Federal Court of Australia

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Palmerston Police Station Case) [2021] FCAFC 7

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

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

REASONS FOR JUDGMENT

(Revised from transcript)

KATZMANN J:

1    I invite Justice Bromwich to deliver the first judgment.

BROMWICH J:

2    The appellant, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) appeals against the quantum of eight civil penalties imposed upon it by a judge of this Court, upon the basis that they are manifestly excessive. The penalties were imposed upon the CFMMEU by reason of the conduct of three of its officials constituting a total of eight admitted contraventions of s 500 of the Fair Work Act 2009 (Cth) (FW Act). The CFMMEU was liable for the conduct of the officials by reason of the operation of ss 550 and 793 of the FW Act. Each of those officials was also individually penalised for their respective contraventions. No separate act of the CFMMEU to that of the officials relied upon in the case against each of them was relied upon by the first respondent who brought the proceeding, the Australian Building and Construction Commission.

3    None of the declarations of contravention made against those three officials or the corresponding declarations of contravention by the CFMMEU are challenged. Nor are any of the penalties imposed upon those officials challenged, each of them being inactive respondents to this appeal. No error of principle is alleged except as is sought to be inferred from the final result. In particular, there is no challenge to the conclusions reached by the primary judge as to the application of the course of conduct principle.

4    The contraventions arose from attempts by the three officials to have work stopped at a police station building site in Palmerston, a township just south of Darwin in the Northern Territory. The ostensible reason for seeking to have work stopped was asserted deficiencies in the amenities and safety at the site. None of these were contended before the primary judge to necessitate work stopping nor the workers leaving the site, as was also suggested at the time.

5    The objective of stopping work was sought to be achieved by conduct that included contravening conduct at the site by all three officials on 14 May 2018 (seven contraventions), and also by contravening conduct by one of those officials the next day, 15 May 2018 (the eighth contravention). As no point is now taken about the approach that the primary judge took to those two different days, there is no need to differentiate further between those two days in these reasons.

6    Each contravention involved acting in an improper manner whilst exercising, or seeking to exercise, rights in accordance with Pt 3-4 of the FW Act. The primary judge summarised that part as follows (at [3]):

Part 3-4 of the FW Act establishes a regime by which officials of registered organisations who are holders of a permit issued by the Fair Work Commission (the FWC) may, for defined purposes, enter particular premises occupied by others. It also regulates the manner of exercise of rights of entry granted by the occupational health and safety legislation of the States and Territories.

7    The available maximum penalty for each contravention by each individual was $12,600. The corresponding maximum penalty for the CFMMEU was $63,000, producing an overall maximum for eight contraventions of $504,000. As will be seen the total penalty imposed on the CFMMEU was $270,000, being just over half of that aggregate maximum.

8    Importantly, none of the officials had any history of prior contraventions. It is and was common ground that the CFMMEU had an extensive history of prior contraventions, including contraventions of s 500 of the FW Act.

9    The conduct that was admitted to be improper, the penalty imposed upon each individual (and the rounded proportion of the maximum penalty of $12,600), and the penalty imposed upon the CFMMEU (and the rounded proportion of the maximum penalty of $63,000) was as follows:

10    As a general rule, an abstract mathematical approach both to imposing and to impugning penalties can render the process unduly mechanical, and suggest, incorrectly, that there is but a single correct penalty for any given case or contravention. The above percentages are therefore mostly reproduced in aid of understanding the CFMMEU’s argument, rather than reflecting any endorsement of such an approach.

11    The CFMMEU’s sole ground of appeal is that the penalties imposed upon it for the eight contraventions arising out of the conduct of its officials were manifestly excessive. There is no dispute as to the applicable principles for a finding of manifest excess: see in particular Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 at [6].

12    While seven narrative particulars are relied upon in support of the asserted conclusion of manifest excess, it is noteworthy that in common with many such appeals, no specific error is alleged on the part of the primary judge. Because of the way in which the appeal has been advanced and argued in written and oral submissions, there is no need to separately consider the specific particulars except in a global way towards the end of these reasons.

13    There is no apparent dispute about the applicable penalty imposition principles as to course of conduct, the role of prior contraventions, and proportionality of the penalty to the conduct, all of which have been the subject of both long-standing and more recent Full Court decisions. The dispute lies in their application. The CFMMEU accepts that the primary judge correctly stated those principles, but submits that his Honour must have erred in the application of course of conduct in order to result in penalties said to be manifestly excessive.

14    In its reply written submissions, the CFMMEU frames the central issue in this appeal as whether there were cogent reasons for penalties to be imposed upon it that were a significantly higher proportion of the maximum penalty than the proportion of the corresponding maximum for each individual contravention. It submits that if there was not a cogent reason for that to take place by reason of any of the criticisms it makes as to the primary judge’s approach and conclusions, then that is a sufficient basis to infer error in the exercise of the penalty imposition discretion of the kind identified in House v The King (1936) 55 CLR 499 at 505. The premise of this appeal is, or is closely akin to, the parity principle in criminal sentencing. That is, does the CFMMEU have a justifiable sense of grievance about the penalties imposed, having regard to the penalties imposed upon its officials giving rise to its liability?

15    The CFMMEU poses the rhetorical question of why each penalty imposed upon it was a greater proportion of the maximum than the corresponding proportion of the maximum applicable to each individual official who was the sole source of its liability. It submits that if the only explanation for that higher proportion is its prior contravening conduct, then the primary judge went too far and imposed too great a penalty, having the effect of in part penalising it afresh for its prior contraventions. However, as can be seen from [121] of the primary judge’s reasons reproduced below at [25], prior contraventions were not the only explanation for the penalties imposed on the CFMMEU, although they were undoubtedly a most important feature.

16    The primary judge also viewed the contraventions by the individual officials as both overlapping, and accumulating in nature, reflecting a course of conduct in the CFMMEU’s hands to achieve the objective of closing the site by multiple means over an extended period of time (being some two hours on the first day). Thus a central plank of the appeal is at least weakened by an erroneous characterisation of his Honour’s reasoning.

17    The CFMMEU relies upon the decision of a five-member Full Court in Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 384 ALR 75; 299 IR 404, and in particular on the references by the plurality to reliance on past conduct not overwhelming the facts and circumstances of the instant contravention so as to produce a disproportionate result. It should be noted that the primary judge was a member of that plurality, and it is accepted by the CFMMEU that his Honour was alert to this issue (delivering the judgment in this case only two weeks earlier). However, the CFMMEU submits that there was insufficient explanation by his Honour as to why the contraventions were so serious in its hands, asserting that it was not on notice of any propensity to contravene by these three officials given their lack of any prior contraventions.

18    The CFMMEU also relies upon part of the course of conduct analysis of Besanko and Bromwich JJ in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39. That was a case in which substantially differential penalties were imposed upon numerous individual union official contraveners, while blanket penalties of the maximum and 75% of the maximum penalty were imposed respectively upon the present appellant and its New South Wales State counterpart, all based upon the conduct of those individual officers. This was found to entail, on the particular facts of that case, incorrectly treating the conduct of the individuals, which was at least different to a degree, as though it was the same, and treating the same conduct in the hands of the two unions, by the same process of attribution, as though it was different: see Parker at [347]-[348].

19    The approach in Parker does not readily transpose to the present circumstances where there was no blanket imposition of either maximum penalties or a fixed percentage of the maximum penalty, irrespective of the seriousness of the individual conduct giving rise to the CFMMEU’s liability. To the contrary, consideration of the summary table above and the primary judge’s relatively lengthy and detailed reasons reveals a nuanced and careful approach by his Honour. For some contraventions there was a lift in the corresponding penalty imposed on the CFMMEU of around double the proportion of the maximum for the individuals, but not exactly so. This was no mere mathematical exercise.

20    By contrast, contravention (4), while regarded as being in the lower range in the hands of Mr Menon without any prior history of contravening, was overtly regarded by his Honour as being much more serious in the hands of the CFMMEU. This contravention involved objectively serious conduct towards work heath safety inspectors, which may properly be regarded as more serious in the hands of a union which has a particular responsibility for ensuring that its officials behave appropriately, especially towards inspectors whose responsibilities are directed towards safe workplaces. His Honour made that basis for the assessment express at [96], where his Honour noted that the work heath safety inspectors were acting in the course of their duties. This meant that this was an aggravating feature, because they should be able to “discharge their duties without being subject to aggression or any form of intimidation”.

21    Implicitly at least, this was of greater concern in the hands of the CFMMEU with organisational responsibility, than in the hands of an individual, especially one with a prior clean record. Similarly, contravention (2), while serious in Mr Menon’s hands, was plainly enough considered by the primary judge to be more serious in the hands of the CFMMEU. That was because, as his Honour observed at [30], “[t]he force of the threat was underlined by the fact that it was made by an organiser of a large well-resourced union well capable of exercising ‘industrial muscle’”.

22    The CFMMEU relies upon other asserted oddities in the primary judge’s sentencing and imposition of penalty. In particular, a comparison is drawn between the second contravention by Mr Menon and the first contravention by Mr Taylor which were penalised by the same proportions of the maximum, and the corresponding penalties imposed upon the CFMMEU, which was substantially higher in respect of Mr Menon’s contravention than in respect of Mr Taylor’s contravention. The answer lies in the primary judge’s reasons at [124], where his Honour noted that the difference in penalties for the respective conduct was attributed to the fact that both occurred at the same time, and in some respects had overlapping elements. His Honour was therefore applying proper course of conduct principles in that respect.

23    His Honour also made references to differences between the penalties for Mr Menon’s third pleaded contravention and Mr Taylor’s second pleaded contravention, attributing those to the fact that Mr Menon made multiple demands over a period of about 30 minutes, whereas Mr Taylor made only two statements in relatively close proximity to one another: see the primary judge’s reasons at [123].

24    There is no need to go further on these points. The primary judge carefully considered and characterised each contravention in the hands of each of the individuals and in the hands of the CFMMEU.

25    The ultimate characterisation by the primary judge of the CFMMEU’s course of conduct, immediately prior to the imposition of penalty cannot be improved upon by paraphrase or summary. His Honour said (at [121]):

While I accept that the fact that the single course of conduct on 14 May 2018 means that penalties should not be imposed on the CFMMEU as though each was a fresh incursion into contravening conduct and that there are some overlapping elements in its contraventions, the very persistence of the CFMMEU in the course of conduct indicates that its contraventions should be viewed seriously. This is reinforced by the fact that it sought by its course of conduct to achieve its objective of closing the Site by multiple means over an extended period. In addition, for the reasons given earlier, account is to be taken of the additional gravity of the conduct of the CFMMEU by reason of the increased culpability of its contraventions indicated by its long history of prior contraventions.

26    I am comfortably satisfied that the primary judge was careful to pay heed to the limited use that may be made of prior contraventions, and that no basis has been demonstrated for any conclusion that a contrary inference should be drawn as to what took place. I am satisfied that there has not been any sanction afresh by his Honour for prior contraventions. Rather, his Honour has quite properly had regard to the greater need for deterrence for the CFMMEU in light of its prior contravening history, but did not misuse the fact of those prior contraventions.

27    The CFMMEU also relies upon its seven contraventions on the first day being treated as a single course of conduct, whereas:

(1)    the underlying four individual contraventions of Mr Menon were a single course of conduct;

(2)    the underlying two individual contraventions of Mr Taylor were a second and separate single course of conduct; and

(3)    the contravention of Mr Cummins was further separate conduct.

The substance of this point is an assertion that one course of conduct by it could not properly be penalised more severely as a proportion of each maximum penalty than three separate sets of contravening conduct.

28    The CFMMEU therefore submits that it was to be expected that the aggregate penalty imposed upon it for the seven contraventions on the first day would be less as a proportion of the maximum penalty than the aggregate penalty imposed for the seven corresponding contraventions by its three officials as a proportion of the individual maximum penalties. A key part of that asserted expectation is that course of conduct was required to be considered separately for Mr Menon and his four contraventions, and for Mr Taylor and his two contraventions, whereas for the CFMMEU course of conduct was required to be considered across all seven contraventions in its hands. The latter was said to give rise to a greater concern to avoid double punishment for overlapping conduct.

29    The problem with this argument is that it pays insufficient regard both to the role of course of conduct principles, and to the primary judge’s thorough exposition and careful application of them. They are not “not rigid rules of law, but, rather, general principles to guide the exercise of the penalty imposing discretion”: Parker at [273]. In particular, as his Honour correctly observed at [80(d)], those principles do not require that two or more contraventions occurring in a single course of conduct be treated as a single contravention. As was pointed out in Parker at [280], error must be demonstrated, not merely an alternative way of viewing what took place.

30    As [121] of his Honour’s reasons reproduced at [25] above makes clear, his Honour did not fail to have regard to the CFMMEU’s course of conduct over the seven contraventions on the first day. I see no error in his Honour considering not just the overlapping conduct of the three officials, but also their cumulative and amplifying effect in seeking to achieve the objective of stopping work at the site.

31    The CFMMEU also particularises a number of lesser features of either mitigation or absence of aggravation, which are said to show that the percentage penalties were very high when assessed against the objective facts and circumstances:

(1)    There was no evidence of actual financial loss, with the primary judge characterising this as improbable.

(2)    There was cooperation by way of admissions in an amended defence.

(3)    The duration of the contravening conduct was relatively short.

(4)    The conduct, while serious, was not of the worst kind.

(5)    The conduct, while serious, was not more than that, such that the penalties imposed are high, especially given that seven of the eight occurred in a single course of conduct.

32    None of these further points on their own take the appeal further as it is clear that each was taken into account by the primary judge and no error is suggested. If the main arguments had succeeded, these points might have assisted in some way to elevate the degree of manifest excess thereby shown to exist. However, without success on the main points, these further points are inadequate to demonstrate any excess, let alone manifest excess, on their own.

33    The penalties imposed on the CFMMEU have not been shown to be manifestly excessive. The appeal must therefore be dismissed.

Associate:

Dated:    8 February 2021

REASONS FOR JUDGMENT

KATZMANN J:

34    I agree with Bromwich J but wish to add some remarks of my own.

35    There are a number of misconceptions underlying the CFMMEU’s argument, largely arising from the failure to have proper regard to the whole of the primary judge’s reasons, including the careful exposition of the relevant legal principles and the application of those principles to the facts. The main misconception is that the only factor upon which the primary judge relied to ‘justify the “additional gravity” reflected in the higher proportionate penalties imposed on the CFMMEU was the union’s “long history of prior contraventions”’. The submission to that effect pays no regard to the fact that his Honour began his analysis of the CFMMEU’s culpability by accepting the ABCC’s submission about the matters that should be taken into account in determining the penalty. Those matters included the CFMMEU’s history of contraventions but were much more extensive. They were that:

(a)    the contraventions were antithetical to the right of entry regime established under Pt 3–4 of the FW Act and caused illegitimate disruption at the [building] Site;

 (b)    the conduct was serious, deliberate and without justification;

 (c)    the CFMMEU has not demonstrated contrition or corrective action;

 (d)    the CFMMEU is a recidivist offender; and

(e)    the CFMMEU is large, asset rich, and well-resourced, such that a small penalty risks being ineffective as a deterrent.

36    Since deterrence is the overriding consideration in imposing civil penalties (see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [54]-[55]), this last matter alone was sufficient to justify the imposition of a markedly greater penalty on the CFMMEU.

37    Another misconception underlying the CFMMEU’s argument is that, because the CFMMEU’s liability is based on the liability of its officials and the Court is required to penalise the contravener for the instant contraventions rather than previous contraventions for which it has already been penalised, his Honour’s reasons indicate that he must have erred because of the extent of the differences between the proportion each of the penalties imposed on the CFMMEU bore to the available maximum and the proportion to the maximum of the penalties imposed on the officials. The parity principle requires that like offenders be treated alike, but it also enables the different circumstances of co-offenders to be taken into account. As Dawson and Gaudron JJ observed in Postiglione v The Queen (1997) 189 CLR 295 at 301 (footnotes omitted):

The parity principle … is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated.

38    In the present case the different penalties reflected both the different degrees of culpability and the different circumstances of the respective contraveners. Unlike the CFMMEU, none of the individual officials bore an organisational responsibility for the conduct and none of them had a record of contraventions. While it is true that, like the union itself, the union officials showed no contrition, the failure of the CFMMEU to take corrective action undoubtedly renders its conduct more serious than that of its officials. Furthermore, the long history of the CFMMEU’s contraventions was capable of influencing the characterisation of the instant contraventions because it demonstrated “[a] continuing attitude of disobedience to the law”: Pattinson v the Australian Building and Construction Commission [2020] FCAFC 177 at [161] (Allsop CJ, White and Wigney J) citing Veen v the Queen (No 2) (1988) 164 CLR 465 at 477 (Mason CJ, Brennan, Dawson and Toohey JJ). These considerations are reflected in the primary judge’s reasons. His Honour did not offend the parity principle.

39    For the reasons given by Bromwich J and these additional reasons, the appeal must be dismissed.

Associate:

Dated:    8 February 2021

REASONS FOR JUDGMENT

GRIFFITHS J

40    I agree with the reasons of both Katzmann and Bromwich JJ and the orders they propose.

41    I would simply add that I found the appellant’s case to be based on a reading of the primary judge’s reasons for judgment, with particular reference to what his Honour said at [121], as parsing and nit-picking. The reasons for judgment need to be read fairly and as a whole.

42    The appellant’s approach seemed to treat his Honour’s use of expressions, such as “serious”, “of a serious kind” and “viewed seriously”, when used in relation to conduct, as having a rigid and immutable content. This is not a fair reading of his Honour’s use of those expressions in explaining the penalties imposed on the three individuals and the Union. His Honour adequately explained why the amounts of those penalties differed.

43    The pecuniary penalties imposed on the Union are not manifestly excessive.

Associate:

Dated:    8 February 2021

SCHEDULE OF PARTIES