FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Restar [2016] FCA 657

ORDERS

THE COURT DECLARES:

1.    In the period January 2012 to April 2014, the Respondent contravened s 131 of the National Vocational Education and Training Regulator Act 2011 (Cth) on 14 occasions because she fabricated 11 bogus vocational education and training (“VET”) qualifications in her own name concerning Aged Care, Disability and Business Management and:

(a)    provided each of the 11 bogus VET qualifications to her employer and purported to hold each of the 11 bogus VET qualifications as a legitimate VET qualification; and

(b)    provided 3 of the bogus VET qualifications to a Lead Compliance Auditor from the Australian Skills Quality Authority in support of her application to be registered as a Registered Training Organisation and purported to hold each of the 3 bogus VET qualifications as a legitimate VET qualification.

2.    In January 2013, the Respondent contravened s 125 of the National Vocational Education and Training Regulator Act 2011 (Cth) on 2 occasions because she fabricated 2 qualifications concerning Aged Care in the name of Mr Rehmani and falsely represented to Mr Rehmani that the 2 qualifications were legitimate VET qualifications issued to him by a Registered Training Organisation.

AND THE COURT ORDERS THAT:

1.    The Respondent is to pay to the Commonwealth a pecuniary penalty of $120,000 pursuant to s 137 of the National Vocational Education and Training Regulator Act 2011 (Cth) for each of the contraventions described in Declarations 1 and 2 above.

2.    The Respondent is to pay the costs of the Applicant.

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

REASONS FOR JUDGMENT

1    On 1 February 2016 the Commonwealth of Australia filed in this Court an Originating Application and a Statement of Claim.

2    The Respondent to that proceeding was named as Ms Synthia Dee M Restar.

3    The jurisdiction of the Court which the Commonwealth invoked was that conferred by s 137 of the National Vocational Education and Training Regulator Act 2011 (Cth) (the “2011 Act”) and s 39B of the Judiciary Act 1903 (Cth) (the “Judiciary Act”). Section 137 confers jurisdiction upon this Court to make an order imposing a pecuniary penalty on a “wrongdoer” who has contravened a “civil penalty provision” of the 2011 Act. Section 39B(1A)(c) of the Judiciary Act confers jurisdiction upon this Court in any matter “arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter”.

4    The Statement of Claim filed by the Commonwealth claims (in very summary form) that Ms Restar has contravened a “civil remedy provision” of the 2011 Act on 14 occasions. The contraventions alleged are of ss 125 and 131 of the Act. A Defence filed by Ms Restar on 4 March 2016 admits each of the allegations made against her in the Statement of Claim.

5    The Commonwealth now seeks declaratory relief and an order for the payment of pecuniary penalties.

The National Vocational Education and Training Regulator Act

6    The Preamble to the 2011 Act provides that it is:

An Act to establish the National Vocational Education and Training Regulator, and for related purposes.

Section 4 sets out the Constitutional basis for the Act, which is to be found in “the legislative powers that the Commonwealth Parliament has under the Constitution” other than s 51(xxxvii), and the “legislative powers that the Commonwealth Parliament has because of a reference or an adoption by the Parliament of the referring State under paragraph 51(xxxvii) of the Constitution”.

7    Section 3 of the Act, being the definition section, defines the “National VET Regulator” as the body established by s 155. The National VET Regulator established under the Act is the Australian Skills Quality Authority (the “Regulator”). Section 155(3), reflecting the Constitutional basis upon which the Act is founded, provides that each State and Territory Education Minister is to be consulted if the Regulator is to be abolished. Section 156 further provides that the Regulator consists of a Chief Commissioner and two Commissioners.

8    Part 2 of the 2011 Act deals with “Registration” and provides (inter alia) for “registering as an NVR registered training organisation”. Part 2 contains provisions for (inter alia) making applications for registration, conditions of registration, and withdrawing registration. Within Part 2, Division 3 sets forth provisions in respect to “ensuring compliance with the VET Quality Framework”, including audits and administrative sanctions. Part 3 of the Act deals with the “Accreditation of courses”, including provisions (inter alia) for making an application for accreditation, conditions of accreditation and cancellation of accreditation. Part 4 deals with the “National VET Regulator’s power to issue and cancel VET qualifications etc”. Part 5 deals with “Investigative powers” and Part 6 deals with “Enforcement”. Part 7 deals with the “National Vocational Education and Training Regulator” and Part 8 deals with “Commonwealth-State arrangements”. Part 9 deals with “Administrative law matters”.

9    Sections 125 and 131 are found within Subdiv C of Div 1 of Pt 6 of the 2011 Act. Section 125 provides as follows:

Civil penalty—making false or misleading representation relating to VET course or VET qualification

A person contravenes this section if:

(a)    the person makes a representation that relates to:

(i)    all or part of a VET course; or

(ii)    a course that is held out as being a VET course; or

(iii)    part of a course that is held out as being part of a VET course; or

(iv)    a VET qualification; or

(v)    a qualification that is held out as being a VET qualification; and

(b)    the representation is false or misleading in a material particular.

Civil penalty:     120 penalty units.

Section 131 provides as follows:

Civil penalty—using a bogus VET qualification or VET statement of attainment

(1)    A natural person contravenes this subsection if:

(a)    the person obtains a qualification; and

(b)    the person knows, or a reasonable person in the circumstances could be expected to know, that the qualification is not a VET qualification; and

(c)    the person purports to hold the qualification as a VET qualification.

Civil penalty:    240 penalty units.

(2)    A natural person contravenes this subsection if:

(a)    the person obtains a statement of attainment; and

(b)    the person knows, or a reasonable person in the circumstances could be expected to know, that the statement is not a VET statement of attainment; and

(c)    the person purports to hold the statement as a VET statement of attainment.

Civil penalty:     240 penalty units.

10    Section 137 provides (inter alia) that the Federal Court may impose pecuniary penalties. Section 137(3) provides as follows:

In determining the pecuniary penalty, the Federal Court or the Federal Circuit Court must have regard to all relevant matters, including:

(a)    the nature and extent of the contravention; and

(b)    the nature and extent of any loss or damage suffered as a result of the contravention; and

(c)    the circumstances in which the contravention took place; and

(d)    whether the person has previously been found to have engaged in any similar conduct by the court in proceedings under this Act.

Whatever may be the ambit of matters that may otherwise be taken into account when determining a pecuniary penalty, the mandate that the Court must have regard “to all relevant matters” directs attention “to those more specific matters which can only be discerned from an analysis of the … Act itself…” including “the objects and purposes” of the Act: cf. Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [27].

The conduct admitted

11    The social context in which 2011 Act operates is of considerable importance. Its importance is only underscored by the degree of co-operation between the Commonwealth and the States and Territories.

12    The object of the legislation is to provide “vocationally-oriented, post-school qualifications”.

13    As at 2014 there were 4,601 Australian providers made up of 3,815 registered training organisations and 786 non-registered training organisations. As at 2014, there were 3.9  million students enrolled in the scheme. Forty five per cent (45%) of the funding for those enrolled came from the Commonwealth and States; 55% came from private tuition fees.

14    In the present case, two of the registered training organisations were H & H Accredited Training Australasia (“H & H”) and ITC Education Ltd (“ITC”).

15    Ms Restar wanted to work in the Vocational Education and Training sector, mainly in the Aged Care and Community Services areas. In 2007 she enrolled in two courses and in January 2012 approached H & H and expressed interest in working for H & H as a vocational education trainer and assessor. In support of her application she provided a folder of materials containing eleven qualifications certifying that she had completed a number of courses. Ms Restar had fabricated each of these qualifications. She became employed with H & H on the basis of these documents.

16    From 2012 to 2014 another person employed as a part-time trainer and assessor by H & H was Mr Sadiq Rehmani. In January 2013 H & H informed Mr Rehmani that he needed to upgrade his training and assessor file. Ms Restar offered to assist. She informed Mr Rehmani that she had a contact within ITC and that she could secure certification for Mr Rehmani at a cost of $2,000. Ms Restar then fabricated two further certificates and provided them to Mr Rehmani who, in turn, provided them to H & H.

17    The fabrication of certificates began to unravel when Mr Rehmani provided the fabricated certificates to another employer with whom he also had part-time employment, Thompson Health Care Pty Ltd (“Thompson”). The irregularities emerged when Thompson conducted an audit of its records in 2014. Ms Restar refunded the $2,000 to Mr Rehmani when he demanded repayment.

18    In 2012 Ms Restar had also sought the registration of her own business, MPJEL Oceania (“Oceania”). She applied for registration in June 2013. As part of the registration process an audit was conducted and Ms Restar again presented fabricated certificates. She was granted initial registration in April 2014. As at August 2015, 12 students were enrolled.

19    In addition to demanding repayment from Ms Restar, Mr Rehmani also made a complaint to the Regulator in April 2014. An investigation by the Regulator exposed the deception.

20    In all, Ms Restar had fabricated 13 bogus qualifications dishonestly to advance her own financial interests.

21    The registration of Oceania was cancelled with effect from February 2016.

Penalties – the general approach

22    The means the Commonwealth legislature uses to attach sanctions to proscribed conduct by a “civil penalty” is quite common: e.g., Fair Work Act 2009 (Cth), s 546 (see DP World Sydney Limited v Maritime Union of Australia (No 2) [2014] FCA 596, (2014) 318 ALR 22); Tax Agent Services Act 2009 (Cth), s 50-20 (see Tax Practitioners Board v Kim (No 2) [2015] FCA 263, (2015) 148 ALD 105).

23    Although the particular statutory scheme under consideration must always dictate the principles to be applied in any given case, principles of common application have evolved in respect to both:

    the manner in which a penalty is to be quantified; and

    the role of the Court – especially in those circumstances where there may be agreement as to the facts constituting the contravention and even where there is agreement (at least between the parties to the litigation) as to the quantum of the penalty to be imposed.

24    As to the former matter, the general manner in which a Court should approach the quantification of an appropriate penalty has been relatively settled over many years.

25    There are, generally speaking, at least three purposes for imposing a penalty: punishment, deterrence and rehabilitation: Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at [93], (2007) 158 FCR 543 at 559 per Lander J.

26    Although it is necessary separately to consider individual aspects of this task when considering the facts of each individual case, a significant early formulation of the general approach is that of French J (as his Honour then was) in Trade Practices Commission v CSR Limited (1991) ATPR 41-076. His Honour there said:

The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:

1.    The nature and extent of the contravening conduct.

2.    The amount of loss or damage caused.

3.    The circumstances in which the conduct took place.

4.    The size of the contravening company.

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

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

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

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

9.    Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention: (1991) ATPR 41-076 at 52,152 to 52,153

See also: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 292. Another formulation of this general approach was that of Branson J in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) [1999] FCA 1714, (1999) 94 IR 231 at 232. Her Honour there observed in the context of quantifying a penalty to be imposed pursuant to Part XA of the Workplace Relations Act 1996 (Cth):

[8]    The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:

(a)    The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act).

(b)    Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act.

(c)    Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct.

(d)    The consequences of the conduct found to be in contravention of Pt XA of the Act.

(e)    The need, in the circumstances, for the protection of industrial freedom of association.

(f)    The need, in the circumstances, for deterrence.

In Rojas v Esselte Australia Pty Ltd (No 2) [2008] FCA 1585 at [65], (2008) 177 IR 306 at 325 to 326 Moore J concluded that this “check list” provided a “useful starting point in determining whether a penalty ought to be imposed, and if so the level of such penalty” but further observed that “at the end of the day the task for the court is to fix a penalty that pays appropriate regard to the contraventions that have occurred”. See also: Comcare v Commonwealth [2007] FCA 662 at [120], (2007) 163 FCR 207 at 228 per Madgwick J.

The role of the Court

27    As to the role of the Court, there is no impediment to a regulator making submissions in civil penalty proceedings and reaching agreement with a respondent on the quantum of the penalty to be imposed: Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, (2015) 326 ALR 476. The observations of the High Court in Barbaro v R [2014] HCA 2, (2014) 253 CLR 58 relating to the constraints imposed upon a prosecutor apply only to criminal proceedings: Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62 at [16] per Mortimer J.

28    The Court may proceed on the basis of an agreed statement of facts, and has power to make a declaration on the basis of such an agreed statement of facts: Comcare v Linfox Australia Pty Ltd [2015] FCA 61, (2015) 144 ALD 593. But, when doing so, the Court should give “close attention” to the form of the declaration: Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 at [90], (2003) 216 CLR 53 at 91 per Gummow, Hayne and Heydon JJ.

29    In Ministry for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72, (2004) ATPR 41–993 (for example) a pecuniary penalty was sought to be imposed upon Mobil for a contravention of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth). The parties had prepared an Agreed Statement of Facts. The parties had also reached agreement as to the quantification of a penalty in the sum of $844,500. When focusing attention upon the agreement of a penalty, Branson, Sackville and Gyles JJ referred to the earlier decision of the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and continued:

[51]    The following propositions emerge from the reasoning in NW Frozen Foods:

(i)    It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.

(ii)    Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.

(iii)    There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.

(iv)    The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more “subjective” matters.

(v)    In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.

(vi)    Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.

The Full Court there went on to express a number of further principles, including the following:

[53]    First, the rationale for giving weight to a joint submission on penalty is said by the Court to be the savings in resources for the regulator and the Court, as well as the likelihood that a negotiated resolution will include measures designed to promote competition. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, “Determining the Appropriate Role for Charge Bargaining in Pt IV of the Trade Practices Act” (1996) 4 Comp & Cons LJ 69, at 72–74. Of course the arguments in favour of negotiated settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty.

[54]    Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties’ proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range.

The quantification of the penalty to be imposed – the facts of the present case

30    Ms Restar’s Defence, which admits the entirety of the substantive allegations made by the Regulator, supplants the place sometimes assumed in other penalty cases of an agreed statement of facts.

31    Different maximum penalties were set for the period before and after December 2012. Taking into account that variation, the Commonwealth now seeks a penalty in the range of $95,000 to $120,000. One difficulty confronting both the Regulator and the Court is the fact that, and as was the position before the Court in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [14], (2008) 165 FCR 560 at 564, there is an absence of meaningful guidance as to the quantification of a penalty arising under the 2011 Act. Indeed the present proceeding is the first occasion on which a penalty has been imposed under that legislation. “A hallmark of justice is equality before the law”: NW Frozen Foods (1996) 71 FCR at 295 per Burchett and Kiefel JJ. But there can of necessity be no sense in ensuring consistency in the quantification of penalties where the case at hand is the first.

32    It is nevertheless concluded that a penalty of $120,000 should be imposed.

33    In quantifying the penalty in this amount, consideration has been given to the range provided by the Commonwealth, together with:

    the matters specifically listed in s 137(3) of the 2011 Act;

    the conclusion that the individual contraventions should be approached from the standpoint of their revealing three separate courses of conduct;

    the need for general and specific deterrence;

    the degree of difficulty involved in detecting contraventions and the importance of ensuring the integrity of an industry which is largely self-regulating; and

    the fact that Ms Restar has co-operated with the Regulator.

Sixteen contraventions – three courses of conduct

34    Where there have been multiple contraventions, it is sometimes appropriate to regard some of the contraventions as constituting a single course of conduct. One of the objectives in approaching multiple contraventions in such a manner is to avoid punishing an offender more than once for the same conduct: Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27, (2014) 97 ACSR 412. In that case Jacobson J addressed the considerations arising from multiple contraventions as follows:

The course of conduct principle

[199]    The “course of conduct” principle recognises that where there is an interrelationship between the legal and factual elements of two or more contraventions, care must be taken to ensure that the offender is not punished twice for what is essentially the same conduct …

[200]    What amounts to the “same conduct” or “same criminality” is a fact specific inquiry. It is a matter of judgment to be exercised according to the facts of each case. But the court is not obliged to apply the principle if the resulting penalty fails to reflect the degree of criminality involved in the particular case …

[201]    The general objective of the course of conduct principle is to ensure that the sentence or penalty fairly reflects the substance of the offending conduct, rather than a purely mathematical total for each separate offence which may be technically identified …

35    Although there have been sixteen legally distinct contraventions, in the present case it is appropriate to approach the quantification of the penalty to be imposed by reference to three courses of conduct, namely:

    the “Trainer/assessor contraventions” involving eleven contraventions of s 131(1), namely the presentation and reliance upon the eleven fabricated certificates when seeking employment with H & H;

    the “Rehmani contraventions” involving two contraventions of s 125, namely the presentation to Mr Rehmani of the two fabricated certificates; and

    the “RTO registration contraventions” involving 3 contraventions of s 131(1), namely the presentation of, and reliance on, the fabricated certificates when seeking registration of Oceania.

36    If reference is made to these three courses of conduct, the approach of the Regulator in submitting that a penalty in the range it suggested was appropriate was by reference to the following calculation:

-    Trainer/assessor contraventions: $65,000 - $80,000 (about 25% of the statutory maximum of $304,800 for all 11 contraventions).

-    Rehmani contraventions: $15,000 - $20,000 (about 45% of the statutory maximum of $40,800 for the 2 contraventions).

-    RTO Registration contraventions: $40,000 - $50,000 (about 35% of the statutory maximum of $122,400 for the 3 contraventions.

General and specific deterrence & difficulties in detection

37    There can be no doubting the importance of both general and specific deterrence when determining the appropriate penalty to be imposed.

38    Deterrence, it has been said, “(especially general deterrence) is the primary purpose lying behind the penalty regime”: Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at [11], (2006) ATPR 42-091 at 44,564. Heerey, Finkelstein and Allsop JJ there went on to observe:

… there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. In some cases the penalty may be so high that the offender will become insolvent. That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined.

39    Of more immediate relevance to the present case are the observations of Foster J in Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205. In the context of considering the appropriate civil penalty to be imposed for contraventions of the Renewable Energy (Electricity) Act 2000 (Cth) his Honour made the following observations in respect to general deterrence:

GENERAL DETERRENCE

[99]    The REC Scheme embodied in the REE Act is a key mechanism used to achieve the Commonwealth Government’s fundamental renewable energy objectives. The provision of false information by participants in the Scheme will undermine the integrity of the REC Scheme and hence the Government’s ability to meet the renewable energy target to which it has committed by undermining consumer confidence in the renewable energy sector in terms of safety, effectiveness and affordability. Furthermore, if RECS are created by reason of the installation of systems which have not been properly installed, there is a risk that the incorrect number of RECS will be created thereby further weakening the renewable energy objectives.

[100]    Second, the REC market is a significant one. In 2012, the value of trades in Small-Scale Technology Certificates alone was expected to exceed $1 billion. Major investors are heavily involved in the REC market and very much in tune to the possibility of disruption through compliance failings.

[101]    Third, the effective operation of the REC market relies heavily upon voluntary compliance with the REE Act. Therefore, when non-compliance is detected, significant penalties are warranted in order to ensure that others may not think that the risk of being caught is well worth taking, having regard to the likely financial rewards of non-compliance. As submitted by the regulator, where the legislature entrusts people with responsibility for compliance, non-compliance should properly attract a strong deterrent penalty.

[102]    Fourth, non-compliance may not be readily detected. It is well recognised that difficulties in detecting contraventions are a significant factor in the need for general deterrence. In the present case, in the end, the contraventions were readily detected. However, this may not always be so. The imposition of substantial penalties for involvement in the provision of false information will provide a strong incentive to industry participants to establish robust mechanisms for ensuring compliance and accuracy. This will not only reduce the risks of non-compliance by them but may also lead to more ready detection of others.

[103]    For the above reasons, I should give significant weight to the need for general deterrence when determining the appropriate penalty …

When addressing the question of general deterrence in respect to one of the individuals who was knowingly involved in the contraventions, his Honour also observed:

GENERAL DETERRENCE

[156]    The considerations discussed at [99]–[105] above in respect of deterrence apply equally to Mr Kibblewhite. However, those considerations, when applied to Mr Kibblewhite, have greater weight than when applied in respect of the other respondents. Mr Kibblewhite was engaged in a dishonest abuse of the REC Scheme. Conduct of that kind must receive the Court’s firm disapprobation and must be visited with a penalty which operates as a significant deterrent to other persons from considering engaging in similar conduct. As submitted by the regulator in the present case:

... The penalties to be imposed must leave no doubt in the minds of other would-be contravenors that such conduct will not pay.

[157]    In addition, in the case of Mr Kibblewhite, there is also a compelling need for the penalty to be imposed upon him to operate as a powerful specific deterrent. He has ignored the present proceedings and has demonstrated no acceptance of wrongdoing on his part. Nor has he shown any remorse or contrition for his conduct.

40    Applied to the circumstances of the present case, and with reference to the need to fix an appropriate penalty to act as a general deterrent, it must be recognised that:

    the scale and nature of the industry means it is partly self-regulating, with limited resources available to the Regulator to conduct audits of each registered trading organisation; and

    there is a need to ensure confidence in the integrity of the industry – including the confidence of other entities involved in providing services, the students who seek out the qualifications, and those members of the public who depend upon receiving qualified assistance from those students once they have completed their courses.

The necessity to take such fundamental considerations into account follows from the mandate imposed by s 137(3) of the 2011 Act to have regard to “all relevant matters” – namely those matters which best promote the objects and purposes of the Act: cf. Pagasa.

41    With reference to the need to fix a penalty appropriate to act as a specific deterrent against Ms Restar engaging in future contraventions, it must be recognised that Ms Restar:

    wishes to continue to engage in the industry;

    has co-operated with the Regulator in the preparation of the present case for hearing; and

    has expressed remorse.

It must also be recognised, however, that Ms Restar’s conduct:

    has demonstrated a deliberate and repeated history of dishonesty over a considerable period of time;

    was pursued for financial gain; and

    has exposed others to both financial loss and, in the case of Mr Rehmani, the loss of employment.

42    It is the consideration given to the need for a penalty to act as a deterrent (both general and specific) which has largely led to the penalty in the present case being imposed being at the very upper limit of the range proposed by the Regulator.

Capacity to pay

43    The one submission Ms Restar did make, when invited to make any observation on the submissions which had been made against her, was that she did not have the capacity to pay even a penalty of $95,000.

44    But that, with great respect, is a matter which assumes far less relevance than the need to impose a penalty which acts as a deterrent and which truly reflects the dishonesty Ms Restar has perpetrated.

45    As recognised in High Adventure, the prospect that a penalty may render an offender insolvent “must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined”. An inability to pay, although a relevant consideration, “is a factor … of limited relevance”: Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27 at [250], (2014) 97 ACSR 412 at 443 per Jacobson J. See also: Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205 at [147] to [149].

CONCLUSIONS

46    It is concluded that a penalty of $120,000 should be imposed. That, it is recognised, is at the very upper end of the range proposed by the Regulator. Indeed, the prospect of an even greater penalty has been considered – but rejected. The submissions of the Regulator, being the entity most closely connected with the industry and the best placed to form a view as to the penalty that will act as a deterrent, are submissions which deserve respect. Although a greater penalty has been considered, it has ultimately been independently concluded – on balance – that in all the circumstances of the present case a penalty of $120,000 is appropriate.

47    The Court should also make declarations as proposed.

48    Costs should follow the event.

THE COURT DECLARES:

1.    In the period January 2012 to April 2014, the Respondent contravened s 131 of the National Vocational Education and Training Regulator Act 2011 (Cth) on 14 occasions because she fabricated 11 bogus vocational education and training (“VET”) qualifications in her own name concerning Aged Care, Disability and Business Management and:

(a)    provided each of the 11 bogus VET qualifications to her employer and purported to hold each of the 11 bogus VET qualifications as a legitimate VET qualification; and

(b)    provided 3 of the bogus VET qualifications to a Lead Compliance Auditor from the Australian Skills Quality Authority in support of her application to be registered as a Registered Training Organisation and purported to hold each of the 3 bogus VET qualifications as a legitimate VET qualification.

2.    In January 2013, the Respondent contravened s 125 of the National Vocational Education and Training Regulator Act 2011 (Cth) on 2 occasions because she fabricated 2 qualifications concerning Aged Care in the name of Mr Rehmani and falsely represented to Mr Rehmani that the 2 qualifications were legitimate VET qualifications issued to him by a Registered Training Organisation.

AND THE COURT ORDERS THAT:

1.    The Respondent is to pay to the Commonwealth a pecuniary penalty of $120,000 pursuant to s 137 of the National Vocational Education and Training Regulator Act 2011 (Cth) for each of the contraventions described in Declarations 1 and 2 above.

2.    The Respondent is to pay the costs of the Applicant.

Associate:    

Dated:    3 June 2016