FEDERAL COURT OF AUSTRALIA

General Manager of the Fair Work Commission v McGiveron [2017] FCA 405

ORDERS

THE COURT ORDERS THAT:

The First Respondent

1.    Subject to Order 3 below, each penalty set out in the third column in the table in Schedule A to these orders be imposed on the first respondent in respect of the conduct correspondingly set out in the second column, being a contravention of the provision of the Fair Work (Registered Organisations) Act 2009 (Cth), correspondingly set out in the fourth column in the table.

2.    To the extent that Order 1 relates to a contravention numbered by an Arabic numeral in the first column in the table in Schedule A, the operation of that order be stayed for 60 days.

3.    To the extent that Order 1 relates to a contravention numbered by a Roman numeral in the first column in the table in Schedule A, the operation of that order be stayed for 74 days.

4.    Upon the payment, within 74 days, of the penalty for a contravention numbered by an Arabic numeral in the first column in the table in Schedule A, the operation of Order 1 be permanently stayed to the extent that it relates to the contravention or contraventions numbered by the Roman numeral or numerals of the same value in that column.

The Second Respondent

5.    Subject to Order 7 below, each penalty set out in the third column in the table in Schedule B to these orders be imposed on the second respondent in respect of the conduct correspondingly set out in the second column in the table, being a contravention of the provision of the Fair Work (Registered Organisations) Act 2009 (Cth), correspondingly set out in the fourth column in the table.

6.    To the extent that Order 5 relates to a contravention numbered by an Arabic numeral in the first column in the table in Schedule B, the operation of that order be stayed for 60 days.

7.    To the extent that Order 5 relates to a contravention numbered by a Roman numeral in the first column in the table in Schedule B, the operation of that order be stayed for 74 days.

8.    Upon the payment, within 74 days, of the penalty for a contravention numbered by an Arabic numeral in the first column in the table in Schedule B, the operation of Order 5 be permanently stayed to the extent that it relates to the contravention or contraventions numbered by the Roman numeral or numerals of the same value in that column.

The First and Second Respondent

9.    Pursuant to s 357(2) of the Fair Work (Registered Organisations) Act 2009 (Cth), the pecuniary penalties be paid to the Commonwealth.

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

Schedule A

Schedule B

REASONS FOR JUDGMENT

BARKER J:

1    The questions for consideration in this judgment concern the orders that should be made against Mr James McGiveron, the first respondent, and Mr Richard Burton, the second respondent, in respect of their admitted contraventions of the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act).

2    The General Manager of the Fair Work Commission (FWC) seeks the making of declarations and the imposition of civil penalty orders. The substantive questions concern the terms of civil penalties. The General Manager, supported by the Transport Workers Union of Australia (TWU) as intervener under the RO Act, submits that the penalties should be at the higher end of the scale of possible penalties, having regard to the serious nature of the contraventions concerned.

3    In Mr McGiveron’s case, Mr McGiveron has admitted to:

    contravening ss 285(1) and 286(1) of the RO Act by purporting to act on behalf of the TWU in executing contracts to purchase two Ford F350 motor vehicles (F350s), and subsequently causing the TWU to pay deposits in the amount of $40,000 for each of the F350s in July 2012 (the McGiveron F350 contraventions); and

    contravening s 286(1) of the RO Act by his conduct related to the adoption of a redundancy policy by the Western Australian Branch of the TWU (WA Branch) in July 2012 (the McGiveron redundancy policy contravention).

4    In Mr Burton’s case, Mr Burton has admitted to:

    contravening ss 285(1) and 286(1) of the RO Act by purporting to act on behalf of the TWU in executing further contracts to purchase the F350s, and by causing a payment to be made from WA Branch funds of approximately $228,500 with respect to the F350s in March and April 2012 (the Burton F350 contraventions);

    contravening ss 285(1) and 286(1) of the RO Act by failing to disclose the purchase of the F350s to the WA TWU Branch Committee of Management (WA BCOM), the relevant WA Branch Finance Committee and/or the WA Branch auditors between October 2012 and February 2014 (the Burton failure to disclose contraventions);

    contravening ss 285(1) and 286(1) of the RO Act by causing the TWU to transfer to Mr McGiveron from WA Branch funds the amount of $348,396.15 gross with respect to Mr McGiveron’s redundancy in July 2013 (the Burton redundancy contraventions)

    contravening ss 285(1), 286(1) and 287(1) of the RO Act by causing the following expenses to be incurred and paid by the TWU from WA Branch funds:

(a)    $486.90 from the Rockpool Bar and Grill in Perth in May 2013 (the Rockpool expense contraventions);

(b)    $535.76 with respect to the hire of a vehicle in September 2013 (the Shark Bay transport contraventions); and

(c)    $1,634.44 with respect to a function at the WAFL Grand Final in September and October 2013 (the WAFL Grand Final expenses contraventions).

5    In seeking these orders, the General Manager, in addition to relying on admissions made in the proceeding by Mr McGiveron and Mr Burton, also relies on the evidence of the deponents in the following affidavits, namely, those of:

    Mr Timothy Dawson made 5 May 2016;

    Mr Raymond McMillan made 9 May 2016 and 7 December 2016;

    Ms Mia Pantechis made 6 May 2016 at [1], [2] and [4], together with annexures “MP-4”, “MP-5”, “MP-9”, “MP-12”, and “MP-13”; and

    Mr Christopher Patrick Enright made 7 March 2017.

6    The General Manager also relies on the oral evidence of Mr Burton arising out of his cross-examination at the penalty hearing on 4 April 2017.

7    In making his submissions as to penalty, Mr McGiveron relies on:

    his amended defence filed 3 February 2017; and

    his outline of submissions on penalty filed 31 March 2017.

8    In making his submissions as to penalty, Mr Burton relies on:

    his further amended defence filed 17 February 2017;

    his outline of submissions on penalty filed 30 March 2017; and

    his affidavits made 3 August 2016 and 20 March 2017.

The Court’s power to impose penalties

9    The Court’s power to grant the remedies sought in this case is to be found in s 306(1) of the RO Act, which provides:

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

(a)    in the case of a body corporate - 300 penalty units;

(b)    in any other case - 60 penalty units.

10    By virtue of the terms of the Fair Work (Registered Organisation) Amendment Act 2012 (Cth) and the RO Act, for the purpose of contraventions that occurred prior to 28 December 2012, the maximum penalty that can be imposed for a contravention of any of ss 285(1), 286(1) or 287(1) of the RO Act, is $6,600. Since 28 December 2012, the maximum penalty that can be imposed under those provisions for such a contravention is $10,200.

11    It might be observed in passing that this is not a high maximum penalty. The maximum pecuniary penalty that can be imposed under provisions analogous to s 285 and s 286 concerning officers and directors of a corporation under the Corporations Act 2001 (Cth), namely s 180 and s 181 is $200,000 for an individual.

12    All of the contraventions admitted by Mr McGiveron occurred prior to 28 December 2012, and so the maximum penalty that can be imposed for each of his admitted contraventions is $6,600.

13    All of the contraventions admitted by Mr Burton occurred after, or substantially after, 28 December 2012 and so attract a maximum penalty in each case of $10,200.

Nature of obligations contravened

14    So far as the three relevant provisions are concerned, it is useful to set out exactly what obligations or duties they create.

15    Section 285 of the RO Act requires an officer to exercise powers with care and diligence, in the following terms:

An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:

(a)    were an officer of an organisation or a branch in the organisation’s circumstances; and

(b)    occupied the office held by, and had the same responsibilities within the organisation or a branch as, the officer.

16    Section 285 of the RO Act is in relevantly the same terms as s 180 of the Corporations Act that deals with directors and other officers of a corporation. The test for determining a contravention of s 285(1) is objective. It does not import a mental element. See Chew v The Queen (1992) 173 CLR 626 at 642 (Dawson J); [1992] HCA 18, citing Byrne v Baker [1964] VR 443 at 450. It requires a court to ask what an ordinary person of ordinary prudence, with the knowledge and experience of the officer, might be expected to have done in all of the circumstances at the relevant time of the conduct if he or she were acting on his or her own behalf. See Daniels v Anderson (1995) 37 NSWLR 438 at 504-505; Australian Securities and Investments Commission v Vines (2003) 48 ACSR 322 at [38] (Austin J); [2003] NSWSC 116, referred to with approval in Vines v Australian Securities and Investments Commission (2007) 62 ACSR 1 at 27 [109] (and see at 115 [593] (Santow JA)); [2007] NSWCA 75; Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 41 ACSR 72 at [372(4)]; [2002] NSWSC 171, applied in Morley v Australian Securities and Investments Commission (2010) 81 ACSR 285 at [807]; [2010] NSWCA 331; Diamond Hill Mining Pty Ltd v Huang Jin Mining Pty Ltd (2011) 84 ASCR 616 at [90] (Croft J); [2010] VSC 288; Parker v Tucker (2010) 77 ACSR 525 at [70] (Gordon J); [2010] FCA 263; Diakyne v Ralph (2009) 72 ACSR 450 at [84], [121]; [2009] FCA 721.

17    Section 286(1) requires an officer to exercise powers in good faith and for a proper purpose, in the following terms:

(1)    An officer of an organisation or a branch must exercise his or her powers and discharge his or her duties:

(a)    in good faith in what he or she believes to be the best interests of the organisation; and

(b)    for a proper purpose.

Note:    This subsection is a civil penalty provision (see section 305).

18    The analogue to s 286 of the Corporations Act is s 181. See Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 at [400], [427], [433]; [2012] FCAFC 6, on appeal from Chameleon Mining NL v Murchison Metals Ltd [2012] FCA 1129 at [105]-[112]; Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 at [738]-[740]; [2002] NSWSC 483. In relation to that provision, it is established that the different limbs of that provision create separate duties, such that the obligation on an officer to discharge his or her duties for a “proper purpose” is separate to the obligation to act in “good faith”.

19    The meaning of the requirement to discharge their duties in “good faith”, in the context of a director’s duty, has been summarised as including that directors:

(a)    must exercise their powers in the interests of the company, and must not misuse or abuse their power;

(b)    must avoid conflict between their personal interests and those of the company;

(c)    must not take advantage of their position to make secret profits; and

(d)    must not misappropriate the company’s assets for themselves.

See Chew v The Queen (1991) 5 ACSR 473 at 499, quoted with approval in Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373 at [106]; [2006] NSWSC 1052 and Australian Securities and Investments Commission v Sydney Investment House Equities Pty Ltd (2008) 69 ACSR 1 at [33]; [2008] NSWSC 1224.

20    Section 286(1)(b) calls for a two-step analysis:

(1)    First, it is necessary to ascertain as a matter of law the purposes for which the relevant power may lawfully be exercised. In that exercise, the starting point will usually be the rules of an organisation.

(2)    Second, it is necessary to determine as a matter of fact the purpose for which the power was exercised, and then to assess whether that purpose falls within the category of permissible purposes identified at step one.

21    Section 287(1) proscribes the use of an officer’s position to gain an unfair advantage, in the following terms:

(1)    An officer or employee of an organisation or a branch must not improperly use his or her position to:

(a)    gain an advantage for himself or herself or someone else; or

(b)    cause detriment to the organisation or to another person.

22    As such, a contravention of s 287(1) contains two elements. First, the “improper” use of an employee/officer’s position. That is, there must be a nexus between the impropriety and the officer or employee’s position. It is not necessary however that the offender be conscious of the impropriety. See General Manager of the Fair Work Commission v Thomson (No 3) [2015] FCA 1001 at [75]–[76] applying The Queen v Byrnes (1995) 183 CLR 501 at 514-515; [1995] HCA 1.

23    Secondly, that this improper use of position was “to” gain a relevant advantage or cause a relevant detriment. This has been found to be a reference to purpose rather than cause. See Chew at 632-633. As such, an officer or employee can have the purpose “to gain an advantage” or “to cause detriment” even if the accrual of the advantage or the suffering of the detriment does not in fact occur.

The Court’s penalty “discretion”

24    As the High Court said in a criminal context in Markarian v The Queen (2005) 228 CLR 357 at [37]; [2005] HCA 25, the determination of the appropriate penalty in any particular case involves an “instinctive synthesis”. Markarian has been applied in the setting of pecuniary penalties on many occasions in this Court.

25    In Australian Competition and Consumer Commission v Marksun Australia Pty Ltd [2011] FCA 695, Gilmour J, at [91], summarised the principles outlined in Markarian, in terms subsequently adopted by Middleton J in Australian Competition and Consumer Commission v Chopra [2015] FCA 539 at [55], as follows:

(1)    the Court’s assessment of the appropriate penalty is a discretionary judgment based on all relevant factors;

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

(3)    it will rarely be appropriate for a court to start with the maximum penalty and proceed by making a proportional deduction from that maximum;

(4)    the Court should not adopt a mathematical approach of increments or decrements from a predetermined range, or assign specific numerical or proportionate value to the various relevant factors;

(5)    it is not appropriate to determine an “objective” sentence and then adjust it by some mathematical value given to one or more factors such as a plea of guilty or assistance to authorities;

(6)    the Court “may not add and subtract item by item from some apparently subliminally derived figure” to determine the penalty to be imposed; and

(7)    since the law strongly favours transparency, accessible reasoning is necessary in the interests of all, and while there may be occasions where some indulgence in an arithmetical process will better serve the end, it does not apply where there are numerous and complex considerations that must be weighed.

26    In addition to the above principles, the authorities (Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [23], [27] (Gray J), [53]-[71] (Graham J), [89]-[97], [102] (Buchanan J); Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at [7]-[9], [14] (Gyles J), [41]-[42] (Stone and Buchanan JJ)) suggest that an appropriate approach in a case involving multiple contraventions is that:

    First, the Court should identify each contravention and determine an appropriate penalty in respect of each. In so doing, the Court should consider whether particular contraventions should be treated as a “single course of conduct”, or by reason of common elements should otherwise be “grouped” to ensure that the wrongdoer is not punished more than once for the same conduct.

    Secondly, having determined an appropriate penalty in respect of each contravention or group of contraventions, the Court should consider whether the aggregate penalty is an appropriate response to the conduct which gave rise to the contraventions. This is referred to as the “totality principle”.

27    If the Court is satisfied that multiple contraventions arose by way of a “single course of conduct” or one transaction, the Court may exercise its discretion to impose a single penalty. However, the Court is not obliged to start from the premise that, if there is a single course of conduct, the maximum penalty for one contravention is the maximum penalty for the course of conduct as a whole. See Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39 at [41]-[42] (Middleton and Gordon JJ).

28    It is acknowledged by the General Manager that the contraventions admitted in this proceeding include contraventions which arose out of a single course of conduct. However, it is submitted that there are important distinctions between ss 285, 286 and 287 of the RO Act which should not be airbrushed out of the record for no better reason than the commonality of much of the conduct which led to the contraventions of each. In this regard, the General Manager observes that in General Manager of the Fair Work Commission v Thomson (No 4) [2015] FCA 1433, Jessup J noted two issues arising in such circumstances:

    First, that it would be neither just nor appropriate for the respondent to be required to pay more than one penalty where the contraventions arose out of one episode or one course of conduct; and

    Secondly, a principled approach to the imposition of penalties in such a situation would be one which involved the imposition of the appropriate penalty for each contravention.

29    His Honour, at [11], went on to refer an approach suggested “by the analogy of concurrent sentences”, stating:

Under this approach, a penalty would be imposed in respect of each contravention considered as an entity in its own right, then a further order would be made that, upon payment of one of the penalties in each group within a time limited by the court, the operation of the order imposing penalties in respect of the other contraventions in the same group be permanently stayed. That is the approach which I propose to take in the present case.

30    His Honour has adopted a similar approach in other civil penalty cases. See General Manager of Fair Work Commission v Musicians Union of Australia [2016] FCA 302; and Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462. As further developed below, the General Manager submits that such an approach should be adopted here. The respondents do not oppose such an approach.

31    When it comes to assessing the appropriate penalty, it should be noted that the High Court has recently recognised the central importance of deterrence in pecuniary penalty cases. In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46 at [55], the plurality approved of an earlier statement by French J (as his Honour then was), is as follows:

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.

(citations omitted)

(Emphasis added)

32    The importance of deterrence in cases involving contraventions of industrial laws has been recognised in numerous authorities including in the context of contraventions of ss 285, 286 and 287 of the RO Act. See Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (Quest Apartments and Greek Community Centre) [2016] FCA 1262 at [33]-[34] per Tracey J. In Thomson (No 4), Jessup J at [4] referred to the above statements by the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate and stated:

Laws are enacted to be observed, that is to say, to cause those in the relevant area of human activity to modify what would, or might, otherwise be their behaviour to bring it into line with community norms. What is referred to as general deterrence is the means by which the imposition of penalties in one case is assumed likely to have a salutary impact upon the behaviour of others. The point is that those others, noting how the instant contravenor has been dealt with, should be strongly disinclined to follow his or her bad example. The community’s establishment of norms of conduct will, if a penalty has this deterrent effect, be the more effective.

33    Following the decision of the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate, there is no limitation on this Court receiving submissions as to the appropriate range of penalty. Accordingly, the applicant provides submissions by way of:

    a brief analysis of comparable cases; and

    specific submissions as to the appropriate quantum for each individual contravention by the respondents.

34    The General Manager, in that regard, draws attention to the decision of this Court in Thomson (No 4), as well as General Manager of Fair Work Australia v Health Services Union [2014] FCA 970. These cases similarly involved contraventions of ss 285, 286 and 287 of the RO Act.

35    In broad terms, the parties accept that a range of factors may bear upon the determination of the appropriate penalty in a given case, including this case, such as:

    The nature and extent of the conduct which led to the breaches.

    The circumstances in which the relevant conduct took place.

    The nature and extent of any loss or damage sustained as a result of the contraventions.

    Whether there had been similar previous conduct by the respondent.

    Whether the contraventions were properly distinct or arose out of the one course of conduct.

    The size of the business enterprise involved.

    Whether or not the contraventions were deliberate.

    Whether senior management was involved in the contraventions.

    Whether the party committing the contraventions had exhibited contrition.

    Whether the party committing the contraventions had taken corrective action.

    Whether the party committing the contraventions had cooperated with the enforcement authorities.

    The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements.

    The need for specific and general deterrence.

See Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14] (Tracey J).

36    Having regard to these various principles, I will consider each of these general factors, first in the case of Mr McGiveron and then in the case of Mr Burton, before finally assessing the relevant penalties.

Mr McGiveron’s case

The nature and extent of the contraventions (the loss and damage sustained and deliberateness)

The McGiveron F350 contraventions

37    Dealing first with the McGiveron F350 contraventions, the General Manager notes that Mr McGiveron admits the following in respect of the McGiveron F350 contraventions:

(1)    That between mid-2012 and April 2013, the custom and practice within the WA Branch was to purchase utilities costing approximately $50,000 each for the use of officers and employees within the WA Branch.

(2)    In or about mid-2012, but prior to 24 July 2012, Mr McGiveron and Mr Burton discussed the acquisition of new motor vehicles by the WA Branch. During that discussion, they agreed that the WA Branch should acquire two Ford F350 motor vehicles; that the vehicles were to arrive after Mr McGiveron’s resignation as WA Branch Secretary; and that one F350 would be used by Mr McGiveron in his anticipated employment with the TWU after resigning as WA Branch Secretary.

(3)    On or about 24 July 2012, Mr McGiveron, purporting to act on behalf of the WA Branch of the TWU, executed two contracts with Barbagallo Motors (Barbagallo), each to purchase one F350 for approximately $137,000 (F350 Contracts) and caused $80,000 of WA Branch funds to be paid as deposits for those vehicles (F350 Deposits).

(4)    Mr McGiveron did not have authority to make the above purchases and they occurred in breach of the rules of the TWU.

38    Mr McGiveron admits contravening ss 285 and 286 of the RO Act with respect to the McGiveron F350 contraventions. That is, he admits that, in executing the F350 Contracts and causing the TWU to pay the F350 Deposits from the WA Branch funds, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch:

(1)    in good faith in what he believed to be the best interests of the TWU or for a proper purpose; and

(2)    with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances, occupied the office of Branch Secretary and had the same responsibilities within the TWU as Mr McGiveron.

39    The General Manager submits the gravity of these contraventions is aggravated by the fact that, as admitted by Mr McGiveron, he knew that the purchase of the F350s might result in him obtaining ownership of one of the F350s at the time his employment with the TWU ceased. He has also admitted that he ought to have known that committing the TWU to expenditure of WA Branch funds in the vicinity of $274,000 on two motor vehicles was a considerable matter for the WA Branch and something which he did not have authority to do without WA BCOM approval.

40    She also submits that Mr McGiveron accepts that this gave rise to a conflict, or a potential conflict between his interests and those of the TWU, and he did not disclose to the WA BCOM the conflict or potential conflict of interests.

41    Considering all these matters, the General Manager submits that:

    the contravention of s 286(1) warrants the imposition of a penalty in the high range, that is, close to the maximum of $6,600;

    the contravention of s 285(1) warrants the imposition of a penalty in the mid to high range.

42    She further submits that these penalties should be imposed “concurrently”, as mentioned above.

43    Mr McGiveron accepts he has made admissions as to legal and factual elements of the General Manager’s pleaded case sufficient to make out the contraventions.

44    Mr McGiveron admits that it was the custom and practice of the WA Branch to purchase vehicles of a particular type. He says, however, that admission only goes so far and is not an admission that there could not be a good reason to purchase some other vehicle for a particular reason at a particular time.

45    Further, he submits, there is nothing in the admissions he has made suggesting that there was anything about the agreement, as between Mr McGiveron and Mr Burton, that was outside the purposes of the WA Branch.

46    As to the General Manager’s submission that the contraventions warrant the imposition of a penalty in the high range, Mr McGiveron contends this is not one of the worst cases to support such a penalty. He submits the General Manager’s submission makes no allowance for discounts appropriate for cooperation, absence of prior contraventions, and absence of loss.

47    Mr McGiveron finally agrees with the General Manager’s submission that the penalty for contravention of s 285(1) ought to be imposed concurrently with the imposition of a penalty for contravention of s 286(1).

The redundancy policy contravention

48    The General Manager notes that Mr McGiveron admits contravening s 286 of the RO Act with respect to the McGiveron redundancy policy contravention. That is, he admits that, by his conduct with respect to the redundancy policy, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch in good faith in what he believed to be the best interests of the TWU or for a proper purpose.

49    She also notes that Mr McGiveron admits the following in respect of these contraventions:

    As at 18 July 2012, he intended to resign his position as Branch Secretary of the WA Branch and to continue employment with the TWU within the WA Branch in a non-elected position. He also knew that, if he were to become employed by the TWU within the WA Branch in a non-elected position, the non-elected position could become redundant. At this time, he was also aware that the WA Branch had a severance policy which provided benefits to employees made redundant.

    On 18 July, the WA BCOM resolved to endorse a redundancy policy for all TWU employees employed within the WA Branch whose positions are made redundant. The terms of the redundancy policy were more generous to redundant employees than was the 2011 severance policy.

    He caused the redundancy policy to be drafted; caused the redundancy policy resolution to be considered by the WA BCOM at the 18 July 2012 WA BCOM meeting; and recommended to the WA BCOM that the redundancy policy be adopted.

    This gave rise to a potential conflict between his interests and those of the TWU. He did not disclose to the WA BCOM the potential conflict of interests, nor absent himself from discussions relating to the redundancy policy resolution or voting upon the redundancy policy resolution.

50    Further, she observes that, as admitted by Mr Burton, Mr McGiveron did ultimately receive a redundancy payment of $348,396.15 gross, or $304,895.80 net, attributable to the redundancy policy.

51    It is the General Manager’s case that Mr McGiveron’s conduct in knowingly causing the redundancy policy to be adopted was taken in bad faith and for an improper purpose because he did so to enable himself to have the benefit of the policy in his anticipated future employment with the TWU. The General Manager relies upon the affidavit of Mr McMillan of 7 December 2016 at [6] and [7] to support that finding.

52    Considering all these matters, the General Manager submits that the McGiveron redundancy policy contravention of s 286(1) warrants the imposition of a penalty in the mid-high range, that is, between $4,000 and $6,600.

53    Mr McGiveron accepts that he has made admissions as to the legal and factual elements of the General Manager’s pleaded case sufficient to make out the contravention. No issue is taken with the General Manager’s summary of the admissions made, as far as it goes.

54    He says the essential wrong which arises from the pleading is his failure, at one WA BCOM meeting, to take either or both of the formal steps necessary to avoid the emergence or appearance of an actual or potential conflict between interest and duty. The two formal steps were: (1) the declaration of the officer’s perception that there is or might be a conflict between interest and duty, or at least the declaration of the factual circumstances which might give rise to an actual or potential conflict; and (2) the withdrawal from further participation in the deliberations of the committee, on the relevant topic. Mr McGiveron admits he took neither of those formal steps.

55    Mr McGiveron submits there are conceivable cases in which an officer’s failure to take those formal steps would be particularly harmful or egregious, but the present case is not one of those. The failure to take those formal steps might be particularly harmful or egregious where the circumstances giving rise to the actual or potential conflict were known to the officer and unknown to the committee. Here, each of the circumstances which – on the General Manager’s case – gave rise to the actual or potential conflict between interest and duty, were circumstances known equally by Mr McGiveron and the members of the WA BCOM. The failure to take the formal steps is admitted to have been wrongful, but that failure did not include any element of concealment, or place the members of the WA BCOM at any disadvantage as to relevant information.

56    Mr McGiveron notes that, at [45] of the General Manager submissions, she refers to the value of a redundancy payment said to have been paid to Mr McGiveron. The General Manager says that the amount paid was attributable to the redundancy policy. However, if the value of that payment is said to be a measure of the consequences of Mr McGiveron’s conduct, that submission is misleading. Elsewhere, Mr McGiveron has asserted that a person in his position would otherwise have been entitled to the value of a termination payment under the 2011 termination payment policy. A part of the payment made to Mr McGiveron is the part that would have been paid in any event, notwithstanding the later adoption of the redundancy payment policy.

57    As to [46] of her submissions, where the General Manager advances a case as to “improper purpose”, Mr McGiveron submits he has made relevant admissions to the pleading, but admissions to the pleading do not involve an incorporation of particulars. An admission to a contravention of s 286(1) does not necessarily involve an admission to a failure to have observed the duty described at s 286(1)(b). A failure to observe the s 286(1)(a) duty is sufficient to make out a contravention of s 286(1).

58    He also submits that, in any event, [6] and [7] of the affidavit of Mr McMillan relied on by the General Manager in this regard, do not make out the General Manager’s “improper purpose” case.

Circumstances in which the conduct occurred

59    The General Manager notes that the particular circumstances in which the contravening conduct occurred is as discussed above. More generally, however, it is relevant that each of the contraventions occurred in circumstances where Mr McGiveron had access to, and control over substantial funds which he was entrusted to control and maintain. As shown by the financial returns lodged by the WA Branch, that branch obtained revenue from operations in excess of $4 million in the years ending 31 December 2010 and 31 December 2011.

60    The General Manager notes that each of the McGiveron F350 contraventions involved the expenditure of funds of the TWU, and that the McGiveron redundancy policy contravention also ultimately resulted in the substantial expenditure of TWU funds.

61    It is accepted that the facts admitted include the fact that the McGiveron F350 contraventions involved the expenditure and commitment of funds of the TWU.

62    Mr McGiveron submits that the General Manager’s contention that the McGiveron redundancy policy contravention “did ultimately result” in an expenditure of TWU funds, is a significant overstatement. The submission is one as to causation. There were many and larger steps in the chain of causation between the admitted contravening conduct and the expenditure of TWU funds, each of them outside Mr McGiveron’s control, which included:

(a)    WA BCOM adopting the redundancy policy;

(b)    WA BCOM, over the months and series of meetings over the intervening time, not rescinding or varying the redundancy policy;

(c)    WA BCOM offering employment to Mr McGiveron, subsequent to Mr McGiveron’s resignation as Branch Secretary;

(d)    WA BCOM, over the months and series of meetings over the intervening time, not modifying the application of the redundancy policy to Mr McGiveron’s employment; and

(e)    Mr McGiveron’s employment being terminated by reason of purported redundancy.

Previous conduct

63    There is no evidence of any relevant previous conduct by Mr McGiveron that would bear on the question of penalty.

64    Mr McGiveron submits that he has never before been the subject of proceedings alleging, let alone findings of, contravention of officers’ duties. Mr McGiveron has been an officer over a very long period.

Whether breaches are distinct or arose from a single course of conduct

65    The General Manager submits that Mr McGiveron’s three admitted contraventions arose from two distinct courses of conduct. Mr McGiveron agrees with the General Manager’s submissions in this regard.

The size of the enterprise

66    As noted above, during the period Mr McGiveron was the WA Branch Secretary of the TWU, the Branch obtained substantial revenue as well as holding assets valued in excess of $5 million.

Senior management

67    Each of the contraventions arose from the conduct of Mr McGiveron when he was the WA Branch Secretary of the TWU. He was the senior full-time officer of the TWU. In that role, Mr McGiveron was the Chief Executive Officer of the WA Branch, charged with the powers and functions set out in rule 37(3) of the TWU Rules, including:

    keeping all documents, books and accounts relating to the business of the Branch;

    being custodian of the moveable property of the Branch; and

    being in charge of the management of the Branch Office.

68    Mr McGiveron held a significant position of trust. He was the embodiment of the “senior management” of the WA Branch.

Contrition

69    The General Manager submits there is no evidence of Mr McGiveron’s contrition before the Court.

Corrective action

70    The General Manager submits there was no evidence of any corrective action taken by Mr McGiveron. However, the General Manager does not submit that any penalty imposed with respect to the McGiveron F350 contraventions should be increased because of this fact.

71    Mr McGiveron submits that the question of whether corrective action may have been taken is dependent on a finding, first, that loss has been suffered. Duties may be contravened without loss having been suffered. If a duty is contravened, yet no loss is suffered (or proved to be suffered), the question of corrective action does not arise.

72    He says the General Manager has not advanced a case to establish the suffering of loss by the TWU, and he has not admitted that any such loss was suffered.

73    He also notes that, in a footnote, the General Manager has referred to material (not in evidence) arising from proceedings conducted by a Royal Commission. The related General Manager’s observation is that the F350 vehicle was disposed of and the proceeds of sale remitted to the TWU. Mr McGiveron says he would be content for the Court to adopt that statement as a finding of fact, so far as it goes.

74    He also notes that the General Manager further says, in the same footnote, that Mr McGiveron received a different vehicle “in exchange”. He says this statement is unsupported by evidence and is not directed to any issue arising from the pleading, and there is nothing that the Court can do with that statement.

Cooperation with enforcement authorities

75    The General Manager acknowledges that, at all times since 3 February 2017, Mr McGiveron has admitted the vast majority of facts and each of the contraventions alleged against him in the General Manager’s amended statement of claim (ASOC). Those admissions have obviated the need for a hearing on liability.

76    Mr McGiveron submits that the General Manager, while acknowledging the cooperation of Mr McGiveron, understates the extent and value of that cooperation as from 3 February 2017.

77    Mr McGiveron says his valuable cooperation was demonstrated long before 3 February 2017. At the first opportunity, in September 2016, he delivered a defence which entered admissions to virtually all of the pleaded facts, and also entered an admission of liability. He thus voluntarily surrendered his entitlement to rely on the penalty privilege, and put the General Manager to her proofs; he surrendered his option of contesting the allegations of fact. The General Manager was thereby immediately relieved of the work and the cost of proving the factual elements of her pleaded case.

78    Further, when the Court ordered mediation, Mr McGiveron participated. After that mediation, the General Manager amended her claim and abandoned two of the five allegations of contravention that she had originally advanced against him. Mr McGiveron amended his defence and admitted liability to the remaining allegations of contravention.

79    Mr McGiveron submits that his cooperation warrants recognition with a substantial discount, and not less than the 25% applied by North J for a similar type of cooperation in Health Services Union.

Specific deterrence

80    The General Manager acknowledges that Mr McGiveron ceased employment with the TWU in 2013 and no longer holds office. She recognises this diminishes the need for specific deterrence in the assessment of any appropriate penalty.

81    Mr McGiveron submits that the present case is no occasion for the imposition of a penalty to give effect to the principle of specific deterrence. The General Manager acknowledges that Mr McGiveron is not now an officer. The Court has no reason to expect that Mr McGiveron will become an officer or employee of a union in the future.

General deterrence

82    The parties agree general deterrence is the most important consideration in determining the appropriate penalty in this case.

83    The General Manager notes what North J said in Health Services Union, in imposing penalties for contravention of ss 285, 286 and 287 in relation to contraventions by union officials for expenditure of union funds for their personal benefit, namely:

[T]here is a particularly serious aspect to these contraventions in that they involved a misuse of the third respondent’s position as Branch Secretary to obtain a private benefit for himself and his spouse to the determinant of the Branch. There is a strong need for the Court to express disapproval of these contraventions in order to send a clear message to deter others from engaging in similar conduct

84    Likewise, as noted by Jessup J in Thomson (No 4) at [5]:

The significance of general deterrence is, if anything, somewhat magnified in the circumstances of the present case, for two reasons. First, the respondent’s position was a very senior one in a national union. Subordinate officials, and members, of the HSU would inevitably have regarded him as an example to be followed, most particularly in the areas of honesty and loyalty to the organisation which he served. Secondly, as stressed in my reasons of 11 September 2015, the respondent worked in an environment where he was subject to little or no supervision, nor even surveillance, by other officers of the HSU. These considerations reflect on the inherent gravity of his contraventions, of course, but they also add relevance to the matter of general deterrence: how the court is prepared to deal with a contravenor in the position of the respondent should, in the perception of others in like positions, be the subject of no ambiguity.

85    The General Manager submits these comments are apposite to the present proceeding. The contraventions admitted by Mr McGiveron involve him using TWU funds, and his position as WA Branch Secretary, for his own benefit. As such, how the Court is prepared to deal with a contravenor in the position of Mr McGiveron should, in the perception of others in like positions, be the subject of no ambiguity.

Submissions as to appropriate penalties

86    The General Manager submits pecuniary penalties should be imposed as follows:

(1)    In respect of the McGiveron F350 contraventions:

    the contravention of s 286(1) warrants the imposition of a penalty in the high range, that is, close to the maximum of $6,600;

    the contravention of s 285(1) warrants the imposition of a penalty in the mid to high range.

She further submits that these penalties should be imposed “concurrently”, as mentioned above.

(2)    In respect of the McGiveron redundancy policy contravention of s 286(1), the contravention warrants the imposition of a penalty in the mid-high range, that is, between $4,000 and $6,600.

87    Mr McGiveron submits that the appropriate penalties for the F350 contraventions should be:

(a)    for the s 286(1) contravention, a penalty in the low to medium range, between $2,000 and $3,000; and

(b)    for the s 285(1) contravention, a penalty in the low range, between $1,000 and $1,500.

Consideration

88    In respect of the McGiveron F350 contraventions, I consider that the General Manager, supported by the TWU, reasonably submits that the penalties to be imposed for contravention of s 286(1) and s 285(1) warrant penalties in the mid to high range. I also agree that it is appropriate in this case, in relation to the contraventions that constitute a single course of conduct, to adopt an approach taken in some earlier cases such as Thompson (No 4) and, effectively, to impose penalties that are concurrent and have the effect that, if the “head penalty” is paid, only one pecuniary penalty will be incurred. In this case, the McGiveron F350 contraventions should properly be treated as involving a single course of conduct and the s 286(1) contravention penalty should be considered to attract the head penalty because of its more serious nature.

89    In my view, the admissions and the related evidence show that Mr McGiveron, effectively aided by Mr Burton, in the light of Mr McGiveron’s decision to resign his position as WA Branch Secretary of the TWU, undertook plans to acquire the two F350s with the awareness that, should his later anticipated employment position with the TWU become redundant, in all likelihood he would be able to keep one of the F350 vehicles as his own under the TWU’s retirement policy.

90    While it is clear from the evidence given in the proceeding and the admissions made by the respondents, that the TWU had a practice of acquiring robust motor vehicles for use by organisers in their employment in some more remote parts of Western Australia, the evidence also discloses that most often the types of vehicles purchased had a value of about $50,000, not a value of more than $150,000, with accessories, paid for the more upmarket vehicles in question here.

91    The fact that the F350s, which after purchase were fitted out with more than $20,000 worth of accessories, were acquired, and the WA BCOM members were not aware of the acquisition, goes to show how serious the breach of the good faith obligation imposed by s 286(1) of the RO Act was.

92    In the circumstances, I also consider that the admissions made by Mr McGiveron support the General Manager’s submissions that not only did he fail to discharge his duty as Branch Secretary to act in good faith, but also that he did not, in so acting, act for a proper purpose.

93    It is artificial, in my assessment, for Mr McGiveron to argue that his admission only related to allegations of not acting in good faith against him, where it is plain that by his admission he accepted that he did not act in good faith and for a proper purpose, or alternatively, that he did not act in good faith or for a proper purpose. Either way the two limbs of s 286 were contravened.

94    That same conduct involved a contravention of Mr McGiveron’s obligation as an officer of the WA Branch, under s 285, to exercise his or her powers and discharge his or her duties with a degree of care or diligence that a reasonable person would exercise if he or she were an officer of an organisation or a branch in the organisation’s circumstances and occupied the office held by, and held the same responsibilities within the organisation or a branch as, the officer. As I have noted, however, the contraventions of the two provisions should be seen as constituting one course of conduct and effectively there should only be one penalty imposed, which is why the concurrent penalty imposition approach accepted by the relevant parties is adopted by me on this occasion.

95    Because the maximum penalty that can be imposed under the RO Act in respect of Mr McGiveron’s contravening conduct is $6,600, no greater penalty than that can be imposed.

96    The actions of Mr McGiveron bespeak a high degree of entitlement to act in the way that he did.

97    It is plain that he knew or ought to have known that committing the TWU to the expenditure of WA Branch funds in the vicinity of $274,000 on the two motor vehicles he had agreed to purchase was a considerable matter for the WA Branch and that he did not have authority to do so without WA BCOM approval. That he was purchasing those types of vehicles at that expense was not something disclosed to the members of the WA BCOM or the union membership more generally. It is something that was discovered much later in the course of events by later officials of the TWU.

98    No doubt many members of the TWU would have been aggrieved, to say the least, to discover the largesse of which Mr McGiveron was the beneficiary following his subsequent redundancy.

99    It is generally accepted that it is no excuse for officials in the position of Mr McGiveron to point to past practices as justifying the contraventions they have admitted. In this case, however, the present TWU officials do not accept that there is any relevant conduct by way of precedent to justify the purchase by Mr McGiveron of the two vehicles of the type that he purchased, or that he should have acquired the vehicles without the authority of the WA BCOM.

100    For these reasons, and subject to what I say below, I accept the submission made by the General Manager, supported by the TWU, that the contravention of s 286(1) of the RO Act warrants the imposition of a penalty in the high range, close to the maximum of $6,600.

101    Similarly, and again subject to what I say below, the contravention of s 285(1) of the RO Act warrants the imposition of a penalty in the mid to high range, somewhere between $4,000 and $6,600. It is of slightly less gravity, in all the circumstances, than the contravention of s 286(1).

102    But before finally assessing the penalty, it is appropriate to regard the second redundancy policy contravention and also to consider all of the other factors mentioned above that are relevant to the penalty assessment process, as well as applying the totality principle.

103    As to the McGiveron redundancy policy contravention, I consider that, on its face, it warrants the imposition of a penalty in the mid to high range, somewhere between $4,000 and $6,600, as submitted by the General Manager and supported by the TWU.

104    Having regard to the reasons I have given in respect of the F350 contraventions, Mr McGiveron was, or must have been, plainly aware that if he were to retire as Branch Secretary and then occupy a non-elected employee position with the TWU, which position then became redundant, the WA Branch severance policy would apply to his advantage.

105    At the 18 July 2012 meeting of the WA Branch, he indicated his intention to resign in the future as Branch Secretary of the WA Branch. At that meeting, the WA BCOM also resolved to endorse a new redundancy policy for all TWU employees employed at that time at the WA Branch. Mr McGiveron caused that new policy to be drafted and was involved in the move to have it considered by the WA BCOM at that meeting. Indeed, he recommended that it be adopted.

106    There is no doubt that this gave rise to a potential conflict between his interests and those of the TWU, because if he were to become an employee, having resigned his position as Branch Secretary, and then were to find his position declared redundant, he would benefit under the new policy. The evidence shows that the most salient feature of the new policy was that a person made redundant would receive an additional week’s severance pay for each year served as an employee of the TWU, compared with the old 2011 redundancy policy. In Mr McGiveron’s case, if soon made redundant, it would mean, as at the time he actually was made redundant, that he would receive an extra week’s severance payout for each of about 27 years that he had served the TWU. That is to say, he would receive about an additional six months’ salary if he received a redundancy payout under the new policy compared with the old one.

107    I do not accept the argument put on behalf of Mr McGiveron that this consequence must have been open for all members of the WA BCOM to see when they voted on the recommended new redundancy policy and so, for that reason, the gravity of Mr McGiveron’s failure to point out these consequences and absent himself from the meeting at which the recommended redundancy policy was voted upon, are less serious than they might otherwise have been. The simple fact is Mr McGiveron was the long-time Branch Secretary, he was involved in the formulation of the new redundancy policy and he indeed recommended it to the WA BCOM. His position was one of some considerable importance and influence. I do not consider that the analysis provided on his behalf lessens the seriousness of the contravention which he has admitted; if anything, it accentuates it.

108    I am also not persuaded that, by his conduct, he is not guilty of both limbs of s 286(1), that is to say, failing to act in good faith and for an improper purpose.

109    Nonetheless, I accept the submission made by the General Manager that the contravention in this case warrants the imposition of a penalty in the mid to high range between $4,000 and $6,600, something a little less than the penalty that the McGiveron F350 contraventions should attract.

110    As to the circumstances in which the various contraventions occurred, one of the other relevant factors I should take into account in assessing penalty, I accept the observations made by the General Manager that Mr McGiveron had access to and control over substantial funds which he was entrusted to control and maintain as Branch Secretary. The F350 contraventions involved the expenditure and commitment of funds of the TWU.

111    While Mr McGiveron submits in respect of the McGiveron redundancy policy contravention that he did ultimately receive some benefit, I accept that it was not in the total amount of the redundancy payment he received, but was only to be equated to the additional severance payment that he would receive under the relevant policy compared with the earlier 2011 one.

112    I do not, however, place a lot of weight, although I do place some weight, on the fact that a number of steps had to be taken in implementation of the new redundancy policy before Mr McGiveron was paid out under it. They included the step of the new Branch Secretary, Mr Burton, declaring his position redundant.

113    But in circumstances where any reasonable view of the events leads to the conclusion that the new redundancy policy was anticipated to be one that, in all likelihood, would be to the benefit of employees, including Mr McGiveron, I do not place much store on the possibility that there was any reasonable likelihood, when Mr McGiveron moved for the adoption of the redundancy policy and breached his obligations in doing so, that the benefits he ultimately received were not likely to become reality.

114    All of that said, so far as previous conduct is concerned, there is no previous conduct by Mr McGiveron that bears on the question of penalty and it is plain he has been an officer of the TWU for a very long period.

115    I have already noted the breaches which arise from a single course of conduct.

116    So far as the size of the enterprise is concerned, it is plain the position Mr McGiveron held gave him control over substantial revenue, as well as assets valued in excess of $5 million on behalf of the TWU.

117    The contraventions also occurred in the role Mr McGiveron performed as WA Branch Secretary of the TWU. He was the senior full time officer. He was possessed of and charged with all appropriate powers and functions under the Rules of the Union, including keeping the documents, books and accounts, being the custodian of moveable property and being in charge of the management of the Branch office. He held a significant position of trust in, and was the embodiment of the “senior management” of, the WA Branch of the TWU. That he held such a significant position is relevant to the question of penalty and the deterrent effect that it should have.

118    While there is no particular evidence of “contrition”, in the sense that Mr McGiveron has not made some heartfelt apology for his conduct, I accept arrangements have been made concerning the return of “his” F350 vehicle and that there is no particular case of “loss” by the TWU suggested on behalf of the General Manager or the TWU.

119    In more general terms, I accept the submissions made on behalf of Mr McGiveron concerning his cooperation in the proceeding since September 2016 when a defence was filed, mediation occurred and his liability was ultimately accepted for those contravention allegations maintained against him. I take that into account in finally setting the penalties, but I should say that in circumstances such as these, they militate only slightly by way of lessening the pecuniary penalty to be imposed, because to allow any substantial reduction in the pecuniary penalty on account of such factors would, in my view, run the risk of significantly reducing the deterrent value of the pecuniary penalty imposed. It should not be thought by persons in the same or a similar position to Mr McGiveron that “coming clean” after the event will always lead to some automatic reduction in the penalty that should be imposed. The contraventions were serious and the penalties must ultimately reflect this fact.

120    I accept, generally speaking, however, that the question of specific deterrence does not loom large in a case such as this. Nonetheless, Mr McGiveron should expect the imposition of a substantial pecuniary penalty for the contraventions he has admitted, given all the matters I have mentioned, especially the seriousness of the contraventions committed by him as Branch Secretary of the TWU in Western Australia.

121    As I have emphasised, general deterrence looms large in considering the appropriate penalty in this case. As I have intimated, the incurring of a penalty should not be seen as the cost of doing business. Senior union officials, in particular, who have the power to control or influence outcomes, including outcomes that might benefit them or others close to them personally in the running of union affairs and have the duty to act in good faith and for proper purposes, must understand that they will feel the full weight of the law if they deliberately contravene the law governing their conduct as union officials. It is trite to say that no person is above the law and, in this case, the provisions of the RO Act make it plain that union officials such as Mr McGiveron are subject to important duties, duties which are very much the same as those that apply to officers and directors of corporations under the general corporations law of Australia.

122    In all of these circumstances, I would impose the following pecuniary penalties:

(1)    In respect of the McGiveron F350 contraventions:

(a)    For the contravention of s 286(1) of the RO Act, I would impose a pecuniary penalty of $6,000.

(b)    For the contravention of s 285(1) of the RO Act, I would impose a pecuniary penalty of $5,000.

(c)    These penalties should be imposed concurrently, as set out in the accompanying orders, with the s 286(1) penalty being the head penalty.

(2)    In respect of the McGiveron redundancy policy contravention of s 286(1) of the RO Act, I would impose a penalty of $5,000.

123    I take account of the totality principle at this point. I do not consider that, taking account of the nature of the contraventions in respect of both the McGiveron F350 contraventions and the McGiveron redundancy policy contravention, the total of the head penalties of $11,000 is either oppressive or crushing, or otherwise unjust.

Mr Burton’s case

The nature and extent of the contraventions (the loss and damage sustained and deliberateness)

The Burton F350 contraventions

124    Except where otherwise expressly indicated, the facts and circumstances relating to the Burton F350 contraventions set out below are admitted by Mr Burton. They include that:

    The contraventions arose out of circumstances including the custom and practice at the relevant time for the WA Branch to purchase vehicles costing approximately $50,000 for the use of officers and employees of the WA Branch.

    On or about 18 July 2012, he attended Barbagallo, together with Mr Glenn Barron, and made enquiries about purchasing an F350 vehicle. At that time, a new F350 was valued at between approximately $130,000 and $150,000 in Australia.

    In or about mid-2012, but prior to 24 July 2012, Mr Burton and Mr McGiveron discussed the acquisition of new motor vehicles by the WA Branch of the TWU. As noted above, Mr McGiveron accepts that on 24 July 2012 he executed the F350 Contracts and caused the F350 Deposits to be paid; this is not admitted by Mr Burton.

    On 6 March 2013, Mr Burton signed an application to license an F350, which application identified himself as the proposed licence holder, care of his home address.

    In about March 2013, Mr Burton discussed with Mr McGiveron what accessories should be fitted to the F350s. He attended Barbagallo and executed additional contracts to purchase the F350s on or around 26 March 2013 (Further F350 Contracts).

    On 2 April 2013, Mr Burton caused a payment to be made from WA Branch funds to Barbagallo of approximately $228,550 with respect to the F350s (Final F350 Payment).

    In or about April 2013, Mr Burton took possession of one of the F350s. After taking possession of the vehicle, Mr Burton caused it to be garaged in a storage facility in Wangara in Western Australia and drove the vehicle for his personal use from time to time.

    By executing the Further F350 Contracts on 26 March 2013, he caused the WA Branch to incur a liability with respect to the purchase price of the F350s.

125    The General Manager notes that Mr Burton admits contravening ss 286 and 285 of the RO Act with respect to the Burton F350 contraventions; and also admits that, in executing the Further F350 Contracts and causing the Final F350 Payment to be paid, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch:

    in good faith in what he believed to be the best interests of the TWU or for a proper purpose; and

    with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances and occupied the office of Branch Secretary, and had the same responsibilities within the TWU as Mr Burton.

126    Accordingly, the General Manager says it is not in issue that Mr Burton failed to act in good faith in what he believed to be the best interests of the TWU, or for a proper purpose.

127    However, Mr Burton denies that at the time of executing the Further F350 Contracts he intended one of the vehicles to be for his use and says, rather, that neither were earmarked for his personal or exclusive use.

128    The General Manager notes Mr Burton’s initial affidavit evidence that he was not privy to Mr McGiveron’s plans as to whether or when he would purchase an F350. He says he subsequently became aware that Mr McGiveron had contracted to purchase F350s, but that neither were intended for him personally.

129    Mr Burton admits that he suggested, and Mr McGiveron agreed, that an F350 was an appropriate vehicle for certain remote organising work. However, he denies that in or about mid-2012 (but prior to 24 July 2012), he and Mr McGiveron:

    agreed that the WA Branch of the TWU should acquire two F350s;

    agreed that the vehicles were to arrive after Mr McGiveron’s resignation as WA Branch Secretary; and

    agreed that one F350 would be used by Mr McGiveron in his anticipated employment with the TWU after resigning as WA Branch Secretary.

130    Although denied by Mr Burton, those matters are admitted by Mr McGiveron.

131    Mr Burton says that he executed the Further F350 Contracts so that the accessories, selected by Mr McGiveron, could be added before the F350s were delivered.

132    Mr Burton also denies that, in or about April 2013, he caused his personalised numberplate to be transferred to the F350. Rather, he says that he attached his privately-owned plate (55-SB) some months later. Likewise, he denies that after taking possession of the F350, he informed various officers and employees of the TWU that the vehicle belonged to him.

133    The above contested allegations go to the gravity of Mr Burton’s contravening conduct. The General Manager submits that the Court can and should make a positive finding that, at the time Mr Burton executed the Further F350 Contracts and caused the Final F350 Payment to be made, he intended that one of the F350s be for his personal use. Specifically, she submits, the Court should find that the purchase of the F350s arose by reason of an arrangement between Mr Burton and Mr McGiveron (as admitted by Mr McGiveron).

134    In this regard, the General Manager particularly relies on Mr Burton’s oral evidence in cross-examination at the penalty hearing as establishing that he knew from about 24 July 2012 that Mr McGiveron had purchased the F350s, even if he did not have the contract documentation. She also submits the fact that Mr Burton knew that Mr McGiveron had contracted to purchase the F350s may be inferred from:

    the fact that he had previously discussed with Mr McGiveron the acquisition of new motor vehicles by the WA Branch of the TWU;

    his intention, as expressed to the WA BCOM on 9 October 2012, to conduct an assessment and renewal of the WA Branch fleet of vehicles; and

    his later conduct in executing the Further F350 Contracts.

135    The General Manager relies on the affidavits of Ms Pantechis at “MP-9” about when Mr Burton caused his personalised numberplate to be transferred to the F350 and Mr McMillan’s evidence about whether Mr Burton informed him that the F350 belonged to him.

136    Mr Burton admits to contravening s 286 and s 285 RO Act by:

(1)    purchasing accessories for two F350s that the TWU had already contracted to purchase, by executing additional contracts to facilitate those purchases, to a value of approximately $32,000.00;

(2)    completing the purchase of two F350s that the TWU had already contracted to purchase, by causing the TWU to pay the balance of the purchase price;

(3)    failing to obtain the WA BCOM’s prior approval before:

(a)    purchasing the accessories; and

(b)    completing the purchase of the two F350s; and

(4)    failing to disclose the purchase of the F350s to the WA BCOM.

137    Mr Burton denies that either of the F350s was purchased for his exclusive personal use.

138    He says the relevant circumstances in which the F350 contraventions occurred were:

(1)    On or about July 2012, Mr McGiveron, who was then the Secretary of the WA Branch, contracted to purchase the two F350s for approximately $137,000.00 each.

(2)    Each of the F350s was imported and, accordingly, the dealer could not deliver them for some months.

(3)    Mr Burton was unaware that Mr McGiveron had contracted to purchase the F350s for about six months after the contracts were executed.

(4)    When he learned that the TWU had contracted to purchase the F350s, he decided to complete the transaction to which the TWU was already legally committed.

(5)    He arranged for some accessories to be added to each of the F350s in circumstances where:

(a)    he could have refused to add the accessories; and

(b)    he had not obtained the WA BCOM’s approval.

(6)    He completed the purchase of the F350s without the WA BCOM’s prior approval.

(7)    He reported the arrival of the F350s to the WA BCOM in the same way that he had seen vehicle acquisition and disposals during his long tenure as a WA BCOM member.

Burton failure to disclose contraventions

139    The General Manager notes that Mr Burton admits contravening s 286 and s 285 of the RO Act with respect to the Burton failure to disclose contraventions; and also admits that, by failing to disclose the purchase of the F350s, he failed to exercise his powers and discharge his duties:

    in good faith in what he believed to be the best interests of the TWU or for a proper purpose; and

    with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances and/or occupied the office of Branch Secretary and had the same responsibilities within the TWU as Mr Burton.

140    As such, the General Manager says, it is not in issue that Mr Burton failed to act in good faith and in what he believed to be the best interests of the TWU, or for a proper purpose in failing to disclose the purchase of the F350s.

141    She says that between 9 October 2012 and 4 February 2014, Mr Burton did not disclose the purchase of the F350s to the WA BCOM, the Finance Committee or the WA Branch auditors. This was despite Mr Burton attending eight WA BCOM meetings and six Finance Committee meetings in that period.

142    On 26 March 2013, Mr Burton also met with the WA Branch auditor and told him that the $80,000 payment to Barbagallo related to the replacement of the WA Branch fleet of vehicles. At one Finance Committee meeting on 23 April 2013 (shortly after the delivery of the F350s), Mr Burton spoke about the replacement of the WA Branch fleet of vehicles. He also said words to the effect that the last two vehicles purchased had arrived, and described the F350s by reference to their registration plates alone.

143    Although Mr Burton admits that he was aware that Mr McGiveron had contracted with Barbagallo to purchase the F350s in late December 2012, he denies knowledge prior to this. The relevant difference between the parties on this question goes to the gravity of the breach. On Mr Burton’s case, his failure to disclose the F350s spanned the period from late December 2012 to 4 February 2014. The General Manager contends that Mr Burton knew that Mr McGiveron had contracted to purchase the F350s as at 9 October 2012. The General Manager’s case is that this period was some two and a half months longer, commencing on 9 October 2012. For reasons including those discussed above, she submits the Court should conclude that Mr Burton was aware of the contract to purchase the F350s from July 2012, or at the very least by 9 October 2012.

144    In addition to the factual issues, especially concerning his knowledge of Mr McGiveron’s purchase of the vehicles, Mr Burton submits that his conduct involved a misunderstanding of the TWU’s rules, the obligations those rules imposed on him, and his broader responsibility to the WA BCOM. It was not calculated, malicious or self-serving conduct on his part. It arose from his ignorance of his obligations, and from his failure to question the WA Branch’s historical approach to managing its financial affairs.

Burton redundancy contraventions

145    The General Manager notes that Mr Burton admits contravening s 286 and 285 of the RO Act with respect to the Burton redundancy contraventions; and also admits that, by causing the TWU to pay Mr McGiveron the redundancy payment from WA Branch funds, he failed to exercise his powers and discharge his duties:

    in good faith in what he believed to be the best interests of the TWU or for a proper purpose; and

    with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances and/or occupied the office of Branch Secretary and had the same responsibilities within the TWU as Burton.

146    She observes that the relevant circumstances of this contravention include that Mr Burton wrote to Mr McGiveron on or about 30 May 2013 (the 30 May 2013 termination letter), purporting to make his position with the WA Branch redundant and providing him with written notice of the termination of his employment with effect from 12 July 2013. By that letter, Mr Burton also informed Mr McGiveron of his entitlement to a payment in accordance with the redundancy policy and enclosed calculations of the termination package. That package totalled $477,294.57 gross, or $373,191.23 net. Of that, $348,396.15 gross, or $304,895.80 net, was attributable to the redundancy policy (redundancy payment).

147    On or about 11 July 2013, Mr Burton caused the TWU to transfer a payment to Mr McGiveron from WA Branch funds, consistent with the 30 May 2013 termination letter. That included the redundancy payment. She says Mr Burton did not have authority to make the redundancy payment to Mr McGiveron; his conduct in causing this to be paid was in breach of rule 75(7)(d) of the TWU Rules. Mr Burton accepts that he knew or ought to have known that committing the WA Branch to the cost of the redundancy payment was a considerable matter for the WA Branch and something which he did not have authority to do without WA BCOM approval.

148    Mr Burton admits to contravening s 285 and s 286 of the RO Act by causing the TWU to pay Mr McGiveron separation payments of $477,294.57 prior to obtaining WA BCOM approval to do so.

149    He says the relevant circumstances in which the redundancy contravention occurred were:

(1)    On or around 18 July 2012, the WA BCOM promulgated a new redundancy policy.

(2)    Mr McGiveron resigned from his position as the TWU’s WA Branch Secretary with effect from 31 December 2012.

(3)    On 1 January 2013:

•    he took office as the TWU’s WA Branch Secretary; and

•    the TWU employed Mr McGiveron as a Special Projects Officer.

(4)    On or around 30 May 2013, he made the Special Projects Officer position redundant and gave Mr McGiveron notice of the termination of his employment.

(5)    He was aware that the redundancy policy applied to Mr McGiveron’s situation, so he caused the TWU to pay Mr McGiveron according to that new redundancy policy.

(6)    He believed that:

(a)    the TWU was legally obliged to pay Mr McGiveron’s termination entitlements to him;

(b)    he was entitled to authorise such payments without prior WA BCOM approval; and

(c)    he misunderstood the scope of his authority to cause the termination entitlements to be paid without prior WA BCOM approval.

Rockpool expense contraventions

150    The General Manager notes that on or about 31 May 2013, Mr Burton attended the Rockpool Bar and Grill in Perth and caused the amount of $486.90 to be incurred on an Amex card issued to him by the WA Branch with respect to the cost of a meal at that restaurant (Rockpool expense). He subsequently caused the Rockpool expense to be paid by the TWU from WA Branch funds.

151    As a result, she says, Mr Burton obtained a personal benefit by reason of the Rockpool expense being paid by the TWU from the WA Branch funds in circumstances where he did not have authority in causing the TWU to pay the Rockpool Expense and did so in contravention of the TWU Rules.

152    Mr Burton admits that, in relation to the Rockpool expense, he improperly used his position as WA Branch Secretary to gain an advantage for himself; gain an advantage for others; and/or cause detriment to the TWU.

153    The General Manager also notes that Mr Burton admits that, in relation to the Rockpool expense, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch in good faith in what he believed to be the best interests of the TWU; and/or for a proper purpose; or with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances, occupied the office of Branch Secretary and had the same responsibilities within the TWU as Mr Burton.

154    Considering all these matters, she submits that the Rockpool expense contraventions in respect of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

155    It is submitted that these penalties should be imposed “concurrently”.

Shark Bay transport contraventions

156    The General Manager notes that on or about 5 September 2013, Mr Burton hired a vehicle which he used to transport items to Shark Bay for his personal benefit. The hire of the vehicle cost $535.76, a cost which was ultimately paid by the TWU from WA Branch funds (Shark Bay transport expense).

157    She says Mr Burton obtained a personal benefit by reason of the Shark Bay transport expense being paid by the TWU from WA Branch funds in circumstances where he did not have authority to incur the Shark Bay transport expense and did so in contravention of the TWU Rules.

158    She notes Mr Burton admits that, in relation to the Shark Bay transport expense, he improperly used his position as WA Branch Secretary to gain an advantage for himself; gain an advantage for others; and/or cause detriment to the TWU.

159    Further, she notes that Mr Burton admits that, in relation to the Shark Bay transport expense, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch in good faith in what he believed to be the best interests of the TWU; for a proper purpose; or with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances, and occupied the office of Branch Secretary and had the same responsibilities within the TWU as Mr Burton.

160    Considering all these matters, the General Manager submits that the Shark Bay transport contraventions in respect of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

161    It is submitted that these penalties should be imposed “concurrently”.

WAFL Grand Final expense contraventions

162    The General Manager notes that some time before 18 September 2013, Mr Burton caused a booking to be made for a catered box for 12 people at the West Australian Football League (WAFL) Grand Final at a cost of $960; and that on 18 September 2013, he attended the WAFL Grand Final in a catered box along with his wife and 10 others. During that event, food and beverages at a value of $674.44 were consumed.

163    She says Mr Burton caused the booking function fee of $960 and the food and beverage cost of $674.44 (WAFL Grand Final expenses) to be paid by the TWU from WA Branch funds.

164    She says Mr Burton thereby obtained a personal benefit by reason of the WAFL Grand Final expenses being paid by the TWU from WA Branch funds in circumstances where he did not have authority to incur those expenses and did so in contravention of the TWU Rules.

165    The General Manager notes Mr Burton admits that, in relation to the WAFL Grand Final Expense, he improperly used his position as WA Branch Secretary to gain an advantage for himself; gain an advantage for others; and/or cause detriment to the TWU.

166    Further, Mr Burton admits that, in relation to the WAFL Grand Final expenses, he failed to exercise his powers and discharge his duties as Branch Secretary of the WA Branch in good faith in what he believed to be the best interests of the TWU; for a proper purpose; or with the degree of care and diligence that a reasonable person would exercise if he or she were an officer of an organisation in the TWU’s circumstances and occupied the office of Branch Secretary, and had the same responsibilities within the TWU as Mr Burton.

167    Considering all these matters, she submits that the WAFL Grand Final expense contraventions in respect of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

168    It is submitted that these penalties should be imposed “concurrently”.

Circumstances in which the conduct occurred

169    The circumstances in which the particular conduct occurred are discussed above in relation to the various contraventions.

170    More generally however, like Mr McGiveron, the General Manager observes Mr Burton had access to and control over substantial funds which he was entrusted to control and maintain. As shown by the financial returns lodged by the WA Branch, that branch received revenue in excess of $5 million in the years ending 31 December 2013 and 31 December 2014; and that each of the contraventions involved the expenditure of the TWU’s funds.

171    Mr Burton makes no further submissions in relation to the circumstances in which the contraventions occur other than in relation to the Shark Bay contravention in which he says there is little evidence about these events.

Previous conduct

172    There is no evidence of any relevant previous conduct by Mr Burton that would bear on the question of penalty.

173    Mr Burton submits there is no evidence of him having engaged in any previous conduct of this kind, or having been the subject of proceedings alleging relevant contraventions.

Whether breaches distinct or arose from a single course of conduct

174    The General Manager submits that Mr Burton’s 15 admitted contraventions arose from six distinct courses of conduct; something with which Mr Burton agrees.

175    Each of the F350 contraventions arose out of the purchase of the F350s. The same conduct provided the factual basis for each of the F350 contraventions and, accordingly, they should be dealt with as a single course of conduct. Each of the other contraventions stand alone.

The size of the enterprise

176    As noted above, during the period Mr Burton was the WA Branch Secretary of the TWU, the branch obtained substantial revenue as well as holding assets valued in excess of $3 million.

Senior management

177    Save for some of the period during which it is alleged that Mr Burton failed to disclose the purchase of the F350s, each of the contraventions occurred in circumstances where Mr Burton was Branch Secretary. As such, he was the Chief Executive Officer of the WA Branch at almost all relevant times. For the remainder of the period (between 9 October 2012 and 31 December 2012) during which it is alleged that he failed to disclose the purchase of the F350s, Mr Burton was Acting Branch Secretary. Any suggestion that, during this period, Mr McGiveron continued to exercise control over the WA Branch’s financial affairs and that Mr Burton was not permitted to authorise any expenditure is rejected.

178    Mr Burton’s role as Branch Secretary was effectively the same as that previously performed by Mr McGiveron.

Contrition

179    The General Manager submits there is no evidence before the Court of Mr Burton expressing any contrition for his conduct.

Corrective action

180    The General Manager notes that Mr Burton deposes to the fact that, on 14 April 2014, he drew a cheque for $5,070.39 from an account held by him and his wife, and sent that cheque, together with a note to the TWU WA Branch. Mr Burton thereby suggests that this payment was to relate to the Rockpool expense, the WA Grand final expenses and other expenses.

181    The General Manager refers to the evidence of Mr Dawson, WA Branch Secretary from 14 April 2014, to the effect that no such cheque or note was ever received by the WA Branch. Rather, shortly after 14 April 2014, Mr Burton met with Mr Dawson and another representative of the TWU. At that time, Mr Burton offered an envelope which he said contained money he owed to the WA Branch. Mr Dawson’s evidence will be to the effect that he declined the envelope and directed Mr Burton to write a letter to the WA BCOM so that any payment would occur in an open and transparent way. It is not in dispute that that payment did not subsequently occur.

182    Mr Burton, in his evidence at the penalty hearing disputed this version of the events.

183    Mr Burton also submits that, in relation to the F350 contraventions, he assisted the TWU to deal with any losses the F350 contraventions caused it.

184    Mr Burton submits that he has attempted to repay the TWU for the amounts expended in connection with the expenditure contraventions. The TWU returned his payment.

Cooperation with enforcement authorities

185    The General Manager acknowledges that Mr Burton has admitted the majority of facts and each of the contraventions alleged against him in the ASOC. Those admissions have obviated the need for a hearing on liability.

186    Mr Burton submits that he worked collaboratively with the General Manager and, where he could truthfully do so, he readily admitted his contraventions.

187    Mr Burton admits that he was slow to recognise and admit that he had failed to follow rule 75(7) of the TWU Rules, but he subsequently did so.

Specific deterrence

188    The General Manager acknowledges that, because Mr Burton no longer holds office, this diminishes the need for specific deterrence.

189    Mr Burton submits that he is not a union official now, nor does he intend on ever being a union official again and, in those circumstances, specific deterrence is unnecessary.

General deterrence

190    As with Mr McGiveron, general deterrence looms large as a consideration of principal importance in the assessment of penalty in respect of Mr Burton’s contravening conduct. The General Manager refers to and relies on her submissions above.

191    Mr Burton acknowledges that the Court should take account of the need for general deterrence when determining penalty.

Submissions as to appropriate penalties

192    The General Manager, supported by the TWU, submits that pecuniary penalties should be imposed as follows:

(1)    In respect of the Burton F350 contraventions:

    the contravention of s 286(1) warrants the imposition of a penalty in the high range, that is, close to the maximum of $10,200 and should be the head penalty; and

    the contravention of s 285(1) warrants the imposition of a penalty in the mid to high range.

It is submitted that these penalties should be imposed “concurrently”.

(2)    In respect of the Burton failure to disclose contraventions:

    the contravention of 286(1) warrants the imposition of a penalty in the high range, that is, close to the maximum of $10,200; and

    the contravention of s 285(1) warrants the imposition of a penalty in the mid to high range.

It is submitted that these penalties should be imposed “concurrently”.

(3)    In respect of the Burton redundancy contraventions:

    the contravention of s 286(1) warrants the imposition of a penalty in the mid-range, that is, between $4,000 and $6,000; and

    the contravention of s 285(1) warrants the imposition of a penalty in the low to mid-range.

It is submitted that these penalties should be imposed “concurrently”.

(4)    In respect of the Rockpool expense contraventions, the contravention of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

It is submitted that these penalties should be imposed “concurrently”.

(5)    In respect of the Shark Bay transport expense contraventions, the contravention of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

It is submitted that these penalties should be imposed “concurrently”.

(6)    In respect of the WAFL Grand Final expense contraventions, the contravention of each of ss 285, 286 and 287 warrant the imposition of a penalty in the low range, that is, between $1,000 and $3,500.

It is submitted that these penalties should be imposed “concurrently”.

193    Mr Burton contends the Court should not characterise his conduct as involving the serious nature contended for by the General Manager.

Consideration

194    As to the Burton F350 contraventions, I accept the submissions on behalf of the General Manager, supported by the TWU, that the contravention of s 286(1) warrants the imposition of a penalty in the high range, close to the maximum of $10,200; that the contravention of s 285(1) warrants imposition of a penalty in the mid to high range; and that the latter penalty should be imposed “concurrently”, with the s 286(1) penalty being the head penalty.

195    While it is strictly correct to say that Mr Burton’s contraventions did not occur until such time as he himself took steps, as Branch Secretary, to execute the additional contracts to purchase the F350s on or around 26 March 2013, and then soon after on 2 April to make the Final F350 Payment, the fact of the matter is, as Mr Burton’s evidence in cross-examination disclosed, he knew about the purchase of the F350s by Mr McGiveron from about the time they were made in late July 2012. He was himself involved in discussing the acquisition of those vehicles with Mr McGiveron when Mr McGiveron was still the Branch Secretary. He understood that one of the vehicles would be registered in the name of Mr McGiveron and the other in his own name. He subsequently signed an application to licence an F350 care of his home address. He discussed what accessories should be fitted to the F350s, which involved a considerable, additional sum of money.

196    In all the circumstances, it is very difficult to distinguish the seriousness of Mr Burton’s contraventions in respect of the F350s from those of Mr McGiveron. Each discussed and knew what was proposed and each was involved in the implementation of the acquisition and subsequent use of the vehicles.

197    Once Mr McGiveron had actually ceased to be the Branch Secretary and went on leave towards the end of 2012, it then fell to Mr Burton, as the acting Branch Secretary, and after Mr McGiveron’s formal resignation as the new Branch Secretary, to complete the acquisition.

198    While he has said that, as a matter of custom, vehicles acquired by the WA Branch for use by the organisers resulted in vehicles being registered in the Branch Secretary’s name, the fact that union officials did not know about the acquisition and use of the two F350s by Mr McGiveron and Mr Burton, speaks volumes about the secrecy that clouded their acquisition and use within the WA Branch. When the two vehicles arrived, they were not referred to in branch information as F350s, but merely referred to by their registration plate numbers. The cloud of secrecy was maintained.

199    However, before I finally consider the penalty that should be imposed in respect of the Burton F350 contraventions, which I consider should be in the mid to high range, I should also consider the other contraventions.

200    In respect of the Burton failure to disclose contraventions, I also accept the submissions that the penalty in the mid to high range should be imposed.

201    There were plainly a number of opportunities between 9 October 2012 and 4 February 2014 on which Mr Burton could have disclosed the purchase of the F350s to the WA BCOM, the Finance Committee or the WA Branch auditors of the union. He attended eight WA BCOM meetings and six financial committee meetings in that period, but did not make such disclosure.

202    I have already referred to the fact that when the last two vehicles that had been purchased duly arrived, they were not referred to by Mr Burton as the F350 vehicles by model name, but rather by reference to their registration plates alone.

203    Although Mr Burton initially said he did not have knowledge of the purchase by Mr McGiveron of the F350s at the time they were acquired, and said that he did not become aware of the purchase until December 2012, his evidence at the penalty hearing confirmed that, in fact, he did know at about the time of their acquisition in late July 2012, that Mr McGiveron had purchased them. What he said he did not know was the details of the contract documentation.

204    The various explanations given by Mr Burton as to why his involvement in the acquisition of the F350s by the TWU and their allocation to Mr McGiveron and himself should be considered less than serious are far from satisfying or convincing.

205    In relation to the Burton redundancy contraventions, I consider, as submitted on behalf of the General Manager and the TWU, that contravention of s 286 warrants the imposition of a penalty in the mid-range between $4,000 and $6,000 and the contravention of s 285(1) warrants the imposition of a penalty in the low to mid-range. These penalties are to be imposed concurrently, with the s 286 contravention being the head penalty.

206    The essence of the contravention in this case is not that Mr Burton was involved in the initial creation of the 2012 redundancy policy, but that Mr Burton first wrote to Mr McGiveron by the 30 May 2013 termination letter purporting to make Mr McGiveron’s position with the WA Branch redundant and providing him with written notice of the termination of his employment with effect from 20 July 2013 and outlined his severance payout, but then on 11 July 2013 caused the payment to be made, in circumstances where Mr Burton did not have authority to make the redundancy payment. In making the payment, he acted in breach of rule 75(7) of the TWU Rules. Mr Burton accepts that he knew or ought to have known that committing the WA Branch to the costs of the redundancy payment was a considerable matter which he did not have authority to do.

207    Mr Burton’s explanation noted above is that, in effect, he understood it was an appropriate way to act as he did as the TWU was legally obliged to pay Mr McGiveron’s entitlements to him and he was entitled to the payments without the WA BCOM approval, and he misunderstood the scope of his authority.

208    I am not satisfied by the evidence that Mr Burton did not appreciate his lack of authority or that he laboured under some misunderstanding as to the scope of his authority. Having regard to the full account of events, little weight should be given to that explanation.

209    Nonetheless, I accept, as I have said, that the pecuniary penalty imposed in respect of these concurrent breaches of s 286(1) and s 285(1) should be respectively in the low to mid-range and in the mid-range. The breach of s 286(1), the failing to act in good faith for good and proper purpose, warrant the imposition of the higher penalty.

210    In respect of the three additional contraventions, the Rockpool contravention, the Shark Bay Transport contravention and the WAFL Grand Final expense contravention, the details of those have been set out above.

211    Mr Burton endeavoured to repay these expenses. There is no need to go into some disputed facts as to when and how he attempted to do that.

212    I accept the submissions made on behalf of the General Manager with the support of the TWU, that the Rockpool expense contraventions should attract penalties to be imposed concurrently, as should the Shark Bay Transport contravention and the WAFL Grand Final expense contraventions, and that each group of contraventions should, respectively, be treated as a single course of conduct contravention, with a penalty imposed in the low range.

213    As to the circumstances in which all relevant conduct occurred, it must be borne in mind that, as in the case of Mr McGiveron, at material times Mr Burton had access to and control over substantial funds, which he was entrusted to control and maintain.

214    At the same time, there is no evidence of any previous conduct by Mr Burton that bears on the penalty question.

215    I have already dealt with the question of the relevant courses of conduct.

216    As the case with Mr McGiveron, Mr Burton was in charge of an enterprise that obtained substantial revenue as well as holding assets in the value of millions of dollars.

217    At material times, save for the period in which he failed to disclose the purchase of the F350s, he was the Branch Secretary. He was the Chief Executive Officer of the WA Branch, therefore, at almost all relevant times. For the remainder of the period between 9 October 2012 and 31 December 2012 he was the acting Branch Secretary. I reject any suggestion that Mr McGiveron continued to exercise any control over financial affairs with the WA Branch during the acting Branch Secretary period.

218    There is not a lot of evidence to support the view that Mr Burton has expressed any contrition for his conduct.

219    As to corrective action, I have already noted that he took steps to repay the $5,070.39 in respect of the Rockpool contravention, the WA Grand Final contravention and the other contraventions mentioned.

220    As far as cooperation with the enforcement authorities is concerned, unlike Mr McGiveron, Mr Burton seems to have been slow, if not reluctant, to accept his responsibility in relation to these matters. He also caused the final penalty hearing to be extended in that he did not admit his knowledge about the purchase in July 2012 of the two F350s by Mr McGiveron, although he readily did so in the course of cross-examination.