Federal Court of Australia

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Registered Organisations Commissioner [2020] FCAFC 232

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is allowed.

2.    Order 2 of the orders made on 27 February 2020 is set aside and replaced with an order that the appellant pay the Commonwealth penalties totalling $200,000.

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

REASONS FOR JUDGMENT

THE COURT:

1    On 27 February 2020, a single judge of this Court made orders declaring that the appellant (the Union) had contravened ss 230(1)(b) and (c) and 233(2) of the Fair Work (Registered Organisations) Act 2009 (Cth) (the Registered Organisations Act). His Honour also ordered that the Union pay a penalty of $445,000, and made ancillary orders.

2    The Union appeals against the order imposing the pecuniary penalty. It does not appeal against the declaratory and ancillary orders.

3    The grounds of appeal allege, in summary, that the primary judge:

(1)    erred in not ascribing a particular penalty to each contravention;

(2)    misunderstood the totality principle and erred in concluding that no reduction was warranted on the basis that the course of conduct principle had already been applied to some of the contraventions;

(3)    mistook the facts and erred in concluding that, in the circumstances of the case, specific deterrence was relevant;

(4)    erred in concluding that certain contraventions were not part of a single course of conduct;

(5)    imposed a total penalty that was manifestly excessive.

4    For the reasons that follow, the appeal should be allowed on the first ground. It will be necessary to set aside the penalty imposed by the primary judge and determine the penalties that should be imposed upon the Union.

Background

5    Section 305(1) of the Registered Organisations Act allows the respondent (the Commissioner) to make an application to the Federal Court of Australia for orders under s 306 in respect of conduct that contravenes a civil penalty provision. Section 306 provides, relevantly:

306    Pecuniary penalty orders that the Federal Court may make

(1)    In respect of conduct in contravention of a civil penalty provision, the Federal Court may make an order imposing on the person or organisation whose conduct contravened the civil penalty provision a pecuniary penalty of not more than:

(a)    in the case of a body corporate—5 times the pecuniary penalty specified for the civil penalty provision; or

(b)    in any other case—the pecuniary penalty specified for the civil penalty provision.

…

(3)    A person is not liable to more than one pecuniary penalty under this Part in relation to the same conduct.

6    In the application before the primary judge, the Commissioner alleged that the Union had engaged in two contraventions of s 230(1)(b), two contraventions of s 230(1)(c) and 82 contraventions of s 233(2) of the Registered Organisations Act. Those sections provide:

230    Records to be kept and lodged by organisations

(1)    An organisation must keep the following records:

…

(b)    a list of the offices in the organisation and each branch of the organisation;

(c)    a list of the names, postal addresses and occupations of the persons holding the offices;

…

Civil penalty: 60 penalty units

233    Obligation to lodge information with the Commissioner

…

(2)    An organisation must, within the prescribed period, lodge with the Commissioner notification of any change made to the records required to be kept under paragraphs 230(1)(b), (c) and (d), certified by declaration signed by the secretary or other prescribed officer of the organisation to be a correct statement of the changes made.

Civil penalty:    60 penalty units.

7    The contraventions of ss 230(1)(b) and (c) related to the Union’s failure to include a particular office and the required information regarding the persons holding that office in its annual returns of offices and officeholders for 2015 and 2016.

8    The contraventions of s 233(2) concerned the Union’s failure to notify the Fair Work Commission (the FWC) of various changes made to records required to be kept under ss 230(1)(b) and (c) within the prescribed period of 35 days.

9    The Union initially admitted all the allegations, but later sought and was granted leave to withdraw its admissions of four contraventions. The primary judge found those four contraventions to be proved and ultimately made declaratory orders and imposed penalties on the Union in respect of all the contraventions alleged by the Commissioner.

The reasons of the primary judge

10    The reasons of the primary judge are detailed and necessarily lengthy, given the number of contraventions involved. The nature of the grounds of appeal requires close scrutiny of his Honour’s reasoning and findings. It is therefore necessary to describe the reasons at some length.

Introductory comments

11    The reasons begin with introductory comments about the size and structure of the Union. For the 2016/17 financial year the Union’s income exceeded $20.7 million and had total net equity exceeding $170 million. The Union represents approximately 2 million members nationally.

12    The primary judge observed at [2] that the Union has three divisions: the Electrical, Energy and Services Division; the Plumbing Division; and the Communications Division. The Divisions consist of a total of 17 Divisional Branches. The Union has in excess of 550 offices.

13    His Honour noted at [6] that the National Secretary, Allen Hicks, described the Divisions as essentially three separate Unions operating autonomously, and the Branches as also operating autonomously. His Honour observed that, “It is this dysfunctional structure of the Union which largely occasioned many of the contraventions”.

The maximum penalties and the principles to be applied

14    The primary judge observed at [17]–[20] that contraventions of ss 230(1) and 233(2) attracted a maximum penalty of five times 60 penalty units for a body corporate such as the Union. Pursuant to s 306(1)(a), the maximum penalty was $51,000 for the contraventions that occurred prior to 31 July 2015, and $54,000 for the contraventions that occurred after that date.

15    The primary judge at [22]–[34] described in detail the principles to be applied in sentencing a respondent for civil penalty contraventions. That description includes the relevance of the maximum penalty, the factual considerations to be taken into account, the course of conduct principle, the totality principle and the objectives of imposing a penalty. In the appeal, the Union has taken no issue with his Honour’s description of the relevant principles.

Summary of the contraventions

16    The primary judge summarised at [36] the Union’s contraventions of s 230(1) of the Registered Organisations Act as involving a failure to keep records concerning the following offices:

•    in the “2015 List of Offices and Office Holders” lodged with the Fair Work Commission, the office of “Divisional Trustee in the Plumbing Division”: s 230(1)(b);

•    in the “2015 List of Offices and Office Holders” lodged with the Fair Work Commission, the name, postal address and occupation of persons holding the office of “Divisional Trustee in the Plumbing Division”: s 230(1)(c);

•    in the “2016 List of Offices and Office Holders” lodged with the Fair Work Commission, the office of “Divisional Trustee in the Plumbing Division”: s 230(1)(b); and

•    in the “2016 List of Offices and Office Holders” lodged with the Fair Work Commission, the office of “Divisional Trustee in the Plumbing Division”: s 230(1)(c).

17    The primary judge then summarised the 82 contraventions of s 233(2) in tabular form. A slightly shortened and amended version of that table is set out below:

18    His Honour at [41] summarised the lengths of the delays in notifying the Fair Work Commission as follows:

•    In nine instances, there was no notification of changes made at all prior to the commencement of the present proceeding;

•    In five instances, notification was between 100 and 255 days outside the prescribed period;

•    In 23 instances, notification was between 45 days and 99 days outside the prescribed period;

•    In 31 instances, notification was between 30 and 44 days outside the prescribed period; and

•    In 14 instances, notification was between 14 and 30 days outside the prescribed period.

19    His Honour noted at [42] that the contraventions were wide-ranging and persistent in that they occurred over an extended period of time from 2015 to 2017 and across six States and one Territory. Further, the contraventions occurred within all six branches of the Union’s Electrical, Energy and Services Division, within a number of branches of its Communications Division and within two of the three branches of the Plumbing Division. His Honour found that the failure to notify extended to the most senior positions within the Branches, Divisions and the Union as a national body.

20    The primary judge noted at [62] that throughout 2015 and 2016, the responsibility to lodge information required under the Registered Organisations Act was poorly understood by the Union, its Divisions and Branches. In July 2016, a new rule 35 was introduced into the Union’s National Rules which, inter alia, allocated responsibility for compliance to the National Secretary, with a number of substantive internal changes being implemented in early 2017. His Honour considered at [66] that the previous position was productive of an unacceptable level of non-compliance with reporting requirements. His Honour said at [67] that the Union was to be given credit for implementing the changes, and that the total penalty would otherwise have been much greater.

21    The new rule 35 allowed the National Council to authorise the National Secretary to take all steps necessary to ensure compliance in connection with the Union’s reporting obligations, including directing officers and employees to provide relevant information or documents, accessing any premises and reviewing any databases, and requiring officers and employees to provide assistance. Further, the rule provided for the appointment of a Governance Officer.

22    A Governance and Compliance Officer, Annette Moran, commenced in January 2017, with a salary of about $150,000. In her opinion, there had been great improvement in compliance and reporting obligations as there is now, for example, a monthly reporting process, auditing of all office holders, monthly spot-checks for officeholders and a procedures policy and reminder emails. Mr Hicks gave evidence that since early 2017, there had only been a failure to “properly notify” on three occasions, and since May 2017, only a single instance of failing to report on time.

The quantification of penalties

23    The primary judge then proceeded to assess the appropriate penalties. His Honour commenced by providing a summary of his conclusions at [76], as follows:

•    the maximum penalty which could be imposed in respect to each of the contraventions – and disregarding any consideration as to whether separate contraventions gave rise to a course or courses of conduct – is a sum of $4,593,000;

•    the Commissioner and the Union were correct in contending that the maximum penalty should not be imposed and not be imposed in disregard of such conclusions as may be reached as to which contraventions constituted a “course of conduct”;

•    although individual penalties should be assessed in respect to each contravention which has been made out, it is nevertheless been further concluded that the facts are such that there are:

•    13 separate “courses of conduct” in respect to the contraventions of s 233(2) and eighteen remaining contraventions of s 233(2); and

•    two courses of conduct in respect to the contraventions of s 230(1) – one course of conduct arising in respect to the 2015 contraventions and another in respect to the 2016 contraventions.

24    His Honour’s finding of 13 courses of conduct in relation to the s 233(2) contraventions and two courses of conduct in relation to the s 230(1) contraventions reflected acceptance of the submissions of the Commissioner. His Honour accepted at [77] that the total maximum penalty, in these circumstances, was $1,770,000, and noted that the Commissioner contended that a penalty at the lower end of the mid-range was warranted.

25    The primary judge concluded at [79] that an aggregate penalty of $445,000 should be imposed, being about 25% of the maximum. His Honour then went on to explain how that aggregate penalty had been arrived at by reference to the list of relevant factors set out by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14].

Penalties in other cases

26    His Honour noted at [81]–[85] that the quantum of the penalty in any given case must depend upon the particular facts and circumstances of the case, but considered that Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) (2018) 267 FCR 40 (TWU Case) provided some guidance.

Courses of conduct

27    The Commissioner submitted that the following contraventions of s 233(2) should properly be characterised as 13 separate courses of conduct: contraventions 1 to 4; 5 to 10; 11 to 15; 16 to 29; 33 to 36; 38 to 40; 41 to 42; 49 to 51; 52 to 63; 66 to 69; 74 to 76; 79 to 80; and 81 to 82.

28    The Commissioner contended that the remaining 18 contraventions of s 233(2) were properly characterised as separate contraventions, namely contraventions 30, 31, 32, 37, 43, 44, 45, 46, 47, 48, 64, 65, 70, 71, 72, 73, 77 and 78, as they arose from separate acts.

29    However, the Union contended that contraventions 30 to 37, 44 to 46 and 64 to 65 should also each be regarded as a separate course of conduct.

30    The primary judge accepted the Commissioner’s submission that contraventions 33 to 36 gave rise to a single course of conduct, while contraventions 30, 31, 32 and 37 were separate contraventions. His Honour concluded that, although contraventions 33 to 36 each had the same date upon which notification was required to be given, contraventions 30, 31, 32 and 37 each had different notification dates and therefore different non-compliance periods and, further, it was not known whether the reasons for failure to comply were different.

31    His Honour also found that contraventions 44, 45 and 46 constituted separate contraventions, not a single course of conduct. Those contraventions arose out of the resignation of three persons from the same Branch. As those resignations occurred at three discrete points in time, his Honour concluded that they did not arise out of substantially the same act.

32    Similarly, contraventions 64 and 65 arose out of two changes to office holders in the same Branch, with both contraventions being notified on the same day. However the changes occurred on a different date, and it could not be concluded that the contraventions arose out of substantially the same act.

33    His Honour concluded at [92] that:

•    contraventions 33 to 36 constitute a single course of conduct;

•    contraventions 30, 31, 32 and 37 are each separate contraventions and not a single course of conduct;

•    contraventions 44, 45 and 46 do not constitute a single course of conduct; and

•    contraventions 64 and 65 do not constitute a single course of conduct.

34    Accordingly, his Honour determined at [93] that in respect of the 82 contraventions of s 233(2), there were 13 separate courses of conduct and 18 separate contraventions.

35    In respect of the four contraventions of s 230(1), his Honour accepted at [94] that two contraventions arose from the same act in 2015 and two contraventions arose from the same act in 2016 and that the Union was liable for one penalty for the 2015 conduct and one penalty for the 2016 conduct.

The circumstances in which the contraventions occurred

36    The primary judge concluded at [96] that the circumstances in which the contraventions occurred included:

•    the fact that the Union is a national union having many Divisions and Branches;

•    the absence of any centralised system prior to 2016/2017 to ensure notification requirements were complied with – Mr Hicks describing the prior system as “no system” or as being “ad hoc”;

•    the fact that the Union was, particularly (but not exclusively) in respect to reporting requirements, a dysfunctional body operating at times as three separate “Unions”.

37    His Honour considered at [97] that the very fact of the Union having a complex structure should have alerted it to the necessity to take greater steps than it had done in the past to ensure compliance with record-keeping and reporting obligations under the Registered Organisations Act.

38    The primary judge referred at [98] to problems arising from the autonomy exercised by Divisions and Branches within the Union and the lack of power vested in the National Council to effect changes. In particular, his Honour referred to Mr Hicks’ evidence concerning the difficulties posed in attempting to make changes to compliance systems as a result of that autonomy. His Honour concluded at [100] that the account given by Mr Hicks warranted a conclusion that the Union had been dysfunctional.

39    The primary judge noted at [101] that a matter not satisfactorily answered by the Union was that the Commissioner from time to time issued “reminders” to the Union as to its need to comply with its reporting obligations. The reminders sent during 2014 through to 2018 fell broadly into one or other of four categories, namely:

•    letters which were in “standard format”;

•    letters which served as “reminders” as to the need to comply in respect to specific events;

•    letters which noted that the notification of changes had been lodged outside the 35 day period and requested that the Union ensure that all future notifications were lodged within 35 days; and

•    letters which were more specific in their terms and which stated, for example, that conscious decisions to contravene provisions of the Registered Organisations Act would be met with an appropriate regulatory response.

40    The primary judge said that what was important was the fact that the need to comply was being brought to the attention of the Union. The Union could not be said to be unaware of a continuing problem of default. The very number of contraventions occurring over such an extended period undermined any suggestion that the continuing contraventions were inadvertent.

41    The primary judge then turned to the facts and circumstances of the contraventions. As much of the argument in the appeal centred upon whether or not his Honour imposed a separate penalty in respect of each contravention, it is worthwhile setting out his Honour’s findings on this issue in full:

104     One course which was shunned by Senior Counsel for the Union was to endorse an approach which simply applied a “broad brush” to all contraventions and to reach a conclusion that a percentage of the maximum penalty could be imposed. A course so crudely pursued, and without regard to each of the contraventions, would cease to be – on the Union’s approach – a process of “instinctive synthesis” (cf. Australian Ophthalmic Supplies Pty Ltd).

105     So much may, for present purposes, be accepted. But such analysis of the contraventions as was pursued by the Commissioner, with respect, does not deny sufficient consideration being given to the facts and circumstances of each of the contraventions involved. Such analysis as has been undertaken by the Commissioner exposed (for example) the obvious fact that:

•    the extent of the delay in notification varied – on the analysis undertaken by the Commissioner, the extent of the delay varying from (for example) five instances where the notification was 100 to 254 days outside the prescribed period to 14 instances where the notification was between 14 to 30 days outside the prescribed period; and

•    the actual conduct which occasioned the contraventions varied, as did the people involved. And one or other of those persons had a different reason for non-compliance. A recurring theme underlying the Union’s case was either a mistaken belief that the requirement of notification was satisfied by reason of the Australian Electoral Commission notifying the Fair Work Commission or simply oversight. But other reasons for the contravention were more particular to the person responsible for ensuring compliance. Another theme that underlay one or other of the contraventions was that that person responsible for ensuring compliance was new to the office or had not been provided with the requisite training. Other reasons were confined to the individual concerned, such as the personal difficulties confronting the office holder in respect to contraventions 64-65 and a lack of understanding of Branch Officers of the scope of the statutory obligations imposed. Some explanations are more persuasive than others.

The reference to these two features of the Commissioner’s analysis is not exhaustive.

106     The Commissioner, in supplementary submissions filed after the conclusion of the hearing, further refined his approach to the quantification of penalties by seeking to identify the range in which penalties should be imposed. In these supplementary submissions it was thus contended that “the appropriate penalty would be at the lower end of the mid-range (i.e. 30%)”.

107    The analysis of the contraventions which has been undertaken by the Commissioner is sufficient, it is respectfully concluded, to warrant a conclusion that – subject to recourse to the considerations outlined by Tracey J in Kelly v Fitzpatrick – a penalty of about 30% of the maximum would be in the range countenanced by the Legislature.

108     It is not considered necessary in a case where there are many contraventions extending over a period of years and involving many different Union officers to ascribe a particular penalty to each contravention or such contraventions as constituted a course of conduct.

109     A consideration of the facts and circumstances of each contravention does not dictate such a detailed approach. It is not considered necessary, for example, to separately ascribe a higher penalty by reference to (for example) the extent of the delay in notification in each individual contravention or any lack of contrition or remorse or by reference to “culpability” to each contravention. An overall assessment of the varying periods of delay and the variety of the reasons given for the failures to notify remains a consideration of the facts and circumstances of each contravention. Such an overall assessment is sufficient for the process of assessment or quantification to remain a process which is one of “instinctive synthesis”.

110     The approach of the Union differed – perhaps more in detail than in substance. On the approach of the Union it was submitted that an assessment as to the penalties to be imposed should be approached on the basis that the contraventions fell into five “Levels” of relative seriousness – with “Level 5” contraventions being the most serious.

111     The very grouping of contraventions, albeit by reference to (inter alia) the extent of delay and the reasons for the delay, nevertheless recognised that individual penalties need not be ascribed to each individual contravention but could be approached on a more broadly expressed basis. The Union’s approach was thus, perhaps, a more refined and disciplined approach than that pursued in the Commissioner’s Outline of Opening Submissions and his subsequent written submissions.

112    But nothing turns on the difference on the facts of the present case.

42    The primary judge at [113] reproduced a table prepared by the Union setting out the penalties contended for by the Union. The table divided the Union’s contraventions into five categories of seriousness, with Level 1 being the least serious and Level 5 being the most serious. The Union categorised the contraventions and the penalties (expressed as percentages of the maximum) as follows:

    Level 1: 19 contraventions, divided into six groups — penalty of 2% for each group.

    Level 2: 27 contraventions, divided into four groups — penalty of 4% for each group.

    Level 3: 8 contraventions, divided into six groups — penalty of 6% for each group.

    Level 4: 26 contraventions, divided into eight groups — penalty of 8% for each group.

    Level 5: 4 contraventions — penalty of 10% for each contravention.

43    The primary judge noted at [114] that the force of the approach advocated for on behalf of the Union was that it, “quite properly focusses attention upon each individual contravention and the circumstances in which it arose”. However, his Honour at [115] expressed doubts about that approach because, first, it invited reservations as to the manner in which each contravention was sought to be categorised and, second, it sought to place a monetary level of penalty which his Honour considered to be too low in the circumstances. As to the first matter, his Honour said at [116] that the five levels of contraventions suggested a greater level of precision than was available on the facts, saying that it was not self-evident, for example, that a contravention involving a delay in notification in excess of 1,000 days should fall within Level 3, as was contended for by the Union in relation to three contraventions (his Honour mistakenly referred to Level 2).

44    His Honour considered, however, that the Union’s analysis provided a useful touchstone to consider the circumstances of each contravention. His Honour at [115] expressly stated that, “The facts and circumstances of each contravention and each course of conduct have been considered”.

45    The primary judge at [118] considered a submission made by the Union that:

Not only should the Court seek to deter non-compliance with s 233(2), but it should also impose a penalty that does not deter self-reporting. Otherwise other registered organisations will be better off not self-reporting late lodgements, if (a) the ROC is unlikely to discover them anyway and (b) self-reporting will simply lead to a penalty that makes it more economic to stay silent.

46    The primary judge then concluded at [118]:

… Deliberate non-compliance on the part of an organisation with the requirements of the Registered Organisations Act, whatever the reason, it may be further accepted will only attract a greater penalty. And self-reporting is a course which may well lead to a lesser penalty. Indeed, on the facts of the present case, it is the recognition of the need to ensure compliance – and the steps which have been taken by the Union and instigated by Mr Hicks – which is the very reason why the penalty in the present case has in fact been reduced. Notwithstanding the submission of the Union, and indeed contrary to that submission, general deterrence remains a very real consideration to be taken into account when assessing the penalty in the present case. Those organisations who may be found to have contravened provisions of the Registered Organisations Act and which do not seek to address the reasons for non-compliance in the same manner as that pursued by the Union in the present case may warrant the imposition of greater penalties.

47    The primary judge at [119] considered that the Union’s range of 2% to 10% for the contraventions was inadequate and inappropriate.

48    His Honour observed at [121] that the Commissioner’s overall approach was to categorise the contraventions into only one of two categories, with the penalties contended for reflecting only a small differential between the least and most serious contraventions. His Honour considered that some of the more serious contraventions could well have attracted a greater penalty of about 45% of the maximum, but that the Commissioner’s overall approach should be accepted.

49    His Honour considered at [122] that, in the end, nothing much turned on the difference in approach pursued by the Commissioner, on one hand, and the Union, on the other hand.

Specific and general deterrence

50    The primary judge concluded at [123] that on the facts of the case, “specific deterrence assumes comparatively less significance than general deterrence, but remains a consideration of relevance to the assessment of penalties”. His Honour reached this conclusion on the basis that the 2016/2017 changes had been implemented and further refined, that the changes seemed to have the support of the Union as a whole, that the changes had found favour with the Commissioner and that since the introduction of the changes there had only been a limited number of failures to notify.

51    His Honour noted at [125] the evidence of Christopher Enright, the Executive Director of the Registered Organisations Commission, to the effect that the Union’s compliance was now at a “very, very high level”. However, given the past history of transgressions, his Honour considered that it was prudent to take into account the need for specific deterrence against the Union. His Honour said at [126] that the steps taken by the Union in 2016/2017 to secure future compliance had reduced what would otherwise have been a greater overall penalty.

52    The primary judge at [128] considered that there was some limited evidence that the Union needed a “reminder” of the consequences of the admitted contraventions. Even after the introduction of the new regime in 2016/2017, there was a contravention (contravention 73) involving a failure to notify the FWC of the resignation of an office holder. His Honour said that the fact that a senior officer, albeit in a small unit of the organisation, did not “fully grasp” his responsibilities after the 2016/2017 changes was of concern. His Honour considered at [129] that either as a matter of general principle or by reference to the specific facts of the case, specific deterrence remained a matter to be taken into account.

53    However, his Honour at [130] considered that the need for a penalty which acts as a general deterrent to other registered organisations was of greater relevance. This was, in part, because contraventions largely come to light as a result of self-reporting. The primary judge noted the evidence of Mr Enright that the regulator, “may never become aware about an absence of notification if changes are made to the records after the annual report is lodged”.

Further considerations

54    The primary judge at [133] then referred to a number of further considerations, as follows:

•    the size of the Union – the Union as a whole having a total income (at the end of the 2017 financial year) exceeding $20.7 million and a total net equity exceeding $170 million, albeit with some Divisions and Branches having greater financial backing than others;

•    the nature and extent of the conduct which led to the contraventions – the default in lodging notification of changes in office holders, in summary form, extended over a number of years and spread geographically throughout the Commonwealth with varying in default from 14 days through to no notification at all prior to the commencement of the present proceeding and involved senior office holders of the Union not being aware of their responsibilities;

•    the fact that, for example, the Commissioner had provided information on its website as to the information required to be provided and reminders having been sent to the Union, its Divisions and Branches;

•    the fact that the Union did not admit the contraventions as early as it could and waited for more than a year before putting into place a system of compliance and the fact that not all contraventions were accompanied by an apology;

•    the fact that the Union nevertheless ultimately did admit most of the contraventions in issue and thereby exhibited a degree of co-operation with the Regulator – the withdrawal of the admissions previously made in the Defence as first filed in respect to contraventions 66 to 69 and the filing of the Amended Defence, it is considered, assumes little relevance. The withdrawal of the admission was presumably the consequence of the case being prepared for hearing and the issue between the parties as to whether an argued absence of power affecting the need to report “any change” being an issue that was not frivolous to pursue;

•    the fact that the Union had not previously engaged in like contraventions such that the Commissioner brought proceedings against the Union;

•    the fact that the contraventions have not given rise to an financial advantage to the Union; and

•    the fact that the National Council of the Union has not issued any statement of remorse or apology for the contraventions – although some (but not all) of the individual officers have expressed an apology for the conduct. Of particular relevance is the fact that the National Secretary of the Union, Mr Hicks, has not offered any apology on the part of the Union. Although it may be expected that Mr Hicks as National Secretary would assume that individual office holders would individually comply with the notification requirements imposed by the Registered Organisations Act, it may have been expected that as National Secretary he would “shoulder the responsibility” for the past contraventions and express (at least) some degree of regret for those contraventions. The position assumed by Mr Hicks in his affidavit, however, is to maintain that he acted “to the best of my ability, to ensure that the CEPU met all of its statutory obligations”. By way of contrast, however, Mr Moran in her affidavit stated that it “has been a matter of great distress and anxiety that a number of these contraventions arose from delays caused by me”.

55    The primary judge then said at [134]:

No further reduction in recognition of the “totality principle” the Commissioner contends, is warranted where, as the Court has, the Commissioner’s proposed approach to courses of conduct is adopted. That submission is accepted. A total penalty in the sum of $445,000 is also considered to be “just and appropriate”: ABCC v CFMEU [2017] FCAFC 113 at [117], (2017) 254 FCR 68 at 93 per Dowsett, Greenwood and Wigney JJ.

56    His Honour concluded at [136]:

It is concluded that an aggregate penalty in the sum of $445,000 should be imposed in respect to the four contraventions of s 230(1)(b) and (c) and the 82 contraventions of s 233(2) of the Registered Organisations Act.

57    The aggregate penalty of $445,000 reflected the view that his Honour had earlier expressed at [76]–[79] of his reasons that the maximum penalty, having regard to the 15 courses of conduct and 18 separate contraventions, was $1,770,000, and that the appropriate aggregate penalty was 25% of that amount.

58    Subsequently, on 27 February 2020, his Honour made orders declaring that the Union had contravened ss 230(1)(b) and (c) and 233(2) of the Registered Organisations Act, imposing an aggregate penalty of $445,000 and making orders for payment of the penalty to the Commonwealth within 60 days.

59    On 19 May 2020, Bromberg J ordered that the order for payment of the penalty be stayed up to the amount of $354,640 until 14 days after determination of the appeal or further order of the Court.

Consideration

Ground 1 — Whether the trial judge erred in not ascribing a particular penalty to each contravention

60    Ground 1 of the Notice of Appeal alleges that:

The trial judge erred in not ascribing a particular penalty to each contravention (whether those contraventions could properly be regarded as arising from a course of conduct or not), and as a result the trial judge applied a wrong principle in the exercise of his sentencing discretion.

61    The focus of the Union’s argument is upon the following paragraphs of the primary judge’s reasons:

[108]    It is not considered necessary in a case where there are many contraventions extending over a period of years and involving many different Union officers to ascribe a particular penalty to each contravention or such contraventions as constituted a course of conduct.

[109]     A consideration of the facts and circumstances of each contravention does not dictate such a detailed approach. It is not considered necessary, for example, to separately ascribe a higher penalty by reference to (for example) the extent of the delay in notification in each individual contravention or any lack of contrition or remorse or by reference to “culpability” to each contravention. An overall assessment of the varying periods of delay and the variety of the reasons given for the failures to notify remains a consideration of the facts and circumstances of each contravention. Such an overall assessment is sufficient for the process of assessment or quantification to remain a process which is one of “instinctive synthesis”.

62    The Union submits that his Honour’s approach was erroneous because the proper approach is to commence with an assessment of an appropriate penalty for each contravention. It is submitted that the Court is ordinarily required to impose a penalty for each contravention, and this was not an appropriate case to apply a single penalty for multiple contraventions. The Union submits that even in a case where a single penalty is ultimately imposed, the single penalty is to be determined on the basis of fixing individual penalties for each contravention, aggregating those individual penalties then applying the totality principle, a process which requires consideration to be given to the circumstances of each contravention.

63    The Commissioner submits that the Union’s submissions proceed upon a false premise that the primary judge imposed a single penalty for the multiple contraventions. The Commissioner submits that on a proper reading of the reasons, his Honour imposed penalties for the 86 contraventions (consisting of 15 courses of conduct and 18 separate contraventions), which were then totalled or aggregated to arrive at $445,000.

64    In reply, the Union submits that his Honour failed to identify how much would have been imposed by way of penalty for each contravention, except as a blanket percentage of 25% applied to all the contraventions irrespective of the particular circumstances of each contravention.

65    The Union’s submissions may be seen to contain alternative strands. The first is that the primary judge applied a single penalty of $445,000 for all 86 contraventions in circumstances where that was not permissible. The alternative is that his Honour erred in applying uniform penalties of 25% of the maximum available irrespective of the particular circumstances of each contravention.

66    There are, it must be accepted, some inconsistencies in the primary judge’s language and difficulties in understanding aspects of his Honour’s reasoning. It is necessary to carefully construe the reasons in order to understand how it was that his Honour arrived at, “an aggregate penalty in the sum of $445,000”.

67    Upon a reading of the reasons as a whole, his Honour’s process of reasoning should be understood as follows. First, his Honour accepted the Commissioner’s submission that the four contraventions of ss 230(1)(b) and (c) comprised two separate courses of conduct, and that the 82 contraventions of s 233(2) comprised 13 separate courses of conduct and 18 separate individual contraventions.

68    Second, the primary judge accepted that only one penalty should be imposed for each course of conduct. This reflected acceptance of the Commissioner’s submission, and the Union’s tacit agreement, that this approach was appropriate. Accordingly, his Honour considered that 33 penalties could be imposed, consisting of a single penalty for each of the 15 courses of conduct and the 18 individual contraventions.

69    Third, his Honour considered that the maximum aggregate penalty that should be imposed was the sum of the 33 maximum penalties.

70    Fourth, his Honour determined that the total maximum penalty available was $1,770,000. This figure consisted of a maximum of $51,000 for each of the four courses of conduct prior to 31 July 2015, and $54,000 for each of the 11 courses of conduct and the 18 individual contraventions occurring after that date.

71    Fifth, his Honour concluded that it was unnecessary to “ascribe a particular penalty” to each contravention or course of conduct, and that instead an “overall approach” should be applied. His Honour then concluded that an “aggregate penalty” of $445,000 should be imposed, being about 25% of the total maximum. The controversy is as to precisely what his Honour’s approach at this step entailed.

72    The first issue is whether, as the Union contends, his Honour imposed a single penalty of $445,000 for all the contraventions.

73    It can be accepted that the primary judge considered the particular facts and circumstances of each course of conduct and separate contravention. That is apparent from his Honour’s detailed schedules of contraventions, consideration of the separate courses of conduct and analysis of the Union’s submissions concerning the categories of seriousness of the contraventions. His Honour also expressly stated that the facts and circumstances of each contravention had been considered. To the extent that the Union asserts that his Honour failed to give consideration to the facts and circumstances of each contravention, that submission must be rejected.

74    However, the Union points to language used by the primary judge which suggests that only a single penalty was imposed for all the contraventions. For example, at [108], his Honour said that it was not considered necessary, “to ascribe a particular penalty to each contravention or such contraventions as constituted a course of conduct”. At [130], his Honour referred to the “need for a penalty to be imposed which acts as a general deterrent”. In addition, the relevant order made by the primary judge was that, “the Respondent is to pay a penalty of $445,000 for its contraventions”.

75    The Commissioner submits that his Honour should be understood as having imposed a series of individual penalties which, when aggregated, totalled $445,000. The reasons at [7] summarise the outcome as being that, “penalties should be imposed in the total sum of $445,000”. At [79], the reasons refer to, “an aggregate penalty of $445,000”. At [134], they refer to a “total penalty in the sum of $445,000”. At [136], the reasons state that, “an aggregate penalty in the sum of $445,000 should be imposed in respect to the four contraventions of s 230(1)(b) and (c) and the 82 contraventions of s 233(2)”.

76    We have observed that the primary judge concluded that an “overall approach” should be applied and that an “aggregate penalty” of $445,000 should be imposed, being about 25% of the maximum of $1,770,000. As we understand [108] and [109] of the reasons, the “overall approach” taken by his Honour involved declining to assess (“ascribe”) an individual penalty for each contravention and instead imposing a global (“aggregate”) penalty for all the contraventions. The explanation given for taking that course at [108] was that, “there are many contraventions extending over a period of years and involving many different Union officers”. His Honour considered at [109] that such an overall assessment was an approach that reflected an “instinctive synthesis”.

77    The Commissioner’s submission that the primary judge imposed separate penalties for each contravention (whether as part of a course of conduct, or for each individual contravention) and then aggregated the penalties to arrive at $445,000 must be rejected. His Honour’s reasons do not indicate any assessment of the appropriate penalty for each contravention. To the contrary, his Honour considered that as a matter of “instinctive synthesis” an “aggregate penalty” of $445,000 was appropriate for the contraventions viewed “overall”. His Honour arrived at that figure on the basis that an appropriate global penalty for the whole of the contraventions was about 25% of the total maximum penalty. The primary judge must be understood as having imposed a single penalty for the contraventions involved in the 15 courses of conduct and the 18 separate contraventions.

78    There are, with respect, two interrelated errors in his Honour’s approach.

79    First, the assessment of a single penalty for multiple contraventions is inconsistent with authority indicating that, absent relevant exceptions, each contravention must have its own penalty.

80    In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 (ABCC v CFMEU), the Full Court was concerned with s 49 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act), which provided that a court, “may make…an order imposing a pecuniary penalty” on a person “who has contravened a civil penalty provision”. The Full Court considered a submission that it was permissible to impose a single penalty in respect of multiple pecuniary penalty provisions arising out of a course of conduct.

81    The Full Court observed at [127] that s 49 of the BCII Act, in terms, empowers the Court to make an order imposing a pecuniary penalty on a person who has contravened a civil penalty provision, and does not provide that a Court may impose a single penalty on a person who has contravened a civil penalty provision on two or more occasions. Their Honours at [128]–[129] considered that the provision indicates that, “each contravention is to have its own penalty”. The Full Court held:

[148]    The important point to emphasise is that, contrary to the Commissioner’s submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions. That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions.

82    The Full Court went on to provide the following examples of the circumstances where a single penalty may be imposed for multiple contraventions:

[149]    In an appropriate case, however, the Court may impose a single penalty for multiple contraventions where that course is agreed or accepted as being appropriate by the parties. It may be appropriate for the Court to impose a single penalty in such circumstances, for example, where the pleadings and facts reveal that the contraventions arose from a course of conduct and the precise number of contraventions cannot be ascertained, or the number of contraventions is so large that the fixing of separate penalties is not feasible, or there are a large number of relatively minor related contraventions that are most sensibly considered compendiously. As revealed generally by the reasoning in Commonwealth v Director, FWBII, there is considerably greater scope for agreement on facts and orders in civil proceedings than there is in criminal sentence proceedings. As with agreed penalties generally, however, the Court is not compelled to accept such a proposal and should only do so if it is considered appropriate in all the circumstances. It is also at the very least doubtful that such an approach can be taken if it is opposed or the proceedings are defended.

It may be observed that even where the parties have agreed that a single penalty should be imposed for multiple contraventions, the Full Court considered that should only be done if appropriate in all the circumstances.

83    Section 306(1) of the Registered Organisations Act is not relevantly distinguishable from s 49 of the BCII Act. Section 306(3), which provides that a person is not liable to more than one pecuniary penalty under s 306(1) in relation to the same conduct, allows a single penalty to be imposed for multiple contraventions, but the parties did not submit, and the primary judge did not suggest, that that subsection was applicable to the present case. The other examples given in ABCC v CFMEU of where a single penalty may be imposed for multiple contraventions do not arise in this case. There was no agreement between the parties that only a single penalty should be imposed for all the contraventions (although there was agreement that only a single penalty should be imposed for each course of conduct). Further, in circumstances where his Honour ultimately determined that there were only 15 courses of conduct and 18 individual contraventions, it cannot be concluded that the fixing of separate penalties was not feasible, nor that there were such a great number of contraventions that they were most sensibly considered compendiously.

84    The primary judge stated at [109] that, “an overall assessment is sufficient for the process of assessment or quantification to remain a process which is one of “instinctive synthesis””. In ABCC v CFMEU, the Full Court observed:

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”…

85    At a general level, the opinion of the primary judge that a global assessment of the relevant factors across the whole of the multiple contraventions involves a process of “instinctive synthesis” can be accepted. However, that does not answer the point made in ABCC v CFMEU at [148] that, generally, a single penalty cannot be imposed for multiple contraventions of a civil penalty provision.

86    In our respectful opinion, his Honour erred by assessing and imposing a single penalty for all of the Union’s 86 contraventions in circumstances where that course was not permissible.

87    A second, interrelated error of approach was his Honour’s failure to commence with an assessment of the appropriate penalty for each contravention. In our opinion, the errors in the approach of the primary judge coalesce into a failure to determine the penalty that was appropriate for each contravention.

88    In Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, Jessup J (Lander J agreeing) held at [146]:

In a setting which did not involve an agreement on penalty, it would, therefore, be necessary to commence with an assessment of an appropriate penalty for each contravention, paying due regard to such mitigating factors as there were.

89    In ABCC v CFMEU, the Full Court observed at [138] that it was apparent from the reasoning in Ponzio, “that, absent any agreement in relation to penalty, the proper approach would have been to commence with an assessment of an appropriate penalty for each contravention”. Further, the Full Court held at [139]:

Thus, while the agreed penalty that was upheld on appeal in Ponzio was, in a sense, a single penalty for multiple contraventions, the appropriateness of that agreed penalty was approached on the basis of fixing individual penalties for each contravention, aggregating those individual penalties and then applying the totality principle to the aggregate figure.

90    In Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, Gray J held at [23]:

…What the magistrate was required to do in the present case was to determine an appropriate level of penalty for each contravention, as if it were a separate offence, and then to look at the aggregate of those penalties in the light of the overall conduct of the appellant, to form a view as to whether that aggregate was out of proportion to that overall conduct.

91    In Pattinson v Australian Building and Construction Commissioner (2020) 384 ALR 75; [2020] FCAFC 177, the Full Court considered s 546(1) of the Fair Work Act 2009 (Cth), which provides that certain courts may 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. The plurality observed at [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.

92    In Pattinson, the plurality stated at [104]:

…[O]ne 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.

93    The plurality also observed at [109]:

…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.

94    Section 306(1) of the Registered Organisations Act confers a discretion upon the Federal Court, “[i]n respect of conduct in contravention of a civil penalty provision”, to “make an order imposing on the person or organisation whose conduct contravened the civil penalty provision a pecuniary penalty”. While s 306(1) does not expressly use the word “appropriate”, the task of the Court must be to determine the penalty that is appropriate in respect of the particular conduct and circumstances constituting each particular contravention. As Besanko and Bromwich JJ observed in Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39 at [339], the inclusion of the word “appropriate” in s 546(1) of the Fair Work Act makes explicit what would otherwise be implicit. In our respectful opinion, the primary judge erred by failing to commence with an assessment of an appropriate penalty for each contravention, and instead making a global assessment of a penalty for all the contraventions.

95    The correct approach would have been for the primary judge to assess appropriate penalties for each contravention. Having done so, and after considering the totality principle, it would not then have offended s 306(1) for his Honour to have ultimately made an order for payment of a total, or aggregate, amount.

96    The Union has established the first ground of the Notice of Appeal. That will make it necessary to assess the appropriate penalties to be imposed upon the Union after considering the remaining grounds of appeal.

Ground 2 — Whether the primary judge misunderstood the totality principle

97    The second ground of appeal is that:

The trial judge misunderstood the totality principle and erred in concluding that a total penalty of $445,000 was just and appropriate, and that no reduction on account of the totality principle was warranted, on the basis that the course of conduct principle had already been applied to some of the contraventions.

98    The primary judge held at [134] that:

No further reduction in recognition of the “totality principle” the Commissioner contends, is warranted where, as the Court has, the Commissioner’s proposed approach to courses of conduct is adopted. That submission is accepted. A total penalty in the sum of $445,000 is also considered to be “just and appropriate”.

(Citation omitted.)

99    The Union submits that in the first sentence of [134], his Honour impermissibly conflated the “totality principle” and the “course of conduct principle”. The Union submits that the totality principle has separate work to do, especially as his Honour determined that there was more than one course of conduct.

100    The Commissioner submits that the reasons make plain that the primary judge was acutely aware that the totality principle has separate work to do from the course of conduct principle. The Commissioner also submits that on a fair reading of [134] as a whole, the primary judge correctly applied the totality principle. Further, the Commissioner submits that the primary judge was not obliged to apply the totality principle in a particular way, or indeed at all, provided that it was properly considered.

101    In ABCC v CFMEU, the Full Court observed at [117]:

The totality principle is sometimes confused or conflated with the course of conduct principle. That is perhaps not surprising because application of the totality principle may again result in a court adjusting what would otherwise have been consecutive or cumulative sentences to sentences that are wholly or partially concurrent. The proper approach, however, is to first consider the course of conduct principle and determine whether the sentences should be consecutive, or wholly or partly concurrent. Once that is done, the Court should then review the aggregate sentence to ensure that it is just and appropriate. That may require a further adjustment of the sentences: either by ordering further concurrency or, if appropriate, lowering the individual sentences below what would otherwise be appropriate.

102    In Parker, the plurality referred at [266] to course of conduct and totality as “closely related topics” that “can often overlap”. But their Honours cautioned that:

[I]t is also important not to lose sight of important and fundamental differences in the applicable legal principles. For that reason, while they generally need to be considered in the context of one another, they remain distinct…

103    The first sentence of [134] of the primary judge’s reasons must be read in the context of the whole of the reasons. His Honour expressly referred at [31] to passages from ABCC v CFMEU (including [117] quoted above) concerning the distinction between the totality principle and the course of conduct principle. The primary judge stated that, “The “totality” principle, their Honours there emphasised, stood separate and apart from the “course of conduct” principle”. It is plain that his Honour understood the distinction.

104    The first sentence of [134] must also be read in the context of the whole of that paragraph. His Honour concluded that, “A total penalty in the sum of $445,000 is also considered to be “just and appropriate””. In that context, the first sentence cannot be understood as conflating the course of conduct principle and the totality principle. Rather, having concluded that 68 of the 86 contraventions should be regarded as comprising 15 courses of conduct, and that only one penalty should be imposed for each course of conduct, his Honour, applying the totality principle as a final step, considered that there should be no further reduction of the proposed aggregate penalty.

105    The Union has not demonstrated any error in his Honour’s understanding of the totality principle. The second ground of appeal must be rejected.

Ground 3 — Whether the primary judge mistook the facts and erred in concluding that specific deterrence was relevant in the circumstances of the case

106    The third ground of the Notice of Appeal alleges that:

The trial judge mistook the facts and erred in concluding that specific deterrence was relevant in the circumstances of this case.

107    The Union submitted before the primary judge that, having regard to the changes to its National Rules and the systems of compliance instituted in 2016/2017, “There is no proper basis to find that a pecuniary penalty is needed to serve the purpose of specific deterrence in this case”. His Honour at [117] rejected that submission and held that, “there remains, it is respectfully concluded, a need to impose a penalty in order to ensure specific deterrence”. His Honour went on to say at [123]–[129] that while specific deterrence assumed comparatively less significance than general deterrence, it remained a consideration of relevance to the assessment of penalties. His Honour concluded that penalties would serve as a reminder to the Union, given its history of transgressions. His Honour also found that there was “some limited evidence” that the Union needed such a reminder because, even after the implementation of the new systems, there had been a further contravention by a Western Australian Branch in May 2017. His Honour considered it to be of concern that a senior officer had still failed to fully understand his responsibilities. His Honour considered that both as a matter of general principle or by reference to the specific facts of the case, specific deterrence remained a matter to be taken into account.

108    The Union submits that this is a case comparable to the TWU Case, where the Full Court found at [133] that, “Specific deterrence assumes little relevance in this case as the TWUA has put in place systems to ensure that the contraventions will not happen again”. The Union contends that only one notification had been lodged late since May 2017, with a 99.6% rate of compliance, and since then, extra audits and checks had been put in place. Further, Mr Enright conceded in evidence that this was “a very high rate of compliance”. The Union submits that his Honour had failed to take into account that the lapse in May 2017 occurred because the Victorian Branch dealt with compliance issues for the Western Australian Branch, that it occurred early in the life of the new system and that the officer involved had since taken steps to better understand his responsibilities.

109    The Union also submits that a pecuniary penalty was not needed to deter it from future offences because this was its first contravention, numerous of its officials had expressed contrition, it had cooperated in the litigation and had admitted almost all of the contraventions and, further, it has no incentive to reoffend.

110    The Commissioner submits that the Union has not asserted or demonstrated any error of fact or law in respect of the primary judge’s conclusion that specific deterrence assumed some relevance. The Commissioner also relies upon a Notice of Contention which asserts that his Honour’s finding should be affirmed on other grounds.

111    The reasons demonstrate careful analysis by the primary judge of the systems put in place by the Union in 2016/2017 and the circumstances of the further contravention in May 2017. His Honour acknowledged that numerous officers of the Union had demonstrated contrition. His Honour accepted that the Union had cooperated in the litigation and had admitted almost all of the contraventions. The Union has failed to demonstrate any misunderstanding of the relevant facts by the primary judge.

112    The primary judge found that, “specific deterrence remains a matter to be taken into account” and, “assumes comparatively less significance than general deterrence, but remains a consideration of relevance”. The Union seems to contend that his Honour ought to have instead found that specific deterrence “assumes little relevance”, as was found in the circumstances of the TWU Case. It is not apparent, however, that the difference in the expressions used translates into any difference in substance.

113    The TWU Case does not suggest that specific deterrence is irrelevant in circumstances where a contravener has put in place systems to ensure that the contraventions will not happen again. There was nothing said in the TWU Case that is inconsistent with the primary judge’s conclusion at [123] that in the circumstances of the case, “specific deterrence assumes comparatively less significance than general deterrence, but remains a consideration of relevance”.

114    In Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461; [2010] FCAFC 39 at [30], Middleton and Gordon JJ held:

A sentencing appeal is not a rehearing. Contentions that a trial judge did not give ‘sufficient weight’ to a particular matter in the exercise of the sentencing discretion is not the ‘kind of error’ an appeal Court can be or should be concerned with in a sentencing appeal: House v The King (1936) 55 CLR 499 at 504-505; see also Markarian v The Queen (2005) 228 CLR 357 at [25] and Lowndes v The Queen (1999) 195 CLR 665 at [15].

115    The Union’s submission is not that specific deterrence was irrelevant or should have been given no weight, but that it was given too much weight by the primary judge. That is not a ground upon which the appeal can succeed. It is unnecessary to consider the Notice of Contention.

116    The third ground of appeal must be rejected.

Ground 4 — Whether the primary judge erred in concluding that certain contraventions were not part of a single course of conduct

117    Ground 4 of the Notice of Appeal alleges that:

The trial judge erred in concluding that:

a.    contraventions 30, 31, 32 and 37 were not part of a single course of conduct together with contraventions 33 to 36;

  b.     contraventions 44 to 46 were not part of a single course of conduct; and

  c.     contraventions 64 to 65 were not part of a single course of conduct.

118    The Union submits that the primary judge erred in failing to regard contraventions 30 to 37 as arising from a single course of conduct, as they occurred in the same place and Divisional Branch, namely the South Australia/Northern Territory Branch of the Communications Division, and the changes in offices involved resignations from the same body, the Branch Committee of Management. The evidence demonstrated that those contraventions occurred through oversight, at a time when the Divisional Branch Secretary was unsure who was responsible for compliance.

119    The Union argues that the primary judge erred in failing to find that contraventions 44 to 46 formed a single course of conduct. These contraventions occurred in the same place and Divisional Branch, namely the South Australian Branch of the Electrical Division. The evidence of the Divisional Branch Secretary was that when he was elected, he became responsible for notifying changes but was unaware of the requirement to do so until shortly before he ultimately notified the changes.

120    The Union argues that the primary judge erred in failing to find that contraventions 64 and 65 formed a single course of conduct. These contraventions occurred in the same place and Divisional Branch, namely the NSW Branch of the Communications Division. There was evidence indicating that the person responsible for notifications had been having a tumultuous personal life prior to his resignation, which had distracted him from ensuring compliance.

121    The Union submits that although it was critical to the primary judge's reasoning in each instance that the due date for notifications was different, as the TWU Case demonstrates, that is not decisive. In that case, the Full Court treated contraventions as arising from a single course of conduct, even though the time for removal of names from the register of members arose at different times. The Union argues that conduct occurring on different days may well be appropriately characterised as manifestations of a single course of conduct.

122    The Commissioner submits that the fact that the due date for the notifications was different was not the only reason these contraventions were not found to constitute a course of conduct. His Honour also took into account that the contraventions had difference compliance dates and arose from different events, and that the reasons for the contraventions had not been satisfactorily established.

123    The primary judge accepted the Commissioner’s submission that contraventions 33 to 36 gave rise to a single course of conduct, but held that contraventions 30, 31, 32 and 37 were to be regarded as separate contraventions. His Honour reasoned that, although contraventions 33 to 36 each had the same date upon which notification was required to be given, contraventions 30, 31, 32 and 37 each had different notification dates and therefore different non-compliance periods and, further, it was not known whether the reasons for failure to comply were different for each contravention. His Honour considered that there was not such an interrelationship between contraventions 30, 31, 32 and 37 that each could be said to have arisen out of substantially the same act.

124    His Honour also held that contraventions 44, 45 and 46 should be regarded as separate contraventions, not a single course of conduct. Those contraventions arose out of the resignations of three persons from the same Branch. His Honour concluded that, as those resignations occurred at three discrete points in time, they did not arise out of substantially the same act.

125    Similarly, contraventions 64 and 65 arose out of two changes to office holders in the same Branch, with both contraventions being notified on the same day. However the changes occurred on two discrete dates, and his Honour considered that the contraventions did not arise out of substantially the same act.

126    In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (2018) 264 FCR 155, the Full Court observed at [31] that the purpose of the “course of conduct principle” is to, “ensure that, having regard to the circumstances (factual and legal), a party is not penalised twice for the same conduct”.

127    In Parker at [280], Besanko and Bromwich JJ held, in relation to the primary judge’s assessment of whether contraventions constituted a course of conduct:

This was an evaluative exercise by his Honour. The appellants must demonstrate error, not merely an alternative way of viewing what took place.

128    The Union submits that the primary judge regarded the differences in the dates for compliance as “decisive”, but accepts that those differences were a relevant matter for his Honour to consider. At best, the Union’s submissions contend that, on appeal, a different evaluation of the relevant factual circumstances should be made. The Union’s submissions do not point to any error of principle or fact in the primary judge’s assessment of courses of conduct.

129    The fourth ground of appeal must be rejected.

Ground 5 — Whether the total penalty was manifestly excessive

130    Ground 5 of the Notice of Appeal alleges that the total penalty of $445,000 was manifestly excessive.

131    As Ground 1 has been upheld, it will be necessary to set aside the order that the Union pay a total penalty of $445,000 and to assess penalties that should be imposed upon the Union. As that exercise will involve the Court forming its own view of the appropriate penalties, it is unnecessary to consider whether the total penalty imposed by the primary judge is or is not manifestly excessive. It is, therefore, unnecessary to determine the fifth ground of appeal.

Assessment of penalties

132    The Commissioner submits that in the event that any of the grounds of appeal are upheld, the matter should be remitted to the primary judge to determine the appropriate penalties. The Union submits that the Full Court should not remit the matter, but should determine the penalties for itself. We are in a position to assess the appropriate penalties, and consider that it is appropriate and preferable to do so.

133    In the TWU Case, the Full Court held at [124]:

In a criminal proceeding, an appellate court is required to form its own view of the appropriate sentence when resentencing. The appellate court’s determination of the appropriate sentence is usually made on the basis of the material before the sentencing judge and the primary judge’s unchallenged factual findings. A similar approach is taken to resentencing in a pecuniary penalty proceeding.

(Citations omitted.)

134    The Union does not take issue with the facts found and the approach taken by the primary judge except to the extent reflected in its grounds of appeal. In other words, the Union only contends that the appellate court should depart from the primary judge’s reasons by, firstly, assessing particular penalties for particular offences; secondly, by giving greater weight to the totality principle; thirdly, by giving little weight to specific deterrence; fourthly, by regarding three additional sets of contraventions as separate courses of conduct; and, fifthly by imposing a lower total penalty than $445,000. It is unnecessary to repeat the findings made by the primary judge except to the extent necessary to address these issues.

135    It is convenient to commence with the question of courses of conduct. The primary judge found that the four contraventions of s 230(1) of the Registered Organisations Act should be regarded as having occurred within two courses of conduct, and that the 82 contraventions of s 233(2) should be regarded as comprising 13 courses of conduct and 18 individual contraventions.

136    The Union submits that contraventions 30, 31, 32 and 37 should be included as part of a single course of conduct together with contraventions 33 to 36; that contraventions 44 to 46 should be regarded as part of a single course of conduct; and that contraventions 64 to 65 should be regarded as part of a single course of conduct.

137    Contraventions 30 to 37 involved eight changes to the Branch Committee of Management of the South Australian and Northern Territory Branch of the Communications Division. The changes involved in contraventions 33 to 36 required notification to the FWC by 5 September 2015, while the remaining five had various notification dates between 19 August and 3 October 2015. All these contraventions were notified on 21 October 2015. Contraventions 30, 31, 32 and 37 arose from four separate resignations at different points in time.

138    Mr Townsend, who was elected Divisional Secretary on 2 July 2015, deposed that he was unsure as to who was responsible for notifications. Mr Townsend said that he was not involved in notifying changes to office holders and Mr Lorrain, the then Branch Secretary, dealt with these matters. Mr Lorrain continued dealing with notifying changes of office holders until 2017. Mr Lorrain said that he did, “not remember why they were filed late”.

139    In circumstances where the contraventions arose from different failures to notify by different dates in respect of separate changes in office holders for reasons that are unexplained, the contraventions should not be regarded as arising from substantially the same act. Accordingly, contraventions 30, 31, 32, and 37 should be regarded as separate contraventions rather than as arising from a single course of conduct together with contraventions 33 to 36.

140    Contraventions 44 to 46 concern three separate resignations from the South Australian State Council of the Electrical, Energy and Services Division at different points in time. Mr Adley became responsible for notifying the FWC of changes in office holders when he was elected to the position of Divisional Branch Secretary on 31 August 2015, but deposed that he was unaware of that responsibility until shortly before he eventually notified the changes on 22 June 2016. That may be correct in respect of contravention 44, where the notification was due in October 2015, but does not adequately explain contraventions 45 and 46, where notifications were due by 13 January 2016 and 10 March 2016 respectively. Mr Adley had received an email from Ms Moran dated 25 November 2015 about lodging the notifications relevant to contraventions 79 to 80, suggesting that he must have been aware of the obligations by that date. Given that there were three different contraventions arising from three different changes in office holders, the last two of which have not been adequately explained, the contraventions should not be regarded as arising from substantially the same act.

141    Contraventions 64 to 65 involved two changes of office holders in the New South Wales Branch of the Communications Division. The changes were due to be notified on 9 September and 4 November 2016 but were not notified until 5 December 2016. The current Divisional Secretary, Mr Murphy, explained that his predecessor was responsible and that the time before his predecessor’s departure, “was a personally difficult one… and that he was under significant pressure in relation to allegations of his personal conduct”. Mr Murphy was, “unable to say” why the notices of change to office holders were not filed within the required time. The predecessor was not called to give evidence. In circumstances where there were different contraventions stemming from different changes in office holders and the reasons for the contraventions have not been adequately explained, the contraventions should not be regarded as arising out of substantially the same act.

142    Therefore, we consider that contraventions 30, 31, 32, 37, 44, 45, 46, 64 and 65 should be regarded as individual contraventions, rather than arising within particular courses of conduct. There is no reason to depart from the primary judge’s conclusion that the four contraventions of s 230(1) of the Registered Organisations Act should be regarded as occurring in two courses of conduct, and that the 82 contraventions of s 233(2) should be regarded as comprising 13 courses of conduct and 18 individual contraventions. The parties did not seek to depart from their concurrence that a single penalty should be imposed for each course of conduct. Having regard to the parties’ agreement, it is appropriate to adopt that approach: cf ABCC v CFMEU at [148].

143    Applying this approach, it is necessary to assess the penalties to be imposed in respect of the following 13 courses of conduct: contraventions 1 to 4; 5 to 10; 11 to 15; 16 to 29; 33 to 36; 38 to 40; 41 to 42; 49 to 51; 52 to 63; 66 to 69; 74 to 76; 79 to 80 and 81 to 82.

144    It is also necessary to assess the penalties to be imposed for the 18 separate contraventions, namely contraventions 30, 31, 32, 37, 43, 44, 45, 46, 47, 48, 64, 65, 70, 71, 72, 73, 77 and 78.

145    It will also be necessary to determine the appropriate penalties for the contraventions of s 230(1), which comprise two separate courses of conduct.

146    Before considering the contraventions individually, the factors common to all of them may be considered.

147    The record-keeping obligations imposed under the Registered Organisations Act are treated by the legislature as important and serious, and contraventions of those obligations are correspondingly serious. In the TWU Case, the Full Court observed:

[130]    The overwhelming sentencing factor in this case is general deterrence. As the objects set out in s 5 of the Registered Organisations Act make clear, registration confers rights, privileges and protections upon registered organisations. However, those advantages come with serious obligations, including obligations to keep accurate records about their membership. It is important that registered organisations should understand that those obligations must be complied with and that non-compliance will attract substantial penalties.

[131]    Whilst ignorance of compliance may explain, it does not excuse. Registered organisations should have it made clear to them the importance of record-keeping...

148    However, it is plain that some contraventions of ss 230(1) and 233(2) of the Registered Organisations Act may be less or more serious than others. For example, a notification that is made a few weeks late through inadvertent administrative error at a branch level cannot be regarded as being as serious as a deliberate or wilful refusal to provide any notification at all determined at a national level. A number of the contraventions in this case are in the former category and none approach the latter category.

149    The contraventions can be described as having a single root cause. The Union has a complex structure, consisting of three Divisions and 17 Divisional Branches which jealously guarded their autonomy from the National Council. This resulted in the absence of a centralised system of control, which led to there being “no real system in place” for compliance with the regulatory requirements. The primary judge considered that, “it is this dysfunctional structure of the Union which largely occasion many of the contraventions”.

150    The 2016/2017 reforms introduced a more centralised reporting structure. Rule 35 of the National Rules was implemented to give the National Secretary much greater power to take the steps necessary to ensure compliance with the reporting obligations of the Union. The Union implemented a system which included appointment of a Governance Officer, a monthly reporting process and audits of office holders and the implementation of particular procedures. Mr Enright, the Executive Director of the Registered Organisations Commission, gave evidence that the Union’s level of compliance is now at a “very, very high level” and “a very, very good level”. There was one lapse in May 2017, but that aberration has not been repeated.

151    In Registered Organisations Commissioner v Australian Nursing and Midwifery Federation (No 2) [2018] FCA 2004, Barker J, referring to the objective of deterrence, both specific and general, observed at [25]:

Even though there may be no indication that a respondent will contravene a civil penalty provision in the proximate future, a penalty must be imposed that will act as a reminder to the respondent and the community of the consequences of the admitted contraventions, and this will often be the most significant factor in determining penalty in a particular case.

152    We agree that in many cases, even where systems have been put in place to prevent further contraventions, specific deterrence will have a role as a reminder of the consequences of the admitted contraventions. That is so in the present case where, apart from the implementation of rule 35, the Divisions and Branches retain their autonomy from the National Council, and there is no clear indication that the dysfunction which led to the contraventions has been entirely ended. Specific deterrence has a role to play in this case as a reminder to the Union of the consequences of non-compliance. We are satisfied, however, that the systems that have been put in place by the Union mean that the contraventions are substantially less likely to recur.

153    We are also satisfied that the Union has shown substantial contrition for its contraventions. It has done so in two ways. Firstly, many of the contraventions were not detected by the Commissioner, but were self-reported by the Union.

154    Mr Enright wrote to the Union in November and December 2016 indicating his intention to review the late notifications lodged during 2016 for potential contraventions of the Registered Organisations Act. Mr Enright then wrote to the Union on 31 May 2017 indicating that a number of potential contraventions had been identified. On 22 September 2017, Mr Enright confirmed that the review had been completed and subsequently commenced an investigation. The review and investigation identified 84 likely contraventions of s 233(2) and four contraventions of s 230(1).

155    The parties’ submissions at the hearing of the appeal suggested that all of the contraventions were self-reported by the Union, whereas the evidence suggested that at least some were discovered in the course of the Commissioner’s investigation. The parties were invited to provide joint submissions clarifying the issue.

156    The parties agree that the Union notified the Commissioner of changes to office holders under s 233(2) of the Registered Organisations Act on the following dates, which revealed the following contraventions:

    1 to 4 — on 1 July 2015;

    5 to 15 — on 16 July 2015;

    16 to 29 — on 24 September 2015;

    30 to 37 — on 21 October 2015;

    38 to 42 — on 1 December 2015;

    43 — on 9 December 2015;

    44 to 46 on 22 June 2016;

    47 — on 12 October 2016;

    48 — on 8 November 2016;

    49 to 51 — on 10 November 2016;

    52 to 63 — on 21 November 2016;

    64 and 65 — on 5 December 2016;

    66 to 69 — on 6 January 2017;

    70 — on 16 January 2017;

    71 — on 7 February 2017;

    72 — on 15 March 2017;

    73 — on 16 May 2017.

157    These changes to office holders were notified prior to 31 May 2017, before the Commissioner notified the Union that the preliminary outcome of the review was that possible contraventions had been identified. In respect of contraventions 47, 66 to 69 and 70, the Commissioner was able to ascertain from the notifications that they were late. In respect of contravention 47, the notification initially purported to have been lodged within time, but it was later acknowledged to be late. The remainder of the contraventions involved express acknowledgments by the Union that the reporting was late when the Union reported the changes. In the joint submissions, the Commissioner accepts that the Union should be regarded as self-reporting all of these contraventions.

158    In respect of contraventions 74 to 82, the Union failed to lodge a notification of change until after the commencement of these proceedings. Those contraventions were identified in the course of the Commissioner’s investigation and were not self-reported. The four contraventions of s 230(1)(b) were also identified during the investigation and were not self-reported.

159    Mr Enright deposed that if no notification of changes in office holders is given, the regulator may never become aware of the contraventions. Mr Enright said that, “breaches of s 233(2) largely come to the attention of the regulator through self-reporting of late notifications”. The Commissioner has not submitted that the investigation would have revealed the contraventions that were self-reported in any event.

160    In R v Ellis (1986) 6 NSWLR 603, Street CJ observed at 604:

When the conviction follows upon a plea of guilty, that itself is the result of a voluntary disclosure of guilt by the person concerned, a further element of leniency enters into the sentencing decision. Where it was unlikely that guilt would be discovered and established were it not for the disclosure by the person coming forward for sentence, then a considerable element of leniency should properly be extended by the sentencing judge. It is part of the policy of the criminal law to encourage a guilty person to come forward and disclose both the fact of an offence having been committed and confession of guilt of that offence.

The leniency that follows a confession of guilt in the form of a plea of guilty is a well recognised part of the body of principles that cover sentencing. Although less well recognised, because less frequently encountered, the disclosure of an otherwise unknown guilt of an offence merits a significant added element of leniency, the degree of which will vary according to the degree of likelihood of that guilt being discovered by the law enforcement authorities, as well as guilt being established against the person concerned.

161    These passages were cited with approval by French CJ and Gageler J in CMB v Attorney-General (NSW) (2015) 256 CLR 346 at [40]. Their Honours noted that in Ryan v The Queen (2001) 206 CLR 267 at [15], McHugh J observed that the significance of the disclosure of what was an unknown offence, “depends on the facts and circumstances of the case”.

162    The principles from R v Ellis are also applicable to the assessment of civil penalties. From the joint submissions in the present case, it seems to be accepted that the contraventions that were self-reported are unlikely to have been detected if they had not been self-reported.

163    The second demonstration of contrition by the Union was its early admission of the contraventions. While the admission of three contraventions was subsequently withdrawn and contested, the primary judge considered that the withdrawal, “assumes little relevance”. In addition, the early admissions had substantial utilitarian value and saved the regulator the expense of a potentially lengthy trial.

164    Although the primary judge considered it to be significant that the National Council of the Union and the National Secretary had not issued any statement of remorse or apology for the contraventions, we would not place much weight upon that factor. The Union demonstrated its contrition in a more practical way by reforming its rules and systems, by self-reporting most of the contraventions, and by its early admissions. The contrition demonstrated by the Union and its cooperation with the regulator are matters that weigh significantly in the Union’s favour.

165    The extent of the delays in the Union complying with its reporting obligations can be summarised as follows:

    in 13 instances, no notification at all by the commencement of the proceedings;

    in five instances, between 100 and 255 days late;

    in 23 instances, between 45 and 99 days late;

    in 31 instances, between 30 and 44 days late; and

    in 14 instances, between 14 and 30 days late.

166    Section 233(2) of the Registered Organisations Act requires that notification of relevant changes be made within the prescribed period of 35 days. Speaking generally, the longer the delay in complying with the reporting requirement, the more serious the contravention. However, much will depend upon the interaction between the length of the delay and the explanation for the delay.

167    We adopt the primary judge’s description of the reminders sent by the Commissioner regarding the need for the Union to comply with its reporting requirements. These were in the form of letters in a standard format, letters which served as reminders in respect of specific events, letters which acknowledged receipt of notification of changes but noted that the notifications were lodged outside the prescribed period and letters which were more specific and stated, for example, that s 233(2) required that the notification be lodged within the prescribed period. In addition, the Commissioner had provided information on its website as to the information required to be provided. We agree with his Honour that the Union cannot be said to be unaware of a continuing problem of default. The number of contraventions occurring over an extended time also undermine any suggestion that the continuing contraventions were purely “inadvertent”.

168    As the primary judge found, there were, “widespread contraventions over a considerable period of time”. They extended over the period from June 2015 to March 2017. The contraventions occurred across six States and one Territory and within each Division of the Union.

169    In most instances, the Union officer responsible for the failure to notify was a Divisional Branch Secretary. Divisional Branch Secretaries can be described as being a middle level of management in the Union’s organisation. In some instances, the officer responsible was at a lower level.

170    The explanations for non-compliance ranged from oversight, to ignorance, to incomplete understanding of reporting requirements, to lack of clear demarcation of responsibility. Some of the contraventions were unable to be fully explained. Even where there is no clear explanation, there is no suggestion that the Union or its officials deliberately or wilfully flouted the law. The contraventions all seem to stem from the lack of appropriate systems for compliance.

171    It is relevant that there is no evidence of specific harm resulting from the contraventions. That reduces, to some extent, the seriousness of the contraventions.

172    The Union had a total income which exceeded $20.7 million in 2016/17 and net equity exceeding $170 million. It is relevant that the Union has the capacity to pay an appropriate penalty.

173    There is no evidence that the Union had previously engaged in like contraventions.

174    In our opinion, the principal matters that differentiate the various courses of conduct and individual contraventions are the lengths of the delays in complying with the reporting obligations, that some contraventions were self-reported and the seniority of the Union official who failed to comply.

175    In our view, the penalties should be assessed as follows:

176    This approach should not be seen to suggest some false certainty or mathematical precision in the evaluative task of assessing appropriate penalties.

177    It is necessary to apply the totality principle. As we have said, the contraventions arose from a common factor, namely the absence of centralised systems in place for compliance with the requirements of the Registered Organisations Act, which stemmed from the absence of central control by the National Council over the Divisions and Branches. This has been resolved to a substantial extent by the implementation rule 35 of the National Rules and the other 2016/2017 reforms. When seen in this light, penalties totalling $218,850 seem too high. In our view, penalties totalling $200,000 are more appropriate.

Summary

178    The appeal should succeed on the basis of Ground 1 of the Notice of Appeal. Grounds 2, 3 and 4 must fail. It has not been necessary to consider Ground 5.

179    The appeal should be allowed and Order 2 of the orders of the primary judge should be set aside. Instead, it should be ordered that the Union pay penalties totalling $200,000.

Associate:    

Dated:    22 December 2020