FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2017] FCA 1555

ORDERS

THE COURT DECLARES THAT:

1.    The second respondent contravened s 499 of the Fair Work Act 2009 (Cth) (“the Act”) when, on 27 February 2014 at the Footscray Railway Station construction site of the Footscray to Deer Park Project Package C (“Footscray Site”), being part of the Victorian Government’s Regional Rail Link Project to build new regional rail lines, he walked through an area delineated as being out of bounds for safety reasons, and, when requested to do so by an occupier of the premises, failed to exit the area.

2.    The second respondent contravened s 500 of the Act when, on 27 February 2014 at the Footscray Site, he acted in an improper manner in that he walked through an area delineated as being out of bounds for safety reasons, and, when requested to do so by an occupier of the premises, ignored that request and failed to exit that area.

3.    The second respondent contravened s 500 of the Act when, on 27 February 2014 at the Footscray Site, he acted in an improper manner in that he summoned a group of workers and addressed them causing them to cease carrying out their duties.

4.    The second respondent contravened s 500 of the Act when, on 27 February 2014 at the Footscray Site, he hindered and obstructed the pouring of concrete by positioning himself between a concrete pump and a concrete truck in such a manner as to prevent the pouring of concrete without causing danger to his safety and acted improperly by failing to comply with a request by an occupier of the site to remove himself from the position he had taken up.

5.    The second respondent contravened s 499 of the Act when, on 27 February 2014 at the Footscray Site, he failed to comply with a request by an occupier of the site to remove himself from the position he had taken up as set out in the declaration in paragraph 4 hereof.

6.    The second respondent contravened s 500 of the Act when, on an occasion subsequent to that set out in paragraph 4 hereof on 27 February 2014 at the Footscray Site, he hindered and obstructed the pouring of concrete by positioning himself between a concrete pump and a concrete truck in such a manner as to prevent the pouring of concrete without causing danger to his safety and acted improperly by failing to comply with a request by an occupier of the site to remove himself from the position he had taken up.

7.    The second respondent contravened s 499 of the Act when, on 27 February 2014 at the Footscray Site, he failed to comply with a request by an occupier of the site to remove himself from the position he had taken up as set out in the declaration in paragraph 6 hereof.

8.    The third respondent contravened s 500 of the Act when, on 27 February 2014 at the Footscray Site, he acted in an improper manner in that he walked through an area delineated as being out of bounds for safety reasons, and, when requested to do so by an occupier of the premises, ignored that request and failed to exit that area.

9.    The third respondent contravened s 500 of the Act when, on 27 February 2014 at the Footscray Site, he hindered and obstructed the movement of a concrete truck by positioning himself in the path of that concrete truck in such a manner as to prevent the truck from moving without causing danger to his safety.

10.    The third respondent contravened s 499 of the Act when, on 27 February 2014 at the Footscray Site, he failed to comply with a request by an occupier of the site to remove himself from the position he had taken up as set out in the declaration in paragraph 9 hereof.

11.    By reason of s 550 of the Act, the first respondent contravened s 499 of the Act by the conduct of the second respondent constituting the contravention the subject of the first declaration herein.

12.    By reason of s 550 of the Act, the first respondent contravened s 500 of the Act by the conduct of the second respondent constituting the contravention the subject of the second declaration herein.

13.    By reason of s 550 of the Act, the first respondent contravened s 500 of the Act by the conduct of the second respondent constituting the contravention the subject of the third declaration herein.

14.    By reason of s 550 of the Act, the first respondent contravened s 500 of the Act by the conduct of the second respondent constituting the contravention the subject of the fourth declaration herein.

15.    By reason of s 550 of the Act, the first respondent contravened s 499 of the Act by the conduct of the second respondent constituting the contravention the subject of the fifth declaration herein.

16.    By reason of s 550 of the Act, the first respondent contravened s 500 of the Act by the conduct of the second respondent constituting the contravention the subject of the sixth declaration herein.

17.    By reason of s 550 of the Act, the first respondent contravened s 499 of the Act by the conduct of the second respondent constituting the contravention the subject of the seventh declaration herein.

18.    By reason of s 550 of the Act, the first respondent, contravened s 500 of the Act by the conduct of the third respondent constituting the contravention the subject of the eighth declaration herein.

19.    By reason of s 550 of the Act, the first respondent, contravened s 500 of the Act by the conduct of the third respondent constituting the contravention the subject of the ninth declaration herein.

20.    By reason of s 550 of the Act, the first respondent, contravened s 499 of the Act by the conduct of the third respondent constituting the contravention the subject of the tenth declaration herein.

THE COURT ORDERS THAT:

21.    The first respondent pay a penalty of $35,000 in respect of its contraventions of ss 499 and 500 of the Act as declared in paragraphs 11 and 12 above.

22.    The first respondent pay a penalty of $35,000 in respect of its contravention of s 500 of the Act as declared in paragraph 13 above.

23.    The first respondent pay a penalty of $40,000 in respect of its contraventions of ss 499 and 500 of the Act as declared in paragraphs 14 and 15 above.

24.    The first respondent pay a penalty of $40,000 in respect of its contraventions of ss 499 and 500 of the Act as declared in paragraphs 16 and 17 above.

25.    The first respondent pay a penalty of $25,000 in respect of its contravention of s 500 of the Act as declared in paragraph 18 above.

26.    The first respondent pay a penalty of $25,000 in respect of its contraventions of ss 499 and 500 of the Act as declared in paragraphs 19 and 20 above.

27.    The second respondent pay a penalty of $7,000 in respect of his contraventions of ss 499 and 500 of the Act as declared in paragraphs 1 and 2 above.

28.    The second respondent pay a penalty of $7,000 in respect of his contravention of s 500 of the Act as declared in paragraph 3 above.

29.    The second respondent pay a penalty of $9,000 in respect of his contraventions of ss 499 and 500 of the Act as declared in paragraphs 4 and 5 above.

30.    The second respondent pay a penalty of $9,000 in respect of his contraventions of ss 499 and 500 of the Act as declared in paragraphs 6 and 7 above.

31.    The third respondent pay a penalty of $5,000 in respect of his contravention s 500 of the Act as declared in paragraph 8 above.

32.    The third respondent pay a penalty of $5,000 in respect of his contraventions of ss 499 and 500 of the Act as declared in paragraphs 9 and 10 above.

33.    The penalties imposed in Orders 21-32 be paid to the Commonwealth within 30 days.

34.    The Originating Application dated 22 January 2015 otherwise be dismissed.

35.    There be no order as to costs.

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

REASONS FOR JUDGMENT

TRACEY J:

1    In August 2016 I found that the second and third respondents, respectively Mr Joe Myles and Mr Drew MacDonald, had contravened ss 499 and 500 of the Fair Work Act 2009 (Cth) (“the Act”).

2    The first respondent, the Construction, Forestry, Mining and Energy Union (“the CFMEU”), was also held to be liable pursuant to s 793 of the Act: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2016] FCA 872 (“the liability judgment”). These reasons should be read in conjunction with the liability judgment upon which they are based.

3    A hearing on penalty took place on 22 November 2016. In the course of the hearing counsel drew the Court’s attention to two appeals, pending in the Court, which touched on potentially relevant issues. The first of those issues was whether an organisation, such as the CFMEU, could be held liable, pursuant to s 793 of the Act, for contraventions by officials of s 500 of the Act. The second was whether the Court could order an organisation not to indemnify officials on whom civil penalties had been imposed for breaches of the Act.

4    As a result of these intimations I advised the parties that I would reserve my penalty judgment until the issues had been resolved by Full Courts. I also granted leave to the parties to file written submissions, should that be necessary, on the implications of any such Full Court decisions for the present proceeding.

5    Further submissions were made following the handing down of the Full Court decisions in the course of this year. I have considered those submissions. I will deal with them shortly.

6    I should, however, interpolate that, whilst judgment stood reserved, following the penalty hearing, the Building and Construction Industry (Consequential and Transitional Provisions) Act 2016 (Cth) commenced operation. By force of that Act the Australian Building and Construction Commissioner (“the Commissioner”) was deemed to have replaced the Director of the Fair Work Building Industry Inspectorate as the moving party in the proceeding: see clause 19 of Schedule 2. As a result the title of the applicant in the present proceeding has been changed to refer to the Commissioner.

THE S 793 ISSUE

7    The Full Court decision, to which counsel had referred, and which it had been anticipated would resolve the question of whether an organisation could be held vicariously liable for the conduct of its officials who had contravened s 500 of the Act, by operation of s 793, was Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner. Judgment was delivered on 17 May 2017: see [2017] FCAFC 77. The Full Court refused leave to the parties to raise the issue because it had not been argued at first instance: see [44]-[52] (Flick J, North and Besanko JJ agreeing).

8    As a result it is necessary to refer to a number of subsequent decisions of single judges which have dealt with the issue.

9    In order to understand the issue it is necessary to refer to the terms of ss 500 and 793 of the Act. It is also useful to make reference to s 499 which, like s 500, is directed to “a permit holder” under the Act. These sections read:

499 Occupational health and safety requirements

A permit holder must not exercise a State or Territory OHS right unless he or she complies with any reasonable request by the occupier of the premises to comply with an occupational health and safety requirement that applies to the premises.

…

500 Permit holder must not hinder or obstruct

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.

…

793 Liability of bodies corporate

Conduct of a body corporate

(1)    Any conduct engaged in on behalf of a body corporate:

(a)    by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or

(b)    by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

State of mind of a body corporate

(2)    If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

(a)    that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

(b)    that the person had that state of mind.

Meaning of state of mind

(3)    The state of mind of a person includes:

(a)    the knowledge, intention, opinion, belief or purpose of the person; and

(b)    the person’s reasons for the intention, opinion, belief or purpose.

Disapplication of Part 2.5 of the Criminal Code

(4)    Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.

Note: Part 2.5 of the Criminal Code deals with corporate criminal responsibility.

(5)    In this section, employee has its ordinary meaning.

A “permit holder”, to whom ss 499 and 500 apply, is one who is the holder of an entry permit issued by the Fair Work Commission: see ss 12 and 512.

10    One of the first instance authorities is the decision of Charlesworth J in Australian Building and Construction Commissioner v McDermott (No 2) [2017] FCA 797. Her Honour held (at [63]) that:

The word “conduct” [in s 793(1)] does not appear in isolation. It appears together with the words “engaged in”. The whole phrase bears its ordinary meaning. In that phrase, the word “conduct” refers to any physical act (and, by reason of s 12, an omission to do an act) engaged in by a person referred to in s 793(1). It does not encapsulate the objective circumstance that the person have the status of a permit holder.

She went on (at [65]) to accept a submission, made by the Commissioner, that the conduct and state of mind of officials were inextricably connected with their statutory status as permit holders. She continued:

But that circumstance, to my mind, only serves to reinforce the legislature’s intention that s 500 (read in conjunction with s 539 and s 545 and absent any other deeming provision) impose actual liability only upon persons having that status. Section 793, being a provision of general application, cannot, on its plain words, overcome the clear intention evident in s 500.

11    As a result, the CFMEU was found not to be liable for the contraventions of s 500 by three of its officials to the extent that such liability was said to have arisen by operation of s 793.

12    The same conclusion had been reached by Siopis J in Australian Building and Construction Commissioner v Harris [2017] FCA 733.

13    The Commissioner maintained that these decisions were not relevant to any issue to be determined in this proceeding because the respondents had made admissions in relation to the application of s 500 which had not been withdrawn. He did not, however, submit that I should not follow the McDermott (No 2) and Harris decisions. In any event, I should do so given that I consider them to have been correctly decided.

14    The CFMEU was, however, held liable by Charlesworth J in McDermott (No 2) for the contraventions as an accessory pursuant to s 550 of the Act. That section relevantly provides that:

550 Involvement in contravention treated in same way as actual contravention

(1)    A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

(2)    A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    …

(b)    …

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    ...

Section 500 is a civil remedy provision: see s 539.

15    Her Honour held that, in circumstances similar to the present, the CFMEU could be “taken” to have contravened s 500 because it had been knowingly concerned in the contraventions by its officials. She outlined the reasoning which supported this conclusion at [121]:

To the extent that it is necessary to show that CFMEU involved itself in some tangible way in the contraventions of its officials, there is no reason why s 793 should not facilitate proof of that requirement. Section 793 is premised on an accepted fiction that a body corporate is a separate legal entity from those who participate in it: Salomon v A Salomon & Co Pty Ltd [1897] AC 22. Accepting that fiction, it does not matter that the deemed physical acts of the secondary participant are the same acts in fact engaged in by the primary contravener. CFMEU did not make any submission to the contrary. Accordingly, the physical acts of [the officials] are, in each instance, taken also to be the acts of CFMEU. That is sufficient to demonstrate CFMEU’s participation in each contravention.

She further held (at [122]) that the CFMEU could be fixed with the knowledge of its officials if they “knew of all of the essential facts constituting their respective contraventions: see s 793(2)”.

16    The issue of liability pursuant to s 550 was again considered by White J in Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [19]-[38]. His Honour followed Charlesworth J’s approach in McDermott (No 2) and at [38] concluded:

In short, I consider that the statutory fictions established by s 793 mean that the conduct of an official of a body corporate may constitute a primary contravention by the official and accessorial conduct by the body corporate. I am satisfied that the CFMEU should be taken to have contravened s 500 by reason of it having been directly or indirectly knowingly concerned in [the official’s] contravention of s 500.

17    This approach was also followed by Barker J in Australian Building and Construction Commissioner v Upton (The Gorgon Project Case) [2017] FCA 847 at [235], where his Honour found that, because of the operation of s 550 when read with s 793, the CFMEU was to be taken to have contravened s 500 by reason of being directly or indirectly knowingly concerned in an official’s contravention of s 500.

18    In the present proceeding the physical acts performed by Messrs Myles and MacDonald which, in each instance, gave rise to the contraventions of ss 499 and 500 of the Act, can and should be taken to be the acts of the CFMEU. My findings in the liability judgment, in respect of each contravention, established that Messrs Myles and MacDonald knew of all the essential facts which gave rise to their various contraventions.

19    In dealing with the imposition of penalties I will, therefore, proceed on the basis that the CFMEU is liable for the contraventions of Mr Myles and Mr McDonald by operation of s 550 of the Act and not pursuant to s 793.

NON-INDEMNIFICATION ORDERS

20    This issue was resolved by the decision of the Full Court (Allsop CJ, North and Jessup JJ) in Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner (2016) 247 FCR 339; [2016] FCAFC 184.

21    The trial judge in that proceeding had made an order that the CFMEU “must not directly or indirectly indemnify [its officer] against the penalties [imposed on him by the Court] in whole or in part, whether by agreement, or by making a payment to the Commonwealth, or by making any other payment or reimbursement, or howsoever otherwise.”

22    The Full Court held, unanimously, that the trial judge had erred in making this order because it was not supported by s 545(1) of the Act: at 343 [15] (Allsop CJ), 345 [26] (North J) and 355 [66] (Jessup J). No other source of power was relied on to support the order.

23    As a result of this decision I have not been pressed by the Commissioner to make any such order in the present proceeding.

PECUNIARY PENALTIES

Maximum available penalties

24    The starting point for determining the appropriate pecuniary penalties for the various contraventions is the identification of the maximum penalties prescribed for contraventions of ss 499 and 500. At the relevant time those maxima were $51,000 for each contravention by the CFMEU and $10,200 for each of the individual respondents: see s 546(2) and column 4 of item 25 of s 539(2) of the Act. A penalty unit was, at the time of the contraventions on 27 February 2014, valued at $170: see Crimes Act 1914 (Cth) s 4AA(1); s 12 of the Act. The applicable rate has been held to be that in force at the time of the contravention: see Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 at 127; [2013] FCA 1146 at [28] (Jessup J); Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [394]-[395] (Katzmann J).

Number of penalties to be imposed

25    It is next necessary to determine the number of penalties which should be imposed on each of the respondents for the contraventions committed by them.

26    In the liability judgment I found that Mr Myles had committed seven contraventions of the Act and that Mr MacDonald had committed three. Derivative liability for each of these contraventions was attributed to the CFMEU via s 793.

27    Adopting the terminology used in the liability judgment those contraventions were:

    Three contraventions of s 499 by Mr Myles (entering the delineated area, obstructing the third concrete truck and obstructing the fourth concrete truck).

    Four contraventions of s 500 by Mr Myles (entering the delineated area, procuring the stopping of work, obstructing the third concrete truck and obstructing the fourth concrete truck).

    One contravention of s 499 by Mr MacDonald (obstructing the third concrete truck).

    Two contraventions of s 500 by Mr MacDonald (entering the delineated area and obstructing the third concrete truck).

28    The respondents submitted that only one penalty should be imposed on each of Messrs Myles and MacDonald. This was because the contraventions arose in the course of what was described as “a single event”. Each contravention was committed in close proximity to the others both as to time and place. The misconduct was directed, so it was said, towards the same broad purpose which was identified as investigating safety matters relating to manual handling. It was artificial to divide this conduct into separate events as the Commissioner sought to do.

29    Alternatively, the respondents submitted that Messrs Myles and MacDonald should each be treated as each having committed two contraventions. The first was their entry into the delineated area and the second was the entirety of the conduct that followed. In Mr Myles’s case this additional conduct was the calling of the stop work meeting and the disruption of the two concrete pours. In Mr McDonald’s case it was the obstruction of the third concrete truck.

30    The respondents submitted that the Court ought to only impose a single penalty on the CFMEU because of the confined time, place and single purpose of the contraventions of the officials. Alternatively, the Court might impose two penalties on the CFMEU in relation to the conduct of each of the officials.

31    The Commissioner, for his part, submitted that four separate penalties should be imposed on Mr Myles. This recognised that his intrusion on the delineated area and each of the third and fourth truck obstructions gave rise to contraventions of both ss 499 and 500. A fourth penalty should, it was submitted, be imposed in respect of Mr Myles’ contravention of s 500 by calling on the workers to cease work and then addressing them.

32    The Commissioner submitted that two separate penalties should be imposed on Mr MacDonald. The first was for his obstruction of the concrete truck which constituted contraventions of both ss 499 and 500. This second was for his contravention of s 500 by entering the delineated area.

33    The Commissioner submitted that six penalties should be imposed on the CFMEU corresponding with the aggregate of the number of penalties which he had submitted should be imposed the two officials.

34    The principles to be applied when it is necessary to fix on a number of penalties to be imposed for multiple contraventions were considered by Middleton and Gordon JJ in their joint judgment in Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1 at 12-13; [2010] FCAFC 39 at [39], [41]-[42]. Their Honours there said:

[39]    As the passages in Williams explain, a “course of conduct” or the “one transaction principle” is not a concept peculiar to the industrial context. It is a concept which arises in the criminal context generally and one which may be relevant to the proper exercise of the sentencing discretion. The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is “the same criminality” and that is necessarily a factually specific enquiry. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.

…

[41]    As noted above … the principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, the court must ensure that the offender is not punished twice for the same conduct. In other words, where two offences arise as a result of the same or related conduct that is not a disentitling factor to the application of the single course of conduct principle but a reason why a court may have regard to that principle, as one of the applicable sentencing principles, to guide it in the exercise of the sentencing discretion: Johnson v R (2004) 205 ALR 346; [2004] HCA 15 at [3]–[4] and [34] and Attorney-General v Tichy (1982) 30 SASR 84 at 92–3. It is a tool of analysis (Tichy at 93) which a Court is not compelled to utilise: Royer v Western Australia [2009] WASCA 139 at [21]–[34] and [153]–[156] (Royer).

[42]    A Court is not compelled to utilise the principle because, as Owen JA said in Royer at [28], “[d]iscretionary judgments require the weighing of elements, not the formulation of adjustable rules or benchmarks”. The exercise of the sentencing discretion does not fall to be exercised in a vacuum. It is a matter of judgment to be exercised according to the facts of each case and having regard to conflicting sentencing objectives: see McHugh J in AB v R (1999) 198 CLR 111; 165 ALR 298; [1999] HCA 46 at [14]. For the same reasons, and contrary to the appellants’ submissions, even if offences are properly characterised as arising from the one transaction or a single course of conduct, a judge is not obliged to apply concurrent terms if the resulting effective term fails to reflect the degree of criminality involved. …

(Emphasis in original.)

See also: Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159 at [421]-[424] (Middleton, Beach and Moshinsky JJ); Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 at 351; [2015] FCAFC 59 at [46] (Dowsett, Greenwood and Wigney JJ); SingTel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 at [51]-[55] (Keane CJ, Finn and Gilmour JJ).

35    I accept that the various contraventions of s 499 and 500 which occurred at the Footscray Station Site on 27 February 2014 all occurred within a relatively short period of time. The events that led to the contravention were sequential but discrete. In a general sense they formed part of a course of conduct. I do not, however, accept that the purpose of that conduct was the pursuit of health and safety issues relating to manual lifting. The actions of Messrs Myles and MacDonald were intended to disrupt concrete pours which they knew were being undertaken in the course of the afternoon. In this they were successful because of some of their contravening conduct.

36    Messrs Myles and MacDonald are not to be punished twice for the same misconduct. In circumstances where the same misconduct gave rise to contraventions of both ss 499 and 500, a single penalty should be imposed. Otherwise their offending conduct was constituted by separate and distinct acts. These were the entry to the delineated areas, the separate obstructions of the trucks, and causing work to cease for about 10 minutes.

37    It does not, necessarily, follow that the CFMEU should be subject to the same number of penalties as those accumulated by its officials: cf Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (The Cain Constructions Case) (No 2) [2017] FCA 368 at [4] (Jessup J). Depending on the circumstances of a given case such a course may, nonetheless, be appropriate.

38    As I have already noted the events which gave rise to the contraventions were separate and discrete from one another. Those which came closest in character were the obstructions of the concrete trucks. Mr MacDonald, acting alone, had blocked the third concrete truck on the approach road to the discharge site. Once he had desisted, the truck moved to near where it was to discharge its load only to be impeded by Mr Myles. Once it had left Mr Myles moved away from the back of the hopper but he returned as soon as the fourth truck arrived. This was a separate obstruction of another truck.

39    In this context it bears mention that s 557 of the Act deems two or more contraventions of certain civil remedy provisions to constitute a single contravention if the contraventions are committed by the same person and they arise out of a course of conduct by that person. The civil remedy provisions, to which this section applies, do not include either ss 499 or 500: see s 557(2). In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458; [2017] FCAFC 53 (“the Perth Airport Case”), Dowsett and Rares JJ (at 478 [88]) considered that the absence of certain civil remedy provisions from the operation of s 557 appeared to evince a parliamentary intention that multiple contraventions of non-included civil remedy provisions would not attract the same sentencing leniency that would be attracted by contraventions of provisions to which the section applied. Their Honours did note that this did not mean they considered that s 557 covered the field or excluded the common law “course of conduct” principle.

40    For these reasons I accept the Commissioner’s submissions. Four penalties should be imposed on Mr Myles and two on Mr MacDonald. The CFMEU should have a corresponding liability to penalty.

Deterrence

41    The predominant purpose of civil penalty provisions is deterrence, both specific and general: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506; [2015] HCA 46 at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ); Australian Competition and Consumer Commission v High Adventure Pty Ltd (2006) ATPR ¶42-091 at 44,564; [2005] FCAFC 247 at [11] (Heerey, Finkelstein and Allsop JJ).

42    In the first of these cases the High Court emphasised the pre-eminence of deterrence as a guiding principle where the fixing of civil penalties is concerned. In their joint judgment, French CJ, Kiefel, Bell, Nettle and Gordon JJ said (at 506 [55]) that:

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.)

43    The comments of Keane J in the same case (at 523-524 [110]) also bear mention:

It is because the Commissioner may, on occasion, be too pragmatic in taking such a stance that the court must exercise its function to ensure that the penalty imposed is just, bearing in mind competing considerations of principle, including that of equality before the law and the need to maintain effective deterrence to other potential contraveners. In this latter regard, in Australian Competition and Consumer Commission v TPG Internet Pty Ltd, French CJ, Crennan, Bell and Keane JJ approved the statement by the Full Court of the Federal Court in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission that a civil penalty for a contravention of the law:

“must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business.”

(Citations omitted.)

44    More recently, in the Perth Airport Case, Dowsett and Rares JJ (at 481 [100]-[101]) made these general observations about the need for industrial laws to be obeyed and the penal consequences of breaches:

100    In a liberal democracy, it is assumed that citizens, corporations and other organisations will comply with the law. Such compliance is not a matter of choice. The community does not accept that a citizen, corporation or other organisation may choose to break the law and simply pay the penalty. The courts certainly do not accept that proposition. Such acceptance would pose a serious threat to the rule of law upon which our society is based. It would undermine the authority of Parliament and could lead to the public perception that the judiciary is involved in a process which is pointless, if not ridiculous.

101    The Parliament’s purpose in legislating to provide that particular proscribed conduct will attract a civil penalty was to deter persons, including but not limited to trade unions or corporations, from engaging or continuing to engage in such conduct. A civil penalty would lose its utility if the person on whom it was imposed simply treated it as a cost of continuing to carry on with the very conduct that had just been penalised.

See also Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 at [98] (Dowsett, Greenwood and Wigney JJ).

45    The CFMEU is a large, asset-rich and well-resourced industrial organisation. It has regularly been involved in litigation in which it has been found to have contravened provisions of the Act. The Commissioner has provided the Court with a table which records contraventions by the CFMEU of industrial legislation on more than 100 occasions over the 15 years from 1999 to 2014. These contraventions have led to the imposition of pecuniary penalties totalling millions of dollars. The CFMEU may, therefore, be taken to be well aware of the constraints imposed upon it and its members by such provisions. Despite this the contraventions have continued. In 2016 the table discloses that the courts found, or the CFMEU admitted, 56 separate contraventions by the CFMEU of industrial laws, which contraventions occurred between February 2011 and June 2014. Of those, 36 were contraventions of s 500. Thirty-one of the 56 separate contraventions occurred prior to 27 February 2014. Eighteen of the 36 contraventions of s 500 were committed prior to that date.

46    The table disclosed one prior contested contravention of s 499, which occurred in 2013: see Director of the Fair Work Building Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293 at [254]-[271] (White J); Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413 at [161] (White J). Five contested contraventions of s 758(3) of the Workplace Relations Act 1996 (Cth), which was in a similar form to s 499, were also found to have occurred in 2008: see Darlaston v Parker (2010) 189 FCR 1 at 57; [2010] FCA 771 at [265] (Flick J); Darlaston v Parker (No 2) (2010) 200 IR 353 at 368-372; [2010] FCA 1382 at [65]-[66] (Flick J).

47    In relation to s 500 and its predecessor, s 767(1) of the Workplace Relations Act 1996 (Cth), the table discloses the following contraventions by the CFMEU:

(1)    three (one admitted and two contested) contraventions of s 767(1) of the Workplace Relations Act 1996 (Cth) in 2008 and 2009 that were subject to judicial determination prior to 27 February 2014;

(2)    four (three admitted and one contested) contraventions of s 500 in 2009 and 2010 that were subject to judicial determination prior to 27 February 2014;

(3)    19 (ten admitted and nine contested) contraventions of s 500 in 2012 and 2013 that occurred prior to, but were subject to judicial determination after, 27 February 2014; and

(4)    37 admitted contraventions of s 500 in 2014 and 2015. These contraventions occurred, and were subject to judicial determination as to penalty, after 27 February 2014.

48    The contraventions of ss 499 and 500 (and their predecessor sections) by the CFMEU which were the subject of judicial determination prior to 27 February 2014 are the most relevant to the task of determining penalty in this proceeding. Those that occurred prior to that date but were subsequently subject to judgment should be afforded less weight but are also relevant: see, eg, Cahill v Construction, Forestry, Mining and Energy Union (No 4) (2009) 189 IR 304 at 314; [2009] FCA 1040 at [41] (Kenny J); Director of the Fair Work Building Industry Inspectorate v O’Connor [2016] FCA 415 at [115] (White J). Contraventions of s 500 that occurred after 27 February 2014 are not irrelevant although less weight should be given to them and the CFMEU should not be penalised twice for its later breaches: see Cahill (No 4) at 314 [41]; Director of the Fair Work Building Industry Inspectorate v Upton [2015] FCA 672 at [55] (Gilmour J); Huddy (No 2) at [93].

49    The present case thus falls into a pattern of repeated disregard for the law. To adopt the language of Mortimer J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436 at [142]: the ongoing misconduct evidences a willingness “by the CFMEU to engage in whatever action, and make whatever threats, it wishes, without regard to the law, and then, once a prosecution is brought, to seek to negotiate its way into a position in which the [penalties] for its actions can be tolerated as the price of doing its industrial business.” See also Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Perth Childrens’ Hospital Contraventions Case) [2017] FCA 491 at [83]-[90] (Barker J) and the authorities there cited and Australian Building and Construction Commissioner v Parker (No 2) [2017] FCA 1082 at [30]-[32] (Flick J); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCA 1269 at [34]-[38] (Reeves J).

50    The officials who constitute the councils of the CFMEU and those holding full-time office in the organisation are, or should be, aware, of the many decisions in which the union has been found liable for contraventions of the Act and related legislation. They are also aware, or should be aware, of the many judicial pronouncements about the gravity and unacceptability of this ongoing misconduct. They are, or should be, aware that millions of dollars of union funds, which could otherwise be utilised for the benefit of the members, have had to be expended in paying penalties for these persistent contraventions. They are, or should be, aware of the considerable advantages and responsibilities conferred on registered organisations by the Act and the Fair Work (Registered Organisations) Act 2009 (Cth). These include the right of officials, such as Messrs Myles and MacDonald who held entry permits granted under the Act, to enter construction sites.

51    Despite this knowledge the contravening conduct has continued. At no point has the CFMEU expressed any remorse for the misconduct of its officials. Nor has it undertaken to take any steps to ensure that there will be no repetition of the contravening conduct. At no point has it expressed any contrition for the misconduct which has led to liability findings.

52    In these circumstances an irresistible inference arises that the CFMEU, despite being well aware of the obligations which fall on it and its officials under the Act, has made a considered decision to continue to pursue its industrial ends by resort to conduct proscribed by the Act. Any resultant penalties are to be regarded as a “cost of doing business”. The penalties, available under the Act, and imposed by the Court, have not been sufficient to persuade the union and its officials to obey the law. Such was the position when the contravening conduct, presently under consideration, occurred. Nothing has since changed.

53    In Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [63] I observed that the longer that the CFMEU’s recidivism continued, the greater the weight which would be accorded to specific deterrence when fixing appropriate penalties.

54    Mr Myles has a deplorable personal history of offending. A table, which accompanied the Commissioner’s submissions, disclosed that, prior to the events the subject of this proceeding, Mr Myles had been found to have been involved in two contraventions of s 500 occurring in 2010: see Director, Fair Work Building Industry Inspectorate v Myles [2013] FCCA 2229 at [143]-[145], [149] (Burnett J). Mr Myles’s conduct which contravened s 500 involved addressing workers, which delayed their return to work, and swearing at and insulting the site foreman. Penalties were not, however, imposed on Mr Myles in relation to those findings until 28 February 2014: see Director of the Fair Work Building Inspectorate v Myles [2014] FCCA 1429. Although he was not a named respondent to the Director’s application, Mr Myles was also found to have committed, in 2010, a breach of s 44 of the Building and Construction Industry Improvement Act 2005 (Cth) (“the BCII Act”) in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 846 at [16] (Collier J) by organising employees not to commence work with the intent to coerce or apply undue pressure on an employer to accept a building enterprise agreement with the CFMEU. The prior contraventions of s 500 are particularly relevant to the assessment of penalty, albeit that the financial penalty was imposed the day after the contravening conduct in this proceeding: cf Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145 at 158; [2009] FCAFC 120 at [92] (Goldberg, Jacobson and Tracey JJ); O’Connor at [115]. Less weight should be placed on the contravention of s 44 insofar as it concerns conduct of a different nature from that in this proceeding: see Stuart‑Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at 70; [2008] FCA 1426 at [44] (Tracey J); Cahill (No 4) at 314 [39]-[40], [46]; cf O’Connor at [139]; Perth Childrens’ Hospital Contraventions Case at [32].

55    Judicial determinations delivered in 2015 and 2016, record that Mr Myles committed nine contraventions of industrial laws in 2012 and 2013. In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436, Mortimer J imposed penalties on Mr Myles following his admission that, in May 2013, he contravened s 348 three times by organising a vehicle blockade and by threatening to prevent a concrete pour with the intent to coerce an employer to put a CFMEU delegate on a particular project: see at [7]. In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Mitcham Rail Case) [2015] FCA 1173, penalties were also imposed by Jessup J on Mr Myles after he again admitted that he contravened s 348 twice in August 2013 by threatening to disrupt normal work and by organising employees not to work with intent to coerce an employer to engage a CFMEU delegate on a site: see at [3]. In Director, Fair Work Building Inspectorate v Cradden [2015] FCA 614, Logan J imposed penalties on Mr Myles for four admitted contraventions of s 44 of the BCII Act in March 2012 whereby he parked vehicles to impede access onto a site and intimidated employees with intent to coerce and apply undue pressure on an employer to agree to make a building enterprise agreement.

56    Some of Mr Myles’ prior conduct recorded in these three cases is broadly similar to that in this proceeding (in particular the threatened prevention of a concrete pour) and may be taken into account in the assessment of penalty. Those contraventions are, however, to be accorded less weight because, although the conduct occurred prior to the contravening conduct at issue in this proceeding, penalties were only imposed subsequent to 27 February 2014: see Draffin at 158 [92]; Cahill (No 4) at 314 [41]; O’Connor at [115].

57    Mr MacDonald has previously been penalised for contraventions of s 38 of the BCII Act, which penalty was imposed in September 2013 prior to the events at issue in this proceeding: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 1014. Justice Gordon found that Mr MacDonald had contravened that section by being involved in unlawful strike action in October 2010 constituted by directing employees to strike for the day. This prior conduct should be given less weight because it concerns conduct of a different nature to that at issue in this proceeding: cf Stuart‑Mahoney at 70 [44]; Cahill (No 4) at 314 [39]-[40], [46]. Nevertheless, it is relevant insofar as it confirms that Mr MacDonald does not have a “clean record”: cf O’Connor at [139].

58    In April 2014, Messrs Myles and MacDonald were involved in a picket line which was maintained by the CFMEU in contempt of court, although they were not named respondents to the Director’s application: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 226. This conduct occurred after the commission of the contravening conduct in this proceeding. For this reason, and for the reasons summarised at [57] above, it should be afforded substantially less weight: cf Huddy (No 2) at [82; Australian Building and Construction Commissioner v McCullough (No 2) [2017] FCA 295 at [41]-[45] (Barker J).

59    At the time of the hearing, neither Mr Myles nor Mr MacDonald held valid entry permits. Mr Myles’ permit had apparently expired in March 2014 and he had not applied for a new one. Mr MacDonald’s entry permit expired in June 2016 and his application for the issue of a new permit was refused in May 2016: see Construction, Forestry, Mining and Energy Union Construction and General Division, Victoria-Tasmania Divisional Branch [2016] FWC 3190.

60    Again, specific deterrence must weigh heavily in the determination of penalties to be imposed on both Messrs Myles and MacDonald. Their contravening conduct on 27 February 2014 was arrogant and dismissive of warnings given to them that they were acting unlawfully. They abused their rights as permit holders and they impeded the concrete pouring which was planned for that afternoon. While espousing an interest in ensuring safety on the site, they deliberately placed themselves in dangerous positions in order to obstruct the movement of trucks carrying concrete to the site. The fact that these respondents no longer hold entry permits does not, the Commissioner submitted, remove the need for specific deterrence because of the possibility that they may still attend work sites when invited: cf Director of the Fair Work Building Industry Inspectorate v Bolton (No 2) (2016) 261 IR 452 at 468; [2016] FCA 817 at [52] (Collier J). The need for personal deterrence is, nonetheless, reduced: see O’Connor at [127].

61    There is, of course, also a need for general deterrence to discourage others who might be minded to contravene provisions of the Act.

Absence of contrition

62    The CFMEU did not express any contrition for the offending conduct of its officials. Nor did it seek to assure the Court that it would put in place remedial measures to ensure that there would be no repetition of such misconduct.

Mitigation

63    The respondents relied on the absence of evidence of economic loss occasioned by the disruption of the concrete pours. The Court should not, so it was submitted, assume that the harm was extensive: cf Director of the Fair Work Building Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 798 at [68] (Barker J). The submission went further: they contended that the failure, by the Commissioner, “to adduce evidence of any particular loss suffered by the builders or supplier has the result that the Court is permitted only to penalise the respondents on the basis that there is no evidence of any loss, and to treat this as a mitigating circumstance”. This submission was said to find support in the judgment of Perram J in Australian Competition and Consumer Commission v MSY Technology Pty Ltd (No 2) (2011) 279 ALR 609 at 627; [2011] FCA 382 at [79].

64    The respondent’s submission is not fully supported by what fell from his Honour in MSY. This was a consumer protection case. Neither party had produced evidence of actual loss or damage being caused by the contravening conduct. In these circumstances, his Honour said (at 627 [79]) that “if harm is likely to have been suffered by reason of the contravening conduct but no evidence is led which suggests that it was, the respondent is entitled to be sentenced on the basis that the conduct has not caused harm which, plainly enough, will be a mitigating circumstance.” In the present case the Commissioner did lead evidence which established that work on the site had been disrupted, that concrete pours had been prevented and that at least one load of concrete was spoilt. Clearly economic loss was sustained. The absence of evidence quantifying the monetary extent of that loss does not, in my view, operate as a mitigatory factor.

65    No other mitigatory factors were pressed.

Other considerations

66    The respondents also submitted that what they called “the incident” on the site on 27 February 2014 “lacked aggravating features such as criminality, aggression, abuse, damage to property, or humiliating behaviour.”

67    I am prepared to accept, for present purposes, that Messrs Myles and MacDonald did not engage in or exhibit any of the aggravating “features” of the kind to which the respondents make reference. I am not, however, to be taken as holding that some of the behaviour of Messrs Myles and MacDonald might not reasonably have been characterised as aggressive.

Proportionality

68    The determination of penalties for contravening conduct is undertaken by a process of “instinctive synthesis”. Where penalties are being imposed for multiple contraventions arising from related events it is necessary to ensure that a respondent is not punished twice for the same conduct. Once penalties have been determined for each contravention it is necessary for the Court to pause and decide whether the aggregate of the multiple penalties fixed by it is appropriate having regard to the total contravening conduct involved. This may lead to a reduction in the aggregate penalty. See Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353 at [66]-[73] (Tracey J). I have followed this process when deciding on appropriate penalties in the present case.

Appropriate penalties

69    Bearing in mind these general principles I turn to the task of fixing appropriate pecuniary penalties.

70    In fixing penalties in relation to the entry to the delineated area I have distinguished between the culpability if Messrs Myles and MacDonald. Both deliberately chose to take the fenced-off route despite being asked not to do so and despite there being an alternative safe route. Mr Myles, however, took the lead and Mr MacDonald followed. Mr Myles also has a longer history of contravening conduct which pre-dated the contraventions presently under consideration.

71    A penalty of $7,000 should be imposed on Mr Myles and a penalty of $5,000 on Mr MacDonald in respect of this incident.

72    Mr Myles procured a stoppage of work at the site for about 10 minutes. This was a serious and unnecessary interference with the performance of work. It only concluded when managers intervened and insisted that the conduct was unlawful and that the men should return to work. A penalty of $7,000 is appropriate.

73    Mr Myles’s obstruction of the third and fourth concrete trucks was, in each case, a deliberate and successful attempt to prevent the trucks discharging their loads into the hopper. He ignored repeated directions and requests by managers to remove himself from the position which he had adopted adjacent to the hopper. It was unsafe for him to be there. His misconduct constituted a serious interference with the normal performance of time-sensitive work. A penalty of $9,000 is appropriate in respect of each obstruction.

74    Mr MacDonald positioned himself on the approach road so as to prevent the third concrete truck passing along the road. This was a deliberate act. Mr MacDonald initially ignored requests that he move aside. He did so after a short period and the truck was able to proceed. A penalty of $5,000 is appropriate.

75    Corresponding penalties should be imposed on the CFMEU having regard to the conduct of its two officials and, in particular, the need, to the extent possible under the legislation, to deter the organisation from any repetition of such misconduct.

DISPOSITION

76    The declarations sought by the Commissioner will be made as will orders imposing the pecuniary penalties which I have determined to be appropriate.

Associate:

Dated:    21 December 2017