FEDERAL COURT OF AUSTRALIA
Australian Building and Construction Commissioner v McDermott (No 3) [2018] FCA 1105
ORDERS
AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant | ||
AND: | First Respondent ANTHONY SLOANE Second Respondent AARON CARTLEDGE (and another named in the Schedule) Third Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The name of the fourth respondent be amended to read “Construction, Forestry, Maritime, Mining and Energy Union”.
2. The first respondent pay:
(a) a pecuniary penalty of $3,800 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 28 April 2014.
(b) a pecuniary penalty of $3,500 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 23 May 2014.
(c) a pecuniary penalty of $3,500 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 6 June 2014.
(d) a pecuniary penalty of $3,500 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 14 July 2014.
3. The second respondent pay a pecuniary penalty of $3,000 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 28 April 2014.
4. The third respondent pay a pecuniary penalty of $3,500 to the Commonwealth for the contravention of s 500 of the Fair Work Act 2009 (Cth) committed on 14 July 2014.
5. The fourth respondent pay:
(a) a pecuniary penalty of $24,990 to the Commonwealth for its knowing involvement in the contravention by the first respondent of s 500 of the Fair Work Act 2009 (Cth) committed on 28 April 2014.
(b) a pecuniary penalty of $22,950 to the Commonwealth for its knowing involvement in the contravention by the first respondent of s 500 of the Fair Work Act 2009 (Cth) committed on 23 May 2014.
(c) a pecuniary penalty of $22,950 to the Commonwealth for its knowing involvement in the contravention by the first respondent of s 500 of the Fair Work Act 2009 (Cth) committed on 6 June 2014.
(d) a pecuniary penalty of $22,950 to the Commonwealth for its knowing involvement in the contravention by the first respondent of s 500 of the Fair Work Act 2009 (Cth) committed on 14 July 2014.
(e) a pecuniary penalty of $22,950 to the Commonwealth for its knowing involvement in the contravention by the third respondent of s 500 of the Fair Work Act 2009 (Cth) committed on 23 May 2014.
6. The application made by the former fifth respondent, Construction, Forestry, Mining and Energy Union – New South Wales Branch, for an order for costs against the applicant pursuant to s 570 of the Fair Work Act 2009 (Cth) is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
CHARLESWORTH J:
1 The Australia Building and Construction Commissioner seeks the imposition of civil penalties upon each of the four respondents for contraventions of s 500 of the Fair Work Act 2009 (Cth). The factual and legal bases for the first to third respondents’ liability is explained in reasons for judgment delivered on 21 September 2016: Director of the Fair Work Building Industry Inspectorate v McDermott [2016] FCA 1147 (first judgment). The factual and legal bases for the fourth respondent’s liability is explained in reasons for judgment delivered on 17 July 2017: Australian Building and Construction Commissioner v McDermott (No 2) [2017] FCA 797 (second judgment).
2 For the reasons given at [4] to [108] below, I will today make orders imposing penalties in the amounts referred to in paragraphs [39], [53], [65], [72], [81], [89] and [107].
3 Also before the Court is an application for costs consequent upon the Commissioner’s abandonment of an application for the imposition of a civil penalty against a formerly-named fifth respondent. For the reasons given at [109] - [126] below, that application is dismissed.
THE UNION OFFICIALS
4 The first to third respondents (respectively, Mr McDermott, Mr Sloane and Mr Cartledge) were, at the time of the contraventions, officials of the fourth respondent, now named the Construction, Forestry, Maritime, Mining and Energy Union (the Union). They each held an entry permit issued pursuant to s 512 of the Act by the Fair Work Commission (FWC). A permit holder enjoys certain rights under the Act, specifically those conferred or recognised under Pt 3-4. Among them is the right to enter premises for the purpose of holding discussions with certain workers: s 484. The rights are not absolute. They are conditioned by a number of provisions, including the following:
486 Permit holder must not contravene this Subdivision
Subdivisions A, AA and B do not authorise a permit holder to enter or remain on premises, or exercise any other right, if he or she contravenes this Subdivision, or regulations prescribed under section 521, in exercising that right.
487 Giving entry notice or exemption certificate
Entry under Subdivision A or B
(1) Unless the FWC has issued an exemption certificate for the entry, the permit holder must:
(a) before entering premises under Subdivision A—give the occupier of the premises and any affected employer an entry notice for the entry; and
(b) before entering premises under Subdivision B—give the occupier of the premises an entry notice for the entry.
(2) An entry notice for an entry is a notice that complies with section 518.
(3) An entry notice for an entry under Subdivision A or B must be given during working hours at least 24 hours, but not more than 14 days, before the entry.
(4) If the FWC has issued an exemption certificate for the entry, the permit holder must, either before or as soon as practicable after entering the premises, give a copy of the certificate to:
(a) the occupier of the premises or another person who apparently represents the occupier; and
(b) any affected employer or another person who apparently represents the employer;
if the occupier, employer or other person is present at the premises.
Entry under Subdivision AA
(5) If the permit holder enters premises under Subdivision AA, the permit holder must, either before or as soon as practicable after entering the premises, give an entry notice for the entry to the occupier of the premises or another person who apparently represents the occupier if the occupier or other person is present at 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.
5 These provisions form part of a framework by which Parliament intended to strike a balance between the rights and interests of workers, registered organisations (such as the Union), and the occupiers of premises: see s 480 of the Act. As the Full Court said in Maritime Union of Australia v Fair Work Commission (2015) 230 FCR 15 at [15] (North, Flick and Bromberg JJ):
Section 480 … sets out that the object of Pt 3-4 is to establish a framework that balances the right of organisations to represent their members, the right of employees to receive information and representation, and the right of occupiers of premises and employers to go about their business without undue inconvenience. The rights conferred by Pt 3-4, including to enter premises and interview persons about suspected contraventions and to hold discussions with employees, have thus been assessed by the legislature as an appropriate balance between the rights of organisations, employees and occupiers. The rights conferred, however, are not ‘untrammelled’ and are subject to both express and implied constraints: Australasian Meat Industry Employees’ Union v Fair Work Australia (2012) 203 FCR 389 at [56] per Flick J (Tracey J agreeing). The exercise of rights conferred upon a ‘permit holder’ renders lawful that which would otherwise be unlawful: cf Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 540 per Mason J.
(Emphasis in original)
Principles
6 The Court has the discretion to order a person to pay a pecuniary penalty to the Commonwealth if satisfied that the person has contravened a civil penalty provision: s 546(1) and s 546(3)(a) of the Act.
7 The principles guiding the Court’s discretion to impose a penalty and to determine the amount of the penalty are well settled: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 (Sham Contracting Case) at [98] - [107]. Reference may also be made to Director of the Fair Work Building Industry Inspectorate v Cartledge [2014] FCA 1047 at [50] - [59] and Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [11] - [26].
8 The task of fixing an appropriate penalty is said to involve a process of “instinctive synthesis”, and so does not lend itself to a rigid or formulaic approach: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [26] - [28] (Gray J), [54] (Graham J), [89] - [91] (Buchanan J); Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [58] (Branson and Lander JJ). The Court must have regard to a range of factors having mitigating and aggravating impacts. The relevant considerations are non-exhaustively summarised by White J in Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [42] - [44]:
42 The Court is to determine a penalty which is proportionate to the contravening conduct and to the contravenor’s circumstances by a process of instinctive synthesis after taking into account all relevant factors: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, (2008) 165 FCR 560 at [27] (Gray J), [55] (Graham J); Markarian v The Queen [2005] HCA 25, (2005) 228 CLR 357 at [37], [39].
43 A number of authorities indicate that contraventions of industrial laws are to be regarded more seriously than may have been the case generally in the past: Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847, (2005) 224 ALR 467 at [72]; Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170, (2008) 171 FCR 357 at [61]-[62].
44 The authorities have identified a number of matters bearing on the assessment of the appropriate penalty in a given case:
(a) the nature and extent of the contravening conduct and the circumstances in which it occurred;
(b) the nature and extent of any loss or damage sustained as a result of the contravention;
(c) whether there has been any similar previous conduct by the contravenor;
(d) when there are multiple contraventions, whether these are to be regarded as separate and distinct or arising out of the one course of conduct;
(e) whether senior management was involved in the contravention;
(f) whether the contravenor has exhibited contrition and/or taken any corrective action;
(g) whether the contravenor cooperated with the enforcement authorities.
9 In the Sham Contracting Case, the Full Court (Dowsett, Greenwood and Wigney JJ) emphasised the protective nature of civil penalties as an aspect of the public interest in ensuring compliance with the Act. Their Honours said (at [98]):
Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance: Trade Practices Commission v CSR Ltd [1990] FCA 521; (1991) ATPR 41-076 at 52,152 [42]; Commonwealth v Director, FWBII at [55] (per French CJ, Kiefel, Bell, Nettle and Gordon JJ). The principal object of a pecuniary penalty 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; both specific and general deterrence are important: Chemeq at [90]; Ponzio at [93]. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 659 [66]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 at 265 [62]-[63]. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at 418 [32].
See also Director of the Fair Work Building Industry Inspectorate v Robinson (2016) 241 FCR 338 at [66] - [69].
10 The purposes served by the imposition of a civil penalty do not include punishment: Robinson at [59] - [69].
11 It is to be accepted that, all other things being equal, similar contraventions should incur similar penalties. However, as the Full Court said in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1997) 71 FCR 285 at 295, all other things are rarely equal. The Court continued:
… The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. The point was well made by Spender J in Trade Practices Commission v Annand and Thompson Pty Ltd (at 48,394) when he said:
‘Each case must, of course, be viewed on its own facts and facts may be infinite in their variety.’
12 Where a person commits multiple contraventions, the Court is to reflect upon the aggregate penalty so as to determine whether it is an appropriate response to the contravening conduct and so ensure that the penalties are not such as to be oppressive or crushing.
13 The Court has the power to make an order to the effect that a person subject to an order pursuant to s 546(1) of the Act be required to pay the civil penalty personally, so that a union official may not be indemnified in respect of a penalty by the registered organisation to which he or she belongs: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Another [2018] HCA 3; (2018) 351 ALR 190. An order to that effect was originally sought by the Commissioner. However, that position was abandoned before the question of the powers of the Court to make the order was resolved by the High Court. The Commissioner has made no application to reinstate it.
14 Penalties are to be imposed having careful regard to the maximum penalty. However, as the Full Court said in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (ACN 003 274 655) [2016] FCAFC 181; (2016) 340 ALR 25 at [156]:
Care must be taken to ensure that the maximum penalty is not applied mechanically, instead of it being treated as one of a number of relevant factors, albeit an important one. Put another way, a contravention that is objectively in the mid-range of objective seriousness may not, for that reason alone, transpose into a penalty range somewhere in the middle between zero and the maximum penalty. Similarly, just because a contravention is towards either end of the spectrum of contraventions of its kind does not mean that the penalty must be towards the bottom or top of the range respectively. However, ordinarily there must be some reasonable relationship between the theoretical maximum and the final penalty imposed.
See also Markarian v The Queen (2005) 228 CLR 357 at [31] (Gleeson CJ, Gummow, Hayne and Callinan JJ).
15 The maximum penalty for each breach of s 500 of the Act in respect of the first to third respondents is $10,200: s 539 and s 546(2)(a); s 4AA of the Crimes Act 1914 (Cth). The maximum penalty for a breach of s 500 of the Act in respect of the fourth respondent is $51,000: s 539 and s 546(2)(b); s 4AA of the Crimes Act.
16 In assessing the seriousness of the contraventions, the mental state accompanying the contraventions is relevant and, in this matter, critically so. In these reasons, considerable emphasis is placed upon the conversations between the union officials and Mr Groves (a representative of the occupier) prior to the officials entering the construction site. It is those conversations that, in my view, evidence the mental state of the officials in respect of the conduct that follows. None of that is to suggest that the “improper conduct” forming the factual basis of liability is constituted of the conversations themselves. To be clear, the words used by the officials form a part of the surrounding circumstances from which the mental state of the union officials may be reasonably inferred and against which the seriousness of the contravening conduct falls to be assessed.
Prior and subsequent misconduct
17 The parties placed considerable emphasis on the occurrence or absence of previous similar misconduct on the part of each of the respondents. It is acknowledged that the delay in the finalisation of this proceeding has meant that subsequent conduct (being conduct occurring on dates after the subject contraventions) has since attracted findings of liability and the imposition of penalties. Where that has occurred, the subsequent contraventions have not been taken into account for the purpose of supporting a conclusion that any previously imposed penalties have failed to deter a respondent from future contravening conduct.
18 Prior or subsequent misconduct may be relevant to prove or disprove the existence of a lax mental attitude towards compliance and so inform the Court’s assessment of the need for general or specific deterrence. It should be emphasised, however, that the occurrence of prior or subsequent misconduct is only one of a number of evidentiary matters informing the Court’s assessment of those issues.
19 As I have said, the mental attitude accompanying the contraventions may be fairly inferred from the circumstances in which the contraventions occurred. The absence of significant prior misconduct is not sufficient, in the present case, to rebut inferences that otherwise arise as to the officials’ degree of moral culpability.
20 It is to be acknowledged that as at the date of the contravening conduct, none of the union officials personally had a significant history of proven non-compliance. That is a relevant consideration and the parties’ written and oral submissions in respect of that topic have been taken into account. However, in assessing the need for general or specific deterrence, proof of the absence of prior contravening conduct does not assist the respondents to any significant degree. The case is one in which the need for deterrence (particularly general deterrence) is obvious and pressing. Nothing in the respondents’ compliance history dissuades me from that view.
21 For the reasons given below, the attitudes accompanying the contraventions may be fairly described as defiant. The contraventions involved a blatant and deliberate disregard of the requirements of the law and cannot be explained away by a mere and isolated lapse of judgment or misunderstanding. The union officials have adduced no evidence to support a finding that they have, at any time since their respective contraventions, gained any meaningful insight into the importance of complying with industrial laws. There is no evidence of contrition. In the absence of such evidence I infer that they each persist in an attitude that their compliance was of no importance or consequence.
22 The imposition of penalties in respect of the individual union officials will now be considered by reference to the dates on which the contraventions occurred.
28 April 2014
23 Declarations of contravention against Mr McDermott and Mr Sloane were made in the following terms:
1. [Mr McDermott] on 28 April 2014, contravened s 500 of the Fair Work Act 2009 (Cth) (Act) while attending with the second respondent at a construction site located at Sturt Street in Adelaide (site) by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, failed to leave the site notwithstanding that the site manager directed him to leave, and held discussions with employees on the site in rooms or areas at the site not agreed with the head contractor (Hindmarsh) for the purposes of s 492 of the Act; and not during mealtimes or other breaks for the purposes of s 490(2) of the Act.
2. [Mr Sloane], on 28 April 2014, contravened s 500 of the Act while attending the site with the first respondent by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, failed to leave the site notwithstanding that the site manager directed him to leave, and held discussions with employees on the site in rooms or areas at the site not agreed with Hindmarsh for the purposes of s 492 of the Act and not during mealtimes or other breaks for the purposes of s 490(2) of the Act.
24 The circumstances surrounding these contraventions are set out in the first judgment at (at [71] - [90]). I will not repeat the detail of them here. The principal focus on those paragraphs is the conduct of Mr Sloane because he denied critical facts pleaded against him.
25 For both Mr McDermott and Mr Sloane it was submitted that although the workers on the site ceased their work to participate in the discussions, the contraventions were not serious because disruption to work on the site was minimal and there was no quantifiable economic impact as a result.
26 I have found that the union officials remained on the site for about 45 minutes carrying on discussions with workers who ceased their activities to participate in the discussions. That the economic impact of their conduct is not “quantifiable” does not mean that it does not exist, or that its existence must be disregarded. The salient point is that the workers on the site in fact downed tools to participate in discussions as, I find, the union officials intended. In that respect there was disruption to work on the site and a wrongful interference with the entitlement of the occupier to progress the works. The fact of that interference is a relevant consideration, whether or not significant economic consequences follow.
27 I would in any event place lesser weight on the objective economic impact of the contravention and more weight on the degree to which the officials’ conduct fell short of the standard of propriety that ought to be expected of persons issued with permits under the Act.
28 The conduct of the union officials in entering the site after failing to give an entry notice and after being directed to leave must be considered in its surrounding context. That context included a deliberate refusal to answer Mr Groves when asked to explain their reasons for being there. Mr McDermott smiled in response to the question. I have found that the smile was not explained by an atmosphere of jocularity between Mr McDermott and Mr Groves.
29 Both officials simply ignored Mr Groves’ express direction to leave.
30 The officials’ conduct demonstrated, I find, a knowing disregard for the legitimate interests of the occupier and a deliberate decision to disregard the conditions attaching to their entry under Pt 3-4 of the Act, particularly the condition that they give an entry notice in accordance with s 487.
31 The officials entered the site with the purpose of having discussions with the workers there and remained on the site to fulfil that purpose, all the while knowing they had been directed by a representative of the occupier to leave and all the while knowing they had not complied with the requirement that they give the occupier of the premises an entry notice.
32 For both officials it was submitted that their conduct was not rude or discourteous. I accept that submission to the very limited extent that the officials’ outward demeanour was not aggressive. Their conduct was, however, outwardly and intentionally dismissive of Mr Groves and thus dismissive of the legitimate interests of an occupier of the site who had properly insisted upon their compliance with the Act. The conduct was rude in that important sense. It is reasonable to infer, and I so find, that the officials intended to convey to Mr Groves that the requirements of the Act were of no consequence to them and that they would enter the site irrespective of the requirements of the law, and over Mr Groves’ protestation. The matters just referred to should be understood as informing the assessment of penalties in each instance to the extent that they are applicable.
33 I turn now to considerations specific to each of the two officials.
Mr McDermott
34 Mr McDermott admitted critical facts in his amended defence. He was excused from attendance at the trial. It is appropriate to allow some reduction in the penalty that might otherwise have been imposed having regard to his pleaded admissions and to their timing relative to the commencement of the proceeding.
35 At the time of submissions as to penalty, Mr McDermott had admitted one contravention of s 355 of the Act concerning coercive conduct: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union and another (2014) 140 ALD 337. A civil penalty of $1,320 was imposed in respect of that contravention. Mr McDermott has been found to have committed seven contraventions of s 500 of the Act on dates following the contraventions in issue in this proceeding: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413, Director of Fair Work Building Inspectorate v Stephenson and others (SAD 138 of 2014) (2014) 146 ALD 75, Director of the Fair Work Building Industry Inspectorate v O’Connor [2016] FCA 415, Director, Fair Work Building Industry Inspectorate v Bolton (No 2) [2016] FCA 817; (2016) 261 IR 452.
36 The Commissioner submits, and I accept, that the contravention currently under consideration was deliberate and that there is no evidence of contrition.
37 At the time of the contravention, Mr McDermott held a senior position as the Assistant Secretary of the Union’s Construction and General South Australian Divisional Branch. That circumstance weighs heavily in the Court’s consideration of the need to generally deter persons in like positions who might be tempted to contravene the Act and so present a poor role model to the less experienced.
38 As to specific deterrence, Mr McDermott is no longer the holder of a permit issued under the Act, nor is he an official of the Union. However, there is no evidence to suggest that Mr McDermott no longer participates in activities to which the Act applies, nor is there evidence to support a conclusion that he cannot or will not re-join the Union as an official, whether in a managerial role or in some other capacity. In the absence of such evidence, I would reject the submission that considerations of specific deterrence are wholly irrelevant. Ultimately, it is considerations of general deterrence that loom large in Mr McDermott’s case, particularly having regard to his senior position at the time of this contravention and the defiant mental attitude accompanying his conduct.
39 A penalty of $3,800 will be imposed in respect of this contravention.
Mr Sloane
40 Mr Sloane put the Commissioner to proof on critical issues, thus necessitating the expense and inconvenience of a trial. Although he ultimately admitted that he well knew he did not have Mr Groves’ permission to enter the site, the admission was made in cross-examination and was painfully extracted. There is otherwise no evidence that Mr Sloane has cooperated with the Commissioner.
41 I find that Mr Sloane played a minimal role in the discussions with the workers on the site. However, in my view, the gravamen of the contravention lies not so much in the nature or extent of the discussions themselves, but more in Mr Sloane knowingly disregarding the conditions that attached to his statutory right as a permit holder to enter a site to hold discussions at all. In that particular respect, I consider Mr Sloane’s conduct to be no less serious than that of Mr McDermott. I find that Mr Sloane, like Mr McDermott, deliberately chose not to comply with the statutory conditions attaching to the rights of entry conferred by or recognised under the Act.
42 The circumstance that Mr Sloane followed Mr McDermott on to the site and that he was not a primary participant in the discussions are to be afforded little weight. There is nothing to suggest that Mr Sloane acted other than deliberately and voluntarily. He adduced no evidence to suggest that he acted under Mr McDermott’s undue influence or direction, nor that he was led by Mr McDermott to misunderstand his rights or obligations under the Act.
43 The circumstance that Mr McDermott was the more senior official justifies a higher penalty upon him principally because of general deterrence considerations. Mr Sloane’s penalty should be sufficient to generally deter more junior officials from ignoring the requirements of the law, whether by following unlawful conduct modelled by more senior officials or not. It should be emphasised to Mr Sloane and others in his position that the Act does not discriminate between senior or junior classes of permit holders: all permit holders must exercise independence of mind when exercising or seeking to exercise rights under the Act. In the absence of evidence, the lesser seniority of a permit holder should not of itself be an indicator of diminished responsibility.
44 As at 28 April 2014, Mr Sloane had not been found to have engaged in previous conduct in contravention of the Act. Mr Sloane has, however, been found to have contravened s 500 of the Act by conduct engaged in about two weeks later at another site. A penalty of $1,100 was imposed on Mr Sloane in respect of that contravention. It is Mr Sloane’s submission that a penalty of similar quantum should be imposed in respect of the contravention of 28 April 2014.
45 Counsel for Mr Sloane further submitted that there is no need for a penalty to be fixed to specifically deter Mr Sloane from contravening the Act in the future. In support of that submission, Counsel submitted that Mr Soane was a person of generally good repute who had performed a valuable role within a State branch of the Union. The submission was supported by three affidavits deposing to Mr Sloane’s prior activities as an official.
46 The Court was told that since the commencement of this action Mr Sloane has been re-issued an entry permit by the FWC, notwithstanding that the FWC was made aware of these proceedings and notwithstanding the imposition of a civil penalty on him in Stephenson. In its reasons for issuing the permit, the FWC determined that Mr Sloane was a fit and proper person. This Court was told that the Commissioner, after initially applying to have Mr Sloane’s permit revoked, ultimately did not oppose the issue of a new permit, subject to the FWC imposing a condition upon it. The condition amounts to a “three month suspension” to be triggered should Mr Sloane be ordered to pay a pecuniary penalty in relation to a further contravention of the Act occurring within four months of the new permit being issued. The contravention in the present case could not, of course, trigger that condition.
47 In assessing the need for specific deterrence in respect of Mr Sloane, this Court is not bound by any concession that might have been made by the Commissioner in proceedings before the FWC, nor is it bound by any express or implied conclusion of the FWC to the effect that Mr Sloane remains a fit and proper person to hold a permit, albeit conditionally.
48 In the course of determining an appropriate penalty for a contravention of a civil remedy provision, it is ordinarily neither necessary nor desirable for the Court to express a view as to whether a person who has contravened the Act is a fit and proper person to hold a permit issued by the FWC under s 512 of the Act. However, in the present case, Mr Sloane has of his own accord squarely raised the issue of his fitness and propriety, as found by the FWC, so as to support a submission that no considerations of specific deterrence arise in his case because the FWC has matters in hand. It is appropriate that the Court deal with Mr Sloane’s written and oral submissions about his fitness and propriety in equally direct terms.
49 The contravening conduct of Mr Sloane on 28 April 2014 falls well short of that to be expected of a fit and proper person holding a permit issued under a Commonwealth enactment and seeking to exercise the important and invasive rights attaching to it. Mr Sloane has demonstrated no appreciation of the importance of observing the conditions attaching to the privileges afforded the holder of a permit issued under the Act. A person who professes to be a fit and proper person on an application for a permit under s 512 of the Act cannot, compatibly with that status, knowingly ignore the requirements of the very law under which the permit is issued as and when he considers it expedient.
50 The evidence adduced by Mr Sloane is insufficient to support a finding that he has since gained insight, or to suggest that this contravention or his earlier contravention resulted from an uncharacteristic lapse of judgment upon which he has gainfully reflected. Like Mr McDermott, Mr Sloane consciously chose to advance the interests of the Union and its members, as he perceived them, over the requirements the law. In those circumstances, it is of little assistance to the Court to hear that members of the Union might applaud Mr Sloane for his other activities as a union official. Similarly, the attachment of a four month conditional suspension period on Mr Sloane’s entry permit in respect of his contravention in Stephenson is not significant in determining the appropriate penalty to be fixed for the contravention presently under consideration. The contravention in Stephenson involved Mr Sloane disobeying an express direction to leave a construction site. So far as considerations of specific deterrence or general deterrence are concerned, the Court places little weight on the circumstance that Mr Sloane has had conditions imposed upon his permit in response to a similar contravention. The conditions do no more than require Mr Sloane to comply with the law. Conditions of that kind may leave the public to wonder how the FWC would respond in the event of a further contravention occurring a day after the conditional extension period.
51 Counsel for Mr Sloane further submitted that the regime pursuant to which permits may be revoked following a contravention involve a “burden” upon permit holders and the existence of that burden is to be taken into account in determining the appropriate penalty. So far as considerations of specific deterrence are concerned, the provision of the Act, it was submitted, “[have] the matter pretty closely in hand”. The submission, as I understood it, concerning the revocation of permits, was that the Court ought to place less weight on specific deterrence considerations in circumstances where a contravening permit holder faced the prospect of having his or her permit revoked consequent upon a proven contravention of the Act. I reject the submission. On its proper construction, the Act contemplates that separate and discrete consequences may befall a permit holder in the event of a proven contravention of a civil penalty provision: the imposition of a civil penalty and the revocation of the permit itself. The prospect that Mr Sloane may have his permit revoked is a natural and logical consequence of his conduct and does not bear significantly on the assessment of penalty.
52 It is the mental attitude accompanying Mr Sloane’s contravention, together with the lack of evidence that his mental attitude has or will change in the future, that in my view justifies a higher penalty than might otherwise be imposed, having due regard to the circumstance that the objective economic ramifications of the contravention were relatively minor.
53 A penalty in the amount of $3,000 will be imposed in respect of this contravention.
23 May 2014
54 A further declaration of contravention against Mr McDermott was made in the following terms:
3. [Mr McDermott], on 23 May 2014, contravened s 500 of the Act while attending the site by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act, in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, remained on the site when asked to leave by the site manager, and held discussions with employees on the site in rooms or areas at the site not agreed with Hindmarsh for the purposes of s 492 of the Act.
55 The circumstances surrounding this contravention are set out in the first judgment (at [35] - [41]) as follows:
35 On 23 May 2014, Mr McDermott attended at the Site. He signed a document described as a ‘visitor register’ at approximately 12:50pm. The visitor register was located inside a pedestrian entrance to the Site running off Stamford Court in Adelaide. After signing the register, Mr McDermott was approached by Benjamin Groves, the Project Manager at the Site. The two exchanged words to the following effect:
Groves: ‘Why are you here?’
McDermott: ‘Just catching up to have a chat with the guys at lunch time’.
Groves: ‘We haven’t received an entry notice’.
McDermott: ‘No’.
Groves: ‘You have to leave site’.
McDermott: ‘I’m not exercising my right of entry’.
Groves: ‘That’s not how it works’.
36 Mr McDermott entered the Site at 12:50pm, notwithstanding that Mr Groves had told him that he had to leave. He proceeded to hold discussions with the Employees in a lunch shed at the Site for approximately 10 minutes. Mr McDermott left the Site at approximately 1:10pm. At the time that he entered the Site, Mr McDermott had not provided Mr Groves or any other person at the Site with an entry notice and the FWC had not issued an exemption certificate for his entry.
37 Although Mr McDermott stated to Mr Groves that he was not exercising his right to enter the Site, he admits that, when entering the Site, he was seeking to exercise rights in accordance with s 484 of the FW Act. On the basis of that admission I find that Mr McDermott entered the Site for the purpose of holding discussions with the Employees.
38 Photographs taken at the Site during the course of Mr McDermott’s visit depict Mr McDermott with the Employees in a lunch shed and Mr McDermott leaving the lunch shed. The photographs were taken by Mr Thomas Fisher, the Project Co-ordinator at the Site, approximately six metres from the lunch shed.
39 In relation to this particular visit, Mr McDermott pleaded that:
(1) the discussions occurred in a normal break in work, being the lunch break;
(2) no work was being performed or being attempted to be performed by the workers he spoke to when he spoke to them;
(3) there was no disruption to their work; and
(4) the discussions occurred in a room or area for the purposes of s 492(3)(b) of the FW Act.
40 I infer from the location at which the discussions were held, and from the time of day at which the visit occurred, that the discussions took place during an ordinary lunch break. That inference is supported by a record completed by Mr Groves on the same day of the visit. However, I am not satisfied that the discussions occurred in a room or area ‘for the purposes of s 492(3)(b) of the FW Act’. Section 492 is contained in Subdiv C of Div 2 of Pt 3.4. It provides:
492 Location of interviews and discussions
(1) The permit holder must conduct interviews or hold discussions in the rooms or areas of the premises agreed with the occupier of the premises.
(2) Subsection (3) applies if the permit holder and the occupier cannot agree on the room or area of the premises in which the permit holder is to conduct an interview or hold discussions.
(3) The permit holder may conduct the interview or hold the discussions in any room or area:
(a) in which one or more of the persons who may be interviewed or participate in the discussions ordinarily take meal or other breaks; and
(b) that is provided by the occupier for the purpose of taking meal or other breaks.
Note 1: The permit holder may be subject to an order by the FWC under section 508 if rights under this section are misused.
Note 2: A person must not intentionally hinder or obstruct a permit holder exercising rights under this section (see section 502).
41 As I have mentioned, Mr McDermott did not attend at trial. He adduced no evidence to the effect that he had made any attempt at all to agree any location with Mr Groves for the holding of discussions on the Site for the purposes of s 492(1). Nor did the Director adduce evidence that would support such a finding. There being no evidence of any attempt to agree a location, I reject Mr McDermott’s pleaded allegation insofar as he means to contend that he was authorised to hold discussions in the lunch shed at the Site by virtue of s 492(3)(b) of the FW Act. The effect of s 486 of the FW Act is that he was not authorised by the Act to hold discussions with the Employees at any location at all on the Site. Whether or not Mr McDermott’s choice of location constitutes a mitigating factor for the purpose of the assessment of penalties is a matter yet to be determined.
56 Mr McDermott submits, and I accept, that work at the site was not interrupted by this contravention because the discussions with workers occurred during an ordinary lunch break. The circumstance that discussions occurred in a lunch shed is also relevant in that it does not appear that other activities on the site were interrupted. Mr McDermott’s time on the site was limited to 20 minutes. There were, I find, no significant economic consequences flowing from the contravention.
57 As with Mr McDermott’s contravention of 28 April 2014, this contravention did not involve “rudeness” insofar as Mr McDermott’s outward demeanour was concerned.
58 The circumstances in which the contravention occurred do, however, involve a display of mockery and defiance on Mr McDermott’s part.
59 Mr McDermott gave no evidence to explain his state of mind when entering the site. His state of mind is to be inferred from the words he used in his curious exchange with Mr Groves. The words are to be considered against Mr McDermott’s admission that he was indeed, at the relevant time, seeking to exercise rights under Pt 3-4.
60 Mr McDermott’s words, together with his status as a permit holder and a senior official of the Union, reasonably support an inference that he well knew that the Act conferred upon him no legal entitlement to enter the site to “just [catch up] to have a chat with the guys at lunch time”. Mr McDermott’s statement to Mr Groves that he was not exercising his rights of entry under the Act are difficult to reconcile with his later admission that he was indeed seeking to do so. It is reasonable to infer, and I so find, that his words were intended to bewilder the occupier as to whether provisions of the Act requiring the provision of an entry notice applied to the proposed entry or not.
61 I find that the contravening conduct was accompanied by a belligerent attitude toward the requirements of the Act. The penalty to be imposed upon Mr McDermott should serve the purpose of generally deterring others from maintaining attitudes that so seriously undermine the operation of the Act.
62 As to the circumstance that Mr McDermott is no longer a permit holder or official of the Union, the same considerations referred to earlier in these reasons apply and they need not be repeated here.
63 There is no evidence of contrition or correction and there is evidence of other contraventions.
64 Whilst Mr McDermott admitted this contravention in his amended defence, his initial position was to deny that he was seeking to exercise rights under the Act at all. Moreover, Mr McDermott advanced unmeritorious arguments as to the interrelation between the Act and the general law in relation to civil trespass and, in doing so, he took issue with the legal basis for his liability and the form in which a declaration of contravention should be made. In short, Mr McDermott did not admit liability without qualification for this contravention from the outset. Moreover, he was in no position to dispute the critical fact that he had not provided an entry notice before entering the site and so his cooperation may be explained by the strength of the Commissioner’s case. It is nonetheless appropriate to allow some reduction in penalty to reflect some degree of cooperation.
65 A penalty of $3,500 will be imposed in respect of this contravention.
6 June 2014
66 A further declaration of contravention against Mr McDermott has been made in the following terms:
4. [Mr McDermott], on 6 June 2014, contravened s 500 of the Act while attending the site by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act, in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, remained on the site when asked to leave by the site manager, and held discussions with employees on the site for approximately 30 minutes.
67 I made the following findings with respect to this contravention (first judgment at [42] - [44]):
42 Mr McDermott again entered the Site on 6 June 2014. He signed the visitor register at 12:05pm shortly after his arrival. He was again approached by Mr Groves. The two exchanged words to the following effect:
Groves: ‘Why are you visiting site?’
McDermott: ‘I am catching up with the guys at lunch’.
Groves: ‘Have you given an entry notice?’
McDermott: ‘If I find anything on site I will use my WHS permit to gain entry’.
Groves: ‘Leave the site’.
43 Again, notwithstanding that he had been told to leave, Mr McDermott continued on to the Site where he held discussions with Employees. The discussions took place in the lunch shed and continued for approximately 30 minutes. Mr McDermott left the Site at approximately 1:07pm.
44 As with his attendance on 23 May 2014, at the time that he entered the Site Mr McDermott had not provided Mr Groves or any other person at the Site with an entry notice and the FWC had not issued an exemption certificate for his entry.
68 Again, it is necessary to consider the mental attitude accompanying the contravening conduct. In my view, it does not differ from that which I have identified in relation to the contravention of 23 May 2014. Mr McDermott gave no evidence to rebut the inferences that otherwise might reasonably be drawn from the words he used in his conversation with Mr Groves.
69 I find that there was no genuine attempt on Mr McDermott’s part to comply with the requirements of the Act. I infer from Mr McDermott’s words that he well knew that he had no entitlement to enter the site, without permission, “to [catch up] with the guys at lunch”, and no entitlement to enter the site for the purpose of identifying potential safety issues which might form the basis for a later entry to the site. Mr McDermott’s attitude accompanying this contravention is appropriately described as cavalier and aloof. This is, I find, a blatant contravention involving a knowing and deliberate departure from the law.
70 As with the previous contraventions, considerations of general deterrence are to be afforded considerable weight. It is the mental attitude accompanying the contravention that reduces the significance of the objective factors that might otherwise weigh in favour of a lesser penalty, including the short duration of the site visit, the location of the meeting and the absence of direct and identifiable economic impact.
71 The considerations referred to at [37], [38] and [64] apply equally to the assessment of penalties in respect of this contravention. It is not necessary to repeat them here.
72 A penalty of $3,500 will be imposed in respect of this contravention.
14 July 2014
73 Declarations of contravention against Mr McDermott and Mr Cartledge have been made in the following terms:
5. [Mr McDermott], on 14 July 2014, contravened s 500 of the Act while attending the site along with the third respondent by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act, in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, remained on the site when asked to leave by the site manager, and held discussions with employees on the site for approximately 25 minutes.
6. [Mr Cartledge], on 14 July 2014, contravened s 500 of the Act while attending the site along with the first respondent by acting in an improper manner while seeking to exercise rights in accordance with Pt 3.4 of the Act, in that he failed to provide an entry notice before entering the site as required by s 487 of the Act, remained on the site when asked to leave by the site manager, and held discussions with employees on the site for approximately 25 minutes.
74 The background to these contraventions is that Mr McDermott entered the site on 9 July 2014. On that day he displayed posters in the lunch shed notifying workers at the site that a meeting would be held there on 14 July 2014 at 12.30pm. Mr McDermott had the permission of Mr Groves to enter the site on 9 July 2014, however Mr Groves was not aware at that time that posters would be displayed giving advance notice of a meeting to be held the following week. On 14 July 2014, Mr McDermott and Mr Cartledge attended the site and signed the visitor register.
75 I have found that the following conversation took place between Mr Groves and Mr Cartledge:
Groves: ‘I understand that you are having discussions at lunch time, because we haven’t received a notice you have to leave’.
Cartledge: ‘We will leave site after we have had our meeting’.
Groves: ‘Why aren’t you giving notice prior to entry if you give prior notice we have no problem’.
Cartledge: ‘Although we won’t be looking at safety on site I think the formwork could be improved and we will turn a blind eye to it, there’s a sneak peak [sic] of what we will be looking at next time on site’.
76 This conversation took place in Mr McDermott’s presence. I have found that Mr Groves’ words ought reasonably to have been understood (and were in fact understood) by both officials as a direction that they leave the site: first judgment at [52]. Both officials ignored that direction, entered the site and proceeded to hold discussions with workers in the lunch shed. Additional circumstances are described in the first judgment (at [54] - [56]) as follows:
54 As in the case of Mr McDermott’s attendance on 23 May 2014, it is then alleged by Mr McDermott and Mr Cartledge that their discussions with the Employees occurred in a lunch room ‘being a room or area within the meaning of s 492(3)(b)’ of the FW Act, that the discussions occurred during an ordinary break in work and that no work was disrupted or delayed by virtue of the discussions. Although I am satisfied that the discussions took place during an ordinary lunch break I am not, for the reasons given above, satisfied that the lunch shed is ‘a room or area within the meaning of s 492(3)(b)’ so as to authorise the holding of discussions there. Nor am I satisfied that the location in which the discussions were held otherwise affects the question of the liability of Mr McDermott or Mr Cartledge for contraventions of s 500 of the FW Act. It was not alleged by the Director that the choice of location for the discussions was a circumstance that constituted acting in an improper manner within the meaning of s 500 of the FW Act in respect of this particular visit. Again, I express no view at present as to whether the location of the discussions is a mitigating circumstance for the purposes of the assessment of penalty.
55 Mr McDermott and Mr Cartledge left the Site at approximately 1:10pm. As at the time of their entry, neither Mr McDermott nor Mr Cartledge had provided Mr Groves or any other person at the Site with an entry notice. The FWC had not issued an exemption certificate in respect of their entry.
56 Mr McDermott admits that by entering the Site, he was seeking to exercise rights in accordance with s 484 of the FW Act and that, in the circumstances described above, he acted improperly within the meaning of s 500 of the FW Act.
77 As with the earlier contraventions, it is submitted on behalf of the officials (and I accept) that there was no rudeness involved in the contravention in the limited sense that their outward demeanour was neither aggressive nor boorish. The officials’ time on the site was short, work at the premises was not interrupted and there was negligible economic impact suffered by the occupier as a result of the contravention.
Mr McDermott
78 Considerations referred to at [37], [38] and [64] are equally applicable to this contravention and need not be repeated.
79 I find that Mr McDermott, as a senior official of the Union, knew of the requirements conditioning his right to enter the site for the purpose of holding discussions with workers and yet he consciously chose to ignore them. The circumstance that Mr McDermott did and said nothing to distance himself from Mr Cartledge’s comments lends further support to that finding.
80 The circumstance that no significant economic ramifications flowed from the contravention, although relevant, are to be given little weight relative to the subjective mental attitude accompanying the contravening conduct. As with the earlier contraventions, the need for general deterrence weighs heavily in favour of a higher penalty than might otherwise be imposed had the contravention involved a mere lapse of judgment or a misunderstanding as to the requirements of the law. As with the other contraventions, the penalty ought to be sufficient to deter others who might be minded to deliberately disregard the requirements of the Act.
81 A penalty of $3,500 should be imposed in respect of this contravention.
Mr Cartledge
82 Mr Cartledge did not give evidence to explain his subjective intentions in respect of his discussion with Mr Groves prior to entering the site. I drew the following inferences from the words that he used.
83 Mr Cartledge intended to convey to Mr Groves that he and Mr McDermott would enter the site notwithstanding Mr Groves’ insistence that they observe the requirements of the Act. His statements that he would “turn a blind eye” to purported safety concerns and that Mr Groves had been given a “sneak peak [sic]” of what might occur next time the officials visited reinforced that intended message. Mr Cartledge adopted an attitude that he could and would ignore the requirements of the Act in their application to permit holders as and when it suited him, and yet he impliedly threatened action pursuant to the same Act in his dealings with Mr Groves. His conduct in then entering the site and holding discussions with workers involved a knowing disregard for the requirements of the Act and a dismissive attitude toward the occupier’s representative who had (properly) insisted that he comply with the law.
84 Mr Cartledge admitted this contravention more than six months prior to the commencement of the trial, having initially denied liability. Mr Cartledge nonetheless maintained a denial that he had a conversation with Mr Groves in the terms pleaded by the Commissioner and later found proven at trial. He alleged that a different conversation took place concerning safety concerns he allegedly raised with Mr Groves, yet he adduced no evidence in support of his alternative pleaded case. Mr Cartledge joined with Mr McDermott in disputing the terms of declaratory relief on legal bases that I have found to be unmeritorious: second judgment [22] - [38]. Whilst Mr Cartledge is to be given some credit for admitting critical facts, I reject his submission that his cooperation was “substantial”.
85 At the time of this contravention, Mr Cartledge occupied a senior position as the Secretary of the Union’s Construction and General South Australian Divisional Branch. He had been an employee of the Union since 1999. Mr Cartledge was first dealt with for a contravention of the Act some 14 years after he commenced work with the Union. His first contravention related to conduct engaged in on 11 November 2013 and so pre-dated the contravention presently under consideration. A penalty in respect of that contravention was not imposed until October 2014.
86 After the events giving rise to this contravention, Mr Cartledge has been found to have contravened s 500 of the Act on three further occasions: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 414, Cartledge, Bolton (No 2). The prior and subsequent contraventions support a conclusion that the contravention in the present case cannot be explained as an uncharacteristic lapse of judgment. Clearly it was not.
87 Although the economic ramifications of this contravention are not serious, the contravention was accompanied by a seriously deficient attitude on Mr Cartledge’s part toward the importance of complying with the law. In the circumstances, the need for general deterrence is to be given considerable weight notwithstanding that the consequences for the occupier of the site on this occasion were negligible.
88 I have taken into account that Mr Cartledge has, since making submissions as to penalty, ceased to be an employee and an official of the Union. However, the need for specific deterrence cannot be discounted entirely whilst there remains a possibility that Mr Cartledge will in the future again be a union official or a permit holder, or otherwise be in a position to influence others in respect of their compliance with the Act. Mr Cartledge has adduced no evidence as to his future employment intentions and I am not prepared to assume, to his benefit, that he will no longer engage in tasks or activities that are regulated by the Act.
89 I impose a penalty on Mr Cartledge of $3,500 for this contravention.
Other matters
90 I am satisfied that the aggregate penalties to be imposed upon Mr McDermott for his multiple contraventions of the Act are an appropriate response to the totality of his proven conduct and that the penalties, considered together, are not oppressive or crushing.
91 I am also satisfied that the penalties to be imposed are proportionate to the gravity of the Union officials’ conduct as I have assessed it. As should now be apparent, in assessing the seriousness of the contraventions, I have afforded significant weight to the mental attitude of the Union officials. That consideration has, in turn, influenced my assessment of the need for general deterrence, a consideration to which I have afforded very considerable weight. To the extent that the officials perceive a different approach, it should be understood as a reflection of, among other things, the weight I have afforded the Union officials’ knowing and deliberate disregard of the law. The penalties are lesser than those that may have been imposed had the economic consequences of the contraventions been proven to be substantial. Whilst I have had regard to the cases relied upon by the parties in support of submissions concerning consistency, I do not otherwise consider the decided cases to warrant alteration of the penalties I otherwise consider proportionate and appropriate.
92 There is no evidence as to the personal financial circumstances of any of the Union officials and therefore no basis to conclude that any one of them lacks the financial capacity to pay.
THE UNION
93 The declaration of liability against the Union, as amended with the consent of the parties on 14 August 2017, was expressed as follows:
1. … In respect of the contraventions of the first respondent on 28 April 2014, 23 May 2014, 6 June 2014 and 14 July 2014 and the contravention of the third respondent on 14 July 2014, the fourth respondent:
(a) is taken, by s 793(1) of the Act to have also engaged in the conduct of the first and third respondents;
(b) is taken, by s 793(2) of the Act to have known of all of the essential facts constituting each contravention;
(c) was, therefore, knowingly concerned in each contravention within the meaning of s 550(2)(c) of the Act; and
(d) therefore is taken in each instance to have contravened s 500 of the Act pursuant to s 550(1) of the Act.
94 It is not inappropriate for a party to make submissions as to the monetary range in which the Court should consider imposing a penalty: The Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482. Ranges were submitted in relation to the individual respondents and the submissions taken into account. The Commissioner submitted the following ranges of penalties in respect of the Union’s deemed contraventions, expressed as a percentage of the maximum:
(1) in relation to the contravention by Mr McDermott on 28 April 2014, a penalty in the range of between 70% to 90% ($35,700 to $45,900);
(2) in relation to the contravention by Mr McDermott on 23 May 2014, a penalty in the range of between 70% to 90% ($35,700 to $45,900);
(3) in relation to the contravention by Mr McDermott on 6 June 2014, a penalty in the range of between 70% to 90% ($35,700 to $45,900);
(4) in relation to the contravention by Mr McDermott on 14 July 2014, a penalty in the range of between 70% to 90% ($35,700 to $45,900); and
(5) in relation to the contravention by Mr Cartledge on 14 July 2014, a penalty in the range of between 70% to 90% ($35,700 to $45,900).
95 The Union’s submitted ranges were as follows:
(1) in relation to the contravention by Mr McDermott on 28 April 2014, a penalty in the range of between 15% to 25% ($7,650 to $12,750);
(2) in relation to the contravention by Mr McDermott on 23 May 2014, a penalty in the range of between 6% to 16% ($3,060 to $8,160);
(3) in relation to the contravention by Mr McDermott on 6 June 2014, a penalty in the range of between 6% to 16% ($3,060 to $8,160);
(4) in relation to the contravention by Mr McDermott on 14 July 2014, a penalty in the range of between 10% to 20% ($5,100 to $10,200); and
(5) in relation to the contravention by Mr Cartledge on 14 July 2014, a penalty in the range of between 10% to 20% ($5,100 to $10,200).
96 In the result, I have rejected the submissions of both the Commissioner and the Union in relation to their proposed monetary ranges as being, respectively, overly severe or overly lenient.
97 As the declaration makes plain, the conduct and the knowledge of the officials is to be attributed to the Union by the operation of s 793 of the Act. The conduct and knowledge referred to in the declaration is that conduct and knowledge relevant to establishing the essential elements of the Union’s deemed liability under s 550 of the Act. In the present case, and for reasons explained in the second judgment, the Union’s involvement in the contraventions arises by the attribution to it of the conduct of its officials by the operation of s 793(1). In addition, it is taken to have knowledge of the essential facts constituting each contravention by the operation of s 793(2).
98 For the purpose of the imposition of penalties, other relevant conduct may be attributed to the Union pursuant to s 793(1). So too may the states of mind attending that relevant conduct: s 793(2). For the purpose of the imposition of penalties, I attribute to the Union the same states of mind as that found in respect of each of its officials, not only in relation to the elements of it accessorial liability, but also in relation to the proven conduct that forms a part of the surrounding circumstances in which the contraventions occurred.
99 The parties are not in complete accord as to the full extent of the Union’s history of non-compliance with relevant industrial laws. I do not consider the points of difference to be of any great moment. It is sufficient to state that at the time of the contraventions the Union had a significant history of proven non-compliance and that conduct occurring prior to the subject contraventions has since culminated in yet further findings of liability and the imposition of yet further penalties.
100 The Union’s history of non-compliance is properly described as reprehensible. That description would remain appropriate even assuming there to be some merit in the points taken by the Union about the Commissioner’s submitted summary of contraventions.
101 It was submitted, and I accept, that as at the date of submissions as to penalty, no allegation of contravention had been made against the Union for a period of one year and nine months. From there it was submitted that the Court may infer that civil penalties previously imposed on the Union have had sufficient deterrent effect, so as to reduce the need for specific deterrence in this instance. In light of the Union’s past contraventions, the absence of further allegations in that period is insufficient, in and of itself, to support an inference that penalties imposed upon the Union in the past have had the claimed deterrent effect. That is especially so having regard to the inferences I have drawn about the serious and persisting states of mind of the Union’s more senior officials, Mr McDermott and Mr Cartledge. Whilst neither presently remain employed by the Union there is no evidence to suggest that the employment relationship ended because the Union disapproved of their actions or attitudes and so sought to rid them from the organisation. There is nothing to indicate that the Union did anything to bring about a change of perspective among the three individual respondents in this case, nor among its officials more generally. I am not prepared to draw an inference that the Union has done anything to bring about organisational change since the dates of these contraventions so as to promote the public interest in its compliance with the Act. There is a pronounced need for specific and general deterrence.
102 Whilst the capacity of a contravener to pay a civil penalty is a relevant consideration, neither party has adduced evidence to enable a meaningful assessment to be made of that factual issue. It does not weigh heavily either way in my determination of the appropriate penalties.
103 As to the Union’s degree of co-operation, it is true that the Union made relatively early admissions of contraventions based upon, and qualified by, the admissions of its officials. With the leave of the Court, it withdrew its admissions and contested liability on questions of law. The change in position is adequately explained by the amendment by the Commissioner of his case so as to introduce a new legal issue, not previously determined by this Court The amendments concerned the proper legal basis for the Union’s liability: second judgment [68] - [93] (vicarious liability) and [94] - [125] (accessorial liability). In my view the Union’s conduct in contesting the now pleaded questions of law should not affect the reduction in penalty that might otherwise be allowed in recognition of its degree of co-operation. It is appropriate to proceed on the basis that the Union’s degree of co-operation in respect of each contravention is not materially different than that of the officials themselves. As has been observed, the official’s co-operation was not absolute. In the case of Mr Sloane it was lacking entirely.
104 Regard must be had to whether the contraventions of the Union are properly to be regarded as occurring in the context of a course (or courses) of conduct so as to attract the application of the course of conduct principle. As the Full Court stated in the Sham Contracting Case at [114]:
The important point to emphasise is that the course of conduct principle, in the criminal context at least, does not operate to permit a sentencing judge to impose a single sentence in respect of multiple offences on the basis that the offences formed part of a course of conduct. Absent a statutory provision that provides otherwise, a sentencing judge is to impose a separate sentence, albeit with the option of concurrency, for each offence.
105 After noting the principle has application in a civil penalty context, the Full Court went on to say at [148]:
The important point to emphasise is that, contrary to the Commissioner’s submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions. That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions.
106 No oral submissions were made by the parties in relation to the appropriate penalty to be imposed upon the Union. In written submissions, the Commissioner referred to the course of conduct principle and denied that the principle should apply so as to alter penalties that should otherwise be imposed. The Union has made no submission to the contrary. Its written submissions refer to the legal principle, however it has not suggested that the contraventions arose out of a course (or courses) of conduct on the facts, nor how the penalties imposed might reflect that circumstance. In the absence of a submission by the Union asserting a proper factual foundation for the application of the principle, I do not consider the question to be truly in contest. I accept the Commissioner’s uncontested submission that there is no basis for finding that the Union engaged in a course of conduct (albeit as an accessory) in respect of any combination of two or more of the contraventions deemed to have been committed by it.
107 The following penalties should be imposed on the Union in respect of its deemed contraventions:
(1) for its knowing involvement in the contravention by Mr McDermott on 28 April 2014, a penalty of $24,990;
(2) for its knowing involvement in the contravention by Mr McDermott on 23 May 2014, a penalty of $22,950;
(3) for its knowing involvement in the contravention by Mr McDermott on 6 June 2014, a penalty of $22,950;
(4) for its knowing involvement in the contravention by Mr McDermott on 14 July 2014, a penalty of $22,950; and
(5) for its knowing involvement in the contravention by Mr Cartledge on 14 July 2014, a penalty of $22,950.
108 The aggregate penalties in respect of the multiple contraventions is $116,790. Having regard to the totality of the Union’s attributed conduct, I am satisfied that the aggregate penalty is not oppressive or crushing.
COSTS OF THE FIFTH RESPONDENT
109 As originally framed, the originating application sought the imposition of a civil penalty on a fifth respondent, the Construction, Forestry, Mining and Energy Union – New South Wales Branch, being a State branch of the Union, capable of being sued in its own right. I will refer to it as the NSW Branch.
110 The allegation against the NSW Branch was to the effect that it was, relevantly, the employer of Mr Sloane and that it was liable for a contravention of s 500 of the Act by the attribution to it of Mr Sloane’s conduct and state of mind under s 793 of the Act. The statement of claim contained further allegations generally to the effect that Mr Sloane was, for the purposes of s 500 of the Act, exercising rights under s 484(b) of the Act, it provides:
A permit holder may enter premises for the purposes of holding discussions with one or more employees or TCF award workers:
…
(b) whose industrial interests the permit holder’s organisation is entitled to represent; and
…
111 This Court has previously held that if a permit holder does not have some basis for a belief that there are eligible employees on a premises, then it may be difficult to conclude that he or she had the subjective purpose of entering a premises to hold discussions with people meeting that description: Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at [39] (Dowsett J).
112 Thirteen months after the commencement of this action, the Commissioner was granted leave to amend the statement of claim so as to withdraw allegations of fact and law made against the NSW Branch. The effect of the amendment was that the action as against the NSW Branch was abandoned.
113 The NSW Branch applied for an order that the Commissioner pay its costs of the action against it. Alternatively, it seeks an order that the Commissioner pay its costs thrown away as a result of amendments to the statement of claim having the effect of withdrawing the pleaded allegations against it.
114 The power to award costs is to be conferred by s 570 of the Act. It relevantly provides:
570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
115 It is submitted that the Commissioner instituted the proceedings without reasonable cause because he was in possession of the information necessary for an assessment to be made that the action as against the NSW Branch was bound to fail. The Commissioner, it was otherwise submitted, commenced proceedings against the NSW Branch unguided by diligent research of the factual or legal matters bearing on the question of liability.
116 There were, I find, two reasons for the withdrawal of allegations against the NSW Branch. The first is that it was apparent to the Commissioner that Mr Sloane was the holder of a permit that had been issued to him under the Act, not on the application of the NSW Branch, but on the application of the Union. The permit itself identified Mr Sloane as a representative of the Union. Further, it was apparent to the Commissioner that officials of the NSW Branch did not have a right to represent members of the Union situated outside of the State of New South Wales. As the site subject to the allegations was situated in South Australia, it would follow that Mr Sloane could not, in his capacity as an employee of the NSW Branch, enter premises under s 484 of the Act for the purposes of holding discussions with members who the Union was entitled to represent.
117 In subsequent amendments to the statement of claim the Commissioner alleged that Mr Sloane acted in his capacity as an employee and representative of the Union. The liability of Mr Sloane was ultimately established on that basis.
118 In Baker v Patrick Projects Pty Ltd (No 2) (2014) 145 ALD 548 at [9], a Full Court of this Court approved a summary given by Pagone J in Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 at [8], as follows:
… To exercise the discretion conferred by [s 570(2)(a) of the FW Act] the Court must be satisfied that the claims were, relevantly, instituted without reasonable cause. That is not established merely because a party fails in the claims: R v Moore; ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470, 473. The relevant provisions reflect ‘a policy of protecting a party instituting proceedings from liability for costs’ and costs will rarely be awarded unless justified by exceptional circumstances: see Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]. In Kangan Batman Institute it was said by the Full Court at [60] that ‘a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure’. In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Wilcox J indicated at 264 that one way of testing whether a proceeding was instituted ‘without reasonable cause’ was to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no ‘substantial prospect of success’. His Honour went on to say that a proceeding lacks a reasonable cause where it is clear that it must fail on the applicant’s own version of the facts.
119 For the Commissioner it is argued that the claim pleaded against the NSW Branch was not untenable. With the benefit of hindsight, and with the benefit of the parties’ submissions on the question, it is difficult to see how that can be so. An entry permit may only be issued upon an application by an organisation: s 512 of the Act. The relevant organisation in Mr Sloane’s case was the Union and not the NSW Branch. So much ought to have been apparent on the face of the permit itself. Less obviously, s 484 of the Act must be understood as referring to that same organisation in respect of which the official holds a permit. There is then the unusual circumstance that Mr Sloane appears to have been the employee of two entitles. As the employee of one he was entitled to represent the interests of workers situated in South Australia and as the employee of the other he was not. I do not accept that the legal significance of these matters should have been immediately apparent to the Commissioner, acting reasonably. If I am wrong about that I would not, in any event, exercise my discretion to allow the application for costs.
120 It is relevant that the facts that are said to have rendered the claim against the NSW Branch untenable would equally have been known to the NSW Branch itself. It was open to the NSW Branch to make the same facts known to the Commissioner immediately upon the service of the proceeding upon it.
121 The NSW Branch did not plead any of the facts or points of law upon which it now relies in support of its submission that the claim against it was always bound to fail. In its amended defence filed on 6 November 2015, it admitted that it was liable for Mr Sloane’s conduct but pleaded that it did not know and therefore could not admit whether Mr Sloane had discussions with workers as the Commissioner alleged. It was only by reference to that plea that it did not know and therefore could not admit whether it too had contravened the Act.
122 It seems to me that two inferences are available. The first is that the significance of the factual and legal matters rendering the claim untenable was not apparent to the NSW Branch until around the time of the discontinuance, in which case its contention that the Commissioner himself acted unreasonably within the meaning of s 570(2)(b) of the Act becomes difficult to accept, even having regard to the standard of diligence to be expected of a quasi-prosecutorial authority. As I have mentioned, it was the combined significance of all of the facts and points of law that fell for consideration. Their collective significance, in totality, was not so obvious so as to render the Commissioner’s conduct in joining the NSW Branch as a respondent unreasonable in the necessary sense.
123 The second available inference is that the NSW Branch appreciated the significance of the matters rendering the claim untenable and yet elected to neither plead those matters nor bring them to the Commissioner’s attention in some other way.
124 It is not necessary to determine which of the two inferences is correct. In either instance, I would not exercise my discretion to make an order for costs, even assuming the Commissioner himself unreasonably failed to identify critical points of fact and law at an earlier stage.
Alternative application
125 In the event that its application for costs was unsuccessful, the NSW Branch sought an order pursuant to s 570(2)(a) or (b) for an order that the Commissioner pay its costs “of the amendment”. The phrase “thrown away” was used in the course of submissions, however, the NSW Branch has not identified how that species of costs differs from the costs generally incurred by it in the proceedings.
126 The Commissioner’s amendment did not necessitate the consequential amendment of any document upon which the NSW Branch relied. It has not been explained how the power in s 570 may be exercised differently on the alternate application, should the primary application fail. In light of the conclusions I have drawn in respect of the primary application I am not satisfied that there is any alternative basis under s 570 of the Act for an order for costs against the Commissioner.
I certify that the preceding one hundred and twenty-six (126) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth. |
Associate:
SAD 58 of 2015 | |
CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION |
