)     An eligible State or Territory court may order an outworker entity to pay an amount to, or on behalf of, an outworker if the court is satisfied that:

(a)    the outworker entity was required to pay the amount under a modern award; and

(b)     the outworker entity has contravened a civil remedy provision by failing to pay the amount.

When orders may be made

(4)    A court may make an order under this section:

(a)     on its own initiative, during proceedings before the court; or

(b)     on application.

Time limit for orders in relation to underpayments

(5)    A court must not make an order under this section in relation to an underpayment that relates to a period that is more than 6 years before the proceedings concerned commenced.

546     Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

Determining amount of pecuniary penalty

(2)    The pecuniary penalty must not be more than:

(a)     if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

(b)     if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

Payment of penalty

(3)    The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a)     the Commonwealth; or

(b)     a particular organisation; or

(c)     a particular person.

Recovery of penalty

(4)    The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

No limitation on orders

(5)    To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.

547     Interest up to judgment

(1)    This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument.

(2)    In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.

(3)    Without limiting subsection (2), in determining the amount of interest, the court must take into account the period between the day the relevant cause of action arose and the day the order is made.

95    If a contravention of a civil remedy provision is threatened or has occurred the court is given wide power to make orders, such as: any order the court considers appropriate: s 545(1); injunctive relief to prevent, or remedy the effects of a contravention: s 545(2)(a); compensation for loss a person has suffered because of the contravention: s 545(2)(b); reinstatement: s 545(2)(c); or a pecuniary penalty that is considered appropriate if satisfied of contravention: s 546(1), including the imposition of a personal payment order, the power for which is implied within s 546(1): Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157 (Non-Indemnification Case (HC)).

96    Some of these provisions (without being completely mutually exclusive) are compensatory, some are preventative and protective, and one is penal. The regime is statutory and, as is obvious, but nevertheless worthy of repetition, it is for Parliament to set the level of penalty to be imposed by the courts by reference to known principles guiding the imposition of penalties. As Allsop CJ said in Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner [2016] FCAFC 184; 247 FCR 339 (1st Non-Indemnification Personal Payment Case (FC)) at 343 [14] in the context of explaining why his Honour did not think that s 545(1) was a valid source of power for an order against the union preventing it from paying any penalty imposed on the union official (as opposed to s 546 as found by the High Court to be the source of power to require the contravening party to pay the penalty and not seek or accept indemnification from the union):

None of the above should be seen as an encouragement to any person or organisation to act in defiance of the law, or any condonation of such conduct. If a penalty is to be seen as a price on contravention that is sufficiently high to deter repetition by a contravenor, and that object is not being fulfilled, the answer may lie in the inadequacy of the penalty. It is a matter for Parliament to set the penalty and to set the consequences of repeated contravention. The imposition of penalties is not the only mechanism for requiring and exacting obedience to the law. If an organisation or a person is behaving in a way that would indicate an unwillingness to obey a Commonwealth statute and such conduct could be seen as likely to repeat itself, injunctive relief may be available. Section 545(2)(b) provides for an order awarding compensation for loss that a person has suffered because of a contravention. The interruption of a concrete pour on a building site leading to the necessity to remove the partially laid concrete and to repeat the otherwise expensive exercise might well be the foundation for an order for compensation.

97    There is no basis to construe s 546 other than as the source of power in the court to impose a civil penalty for a stated and proven contravention. There is no reason (textually or contextually derived) to construe the provision as empowering a court to impose more than one penalty for a proven contravention. The words do not permit multiple penalties for the same contravention. This approach has been universal to the imposition of civil penalties and underlies the body of jurisprudence on the so-called “course of conduct” principle, as to which cases see [116] below.

98    The court’s task is to determine and impose a penalty that it considers “appropriate” if it is satisfied that a person upon whom the penalty is to be imposed has contravened a civil remedy provision. That task is to be undertaken in the light of the object or purpose of the imposition: the promotion of the public interest in compliance with the provision of the statute in question, by deterrence, specific and general. It is clear that the object of deterrence is directed to the subject contravention. That is, it is the deterring of contraventions of the kind before the court to which regard must be had in fixing the penalty that is considered appropriate, by reference to the frame of reference or yardstick provided by the maximum penalty as set by Parliament. Thus, it will always be important to understand the nature, character and full context of the contravening.

The appropriate penalty

99    The kinds of consideration to be taken into account to which French J referred in CSR (1991) ATPR 41-076 at 52,15252,153 were:

 1.    The nature and extent of the contravening conduct.

 2.    The amount of loss or damage caused.

 3.    The circumstances in which the conduct took place.

 4.    The size of the contravening company.

5.    The degree of power it has, as evidenced by its market share and ease of entry into the market.

 6.    The deliberateness of the contravention and the period over which it extended.

7.    Whether the contravention arose out of the conduct of senior management or at a lower level.

8.    Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

9.    Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.

Other cases have similarly expressed lists of possible relevant considerations: see for example, Santow J in Australian Securities and Investment Commission v Adler [2002] NSWSC 483; 42 ACSR 80 at [126] and Tracey J in Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at 18–19 [14]. To the list of French J may be added, to the extent that it is not inherent within his Honour’s list, the apparent attitude of the contravenor to compliance with the relevant law of Parliament. Such lists are (unless found in a relevant statutory provision) not legal check lists. They are judicial descriptions of likely relevant considerations applicable to the task of coming to an appropriate penalty in the circumstances of varied cases, for the object of deterrence of contraventions of like kind set against the statutory maximum penalty. As Buchanan J said in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at 580 [91] such lists are useful as long as they “do not become transformed into a rigid catalogue of matters for attention. [T]he task of the Court is to fix a penalty that pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. As Gyles J said in A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [6] the factors are not mandatory criteria and can lead to over-elaborate reasoning for a task that is a discretion at large as to what is appropriate to the object concerned.

100    The setting out of such factors is of assistance, however, not only in capturing relevant matters, but also in providing the necessary focus: that it is to the contravention in question to which the penalty is directed. This is not because there is a retributive principle that there must be equality between act and punishment for the crime, but because the contravention (and its nature, quality and seriousness) must be considered and understood such that the appropriate penalty be imposed to deter such a contravention in the future. The features of the contravention that can be seen to be relevant to its seriousness will find their place, not in the operation of some freestanding retributively-derived principle of proportionality, but in understanding the degree of deterrence necessary to be reflected in the size of the penalty: Flight Centre Limited v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at 86 [71]. Importantly, however, the imposition of an appropriate penalty, given the object of deterrence, does not authorise and empower the imposition of an oppressive penalty that is one that is more than is appropriate to deter a contravention of the kind before the court. The primacy of the object of deterrence does not unmoor or untether the consideration of appropriateness from the circumstances and the contravention before the court and what is reasonably necessary to deter contraventions of the kind before the court. Notions of reasonableness inhering in statutes as part of the principle of legality would deny a construction that sought to do so, at least without the clearest language. Any such construction would entail the risk of personal predilection, not principle, guiding the imposition of penal sanction with necessary attendant problems of inconsistency, a consequence not to be attributed to Parliament. As Burchett and Kiefel JJ said in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 293:

As Smithers J emphasised in Stihl Chain Saws (at 17,896), insistence upon the deterrent quality of a penalty should be balanced by insistence that it “not be so high as to be oppressive”. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression.

101    As Toohey J put the matter in Trade Practices Commission v Mobil Oil Australia Limited [1984] FCA 403; 4 FCR 296 at 298:

The penalty should be such as to deter not only the particular offender but others who may be disposed to engage in prohibited conduct of a similar kind.

(Emphasis added.)

102    The balance of an appropriate penalty to deter, but not be oppressive in respect of the instant contravention has the authority of Full Courts in NW Frozen Foods; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) [2007] FCAFC 146; 161 FCR 513 at 527 [58]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at 264 [60]; and Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at 61 [152]. It is appropriate to set out what the Full Court said in Reckitt Benckiser expressed as it was after, and taking account of, the High Court’s clear direction in the Agreed Penalties Case (HC) at 258 CLR 506 [55]. The Full Court said the following in Reckitt Benckiser at 340 ALR 61 [152]:

If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance.

103    The question is what can reasonably be thought to be appropriate to serve as a real deterrent and “must be fixed with a view to ensuring that the penalty is such as not to be regarded as an acceptable cost of doing business”: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at 659 [66] referring to Singtel Optus 287 ALR at 265 [62][63].

104    These considerations must be assessed, now, in the clear light of the instruction of the High Court in the Agreed Penalties Case (HC) 258 CLR at 506 [55]. If one accepts, as in our view one must by a reading of s 546 in the light of the Agreed Penalties Case (HC), that the penalty is imposed to deter, that it is imposed for the instant contravention and not for past (already penalised) contraventions or past (unpenalised, but unpleaded) contraventions, and (as one takes from s 546 and from the Full Court decisions set out at [98] above) that the penalty is set at what is considered appropriate to deter contravention of such kind, guided by the statutory maximum penalty, but not at a level reasonably thought to exceed that purpose and thus be oppressive, one sees a notion of proportionality within the task set out in s 546. That task, of course, is the imposing of an “appropriate” penalty for the instant contravention to serve the object of deterrence from repetition of like contravening in the future. Proportionality and appropriateness are thus intimately related. Proportionality is not a free-standing principle separate from the requirement of what is “appropriate”, rather it is part of that assessment which will necessarily involve examining the nature of the contravention, and all factors that rationally bear on the assessment of the need for deterrence in all the circumstances.

105    The setting of a maximum penalty by Parliament is a part of such a notion of proportionality. Parliament is to be taken to be setting the maximum penalty for cases in which the need for deterrence is strongest, as it is in crime intended for the worst type of case. If the penalty is to be appropriate for the object of deterrence in relation to contravention of the kind before the court the various considerations that bear on the question must display such features as warrant the evaluative conclusion that the penalty is appropriate. The place of the maximum penalty was discussed by the Full Court in Reckitt Benckiser (after the Agreed Penalties Case (HC)), as follows at 340 ALR 61 [154]–[156]:

154 In considering the sufficiency of a proposed civil penalty, regard must ordinarily be had to the maximum penalty. In Markarian, a criminal sentencing context, it was observed at [31] that:

careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.

155 The reasoning in Markarian about the need to have regard to the maximum penalty when considering the quantum of a penalty has been accepted to apply to civil penalties in numerous decisions of this Court both at first instance and on appeal (Director of Consumer Affairs, Victoria v Alpha Flight Services Pty Ltd [2015] FCAFC 118 at [43]; Australian Competition and Consumer Commission v BAJV Pty Ltd [2014] FCAFC 52 at [50]–[52]; Setka v Gregor (No 2) (2011) 195 FCR 203; [2011] FCAFC 90 at [46]; McDonald v Australian Building and Construction Commissioner (2011) 202 IR 467; [2011] FCAFC 29 at [28]–[29]). As Markarian makes clear, the maximum penalty, while important, is but one yardstick that ordinarily must be applied.

156 Care must be taken to ensure that the maximum penalty is not applied mechanically, instead of it being treated as one of a number of relevant factors, albeit an important one. Put another way, a contravention that is objectively in the mid-range of objective seriousness may not, for that reason alone, transpose into a penalty range somewhere in the middle between zero and the maximum penalty. Similarly, just because a contravention is towards either end of the spectrum of contraventions of its kind does not mean that the penalty must be towards the bottom or top of the range respectively. However, ordinarily there must be some reasonable relationship between the theoretical maximum and the final penalty imposed.

106    It is important not to allow the language of the transposed principles of criminal law to deflect the proper considerations for the imposition of civil penalties. To speak of the “worst possible case” properly directs one to the circumstances of the contravention before the court, but it is difficult to see why the objective facts of the case alone (without regard to the circumstances of the contravenor) should determine this characterisation. In criminal sentencing the clear principle of proportionality, on one view, may require that limitation: McNaughton. On another view in criminal sentencing, the objective circumstances and the gravity of the offending are assessed by reference to circumstances of the offender as well as the offence: Omar, Mulholland and cf Tait. As remarked in Way 60 NSWLR at 188 [98] it may make little practical difference whether prior offending goes to the gravity of the offending or to the choice of the level of punishment. It may not be a point of substantive difference, but the place of the maximum penalty for the imposition of civil penalties may be better expressed as for circumstances, including the nature and gravity of the contravention, that warrant or call for the highest possible level of deterrence as reasonably appropriate. The judicial discretion as to the fixing of an appropriate civil penalty for the object of obtaining compliance through deterrence must be exercised reasonably. Speaking in a different context found in the Public Service Act 1999 (Cth), Kiefel CJ, Bell, Keane and Nettle JJ said the following in Comcare v Banerji [2019] HCA 23; 372 ALR 42 at 5758 [40]:

Section 15 of the Public Service Act provides for a range of penalties and for the selection and imposition of the appropriate penalty by the Agency Head in the exercise of discretion. As a matter of law, that discretion must be exercised reasonably [Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 348-349 [23]-[24] per French CJ, 362 [63] per Hayne, Kiefel and Bell JJ, 370-371 [88]-[89] per Gageler J; [2013] HCA 18] and, therefore, according to the nature and gravity of the subject contravention [Li (2013) 249 CLR 332 at 352 [30] per French CJ, 366-367 [74]-[76] per Hayne, Kiefel and Bell JJ. See and compare House v The King (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ; [1936] HCA 40; Veen v The Queen (No 2) (1988) 164 CLR 465 at 472 per Mason CJ, Brennan, Dawson and Toohey JJ; [1988] HCA 14]. As with other civil penalties, the essence of the task is to put a price on the contravention sufficiently high to deter repetition by the contravenor and others who might be tempted to contravene [Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506 [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ; [2015] HCA 46, quoting Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 at 52,152 per French J], but bearing in mind that a penalty of dismissal must not be “harsh, unjust or unreasonable” [See Fair Work Act 2009 (Cth), Pt 3.2]. Unquestionably, there are cases of breach of s 13(11) that are so serious in the damage done to the integrity and good reputation of the APS that the only appropriate penalty is termination of employment. The instance earlier cited of a Permanent Secretary who publicly engages in trenchant criticism of the Secretary's Minister, Government policy or departmental administration is an obvious example. By contrast, in other cases the level of the employee involved and the nature of the conduct in issue may be such that nothing more than a reprimand is warranted. And of course between those two extremes lies a range of possible situations warranting the imposition in the reasonable exercise of discretion of differing penalties according to the particular facts and circumstances of the matter. It is not the case that every employee of the APS who commits a breach of s 13(11) by broadcasting public “anonymous” communications is liable to be dismissed. Nor is it the case that the impugned provisions provide for the imposition of a penalty which is not proportionate to the contravention. Breach of the impugned provisions renders an employee of the APS liable to no greater penalty than is proportionate to the nature and gravity of the employee's misconduct.

(Emphasis added.)

These notions inhere equally in the exercise of judicial power.

107    The relevance of proportionality in the imposition of an appropriate civil penalty is not dependent upon notions of retribution as in the criminal law. Retribution may be seen to be the, or a, source or derivation of the principle of proportional punishment in the criminal law. A notion of proportionality inheres, however, in the notion of the reasonableness of an appropriate judicial response to contraventions of the law in the imposition of a civil penalty in order to further the object of deterrence and compliance with the relevant legislation. This is not to insert a separate principle distinct from the statutory task of fixing what is considered to be an appropriate penalty for the contravention in question to further the object of deterrence and compliance. It is not a label on a group of considerations separate from others which must first be addressed before a second or subsequent stage of analysis be undertaken. It is part of the “balance” between the “insistence upon the deterrent quality of the penalty” and the “insistence” that the penalty not be greater than is necessary to achieve the object of deterrence, for such would not be deterrence but “oppression”: see NW Frozen Foods 71 FCR at 293 ([96] above). In the same case, after discussing measures or features that might ameliorate a penalty, Burchett and Kiefel JJ said at 71 FCR 294295:

There are, of course, limits to the approach accepted in these cases. The Court should not leave room for any impression of weakness in its resolve to impose penalties sufficient to ensure the deterrence, not only of the parties actually before it, but also of others who might be tempted to think that contravention would pay, and detection lead merely to a compliance program for the future.

108    The demonstrated willingness (and its degree or strength) of a contravenor to disobey the law (however that is derived admissibly) is or must be of significance to the assessment of what is reasonably appropriate in order to deter and within that task to what is proportionate. There is not more than one task called for by the statute. If we may respectfully adopt at this point what was said by Charlesworth J in Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525; 241 FCR 338 at 351 [66]–[69] in a case after the Agreed Penalties Case (HC):

66 Once it is accepted that civil penalties are not retributive, concepts of proportionality should not be applied for the purposes of serving broader objectives of punishment in the sense described in R v Hunter (1984) 36 SASR 101 at 103 (King CJ) (applied by Lander J in Ponzio (at [93])):

The basic concepts of justice which underlie the criminal law require that the punishment be fairly proportionate to the crime in accordance with the prevailing standards of punishment. Only when it meets that criterion can a sentence satisfy the sense of justice of the community which is expected in the criminal law and in the practice of the courts in applying the criminal law.

67 Proportionality is nonetheless a critical objective in exercising the discretion conferred by s 546 of the FW Act. That is because the degree of seriousness of a contravention is relevant to ascertain “the assessment of a penalty of appropriate deterrent value”: CSR at [42]. A penalty of appropriate deterrent value is one that recognises that the maximum penalties prescribed in the statute are appropriately imposed in cases where the need for deterrence is the most pronounced. There remains, in addition, a discretion not to impose a penalty at all if the statutory purpose of deterrence would not be served by the imposition of one.

68 The seriousness of the conduct constituting the contravention is an important indicator of the need for deterrence in a particular case, but is not the sole indicator. Consistent with the reasoning of French J (as he then was) in CSR, in all cases it is proportionality in relation to the need for deterrence that must be achieved, having regard to all relevant circumstances, including the objective seriousness of the contravention before the Court.

69 It should also be recognised that penalties fixed for a deterrent purpose are intended to have an attitudinal effect: dissuasion. It is for this reason that any assessment of the seriousness of the conduct of the respondents places appropriate emphasis on the mental attitudes accompanying their physical acts.

(Emphasis added.)

109    Notwithstanding the continued relevance of the notion of proportionality in considering and fixing an appropriate penalty for a contravention with the object of deterrence, the recognition of the irrelevance of considerations such as retribution, denunciation and rehabilitation in the context of possible loss of liberty, and the recognition that the imposition of the penalty is the setting of a price to dissuade the contravenor and others from contravening in like manner in the future makes clearer the whole overall process of arriving at the evaluative conclusion of an appropriate penalty to fulfil the object of deterrence. The process is whole and discretionary, and evaluative in character, to which objective aspects of the contravention and what might be called the subjective characteristics of the contravenor, indeed all considerations that rationally touch on or inform deterrence, are relevant. As Charlesworth J said in Robinson above, the mental attitude of the contravenor is relevant: whether innocent, or whether reflective of a determined refusal to comply with, or of a determination to be disobedient to, the law, or whether some other characteristic relevant in some other way that can be seen to bear on the assessment of the need for, and required degree of, deterrence.

110    Thus, it would be wrong to approach the matter by first fixing a so-called range drawn from only some of the considerations that can be seen to be relevant to deterrence, being only those that can be said to be the “objective” features of the contravention said to establish its objective gravity, and then, only at a second stage, applying so-called subjective considerations concerning the contravenor that naturally and rationally bear upon the assessment of the need for deterrence of that person (including any demonstrated unwillingness to defy or disobey the law), to determine a penalty within that already fixed range. Such a process would tend to introduce a competing informing purpose or object, other than deterrence, to the assessment, to reintroduce a retributive consideration in the first stage of consideration by using the objective nature of the contravening as the central or controlling feature of the process, making the imposition of the penalty akin to punishment (in the retributive sense) for the (objective) nature of the crime committed. This approach would see the objective characteristics of the actions of contravening (through a principle of proportionality based only on the objective features of the contravention) made a distinct and governing consideration for the setting of what is legally available as appropriate to deter, when the notion of (at least specific) deterrence is best understood by reflecting on the attitude or willingness of the contravenor to obedience or disobedience to the provision or type in question. That said it cannot be lost sight of that the imposition is for the contravention in question which is made up of the constitutive facts that occurred, being the acts and any mental state provided for by the statute as contravening conduct, in aid of deterrence from contraventions of that kind.

111    Proportionality is relevant not because a notion of retribution is being expressed or manifested in a free-standing principle, but because of a balance in the reaching of an “appropriate” penalty between an “insistence” on deterrence and an “insistence” on not imposing more than is reasonably necessary (NW Frozen Foods) as part of the reasonable and lawful exercise of judicial power (cf Banerji) in respect of a contravention before the court and in furtherance of the object of deterrence of contraventions of like kind.

112    Whilst the process is no longer what might be called a Markarian instinctive synthesis of features or objects of sentencing such as retribution, denunciation, rehabilitation and deterrence, the approach in Markarian remains relevant as a convenient way to express an evaluative process to which many factors may be relevant in reaching a conclusion of an appropriate penalty necessary in the circumstances for the object of deterrence, without exceeding what is reasonably necessary and thus becoming oppressive, in respect of a contravention of a kind before the court.

The course of authority since the Agreed Penalties Case (HC)

113    Against this background, it is necessary to say something of a number of Full Court decisions at the centre of the arguments on the appeal, including those raised by the notice of contention.

114    After the High Court decided the Agreed Penalties Case (HC) in December 2015, the matter was remitted to the Full Court for the imposition of penalty. The matter was heard in May 2016, and judgment delivered in August 2017: Queensland Infrastructure Case (2017) 254 FCR 68. The matter had been before a Full Court in the original jurisdiction of the Court in the Agreed Penalties Case (FC) pursuant to a direction under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) given the important question of the applicability, or not, of the principle in Barbaro. That question having been resolved by the High Court, which in doing so settled the question as to the statutory object or purpose of the imposition of a civil penalty, in accordance with the line of authority reflected by CSR and NW Frozen Foods, the matter came back to the Full Court (Dowsett, Greenwood and Wigney JJ) for imposition of penalties. Their Honours set out what they perceived to be relevant general principles. The discussion should be read and understood in the context that there was “effectively no dispute” about them: see [97]. They were expressed to be a “brief discussion” drawn from Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2016] FCA 1516; 118 ACSR 124, but importantly they were expressed in the light of the High Court’s recent expression of view. At 254 FCR 8890 [98][107], their Honours said the following:

98 Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance: Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152; Commonwealth v Director, FWBII at [55] (per French CJ, Kiefel, Bell, Nettle and Gordon JJ). The principal object of a pecuniary penalty 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; both specific and general deterrence are important: Chemeq at [90]; Ponzio at [93]. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 (TPG Internet) at [66]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [62]-[63]. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (2003) 130 FCR 406 at [32].

99 The question whether a pecuniary penalty involves an element of punishment remains somewhat controversial: see the discussion in Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2016) 242 FCR 389 at [76]; ACCC v ANZ at [78]-[83]; Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner (2016) 247 FCR 339 at [8], referring to NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 (NW Frozen Foods) at 296-297; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 at 241; Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd [1978] ATPR 40-091 (Stihl Chain Saws) at 17,896; Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2002] ATPR 41-851 at [50]. To a certain extent, that debate appears to be more semantic or philosophical than real. It is sufficient to say that, accepting that the primary purpose of imposing a pecuniary penalty is to protect and deter, that purpose is achieved by imposing a punishment in the form of a pecuniary penalty: ACCC v ANZ at [83].

100 The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the defendant, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purpose of a pecuniary penalty. While there may be differences between the criminal sentencing process and the process of fixing a pecuniary penalty (cf Commonwealth v Director, FWBII at [56]-[57]), the fixing of a pecuniary penalty may to an extent be likened to the “instinctive synthesis” involved in criminal sentencing: TPG Internet Pty Ltd v Australian Competition and Consumer Commission (2012) 210 FCR 277 at 294. Instinctive synthesis is the “method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case”: Markarian v The Queen (2005) 228 CLR 357 (Markarian) at [51] (per McHugh J). Or, as the plurality put it in Markarian (at [37], per Gleeson CJ, Gummow, Hayne and Callinan JJ) “the sentencer is called on to reach a single sentence which … balances many different and conflicting features”. Like the exercise of imposing a sentence for an offence, the process of fixing an appropriate pecuniary penalty should not be approached as a mathematical exercise involving increments to or decrements from a predetermined range of sentences: Wong v The Queen (2001) 207 CLR 584 at [74]-[76].

101 In fixing the amount of a civil penalty, reference is frequently made to the lists of factors or considerations identified by Santow J in Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 at [126] and French J in Chemeq at [99]. Those lists of relevant considerations, which have been approved and elaborated on by many subsequent decisions of this Court, were not, and plainly were not intended to be, exhaustive. Nor was it suggested that each of the factors referred to in the respective lists was necessarily relevant or important in every case. These lists of factors should not be treated as a rigid catalogue or checklist of matters to be applied in each case; the overriding principle is that the Court should weigh all relevant circumstances: Australian Securities and Investments Commission v GE Capital Finance Australia [2015] ASC 155-203 at [72].

102 In general terms, the factors that may be relevant when fixing a pecuniary penalty may conveniently be categorised according to whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the defendant in question.

103 The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.

104 The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.

105 Where the defendant is a body corporate, the size of the body does not of itself justify a higher penalty than might otherwise be imposed: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540 (Coles Supermarkets) at [89]-[92]. The size of the corporation may, however, be particularly relevant in determining the size of the pecuniary penalty that would operate as an effective deterrent. The sum required to achieve that object will generally be larger where the company has vast resources: Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301 at [39]; Australian Competition and Consumer Commission v Apple Pty Ltd [2012] ATPR 42-404 at [38].

106 Careful attention must also be given to the maximum penalty for the contravention. That is so for at least three reasons: first, because the legislature has legislated for the maximum penalty and it is therefore an expression of the legislature’s policy concerning the seriousness of the prescribed conduct; second, because it permits comparison between the worst possible case and the case that the Court is being asked to address; and third, because the maximum penalty provides a “yardstick” which should be taken and balanced with all the other relevant factors: Markarian at [31] (per Gleeson CJ, Gummow, Hayne and Callinan JJ).

107 Even where the maximum penalty for the contravention is high, and the amount necessary to provide effective deterrence is large, the amount of the penalty should be proportionate to the contravention and should not be so high as to be oppressive: Stihl Chain Saws at 17,896; NW Frozen Foods at 293.

115    The following comments can be made about these paragraphs. First, the comments at [99] reflect what we have said at [38][39] above. The Court clearly expressed itself as needing to eschew retributive elements in the object of the imposition of the penalties. Secondly, the utilisation of the notion of the “instinctive synthesis” in [100] can be seen as a (correct) emphasis on the evaluative resolution or conclusion from sometimes conflicting considerations and the (correct) rejection of a mechanical or a mathematical approach in some (impossible) search for precision. Thirdly, whilst a degree of taxonomy can be seen in dealing with available factors at [100][104], there was no rigidity of approach that could be seen as limiting or restricting the statutory task of fixing the appropriate penalty for the relevant contravention for the object of deterrence by reference to all considerations relevant to deterrence. Fourthly, by way of comment, there could be added to [104] or [105], depending upon how the factors arose, a consideration of whether the contravention involved or reflected, or other material including past contraventions evidenced, a degree or strength of unwillingness in the contravenor to obey the law. Such would be highly relevant to deterrence. We do not see anything in these paragraphs of the Full Court excluding such a consideration which could be seen to derive from Veen (No 2) at 477478. Fifthly, we agree with the expression of the matters concerning the role of the maximum penalty in [106][107]. We do not see anything in [106] as contrary to viewing the maximum penalty as available for circumstances where the most severe penalty is warranted given the object is to deter contraventions of the kind before the court.

116    In fixing the relevant penalties, the Full Court dealt with the record of contravention of the union. It is appropriate to set out that consideration at some length given the arguments which will be dealt with later. The Court said at 254 FCR 101103 [158][165] the following:

158 As for the position of the CFMEU itself, the Commissioner tendered schedules of prior cases involving the CFMEU that on any view reveal a lamentable, if not disgraceful, record of deliberately flouting industrial laws. At the time of the hearing, the CFMEU and its officials had been involved in 37 separate cases involving breaches of s 38 of the BCII Act, as well as countless other cases involving contraventions of other industrial laws. It is unnecessary and probably undesirable to discuss the specifics of those cases, including the penalties imposed in them, in any detail. The conduct involved in the cases covers a broad range of unlawful industrial action. In most of the cases the contraventions were admitted and the penalties were agreed between the parties. In all the circumstances, it is not possible to discern any meaningful pattern or range in the penalties that have been imposed that would assist in fixing the penalties in this case.

159 The most significant point to emerge from the schedules of past cases is that the CFMEU is a recidivist when it comes to contravening industrial laws. No penalties that have been imposed in the past have appeared to reduce its willingness to breach the law. It continues to thumb its nose at the industrial laws, including the BCII Act. The Court should nevertheless not shy away from imposing stern sentences with a view to attempting to deter the CFMEU from engaging in, or encouraging others to engage in, further unlawful industrial action. Considerations of deterrence, both specific and general, undoubtedly loom large in fixing the appropriate penalties.

160 Equally, the CFMEU’s record of past transgressions means that there is no reason to afford it any particular leniency based on its past behaviour. That is not to say that it should be penalised again for its past contraventions. The CFMEU’s conduct in the past should be given significant weight in determining the appropriate penalties, but it should not lead to penalties that are disproportionate to the nature and circumstances of the relevant contraventions.

161 It should also perhaps be noted that the schedules reveal that the CFMEU officials involved in the contraventions in this matter have been involved in many of the past contraventions by the CFMEU. Nevertheless, for reasons that remain largely unexplained, the Commissioner did not commence proceedings and seek penalties against the officials in this matter. The relief sought was limited to the union itself.

162 It is uncontroversial, and in any event is a matter of common knowledge not reasonably open to question, that the CFMEU is a significant organisation with real power and influence in the building industry. There is, however, no evidence or agreed fact about its financial capacity.

163 About the only thing that could be said in favour of the CFMEU, other than that the conduct was related to genuine concerns about sham contracting, is that it cooperated with the Commissioner in relation to these proceedings by admitting the contraventions and reaching agreement in relation to the facts. Importantly, the admissions and agreed facts were also not withdrawn after the initial agreement in relation to the penalty amounts was withdrawn by the Commissioner. There is no doubt that the CFMEU should receive credit for this cooperation. From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows willingness on the part of the CFMEU to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceedings were not defended saved the community the expense of a potentially lengthy contested hearing.

164 It is, however, doubtful in all the circumstances that the CFMEU’s cooperation with the regulator could really be said to demonstrate contrition or remorse. In some respects the cooperation reflects nothing more than an acceptance of the inevitable. The CFMEU did not adduce any evidence of contrition or remorse. Indeed, there was not even an expression of contrition or remorse in its submissions. There was no evidence from which it could be inferred that the CFMEU intended to change its ways. There was certainly no suggestion, let alone evidence, to the effect that the CFMEU intended to set up any systems, processes, procedures or education to ensure that its officers did not encourage unlawful industrial action in the future.

165 The principles in relation to taking admissions and cooperation into account are well-known and do not need to be repeated. It is sufficient to note that the authorities make it clear that it is not necessary for the Court to specify a specific discount or percentage discount in respect of cooperation.

(Emphasis added.)

117    With respect, we see no error in any aspect of the principles there expressed in the course of their practical application. We see no intrusion of inappropriate considerations of retribution. The matters expressed in [160] are all consistent with the notion of reasonable proportionality inhering in s 546 for the reasons that we have earlier given.

118    In February 2018, the High Court handed down judgment in the Non-Indemnification Case (HC) (2018) 262 CLR 157. The majority of the Court determined that s 546 contained an implied power to make an order against the person upon whom the penalty was imposed not to seek indemnification or payment from any other person (including the union). The reasons were not concerned with an examination of sentencing principles, apart from reiterating the objective of the imposition of civil penalties being deterrence: 262 CLR at 173 [42] and 195 [116]. The matter was remitted to the Full Court for the setting of fresh penalties.

119    The remitted penalty hearing in this Court was heard on 25 May 2018, with judgment being delivered on 25 June 2018. There was no doubt that past conduct and past contraventions by the union and the union official concerned were at the centre of the consideration of the Court. That is clear both from the primary judge’s reasons in that matter (Mortimer J), and the reasons of the Full Court: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97; 264 FCR 155 at 165–166 [12]–[13] (2nd Non-Indemnification Personal Payment Case (FC)). In that context, the Full Court shortly expressed the relevant principles at 264 FCR 167168 [19][22] and 168169 [25][27] as follows:

19 It is unnecessary to engage in any extended discussion of principle. Of particular significance is the recognition that deterrence (general and specific) is the principal and indeed only object of the imposition of a penalty — to put a price on contravention that is sufficiently high to deter repetition by the contravener and others who might be tempted to contravene the Act: French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076 at 52,152, cited by the plurality in Commonwealth v Director of the Fair Work Building Industry Inspectorate (Civil Penalties Case) [2015] HCA 46; (2015) 258 CLR 482 at [55]. Retribution, denunciation and rehabilitation have no part to play.

20 Relevant factors in the overall assessment of penalty were helpfully listed by French J in CSR. They have been adopted in many cases. For present purposes, they can be restated as follows: the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.

21 The seriousness of the contravention and other features of the conduct which may be seen as relevant to it (here, the seriousness of interruption of a concrete pour, the seriousness of the threats of repetition, the deliberateness of the contravening of the Act, and the exhibited apparent sense of impunity in undertaking contravening conduct) find their place in understanding the degree of deterrence that is necessary to be reflected in the size of the penalty: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68 at [71].

22 The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.

25 The maximum penalty under the Act for each contravention is $51,000 for the Union and $10,200 for Mr Myles: see Item 11 of the table in s 539(2) and s 348 of the Act, and s 4AA of the Crimes Act 1914 (Cth), by reference to the date of the contravening conduct.

26 It is necessary to have regard to the maximum penalty. In Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 at [154]-[156], the Full Court said:

[See these paragraphs set out at [101] above].

27 These considerations, especially those in [156], will be affected by the level of deterrence recognised as necessary, in part from any history of contravening conduct.

120    The Court also, in dealing with the notion of course of conduct, emphasised the role of that principle in the prevention of penalising a party more than once for the same conduct. In that respect, regard was had, at 264 FCR 170 [31], to a series of Full Court cases rejecting double punishment, that is, rejecting the proposition that a party could have imposed on him, her or it a penalty for the same contravention more than once: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461 at [41]; Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd (No 2) [2016] FCA 698 at [24][25] approved by the Full Court in Reckitt Benckiser at [141] and Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159; 258 FCR 312 at 448 [425][426]; and Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 at 295 [231][232].

121    On 14 August 2018, the Full Court delivered judgment in Broadway on Ann 265 FCR 208. This decision was at the centre of the primary judge’s reasoning. The primary judge saw in the reasoning of the majority (Tracey J and Logan J) a correct understanding of the proper principles concerning the imposition of penalties, in contradistinction to what he considered the flawed expression of principle by the dissenting member of the bench, Bromwich J, in particular in what the primary judge perceived to be a failure by Bromwich J to apply Veen (No 2) correctly.

122    The leading judgment in Broadway on Ann was delivered by Logan J. It is helpful, however, to frame the analysis of the reasons of Logan J by referring first to the “observations” of Tracey J. Before doing so, it is instructive to understand the facts of the case and how the primary judge had dealt with them. The case involved the right of entry to a construction site and the improper behaviour of a very senior union official of the CFMEU, contrary to s 500 of the Fair Work Act. The reasons of Logan J at 265 FCR 217218 [33][37] reveal, in narrative form, the relevant facts in the human context of what occurred on the day in question, with clarity and restrained expressive illumination. The principal actor, Mr Hanna, was a very senior union official, known to be such by the representatives of the employer and by the workers on the site.

33 Shortly after Mr Hanna entered the premises, his presence was noted by Mr John Liddington, Hindmarsh’s project manager and by Mr Garry Gough, who was its site manager for the building project. They told him that he was on site illegally and that he must return to the site office immediately. Mr Hanna ignored this. He remained on the premises. He descended down some stairs to the basement level of the project. There he encountered Mr David Liebke, who was Hindmarsh’s site supervisor. Mr Liebke asked Mr Hanna what he was doing on site. Mr Hanna replied: “I’m having a meeting with my workers.” Mr Liebke asked Mr Hanna if he had a right of entry permit. At this point Mr Hanna raised his hand to Mr Liebke with his middle finger extended and said that he did not need an entry permit. Mr Liebke then asked Mr Hanna to leave the premises. Notwithstanding this, Mr Hanna remained on the premises at the basement level. He walked away from Mr Liebke and called some of the employees present from the four different subcontractors mentioned towards him. He told them that they were going to have a meeting.

34 Shortly thereafter and while Mr Hanna was still on the basement level, Mr Gough approached him. Mr Gough said to him: “You are trespassing. Why don’t we go upstairs and talk about it?” Mr Hanna replied to the effect that he had come to meet with his members. Mr Gough then said: “What are you doing here? You are here illegally. Why don’t you go through the right channels?” Mr Hanna replied: “I can do what I like.” Mr Thomas Neylon, who was Hindmarsh’s contracts manager for the project, then approached Mr Hanna with Mr Liddington. Mr Liddington again said to Mr Hanna that he was to leave the site as he did not have permission to be there and that no entry permit had been sent to Hindmarsh. Mr Hanna’s response was to the effect that he did not need to get permission to enter a building site to talk to the men with whom he had an enterprise bargaining agreement.

35 During this discussion between Mr Liddington and Mr Hanna, Mr Neylon activated the video recorder function on his mobile phone. Mr Hanna, seeing this, then moved towards Mr Neylon. Mr Hanna, who had in his hand a plastic water bottle, squirted water from the plastic water bottle at Mr Neylon. This hit Mr Neylon in the face, wet his shirt and went over his mobile phone. Mr Hanna then moved to Mr Neylon and said: “Take that phone away or I’ll fucking bury it down your throat. You ask me if you want to take a picture of me. You ask me.”

36 Mr Hanna then spoke to some of the employees who were there in the basement level of the project. This conversation was not heard by any of the persons in authority for Hindmarsh. At about 12 noon, Mr Hanna and a number of the employees left the basement level of the project and made their way out of the premises. Mr Hanna used the swipe card of one of those employees to swipe out a number of the employees through the turnstiles at the exit of the premises. That had the effect of a number of employees leaving under the one swipe card. This meant that Hindmarsh did not have a record of which employees had left the premises and which employees had not. The employees were all similarly dressed. There is no evidence that any employee in a position of authority for Hindmarsh was in any way then able to check who it was had left the site and where they were. Of this the learned primary judge, permissibly and understandably, observed at [17] “The safety aspects of such an action should be quite obvious.”

37 The employees who left in this manner with Mr Hanna were away for about 30 minutes. The employees then returned to the premises and recommenced work.

123    From this the evident seriousness of the episode of conduct can be appreciated.

124    Out of this episode, six contraventions of s 500 of the Fair Work Act of exercising or seeking to exercise a right of entry in an improper manner were extracted and found by the primary judge (for each of which the union had imposed on it the maximum penalty by the primary judge). They were described by Logan J at [41] as follows:

(a)     entering the Project without having given a notice of entry under s 487 of the FWA;

 (b)     remaining on the premises despite requests to leave;

(c)     when asked if he had a right of entry permit, responded by raising his hand with his middle finger extended and saying that he did not need one;

(d)     squirted water at a person validly engaged to work on the Project, which struck the person’s face, shirt and mobile phone;

(e)     stating “Take that phone away or I’ll fucking bury it down your throat, you ask me if you want to take a picture of me, you ask me”; and

(f)     using an employee’s swipe card to swipe out a number of employees engaged on the Project, the effect of which was that the occupier of the premises did not have a record of which employees had left the premises and which had not.

125    This disaggregation of the conduct into somewhat more abstracted and less humanly expressive terms, tended, at least in language, to drain the whole conduct of some of its seriousness. This is so because the disaggregation (necessary for the precise identification of the contraventions) tended to separate the events from their interconnected whole human context.

126    Section 500 is not included in what can be called the statutory course of conduct provision of s 557. From this, the primary judge (wrongly) concluded that he was bound to deal with each contravention without regard to considerations of a single course of conduct as part of ordinary sentencing principles. Thus, the Full Court, on any view, was required to engage in the process of resentencing.

127    The appeal, as argued, raised four grounds, which were set out by Logan J at [44]:

(a)     an alleged error in concluding that course of conduct considerations were not applicable to the imposition of penalty in the circumstances;

(b)     an alleged error in the description of Mr Hanna as the public face of the CFMEU;

(c)     an alleged error in the characterising of the contraventions as in the worst possible category; and

(d)     whether the penalty imposed was, both individually and in total, was [sic] manifestly excessive.

128    In the result, and for the reasons to which we will come, even having regard to the considerations of the course of conduct of the events, Logan J concluded (with which conclusion Tracey J agreed) at 265 FCR 230 [87]:

So recalcitrant is the contravening conduct charged having regard to the past history in the tabulation and such is the importance of deterrence and compelling conformity with the requirements of the FWA my view is that only the most condign penalisation of a cumulative maximum punishment is warranted in the circumstances of this case. I would impose that so as to bring home emphatically to the CFMEU that, in its internal governance, it must force systemic behavioural change upon its Construction Division.

129    Tracey J, after referring to the history of the uncertainty of the character of the penalty under earlier legislation, the settling of that controversy in Gapes v Commercial Bank of Australia Ltd [1979] FCA 62; 38 FLR 431, the development of the civil remedy provisions in replacement of criminal provisions in more modern legislation, and the settled guidance, nevertheless, in many cases in the Court of sentencing principles from crime adapted to the imposition of civil penalties (in particular proportionality, consistency, avoidance of double punishment, deterrence and totality), referred to the “modifications and differences in emphasis in the way in which the principles are framed” following the Agreed Penalties Case (HC): see 265 FCR at 212 [9]. In that context, and immediately after referring to the Agreed Penalties Case (HC) 258 CLR at 506 [55] and 523–524 [110], Tracey J set out at [13], without disapproval, what had been recently said by the Full Court in the 2nd Non-Indemnification Personal Payment Case (FC) 264 FCR at 167168 [20][22] (as to which see [115] above). At [14], Tracey J referred to the distinction between:

… the need to ensure that a contravenor is not doubly penalised for past and present misconduct and the consideration of historic misconduct for the purpose of assessing the need for specific deterrence of a recidivist organisation.

The distinction to which his Honour was referring was supported by Veen (No 2) at 477478, subject to the recognition of the importance of the place of the maximum penalty referred to in Veen (No 2) at 478.

130    After referring to decisions of the Court emphasising the need for industrial laws to be obeyed: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462 at [8] (Jessup J), Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; 249 FCR 458 at [100][101] (Dowsett and Rares JJ) and the Queensland Infrastructure Case 254 FCR at 88 [98], Tracey J said at [16]:

These principles are to be observed in the fixing of any civil penalties under the FW Act. All relevant considerations must be taken into account with a view to determining an appropriate penalty.

131    It is clear that in this statement of principle, to this point, his Honour was guided by Veen (No 2), that his Honour recognised that the imposition of a penalty for the past was impermissible as a form of double punishment, and that the imposition of the penalty was for the instant contravention before the court.

132    From [17]–[22] of his reasons, Tracey J gave pointed and powerful expression to deep concerns about the conduct of the CFMEU over “recent years”, saying:

17 Over recent years I have become increasingly concerned about the ongoing misconduct of the CFMEU and its officials and the implications of this conduct when penalties are being determined. These misgivings have been expressed in a series of judgments.

18 In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) (2015) 234 FCR 451, I made the following comments:

106     The circumstances of these cases were not identical to those in the present case. They, nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.

107     The CFMEU is not to be punished again for its earlier misconduct. It is, however, to be punished more severely than it would have been had it had no adverse record or been responsible for only a few isolated incidents over a period of many years. Its continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, have not had a deterrent effect: cf Veen v R (No 2) (1988) 164 CLR 465 at 477-8.

19 In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [63] I said that:

The longer such recidivism continues the more likely it is that this consideration will carry greater weight than the principle that the maximum available penalty must be reserved for the worst possible offending.

20 More recently, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 at [32], I observed that:

Having regard to the history of offending by the CFMEU to which I have referred, it may be doubted that any penalty falling within the available range for contraventions of the kind presently under consideration would be “sufficiently high to deter repetition”. Any penalty will be paid and treated as a necessary cost of enforcing the CFMEU’s demand that all workers on certain classes of construction sites be union members.

21 Again, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) (2017) 274 IR 460 at [53], I said:

In Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [63] I observed that the longer that the CFMEU’s recidivism continued, the greater the weight which would be accorded to specific deterrence when fixing appropriate penalties.

22 Such comments (and many others to like effect by other members of the Court and the Federal Circuit Court) over recent years have appeared in published judgments and must be taken to be well known to the officials who constitute the governing councils of the CFMEU. In many of these cases penalties have been imposed because of the failure of CFMEU officials who hold entry permits under the Act to comply with the requirements of Pt 3-4 of the FW Act. They have also involved contraventions of s 500 of the FW Act in the course of these site entries.

133    Drawing this together Tracey J said the following at [23]:

The contravening conduct has continued unabated to a point where there is an irresistible inference that the CFMEU has determined that its officials will not comply with the requirements of the FW Act with which it disagrees. If this results in civil penalties being imposed they will be paid and treated as a cost of the union pursuing its industrial ends. The union simply regards itself as free to disobey the law.

134    Whilst [17][22] may perhaps express no more (in different, and perhaps stronger language) than was said by the Full Court in the Queensland Infrastructure Case at 254 FCR 101103 [158][165] (see [112] above), the expression of the matter in [23] as an inference, expressed apparently in respect of any and all of the union’s officials, in any and all of its branches, to any and all relevant provisions of relevant legislation, has the capacity to appear to express a binding feature of the circumstances of any particular future case. The danger is that the strength of the language and the characterisation of the past becomes seen and applied as almost irrefutable factual conclusions, conclusively drawn, by a judge on appeal, applicable to any and all future factual circumstances. This risks distorting the proper judicial task of fixing an appropriate penalty for the contravention in question taking account of all relevant circumstances attending the contravention, including material that reflects any attitude to disobedience to the provision, and the maximum penalty, all in aid of the objective of deterrence of a contravention of the kind before the court. The practical consequences of this danger to judges imposing civil penalties can be seen in Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 267 FCR 268, which is discussed below.

135     At [25], Tracey J expressed why he thought that the maximum penalty should be imposed:

The features of the present case and the context in which they arise, which, in my view, warrant the imposition of the maximum available penalties on the CFMEU, are:

    The many decisions of the Court over the past 15 years in which the CFMEU has been found liable and penalised for failures to comply with entry requirements on building sites and for the misconduct of its officials whilst exercising rights of entry on those sites.

    The failure of the CFMEU to respond to these repeated findings by acknowledging error and implementing remedial measures.

    The absence of any contrition for the earlier offending.

    The absence of any contrition for the present offending.

    The ongoing willingness of the CFMEU to pay the pecuniary penalties imposed by the Court by drawing on its considerable financial resources.

    The fact that it was a State Divisional President of the CFMEU who was found to have engaged in multiple contraventions on the site.

    The blatant and public assertion by such a senior official that he would not comply with the notice requirements imposed by the FW Act.

136    The consideration of the appropriate penalty by Logan J commenced with consideration of the place of the maximum penalty by reference to Elias 248 CLR at 494–495 [27]. His Honour recognised that some of the considerations there referred to do not translate into the imposition of civil penalties. Importantly, however, and with respect, correctly, Logan J said the following at 265 FCR 224 [57]:

That the maximum penalty for each contravention is $51,000 with a total maximum of $306,000 being open is relevant. Individually and collectively they provide a sentencing “yardstick”. It would though be quite wrong to base any individual or total penalty order on a view that the yardstick itself is inadequate and so come to fix penalties unwarranted by the circumstances of a particular case measured against that yardstick. The prescription of maximum penalties is a matter for Parliament, not the courts. If, by reason of the change in the value of money over time or, relevantly for example, changing patterns of industrial behaviour, maximum penalties once considered adequate are judicially believed to have a diminished deterrent quality, it is not for a court to impose a maximum penalty in circumstances which do not warrant the same because of that belief.

(Emphasis added.)

137    We would only add to this clear statement, especially in the last emphasised passage, the following: To do so would be a usurpation of Parliamentary power based on personal perspective and belief.

138    At [62], Logan J referred to the approval in TPG Internet 250 CLR at 659 [66] of what the Full Court had said in Singtel Optus 287 ALR at 265 [62][63] that a civil penalty:

must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business.

139    Accepting fully what was said in Singtel Optus, it cannot be a reason for imposing the maximum penalty in circumstances which are otherwise unwarranted by reference to the nature and gravity of the instant contravention (including by reference to any apparent unwillingness to obey the law), because of a perceived inadequacy of the level of penalties to deter. Justice Logan did not say as much; indeed his Honour said to the contrary in [57] referred to above. The setting of the level of penalties is a matter for Parliament, not the courts. The courts apply established principle by reference to the considerations set by Parliament, including the maximum penalty.

140    Justice Logan then turned to the material revealing past contraventions by the union. In dealing with the submissions of the union which stressed the passage from Veen (No 2) at 164 CLR 477 immediately prior to the reference to Ottewell (see [56] and [57] above), his Honour stressed the balance of the paragraph at 164 CLR 477–478 (also set out at [55] above).

141    In so referring to the whole of the relevant parts of Veen (No 2) at 164 CLR 477–478, his Honour was undoubtedly correct as a matter of principle.

142    Thereafter, Logan J sought to apply this principle to the case before him. At [70]–[72], his Honour described the conduct again, this time, by reference to its characterisation of seriousness:

70 All of the features of unrepentant, outlaw behaviour are present in Mr Hanna’s conduct on 10 February 2015. The statement which he made to Mr Gough: “I can do what I like.” is pregnant with these features, as is each other of his studied refusals to leave the site when requested. These refusals were reinforced by a contemptuous gesture (the “single finger salute”) and by what the learned primary judge rightly concluded was conduct which might equally have been charged under the criminal law as an assault (the squirting of water).

71 Further, Mr Hanna’s swiping out of workers from the premises under the one card was not just contemptuous of Hindmarsh’s responsibility, as occupier, for entry to and egress from the premises. It was also subversive of the responsibilities under the Work Health and Safety Act 2011 (Qld) of Hindmarsh as the person in control of the premises and employer of some of the workers there and of the subcontractors who had employees there. Necessarily, the method of exit which he employed rendered it impossible, without stopping for a roll call, to identify who remained on the premises and what tasks could or could not still safely be undertaken by remaining staff. There is no evidence as to whether this measure was taken. It rather looks as if the pragmatic alternative of stopping work altogether was determined upon by Hindmarsh and its subcontractors. But the point for present purposes is that the conduct was subversive of workplace health and safety responsibilities, responsibilities of the very kind with which, historically and legitimately, trade unions have been deeply concerned in the interests of workers.

72 There is a course of conduct evident in Mr Hanna’s conduct on 10 February 2015. It is relevant to recognise this but it does not necessarily follow that this is a mitigating factor. Section 500 of the FWA contains no qualification that the need for advance notice to be given is inapplicable to an industrial association where that association has members on a site or is a party to an industrial instrument governing workers on a site. Inferentially from his statements and behaviours, it is more likely than not that Mr Hanna was aware of this but did not accept that this law should bind the CFMEU or him in this way. Were there any doubt about this, the belief of Hindmarsh as to the illegal nature of his presence was drawn to his attention on several occasions. He did not just decline an offer extended to him on behalf of Hindmarsh to discuss that subject. He treated that offer with contempt and then with what, in law, was “improper conduct” the relevant particulars of which constituted an assault.

143    At [73], Logan J summarised what had happened by reference to the individual contraventions:

What occurred then in a compressed period was more likely than not a studied entry to the premises without the giving of notice. This was followed by a repeated persistence in presence on the premises notwithstanding opportunities to discuss the same and directions to leave, accompanied by foul gestures and language, refutation that the law applied to him, and an assault and culminating in a subversion of a workplace health and safety obligation. As noted, it is accepted that the CFMEU’s conduct, via Mr Hanna, constituted six separate contraventions. But what is revealed by those contraventions is an escalating series of events, at any time during the course of which it was within the remit of Mr Hanna to acknowledge the error of his ways, seek some reasonable accommodation or leave. In short, the CFMEU, via Mr Hanna, had a choice on several occasions on 10 February 2015 at the premises to abide by s 500 of the FWA. Its deliberate choice was completely and pithily summed up in Mr Hanna’s words: “I can do what I like.”

144    Turning to the question of the relevance of the course of conduct, Logan J said at [75] and [77]:

75 … The features of Mr Hanna’s conduct on 10 February 2015 do not, in my view, warrant the penal ameliorating consequence that can in other cases attend identification of a course of conduct. To approach penalisation otherwise would yield a penalty which in no way reflects, when the purpose of a civil penalty regime is understood, the gravity of what occurred that day and its manifestation of the prior history revealed by the tabulation of defiance by the CFMEU of industrial law norms.

77 Once the contraventions on the day, deplorable in themselves, are viewed in context, they are, in my view, of the worst possible kind. Common sense, to say nothing of the maintenance of the rule of law, dictates that this must be so. Each contravention well warrants the maximum penalty. Laws which may be ignored at will on the basis of a persistent, self-arrogated, alternative standard of behaviour are no laws at all, only empty aspirational statements.

145    His Honour then referred to a case in which he had heavily penalised an employer in a case that was brought by the CFMEU, stating from that context at [82]:

CFMEU v North Goonyella Coal Mine [[2013] FCA 1444] also offers a reminder that it is an over-simplification to regard the CFMEU in all of its other manifestations as a rogue, outlaw industrial association. That case emanated from the union’s Mining Division. Defence of workplace rights apart, the records of the Court disclose there are many other examples of cases brought by the CFMEU for the construction of industrial instruments of one sort or another. Such litigation is not subversive of the rule of law in industrial matters but deeply deferential to, and respectful of, the rule of law. Overwhelmingly, what the present case and those set out in the tabulation reveal is that the rogue, outlaw tendency in the CFMEU is to be found in its Construction Division.

146    His Honour continued in the following paragraphs to discuss the amalgamation of trade unions since the early 1990s and in that context said at [83]–[84]:

83 The present case and those in the tabulation provoke, strongly, the thought that there is a persistence within the CFMEU of the former Australian Building Construction Employees’ and Builders Labourers’ Federation (the BLF). That thought is hardly novel. Systemic unlawful conduct with historic precedent in the activities of the BLF is one feature of the CFMEU remarked upon in the report of the Royal Commission into Trade Union Governance and Corruption, Volume 5, Chapter 8 (see paras 1 to 3).

84 That the contravening conduct charged was that of a senior official and but another manifestation of a lengthy history of unlawful conduct revealed by the tabulation inferentially suggests that, in its internal governance, the CFMEU has been unable or unwilling to restrain aberrant behaviour within its Construction Division.

147    After referring to further history of the Builders Labourers Federation, Logan J said the following at [85]–[86] about the CFMEU, and the matter before him:

85 … Amalgamation and the concentration of unlawful conduct in the Construction Division undoubtedly makes the subject of deregistration more complex but an organisation which manifests an inability by its internal governance to rein in aberrant behaviour cannot expect to remain registered in its existing form.

86 As it is, deregistration is not the subject of the present proceeding but a recollection of history underscores why it is that deterrence and compliance with statutory obligations are so overwhelmingly important in the fixing of penalties in the present case.

148    His Honour concluded in [87] (part of which we have already set out at [124] above) by explaining why he considered that six penalties of the maximum penalty was appropriate:

Approaching the subject of penalisation afresh and for all of the reasons given, I consider that the maximum penalty in respect of each contravention is warranted in the circumstances of this case. Being of this view, I have, in deference to the totality principle, asked myself whether, in total, such an overall penalty would be a disproportionate response in the overall circumstances of the case? So recalcitrant is the contravening conduct charged having regard to the past history in the tabulation and such is the importance of deterrence and compelling conformity with the requirements of the FWA my view is that only the most condign penalisation of a cumulative maximum punishment is warranted in the circumstances of this case. I would impose that so as to bring home emphatically to the CFMEU that, in its internal governance, it must force systemic behavioural change upon its Construction Division. That penalisation is necessary but it can be viewed as a cruel necessity. The cruel element is that there is an opportunity cost in the payment of the total penalty in terms of other activities, beneficial to members, to which the union’s funds might otherwise be deployed. It is to be hoped that the realisation of that promotes change in the internal governance of the CFMEU.

149    Before turning to the dissenting judgment of Bromwich J, the following can be said to be clear from the reasons of Logan J (and thus also Tracey J) in point of expression of legal principle: The primary object of the imposition of a civil penalty is deterrence; in accordance with Veen (No 2) (which was treated as relevant and binding) the antecedent contravention history is relevant to understanding an attitude of disobedience and as such the seriousness of the contravention that is before the court and the appropriate deterrence called for in the imposition of the penalty; the penalty to be imposed is to deter a repetition of a contravention of the kind before the court; and the maximum penalty is for contravention of the kind (in its gravity and seriousness, including by reference to what antecedent contraventions show of a wilfulness to disobey the law) calling for, that is warranting, the most serious penalty by way of deterrence. With respect, such expression of principle is orthodox.

150    As to the so-called course of conduct principle, we agree that as a matter of principle the whole conduct, the whole episode, may well (as it did there) serve to highlight the seriousness of one or more individual contravention or contraventions, bearing in mind its or their place in the whole episode of multiple (there, six) contraventions. There was nothing, however, expressed by Logan J as a matter of principle, to justify the imposition of a penalty for an individual contravention greater than was appropriate in all the circumstances for that instant contravention (including what past contraventions, together with the conduct in question, showed about a willingness to disobey the law) and in the context of the conduct or episode as a whole.

151    Justice Bromwich dissented. The point of dissent was in essence in point of characterisation of the contraventions, not in point of expression of principle.

152    Early in his Honour’s reasons at [93], Bromwich J set out five “points of principle”, two of which are relevant to this appeal:

(1)     While any prior contravention is a factor which may be taken into account in determining quantum, it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant contravention.

(2)     The maximum penalty available under statute must be reserved for the worst category of cases. However, this does not mean that a lesser penalty must be imposed because it is possible to envisage a worse case.

153    At [95][101], Bromwich J discussed the place of criminal sentencing principles and cases to the imposition of civil penalties. At [97], his Honour reflected upon the need for a penalty that is proportionate to the contravention, as an aspect of applying the statute, citing the 2nd Non-Indemnification Personal Payment Case (FC) 264 FCR at 167168 [22], which drew on Veen (No 2) 164 CLR at 477478. In this discussion, his Honour was clearly aware of the need for caution, after the Agreed Penalties Case (HC), in applying criminal sentencing principles and cases to the imposition of civil penalties: see [98][100]. Importantly, however, and, with respect, correctly, Bromwich J, after referring to the deterrent object of civil penalties drawn from the High Court’s judgment in the Agreed Penalties Case (HC), said the following at [99]:

Thus, deterrence rules supreme as the means by which the objective of compliance is to be achieved in civil penalty cases. However, as the discussion below demonstrates, it is deterrence by reference to the instant contravention that is required.

154    At [100], Bromwich J discussed principles of criminal sentencing of relevance, saying:

These include the principles pertaining to course of conduct, totality, proportionality and the role of the maximum penalty. Provided that a weather eye is kept on the dominant consideration that is the objective of deterrence, there is no reason why these principles cannot readily be adapted and applied in a civil penalty context as a valuable means of assessing whether the penalty to be imposed is an appropriate consequence overall for the instant contravening conduct.

155    Such statements from [99] and [100] are conformable with the expression of principle by appellate courts, including Veen (No 2) and the 2nd Non-Indemnification Personal Payment Case (FC), and by Tracey and Logan JJ in their reasons.

156    At [102][107], Bromwich J discussed the first relevant principle that he had earlier identified at [93]: that the penalty must not be disproportionate to the instant contravention. The discussion was by reference to the whole of the relevant passages from Veen (No 2) at 477478. The discussion recognised that the necessity for proportionality was derived from the statute (s 546) and the word “appropriate” therein. This recognition was in accordance with NW Frozen Foods 71 FCR at 293, the 2nd Non-Indemnification Personal Payment Case (FC) at 167168 [22] and the other Full Court decisions referred to at [98] above.

157    It is important to set out what Bromwich J said at [105] and [107]:

105 As the High Court’s observations in Veen (No 2) illustrate, it is legitimate to take into account the antecedent contravening history of a contravener insofar as it may indicate that a condign civil penalty is necessary to deter the contravener and other potential contraveners from committing further contraventions of a like kind in the future. However, the penalty that is imposed must still be proportionate to the gravity of the instant contraventions, as assessed in their own terms, for to do otherwise would be to impose a fresh penalty for past contraventions.

107 The important principle identified in the passage from Veen (No 2) above is particularly relevant where there is, as in this case, a serious and sustained prior history of contraventions, and an apparent determination to continue engaging in proscribed conduct. The role of any past contraventions is to be no more than a prism through which to view the instant contravention. This enables a court to assess whether, for example, the instant contravention is an “uncharacteristic aberration” or whether the contravener has, by the instant conduct, manifested “a continuing attitude of disobedience of the law”. If the latter, as is clearly available to be concluded in this case, the heightened need for deterrence indicates that a more severe penalty is warranted for the instant contravention. Nonetheless, that penalty must still fall within the applicable range that is otherwise considered appropriate for that contravention.

(Emphasis added.)

158    The emphasised portions of those two paragraphs, read in the whole context of Veen (No 2), do not advance any two stage approach of the kind to which we referred at [106] above. We would not read [105] and [107] as departing in any way from Veen (No 2), or from the principle as put in NW Frozen Foods, the authorities referred to at [98] above, the Queensland Infrastructure Case, or the 2nd Non-Indemnification Personal Payment Case (FC): that is, it is legitimate to draw from past conduct and past contraventions any proper conclusion as to a willingness to disobey the law in assessing the gravity and seriousness of the contravention before the court and the consequent need for deterrence for that kind of contravention and so in deciding upon an appropriate and proportionate penalty in all the circumstances of the instant contravention with the object of deterrence for that kind of contravention, and bearing in mind the guidance of the statutory maximum penalty.

159    At [108][110], Bromwich J discussed the second relevant principle that his Honour had earlier identified at [93]: that the maximum penalty is to be reserved for the worst category of cases.

160    Once again, the analysis began at [108] with what the majority had said in Veen (No 2) 164 CLR at 478, as to which see [58] above. At [109], Bromwich J said the following:

Thus, the maximum penalty is reserved for contraventions falling within the worst category of cases for which that penalty is prescribed. This does not require characterisation as the worst possible case. However, a case is not in the worst category merely by reason that the contravener has a history of prior contraventions, although that history may assist in the proper characterisation of the instant contravention. Considerable caution may be required to avoid blurring this vital distinction. This is especially so when, as in this case, past contraventions are many in number, extend over a protracted period of time and the legislature has not seen fit to provide greater penalties for second and subsequent contraventions.

(Emphasis added.)

161    There is nothing unorthodox or erroneous or lacking in clarity in the expression of the matter by Bromwich J in this paragraph. The distinction to which his Honour referred was explicit in Veen (No 2) at 477478. The history of contravention “may assist in the proper characterisation of the instant contravention” because it may tell one something of its seriousness or gravity by showing a “continuing attitude of disobedience to the law”: Veen (No 2) at 477. The caution to which Bromwich J referred inheres in a proper understanding of Veen (No 2). The caution concerns not using past conduct to impose a penalty disproportionate to the nature, gravity and seriousness of the instant contravention and thereby, effectively, re-penalising past conduct.

162    Nothing said by Bromwich J other than reflects the consistent expression of principle by this Court before and after the Agreed Penalties Case (HC), including, in point of expression of principle, what was said by Tracey and Logan JJ in Broadway on Ann to the extent it was drawn from appellate authority, that in the furtherance of the object of deterrence of the kind of contravention before the court the court’s task is to set an appropriate penalty for the instant contravention that is proportionate to the nature and gravity of that contravention informed by all relevant circumstances, including what can be concluded as to any willingness to disobey or defy the law, and that the maximum penalty is for the worst kind of case that warrants the maximum level of deterrence set by Parliament.

163    The consideration by Bromwich J of the appropriate penalties was preceded by a careful discussion of what had been submitted to the primary judge, which included submissions by the Commissioner as to the grouping of the individual contraventions into phases of the conduct that reflected its character, quality and seriousness of the conduct. The three groups were: group 1, being contraventions 1 and 2: entering and remaining on the premises without permission and after a request to leave; group 2, being contraventions 3, 4 and 5: squirting water at Mr Neylon, verbally abusing him, and giving him an intended insulting hand gesture in response to a question as to whether he had an entry permit; and group 3, being contravention 6: using one swipe card to swipe out all workers who left the site.

164    These submissions of the Commissioner, if we may respectfully say so, thoughtfully sought to grapple with the difficult and subtle questions (faced on a day-to-day basis by sentencing judges) of evaluating the nature and gravity of instant contraventions. The difficult and subtle questions arise from applying the principles to which we have referred to six disaggregated, but related contraventions, in one overall episode. The episode was very serious. It could be seen, as a whole, as a body of conduct of gravity and seriousness warranting significant penalisation. If one were required to view the whole episode as one contravention we would have no doubt that it was in its nature and gravity, including its features of wilful, insulting and arrogant defiance of the law, of the worst kind, warranting the maximum penalty in aid of the object of deterrence.

165    But the episode was pleaded and found, in accordance with the statute, to involve six contraventions. The expression of the seriousness of the whole episode (if it were one contravention) does not translate into a proposition that each of the contraventions of improper conduct was of the worst kind. There is no place for abstracted logic here: it is a process of characterisation of all the events and circumstances to assess or evaluate the seriousness and gravity of the instant contraventions so that an appropriate penalty for them can be set to deter the contravenor and others from repeating contraventions of that kind.

166    At [151][153], Bromwich J described the characteristics of the six contraventions in these three groups:

151 The first two contraventions entailed no more than being present illegally and refusing to leave when asked. The conduct giving rise to the third to fifth contraventions was, viewed either separately or collectively, a distinct escalation of the first two contraventions.

152 The third to fifth contraventions were doubtless unpleasant, and were a manifest abuse of the permit system. However, they comprised conduct whilst there, rather than the conduct in being there, which is what made these contraventions distinct from the first two contraventions. That was the way in which those three contraventions were pleaded. Individually, each was still at the lower range of objective seriousness. Collectively, they did rise somewhat higher than the first two contraventions. However, even collectively, it is impossible to see how they could properly be characterised as being in the most serious category. That is so notwithstanding that none of the contraventions were, in the language of Veen (No 2), an “uncharacteristic aberration”, but, rather, were conduct manifesting “a continuing attitude of disobedience of the law”. Cast in the light of that attitude of disobedience, the third to fifth contraventions may be regarded as rising, in combination, to somewhere in the middle of the range of objective seriousness.

153 The conduct giving rise to the sixth contravention was the most serious. Not only were workers effectively smuggled off the site, but there was a potentially serious safety issue if anything happened at the site, such as might require an evacuation. The sixth contravention, although far from the worst possible to envisage, could properly be regarded as being in the worst category because of the subversion, while illegally on the site, of an inherently important purpose of having a swipe card system, being to record, in real time, who was on the site at any given point in time.

167    At [163][166], Bromwich J expressed his reasons for the penalties he thought appropriate:

163 The first and second contraventions, in the context of the many prior contraventions of the appellant, may be viewed as deliberate conduct in overt defiance of the law, but as not entailing the more serious elements of hindering or obstructing. Those contraventions are to be viewed as requiring a condign penalty to deter repetition. Taken on their own, each warrants a penalty of $10,000 when viewed in light of the prior contraventions and the “continuing attitude of disobedience of the law” that they manifest. There needs to be a degree of totality adjustment due to the relationship between the two contraventions and the grouping that should take place. The appropriate combined penalty is $15,000 in light of those considerations.

164 As discussed above, the third to fifth contraventions in combination rise to the mid-level of objective seriousness when viewed in light of the prior contraventions and the “continuing attitude of disobedience of the law” that they manifest. So considered, each warrants a penalty of $15,000. There needs to be a degree of totality adjustment due to the relationship between the three contraventions and the course of conduct grouping that should take place. The appropriate combined penalty is accordingly $30,000.

165 For the sixth contravention, while worse contraventions can be envisaged, this can properly be characterised as being in the worst category and therefore permits and warrants the imposition of the maximum penalty of $51,000. While the contravention was not pleaded as one of intentionally hindering or obstructing the usual operation of the workplace, the protean quality of acting in an improper manner can, and in this case does, permit a view that it is no less serious than conduct that might be pleaded as intentionally hindering or obstructing. In the context of the prior contraventions, it may properly be regarded as requiring the maximum deterrence.

166 The overall penalties that should be imposed therefore add up to a total of $96,000. This is, on any view, a very substantial penalty for contraventions that took place in a half-hour period and were not shown to have caused any actual loss or damage. While the primary judge referred to a loss of productivity for 30 minutes, it is not apparent how that conclusion was reached, nor what it meant.

168    This is not an appeal from Broadway on Ann. But the stark difference between the majority and the minority, and the refusal of an application for special leave has led to the (incorrect) view that there was a difference in expressed principle by the majority from the minority and to the (incorrect) view that the majority were, in point of principle, breaking from past expressions of principle by the Court (without saying so) and setting proportionality to one side. Nevertheless, the difference between the two outcomes (of Tracey and Logan JJ on the one hand and Bromwich J on the other) is stark.

169    In our respectful view, the approach of Bromwich J accorded with the principles expressed by the Full Courts of this Court on many occasions. That is not to say that we would not have imposed higher penalties than Bromwich J if charged with his task. For our part, the history of contraventions reflecting a willingness to defy the law on right of entry and other provisions, the seniority of Mr Hanna, and Mr Hanna’s evident staunch defiance of the relevant provisions in the serious manner in which he acted may have warranted higher penalties. Nevertheless, plainly, taken individually, even informed by the willingness to defy the law, some of the contraventions were less serious than others.

170    Whilst the expressed view of the majority as to principle may not have departed from previous appellate expression of principle, in point of application one can see the facts and circumstances of the instant (six different) contraventions becoming overwhelmed by past conduct in a manner that led, in relation to some of the contraventions, to the imposition of penalties disproportionate to the gravity and nature of the particular instant contravention. It perhaps does little to advance the resolution of this appeal for this Court to engage in putative resentencing of the CFMEU’s conduct in Broadway on Ann. It is necessary, however, given the arguments, to say that, in our respectful view, the majority’s conclusion that each of the six contraventions was in the worst possible category of contravention, was plainly not correct. That is not to deny the conclusion that the whole episode was of the worst kind (if viewed as one contravention). The approach of Bromwich J to look at the seriousness of each contravention individually by reference to the nature of what occurred and by reference to the apparent willingness to defy the law was demanded by the statute and was correct and orthodox. To the extent that it may be relevant, we might disagree with the level of total penalties imposed by Bromwich J if it were our task to do so. With respect to the majority, however, even taking the fullest regard, as we would, for the demonstrated willingness to disobey the law, we cannot accept, on a principled basis that (for instance) the first contravention of entering without an entry permit can be characterised as of the worst case warranting as the relevant instant contravention the imposition of the maximum penalty. The imposition of the maximum penalty for that contravention could only be based on a freedom from the notion of proportionality to the identified contravention, or a freedom to penalise (again) for past contraventions or for one or more of the other contraventions (in addition to their individual penalisation).

171    Our view does not rest on totality, or on the so-called course of conduct principle, rather it rests on the proposition that, for the reasons that we have sought to express, s 546 contains within it a notion of proportionality such that the appropriate penalty for the instant contravention of such gravity and seriousness as is assessed (by reference to all the circumstances of the conduct, and including any demonstrated willingness to defy the law) is that which is necessary to deter the contravenor and others from contraventions of like kind. In so doing we cannot agree that in the circumstances of Broadway on Ann, each and every one of the contraventions in that case could reasonably be characterised as of the worst kind.

172    Next came Parker 270 FCR 39. The case involved numerous issues of liability and penalties concerning the organisation and taking of industrial action at a large building site in Sydney. Those issues included the relevance of prior contraventions, the place of proportionality and the role of the maximum penalty in fixing an appropriate penalty.

173    The leading judgment was delivered by Besanko and Bromwich JJ, with which judgment Reeves J agreed. The relevant appeal grounds on the above issues were dealt with at 270 FCR 141149 [321][351]. Parker involved individual participants who had many past contraventions as did the union, the CFMEU. The arguments involved emphasis by the union on a limited role for past contraventions, by reference only to the objective seriousness of the contraventions. The union’s submissions were distilled by Besanko and Bromwich JJ at 270 FCR 145 [334] as follows:

(1)     whether the primary judge paid insufficient attention to the objective seriousness of the contraventions, most especially as to conduct attributed to the two Unions;

(2)     whether, as a result or independently, the past contraventions were misused by his Honour so as to sanction past contraventions afresh, rather than being properly confined to the instant contraventions;

(3)     whether, additionally to, or independently of, the question of overt error being established, the penalties imposed were, taken holistically, manifestly excessive in all the circumstances.

174    Relevantly here, the expression of relevant principle can be found in [339], [341], [342] and [348].

175    At [339] the question of the place of past contraventions was dealt with by reference to Veen (No 2) as follows:

As to the second consideration, being the use that was put by the primary judge to prior contraventions, especially in respect of the CFMEU, a court imposing a civil penalty is entitled to have regard to such prior contraventions in the exercise of the discretion, but that does not permit such a history to be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the contravention that is being considered: Veen (No 2) at 477. That is because a court should impose a penalty that is proportionate to the gravity of the contravention being sanctioned, and no more. This is also supported by s 546(1) of the Act, which expressly provides for what would otherwise likely be implicit, namely, for the Court to fix an “appropriate” penalty for a contravention. A civil penalty that is not proportionate cannot be regarded as appropriate, and therefore cannot meet that statutory requirement.

176    In [340] their Honours cited the 2nd Non-Indemnification Personal Payment Case (FC) 264 FCR at 167168 [22].

177    Their Honours then continued at [341] and [342] as follows:

341 Thus, the role of any past contraventions is to be no more than a prism through which to view the instant contravention. This enables a court to assess whether, for example, the instant contravention is an “uncharacteristic aberration”, or whether the contravener has, by the instant conduct, manifested “a continuing attitude of disobedience of the law”. If the latter, as is clearly available to be concluded in this case, the heightened need for deterrence may indicate that a more severe penalty is warranted for the instant contravention. Nonetheless, that penalty must still fall within the applicable range that is otherwise considered appropriate for that contravention. If that is not carefully observed, the contravener may suffer the fate of being sanctioned anew for past contraventions, as the above quote from Veen (No 2) makes clear is not permitted.

342 Veen (No 2) also provides valuable guidance as to the role of the maximum penalty. The High Court’s observations at 478 make it clear that the maximum penalty is reserved for contraventions falling within the worst category of cases for which that penalty is prescribed. This does not require characterisation as the worst possible case. However, a case is not in the worst category merely by reason that the contravener has a history of prior contraventions, although that history may assist in the proper characterisation of the instant contravention. Considerable caution may be required to avoid blurring this distinction. This is especially so when, as in this case, past contraventions are many in number, extend over a protracted period of time and the legislature has not seen fit to provide greater penalties for second and subsequent contraventions.

(Emphasis in bold added.)

178    A reading of the above paragraphs reveals complete conformity with the approach of the Full Courts to which we have referred, including, at least in point of expression of principle, the judgments of Tracey J and Logan J in Broadway on Ann. In particular in [342] the proper characterisation of the instant contravention is recognised as assisted by what can be taken from prior contraventions as to any continuing wilful disobedience of the law. Their Honours were clearly expressing the view that the prior contraventions gave assistance in the characterisation of the instant contravention in its level of seriousness. However, they warned of the need for a considerable caution required to avoid blurring the distinction between the proper characterisation of the instant contravention, taking into account wilful disobedience to the law shown in part by a prior contravention, and changing the character of the contravention by overly emphasising past conduct so as, in effect, to overwhelm the circumstances of the instant contravention and to slide into penalisation of past conduct. Their Honours explained this by saying that a matter is not placed in the worst category merely because the contravenor has a history of prior contraventions, although that history may assist in the proper characterisation of the events and circumstances attending the contravention by reference to any displayed wilful disobedience. Once one understands the proper content of [339][342] the content of [348] is clear. In that paragraph their Honours said:

As the above discussion of Veen (No 2) demonstrates, while the role of past conduct informs the need for deterrence, that cannot be used to change the character of the instant contravention. Without an explanation as to how it was possible to treat attributed contraventions that were the same in the hands of the Unions differently, and attributed contraventions that were different as to their source in the same way, it is impossible to avoid the conclusion that past contraventions have been inadvertently used by his Honour in a way that goes beyond a prism through which to view the instant contraventions. Thus in this way, which is hard to quantify, the principles in Veen (No 2) have been breached. That error in approach means that the exercise of the discretion by imposing uniform maximum penalties against the CFMEU has miscarried as a matter of process, rather than necessarily the result. Thus ground 11 should succeed, and upon that basis, as for totality, the penalties imposed on the two Unions should be set aside and the penalty imposition exercise for each carried out afresh.

179    The primary judge referred to the word “character” in the first sentence in [348]. His Honour perceived a lack of clarity between the first sentence in [348] and the last three sentences of [342] and in particular the distinction between “characterisation of the instant contravention” and “character of the instant convention”. With respect to the primary judge, the reasoning of their Honours is tolerably clear. As stated in [342] the history of prior contraventions, to the extent that it shows wilfulness, can be taken into account in characterising the seriousness of the contravention. Once that process has been undertaken and the seriousness of the instant contravention (including what can be drawn from prior contraventions as well as the circumstances otherwise of the instant contravention) is assessed, the prior contraventions do not have a further role to play in changing that character.

180    In all these cases what can be seen as clear and as taken from the content of the statute (as directed to the instant contravention for the objective of deterrence of such kind of contravention, in a statutory context of a maximum penalty for the worst type of contravening warranting the heaviest possible penalisation for the object of deterrence) is that the notion of proportionality of the penal response is central to the content of the statutory power to impose the penalty. That proportional response is not blind to wilful recidivism, to asserted impunity from obedience to the law, or to any other aspect of intentional disobedience to the will of Parliament. Such matters form a principled part of the assessment of the seriousness of the contravention and thus the evaluation of the appropriate penalty. No Full Court has said to the contrary. The jurisprudence of the Court in point of expression of principle is clear and consistent. What is not permitted in the name of deterrence is to untether the penal response from the nature and character of the instant contravention such that the penalty imposed can be seen to be undifferentiated between grades of conduct assessed and characterised on a principled basis.

181    Were the statute to permit such penalisation: that is the imposition of a penalty disproportionate to the seriousness of the contravention (having considered any willingness to disobey the law in that assessment), one would need the clearest words. Any such interpretation of the statute, that is to remove proportionality from the assessment of an appropriate penal response to a contravention or to make it a subsidiary consideration, would lead to an interpretation of a statutory power to inflict a penal consequence untethered to the nature and seriousness of the contravention. In such circumstances one is no longer penalising for an instant contravention, rather one is imposing penalties to bring about compliance generally by, in effect, saying the maximum penalty is always available against the recidivist for any contravention since the penalty will always conform with the object of deterrence. Such an approach could encourage or lead to inconsistent decision-making informed by personal perspective and opinion. A view that that is the current law would require the High Court to state as much. The view that Parliament would intend a discretion in sentencing with such capacity for variance according to personal choice and attitude is not lightly to be made. Any such interpretation would be required to confront what Gleeson CJ said in Wong v The Queen [2001] HCA 64; 207 CLR 584 at 591 [6] (albeit in the criminal law), as approved by the plurality (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in Hili v The Queen [2010] HCA 45; 242 CLR 520 at 535 [47]:

All discretionary decision-making carries with it the probability of some degree of inconsistency. But there are limits beyond which such inconsistency itself constitutes a form of injustice. The outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in like manner. The administration of criminal justice works as a system; not merely as a multiplicity as unconnected single instances. It should be systematically fair, and that involves, amongst other things, reasonable consistency.

182    So much may be also said as to the imposition of civil penalties.

183    The case of Auimatagi (2018) 363 ALR 246 should be mentioned. It was decided before Parker, but after Broadway on Ann. The case concerned conduct on a building site in Brisbane during one of the hottest parts of the year and focused upon whether or not workers would comply with a policy of the head contractor prohibiting short pants and short sleeves. The CFMEU and Mr Auimatagi, who was a union official, were said to have contravened s 340 (adverse action) and s 343 (coercion) of the Fair Work Act. In the events that occurred the findings of liability were set aside by the Full Court. The reasons for this need not be addressed. Comments were made, however, on penalty by way of obiter in short reasons in summary form adequate to deal with the instant case, at 363 ALR 279280 at [172][177], as follows:

172 Although it is unnecessary in the circumstances to say anything of the penalties, in case we are wrong in our views as to liability, and in particular for the benefit of Mr Auimatagi, we consider it appropriate to express some brief views as to penalty which would have been more fully elaborated had we not upheld the appeal on liability.

173 Given our views as to the lack of the requisite quality of unconscionability or illegitimacy to lead to a conclusion of coercion, our comments need to be qualified by that recognition.

174 This was Mr Auimatagi’s first contravention. He was, as we have said, representing the views of the men on the site. It can be accepted that he was also pushing his views as to what the Union wanted. He put those views with apparent firmness and clarity, but without the kind of arrogance or entitled impunity that can mark exchanges of this kind. To characterise this as worthy of a penalty so close to the maximum ($7,500 from a maximum of $10,200) was manifestly excessive. Taking into account all the facts and the need for deterrence, if there had been a contravention of s 340 or, if contrary to our views the conduct can be characterised as coercive, we would not have imposed a penalty outside a range of $1,750-$2,000.

175 As to the Union, the imposition of the maximum penalty of $51,000 was manifestly excessive. It is difficult to escape the conclusion that the “recidivism” to which the primary judge referred was not merely a factor in giving a penalty at the high end of an appropriate response to the contravention, but in substance there was punishment for past conduct.

176 The quality or objective seriousness of the contravention (on this hypothesis) fell far short of being worthy of the maximum penalty. It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases. See the points of principle set out in the reasons of Bromwich J (dissenting in the result, but not in point of principle) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Broadway on Ann Case) [2018] FCAFC 129 at [93] and [102]-[110], and see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 at [22].

177 Considering all the circumstances here and the fact that the contravention by the Union was wholly based on Mr Auimatagi’s conduct, we would not impose a penalty outside a range of $10,000 to $12,000.

184    The reason it was said to be for the benefit of Mr Auimatagi is that the surrounding facts showed that Mr Auimatagi was not a high ranking union official, did not display any declared intransigent disobedience to the law and was acting in what he thought to be representing the interests of the workers who had almost unanimously voted not to comply with the policy. There was no suggestion that the union or Mr Auimatagi had bullied or coerced the workers into this course of action. Mr Auimatagi was representing the members of the workforce to the head contractor in question. If there had been a breach of the Fair Work Act a penalty would have followed. But the learned primary judge had imposed a penalty on Mr Auimatagi of $7,500 against the maximum of $10,200 and the maximum of $51,000 on the union. In all the circumstances, notwithstanding the expression of the correct principle by the primary judge in her Honour’s penalty judgment, such a characterisation of Mr Auimatagi’s behaviour could only have been thought to be so serious if such weight had been given to the unions (not his) past contraventions. Likewise the imposition on the union was such as to betray such an emphasis on past conduct as to be effectively penalisation for past conduct. This was made all the more plain when one appreciated the facts that Mr Auimatagi was effectively representing the views of the workers on the job, not imposing some union position in defiance of the law, and that the workers were off the job for about a day, the matter being placed before the Fair Work Commission immediately and the union being instrumental in the amicable resolution of the dispute on the day that it went before the Fair Work Commission. In the circumstances of how the issue had arisen and been dealt with, if there had been a contravention, to characterise it as the primary judge did as so serious as to warrant a $7,500 penalty upon Mr Auimatagi and the maximum penalty upon the union betrayed a complete mischaracterisation of the contravention and betrayed the influence and utilisation of past contravening conduct when such had no proper connection with such contravention as might have been found.

The primary judge’s treatment of Full Court authority

185    From [39][82] of his reasons, the primary judge examined Veen (No 2), Broadway on Ann, Parker and a number of other judgments of the Federal Court including judgments at first instance. From this analysis, the primary judge concluded that the judgments of Bromwich J in Broadway on Ann and Besanko and Bromwich JJ in Parker stood for the proposition that the character or seriousness or the gravity of the contravention must be assessed without regard to prior contraventions or any demonstrated disobedience to the law. Involved in that conclusion was a view that their Honours had misunderstood Veen (No 2).

186    For the reasons already given, we do not consider that to be the correct way to read any of the Full Court decisions, including Bromwich J in dissent in Broadway on Ann and Besanko and Bromwich JJ in Parker. Whatever may be the position in the context of criminal punishment, the Full Courts of this Court have recognised the relevance of a continuing disobedience of the law in the characterisation of the contravention. In Parker it was said expressly: see 270 FCR at 147 [342]. What all the Full Courts (including the majority in Broadway on Ann in point of principle) have said, however, and what Parker makes clear, is that the imposition of the penalty is for the contravention in question to deter contravention of such or like kind, and the character of the contravention cannot ignore or exclude the acts and omissions of the relevant persons that constitute, directly or by attribution, the contravention in question.

A question of judicial method

187    In [65] of his reasons the primary judge commented upon Auimatagi, Parker and a number of first instance decisions of judges of the Court:

None of Auimatagi, the Springvale Rail Crossing Case, the Prolac Case, Hassett, Parker, Powell, Laverton North, Altona North or Geelong Grammar contains any material analysis of what Tracey and Logan JJ said in Broadway on Ann. In saying so, I mean only to observe that each of those cases was decided contrary to what their Honours in Broadway on Ann held (but, of course, consistently with other, more recent full court authority). Neither of the two full court decisions (Auimatagi and Parker) explains how (or if) it was that Broadway on Ann was wrong (let alone plainly so).

188    The Federal Court of Australia Act 1976 (Cth) provides for a Full Court system. In its operation, judges sit on first instance cases exercising the original jurisdiction of the Court, and on Full Court appeal benches exercising the appellate jurisdiction of the Court. It is important to recognise the differences involved, and of the place of Full Courts. That neither Auimatagi nor Parker essayed the task in the last sentence of [65] is capable of explanation. The Court in Auimatagi did explain: It perceived no difference in expression in point of principle between Tracey and Logan JJ and Bromwich J in Broadway on Ann. There was no call in that case (unlike this case because of the issues thrown up by the judgment below) to comment on whether the expressed principle was applied correctly by the majority in Broadway on Ann. One can assume the Court in Parker took the same approach. In any event, it is the task of a Full Court, not a judge at first instance, if it be considered necessary, to eliminate or undermine the precedential value of a Full Court decision by analysing it as per incuriam. The primary judge was bound by the 2nd Non-Indemnification Personal Payment Case (FC) and Parker. Obiter dicta in Auimatagi explained to the primary judge why the binding condition of the most recent Full Court in Parker was not in any way affected by Broadway on Ann. There was no basis and no occasion for the primary judge, sitting at first instance, to assume the task of finding error in Parker, whether through extrapolation from other first instance decisions, or otherwise.

The first ground of the notice of appeal and the notice of contention

189    The submissions of the second appellant focused predominantly on the place in the assessment of the appropriate penalty of the union’s history of prior contravention. It was submitted that the union’s history of prior contravention was irrelevant in assessing the objective gravity of the contravention. The central error of the primary judge was submitted to be taking the union’s history into account in assessing the gravity of the contravention. This error was said to infect the majority judgments in Broadway on Ann.

190    The argument underlying this approach can be seen to reflect the approach (in crime) in cases such as McNaughton: that there is some taxonomical division between the gravity of the offending, on the one hand, and the degree of punishment, on the other. The acceptance of the correctness of that strict taxonomical division has not been universal: see Omar, Young and Mulholland and other cases referred to above. A principled basis for the division in crime can be seen to be the free-standing principle of proportionality (rooted in retribution) by reference to which principle no one should be punished more severely than the nature or gravity of the crime requires. That said there are powerful reasons to consider that a displayed attitude of disobedience to the law in connection with the commission of the instant crime is part of the seriousness of the crime.

191    Nevertheless, we are not in the domain of crime. The imposition of civil penalties is free from notions of retribution and denunciation, its object is deterrence. But as is clear from the overwhelming preponderance of authority, the penalty is imposed for the instant contravention in furtherance of the deterrence of such or like contraventions by the contravenor or by others. The assessment of the character of the contravention includes all factors that can rationally go to its gravity and seriousness, bearing in mind that the object of the imposition is deterrence. That includes an attitude of displayed and continuing disobedience to the law, as part of a characterisation of the nature and character of what was done.

192    Thus for the reasons earlier expressed, we would reject the second appellant’s submission to the extent that it drew upon the strictness of the proposition that the union’s history of contravention was irrelevant to assessing the gravity or seriousness of the offending, and that some range was to be set, a-contextually divorced from such history, with past contravening relevant only to the choice of a level of penalty within that range.

193    The submissions of the second appellant were, however, somewhat broader and more subtle than that. They invoked a proper application of Parker and the recognition that the penalty was to be imposed for the instant contravention to dissuade like contraventions by the contravenor or others in the future. Within that submission was the demand for a degree of proportionality referable to the character of the contravening affected in its assessment by any demonstrated unwillingness to obey the law. The statutory task involved necessarily the assessment of the objective characteristics of the contravening in the light of all the factors attending the contravention, including prior contraventions. Thus, as was said in Parker, the history of prior contravention may assist in the proper characterisation of the instant contravention, but caution was required not to use it to overwhelm the process to change the character of the instant contravention into something it cannot properly and reasonably be seen to be. If one were to do so it would lead to the imposition of a penalty, again, for past conduct: Parker at [339][342] and the 2nd Non-Indemnification Personal Payment Case (FC) at [22]. The penalty imposed was submitted to be excessive.

194    The point is a subtle one, but important and real. It is not to be lost in definitional taxonomies and rules of bright lines. The task should not be complex to understand. A demonstrated unwillingness to obey a law of Parliament can be seen to bear upon the seriousness of conduct that is a contravention of that law. How one approaches, properly and fairly, the proof of such a present state of disobedience relevant to the instant contravention was not explored in argument. The relevant question may be seen to be the demonstrated or inferred attitude or state of mind of the contravenor to the law in question. That will be assessed and taken into account along with, and not ignoring, all the other features of the contravening. The danger of just referring to prior contraventions without a proper evaluation and taking account of the circumstances of the instant contravening (that is what actually happened) can be seen in Auimatagi, where past contraventions had little, if anything, to do with the events of the day in question that led to the stoppage of work.

195    The error of the primary judge here, being the error of the majority in Broadway on Ann, was that in the name of utilising a notion of recidivism of the union it was seen as in accordance with principle to impose a penalty at the highest level because of the number of prior contraventions, in what was said to be the demonstrated intention of promoting a no-ticket no-start policy, but without any real evaluation of, or weight being given to, the objective characteristics of what occurred as part of the assessment of what was the subject contravention of the penalty to be imposed. Thus, the penalty for the instant contravention became subsumed by a proposition that the time had come, once the perceived threshold level of prior contravening was reached, that henceforth all contraventions would be treated as of the worst category or warranting the maximum penalty, irrespective of the nature and the character of the human conduct that constituted the contravention in question. This can be seen in the approach of the primary judge at [71], [72], [83] and [84] set out above. The past has been used beyond the point of characterising the nature of the contravening (which is the subject of the imposition of the penalty) and has become the reason for the maximum penalty irrespective of the nature and seriousness of the instant contravening. To ask the rhetorical question in the last sentence of [72] of the primary judge’s reasons as a supporting proposition is to raise the object of the imposition of the penalty to a justification for ignoring the nature of the contravening, and so to impose the penalty because of, and framed by, only the past. This is not to use, but to jettison, a notion of proportionality by setting to one side the nature of the conduct that comprised the contravention. The penalty becomes imposed not for the instant contravention but, to some degree, for the past, again. This approach elevated past offending to be the defining consideration of the character or gravity of the contravening, irrespective of the actual reality of what constituted the contravention. It was not an assessment of the gravity of the circumstances, including (but not limited to or defined by) what could be drawn legitimately and contextually as to the instant contravention from past contraventions; rather, it was to draw from the past a conclusion that, regardless of how objectively serious or not the conduct in question was otherwise, the maximum penalty should henceforth be imposed.

196    In the approach we have taken, the notice of contention does not strictly arise in that we do not accept that the assessment of the gravity of the contravention is undertaken divorced entirely from what can be legitimately drawn about the instant contravention from prior contraventions. Nevertheless the notice of contention was important to frame and direct the argument on proportionality and upon the statutory task involved in applying s 546. The notice of contention was in the following form:

1.     The criminal law sentencing principle of “proportionality” is not a relevant consideration for the fixing of a pecuniary penalty for a contravention of a civil remedy provision of the Fair Work Act 2009 (Cth) (FW Act).

2.     In the alternative to Ground 1, it is not mandatory to apply the criminal law sentencing principle of “proportionality” when undertaking the function of fixing a pecuniary penalty for a contravention of a civil remedy provision of the FW Act but, in the Court's discretion, a court may have regard to that principle if it will assist the Court in the discharge of its function.

3.    In the alternative to Ground 1 and further to Ground 2, if the criminal law sentencing principle of “proportionality” is a mandatory consideration or is otherwise a relevant consideration, nevertheless, such principle does not act as a fetter or a ceiling so as to restrict or constrain the level of penalties that a court may impose so as to meet the predominant, if not the only, object of fixing pecuniary penalties for contraventions of civil remedy provisions of the FW Act, namely, deterrence (both general and specific).

197    For the reasons that we have already set out, the notion of proportionality inheres in the task of imposition of an appropriate penalty in aid of the object of deterrence. It is not a free-standing principle to be seen as based on retribution, as the principle of proportionality in sentencing for crime can be (at least historically). Rather, the relevance of the notion of proportionality inheres in the statutory task of the imposition of a reasonably appropriate penalty for the contravention before the court to deter such or like contraventions, and a rejection of the double imposition of penalty consequences.

198    In a clear, frank and open submission, senior counsel for the Commissioner recognised that, to support the notice of contention, and, really, to support the primary judge’s approach (as discussed above), he must support the contention that deterrence, as the sole object of the imposition of the penalty, and the terms of s 546, together, entitled the court, because of past contraventions, to impose a penalty more than once for the same contravention or to a level that bore no real relationship to the facts and circumstances of the instant contravention: That once the past contraventions reached a certain point, it could be appropriate to deter any contravention, whatever its seriousness otherwise, by the maximum penalty, irrespective of the acts and circumstances that otherwise made up the contravention.

199    That was, in effect, the approach of the primary judge, which needed the notice of contention and the approach within it, to support it.

200    Notwithstanding our view that the primary focus of the second appellant’s submission that the prior contraventions cannot be relevant to the assessment of the gravity of the contravention is wrong, we would nevertheless, for the above reasons, uphold grounds 1.6 and 1.7 of the appeal and dismiss the notice of contention.

201    The assessment of what is an appropriate penalty is informed by a reasonable appreciation of all the circumstances that rationally go to an assessment of the gravity and seriousness of the contravention before the court, including (but not limited to) what can be drawn from past conduct as to the instant contravention, and that rationally go to an assessment of what is reasonably necessary, and thus appropriate, to deter such or like contravention in the future by the contravenor or by others. If a grave contravention and a much less serious contravention (thus analysed in the same context) are both said to require the imposition of the maximum penalty, it is difficult to conclude otherwise than that in respect of the latter contravention, the less serious, the penalty is being imposed for both the present contravention and for the past contraventions: a conclusion that was frankly recognised in the argument on the notice of contention. That is also why we consider the approach of the majority in Broadway on Ann to award the maximum penalty for each and every contravention to have been a misapplication of principle.

202    It is not appropriate to discuss in detail the now some number of first instance cases that have sought to deal with Broadway on Ann and Parker. It is, however, appropriate to say, conformably with what we have said above about Parker and Broadway on Ann of not being divergent in point of expression of principle that we would agree with O’Callaghan J in Australian Building and Construction Commissioner v Hassett [2019] FCA 855 at [52][54] and with Wheelahan J in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 at [84][96] in that regard. Further, in conclusion, we would see (and without intending to qualify the views herein expressed) the expression of the matter by Wheelahan J in the Syme Library Case at [96] as conforming with the expression of the principle expressed herein, as long as one recognises that the overall evaluation necessarily includes what actually happened to constitute the instant contravention and that close attention must be given to the maximum penalty.

203    Ground 1 of the appeal is partly made out.

The primary judge’s reasons on cooperation

204    The primary judge dealt with contrition and cooperation in one section of his reasons at [90][95].

205    The Commissioner had submitted that the respondents were entitled to some discount for their admissions at a very early stage, though they had not shown any contrition, remorse or regret or done anything to reduce or eliminate the prospect of similar contraventions. The primary judge disagreed with the submission that some account should be given for the earlier admission, for either Mr Pattinson or the union. His Honour said that he had taken account of the decision to make admissions and not contest liability but then stated at [92][95] the following:

92 It does not, however, follow, that the respondents are automatically entitled to any “discount” of the penalties to be imposed upon them. Rather, the court should consider whether the decision not to contest that liability bespeaks contrition or some other recognition on the respondents’ part by reason of which (in either case) the court might infer that deterrence looms less large than it otherwise might.

93 The respondents submitted that their admissions “…evince[d] a willingness on their part to accept responsibility for their actions and facilitate the course of justice.” To the extent that that should be understood as nothing more than an acknowledgment that the respondents have not insisted upon what, no doubt, would have been a difficult and expensive trial, that can be accepted. But if it is advanced to suggest that there is evidence that the respondents have—and the Union, in particular, has—had any sort of epiphany, that submission is beyond ambitious. In the present case, there is nothing to suggest—and I do not accept—that the respondents’ decision to admit their conduct at an early stage reflects any sudden realisation that what they did was wrong and ought not to be repeated. On the contrary, it is far more likely a forensic acceptance of the fact that what was done was done unlawfully, and that their interests would best be served by the court’s saying so before, rather than after, large sums of Union and public money were washed away by a contested trial: see, in that vein, Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68, 102-103 [164] (Dowsett, Greenwood and Wigney JJ) and Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (“Cardigan St Case”) [2018] FCA 957, [94] (Bromberg J). To discount the penalties that might otherwise be imposed would be to reward that adventure in self-interest.

94 In my view, the deterrent effect that the penalties to be imposed should enliven is no less pronounced on account of the admissions in this case than it would be without them. That is so for the reasons that the Commissioner identifies; but also because of what is said above (in particular at [84]) about the Union’s “no ticket, no start” policy, and its apparent and enduring indifference toward the penalties that it has repeatedly paid for its enforcement. To put it in simpler terms: the Union regards the imposition of penalties as an acceptable cost of the manner in which it chooses to operate. I do not accept that its admissions in this case—as opposed to the penalties imposed in the many that preceded it—should be understood to reflect some sudden realisation that perhaps it ought to act lawfully and ought not to insist upon the forced co-option of construction workers to its ranks. Mr Pattinson’s admissions are similarly of no moment.

95 I do not accept that either of the respondents should receive any material penalty “discount” for their admissions.

The second ground of the notice of appeal

206    Ground 2 of the notice of appeal was in the following terms:

2. The primary judge erred in so far as his Honour:

2.1     determined (J[92], [95]) that the appellants should not receive any material discount on penalty by reason of their admissions and co-operation rendering a trial unnecessary;

2.2     held (J[92], [93]) that cooperation is only to be treated as [a] factor in mitigation warranting a discount on penalty where accompanied by contrition or evidence that the contravener has had a realisation that their conduct is “wrong and ought not be repeated”;

2.3     erred by requiring (J[93], [94]) that cooperation be accompanied by evidence of motive (either contrition or a realisation that the contravening conduct is wrong and ought not be repeated), when cooperation requires no more than evidence of the utilitarian value of cooperative conduct, and does not invite an inquiry into motive.

207    There is force in the criticism of the primary judge’s approach in ground 2. The Full Court in the Queensland Infrastructure Case 254 FCR at 102–103 [163]–[165] described the correct way to approach the utilitarian (as opposed to contritional) feature of early cooperation:

163 About the only thing that could be said in favour of the CFMEU, other than that the conduct was related to genuine concerns about sham contracting, is that it cooperated with the Commissioner in relation to these proceedings by admitting the contraventions and reaching agreement in relation to the facts. Importantly, the admissions and agreed facts were also not withdrawn after the initial agreement in relation to the penalty amounts was withdrawn by the Commissioner. There is no doubt that the CFMEU should receive credit for this cooperation. From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows willingness on the part of the CFMEU to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceedings were not defended saved the community the expense of a potentially lengthy contested hearing.

164 It is, however, doubtful in all the circumstances that the CFMEU’s cooperation with the regulator could really be said to demonstrate contrition or remorse. In some respects the cooperation reflects nothing more than an acceptance of the inevitable. The CFMEU did not adduce any evidence of contrition or remorse. Indeed, there was not even an expression of contrition or remorse in its submissions. There was no evidence from which it could be inferred that the CFMEU intended to change its ways. There was certainly no suggestion, let alone evidence, to the effect that the CFMEU intended to set up any systems, processes, procedures or education to ensure that its officers did not encourage unlawful industrial action in the future.

165 The principles in relation to taking admissions and cooperation into account are well-known and do not need to be repeated. It is sufficient to note that the authorities make it clear that it is not necessary for the Court to specify a specific discount or percentage discount in respect of cooperation.

208    The same can be seen in NW Frozen Foods 71 FCR at 291 (per Burchett and Kiefel JJ) where their Honours said:

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.

The same can be said in this field of regulation. See also the Agreed Penalties Case (HC) 258 CLR at 504 [46].

209    The reasons of the primary judge link the utilitarian value of the (here early) admissions and the connected public policy involved on the one hand, and contrition on the other. The two concepts, of course, may be related on the facts of any particular case. But they do not involve the same legal concept or consideration. There were early admissions and utilitarian value from them, but there was no contrition. The latter does not diminish the legitimacy of consideration to the public policy involved in recognising admissions, especially early admissions.

210    Ground 2 of the notice of appeal is made out.

The reimposition of penalties

211    Given that ground 1 has been made out (in part) in respect of the second appellant and ground 2 has been made out in respect of both appellants, the orders made by the primary judge imposing the penalties should be set aside. All parties urged this Court to re-exercise the discretion in the imposition of penalties. Submissions by the parties were sparse.

212    There was no appeal from individual findings made by the primary judge. Nevertheless, the facts are in tolerably short compass. They require no overly elaborate reasoning. The essence of what occurred is set out [11] and [12]. Mr Pattinson admitted that he knew of or was recklessly indifferent to the misleading nature of his representation. That admission has the equivocation that is obvious, which was raised with counsel on the appeal. The imposition of penalties should be approached on the basis that Mr Pattinson was at least reckless as to the false or misleading character of his statement to the sub-contractor’s two employees that they had to join the union to work on the site.

213    There was a single event or episode or “instance” as the primary judge referred to it, but there were two contraventions. In the circumstances, in order not to penalise twice for the same contravening care must be taken in imposing a penalty for each contravention.

214    The primary judge considered (at [113] of the reasons) that it would not be appropriate to impose penalties totalling in excess of the maximum for a single contravention. His Honour, correctly, with respect, did not conclude that there was only one contravention; rather there were two, but in the circumstances and in the events that had happened it would be to punish twice for the same conduct to impose penalties for the two contraventions of more than the maximum for one.

215    This is not a review of the approach of the primary judge. The orders his Honour made imposing penalties are to be set aside. It is for this Court to reimpose penalties. There is no call for any detailed discussion of the proper approach to the notion of course of conduct or totality here, in particular in the light of the lack of submissions on the matter. Reference need only be made to: Cahill 194 IR 473–472 [39]–[42]; ACCC v Cement Australia 258 FCR at 447448 [421][424]; Yazaki 262 FCR at 294–296 [226]–[237]; Transport Workers Union of Australia v Registered Organisations Commissioner [2018] FCAFC 203; 267 FCR 40 at 56–59 [84]–[91]; Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262 at 266 [10]–[12] and 287–289 [123]–[132]; and the Queensland Infrastructure Case 254 FCR at 90–100 [108]–[149].

216    The contravening involved one body of representations in a short period of time to two people in company. It cannot be seen to be separate repeated incidents. Nevertheless, two people were misled and there were two contraventions. The order of magnitude of the overall contravening is appropriately contemplated by looking at the seriousness of one body or episode of contravening conduct, although some recognition should be given to the fact that two people were involved and two people were told that they could not work at this site unless they were financial members of the union. This was false. It should not be thought, however, that one clear statement to a gathering of any number of people in which such a reckless or deliberate false statement was made would be viewed as reasonably only attracting penalties by reference to a single episode of conduct. The multiple contraventions in such circumstances may make relevant the kind of consideration to which Beach J referred in Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd [2016] FCA 698 at [25] referred to with approval in Yazaki 262 FCR at 295 [231].

217    As to Mr Pattinson, looking at the matter as a whole and not employing two stages, his contravening was at least reckless. His conduct amounting to the contraventions was reasonably accurately summarised by senior counsel in the first two sentences of the submission set out at [17] above. Care must attend the use of phrases such as “range” or “spectrum”, but Mr Pattinson’s behaviour and its consequences can be seen as less than the most serious of contraventions, at least in terms of surrounding or consequential circumstances. It must, however, be recognised that the relevant provision (s 349(1)(a)) does not contain within it a range or penumbra of conduct such as one finds in s 500 (“hinder or obstruct … or act in an improper manner”). Here, the prohibition is knowingly or recklessly making a false or misleading misrepresentation about a relevant matter. Mr Pattinson did so. The constituent elements of the contravention were fully engaged. To a degree, beyond the submission put by senior counsel as to the lack of serious surrounding or consequential circumstances, not much can be said other than that there was cooperation, but no contrition.

218    Mr Pattinson was not a senior union official, but he had been a site delegate since 1997. The primary judge found (at [85] of the reasons) that Mr Pattinson “did what he did out of fealty to his union’s policy of enforcing a ‘no ticket, no start’ regime at the construction sites over which it wields influence”. There was no challenge to this finding. Mr Pattinson had, however, no history of contravening. There was no evidence put before the Court of Mr Pattinson’s assets and his ability to pay. No personal payment order was sought. We make no assumption about who will pay any penalty. The penalty is imposed on Mr Pattinson. There was no evidence of any loss from the conduct: see [101] of the primary judge’s reasons. The subject matter of the false or misleading statement was the important matter of freedom of association: the freedom to join or not to join an industrial organisation which freedom is protected in Div 4 of Pt 3-1 of the Fair Work Act. That freedom is a general one protecting both employees and employers in the conduct of their affairs and working lives. That the two employees of the subcontractor do not appear, at least objectively, to have exhibited a response that led to any confrontation as may occur in other circumstances does not mean that the essential character of the contravention (the knowing or reckless making of a false representation) has not been fully and completely made.

219    In all the circumstances including the objective nature of the conduct, recognising the nature of the conduct as substantially one short episode to two people in company, albeit two contraventions to be dealt with, recognising the need to avoid double imposition of penalty for essentially the same contravening, having close regard to the maximum penalty of $12,600 for a contravention, recognising the importance of the subject matter of the representation, the lack of any proof of loss caused to anyone, a lack of prior contravening by Mr Pattinson and giving due allowance for the important public policy of cooperation, albeit without any contrition, we consider that an appropriate penalty for the object to deter contraventions of this kind would be penalties for the two contraventions of $4,000 and $500 in a total of $4,500. We would consider these penalties as appropriate to deter Mr Pattinson and others in his position from repetition of such contravening conduct.

220    In coming to the above figure we have had broad regard to the level of penalties reflected in what might be called the “no ticket, no start” cases referred to at [35] of the primary judge’s reasons. Care needs to be exhibited in attempting to be in any way precise in relation to, or taking too much from, other contravening conduct in other cases. Some of these cases revealed conduct significantly more serious in character, at least in what might be called surrounding or consequential circumstances, than Mr Pattinson’s conduct here. Nevertheless, they give some assistance in consideration of what is appropriate.

221    Turning to the union, and looking at the matter as a whole and not employing two stages, the acts and state of mind of Mr Pattinson are to be attributed to the union by s 363. The surrounding and consequential circumstances remain unchanged: there was no proof of loss caused to anyone, there was a single representation (recklessly at least made) to two people in company, without any evidence of this event being part of any particular pattern of behaviour by Mr Pattinson himself. That, however, does not set some range beyond which the penalty upon the union cannot be imposed. The events and conduct in question can be seen to be more serious or grave in the hands of or attributed to the union. Mr Pattinson, and so the union, through s 363, knew or was reckless as to the falsity of the representation. The subject matter of the representation was important and has been a feature of the unions conduct in the past, as revealed in the cases to which the primary judge refers at [35] of his reasons. There was no complaint made or appeal about the primary judges finding at [88] that the union had a “no ticket, no start” policy at Australian construction sites. The cases referred to in [35] of the reasons of the primary judge support his Honour’s conclusion of the existence in the past, including the recent past, of such a policy.

222    In the light of the history of contravening conduct in attempted enforcement of the union’s policy, the absence of any evidence of contrition or that the policy has been changed or ended, the character and gravity of the contravening conduct in the hands of the union is more serious than it is for Mr Pattinson, and the call for deterrence is heightened by that seriousness. It can be taken that the contravening in question (though on the evidence, Mr Pattinson’s first contravention) is an example of a continuation of a policy framed and implemented in direct opposition to the statutory policy of freedom of association under Div 4 of Pt 3-1 of the Fair Work Act and reflects a willingness in that respect to contravene the statute. Taking such matters into account, but also having regard to the nature of the objective circumstances of what actually occurred including the single episodic nature in the exchange with two people in company, but recognising that there were two contraventions, the lack of any proof of financial impact on anyone, the public policy in the cooperation shown, and the maximum penalty for one contravention of $63,000, we consider that an appropriate penal response in aid of the object of deterrence would be to impose upon the union penalties for the two contraventions of $38,000 and $2,000 totalling $40,000.

223    None of the penalties need to be reduced in the light of the totality principle. They are in our view appropriate.

224    There was no appeal by the Commissioner against the refusal of the primary judge to make declarations. Accordingly it is not necessary to address this part of his Honour’s reasons.

225    In these circumstances, the orders that we would make are:

1.    Appeal allowed and Notice of Contention dismissed.

2.    Orders 1 and 2 of the Court made on 14 October 2019 be set aside and in lieu thereof it be ordered that:

(a)    The first respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act 2009 for the two contraventions of s 349(1)(a) of the Fair Work Act on 13 September 2018 in the sums of $4,000 and $500.

(b)    The second respondent pay to the Commonwealth pecuniary penalties under s 546 of the Fair Work Act for the two contraventions of s 349(1)(a) of the Fair Work Act on 13 September 2018 in the sums of $38,000 and $2,000.

I certify that the preceding two hundred and twenty-five (225) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop and Justices White and Wigney.

Associate:

Dated:    16 October 2020

REASONS FOR JUDGMENT

BESANKO AND BROMWICH JJ:

226    We agree with the orders proposed by the Chief Justice, White and Wigney JJ and with the reasons for making those orders. We wish to add to those reasons as follows.

227    The possible approaches that could be taken to the role of prior contraventions in the task of imposing a civil penalty for a further contravention may be summarised as follows:

(1)    Prior history is not relevant to the characterisation of the seriousness or gravity of the instant contravening conduct and only plays a role in deciding where in the range of already appropriate penalties that conduct falls. This is the argument advanced by the appellants, and rejected by the Chief Justice, White and Wigney JJ, and by us.

(2)    Prior history can inform the seriousness of the instant contravening conduct to the extent of justifying the imposition of the maximum penalty for conduct that is not of itself of that character, because of the primacy of the role of deterrence. This is the approach urged upon us by the respondent’s notice of contention, being in substance what the primary judge in fact did despite his Honour’s comments perhaps suggesting the contrary. This unavoidably entails putting the principle of proportionality identified in Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 (Veen No 2) to one side. It is an approach that is contrary to any persuasive authority or the proper understanding of the relevant principles of civil penalty imposition derived from criminal sentencing, and is also rejected by the Chief Justice, White and Wigney JJ, and by us.

(3)    Prior history may be relevant to an assessment of the seriousness or gravity of the instant contravening conduct, but neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to the contravening conduct itself, having regard to the maximum penalty provided. This is directly supported by the principles stated in Veen No 2, especially at 477–8, as analysed by the Chief Justice, White and Wigney JJ. This is the correct approach.

228    There was no material difference in the expression of the principles concerning the role of prior contraventions in fixing a civil penalty by the majority as compared to Bromwich J in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Broadway on Ann) [2018] FCAFC 126; 265 FCR 208 and in our joint judgment in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39, which accord with (3) above. The difference was in the application of those principles. The application of those principles by the majority in Broadway on Ann, and by the primary judge in this case, was plainly wrong for the reasons identified by the Chief Justice, White and Wigney JJ. The approach taken by the primary judge was also contrary to the weight of appellate and single judge authority in this Court. It was contrary to the manner in which the principles in those decisions are to be applied having regard to the principle of proportionality derived by close analogy with the approach to criminal sentencing taken in Veen No 2. His Honour was not at liberty to disregard that lineage of decisions, nor to misapply them. We agree with what the Chief Justice, White and Wigney JJ say about that matter (at [187]–[188]).

229    The primary judge at [53] correctly identified the similarity between the judgment of Bromwich J in Broadway on Ann and our judgment in Parker in relation to the application of the principles based on Veen No 2. However, in the primary judgment his Honour erroneously attributed to us in Parker (at [53], [63] and [67]), and to Bromwich J in Broadway on Ann (at [46]) a view that prior contravening history is never relevant either to the assessment of the seriousness of a contravention, or to the determination of the range within which a penalty may properly fall. That interpretation would also be to reject, rather than to apply, Veen No 2.

230    Rather, as we endeavoured to explain in Parker at [341]–[342] and [348], and as Wheelahan J correctly recognised in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 at [96], in properly applying Veen No 2, prior contravening history may be able to be demonstrated to be relevant to an assessment of the seriousness or gravity of the instant contravening conduct. However, neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to contravening conduct itself, having regard to the maximum penalty. That is, prior contraventions may be illuminating in properly characterising what has happened, including the extent of the need for deterrence. This may in turn assist in determining both the appropriate range within which a penalty may be imposed, and in determining where within that range the penalty to be imposed should fall.

231    The proper role of relevant prior contraventions is therefore in assisting with better understanding what has taken place and how it should be assessed. This can include having regard to how that history informs the need for deterrence in the context of the maximum penalty, but falls short of changing what has happened in the instant case because the effect of taking that additional step would be to penalise again for what has happened in the past. This is the subtle but fundamental difference between characterising what has happened, which is conventional and permissible, and changing the character of what has happened, which is impermissible because it has the effect of at least in part imposing a penalty for what has been sanctioned previously. It is the injustice of the latter approach that is precluded by the principle of proportionality identified in Veen No 2. The contrary conclusion that imposing a disproportionate civil penalty in this sense is permissible is a matter only for the High Court to decide or for the legislature to enact.

232    The primary judge referred to the fact that the High Court refused special leave to appeal in Broadway on Ann [2018] HCASL 380, implying that the High Court endorsed the application of principle by the majority in that case. That implication does not withstand scrutiny, either in principle or in fact. The High Court has made it clear that the reasons for refusing an application for special leave, which is no more than an application to commence proceedings and which does not of itself constitute proceedings inter partes, create no precedent and are not binding authority on anyone: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; 256 CLR 104 at [52], [111]–[112], [119]. As Barwick CJ said in Wardrop v The Queen on 23 May 1979, immediately after refusing special leave to appeal on behalf of a bench of five justices of the High Court, including two future Chief Justices (Barwick CJ, Gibbs, Stephen, Mason and Aickin JJ):

I think I should take the opportunity to say again that when this court refuses special leave, its refusal does not indicate that the court endorses judgments below or their reasons. The court simply does not grant special leave and nothing more than that can be taken from its refusal.

233    In any event, Gordon and Edelman JJ’s reasons for refusing special leave to appeal in Broadway on Ann, a decision made on the papers, were that the application raised no question of principle of general importance sufficient to warrant a grant of special leave and that the proposed appeal would not enjoy sufficient prospects of success to warrant a grant of special leave. The first conclusion is unsurprising given that there was no divergence between any of the judges in Broadway on Ann in the conventional statement of principle. As to the second conclusion, although we do not have the benefit of the summaries of argument that were before the High Court, we readily infer that the applicant union, being the present second appellant, was advancing the same or a similar argument as it did in this appeal. That argument is unanimously rejected by this Court.

234    The final point that we wish to make also concerns the primary judge’s interpretation of Parker. His Honour at [63] agreed with Bromberg J in Australian Building and Construction Commissioner v Powell [2019] FCA 972 at [30] that Parker in some way required a two stage penalty imposition process, whereby prior contraventions were not relevant to ascertaining the appropriate range within which a penalty could be imposed, but only where that penalty should fall within such a range independently determined. We wish to make it clear that, in our view, Parker affords no support or sanction for such an approach, let alone requiring it to be adopted. To the contrary, we consider that such an approach is contrary to Parker and contrary to the correct application of principle as explained by the Chief Justice, White and Wigney JJ. A two stage approach to penalty imposition precludes prior contraventions being relevant to the assessment of the seriousness or gravity of the instant contravening conduct and is therefore incorrect and should not be followed.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Besanko and Bromwich.

Associate:

Dated:    16 October 2020