FEDERAL COURT OF AUSTRALIA

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

THE COURT DECLARES THAT:

1.    The first respondent contravened section 348 of the Fair Work Act 2009 (Cth) (the Act) when, on 16 May 2013, Joseph Myles, an officer of the first respondent for the purposes of section 363(1)(b) of the Act, organised for approximately 20 persons with approximately nine vehicles to blockade Josephs Road, Footscray so as to prevent vehicular access to the construction site of the City to Maribyrnong River Project Package B (Package B Project), being part of the Victorian Government’s Regional Rail Link Project to build new regional rail lines, with intent to coerce John Holland Pty Ltd (John Holland) and, or alternatively, Abigroup Pty Ltd (Abigroup) to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

2.    The first respondent contravened section 348 of the Act when, on 16 May 2013, Joseph Myles, an officer of the first respondent for the purposes of section 363(1)(b) of the Act, threatened to organise or take action to prevent the pouring of any concrete on the Package B Project on the following day and thereafter, with intent to coerce John Holland and, or alternatively, Abigroup to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

3.    The first respondent contravened section 348 of the Act when, on 17 May 2013, Joseph Myles, an officer of the first respondent for the purposes of section 363(1)(b) of the Act, threatened to organise or take action to conduct a war against the Package B Project and to prevent the pouring of any concrete on the Package B Project on the following day, with intent to coerce John Holland and, or alternatively, Abigroup to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

4.    The second respondent contravened section 348 of the Act when, on 16 May 2013, he organised for approximately 20 persons with approximately nine vehicles to blockade Josephs Road, Footscray so as to prevent vehicular access to the Package B Project construction site, with intent to coerce John Holland and, or alternatively, Abigroup to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

5.    The second respondent contravened section 348 of the Act when, on 16 May 2013, he threatened to organise or take action to prevent the pouring of any concrete on the Package B Project on the following day and thereafter, with intent to coerce John Holland and, or alternatively, Abigroup to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

6.    The second respondent contravened section 348 of the Act when, on 17 May 2013, he threatened to organise or take action to conduct a war against the Package B Project and to prevent the pouring of any concrete on the Package B Project on the following day, with intent to coerce John Holland and, or alternatively, Abigroup to comply with a lawful request of the first respondent to put a CFMEU delegate on the Package B Project.

THE COURT ORDERS THAT:

7.    The first respondent pay a penalty of $45,000 in respect of its contraventions of section 348 of the Act as declared in paragraphs 1 and 2 above.

8.    The first respondent pay a penalty of $15,000 in respect of its contravention of section 348 of the Act as declared in paragraph 3 above.

9.    The second respondent pay a penalty of $8,000 in respect of his contraventions of section 348 of the Act as declared in paragraphs 4 and 5 above.

10.    The second respondent pay a penalty of $10,000 in respect of his contravention of section 348 of the Act as declared in paragraph 6 above.

11.    The penalties in paragraphs 7 and 8 are to be paid to the Commonwealth within 30 days.

12.    The penalties in paragraphs 9 and 10 are to be paid to the Commonwealth within 90 days.

13.    The first respondent must not directly or indirectly indemnify the second respondent against the penalties in paragraphs 9 and 10 above in whole or in part, whether by agreement, or by making a payment to the Commonwealth, or by making any other payment or reimbursement, or howsoever otherwise.

14.    The further amended originating application dated 5 October 2015 is otherwise dismissed.

15.    There be no order as to costs.

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

REASONS FOR JUDGMENT

MORTIMER J:

INTRODUCTION AND SUMMARY

1    The applicant, the Director of the Fair Work Building Industry Inspectorate, brings these proceedings for penalties under the Fair Work Act 2009 (Cth) against respondents who are familiar with the course and possible outcomes of such proceedings. The first respondent, the CFMEU, is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth), with the privileges and responsibilities that such registration carries. The second respondent, Mr Myles, is an employee and office holder of the CFMEU. The respondents admit that, at all times material to the events in this proceeding, he was acting in that capacity on behalf of the CFMEU and within the scope of his actual or apparent authority.

HISTORY OF THE PROCEEDING AND AGREEMENT ON LIABILITY

2    This proceeding was commenced on 21 May 2014. As described in the introductory part of my reasons for interlocutory judgment refusing a stay of the proceeding (Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 47), this proceeding concerns industrial action the applicant alleged was taken by the respondents at the building site for the Victorian Government’s Regional Rail Link construction site. The applicant alleged that, on 16 and 17 May 2013, the respondents blockaded the building site, preventing trucks operated by Boral Resources (Vic) Pty Ltd (trading as Boral Concrete) from delivering wet concrete it had been engaged to provide to the project. As I set out below, the respondents ultimately made admissions to contraventions of the Fair Work Act.

3    By application dated 5 September 2014, the respondents sought orders staying this proceeding pursuant to s 553 of the Fair Work Act, by reason of what were said to be “overlapping criminal proceedings” against the CFMEU in a contempt proceeding brought by Boral in the Supreme Court of Victoria. At the time, that proceeding was pending before the Supreme Court. The nature of that Supreme Court proceeding, and other related proceedings, is set out in my reasons for interlocutory judgment.

4    On 6 February 2015, I refused the respondents’ application for a stay including on the basis the conduct the subject of the Supreme Court contempt proceeding was not “the same or substantially the same” as the conduct the subject of this proceeding: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 47. On 20 February 2015, the respondents filed an application for leave to appeal from that decision. When the parties appeared before me for directions on 6 March 2015, the respondents informed me of that application, which they indicated was likely to be heard in the May 2015 Full Court sittings. Accordingly, I made orders preparing the proceeding for trial and listed the proceeding for hearing on an estimate of two weeks commencing on 23 November 2015, on the basis the respondents should not be compelled to put on any material by way of pleading or evidence until the Full Court had delivered judgment in respect of their application for leave to appeal, and made clear the respondents were free to seek leave to vary those orders if necessary to achieve that outcome (and indeed, some of those orders were subsequently varied by me).

5    On 18 May 2015, the respondents’ application for leave to appeal was heard together with substantive argument on the appeal before a Full Court of this Court.

6    On 18 September 2015, while the Full Court was reserved on its decision, the Supreme Court of Victoria made orders by consent discontinuing the contempt proceeding bought by Boral which had given rise to the application for a stay of this proceeding. Accordingly, I made orders by consent on 29 September 2015 re-timetabling this matter for hearing on a revised estimate of five days commencing on 30 November 2015. Separately, the Full Court made orders by consent on 8 October 2015 dismissing the application for leave to appeal.

7    On 20 November 2015, ten days before the hearing of this matter was due to commence, the parties advised the Court that they had reached settlement as to liability and proposed orders by consent preparing the matter for a hearing as to penalties only. The respondents admitted Mr Myles organised and participated in the blockade on 16 May 2013 and made threats on 16 and 17 May 2013 with the intention of coercing two of the project joint venturers, John Holland Pty Ltd and Abigroup Contractors Pty Ltd, to comply with a request to have a CFMEU delegate on the site. The respondents admitted that, by reason of that conduct, Mr Myles and through him the CFMEU contravened s 348 of the Fair Work Act.

8    The parties duly filed a statement of agreed facts and admissions, and submissions and evidence as to penalty.

RELEVANT LEGISLATIVE PROVISIONS

9    The conduct the subject of this proceeding is agreed to be in contravention of s 348 of the Fair Work Act. Section 348 provides:

A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.

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

10    The phrase “engages in industrial activity” is defined in s 347. Subsection (b) is relevant to this proceeding, and provides that a person engages in industrial activity if she or he:

does, or does not:

(i)    become involved in establishing an industrial association; or

(ii)    organise or promote a lawful activity for, or on behalf of, an industrial association; or

(iii)    encourage, or participate in, a lawful activity organised or promoted by an industrial association; or

(iv)    comply with a lawful request made by, or requirement of, an industrial association; or

(v)    represent or advance the views, claims or interests of an industrial association; or

(vi)    pay a fee (however described) to an industrial association, or to someone in lieu of an industrial association; or

(vii)    seek to be represented by an industrial association; …

11    Section 363 is also relevant to the findings of contravention in this proceeding. Section 363 is a deeming provision dealing with the actions and state of mind of an industrial association, and relevantly provides:

(1)    For the purposes of this Part, each of the following is taken to be action of an industrial association:

…

(b)    action taken by an officer or agent of the industrial association acting in that capacity;

…

(3)    If, for the purposes of this Part, it is necessary to establish the state of mind of an industrial association in relation to particular action, it is enough to show:

(a)    that the action was taken by a person, or a group, referred to in paragraphs (1)(a) to (e); and

(b)    that the person, or a person in the group, had that state of mind.

(4)    Subsections (1) to (3) have effect despite subsections 793(1) and (2) (which deal with liabilities of bodies corporate).

12    Section 12 defines “officer”:

officer, of an industrial association, means:

(a)    an official of the association; or

(b)    a delegate or other representative of the association.

13    Section 12 also defines “official”:

official, of an industrial association, means a person who holds an office in, or is an employee of, the association.

14    Section 348 is a civil remedy provision. Section 545 relevantly provides in respect of contraventions of civil remedy provisions that:

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

Note 1:    For the court’s power to make pecuniary penalty orders, see section 546.

Note 2:    For limitations on orders in relation to costs, see section 570.

Note 3:    The Federal Court and the Federal Circuit Court may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).

Note 4:    There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).

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

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

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

(c)      an order for reinstatement of a person.

15    In relation to the imposition of penalties for contraventions of a civil remedy provision of the Fair Work Act, s 546 of the Act provides:

546    Pecuniary penalty orders

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

Note:    Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).

Determining amount of pecuniary penalty

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

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

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

Payment of penalty

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

(a)    the Commonwealth; or

(b)    a particular organisation; or

(c)    a particular person.

Recovery of penalty

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

No limitation on orders

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

16    The penalties that may be imposed by this Court are set out in s 539 of the Fair Work Act. Relevantly, s 539 provides:

539    Applications for orders in relation to contraventions of civil remedy provisions

(1)    A provision referred to in column 1 of an item in the table in subsection (2) is a civil remedy provision.

(2)    For each civil remedy provision, the persons referred to in column 2 of the item may, subject to sections 540 and 544 and Subdivision B, apply to the courts referred to in column 3 of the item for orders in relation to a contravention or proposed contravention of the provision, including the maximum penalty referred to in column 4 of the item.

Note 1:     Civil remedy provisions within a single Part may be grouped together in a single item of the table.

Note 2:    Applications cannot be made by an inspector in relation to a contravention of a civil remedy provision by a person in certain cases where an undertaking or compliance notice has been given (see subsections 715(4) and 716(4A)).

Note 3:    The regulations may also prescribe persons for the purposes of an item in column 2 of the table (see subsection 540(8)).

17    Section 348 is included as a civil remedy provision at item 11 of the table then set out in s 539(2). Under that item, the maximum penalty to be imposed for a contravention of s 348 is 60 penalty units. Further, the maximum penalty to be imposed on a body corporate pursuant to s 546(2)(b) of the Fair Work Act is five times the maximum number of penalty units referred to in the relevant item of the table in s 539(2).

18    Section 4AA of the Crimes Act 1914 (Cth) determines the rate of a penalty unit. The applicable penalty rate is fixed by reference to the date of the contravening conduct: Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146; 221 FCR 118 at [6]-[28].

19    At the time of the contravening conduct in May 2013, the applicable penalty rate was $170. Accordingly, the maximum penalty that might be imposed for each contravention by the CFMEU is $51,000. The maximum penalty that might be imposed for each contravention by Mr Myles is $10,200.

MATTERS IN ISSUE

20    The applicant provided a minute of proposed orders that he requested the Court to make as an annexure to his submissions on penalty.

21    Through the statement of agreed facts and admissions, and their submissions, the parties identified the main areas of disagreement. They were:

(1)    Whether the Court should make one declaration of contravention in respect of each respondent, or more than one.

(2)    Whether the Court should impose one penalty upon each respondent, or more than one. This depended on the resolution of competing contentions about whether the conduct was a single course of conduct.

(3)    What was the appropriate approach in principle to the fixing of penalty, in terms of the role to be played in the process by the principle of proportionality and the admitted prior contraventions of both respondents.

(4)    Whether the Court had power to make orders constraining the method and sources of payment of any penalty imposed on Mr Myles.

(5)    Whether, if the Court had power to make orders of that kind, in its discretion it ought to make them.

22    Other than in respect of those issues, the respondents did not submit there were any other difficulties with the orders proposed by the applicant.

23    I deal with these matters as necessary below, along with other relevant (but less controversial) considerations in determining what orders are appropriate to be made against each respondent.

FACTUAL BASIS FOR THE ORDERS TO BE MADE

24    The following findings are made on the basis of the statement of agreed facts and admissions filed by the parties.

25    This prosecution concerns conduct occurring at one of the sites for what is known in Victoria as the Regional Rail Link project, which involves the construction of regional rail lines separate from metropolitan rail lines as well as the modification of existing rail infrastructure including metropolitan, V/Line and Australian Rail Track Corporation Ltd lines. The City to Maribyrnong River Project Package B part of the project includes an area between the north end of Southern Cross Station and the up side of Hopkins Street, Footscray, as well as a section of the Werribee rail line from the down side of Maribyrnong River to the down side of Hopkins Street Footscray.

26    This part of the Regional Rail Link project is to be carried out as a joint venture between John Holland Pty Ltd, Abigroup Contractors Pty Ltd and Coleman Rail Pty Ltd. There is a broader group involved in what is known as the “Package B Project Alliance”, which includes the Secretary of the Victorian Department of Transport (I use this general description recognising the Department changes its name from time to time), the relevant train operators (V/Line and Metro Trains) and a number of other corporations. However it is the three joint venturers who were responsible for the construction work on the project.

27    The workforce of John Holland and Abigroup involved in the project was covered by a single enterprise agreement made under the Fair Work Act. The enterprise agreement was titled the Abigroup, John Holland and the Australian Workers’ Union Regional Rail Link Southern Cross Station to Footscray Junction Project 2012-2015. The Australian Workers’ Union was a party to the enterprise agreement, and there was, accordingly, an AWU delegate on the construction site.

28    The main site offices for the Package B Project were located in Josephs Road, Footscray. The workforce for the project was drawn from labour provided by the three joint venturers as well as a variety of other subcontractors. John Holland had the most employees on site at the time of the offending conduct (71 employees), with Abigroup and Coleman Rail each having a comparatively smaller number (15 and 12 employees respectively).

29    There was a gated entrance to the site offices on Josephs Road, and this was the only way vehicles could enter the construction site.

30    Mr Myles was, in May 2013, a Vice President of the Construction and General Division of the CFMEU. From the evidence, it appears this position sits in the CFMEU organisation hierarchy below the positions of Senior Vice President and President of the Construction and General Division. At the time, there were four Senior Vice Presidents and six Divisional Vice Presidents of the Construction and General Division.

31    The CFMEU wanted a CFMEU delegate on the site. Mr Myles had visited the site frequently since the start of the project and had spoken with Mr Dennis Summerfield, an employee of John Holland. Mr Summerfield was responsible for coordinating and planning the civil works for the Package B Project, including the earth works, structures and services. On repeated occasions Mr Myles had exchanges with Mr Summerfield about getting a CFMEU delegate on the site. He had said to Mr Summerfield that John Holland should “put a CFMEU delegate on the Site”, and had told Mr Summerfield “I need a CFMEU delegate on the Site” and “when am I going to get a delegate?”, or words to that effect.

32    Mr Summerfield’s response had been that since the AWU was the party to the Enterprise Agreement and had a delegate on site, there was no need for a CFMEU delegate. Having said that, there was no dispute before me that the CFMEU was lawfully entitled to make a request of the joint venturers to have one of its delegates on site as well.

33    The parties were also agreed that the making of that request by the CFMEU was within the meaning of “engages in industrial activity” in s 347(b)(iv) of the Fair Work Act, and I accept that to be the case.

34    Prior to the events which are the subject of this prosecution, and consistently with the view Mr Summerfield had conveyed to Mr Myles, the joint venturers had not agreed to have a CFMEU delegate on the site.

35    That brings me to the events of 16 May 2013. On that day John Holland and Abigroup had scheduled the construction of what was called in the evidence a “deflection wall” along a section of railway track. Counsel for the applicant explained in oral submissions that the purpose of the deflection wall was to support a bridge that was to be constructed over the railway line. The wall was to be made of concrete.

36    Boral had been engaged to supply the concrete to build the wall. A large amount of concrete was required: 130 cubic metres of wet concrete. On 16 May 2013, the concrete was to be delivered by concrete trucks arriving in approximately 10 minute intervals over a three to four hour period, with between five and seven cubic metres of concrete to be delivered per load. A number of subcontractors had been engaged to build the wall on that date – some to do the formwork for the wall, some to pump the concrete. The concrete pour would involve 13 employees of the subcontractors, who were scheduled to, and did, arrive between 7 am and 9 am that morning.

37    The first Boral concrete truck arrived at 11.20 am, and the concrete pour began. By approximately 11.50 am, four Boral concrete trucks had delivered approximately 24.4 cubic metres of the 130 cubic metres of concrete to be poured that day. Due to the events which followed, no more concrete would be poured and the construction of the wall had to be abandoned and redone at a later date.

38    Mr Myles and approximately 20 other people arrived at the Josephs Road entrance to the site at approximately 12 noon. By this time, the concrete pour was well underway. They arrived in approximately nine separate vehicles, some of which had “CFMEU” stickers on their rear windows. Neither the people nor the vehicles had any association with the construction work occurring on the site. Many of the people who came with Mr Myles were wearing jumpers with “CFMEU” written on the front and back, or fluorescent vests with the names of various contractors on them.

39    The nine or so vehicles were parked next to each other across the width of the road outside the entrance gate. This blocked vehicle access to the site entrance. Mr Myles and the other people got out of the vehicles and stood around them. The respondents accepted it was appropriate to describe the situation as a blockade.

40    After Mr Summerfield telephoned them, Robert Currie, Abigroup Human Resources/Industrial Relations Manager and Robert Maroney, Abigroup Human Resources Advisor came to the site, arriving shortly after 12 noon.

41    When Mr Summerfield approached Mr Myles and asked him what he was doing, Mr Myles responded with words to the effect of “we’ve lost our keys and are waiting for the RACV”.

42    Mr Summerfield had some traffic management issues to deal with, both in terms of vehicles trying to enter the site and some trying to leave. The drivers of all those vehicles were told to park on the side of the road until he could sort things out.

43    Mr Maroney took some photographs of the scene, which were tendered in evidence. They show a confined area crowded with parked cars and various individuals, and there is clearly no way that any vehicle could get through to enter or leave the site.

44    Mr Currie called the Footscray Police and spoke to Sergeant Mark Anderson, explaining what was happening at the Site. He made this call about 12.20 pm and soon, several police constables had arrived, along with Sergeant Anderson. Sergeant Anderson spoke to Mr Myles, who told him that he and the other individuals with him would “be there for about an hour”.

45    By this time (that is, around 12.30 pm), four more Boral concrete trucks had arrived at the site to continue the concrete pour, and were forced to park along the side of Josephs Road. Mr Summerfield went over to speak to Mr Myles again, and they had a conversation, the substance of which was agreed between the parties to be as follows:

Myles:    I haven’t got a delegate on site to protect my members so I’m blocking the road.

Summerfield:    The Alliance has an AWU delegate, we don’t need a CFMEU delegate. We are under an AWU Agreement.

Myles:    I will only remove the blockade if you stop the pour and pack the concrete pumps up.

46    More police officers arrived. One was Senior Sergeant Damian Jones from the Footscray Police. He spoke to Mr Myles who told him that Mr Myles and his companions would not leave the site until they had disrupted the concrete pour for the day. He also said that the cars would remain blocking the road until the concrete trucks and the concrete pumper had left the area for the day.

47    Approximately an hour later, the respondents’ actions began to have an effect on the condition of the concrete in the four trucks, which began to spoil. All the concrete was rendered unusable. The four trucks left Josephs Road and went to Delta Concrete Recycling to dump the spoiled concrete. The 24.4 cubic metres of concrete which had already been poured to start the wall was also wasted. That concrete had to be destroyed. The entire wall was subsequently repoured at a later date.

48    In turn, this led to John Holland, through Mr Summerfield, cancelling the rest of the concrete deliveries scheduled for 16 May 2013 and instructing the pumping crews to pack up and leave the site because there was no work for them to do. The rest of the work scheduled for 16 May 2013 also had to be abandoned, and recommenced on another occasion.

49    After the concrete trucks and the subcontractors had left, and as Mr Summerfield was passing near to Mr Myles, Mr Myles said:

I’ll be back tomorrow to stop the concrete pour … You won’t pour again until you put a delegate on and Ralph Edwards is happy.

50    Mr Ralph Edwards was the President of the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU.

51    Shortly after this comment, a discussion occurred between the individuals who were blocking the site entrance. They were observed to shake hands and pose for a photograph with a red “CFMEU” flag that one of them was carrying. After the photo was taken, they all left Josephs Road in their vehicles and the road was clear again. This was not long after 2.30 pm. The road had therefore been blocked for just over two and a half hours.

52    The respondents do not dispute that their actions caused delay and disruption to the construction works at the site, and caused the joint venturers to incur wasted construction costs. Those costs included the cost of delivery of the concrete which was both wasted and spoiled, and labour costs associated with the concrete pour that day. Additional costs were incurred in demolishing that part of the wall which had been erected, and also in disposing of the spoiled concrete assigned to it. Those losses were not quantified on the evidence before me, however I am prepared to infer from the evidence about the amount of concrete involved, the number of trucks and the number of workers, that those costs were significant. The respondents’ action caused a short delay to the project itself, but on the evidence that delay does not appear to have been more than one day.

53    The respondents were not done with their disruption upon leaving the site on 16 May 2013.

54    Instead, Mr Myles returned to the site the next morning, on 17 May 2013, to see if the CFMEU action had had the desired effect. He met Mr Summerfield at approximately 9.55 am, at the pedestrian entrance to the site. The following conversation occurred:

Myles:    Has the project reconsidered having a delegate on site, because if there was a delegate on site, there would be no more issues, guaranteed?

Summerfield:    No, we haven’t considered a delegate and won’t be having one.

Myles:        Do you want a war or a delegate?

Summerfield:    Nobody wants a war.

Myles:    Well if you don’t want to put a delegate on then we will have one. I’ll be back tomorrow to stop the concrete pour.

55    Having delivered his message, Mr Myles left the site. There is no evidence before me whether he did in fact return on 18 May 2013 to stop, or attempt to stop, the concrete pour. Indeed, there is no evidence at all before me as to events after 17 May 2013 at the Josephs Road site, nor in relation to whether a CFMEU delegate was put on the site.

FINDINGS

56    On the basis of those facts, I make the following findings.

57    Mr Myles was an “officer” of the CFMEU within the meaning of that word set out in s 12 of the Fair Work Act, because he was an “official” of the CFMEU, holding the office of Vice President of the Construction and General Division.

58    Mr Myles organised and participated in the blockade of the Josephs Road entrance to the Package B Project construction site on 16 May 2013, between approximately 12 noon and shortly after 2.30 pm. He led a group of more than 20 other individuals associated with the CFMEU. Their actions caused a significant and costly amount of wastage of a very large amount of concrete which had been ordered and partly delivered to the site. It also caused the joint venturers to incur additional, unforeseen and unnecessary costs of disposing of the spoiled concrete and dismantling that part of the wall that had been poured and was wasted because of the blockade. Their conduct also caused a short delay in completion of the construction of the wall.

59    As well as organising, leading and engaging in the blockade itself, Mr Myles made two distinct threats to the joint venturers, by his statements to Mr Summerfield. The first threat was that which I have set out at [49] above, which was made after the concrete pour had been successfully disrupted. That threat was to repeat the blockade on 17 May 2013, and to cause a similar level of disruption and waste to the construction work at the Josephs Road site. I infer that Mr Myles was aware that a second day of disruption and potential wastage of that large an amount of concrete would cause additional damage to the joint venturers and to the progress of the project.

60    The second threat was the one I have set out at [54] above, and was made by Mr Myles to Mr Summerfield the following day, 17 May 2013. I find Mr Myles returned to the site with the express intention of finding out whether the threat made on the previous day, after the successful disruption of the concrete pour, had had the desired effect of causing John Holland and the other joint venturers to allow a CFMEU delegate onto the site.

61    I find that the blockade itself was undertaken with the clear intention of coercing John Holland, and the other joint venturers, to change their position and comply with the CFMEU request for a CFMEU delegate to be present on the Josephs Road site.

62    I further find that each of the threats was made with the clear intention of coercing John Holland, and the other joint venturers, to change their position and comply with the CFMEU request for a CFMEU delegate to be present on the Josephs Road site.

63    In the case of the blockade itself, and the two threats he made on 16 and 17 May 2013 respectively, the conduct in which Mr Myles engaged was intended to coerce John Holland and the other joint venturers to engage in industrial activity within the meaning of s 347(b)(iv) of the Fair Work Act: namely, to comply with the CFMEU request for one of its delegates to be present at the Josephs Road site.

64    The blockade, and the two threats made by Mr Myles, amount to contraventions of s 348 of the Fair Work Act.

65    Mr Myles engaged in the conduct I have set out above in his capacity as an officer of the CFMEU. By reason of s 363(1)(b) of the Fair Work Act, read with s 363(3), his actions and state of mind, as I have described them above, are taken to the be the actions and state of mind of the CFMEU. Accordingly, I find the CFMEU has also contravened s 348.

66    There is no doubt that penalties must be imposed on each of Mr Myles and the CFMEU for this conduct.

APPLICABLE PENALTY PRINCIPLES

67    I summarised the approach I consider should be taken to the determination of appropriate penalties for contraventions of the Fair Work Act in Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 at [73]-[88] and I need not repeat those observations.

68    In Weininger v The Queen [2003] HCA 14; 212 CLR 629 at [24] the plurality said:

As was pointed out in Storey, it is important to avoid introducing “excessive subtlety and refinement” to the task of sentencing. That object is advanced if sentencing and appellate courts pay close attention to identifying those matters that the sentencing judge takes into account in a way that is adverse to the interests of the accused, and those matters that the sentencing judge takes into account in favour of the accused. It must be recognised that not every matter urged on the judge who is to pass sentence has to be, or can be, fitted into one or other category. The judge may be unpersuaded of matters urged in mitigation or in aggravation. The absence of persuasion about a fact in mitigation is not the equivalent of persuasion of the opposite fact in aggravation. So to conclude would ignore the different standards of proof that are to be applied. It would also be wrong because it would assume that human behaviour can always be described as a dichotomy. It cannot. Human behaviour and characteristics are more varied than that. Further, it would be wrong because it would assume that sentencing is a syllogistic process. It is not. It is a synthesis of competing features which attempts to translate the complexity of the human condition and human behaviour to the mathematics of units of punishment usually expressed in time or money.

(Footnote omitted.)

69    Both parties relied on parts of the reasons of the High Court in Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465. In my opinion, the relevant passages, to which I shall return, are the following (at 472-8):

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

…

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

…

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

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

(Footnotes omitted.)

70    The need for proportionality was emphasised again by the High Court in Hoare v The Queen [1989] HCA 33; 167 CLR 348 at 354. The respondents relied in particular on the passage at 354 in which the High Court said that the proportionality of the sentence or punishment to the gravity of the breach needs to be assessed in light of the “objective circumstances” of the case (emphasis in original), although I note those observations were made in the context of the role that the potential for remissions on sentence (as a future discretionary decision) should play in the sentencing process. The High Court has also referred with approval to Veen (No 2) and confirmed the relevance of the principle of proportionality in more recent decisions such as Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [69] per McHugh J (“one of the fundamental principles of sentencing law”); Muldrock v The Queen [2011] HCA 39; 244 CLR 120 at [18] per the Court (“At common law the exercise of the sentencing discretion is the subject of established principles. These include proportionality, parity, totality, and the avoidance of double punishment” (citations omitted)); Elias v The Queen [2013] HCA 31; 248 CLR 483 at [25] per French CJ, Hayne, Kiefel, Bell and Keane JJ; and Munda v Western Australia [2013] HCA 38; 249 CLR 600 at [53] per French CJ, Hayne, Crennan, Kiefel, Gageler and Keane JJ (“Mitigating factors must be given appropriate weight, but they must not be allowed ‘to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence’”).

71    I accept also, as the applicant submits, that care needs to be taken so that matters which are regularly referred to in penalty cases do not become some kind of inflexible checklist to be followed: see the remarks of Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [91], which I would respectfully adopt; see also A & L Silvestri v Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [6] per Gyles J; Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171; 262 ALR 417 at [29]-[30] per Moore, Middleton and Gordon JJ.

72    That principles of proportionality in criminal sentencing should be applied in determining a penalty in this case was a central feature of the respondents’ submissions. Proportionality was also their principal answer to the applicant’s contention that relatively high penalties should be imposed on the CFMEU in particular, given its prior record of contraventions, including contraventions involving coercion. On the basis of those prior contraventions, the applicant submitted the CFMEU was an “incorrigible recidivist”. The respondents sought to dilute the effects of these contentions by submitting that to accept them would offend the principles of proportionality which the High Court has repeatedly endorsed.

73    Notwithstanding reliance on Veen (No 2), including the parts I have extracted above, I do not accept, in its totality, the submission made on behalf of the respondents regarding the role of proportionality in the imposition of civil penalties. There are several reasons for this.

74    In their written submissions, the respondents relied on the need for proportionality in submitting there was no “augmented role” for deterrence in this proceeding, which the applicant submitted was the case because previous penalties imposed on the CFMEU had been ineffective. The respondents contend that high penalties would not be proportionate to the “objective circumstances” of these particular contraventions and that those circumstances include “the circumstances of the offence (but not the circumstances of the offender)”.

75    I do not accept either of those contentions. In Magaming v The Queen [2013] HCA 40; 252 CLR 381 at [51], the plurality described the operation of proportionality in a way which, in my respectful opinion, gives more content to the concept of “objective circumstances” that was referred to in Hoare:

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

76    Therefore, the penalties imposed must reflect the particular circumstances of each respondent and that respondent’s conduct when compared to other contraveners and other contraventions. That analysis is properly to be undertaken in the setting of the Fair Work Act. While proportionality is to be applied as between the penalty and the contravening conduct, I do not accept the minimisation in the respondents’ submissions of the seriousness of their conduct. For reasons I set out more fully below, I consider these were serious contraventions of a substantial kind.

77    The remarks of the High Court in the authorities to which the respondents referred were made in contexts in which the sentence under consideration was imprisonment. Loss of liberty is, under Australian law, the most serious punishment available to a sentencing court. Judicial consideration of the length of a head sentence, and any non-parole period, occurs in the face of the fact that an individual is being deprived of her or his liberty. It is little wonder that, in that context, the courts emphasise the need for close correlation between the objective circumstances of the conduct constituting an offence and what is necessary and justifiable to meet the purposes of sentencing principles. It may be, in my opinion, that where the imposition of penalties is the subject matter of judicial consideration, other considerations such as general and specific deterrence (given their primary roles in penalties schemes) allow for what is considered proportionate to cover a wider field than might be the case with a sentence of imprisonment.

78    For that reason, it is important to recall the characterisation by the plurality of the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 90 ALJR 113 (the Agreed Penalties Case) of the nature and purpose of a civil penalty regime. The plurality referred to and endorsed the distinction made by a Full Court of this Court in Gapes v Commercial Bank of Australia Ltd [1979] FCA 62; 38 FLR 431 between civil penalty regimes and criminal offences, including differences as to applicable procedure and standard of proof. At [24] the plurality described the purpose of civil penalty regimes in the following terms:

In essence, civil penalty provisions are included as part of a statutory regime involving a specialist industry or activity regulator or a department or Minister of State of the Commonwealth (the regulator) with the statutory function of securing compliance with provisions of the regime that have the statutory purpose of protecting or advancing particular aspects of the public interest. Typically, the legislation provides for a range of enforcement mechanisms, including injunctions, compensation orders, disqualification orders and civil penalties, with or, as in the BCII Act, without criminal offences. That necessitates the regulator choosing the enforcement mechanism or mechanisms which the regulator considers to be most conducive to securing compliance with the regulatory regime. In turn, that requires the regulator to balance the competing considerations of compensation, prevention and deterrence. And, finally, it requires the regulator, having made those choices, to pursue the chosen option or options as a civil litigant in civil proceedings.

79    Later in their reasons for judgment (at [51]-[60]), the plurality returned to identify some of the differences between a criminal prosecution and a civil penalty proceeding. Keane J identified similar considerations at [89]-[93], especially the accusatorial nature of criminal proceedings and the consequences for the procedural and substantive principles engaged because those proceedings have that character. Amongst the matters emphasised is the proposition that there is a central connection between the nature of the orders sought and the standard of proof in a proceeding, with the plurality endorsing (through footnotes to the propositions) the Court’s statement in Chief Executive Offıcer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; 216 CLR 161 at [136] that:

In particular, proceedings are distinguished according to whether or not they seek the conviction of the defendant for an offence.

80    The plurality in the Agreed Penalties Case also endorsed at [55] the description given by French J (as his Honour then was) in Trade Practices Commission v CSR Ltd [1990] FCA 521 at [40]; [1991] ATPR 41-076 at 52,152 of the purpose of civil penalty provisions:

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

Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.

(Footnotes omitted.)

81    It is also appropriate to recall the identification by the plurality at [47]-[48] of the different functions performed by submissions made by the parties (including joint submissions) as to the civil penalty a court should impose as opposed to a criminal penalty:

Weinberg JA’s criticisms in Ingleby of NW Frozen Foods and Mobil Oil did not anticipate the reasoning in Barbaro. As was earlier emphasised, Barbaro was concerned with submissions as to the available range of sentences in criminal proceedings, in the sense described in Everett. That range refers to the spread which notionally separates the indeterminate points beyond which a court of criminal appeal is persuaded that a sentence is so manifestly excessive or inadequate as to be affected by error of principle. In contrast, NW Frozen Foods and Mobil Oil were concerned with the very different conception applicable to civil penalty proceedings that, because fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which “courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another”. It is only in that latter sense and only to that extent that the court will not depart from the submitted figure “merely because it might otherwise have been disposed to select some other figure”.

NW Frozen Foods and Mobil Oil do not suggest that the task of a judge faced with an agreed civil penalty submission is to determine whether the submitted penalty is “wholly outside” the “range of penalties reasonably available” or that the court is “bound to impose [an agreed] penalty irrespective of whether it is considered appropriate”. To the contrary, as was emphasised in Mobil Oil, those cases make plain that the court is not bound by the figure suggested by the parties. The court asks “whether their proposal can be accepted as fixing an appropriate amount” and for that purpose the court must satisfy itself that the submitted penalty is appropriate.

(Footnotes omitted. Emphasis added by the plurality.)

82    Finally, I note a point made by Keane J at [89] , where his Honour refers to the observations of Hayne J in Labrador at [114]:

As Hayne J, with whom Gleeson CJ and McHugh J agreed, said in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd, the classification of proceedings as “civil” or “criminal” is:

at best, unstable. It seeks to divide the litigious world into only two parts when, in truth, that world is more complex and varied than such a classification acknowledges. There are proceedings with both civil and criminal characteristics: for example, proceedings for a civil penalty under companies and trade practices legislation. The purposes of those proceedings include purposes of deterrence, and the consequences can be large and punishing.

83    Nevertheless, as Keane J noted (for example at [90] and [101]) it is incumbent on the judicial branch to observe and give effect to the legislative choice of the parliament in designating certain statutory prohibitions as “civil penalty provisions”, in contradistinction to a designation of statutory prohibitions as criminal offences.

84    In approaching the task of imposing penalties under the Fair Work Act in this case, the distinctions drawn in the judgments in the Agreed Penalties Case, and the earlier statements of principle endorsed in that case, are not only applicable but of some importance in resolving the competing contentions about the role of proportionality and the weight to be given to principles of specific and general deterrence in fixing civil penalties.

85    I turn now to examine the matters I consider affect, one way or the other, the penalties which should be imposed. In doing so I consider the competing arguments whether the conduct which is the subject of the prosecution is properly characterised as one course of conduct.

MATTERS RELEVANT TO PENALTY IN THIS PROCEEDING

Whether there is one course of conduct

86    Section 348 of the Fair Work Act, the provision contravened by the respondents, is not amongst the provisions listed in s 557(2) of the Fair Work Act. Accordingly, the matters set out in s 557(1) do not apply to a contravention of s 348. Section 557(1) provides:

(1)     For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

(a)     the contraventions are committed by the same person; and

(b)     the contraventions arose out of a course of conduct by the person.

87    Although s 557(1) is inapplicable to contraventions of s 348, the parties made submissions about, and I accept it is appropriate to determine, whether the conduct constituting the contraventions in this case is a single course of conduct. I adhere to the views I expressed in Sayed at [29]-[34], that although the avoidance of double punishment is an important aspect of the rationale for considering whether the conduct alleged to constitute two or more contraventions is, in reality, one course of conduct, broader notions of what is a just outcome are also at work.

88    There may be an argument, whether based on principles of construction such as that found in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia [1932] HCA 9; 47 CLR 1, or some other principle, that any such general law principles, even if otherwise applicable, are displaced by the presence of the express and specific terms of s 557(1). However, neither party made that submission.

89    In the present case, the relevant events in question occurred on consecutive days on 16 and 17 May 2013. However, as I noted in Sayed at [37], the mere fact that events occurred over a short space of time does not necessarily indicate one course of conduct. Otherwise, the more quickly and hastily a person acted, the easier it would be for her or him to seek to characterise her or his actions as only one incursion of the applicable statutory prohibitions.

90    The applicant submits there are three discrete contraventions of s 348 that should attract discrete penalties: first, the blockade on 16 May 2013; second, the threat made on 16 May 2013; and, third, the threat made on 17 May 2013. However, the applicant acknowledges some similarities and connections between the two events of 16 May 2013 and his counsel acknowledged in oral submissions that it would be open to the Court to find that the two events constitute a single course of conduct for the purposes of penalty. Nevertheless, relying on Johnson v The Queen [2004] HCA 15; 205 ALR 346 at [4]; Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; 168 FCR 383 at [41]-[55]; Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461 at [45]; and Carr v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2005] FCA 1802 at [12] and [16], the applicant submits that even where contraventions occur closely together, “consecutive” penalties would generally be appropriate if the contraventions are in truth “separate incursions” into offending conduct.

91    The applicant accepts an obvious common coercive intent running through the contraventions on 16 and 17 May 2013 to force the joint venturers to allow a CFMEU delegate on the site. However, he contends the conduct constituting the three contraventions was different in nature, and separate and distinct in time and type. In his written submissions, those differences were described as follows:

The Blockade involved Myles attending the Site in the company of other persons wearing CFMEU attire (whom Myles organised) and having cars parked across the road accessing the Site, so as to disrupt a concrete pour. This conduct involved no threat.

The first threat was to take further additional action in the future. It was distinct in time from the Blockade already engaged in earlier in the day and was in addition to the action already taken. It was not clear from the threat how the result would be achieved. It therefore could not be said to be the “same” as the action Myles had already taken. Rather, the threat represented a distinct and separate escalation in the hostilities the CFMEU was preparing to pursue. Importantly, section 348 recognises the distinction between threatening action and taking action (with the requisite intent) and seeks to separately proscribe and punish each. They are separate incursions.

The second threat was made on a different day in quite a different context and was different in its nature.

92    The respondents submit there is no meaningful distinction between the episodes on 16 and 17 May 2013. They submit there is clear unity as to motive; practical identity as to location and parties; and that the nature of the coercion is identical. The respondents submit the threats made on 16 and 17 May 2013 derive their force and meaning entirely from the 16 May 2013 blockade. The respondents note this Court has previously accepted that an action, combined with a threat to continue the action, can amount to a single course of conduct: Williams at [23]-[25] per Moore, Middleton and Gordon JJ; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1173 at [21]-[22] per Jessup J (the Mitcham Rail Case); Hamberger v Construction, Forestry, Mining and Energy Union [2002] FCA 585 at [26]-[27] per Cooper J.

93    Without abandoning the contentions as I have set them out above, both parties in oral submissions acknowledged it would be open to characterise the blockade and Mr Myles’ threat on 16 May as one course of conduct, and Mr Myles’ threat on 17 May as a separate course of conduct. In other words, that the three contraventions are to be properly characterised as two courses of conduct for the purposes of penalty.

94    The terms of s 348 disclose a legislative intention to prohibit, and punish, both the taking of action with the relevant intention to coerce and threats to take such action. Section 348 prohibits both forms of conduct and each is capable of constituting a contravention of the statute. As Cahill demonstrates, it is also possible to characterise a series of threats, separated in time, as separate contraventions. The capacity of threats and action to be identified as separate courses of action was articulated by Jessup J in the Mitcham Rail Case at [22]:

Section 348 makes a distinction between organising or taking, and threatening to organise or to take, action. It is one thing to say that action combined with a threat to continue the action if the demand in question were not acceded to amounts to a single course of conduct, as was the case in Williams. It would be a very different thing, in my view, to say that the making of a threat, the intercession of a three-week period to see if the threat would produce the desired result, and the taking of consequential action when it was apparent that it had not done so amounted to but a single course of conduct.

95    Where there is conduct constituting a threat, or threats, and conduct constituted by actions, the element of intention to coerce for the purpose set out in s 348 will often be common between them, that intention being a necessary element in establishing a contravention of s 348. Thus, for the purposes of identifying separate courses of contravening conduct, the persistence of the intention to coerce in respect of a particular kind of industrial activity throughout a number of threats, or actions, will not be determinative in identifying what is properly to be regarded as ‘separate’. At least in part, this was the point made by Tracey J in Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [37] (the Myer Emporium Case), although as his Honour also noted (and I respectfully agree) that neither the fact that the conduct occurred in the same place or that the same provisions of the Fair Work Act were contravened necessarily leads to the conclusion that the conduct must be seen as one course of conduct. See also the observations of Cavanough J in Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134; 241 IR 288 at [89] and Katzmann J in Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 4) [2012] FCA 894 at [14] (“The same motive will rarely be enough”).

96    Some of the authorities to which I have referred illustrate, in their application of principle to the facts, that there are questions of degree and characterisation involved in determining what in the course of events admitted, or proved, against a contravening party should be seen as one course of contravening conduct.

97    Based on the findings I have made above, in my opinion the correct characterisation of the respondents’ conduct on 16 May 2016 is that they engaged in action of blockading the Josephs Road entrance to the Package B Project construction site for more than two hours, and that action was accompanied by a threat made by Mr Myles to Mr Summerfield as I have described at [49] above. The intention of Mr Myles was to coerce John Holland and the other joint venturers into agreeing to a CFMEU delegate being placed on the site. That was the reason for both the blockade and for what Mr Myles said to Mr Summerfield. There were two contraventions of s 348, one constituted by the action of the blockade and one constituted by Mr Myles’ threat.

98    Once it was obvious that the blockade meant no concrete trucks could get through and the pour would have to be abandoned, John Holland, through Mr Summerfield, cancelled the rest of the concrete deliveries scheduled for 16 May 2013 and told the pumping crews to pack up and leave the site because there was no work for them to do. The rest of the work scheduled for 16 May 2013 also had to be abandoned, and recommenced on another occasion. It was after what was, I find, a successful outcome from Mr Myles’ perspective because the disruptive aim of the blockade had been achieved, that Mr Myles then issued another threat, by saying, as I have recorded at [49] above:

I’ll be back tomorrow to stop the concrete pour … You won’t pour again until you put a delegate on and Ralph Edwards is happy.

99    I have considered whether it is appropriate to see this as a separate act of contravention to what had occurred to this point on 16 May 2013. Certainly, its context is quite different to what went before. Whatever Mr Myles said at earlier points in the confrontation (including a threat to the effect of “I won’t move the blockade unless …”) was part and parcel of the disruptive blockade action designed to procure a change in John Holland’s decision about the CFMEU delegate. This subsequent threat, made after work for the day had been called off, was, I find, designed to reinforce the power of the CFMEU to continue to affect adversely the business operations of the joint venturers when the joint venturers refused to comply with CFMEU demands.

100    Nevertheless, because of its close connection in time and circumstance with the blockade, its close connection with what Mr Myles had already said to Mr Summerfield during the blockade, and the fact that what Mr Myles said flowed directly from what had happened at the blockade that day, I find the threat uttered by Mr Myles was designed to reinforce and stand together with what had already occurred that day. It was a final departing comment to Mr Summerfield regarding the consequences for the joint venturers of refusing to allow a CFMEU delegate on site. It was a threat about what future consequences would flow to the joint venturers if they did not change their position, but it was also a final ‘wrap up’ kind of comment following on from the action taken that day. Therefore, I do not consider it would be appropriate to characterise these parting remarks by Mr Myles as a separate course of conduct for the purposes of determining penalties for contraventions of s 348 of the Fair Work Act.

101     What occurred the next day however should in my opinion be seen as a separate course of conduct. The respondents, having made their point with conduct and threats on 16 May and having caused considerable disruption of work on the Josephs Road site, took a deliberate decision to return to the site to apply further coercive pressure to the joint venturers. As I have found at [54] above, Mr Myles returned to the site on 17 May 2013 with the express intention of finding out whether his conduct the day before had produced the effect the CFMEU desired. On discovering it had not, and that the joint venturers were not going to change their positon regarding the presence of a CFMEU delegate on site, he chose to make a further threat. The terms of that further threat are also set out at [54] above. He made that further threat with the intention of pressuring the joint venturers (through Mr Summerfield, to whom he spoke) to reconsider their position and comply with the CFMEU’s request. By using the terminology of “war”, Mr Myles chose language designed to suggest to Mr Summerfield that the dispute would escalate. That is, Mr Myles decided, separately from the action of the blockade on 16 May 2013 and from what he said during that event, to convey the impression to Mr Summerfield that the CFMEU intended to escalate the dispute into a “war” unless its demands were met. That decision, and the threat made by Mr Myles, was in my opinion a separate course of conduct contravening s 348, albeit made with the same intention as the conduct and threats of 16 May 2013.

102    Thus, in my opinion the respondents engaged in three contraventions of s 348 of the Fair Work Act, which are appropriately seen as two separate courses of conduct: one on 16 May 2013 and the other on 17 May 2013. Penalties should be imposed on each respondent in respect of each course of conduct.

The nature and seriousness of the conduct

103    In my opinion it is inescapable that the respondents’ conduct should be characterised as serious, and as intended to have only one purpose, which was an unlawful purpose. That conclusion stems from a number of factors. A clearly available inference from the evidence, which I am prepared to draw, is that the respondents’ contraventions occasioned significant extra cost to the joint venturers, material delay, and significant disruption to work on the project site. I also find that the respondents intended to cause each of those outcomes. The outcomes were not collateral effects of the respondents’ conduct, but part and parcel of the coercive pressure the respondents intended their conduct to produce.

104    Given the history of contraventions of s 348 by both the CFMEU and Mr Myles, I am prepared to infer that both respondents (and the CFMEU’s other responsible officers) well knew the conduct was unlawful, and did not care. I accept the applicant’s submission that the respondents’ behaviour in relation to these contraventions is a continuation, or repetition, of the behaviour exhibited in relation to the Mitcham Rail project (Mitcham Rail Case [2015] FCA 1173, Jessup J, in which findings were made against both the CFMEU and Mr Myles) and the Bald Hills Wind Farm project (Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407, Tracey J (the Bald Hills Wind Farm Case), in which Mr Myles was not a respondent). The seriousness of the respondents’ behaviour is exacerbated by the fact that it can be characterised as a repeated tactic. The use by Mr Myles of Mr Edwards’ name, and his obvious intention to convey the message to Mr Summerfield that Mr Edwards endorsed what was happening, was calculated to give the impression of the level of authority Mr Myles had to make the threats and the level of the CFMEU’s determination to procure the result it wanted.

105    It is correct that the time period over which the contraventions occurred was reasonably short, but I am not persuaded that is a factor which tells one way or the other in terms of fixing an appropriate penalty. The period of time is more obviously related, in my opinion, to the nature of the threat and the blockade. Having successfully blockaded the site, and having followed it up with a threat, the point was made.

106    I accept the respondents’ submissions that there was, on the evidence before the Court, no violence involved in the contraventions. Contrary to the respondents’ submissions, I do not consider the absence of violence to affect the level of seriousness with which the contraventions should be viewed. If Mr Myles or other CFMEU members had engaged in violence during the blockade on 16 May, or there had been violence on the return to the Josephs Road site on 17 May, then no doubt consideration would have been given to whether criminal charges should be laid. The criminal law is apt to deal with violent conduct occurring in a situation such as this. I see nothing in the text, context or purpose of s 348 which suggests that action which does not involve violence should necessarily, or even usually, be seen as “less serious”. An assessment of the seriousness of the conduct is made by reference to the intention of s 348 in preventing the coercion of people to engage in industrial activity.

The conduct was deliberate and knowingly unlawful

107    I have already made findings to this effect. The respondents are longstanding, experienced, and regular participants in industrial activity. They are legally represented and have clear capacity to take advice about the lawfulness of their proposed conduct before they engage in it. For the year ending 31 December 2014, the accounts of the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU alone showed an expenditure on legal fees of over $2.2 million.

108    As I have noted elsewhere in these reasons, the evidence shows that they repeatedly engage in the same kind of conduct, which is repeatedly found to be unlawful, often on the eventual basis of agreed facts and admissions. These matters are in my opinion relevant to an understanding of how deliberate, and how knowingly unlawful, these particular contraventions can be said to be.

109    It is apparent from the evidence that neither the CFMEU as an organisation, nor the controlling minds within its executive, appear to care at all whether conduct they plan against employers for industrial purposes is unlawful. Nor, it appears from the evidence, does Mr Myles care about the lawfulness of what he does either, so long as it serves the industrial purpose he seeks to advance. No explanations for what occurred were offered in evidence, or by way of agreed facts. There were no expressions of remorse or any apologies forthcoming from the CFMEU executive, or from Mr Myles. No exculpatory factors were proffered in the evidence, or by way of agreement. Indeed, no larger context was given to the industrial dispute at all by the respondents. It was not suggested in evidence, for example, that there were particular health and safety concerns at the Josephs Road site which had prompted the CFMEU to insist on its own delegate being present on site. Rather, the evidence suggests the respondents’ activity arose from nothing other than a continued drive for greater industrial power. The prospect of conduct (whether actions or threats or both) being unlawful appears to have no impeding effect at all on the respondents’ behaviour.

110    There is a further point which should be made about the deliberate nature of the respondents’ conduct, in the context of the CFMEU as an industrial organisation.

111    The CFMEU is an organization with a large asset and income base. It occupies a position with particular legal privileges and responsibilities as a registered organisation under the Fair Work (Registered Organisations) Act 2009 (Cth). It is exempt from income tax, and in that sense whatever funds it determines to use to pay pecuniary penalties are not “after tax” funds. The applicant submitted, and I accept, that the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU alone recorded a net surplus of $2,982,143 for the financial year ending 31 December 2014; and as at 31 December 2014, had net assets of $58,862,813 (including $14,353,117 of cash and cash equivalents such as cash at bank and short term deposits).

112    The accounts of the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU alone for the year ending 31 December 2014 show receipts of in excess of $19 million from its members. It also appears to have received in excess of $8 million in “operating grant receipts”, which I infer are receipts from public funds. The 2014 accounts do not reveal any entries in respect of the payment of penalties by the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU, but I consider it a reasonable inference to draw that where the CFMEU is ordered to pay penalties, it will do so from funds which have been in part received from its members, or alternatively from public funds.

113    The relevance of this evidence for present purposes is that, in my opinion, it is clear that when the CFMEU (and its officer, Mr Myles) decided to engage in this conduct, knowing it was unlawful, and intending the conduct to have the prohibited coercive effect set out in s 348, they did so also knowing that any pecuniary penalties a court may impose could be satisfied from funds received both from the public purse and from CFMEU members, despite such use producing no benefit at all for CFMEU members. It compounds the respondents’ disregard for the law that the large asset and income base of the union could be seen as providing a suitable cushion from the tangible effects of any unlawful behaviour.

The admissions made by the respondents and the avoidance of a contested hearing on contravention

114    I give some, but minimal, weight to the fact that, ultimately, the respondents made admissions and a contested trial on the facts was avoided. That is because the respondents’ change in position occurred very close to trial and, I find, for reasons related to the settlement of other litigation. It was not a change of position borne of any real contrition.

115    The amended defences filed on behalf of the respondents in mid November 2015 contained no admissions, and consisted almost entirely of pleadings that the respondent did not know or could not admit certain allegations, or denied the applicant’s allegations. As I have noted earlier in these reasons, the parties advised the Court of a settlement of the applicant’s claims only 10 days before the trial was due to commence. This followed upon the settlement of related proceedings in the Supreme Court of Victoria. Senior counsel for the respondents said in argument:

MR MORRISSEY:     Anyway, I think it’s – so just to be clear not to distract that the submission is simply this that by virtue of being – that the charge in the proceedings in this matter were not brought for 12 months and that hasn’t occasioned us any embarrassment, so we’re not making a complaint of it, but it’s – that is the fact. In the meantime a criminal charge was laid. That took priority for the union and ultimately when that matter resolved and was withdrawn this matter has speedily raced to a conclusion. If your Honour were not minded to make a finding in the union’s favour concerning delay there then it still is a relevant matter in considering the cooperation of the union with the process in ultimately accepting responsibility for the breaches I mentioned and that’s the way in which it can be used.

HER HONOUR:     You don’t seek to characterise that as remorse or contrition, you seek to - - -

MR MORRISSEY:     No.

HER HONOUR:     - - - characterise it as cooperation?

MR MORRISSEY:     Correct.

116    I consider the respondents’ conduct demonstrates the barest of cooperation, mostly due to the realisation that once the issues they had sought to raise about the stay of these proceedings had been unsuccessful, or served no further purpose, they were likely to be found to have engaged in the contraventions alleged. Their change in position was due, I find, to self interest, rather than to any considerations which should operate significantly in mitigation of penalty.

117    Some allowance should be made for encouraging parties in the position of the respondents to make admissions and co-operate in agreeing facts with the resulting savings in the resources of the parties and the publicly funded resources of the Court, and I have made such an allowance in reaching the figures I consider are appropriate penalties.

History of contraventions: CFMEU and Mr Myles

118    Just as in other penalty proceedings involving the CFMEU, the applicant attached to his submissions a table setting out the prior contraventions of industrial laws by the CFMEU. That table had 106 separate entries, dating back to 1999. In 2015 alone, there were 10 decisions of this Court finding contraventions against the CFMEU, in relation to conduct occurring between 2012 and 2014.

119    The applicant attached a second table showing the history of coercion contraventions involving the Victoria/Tasmania Branch of the Construction and General Division of the CFMEU, the branch responsible for this conduct. This table shows 23 separate proceedings in which contraventions have been proven, dating back to 2004. In 2015 there were four proceedings resulting in orders, relating to conduct between 2012 and 2014.

120    Finally, the applicant attached a table showing Mr Myles’ history of contraventions of industrial laws. The table showed four sets of proceedings in which orders had been made against Mr Myles, the first being in 2013. Three related to conduct in Queensland and the most recent related to conduct in Victoria. Two were in 2015.

121    Neither respondent challenged any aspect of these tables and I accept them as accurate.

122    In the Myer Emporium Case [2015] FCA 1213 at [63], in a statement with which I respectfully agree, Tracey J said:

Neither the CFMEU nor any individual respondent is to be punished again for earlier misconduct. They are, however, to be punished more severely than they would have been had they had no adverse record or been responsible for only a few isolated incidents over a period of many years. Their continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, had not had a deterrent effect: cf Veen v R (No 2) (1988) 164 CLR 465 at 477-8. The longer such recidivism continues the more likely it is that this consideration will carry greater weight than the principle that the maximum available penalty must be reserved for the worst possible offending.

123    To describe what is revealed by each of these tables, and the first table in particular, as evidence of a “continuing attitude of disobedience of the law” is to apply, in my opinion a relatively neutral description.

124    I also agree with the observations of Jessup J in the Mitcham Rail Case [2015] FCA 1173 at [29] that this kind of evidence “bespeaks an organisational culture in which contraventions of the law have become normalised”.

125    Clearly, the contraventions relating to coercive conduct are of the most relevance. The respondents did not submit otherwise, nor did they advance a submission (which has been advanced elsewhere) that contraventions occurring outside Victoria, or under previous industrial legislation, should be set aside. Nevertheless, I have considered those issues, and I respectfully agree with the approach taken by White J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160; 140 ALD 337, especially at [54]-[58]. As his Honour noted at [58], where an applicant relies on such material, a respondent is not precluded from adducing evidence in a particular case to explain how the conduct of one branch of an industrial organisation should be seen as independent from another, or to persuade the court that no inference should be drawn about some overall culture within the industrial organisation nationally, and in each branch, of the kind described by Jessup J and to which I have referred at [109] above. No such attempt was made on behalf of the CFMEU in this case. Nor did Mr Myles seek by evidence or submissions to distinguish the four prior proceedings, in which judges of this Court have found he engaged in contravening conduct.

126    There was something of a debate in the present case whether the prior contravening conduct of both respondents was relevant to the Court’s approach to proportionality, or in some other way, by reference to the Court of Appeal’s decision in R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566. I do not consider that I need to enter into the debate with which that case was concerned. It suffices to note the observations of Spigelman CJ at [29], relying on remarks of McClellan CJ at CL in R v Hathaway [2005] NSWCCA 368 at [34], that the different approaches are unlikely to be of practical significance when determining an actual sentence. That will in my opinion be all the more the case when what is occurring is not a sentencing process after criminal conviction. It may be accepted that, so far as the criminal law is concerned, on the authority of Veen (No 2) determining a proportionate sentence involves consideration of the objective circumstances of the offending in the particular case, without reference to prior convictions. Insofar as it is necessary, in imposing penalties, to avoid double punishment, similar reasoning may be required. Beyond noting that requirement, in my opinion it is more useful to focus on the purpose of imposing civil penalties.

127    The purpose of imposing civil penalties, derived from the protective and regulatory objectives of the legislative schemes in which they appear, is to enhance and enforce compliance with the schemes Parliament has established. Where Parliament has determined to prohibit certain conduct, the purpose of empowering a court to impose penalties for contravention of those prohibitions is (leaving to one side additional remedial provisions such as compensation) to better ensure compliance in the future, and to deter contravening conduct. Those objectives form only part of the objectives of sentencing in the criminal law, and in my opinion this means some caution needs to be exercised in considering authorities about the role of prior convictions in the sentencing process. Clearly there are some principles which carry over to the penalties discretion, such as the avoidance of double punishment, although describing what occurs in the imposition of penalties as “punishment” (as that concept is understood in the criminal law) is something of a loose description. The observations of McLellan CJ at CL, endorsed by Spigelman CJ in R v McNaughton, that there may be no practical significance in the distinctions said to be at issue in those cases, has even more force in considering the imposition of penalties. For that reason, I do not propose to enter into the debate, if there be one, regarding what was said by the Northern Territory Court of Appeal in R v Haji-Noor [2007] NTCCA 7; 21 NTLR 127 about the NSW Court of Appeal’s approach in McNaughton.

128    What matters for the imposition of penalties in a proceeding such as this is what that history of contraventions says regarding the role that both specific and general deterrence should play in the level of penalties to be imposed, and any other discretionary orders that might be made. As Spigelman J noted at [26] and [27] of McNaughton, in Veen (No 2) the High Court recognised that to serve objectives such as the protection of society, it would be necessary to consider a person’s prior offending and any attitude of disobedience to the law: see also Le v The Queen [2014] VSCA 283 at [30] per Weinberg and Whelan JJA. There is, in my respectful opinion, a good summary of the correct view of the appropriate principles by Kourakis J in R v Bukvic [2010] SASC 195; 107 SASR 405 at [74]-[78], which I would respectfully adopt.

129    If the entire process of imposing penalty is properly described as an “instinctive synthesis”, in my opinion, so long as the court is conscious to avoid imposing a penalty for conduct that has been previously penalised, there may be a number of bases on which previous contraventions are important in determining the appropriate penalty in accordance with the purposes of penalty provisions, particularly having regard to the central importance of deterrence: see Australian Competition and Consumer Commission v High Adventure Pty Limited [2005] FCAFC 247; [2006] ATPR 42-091 at [11]-[12]. That is the case in relation to these particular contraventions.

130    I turn now to consider the factors of general and specific deterrence, which are critical to fixing the appropriate penalty in relation to the contraventions.

Deterrence: general

131    In Australian Competition and Consumer Commission v TPG Internet [2013] HCA 54; 250 CLR 640 at [65], the plurality said:

General and specific deterrence must play a primary role in assessing the appropriate penalty in cases of calculated contravention of legislation where commercial profit is the driver of the contravening conduct.

132    In my opinion, the same approach should be applied to calculated contraventions of the industrial protections regime in the Fair Work Act. Commercial profit is not the driver, but industrial power and advantage are, and that is precisely what the coercion prohibitions exist to control.

133    Also analogously, a Full Court of this Court in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249 at [68] emphasised that in fixing a penalty, the court must “make[] it clear to [the contravener], and to the market, that the cost of courting a risk of contravention … cannot be regarded as [an] acceptable cost of doing business”. Similar statements made by the Full Court at [62]-[63] were endorsed by the plurality in TPG Internet at [66].

134    In my opinion, it is equally critical that the court make clear to contraveners, or potential contraveners, of the prohibitions in Div 4 of the Fair Work Act protecting the freedom to engage (or not) in ordinary industrial activity that the cost of intruding unlawfully into that freedom cannot be regarded as an acceptable cost of advancing the interests, and viewpoint, of a particular registered organisation.

135    The numbers of contraventions recorded against the CFMEU, the Victoria/Tasmania Branch of its Construction and General Division, and Mr Myles, are high, to say the least. It is correct that in this proceeding, no specific evidence was adduced to establish, one way or the other, whether unions other than the CFMEU engage in the repeated, disobedient, recidivist behaviour in which the history of contraventions illustrates that the CFMEU engages. One might, but I do not, speculate about possible explanations. Competing and polarised views about the CFMEU’s behaviour and attitude were expressed during the parties’ submissions. In some areas of the criminal law, as senior counsel for the respondents pointed out in submissions, courts may perceive an increased need for sentences to reflect principles of general deterrence because of either the extent of community concern about particular kinds of offending or its prevalence. No evidence was adduced to suggest that any such concerns or prevalence (outside the behaviour of the CFMEU, its branches and officers) was apparent in the industrial context of these contraventions. The behaviour proven against both respondents in this case seems to be a speciality of the CFMEU. In that sense, and subject to the matter I deal with at [136] below, considerations of general deterrence are important in relation to the matters I have set out at [56]-[66] above, but they do not loom as large as considerations of specific deterrence.

136    The qualification on what I have said is this. Coercion and intimidation as methods of achieving desired ends can occur in many walks of life, not only in industrial activity. Such conduct involves abuse, and misuse, of power. Coercive and intimidatory conduct is part of an ‘end justifies the means’ way of thinking which is frequently inconsistent and incompatible with the rule of law. The Court by its civil penalty orders should make it clear that coercion and intimidation contrary to law will not be tolerated and will be the subject of sanctions. Significant penalties are required to give some public confidence that those who administer the law will not condone coercive and intimidatory conduct, in this case in the sphere of industrial activity, but also more generally.

Deterrence: specific

137    The respondent submitted that considerations of specific deterrence have “no augmented role to play in these proceedings” and, while acknowledging the role specific deterrence could play in the instinctive synthesis by which an appropriate penalty is to be determined, further submitted that considerations of specific deterrence “cannot hijack the process beyond the bounds of proportionality”. It was also submitted by the respondents that it is “impermissible to reason that previous penalties had been ineffective”.

138    Insofar as they were directed at securing a penalty in the lower range, I do not accept those submissions. If those submissions were accepted on their face, what would be hijacked would be the proper administration of the penalty regime under the Fair Work Act in relation to a proven recidivist organisation. Invocation of the concept of proportionality should not be allowed to relieve a recidivist organisation, or recidivist individuals, from responsibility for serious contraventions of industrial laws, especially contraventions involving (as these contraventions do) abuses of industrial power.

139    I have referred above to the number of previous contraventions by the CFMEU, and by the Victoria/Tasmania Branch of its Construction and General Division. What is notable is not only the sheer number of contraventions, but the frequency of them. The conduct involved in those contraventions ranges from very similar conduct to these contraventions (that is, conduct and threats designed to force an employer to accept a CFMEU delegate on site); to blockades to achieve other industrial outcomes; to abuse (including racial abuse: Director of the Fair Work Building Industry Inspectorate v Upton [2015] FCA 672) when unlawfully on work sites; to seeking to coerce employers to employ CFMEU members and fire non-CFMEU members; to using blockades, obstructing access to sites and making threats during enterprise bargaining negotiations; to engaging in bullying behaviour while on work sites and refusing to leave sites; to encouraging workers not to attend work sites; to threatening industrial action unless a CFMEU member was reinstated. This list is taken from only the first 20 or so entries in the table attached to the applicant’s submissions, and could be multiplied and expanded several times over, particularly given this Court has continued to make similar findings against the CFMEU and its members since the list was compiled in November 2015: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 414.

140    The conduct has in common features of abuse of industrial power and the use of whatever means the individuals involved considered likely to achieve outcomes favourable to the interests of the CFMEU. The conduct occurs so regularly, in situations with the same kinds of features, that the only available inference is that there is a conscious and deliberate strategy employed by the CFMEU and its officers to engage in disruptive, threatening and abusive behaviour towards employers without regard to the lawfulness of that action, and impervious to the prospect of prosecution and penalties. An alternative inference – that the CFMEU weighs up the cost of engaging in such action (that is, likely prosecution and imposition of penalties) and nevertheless concludes it is a collateral cost of doing its industrial business – reflects no better on the organisation or its officials.

141    There is no evidence that any individuals are disciplined in any way by the hierarchy of the CFMEU for contraventions of the kind I have outlined above. Indeed, the individuals involved are often part of the CFMEU hierarchy, as is the case with Mr Myles. Rather, the evidence suggests this ongoing behaviour is tolerated, facilitated and encouraged by all levels of the organisation. There is no evidence that it has been proposed that members’ funds cease to be available to pay penalties and that individual office holders or employees should pay those penalties themselves, as an internal incentive for individuals within the CFMEU to be encouraged to begin to respect industrial laws. In this case, there was no evidence Mr Ralph Edwards sought to distance himself from the contravening conduct, to condemn it, or to take any action to ensure it did not occur again.

142    I also consider it relevant to note from the applicant’s table that a large proportion of the contraventions and penalties stem from agreed facts and agreed ranges of penalty. In other words, the CFMEU (and the Victoria/Tasmania Branch of its Construction and General Division) have a history of eventually admitting to contraventions. In some contexts, this might be seen as a mitigating factor. I do not see it in that way, in all of the circumstances. Rather it seems to me to be part of a deliberate and calculated strategy by the CFMEU to engage in whatever action, and make whatever threats, it wishes, without regard to the law, and then, once a prosecution is brought, to seek to negotiate its way into a position in which the penalities for its actions can be tolerated as the price of doing its industrial business.

143    A registered industrial organisation such as the CFMEU can only act through its office holders, members or employees. Although considerations of specific deterrence might be described as applicable to the CFMEU as a registered organisation, in a practical sense they are applicable to those who hold office within the organisation and, it is fair to assume, make decisions about industrial actions by the union, and are accountable to their members for such actions.

144    For these reasons, I consider the penalties to be imposed need to be fixed with particular reference to the need for them to provide specific deterrence to the CFMEU.

145    As to Mr Myles, this will be his fifth set of contraventions of the Fair Work Act in three years. That is an unimpressive record for an individual who holds an office recognised under industrial law and to which a range of rights and privileges attaches: Director, Fair Work Building Industry Inspectorate v Cradden [2015] FCA 614 at [13] per Logan J. Whether or not he is, as the respondents put in issue, a ‘senior’ official within the CFMEU, he is a Vice President of the Construction and General Division. All of his contraventions involve coercion.

146    To take the proceedings before Logan J in Cradden as but one example, the non-protected industrial action in which Mr Myles was found to have engaged included the parking of vehicles in a work zone on a street to obstruct access to the employers’ work site; the placing of a CFMEU van on the same street and gathering around a barbecue under an awning attached to that van such that there was a practical impediment to entry to the site; and upsetting, intimidating, abusing, and threatening Grocon employees and subcontractors and their employees who sought access to the project site: at [5]. At [6], Logan J described this conduct as “a deliberate stratagem on the part of the CFMEU to supplement lawful bargaining and protected industrial action”. At [22]-[25], Logan J singled out Mr Myles for special comment in relation to his role in the contraventions, and the fact that he had previously engaged in other contraventions. His Honour said at [25] that he considered Mr Myles to be a “union official who is predisposed to engage in unlawful conduct to supplement legitimate industrial aims.” These contraventions took place in Brisbane in March 2012, just over 12 months prior to the contraventions with which this proceeding is concerned.

147    It was Mr Myles who remarked to Mr Summerfield during the blockade that “we’ve lost our keys and are waiting for the RACV”. In another context, this remark might be seen as witty. Here, its flippancy, and the impunity Mr Myles clearly felt he had to utter it, reveal how little he personally cared about the unlawfulness of what he was doing. He thought it opportune to make a joke about it, to thumb his nose at Mr Summerfield in order to make Mr Summerfield see that he was not in the least troubled about breaking the law, stopping work on the site, and causing disruption – rather, he was so comfortable in doing so that he could make a joke of it.

The absence of mitigating factors

148    I have set out at [114]-[116] above the respondents’ absence of remorse or contrition, and at [141] above the absence of any evidence of any organisational consequences flowing from these contraventions, including the absence of any disciplinary action against Mr Myles.

Penalty amounts

149    In supplementary submissions filed after the High Court’s decision in the Agreed Penalties Case, each of the parties addressed the question they had previously been unable to address: what range of penalties they each submitted should be imposed.

150    The applicant submitted that pecuniary penalties will not serve any principle of general or specific deterrence unless they exceed (or at least attempt to exceed) what the cases have referred to as a contravener’s “acceptable cost of doing business”.

151    By reference to the table of previous contraventions, the applicant contended that existing penalties (even high penalties) have not deterred either respondent, so that the penalties should now be higher still. These matters led the applicant to submit that penalties should be fixed at close to the maximum available for each contravening course of conduct with respect to both respondents ($51,000 and $10,200 respectively).

152    The respondents submitted that the available range of penalties is indicated by the dispositions in the Mitcham Rail Case and the Bald Hills Wind Farm Case. The respondents submitted that those cases, neither of which has been appealed, were broadly contemporaneous, involved analogous defendants and involved objectively more serious misconduct, and therefore provide useful guidance.

153    The respondents otherwise declined to make submissions on any particular range, contending that the Court would not be assisted by them doing so. Their submissions concluded with the assertion that “the conduct in this case is comparatively mild by comparison with other cases, and moderate, proportionate penalties are called for”.

154    Given I have found two courses of conduct taken in contravention of s 348 in relation to each respondent, the maximum penalties which could be imposed are $51,000 for each course of conduct by the CFMEU and $10,200 for each course of conduct by Mr Myles.

155    While recognising there are more serious examples of coercion contrary to s 348 that can be imagined, the very conscious and deliberate nature of these contraventions, borne out of the respondents’ attitude that the end justifies the means, makes the contraventions very serious because of the respondents’ deliberate disregard for the law. There was a planned strategy, executed knowing it would be unlawful, and not caring about that fact. Industrial power was used to attempt to secure a desired outcome. A further repeated strategy was used of eventually capitulating when the time was right and submitting to penalty. That conduct in itself has an aspect of the respondents thumbing their noses at the system, including at the courts.

156    If there had been violence or property damage, then proven or admitted conduct of that kind would likely be punished in additional and separate ways. Punishment of that conduct is not the central purpose of s 348. The central purpose of s 348 is directed to precisely what the respondents did on this occasion: they abused their industrial power to try to force their desired industrial outcome on the joint venturers. They did so, as I have found earlier, with a sense of impunity and disregard of the unlawfulness of their actions. On any view, that conduct is most serious.

157    I consider it appropriate to impose penalties of $45,000 and $8,000 respectively on the CFMEU and Mr Myles for the events of 16 May 2013, during which the most disruption was caused, and penalties of $15,000 and $10,000 respectively in relation to the threat the next day. While I am confident those to whom Mr Myles reported within the CFMEU were content with what he did on 17 May 2013, there was, on the evidence, less organisational presence that day, and no blockade. The vice in Mr Myles’ actions that day was in the threat he personally decided to issue to Mr Summerfield. He should bear, proportionately, a greater penalty for that conduct.

Totality

158    The total amount of penalties imposed for the respondents’ conduct over the two days is $60,000 in respect of the CFMEU and $18,000 in respect of Mr Myles.

159    In Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030; [2013] ATPR 42-449 at [62] Middleton J noted that an application of the totality principle involves a “final consideration of the sum of the penalties determined”. His Honour referred with approval to the approach set out by Goldberg J in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] FCA 450; 145 ALR 36 at 53 that the Court:

must, as an initial step, impose a penalty appropriate for each contravention and then as a check, at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct involved.

160    I have reflected carefully on whether these amounts are appropriate for the total contravening conduct and in my view they are. I have not accepted the thrust of the respondents’ submissions designed to minimise the seriousness of what occurred. I have concluded that there is a particular need for considerations of general, and most importantly, specific deterrence principles to be applied. The sense of impunity shown by Mr Myles is particularly concerning.

THE BRAGDON ORDERS SOUGHT

161    In addition to imposing penalties, the applicant submitted the Court should make orders of a similar nature to those made by Flick J in Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998. The orders sought would require Mr Myles to fund any penalties imposed on him out of his own personal funds and would preclude the CFMEU, or anyone else, paying the penalty for him or providing funds towards its payment. Such orders, the applicant submitted, would operate to deter Mr Myles from contravening the Fair Work Act in the future, as well as deterring any other union officers minded to engage in similar contravening conduct, by raising the spectre of personal financial responsibility for penalties imposed as a result of that conduct.

162    The orders sought in this proceeding are not identical to those made by Flick J in Bragdon. Having imposed a penalty of $20,000 on Mr Bragdon, Flick J ordered:

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

163    Similar orders were made against another individual union officer, the second respondent. The third, fourth and fifth respondents were unions and, while the Court imposed a penalty on the third respondent (the CFMEU), no prohibitory orders were made restraining the union parties from paying or contributing to, directly or indirectly, the penalties imposed on the individual union officers.

164    Here, the applicant seeks a different form of orders. He seeks orders against Mr Myles, but he also seeks prohibitory orders against the union. The orders sought are relevantly as follows:

14.     The second respondent must pay the penalties the subject of orders 10-12 above (Penalties) from his own personal funds, and must not, directly or indirectly, whether before or after the payment of the Penalties:

(a)    procure, cause, encourage, seek, induce or incite any other person (individual or corporate, including in particular the first respondent) to pay to him or for his benefit any monies referable to the payment of the Penalties (whether in whole or in part), whether by way of reimbursement or otherwise; and

(b)    accept or receive any monies referable to the payment of the Penalties (whether in whole or in part), whether by way of reimbursement or otherwise, from any other person (individual or corporate, including in particular the first respondent).

15.    The first respondent must not, directly or indirectly, whether before or after the payment of the penalties by the second respondent the subject of orders 10-12 above:

(a)     procure, cause, encourage, seek, induce or incite any other person (individual or corporate) to pay to the second respondent or for his benefit any monies referable to the payment of the Penalties (whether in whole or in part), whether by way of reimbursement or otherwise; and

(b)     pay to the second respondent any monies referable to the payment of the Penalties (whether in whole or in part), whether by way of reimbursement or otherwise.

165    For reasons I develop below, I have concluded it is appropriate to make an order of the kind sought by the applicant in paragraph 15 of his proposed orders, but not an order of the kind sought in paragraph 14.

166    The applicant submits that, in other regulatory schemes, there are express provisions which manifest a policy objective of preventing a related third party from indemnifying an individual upon whom a penalty is imposed. For example, s 77A of the Competition and Consumer Act 2010 (Cth) provides:

77A    Indemnification of officers

(1)    A body corporate (the first body), or a body corporate related to the first body, must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer of the first body:

(a)    a civil liability;

(b)    legal costs incurred in defending or resisting proceedings in which the person is found to have such a liability.

Penalty: 25 penalty units.

(2)    For the purposes of subsection (1), the outcome of proceedings is the outcome of the proceedings and any appeal in relation to the proceedings.

Definitions

(3)    In this section:

civil liability means a liability to pay a pecuniary penalty under section 76 for a contravention of a provision of Part IV or Part V.

officer has the same meaning as in the Corporations Act 2001.

167    Another example can be found in s 199A(2)(b) of the Corporations Act 2001 (Cth), which provides:

When indemnity for liability (other than for legal costs) not allowed

(2)    A company or a related body corporate must not indemnify a person (whether by agreement or by making a payment and whether directly or through an interposed entity) against any of the following liabilities incurred as an officer or auditor of the company:

…

(b)    a liability for a pecuniary penalty order under section 1317G or a compensation order under section 961M, 1317H, 1317HA or 1317HB;

…

168    In my opinion, the existence of these legislative prohibitions in other regulatory schemes, which share some of the features of the regulatory scheme in the Fair Work Act, supports the proposition that orders of this kind can be seen, objectively, as advancing the purposes of general and specific deterrence.

169    The applicant submits that the form of orders it seeks in this proceeding is clearer than that in Bragdon, and avoids some of the difficulties noted by Jessup J in the Mitcham Rail Case. That was, as I have noted earlier, also a case involving Mr Myles as one of the individual contraveners. As a matter of discretion, Jessup J expressed the opinion that there were practical issues with “the enforcement of an order in the terms proposed”, in particular because the applicant “made quite clear that [he] had no intention of monitoring the doings of Mr Myles and the Union” so as to ensure the CFMEU did not reimburse Mr Myles, or otherwise pay his penalty for him (at [37]). Jessup J concluded at [38] that:

Where Mr Myles would source the funds to meet any penal obligation imposed on him is not, in my view, a matter with which the court should concern itself.

170    In reaching that conclusion, his Honour expressly noted at [39] that he did not cast any doubt upon the power to make such orders.

171    Nor were the respondents’ submissions on the issue in this proceeding initially couched in terms of power. On the morning of the penalty hearing, however, the respondents filed an amended written submission which sought to challenge the power of the Court to make an order of the kind made by Flick J in Bragdon. Their submissions filed in accordance with the Court’s orders had not made that submission. In answer to a question, senior counsel informed the Court that the power of the Court to make such orders formed part of the appeal by the CFMEU against Flick J’s orders in Bragdon.

172    The Full Court’s decision in Bragdon v Director of the Fair Work Building Industry Inspectorate [2016] FCAFC 64 was published the day before the date on which the parties had been notified the decision in this proceeding would be handed down. As a result, delivery of judgment was postponed so that the Court could consider the Full Court’s reasons. That consideration appears at [178] to [195] below.

173    The respondents’ argument with respect to power in this matter rested on a contention that the only source of the Court’s power to make orders in relation to payment of penalties for contraventions such as those in issue in this proceeding lies in s 546(1), read with the limits in s 546(2) and (3). The respondents submit the more general power conferred on the Court by s 545(1) (which I have set out at [14] above) does not extend to making the kind of orders made by Flick J. They point, as an example, to the asserted consequence that, in reliance on s 545(1), the Court could avoid the maximum penalties specified in s 546(2).

174    The limitations which the respondents’ contentions seek to place around the words “may make any order the court considers appropriate” in s 545(1) are significant. I see no basis in the text, context or purpose of s 545 for such limitations. The presence and text of s 545(2) tends against the kind of limits suggested by the respondents. Clearly, as between the more specific power in s 546(1) relating to the imposition of pecuniary penalties limited to certain maximum amounts, and the location of that limited power straight after the more plenary power in s 545(1), together with note 1 to s 545(1), a limit will be implied into the power in s 545(1) so that its exercise cannot cut across the clear intention manifested by parliament in s 546(1) and (2) to authorise the Court to order pecuniary penalties be paid only within a certain monetary range. Further, s 546(5) expressly contemplates that orders may be made which are additional to, and separate from, an order imposing a pecuniary penalty. Other textual features also suggest a wide power capable of supporting an order prohibiting indemnification. The court can make an order under s 545(1) of its own initiative: s 545(4)(a). The power expressly extends to injunctions and an order prohibiting indemnification shares some of the characteristics of an injunction.

175    It is well settled that discretionary powers conferred upon courts to make orders in response to a breach of statute are not to be construed narrowly by reference to matters extraneous to the statutory scheme. A statutory power to order compensation, for example, is not to be construed as subject to common law limitations on damages where those limitations do not arise from the statute itself and may not accord with its objects and purposes: Murphy v Overton Investments Pty Ltd [2004] HCA 3; 216 CLR 388 at [44]-[45] per the Court; Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494 at [17] per Gaudron J, [38] per McHugh, Hayne and Callinan JJ, [103] per Gummow J, and [152] per Kirby J.

176    The power in s 545(1) is wide and may support a wide range of orders: Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; 193 FCR 526 at [421] per Barker J. For example, it may support an order compelling an employer to develop and comply with a program specifying what it will do to ensure it complies with the Fair Work Act: Automotive, Foods, Metals, Engineering, Printing and Kindred Industries Union v Thornton Engineering Australia Pty Ltd [2009] FCA 1584; 191 IR 315 at [7] per North J. While a power of that kind must be exercised in accordance with the purposes for which it was conferred (see, eg, Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [44] per the Court), I can see nothing in the text or context of s 545(1), including the specific power to impose penalties in s 546(1), to indicate that it should be construed to exclude the possibility that a court might make orders of the kind I have made in this proceeding.

177    A single judge of this Court should follow a conclusion of law reached by another single judge of this Court unless persuaded the conclusion is plainly wrong: BHP Billiton Iron Ore Pty Ltd v National Competition Council [2007] FCAFC 157; 162 FCR 234 at [83]-[86] per Greenwood J, Sundberg J agreeing at [1]; Saeed v Minister for Immigration and Citizenship [2009] FCAFC 41; 176 FCR 53 at [38]-[40] per the Court (I note that Saeed was subsequently overruled by the High Court, but not in relation to this point: Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252). By “plainly wrong”, what is meant is that the error must be “manifest”, or at least “so clear as to enable a later court to say that the point is not reasonably arguable”: SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2; 150 FCR 214 at [148] per Weinberg J (emphasis in original), Allsop J agreeing at [190]; and see Saeed [2009] FCAFC 41; 176 FCR 53 at [39], citing Weinberg J’s statement with approval. In my opinion, that is especially so where the point deals with a question of powers of this Court: see, eg, Citigroup Pty Ltd v Mason [2008] FCAFC 151; 171 FCR 96 at [7].

178    The Full Court in Bragdon did not determine that Flick J had no power to make the orders sought, and indeed the obiter remarks by the Full Court do not appear to doubt that the Court has power to make such orders. Rather, their Honours focussed on discretionary considerations. Both as a matter of statutory construction and as a matter of comity and practice, then, I take the approach that s 545(1) would authorise the kind of orders sought by the applicant in the present proceeding, and made by Flick J in Bragdon.

179    I turn to consider the discretionary matters raised by the Full Court and to explain why, in my opinion, they do not preclude an order prohibiting indemnifications of the kind I have made.

180    The appeal in Bragdon was determined on the basis of error in the trial judge’s findings as to liability: see Bragdon [2016] FCAFC 64 at [53]-[54]; [64]-[65]; [75]-[76]; [78]. In obiter, the Full Court said (at [82]) it would not have upheld the CFMEU challenge to the trial judge’s penalties as manifestly excessive. The Full Court then said (at [83]) that there was “one feature of the penalty orders made by the primary judge which should be separately mentioned”, and turned to discuss the orders I have reproduced at [162] above.

181    At the discretionary level, their Honours expressed reservations about the orders the trial judge had made. It seems to me those reservations fall into three categories.

182    First, the Full Court was not persuaded that an earlier Full Court decision (Australian Building Construction Employees’ and Builders Labourers’ Federation v Minister of State for Industrial Relations [1982] FCA 131; 43 ALR 189 (the Australian Building Case), in particular at 214) should be seen as supporting the making of such orders in the circumstances of Bragdon, instead characterising the Australian Building Case as a “special” case. At [86] the Full Court said:

The purpose of the order was apparently to address statements of open defiance of the Court’s authority, to the effect that stoppages of work would effectively compel someone other than the union to make, or appear to make, payments of the fine. The case was a special one in that respect and, despite the apparent encouragement of the Full Court that the approach was a “model”, the practice has not become established.

183    Second, like Jessup J in the Mitcham Rail Case (to which their Honours referred with approval), the Full Court considered there were practical difficulties about orders in the form made by the trial judge. Those difficulties were the ones identified by Jessup J, relating to the supervision of how an individual might obtain funds to pay a penalty imposed on that individual for contravention of the Fair Work Act: at [87]-[88].

184    Third, the Full Court added two other matters to the practical difficulties identified by Jessup J in the Mitcham Rail Case. It drew a parallel with the High Court’s decision in Lamb v Cotogno [1987] HCA 47; 164 CLR 1, saying at [91]:

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

185    Then, the Full Court also referred to the “wider context” and said at [92]:

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

186    I accept the force of the observations made by Jessup J in the Mitcham Rail Case and endorsed by the Full Court in Bragdon. Identifying the source used by an individual to pay a penalty is fraught with difficulty. No such difficulty attends an order against another party prohibiting indemnification, especially where that party is a registered organisation, the financial accounts and transactions of which are open to scrutiny.

187    Further, I consider the Australian Building Case offers some support for the approach I take, on both the question of power and that of discretion. There was no doubt expressed by the Full Court in that case that the power to make the order existed. There, the power of the Court could be traced either to s 31 of the Federal Court of Australia Act 1976 (Cth) or s 23 of that Act. The latter power is not excluded by s 545(1) of the Fair Work Act and may be available if, contrary to my opinion, s 545(1) did not authorise the making of such an order: see, generally, Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; 195 CLR 1 at [27] per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ. Further, the conduct of the respondents in this case reveals, as I have found, a contumelious disregard for the law. Their respective histories of contraventions confirm that characterisation. In that sense, there are some parallels with the conduct under consideration by the Full Court in the Australian Building Case, even if the Full Court found the circumstances of Bragdon offered no such comparison.

188    The principles and their application in Lamb do not tend against an order of the kind I have made. In Lamb, the High Court recognised the objective of exemplary damages as being “to punish the defendant for conduct showing a conscious and contumelious disregard for the plaintiff’s rights and to deter him from committing like conduct again”: at 9, quoting XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12; 155 CLR 448 at 471 per Brennan J. It also recognised other purposes for exemplary damages such as general deterrence, assisting to discourage revenge by victims, and marking the court’s condemnation of the defendant’s behaviour, an objective the High Court saw as not excluded because an insured defendant would not pay the exemplary damages sum himself or herself: at 9-10. In my opinion, the Court’s reasons at 10 reveal an acceptance that there is no effect given to the principle of specific deterrence with an insured driver. However, the Court in Lamb was concerned with the award of damages in tort, where the general objective is compensatory (in both general and aggravated damages) and the more punitive objective of exemplary damages is exceptional. In those circumstances, while the Court was concerned to identify some kind of punitive purposes served by exemplary damages, because those damages were of an exceptional nature in the cause of action, it mattered much less than principles of specific deterrence which were not addressed.

189    That is not the case in the jurisdiction exercised by this Court under the Fair Work Act in the present proceeding. The operation of specific deterrence is, as I have explained above, one of the two principal purposes of the imposition of penalties, the other being general deterrence. The Court is concerned to encourage and facilitate compliance with the regulatory scheme, and to avoid repetition of the same or similar unlawful conduct in the future.

190    If no regard is paid to how individuals such as Mr Myles may, in reality, be indemnified by their unions for their unlawful conduct, then the objectives of specific deterrence are diminished almost to the point of disappearance. It may well be the case that reputational concerns were one of the matters which the High Court in Lamb had in mind when it referred to the impact of the Court marking out its condemnation of a defendant’s behaviour. That Mr Myles has any reputational concern in relation to the accumulation of court-imposed penalty orders is not apparent from the evidence in this case, including Mr Myles’ history of contraventions. Mr Myles certainly gave no evidence demonstrating any such concerns. I consider that the effectiveness of an exercise of judicial power to impose penalties is significantly impaired where the reality is that the contravener is likely to be entirely indemnified from the consequences of the order. While there was no direct evidence of whether the CFMEU would or intended to pay any penalty imposed on Mr Myles, I am satisfied on the balance of probabilities that will occur if orders of the kind sought by the applicant are not made. The respondents’ arguments proceeded on the basis that the CFMEU should not be prevented, directly or indirectly, from taking that course of action. The assumption underlying that submission is that there would be indemnification, otherwise the time spent opposing such an order would make no sense. As for Mr Myles, the impunity with which he knowingly engaged in contraventions of the Act, as to which I have made findings above, demonstrates that he was not concerned about the possibility of bearing personal financial responsibility for the consequences.

191    Not only can an order of the kind I have made have a deterrent effect on Mr Myles in relation to his future conduct, in my opinion it is capable of having a deterrent effect on the CFMEU. That is because, if indemnification of officials or other agents of the CFMEU for unlawful industrial action may be prevented by court orders, those responsible for decision making in the union may have cause to think about the penalties to which their own officials may be exposed when they consider engaging in conduct that may be unlawful. Such orders are also capable of having a general deterrent effect on other individuals and unions for the same reason.

192    Next, the existence of s 546(4) does not deprive an order of the kind I have made of its effect. If an order prohibiting the union from paying another respondent’s penalty was made, the effect of the prohibition in the order would need to be recognised by (in this case) the Commonwealth. For the Commonwealth to accept payment from the union in those circumstances could make the Commonwealth complicit in a breach of a court order. That is so whether or not regard is had to the conversion of the penalty by operation of s 546(4) into a debt. The purpose of s 546(4) is to aid enforcement in circumstances where a penalty is not paid at all. As I have previously noted, it does not have the effect of removing its character as a penalty: Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244 at [11]; see also Australian Securities and Investments Commission v Hawley [2008] FCA 1423; 250 ALR 57 at [11] per Perram J. The penalty imposed on Mr Myles could not be enforced against the union. However, if an order of the kind made in this case exists, the penalty can be enforced against Mr Myles unless he makes arrangements other than having the union pay his penalty for him. He is, as I set out below at [202], free to make other arrangements but he will have to take responsibility himself for making those other arrangements.

193    Finally, it does not appear that the Full Court’s attention was drawn to the existence of statutory schemes such as those in s 77A of the Competition and Consumer Act and s 199A of the Corporations Act. Those provisions would be affected by the same kind of arguments I have discussed above. Yet clearly none of those arguments could preclude these prohibitions from being effective. Similarly to s 546(4) of the Fair Work Act, s 1317G(2) of the Corporations Act provides that a penalty imposed under that Act:

… is a civil debt payable to ASIC on the Commonwealth’s behalf. ASIC or the Commonwealth may enforce the order as if it were an order made in civil proceedings against the person to recover a debt due by the person. The debt arising from the order is taken to be a judgment debt.

194    But a company that paid a penalty imposed on its officer under the Corporations Act could hardly plead as a defence to the prohibition in s 199A(2)(b) of the Act that it was simply paying the officer’s debt and not indemnifying the officer against liability for the penalty. So it must be with the exercise of a general power such as that in s 545(1) to make an order of the same kind.

195    There is no doubt that the discretionary considerations (covering the “practical difficulties” of such orders) raised by Jessup J in the Mitcham Rail Case and repeated by the Full Court in Bragdon remain, although in my opinion they are diminished in the current proceeding by the fact that only a prohibitory order is made against the CFMEU. The prohibitory order is capable of being effective to preclude the CFMEU from using its funds, and its members’ funds, to pay Mr Myles’ penalty. However, it will not preclude Mr Myles findings another source of funds to pay the penalty. Only the applicant’s proposed personal order against him is aimed at achieving that outcome.

196    In my opinion, given the history of contraventions by the CFMEU and by Mr Myles, in order to give any real effect to the principles of specific deterrence, it is appropriate to make some kind of additional order, over and above the imposition of penalties. There are three factors which have emerged as consistent themes in these reasons. First, the contumelious disregard for the restrictions the law imposes on industrial activities shown by those who control the CFMEU as a registered organisation and by individual union officials such as Mr Myles. Second, the repeated use of coercive and intimidatory behaviour in order to secure industrial outcomes the CFMEU desires. Third, the access the CFMEU has to large amounts of funds to pay penalties, predominantly sourced from members’ contributions on an annual basis and cumulatively over many years, so that little or no adverse financial impact appears to be felt by orders the courts make. Another way to characterise the respondents’ attitude, as it appears from the evidence, is that the ‘cost of doing industrial business’ is precisely the prism through which the payment of penalties is seen.

197    Lest these remarks seem overly one-sided, I repeat my findings at various points in these reasons that no evidence as to contrition or remorse has, so far as I can see, ever been tendered in any of these penalty proceedings against the CFMEU, and there was certainly no evidence of that kind in this proceeding. There is no evidence of organisational consciousness of wrongdoing or evidence about changing culture, attitudes and behaviour within the CFMEU. There is no evidence of internal disciplinary mechanisms imposed on individual officers, nor evidence of any kind of adverse consequence experienced by officials such as Mr Myles by reference to their unlawful behaviour.

198    Indeed, the inference I draw is that the CFMEU is willing to pay the penalties of its individual officers can only suggest ongoing condonation of their unlawful conduct.

199    As I have noted at [143] above, a registered organisation such as the CFMEU can only behave in the way it does because individuals within the union decide that action should be taken. The CFMEU is legally represented and has access to legal advice. Both the organisation and its officials who lead the contravening conduct seem, on the evidence before me, to be uninterested in whether the conduct is lawful or not, provided they consider the industrial outcome to be sufficiently important. The CFMEU, and its individual officers such as Mr Myles, operate very much on an ‘end justifies the means’ basis.

200    The need for an individual to take responsibility for conduct found to be unlawful, and for that responsibility not to be transferred, lies behind provisions such as s 77A of the Competition and Consumer Act. Where corporate entities are principal actors, it is one of the few mechanisms by which individual behaviour may be changed or affected and the compliance objectives of regulatory schemes advanced.

201    Accordingly, I have made a prohibitory order against the CFMEU. The terms of the order differ somewhat from paragraph 15 of the orders proposed by the applicant, which I have set out at [164] above, but its effect is the same. The purpose of the order mirrors the legislative purpose of parallel provisions such as those I have discussed in other regulatory regimes. I do not consider such a power needs to be expressly given to the Court for it to be available. The terms of s 545(1), properly construed, are ample to include such a power. The order is made against a party to the proceeding and is made expressly to serve the purposes of specific and general deterrence, which have central roles to play in regulatory schemes.

202    I recognise such an order does not preclude Mr Myles from raising the funds to pay the penalty imposed on him from other sources. As Jessup J recognised in the Mitcham Rail Case at [38], Mr Myles is free to do that. He may have generous relatives or friends who are prepared to assist him. Some of his colleagues may wish to hold a fundraiser for him. However he seeks to raise the money, he will not have the comfort and convenience of using the money of CFMEU members contributed to their union to fund its lawful activities, as opposed to unlawful ones. Raising funds other than by asking the union to write a cheque (or to make an electronic transfer) is likely also to involve more time and effort for Mr Myles. It may put him out a little. It may be embarrassing to ask others to help him out of a situation for which he has no one to blame but himself. That, in itself, may give him cause to think more carefully about the consequences of breaking the law.

DECLARATIONS

203    Aside from a debate about the number of declarations that should be made, there was no debate between the parties about the form of declaratory relief sought. I consider it appropriate to grant declaratory relief, and to do so by making a separate declaration in respect of each of the contraventions I have found against each of the respondents.

Associate:

Dated:    13 May 2016