FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Wright Solution Qld Pty Ltd [2018] FCA 1575

ORDERS

THE COURT DECLARES THAT:

1.    In May 2014, the first respondent (Wright Solution) contravened s 117(1) of the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act) on 19 occasions by offering to provide 19 VET courses or parts of VET courses to the Toowoomba Regional Council (the Council) in Queensland when Wright Solution was not a registered training organisation (RTO).

2.    In May and July 2014, Wright Solution contravened s 117(1) of the NVR Act on 12 occasions by providing part of a VET course, namely RIIOHS205A – Control traffic with a stop/slow bat, to 12 employees of the Council in Queensland when Wright Solution was not a RTO.

3.    On or about 10 July 2014, Wright Solution contravened s 121 of the NVR Act on 11 occasions by purporting to issue 11 VET statements of attainment in respect of RIIOHS205A – Control traffic with a stop/slow bat to 11 employees of the Council when Wright Solution was not a RTO.

4.    After 28 April 2014, Wright Solution contravened s 117(1) of the NVR Act on one occasion by providing part of a VET course in respect of BSB40507 – Certificate IV in Business Administration to Ms Sara Jane Skinner when Wright Solution was not a RTO.

THE COURT FURTHER DECLARES THAT:

5.    After 28 April 2014, the Second Respondent (Mr Wright) contravened s 138 of the NVR Act in respect of each of the contraventions of ss 117(1) and 121 of the NVR Act by Wright Solution described in declarations 1 to 4 above, by, as sole director, secretary and shareholder of Wright Solution, knowingly permitting or causing Wright Solution to engage in the said contraventions and thereby aiding, abetting, counselling or procuring each of those contraventions.

THE COURT ORDERS THAT:

1.    Wright Solution pay to the Commonwealth pecuniary penalties pursuant to s 137 of the NVR Act for each of the contraventions of ss 117(1) and 121 of the NVR Act described in declarations 1 to 4 above in a total amount of $180,000.

2.    Mr Wright pay to the Commonwealth pecuniary penalties pursuant to s 137 of the NVR Act for each of the contraventions of s 138 of the NVR Act described in declaration 5 above in a total amount of $69,750.

3.    The respondents pay the applicant’s costs in the agreed lump sum of $75,000.

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

REASONS FOR JUDGMENT

ROBERTSON J:

Introduction

1    This case concerns multiple contraventions of ss 117(1) and 121 of the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act) by the first respondent (Wright Solution) and related contraventions by the second respondent (Mr Wright) who was involved in those contraventions as the sole director, secretary and shareholder of Wright Solution for the period 2010 to 2014 inclusive. Counsel has taken me to Mr Wright’s antecedents, that is, his present personal and professional circumstances, and I take those matters into account.

2    The contraventions arose in the Vocational Education and Training (VET) sector. In short, Wright Solution contravened ss 117 and 121 of the NVR Act by providing, or offering to provide, VET courses or parts of VET courses, and purporting to issue VET statements of attainment, at a time when Wright Solution had ceased to be a registered training organisation (RTO) as a result of its non-compliance with relevant standards and requirements. Mr Wright was involved in these contraventions.

The statutory provisions

3    The relevant provisions of the NVR Act are as follows:

2A    Objects

The objects of this Act are:

(a)    to provide for national consistency in the regulation of vocational education and training (VET); and

(b)    to regulate VET using:

(i)    a standards-based quality framework; and

(ii)    risk assessments, where appropriate; and

(c)    to protect and enhance:

(i)    quality, flexibility and innovation in VET; and

(ii)    Australia’s reputation for VET nationally and internationally; and

(d)    to provide a regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population; and

(e)    to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and

(f)    to facilitate access to accurate information relating to the quality of VET.

Note 1:    The standards-based quality framework mentioned in paragraph (b) consists of instruments made by the Ministerial Council, the Minister or the National VET Regulator.

Note 2:    These objects are subject to the constitutional basis for this Act (see Division 3).

…

117    Civil penalty—providing, or offering to provide, all or part of a VET course without registration

(1)    A person contravenes this subsection if:

(a)    the person provides, or offers to provide, all or part of a VET course in a referring State or a Territory; and

(b)    the person is not an NVR registered training organisation.

Civil penalty:    600 penalty units.

(2)    A person contravenes this subsection if:

(a)    the person is a registered provider (other than a secondary school); and

(b)    the person provides, or offers to provide, all or part of a VET course in a non-referring State; and

(c)    the person is not an NVR registered training organisation.

Civil penalty:    600 penalty units.

Note:    Paragraph (a)—registered provider is defined, see section 3.

…

121    Civil penalty—issuing VET statement of attainment

A person contravenes this section if:

(a)    the person purports to issue a VET statement of attainment; and

(b)    the person is not a registered training organisation.

Civil penalty:    600 penalty units.

…

137    Federal Court or Federal Circuit Court may impose pecuniary penalty

Application for order

(1)    Within 6 years of a person (the wrongdoer) contravening a civil penalty provision, the National VET Regulator may apply on behalf of the Commonwealth to the Federal Court or the Federal Circuit Court for an order that the wrongdoer pay the Commonwealth a pecuniary penalty.

Court may order wrongdoer to pay pecuniary penalty

(2)    If the Federal Court or the Federal Circuit Court is satisfied that the wrongdoer has contravened the civil penalty provision, the court may order the wrongdoer to pay to the Commonwealth for each contravention the pecuniary penalty that the court determines is appropriate (but not more than the amount specified for the provision).

Determining amount of pecuniary penalty

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

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

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

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

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

Civil evidence and procedure rules apply

(4)    The Federal Court or the Federal Circuit Court must apply the rules of evidence and procedure for civil matters when hearing and determining an application for an order under this section.

Note:    The standard of proof in civil proceedings is the balance of probabilities, see section 140 of the Evidence Act 1995.

Conduct contravening 2 or more provisions

(5)    If conduct contravenes 2 or more civil penalty provisions, proceedings may be instituted under this Act against a person for the contravention of any one or more of those provisions. However, the person is not liable to more than one pecuniary penalty for the same conduct.

138    Involvement in contravening civil penalty provision

(1)    A person must not:

(a)    aid, abet, counsel or procure a contravention of a civil penalty provision; or

(b)    induce (by threats, promises or otherwise) a contravention of a civil penalty provision; or

(c)    conspire to contravene a civil penalty provision.

(2)    This Act applies to a person who contravenes subsection (1) in relation to a civil penalty provision as if the person had contravened the provision.

141    Continuing and multiple contraventions of civil penalty provisions

(1)    If, under this Act, an act or thing is required to be done within a particular period or before a particular time, then, unless the contrary intention appears, the obligation to do that act or thing continues, even if the period has expired or the time has passed, until the act or thing is done.

(2)    If a refusal or failure to comply with a requirement described in subsection (1) contravenes a civil penalty provision, a person contravenes the provision on each day during which the person refuses or fails to comply with that requirement, including the day the Federal Court or the Federal Circuit Court orders the person to pay a pecuniary penalty for any of the contraventions or any later day.

(3)    Proceedings against a person for any number of orders to pay pecuniary penalties for contraventions of a civil penalty provision that are founded on the same facts, or form, or are part of, a series of contraventions of the same or a similar character, may be joined.

(4)    The Federal Court or the Federal Circuit Court may make a single order to pay a pecuniary penalty for all the contraventions described in subsection (3), but the penalty must not exceed the sum of the maximum penalties that could be ordered if a separate penalty were ordered for each of the contraventions.

(5)    Subsection (1) does not affect the application of section 4K of the Crimes Act 1914 in relation to any law of the Commonwealth.

Procedural history

4    These proceedings were commenced by originating application and statement of claim filed on 1 December 2017.

5    As against the first respondent, the applicant sought the following declaratory relief:

1.    A declaration that in May 2014, the First Respondent (Wright Solution) contravened s 117(1) of the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act) on 19 occasions by offering to provide 19 VET courses or parts of VET courses to the Toowoomba Regional Council (the Council) in Queensland when Wright Solution was not a registered training organisation (RTO).

2.    A declaration that in May and July 2014, Wright Solution contravened s 117(1) of the NVR Act on 12 occasions by providing part of a VET course, namely RIIOHS205A – Control traffic with a stop / slow bat, to 12 employees of the Council in Queensland when Wright Solution was not a RTO.

3.    A declaration that on or about 10 July 2014, Wright Solution contravened s 121 of the NVR Act on 11 occasions by purporting to issue 11 VET statements of attainment in respect of RIIOHS205A – Control traffic with a stop / slow bat to 11 employees of the Council when Wright Solution was not a RTO.

4.    A declaration that after 28 April 2014, Wright Solution contravened s 117(1) of the NVR Act on 1 occasion by providing part of a VET course in respect of BSB40507 – Certificate IV in Business Administration to Ms Sara Jane Skinner when Wright Solution was not a RTO.

6    As against the second respondent, the applicant sought the following declaratory relief:

5.    A declaration that after 28 April 2014, the Second Respondent (Mr Wright) contravened s 138 of the NVR Act in respect of each of the contraventions of s 117(1) and s 121 of the NVR Act by Wright Solution described in paragraphs 1 to 4 above, by, as sole director, secretary and shareholder of Wright Solution, knowingly permitting or causing Wright Solution to engage in the said contraventions and thereby aiding, abetting, counselling or procuring each of those contraventions.

7    The applicant sought pecuniary penalties against each respondent as follows:

6.    Orders that Wright Solution pay to the Commonwealth pecuniary penalties pursuant to s 137 of the NVR Act for each of the contraventions of s 117(1) and 121 of the NVR Act described in paragraphs 1 to 4 above.

7.    Orders that Mr Wright pay to the Commonwealth pecuniary penalties pursuant to s 137 of the NVR Act for each of the contraventions of s 138 of the NVR Act described in paragraph 5 above.

8    The applicant filed a detailed statement of claim with its originating application.

9    By their defence filed on 15 March 2018, the respondents admitted the particulars as outlined in the statement of claim from paragraph 2 to and including paragraph 54.

10    On 9 May 2018, the parties filed a statement of agreed facts.

11    Each of the respondents admitted the contraventions in the statement of claim in full in their defence and joined in the making of the statement of agreed facts.

12    On 20 September 2018, the applicant filed its written submissions as to the appropriate range of penalties. On 11 October 2018, the respondent filed its written submissions, adopting the applicant’s submissions on the appropriate range of penalties. I also note that the applicant handed up an updated table of submissions on penalty.

The facts

13    Based on the statement of agreed facts and adopting much of its language, I find as follows.

14    The first respondent admitted 43 contraventions of the NVR Act arising from its continuing to operate as a training organisation, despite losing its registration to do so. It offered to provide training services in relation to VET courses or parts of VET courses, and provided such training, contrary to s 117(1). It also purported to issue VET statements of attainment contrary to s 121. Mr Wright, the director of Wright Solution, was involved in each of its contraventions and is thereby separately liable to penalties for them under s 138(2) of the NVR Act.

15    Prior to all of the conduct, there had been the events and warnings set out at [47]-[59] of the statement of agreed facts. These included a renewal of registration audit in early August 2013, that audit finding there had been “critical non-compliance with the NVR RTO standards by Wright Solution”; a finalised audit report on 14 December 2013, after having regard to the rectification evidence provided by Wright Solution on 18 September 2013; the decision on 18 December 2013, rejecting Wright Solution’s renewal application; notification on 16 January 2014 of the decision not to renew the registration; the application on 14 February 2014 by Mr Wright for reconsideration of the reviewable decision; the review of the further evidence in March 2014; the analysis of that evidence in early March 2014; on 19 March 2014, the chief commissioner deciding to affirm the decision under s 17, rejecting Wright Solution’s application for renewal of registration as a RTO; notification on 26 March 2014 by letter to Wright Solution; and, significantly, the terms of that letter of 26 March 2014 setting out the effect of the expiry of the organisation’s registration, a number of important legal obligations requiring immediate attention and that the organisation would no longer be a RTO it being then necessary to remove all references from the organisation’s advertising and marketing material. The effect of all of that was that from and after 20 April 2014, Wright Solution was not a RTO.

16    The first three groups of contraventions by Wright Solution involved its conduct in relation the Toowoomba Regional Council (Council). The first group of contraventions occurred when Wright Solution offered to provide VET courses, and parts of VET courses, to the Council when it was not a RTO by entering into a contract with the Council to be a preferred supplier for training services (the Preferred Supplier Contract) in May 2014. Wright Solution thereby offered to provide 19 separate courses (the Offered Courses) to the Council in Queensland during the period 5 May 2014 to 5 May 2015. Each of the Offered Courses were VET courses, or parts of VET courses. In May 2014, Wright Solution was not a RTO and was not authorised to provide, or offer to provide, VET courses or parts of VET courses. Wright Solution had previously been advised by the Australian Skills Quality Authority (ASQA) on 26 March 2014 that it would cease to be a RTO on 28 April 2014 and that penalties applied to organisations that falsely held themselves out as being RTOs.

17    The other two groups of contraventions by Wright Solution in relation to the Council were as follows.

18    Wright Solution provided a part of a VET course to 12 employees of the Council when it was not a RTO. This training was conducted by Mr William Lionel Johnson (Mr Johnson) for and on behalf of Wright Solution. Mr Johnson conducted face-to-face training for 12 Council employees at the Pittsworth Community and Technology Centre in relation to RIIOHS205A – Control traffic with a stop/slow bat on 23 May 2014. The Council employees who attended this training understood their training was being provided by Wright Solution. On 26 June 2014, Mr Johnson provided a tax invoice to the Council in respect of the training and assessment that was conducted on 23 May 2014. Wright Solution was not a RTO from May to July 2014 inclusive.

19    On or about 10 July 2014, Wright Solution purported to issue VET statements of attainment to 11 employees of the Council when it was not a RTO. These 11 separate VET statements of attainment were issued to the Council employees who had completed the unit of competency of RIIOHS205A – Control traffic with a stop / slow bat. These statements of attainment were purported to be issued by Mr Johnson, for and on behalf of Wright Solution. Wright Solution was not a RTO on 10 July 2014.

20    Mr Johnson’s role was as follows. Commencing in or around September 2010, and until about August 2014, Mr Johnson provided training and assessment services for and on behalf of Wright Solution. Mr Johnson was authorised to act for and on behalf of Wright Solution. Until at least August 2014, Mr Johnson was not aware that he was unable to continue providing training and assessment for and on behalf of Wright Solution in accordance with the arrangements that had been in place since about September 2010. Prior to August 2014, Mr Johnson was acting with Wright Solution’s authority and consent in providing training and assessment and issuing the statements of attainment for and on behalf of Wright Solution.

21    A further contravention by Wright Solution concerned conduct in 2013 and 2014 involving Ms Sara Jane Skinner. Wright Solution provided part of a VET course to Ms Skinner when it was not a RTO.

22    The contraventions by Mr Wright were as follows. First, Mr Wright was involved in Wright Solution offering to provide 19 VET courses or parts of VET courses to the Council. He executed the Preferred Supplier Contract on behalf of Wright Solution, knowing that Wright Solution was no longer a RTO and was not authorised to provide, or offer to provide, VET courses or parts of VET courses to anyone.

23    Second and third, Mr Wright was involved in Wright Solution providing part of a VET course to the 12 Council employees, and purporting to issue the 11 statements of attainment.

24    Fourth, Mr Wright was involved in Wright Solution’s provision of part of a VET course to Ms Skinner after Wright Solution had ceased to be a RTO. Mr Wright personally delivered training and assessment to Ms Skinner in respect of part of a VET course and did not, at any stage, inform Ms Skinner or her employer, Condamine Sports Club of Warwick Inc, that Wright Solution was no longer a RTO.

25    Harm was caused by Wright Solution’s and Mr Wright’s contraventions. Wright Solution, by providing VET courses or parts of VET courses when it was not a RTO, exposed Australia’s VET system, and the individuals and organisations who relied upon the provision of training and assessment by Wright Solution, to the risk of harm including that:

    the quality of training and assessment provided to students will fall below the level expected by students and employers and perhaps even below the level needed to give students the minimum skills and competencies required by their chosen field of employment;

    this reduction in skills may lead to failings in performance of work;

    issues such as these could undermine confidence in the VET Quality Framework, such that the value of VET qualifications is undermined;

    by avoiding the costs required to be paid by RTOs that do comply with the VET Standards, those complying RTOs are faced with unfair competition (in terms of costs and prices) from those RTOs that are providing ‘cheap alternatives’; and

    substantial non-compliance with the VET Standards, or a perception that they are not being properly enforced, may undermine the integrity of those standards and attract public concern that the financial investment by the Commonwealth and States in supporting the VET sector are being misused.

By causing and/or permitting Wright Solution’s contraventions, Mr Wright’s conduct similarly gave rise to the risk of this harm.

26    Wright Solution’s and Mr Wright’s contraventions also gave rise to specific harm in respect of the Council and its employees and in respect of Ms Skinner and Condamine Sports.

27    There was financial gain to Wright Solution and Mr Wright by reason of the contraventions. Had Mr Wright notified Ms Skinner that Wright Solution was no longer a RTO, Condamine Sports would no doubt have sought a refund of the amount of $2,250 Wright Solution received from Condamine Sports up-front for provision of the training and assessment provided to Ms Skinner. To date, this amount has not been repaid to Condamine Sport. Had Mr Johnson not been informed by Mr Bronc Hansford (Plant Assessment Officer with the Council) that Wright Solution ceased to be a RTO in or around August 2014, Wright Solution and Mr Wright personally would also have stood to gain financially from the training and assessment Mr Johnson gave to the Council employees on behalf of Wright Solution. However, once Mr Johnson learned that Wright Solution was no longer a RTO, he decided not to remit to Wright Solution its 10% cut of the amount he received from the Council for providing this training and assessment.

28    Wright Solution and Mr Wright have acknowledged wrongdoing. Wright Solution accepts that it deliberately put its commercial interests ahead of its legal obligations by providing, and offering to provide, VET courses or parts of VET courses, and issuing VET statements of attainment, in circumstances where Wright Solution was not a RTO. Mr Wright personally acknowledges his involvement in Wright Solution’s contraventions and accepts that he should have, as soon as Wright Solution ceased to be a RTO:

    personally notified Mr Johnson, the Council, Condamine Sports, “BUSY at Work” and Ms Skinner; and

    stopped providing training and assessment to Ms Skinner.

29    Mr Wright personally acknowledges that he deliberately put his own commercial interests ahead of his legal obligations.

30    Mr Wright recognises that any financial gains obtained by Wright Solution and himself personally were to the detriment of those people to whom Wright Solution provided VET courses or parts of VET courses, and purported to issue VET statements of attainment.

31    As to co-operation, Wright Solution and Mr Wright have co-operated with ASQA in this proceeding by: making some admissions during ASQA’s investigation; filing an admitting defence; and agreeing to a statement of agreed facts.

32    If Wright Solution and Mr Wright had not co-operated in these ways and had instead contested the proceedings, the time and cost involved in these proceedings would have been significantly greater.

33    As to prior contraventions, neither Mr Wright nor Wright Solution had been previously found by a court to have contravened the NVR Act.

Submissions on penalty

34    The applicant submitted as follows.

35    The primary purpose of imposing civil penalties is to ensure compliance with the statutory regime by deterring future contraventions, both by the present respondents (specific deterrence) and other would-be contravenors. In Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482, the High Court emphasised that the primary purpose of civil penalties is to secure deterrence: in contrast to criminal sentences, they are not concerned with retribution and rehabilitation but are “primarily if not wholly protective in promoting the public interest in compliance”: at [55], [59] and [110]. The High Court has more recently explained this in terms of the need for a penalty to have a sufficient “sting or burden” to secure “the specific and general deterrent effects that are the raison d’etre of its imposition”: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 351 ALR 190 at [116]. The primacy of deterrence has likewise been emphasised in determining civil penalties under the NVR Act.

36    The applicant submitted that the present contraventions should attract penalties which will act as a strong general deterrent.

37    The strength of the necessary deterrent message, the applicant submitted, corresponds in part to the determination of the would-be contravenor to flout the law. In this case, Wright Solution persisted in offering or providing VET courses to members of the public, despite being warned by ASQA that it must immediately cease to advertise and operate as a RTO. The applicant submitted the penalties in this case should therefore be set at a level which will send a robust deterrent signal to others who may be similarly minded to contravene in such a determined way.

38    The applicant submitted that specific deterrence is also a relevant factor where, as here, the contraventions involved deliberate wrongdoing in the face of warnings by ASQA about the potential consequences of such wrongdoing. However, as it is unlikely that the respondents will contravene again, the applicant does not contend for a penalty greater than that necessary to secure general deterrence.

39    The conduct for which penalties are sought gave rise to 43 separate contraventions which, although legally distinct, were in some cases closely factually interrelated. Accordingly, the applicant submitted, the assessment of appropriate penalties requires consideration of the course of conduct and totality principles.

40    The applicant submitted that in some cases separate acts, giving rise to separate contraventions, may be so inextricably interrelated that they should be viewed as one multi-faceted “course of conduct”. Whether they should be so treated is a factual enquiry to be made having regard to all of the circumstances of the case; this is a “tool of analysis” which can, but need not, be used. The course of conduct approach is expressly recognised in ss 141(3) and (4) of the NVR Act. When a penalty is imposed for a course of conduct, the statutory maximum for one contravention is not converted into a maximum for the entire course of conduct; it continues to apply to each contravention which forms part of the course of conduct.

41    The applicant submitted that it is appropriate to group Wright Solution’s 43 contraventions in the following way:

    Offered Courses contraventions – 1 course of conduct: on 15 May 2014, Wright Solution entered into a contract with the Council, offering to provide 19 VET courses or parts of VET courses, when it was not a RTO, giving rise to 19 legally distinct contraventions of s 117(1).

    Council training contraventions – 1 course of conduct: in May 2014, Wright Solution provided part of a VET course to 12 Council employees, when it was not a RTO, giving rise to 12 legally distinct contraventions of s 117(1).

    VET statement contraventions – 1 course of conduct: on or about 10 July 2014, Wright Solution purported to issue 11 separate VET statements of attainment to 11 Council employees, giving rise to 11 distinct contraventions of s 121.

    Skinner contravention: Wright Solution’s remaining contravention of s 117(1) that arose from the provision of part of a VET course to Ms Skinner in July-August 2014 should not form part of any course of conduct – a separate penalty should be imposed, having regard to the distinctive features of this contravention.

42    The applicant submitted that Mr Wright’s 43 legally distinct contraventions of s 138(1) correspond with those same contraventions by Wright Solution; it is appropriate to group them in the same way.

43    Where multiple penalties are to be imposed upon a particular wrongdoer, the totality principle requires the Court to make a “final check” of the penalties to be imposed on a wrongdoer, considered as a whole. In cases where the Court believes that the cumulative total of the penalties to be imposed would be too low or too high, the Court should alter the final penalties to ensure that they are “just and appropriate”. In this case, the applicant submitted, addressing the overlap through courses of conduct in the manner proposed in [41] above would mean that no further reduction was thereafter required for totality.

44    The applicant submitted that each of Wright Solution’s and Mr Wright’s contraventions arose from conduct which took place in May to August 2014, at which time the value of a penalty unit was $170. The maximum penalty prescribed by ss 117(1) and 121 of the NVR Act is 600 penalty units for a single contravention by a person. Accordingly, the maximum penalty for each separate contravention is $102,000. As the NVR Act does not set higher maximum penalties for contraventions by a body corporate than for a natural person, the total maximum penalty for the 43 contraventions by Wright Solution and Mr Wright is the same – $4,386,000 in each case.

45    The applicant submitted that, in addition to the enumerated factors the section specifies, s 137(3) requires the Court to take into account “all relevant matters” which in this case includes the co-operation shown by Wright Solution and Mr Wright. Such factors are not to be treated as a “rigid catalogue of matters for attention”. However, addressing each of these matters will assist the Court to carefully and transparently consider the overall circumstances of the contraventions.

46    The reasoning process in deriving a penalty figure having regard to the various relevant factors is conventionally described in criminal sentencing as one of “instinctive synthesis”. This is applied in the civil penalty context, noting that the synthesis is of a somewhat different kind.

47    The applicant submitted that consideration of the relevant penalty factors leads to an appropriate total penalty range against (i) Wright Solution in the range of $170,000-$240,000 and (ii) Mr Wright in the range of $70,000-$95,000. The applicant also seeks declarations as described in paragraphs 1-5 of its originating application, and that the respondents pay its costs of the proceedings.

48    As to declarations, the applicant submitted that the utility of granting declarations to a regulator which set out the particular liability found and the basis for penalties ordered is well recognised by the High Court, the Full Court of the Federal Court, and in the great majority of civil penalty cases at primary judge level: see Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53 at [95]; Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex Rel Corporate Affairs Commission [1981] HCA 49; 148 CLR 121 at 125, 144-5.

49    The applicant submitted that the declarations it sought sufficiently describe how and why the relevant conduct of Wright Solution and Mr Wright contravened the NVR Act and will formally establish the specific number of their respective contraventions of the NVR Act. This makes clear the precise liability for which penalties are ordered.

50    The respondents adopted the submissions on penalty filed on behalf of the applicant. The respondents agreed with the statements of law and principle outlined in the applicant's written submissions, in particular relating to the need for general and specific deterrence. The respondents submitted that the penalties to be imposed would be at the bottom of the ranges proposed for the following reasons:

(a)    The respondents had accepted liability by their defence dated 14 March 2018;

(b)    There is an agreed statement of facts;

(c)    The respondents had accepted the penalty ranges submitted by the applicant. Such concession would entitle the respondents to a further reduction beyond agreement on the facts;

(d)    It is anticipated there will be an agreement on costs;

(e)    Mr Wright made a number of frank admissions on behalf of the respondents. Such co­operation (as well as that in points (a)-(c)) saved time and cost to the investigation.

(f)    Such co-operation demonstrated remorse and contrition on behalf of the respondents;

(g)    Neither respondent had previously been found by a court to be in breach of the NVR Act.

51    As to courses of conduct, the respondents submitted there were 43 separate contraventions of the law by each respondent. The applicant groups the respondents’ conduct into the offer to the Council; the purported provision of the services; and the issue of statements of attainment as separate courses of conduct. The respondents submitted that this sequence of offending was inextricably interrelated and was in fact a multifaceted “course of conduct”: seeking out the work; purporting to provide it; and issuing a certificate. The maximum penalty continues to apply for each contravention even in the one course of conduct.

52    As to the provision of training by Mr Johnson, the respondents submitted that at the time that Mr Johnson provided the training he was qualified to conduct the relevant training. Whilst the “training” undertaken was ultimately not authorised and therefore not effective in providing certification it cannot be said that such training was likely to cause a risk to the public. It remained accepted that it was unauthorised; no doubt embarrassing to the recipients; and a clear demonstration of the respondents putting their financial gain first. The strength of the submission was that the potential for harm by work conducted by poorly trained persons was not present.

53    As to totality, the respondents submitted that as the applicant correctly submits a “final check” of the penalties to be imposed must be undertaken to ensure that the end result is “just and appropriate”. By submitting that the conduct engaged in with regard to the Council was more appropriately considered one course of conduct it was not submitted that the penalty to be imposed would be less than the minimum suggested by the applicant. Rather it would provide further reasons for consideration of the imposition of the minimum penalty suggested.

54    In consequence of these submissions on behalf of the respondents, the applicant amended its table on penalty in light of what it accepted demonstrated a further willingness on the part of the respondents to co-operate in the proceeding in an effort to reduce the time and costs involved in the hearing. The applicant’s submissions on penalty filed on 20 September 2018 suggested that the respondents should receive a discount on penalty in the order of 20% to reflect their level of co-operation. Having regard to this additional co-operation, the applicant submitted that a discount on penalty in the order of 30% would be appropriate. The applicant submitted an updated table setting out the revised proposed penalty ranges the applicant intended to seek from each of the respondents.

Consideration

55    In light of the submissions of the parties, the terms of s 137(3) of the NVR Act and the recent consideration of principle in Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 357 ALR 55 at [226]-[237], I turn first to the contraventions by Wright Solution.

56    In relation to the provision of 19 VET courses or parts of VET courses to the Council by entering into the Preferred Supplier Contract on 15 May 2014, there were 19 contraventions of s 117(1) with the maximum penalty for each contravention being $102,000. I regard this as one course of conduct and I consider that the penalty range put forward is appropriate. I determine the penalty for the 19 contraventions is $110,000.

57    In relation to the provision of part of a VET course to 12 employees of the Council, there were in the period May to July 2014 12 contraventions of s 117(1) with the maximum penalty for each contravention being $102,000. I regard this as one course of conduct and I consider that the penalty range put forward is appropriate. I determine the penalty for the 12 contraventions is $20,000.

58    I next consider the contraventions of s 121 constituted by Wright Solution purporting to issue 11 VET statements of attainment to 11 employees of the Council on 10 July 2014. The maximum penalty for each contravention is $102,000. I regard this as one course of conduct. I consider the penalty range put forward is appropriate. I determine the penalty for the 11 contraventions is $85,000.

59    Fourth and last in relation to Wright Solution, I consider the single contravention of s 117(1) constituted by the company, in July to August 2014, providing part of a VET course to Ms Skinner. The maximum penalty is $102,000. I consider the penalty range is appropriate. I determine the penalty for the contravention is $25,000.

60    The total penalty in respect of Wright Solution is therefore $240,000. I do not accept as appropriate the co-operation discount of 30% put forward by the applicant and consider that the appropriate discount is 25%. This gives a total penalty in respect of Wright Solution of $180,000.

61    I next turn to the contraventions by Mr Wright.

62    I note that Mr Wright personally signed the Preferred Supplier Contract in which Wright Solution offered to provide 19 VET courses or parts of VET courses to the Council in May 2014. There are 19 contraventions. The penalty for each contravention is $102,000. I accept that this was a single course of conduct. I regard the penalty range put forward as appropriate. I determine the penalty for the contraventions is $50,000.

63    I next consider the 12 contraventions of s 117(1) in the period May to July 2014 whereby Mr Wright was involved in permitting Wright Solution to provide part of a VET course to 12 employees of the Council. The maximum penalty for each contravention is $102,000. I consider there was one course of conduct. I consider the penalty range put forward to be appropriate. The penalty I determine is $7,500.

64    Third is the 11 contraventions of s 121 on 10 July 2014 when Mr Wright caused or knowingly permitted Wright Solution to purport to issue 11 VET statements of attainment to 11 employees of the Council. The maximum penalty for each contravention is $102,000. I consider there was one course of conduct. I consider the penalty range put forward to be appropriate. The penalty I determine is $22,500.

65    Fourth and last in relation to Mr Wright, there is the contravention in the period July to August 2014 of s 117(1) by his involvement in Wright Solution’s provision of part of a VET course to Ms Skinner. This was a single contravention. The maximum penalty is $102,000. I consider the proposed penalty range put forward to be appropriate. The penalty I determine is $13,000.

66    The total penalty in relation to Mr Wright is $93,000. Again, I do not accept as appropriate the co-operation discount of 30% and consider that the appropriate discount is 25%. This gives a total penalty in respect of Mr Wright of $69,750.

67    In my opinion it is appropriate to make the declarations for which the applicant contends.

68    This leaves the question of costs. The applicant submitted that, consistent with the usual practice, Wright Solution and Mr Wright ought to be ordered to pay the applicant’s costs of these proceedings. In the respondents’ written submissions they submitted that it was anticipated that there would be an agreement on costs. The parties have informed me that such an agreement has eventuated this morning.

Conclusion and orders

69    I make the declarations as sought and I order each of the respondents to pay the pecuniary penalties as stated above. I order that the respondents pay the applicant’s costs in the agreed lump sum of $75,000.

Associate:

Dated:    18 October 2018