FEDERAL COURT OF AUSTRALIA

Registered Organisations Commissioner v Australian Nursing and Midwifery Federation [2018] FCA 1735

ORDERS

THE COURT ORDERS THAT:

1.    The applicant file and serve a minute of proposed declaration and orders together with submissions on penalty and any affidavit material by 4pm 22 November 2018.

2.    The respondents file and serve responsive submissions and any affidavit material by 30 November 2018.

3.    The matter be listed for a final hearing on penalty and final orders on 6 December 2018 at 10.15am.

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

REASONS FOR JUDGMENT

BARKER J:

1    Section 285(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act), as it applied at material times, relevantly provided that:

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

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

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

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

2    The Registered Organisations Commissioner (formerly the General Manager of the Fair Work Commission) alleges that Mr Mark Olson, as the Secretary of the WA Branch of the Australian Nursing and Midwifery Federation (ANMF) contravened s 285(1) either on 14 occasions between July 2010 and July 2013, or alternatively throughout the whole of that period, by reason of the failure by the WA Branch to lodge annual statutory returns (inclusive of general purpose financial reports); and seeks declarations to that effect and the imposition of penalties on him.

3    Mr Olson rejects the allegations made against him.

4    This judgment is only concerned with the proceeding against Mr Olson.

5    Prior to the hearing of the proceeding against Mr Olson, the ANMF admitted related contraventions of ss 253, 265(5) and 266 of the RO Act alleged against it by the Commissioner. Pending the determination of the proceeding against Mr Olson, the question of what penalties should be imposed in respect of the conduct of the ANMF stands adjourned.

The operation of s 285(1) and parties’ cases

6    Section 285(1) is in terms similar to s 180(1) of the Corporations Act 2001 (Cth). The latter provision provides:

(1)     A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:

(a)     were a director or officer of a corporation in the corporation’s circumstances; and

(b)     occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.

Note: This subsection is a civil penalty provision (see section 1317E).

7    In Shafron v Australian Securities and Investments Commission (2012) 247 CLR 465; [2012] HCA 18 at [18] , the plurality of the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) said of s 180(1):

The degree of care and diligence that is required by s 180(1) is fixed as an objective standard identified by reference to two relevant elements – the element identified in para (a): ‘the corporation’s circumstances’, and the element identified in para (b): the office and the responsibilities within the corporation that the officer in question occupied and had. No doubt, those responsibilities include any responsibility that is imposed on the officer by the applicable corporations legislation. But the responsibilities referred to in s 180(1) are not confined to statutory responsibilities; they include whatever responsibilities the officer concerned had within the corporation, regardless of how or why those responsibilities came to be imposed on that officer.

8    The plurality, at [19], added that the effect of para (b) was to require analysis of what a “reasonable person” in the same position as the officer in question would do. His or her position is not adequately described unless regard is had both to the office held and to the responsibilities that the person has.

9    This dicta plainly applies to the proper construction and application of s 285(1).

10    The Standard Branch Rules of the ANMF identify the actual duties and powers Mr Olson, as Branch Secretary, had at material times:

    By Rule 81.1.1(b), he had the power to direct, control and supervise the officers and employees of the Branch.

    By Rule 81.1.2(a), he was responsible for keeping the proper books of account and other financial records.

    By para (c), he was responsible for preparation and certification of progress reports and financial statements.

    By para (e), he was responsible for having the books in readiness and making all arrangements necessary for audits as directed by the Branch Council.

    By para (j), he was responsible for carrying out the instructions of Branch Council and Branch Executive and exercising a general control over the affairs of the WA Branch and reporting his official acts to the Branch Council or Branch Executive at each meeting.

    By para (n), he was responsible for executing all documents on behalf of the WA Branch.

    By para (o), he was responsible for directly and personally preparing all returns required by the then Workplace Relations Act 1996 (Cth) and furnishing a copy to the Registrar at the time appointed by the Act for such returns to be made.

11    Rule 81.1.1(d) enables delegation of such powers and duties by the Secretary, with Branch Executive approval, but is not of any particular relevance in this case.

12    Section 253 of the RO Act, at material times, had the effect of requiring the WA Branch to prepare a general purpose financial report after the end of each financial year, in accordance with the Australian Accounting Standards, from the financial records kept under s 252(1), in relation to the financial year. That statutory return was required to be prepared “as soon as practicable” after the end of each financial year.

13    Section 265 of the RO Act had the effect that, at material times, the WA Branch was required to provide the annual statutory return including the general purpose financial report to members free of charge. Copies were to be provided in the following timeframes:

(1)    if a general meeting of members to consider the reports was held within six months after the end of the financial year – the period starting at the end of the financial year and ending 21 days before that meeting; or

(2)    in any other case – the period of five months starting after the end of the financial year.

14    Once prepared, provided and presented as required by these provisions, s 268 of the RO Act required that the various statutory returns be lodged with the Fair Work Commission. This was to occur within 14 days of the meeting to which s 266 refers.

15    I accept the submission of the Commissioner, which is not disputed by Mr Olson, that given ss 265(5), 266(1) and 268 prescribe what might be called deadlines for the provision, presentation and lodgement of statutory returns (inclusive of a general purpose financial report) for each financial year, it is clear that the requirements under s 253(1) to prepare a general purpose financial report “as soon as practicable after the end of each financial year” is a requirement that it be prepared in advanced of such deadlines.

16    Under the RO Act, by s 255(1), the General Manager of the Fair Work Commission, as the position and organisation was then called, was required to issue reporting guidelines for the purposes of s 253. The reporting guidelines issued thereunder spelt out the requirements for a general purpose financial report prepared under s 253.

17    It is in this context that s 285(1) imposes important obligations on a branch secretary such as Mr Olson.

18    I accept, and again it is not disputed by Mr Olson, that the timely preparation, circulation and lodgement of financial reports under the RO Act is critical to ensuring that registered organisations operate in compliance with the statutory requirements imposed upon them. Unless responsible officers take the steps that they are expected to take to comply with the requirements of the RO Act – to make, keep and lodge financial records and statements in a timely manner as required – members and regulators alike risk being deprived of an effective means of understanding, detecting and responding to any issues that might arise in connection with the management of registered organisations. This has been emphasised in such decisions as that of General Manager of Fair Work Australia v Health Services Union [2014] FCA 970 at [86].

19    The 14 contraventions alleged against Mr Olson are effectively one and the same, namely, that he did not do or cause to be done all that he could have or might have done “to allocate proper resources” and to “properly resource preparations”, at certain material times, to ensure that the statutory reports due for the financial years ending 2010, 2011 and 2012 were lodged, in a timely manner, under the RO Act.

20    Although Mr Olson’s alleged contraventions are primarily pleaded as 14 separate contraventions, the circumstances relied on by the Commissioner to substantiate each are said to be cumulative. That is to say, the Commissioner contends that the circumstances that warranted Mr Olson’s urgent attention to the completion of the WA Branch’s statutory returns at the start of each relevant reporting period continued to warrant his urgent attention to the tasks at hand as each new reporting period arrived. In the alternative, as noted above, the Commissioner alleges Mr Olson contravened s 285(1) throughout the relevant three year period.

21    Mr Olson does not dispute he had the obligation as Branch Secretary, to undertake what was required to lodge the relevant statutory returns in a timely manner. Nor does he deny the statutory returns were lodged late.

22    Mr Olson says that, while he regrets that the statutory reports were late and concedes it would have been preferable for them to have been presented and lodged when required, the reports were in fact prepared as soon as was practicable in the circumstances and denies he breached the duty imposed on him as Branch Secretary by s 285(1).

23    Mr Olson says that prior to, at, and since the times of the alleged contraventions, he was concerned to have proper and accurate financial records; to have them properly prepared as financial accounts; and to have them available for members and lodged appropriately and in a timely manner, as required by the RO Act. Mr Olson notes the concurrent duty, under s 253 of the RO Act, for the reports to present a true and fair view of the financial position.

24    He contends, however, that as a result of the circumstances immediately preceding and during the required dates for the preparation, presentation and lodgement of the returns, the returns were late.

25    Mr Olson says that those circumstances have effectively been ignored by the Commissioner in bringing this proceeding against him.

26    Mr Olson says that prior to and during the time of the alleged contraventions, he arranged for additional resources, to the extent that they were available, to fix the problems with the accounts and get the returns up to date. He says he relied on those resources and exercised “business judgement” as to the extent of the response required to the reporting difficulties faced by the WA Branch at material times.

27    He contends that resources were increased, additional staff were trained, and external consultants with appropriate expertise were engaged. The only available resources to fix the problems were used and relied on, he says, entirely reasonably by him. He says he acted in good faith in what he believed to be the best interests of the organisation; and that no additional resources were requested by employees, the WA Branch’s auditors or its external consultants.

28    Meanwhile, Mr Olson contends, the Commissioner at all material times condoned the lateness of the reports for years including in the period leading up to July 2010.

29    Ultimately, Mr Olson notes, all of the late reports were submitted, and the current situation, since 2013, is that the reports are up to date and there have been no further late reports.

30    Mr Olson says that the goal that he initially had, in 2010, after experiencing problems with the accounts during 2007, 2008 and 2009, was to get the accounts sorted out properly, such that the organisation would have good financial records going forward. He says this goal has now been achieved.

31    Having regard to all of the circumstances of the case, Mr Olson submits that he should not, as a result, be sanctioned by the Court for a breach of duty. If he is guilty of any contravention, Mr Olson submits that he should be excused from it, under s 315 of the RO Act.

32    I should, having regard to these submissions made by Mr Olson, at this point, say a little more about what “defences” are available under the RO Act. This is because Mr Olson significantly refers to his reliance on: (1) an alleged course of condoning conduct by the regulator; (2) his own business judgement as to what course of action was appropriate at material times; and (3) his reliance on the evidence of others as the best way forward.

33    As to the question of condonation of the delay or failure at material times of the WA Branch to lodge required statutory returns, I should observe that there is no provision in the RO Act, or other statutory provision identified by Mr Olson as making condonation a “defence” to a proceeding pleading contravention of s 285(1) by an officer of an organisation, such as him. I take Mr Olson’s submission to be that because there was, in fact, condonation or acquiescence by the regulator of the delay or failure of the WA Branch to get its statutory returns in on time, that is a relevant fact or circumstance that should be taken into account in determining what a reasonable branch secretary of an organisation in the position of the WA Branch would, or should, have done at material times. As to whether there was any such condonation or acquiescence by the regulator that is a matter of fact dealt with below.

34    As to the question of business judgement, s 285(2) of the RO Act is of particular relevance. It provides:

(2)     An officer of an organisation or a branch who makes a judgment to take or not take action in respect of a matter relevant to the operations of the organisation or branch is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if he or she:

(a)     makes the judgment in good faith for a proper purpose; and

(b)     does not have a material personal interest in the subject matter of the judgment; and

(c)     informs himself or herself about the subject matter of the judgment to the extent he or she reasonably believes to be appropriate; and

(d)     rationally believes that the judgment is in the best interests of the organisation.

The officer’s belief that the judgment is in the best interests of the organisation is a rational one unless the belief is one that no reasonable person in his or her position would hold.

Note:     This subsection only operates in relation to duties under this section and their equivalents at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence)—it does not operate in relation to duties under any other provision of this Act or under any other laws.

35    There is no issue in this case so far as para (a) or para (b) is concerned.

36    It is, however, for Mr Olson to show that he satisfies para (c) and para (d).

37    It is also important for the purpose of para (d) that Mr Olson addresses the best interests of the organisation factor.

38    Accordingly, for the business judgement “defence” to apply, Mr Olson must relevantly show, in the circumstances of this case:

    He made “a judgment to take or not take action in respect of a matter relevant to the operations of” the WA Branch.

    He informed himself “about the subject matter of the judgment” to the extent that he reasonably believed to be appropriate.

    He rationally believed that the judgement “was in the best interests of” the WA Branch.

39    Significantly, there must be a judgement “to take or not take action”; and that action must pertain to “the operations of the organisation”.

40    The authorities make clear, in relation to the equivalent provision of the Corporations Act, s 180(2) that there must be an actual decision to do or not do something. A negligent omission or failure to consider a matter is not protected. See Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler and Others (2002) 41 ACSR 72 at [406]; [2002] NSWSC 171; Australian Securities and Investments Commission v Rich and Another (2009) 75 ACSR 1 at [7277]; [2009] NSWSC 1229. Further, only those judgements relevant to the “operations of the organisation” will qualify for protection under this provision.

41    A question arises, that I will deal with below, whether a judgement about statutory compliance obligations is a judgement concerning an organisation’s operations.

42    The requirement in para (c) is not open ended. In Rich, Austin J, at [7283], said that the question of whether a director (under the Corporations Act) has reasonably informed himself or herself as required depends upon:

    the importance of the business judgement to be made;

    the time available for obtaining information;

    the costs related to obtaining information;

    the director or officer’s confidence in those exploring the matter;

    the state of the organisation’s business at the time and the nature of competing demands on the board’s attention; and

    whether or not material information is reasonably available to the director.

43    Justice Austin added that it is also necessary for the director to become informed about the subject matter of the decision prior to making it, since the business judgement rule should not protect decisions taken in disregard of material information readily available.

44    Accordingly, for Mr Olson to rely on s 285(2)(c) he needs to establish that he informed himself about the subject matter of his decision to such a degree as was reasonably warranted in the circumstances. It may reasonably be said that, in circumstances where the subject of the judgement involves a serious and lengthy want of compliance with statutory obligations, that requirement imposes a substantial burden.

45    So far as the question of reliance on the advice of others is concerned, something upon which Mr Olson relies, s 292 of the RO Act provides as follows:

292 Reliance on information or advice provided by others

If:

(a)     an officer relies on information, or professional or expert advice, given or prepared by:

(i)     an employee of the organisation or the branch whom the officer believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or

(ii)     a professional adviser or expert in relation to matters that the officer believes on reasonable grounds to be within the person’s professional or expert competence; or

(iii)     another officer in relation to matters within the officer’s authority; or

(iv)     a collective body on which the officer did not serve in relation to matters within the collective body’s authority; and

(b)     the reliance was made:

(i)     in good faith; and

(ii)     after making proper inquiry if the circumstances indicated the need for inquiry; and

(c)     the reasonableness of the officer’s reliance on the information or advice arises in proceedings brought to determine whether an officer has performed a duty under this Part or an equivalent duty at common law or in equity;

the officer’s reliance on the information or advice is taken to be reasonable unless the contrary is proved.

46    This provision is similar to s 189 of the Corporations Act.

47    Section 292 does not appear to be linked to s 285(1) of the RO Act or to any of the protections afforded by s 285(2), so as to result in reliance on advice from others to exculpate an officer for an apparent contravention of s 285(1). Mr Olson does not make any submission as to how or why s 292 should afford him a “defence” in this case.

48    Rather, as I apprehend Mr Olson’s submissions, he relies on his engagement of staff internally, and external advisers such as Mr John Edward Allanson and the auditors, to explain why, in all the circumstances, the failure or delays of the WA Branch to lodge statutory returns on time should not be seen to constitute conduct, on his part, that involves contraventions of s 285(1). I will also deal with this “defence” below.

Factual setting

49    The evidence shows, as the Commissioner submits, that the financial affairs of the WA Branch were straightforward. It received from the Australian Nursing Federation, Industrial Union of Workers Perth (WA Union), funds sufficient for it to meet its own obligations to the ANMF; and it paid funds to the ANMF by way of satisfaction of those obligations. All other transactions pertaining to its affairs were administered by the WA Union. For audit purposes, the affairs of the WA Branch and the affairs of the WA Union were treated as one and the same.

50    In respect of the three financial years the subject of the alleged contraventions in this proceeding, the following table generally summarises the relevant dates in relation to the provision, presentation and lodgement of the statutory reports.

51    In relation to the preparation of the general purpose financial reports (inclusive of the materials that the reporting guidelines require that they contain), the 2009-10 and 2010-11 reports were both prepared (or completed) on 29 November 2014 and the 2011-12 report was prepared (or completed) on 20 February 2015.

52    While the ANMF has admitted the Commissioner’s allegations that the general purpose financial reports pertaining to each of those financial years was not prepared as soon as practicable after the end of the year to which it pertained, Mr Olson maintains that they were.

53    It is also relevant to note, although no statutory contraventions are alleged in respect of them, that the presentation, provision and lodging of the WA Branch’s statutory returns for the financial years ending 30 June 2007, 30 June 2008 and 30 June 2009 also occurred later than required. The following table – which contains information that is largely not in dispute – illustrates the position.

54    As it transpires, as with the 2009-10 and 2010-11 statutory returns, the general purpose financial report for each of these earlier three financial years was prepared (or completed) on 29 November 2014.

55    The statutory return for the 2005-06 financial year was not lodged until February 2009.

56    Thus, it may be seen that for the six financial years spanning 1 July 2006 to 30 June 2012, the WA Branch did not prepare, provide, present or lodge proper statutory returns until 29 November 2014.

57    It is this latter factual circumstance that underlies the contraventions of s 285(1) alleged against Mr Olson.

58    Mr Olson draws attention to the fact that the lodgement history just set out reflects the requirement of the Fair Work Commission for each of the reports to be redone on numerous occasions, which required additional resources for the auditors to work on the reports during the period in which the reports were late. The point is, if amendments to the “draft” reports had not been required, the statutory returns may have been lodged a little earlier than they were, but not by much.

The 14 separate contraventions alleged by the Commissioner

Alleged Contravention 1 – failure to allocate proper resources in July 2010

59    The Commissioner alleges that:

    As at July 2010, the WA Branch had three years’ worth of statutory returns outstanding, from 2007 to 2009. Those documents had been the subject of a volume of correspondence from the Fair Work Commission and its predecessor, which consistently urged that they be attended to. They were also the subject of promises from Mr Olson that their lodgement was in hand; promises that, ultimately, remained unfulfilled for a further three-and-a-half years.

    Additionally, relevantly, in July 2010, the most recent financial year, 2009-10, had drawn to a close: the obligation to prepare the general purpose financial report for that year was in play; and the deadlines for the provision of the statutory return for that year to members, its presentation to a meeting, and its lodgement with the Fair Work Commission were only a few months from expiry.

    In order that the WA Branch might meet those deadlines, it was necessary first to complete the statutory returns for previous years. At best, the audit of the then draft 2006-07 return was only partially complete; the audits of the returns for 2007-08 and 2008-09 appear not even to have commenced.

    Complicating matters, the WA Branch’s then Finance Manager, Mr John Quinn, had given notice of his resignation and was due to cease his employment in mid-July. His absence would leave the WA Branch and the WA Union without a dedicated bookkeeping capability.

    These circumstances ought to have been enough to jolt Mr Olson into realising that “business as usual” was not an option. The WA Branch’s already sorry history of noncompliance with its reporting obligations and its reduced capacity to meet them on an ongoing basis was clear, as was the solution: the WA Branch needed to engage and/or allocate to the preparation of the outstanding (or soon-to-be-due) statutory returns more (and/or better qualified) people than it previously had. It had the financial resources to do so.

    Instead, Mr Olson’s reaction to the circumstances that confronted the WA Branch in July 2010 was woefully inadequate. He did not replace Mr Quinn. Instead, he diverted Ms Ioanna Papantoniou – a 25-year-old human resources management graduate with no accounting background whom he had employed in the WA Branch only four months earlier as a membership officer – to perform part of the role that Mr Quinn vacated. No additional resources were directed to the preparation of the imminently required statutory returns (namely, the 2006-07, 2007-08 and 2008-09 statutory returns).

    By reacting as he did – or, more accurately, by failing to act in the way that he should have – in July 2010, Mr Olson failed to discharge his role as Secretary of the WA Branch with the degree of care and diligence that a reasonable branch secretary would have exercised in the circumstances that confronted the WA Branch. That failure amounted to a contravention of s 285(1) of the RO Act.

Alleged Contravention 2 – failure to properly resource preparations in October 2010

60    The Commissioner alleges that:

    In October 2010, Mr Olson was alerted to an issue that had occurred in connection with the WA Branch’s accounting software, “Attaché”. Specifically, it appeared that a volume of the WA Union’s transactions had been incorrectly entered into Attaché, such that it could not accurately be determined to which accounting period they pertained. The errors affected transactions that occurred in the 2009-10 and 2010-11 financial years. Approximately 3.5 months’ worth of transactions relating to the 2010-11 financial year were incorrectly recorded as having occurred in June 2010 (that is, within the 2009-10 financial year). Mr Olson was told that this issue would take one person, working full-time, six to 12 weeks to address.

    Having been alerted to that issue, it ought to have been immediately apparent to Mr Olson – and would have been immediately apparent to a reasonable branch secretary in equivalent circumstances – that the preparation of the WA Branch’s 2009-10 and 2010-11 statutory returns would be jeopardised unless immediate steps were taken to address the Attaché issue. At the very least, Mr Olson should have – and a reasonable branch secretary would have – promptly engaged one or more people to address it.

    Instead, Mr Olson did not engage anybody to address the Attaché issue until December 2010 (and, even then, they were not due to begin until the new year). By that stage:

(a)    the WA Branch had yet to prepare a general purpose financial report for the 2008-09 financial year, let alone the 2009-10 financial year;

(b)    the deadline for the provision of the 2009-10 general purpose financial report to the WA Branch’s members had either expired already or was about to; and

(c)    the deadline for presenting the “full report” in accordance with the requirements of s 266(1) was due to expire the following month.

    All the while, the WA Branch’s 2006-07, 2007-08 and 2008-09 statutory returns remained outstanding.

    Mr Olson’s failure to allocate resources to the correction of the Attaché issue when he was told about it bespoke a want of the care and diligence that s 285(1) of the RO Act required of him.

Alleged Contravention 3 – failure to properly resource preparations in February 2011

61    The Commissioner alleges that:

    In December 2010, Mr Olson arranged for an external consultant, Mr Allanson, of CA Management Services Pty Ltd, to address the Attaché issue. Mr Allanson commenced that work in mid-January 2011, and worked full-time on the issue until approximately late February or early March 2011. In addition to addressing the Attaché issue, Mr Allanson was charged with assisting staff at the WA Union to use the Attaché platform.

    Also in December 2010, the WA Union’s auditors, Maxim Hall Chadwick, wrote to Fair Work Australia (as the Fair Work Commission was then known), undertaking to have the audits for the WA Branch’s statutory returns for the 2006-07, 2007-08 and 2008-09 financial years completed by “no later than the end of February 2011”. That correspondence was sent in response to yet another letter that the regulator had sent to Mr Olson a month earlier, reminding him that those returns were overdue and that their continued non-completion risked exposure to civil penalty.

    By late February, when Mr Allanson’s full-time secondment to the WA Union expired:

(a)    the WA Branch’s statutory returns for the 2006-07, 2007-08, 2008-09 and 2009-10 financial years remained incomplete – indeed, little or no work had been done on the latter two years’ returns;

(b)    the deadline by which the 2006-07, 2007-08 and 2008-09 returns had been promised had either expired or was about to; and

(c)    the Attaché issue remained unresolved.

    Further, a significant obstruction frustrating completion of the outstanding statutory returns in early 2011 was the auditors’ inability to obtain the instructions that they required.

    Again, these circumstances would have jolted the hypothetically-reasonable branch secretary into properly resourcing the preparation of the WA Branch’s outstanding statutory returns. Additional personnel ought to have been retained and deployed to that end, and with appropriate urgency. By failing to do as much, Mr Olson conducted himself with a degree of care and diligence comfortably below the standard required of him under s 285(1) of the RO Act.

Alleged Contravention 4 – failure to properly resource preparations in July 2011

62    The Commissioner alleges that:

    Between March and July 2011, the WA Union continued to engage Mr Allanson to work on the preparation of its accounts – but sporadically, rather than on the full-time basis upon which he had worked earlier that year. Ms Papantoniou continued to provide some assistance to him, all the while continuing to perform her day-to-day bookkeeping tasks.

    By July 2011:

(a)    the WA Branch’s auditors had completed, or substantially completed, audits of its 2006-07, 2007-08 and 2008-09 financial records but the WA Branch’s statutory returns for those years remained outstanding; and

(b)    the WA Branch’s general purpose financial report for the 2009-10 financial year remained outstanding.

    With the continued non-completion of the 2009-10 general purpose financial report and the pending deadlines relating to the equivalent material for the 2010-11 financial year, it ought to have been apparent to Mr Olson – and would have been apparent to a reasonable branch secretary in equivalent circumstances – that the resources then deployed to those ends were inadequate. Mr Olson ought to have retained additional personnel to ensure that those tasks were attended to with far greater urgency. By not doing so, he conducted himself with a degree of care and diligence below that which s 285(1) of the RO Act required of him.

Alleged Contravention 5 – failure to properly resource preparations in January 2012

63    The Commissioner alleges that:

    In January 2012, the deadline for the provision and presentation of the 2010-11 statutory return had come and gone. The 2009-10 general purpose financial report continued to remain outstanding, as did the equivalent material for 2010-11. Although at least substantially complete, the statutory returns for the 2006-07, 2007-08 and 2008-09 financial years were still yet to be lodged with Fair Work Australia, which was chasing them.

    Mr Allanson maintained at least a sporadic presence at the WA Union in the second half of 2011. At best, the resources allocated to the completion of the outstanding returns remained unchanged from the first half of 2011; at worst, fewer resources were allocated.

    Again, Mr Olson’s failure to retain and allocate additional personnel toward completion of the WA Branch’s then-outstanding statutory returns involved a degree of care and diligence, on his part, that was below that which s 285(1) of the RO Act required.

Alleged Contravention 6 – failure to properly resource preparations in April 2012

64    The Commissioner alleges that:

    On 19 March 2012, Fair Work Australia wrote to Mr Olson about the WA Branch’s then-outstanding statutory returns for the 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11 financial years. Again, that correspondence alerted Mr Olson to the possibility that pecuniary penalties might arise in the face of continued non-compliance with the WA Branch’s statutory reporting requirements.

    In response, Mr Olson corresponded with Mr Robert Pfeiffer, from Fair Work Australia, and undertook to have the 2009-10 and 2010-11 statutory returns finalised and lodged by 30 April 2012.

    Three days later (on 23 March 2012), Mr Olson was provided with correspondence from the WA Branch’s auditors concerning the audits that they had conducted of the WA Union’s financial accounts over the 2006-07, 2007-08 and 2008-09 financial years. Amongst other things, that correspondence referred to difficulties that the auditors had encountered in obtaining relevant information.

    By the end of April 2012, the WA Branch appears to have been no closer to completing the 2009-10 or 2010-11 statutory returns (that is to say: preparing the general purpose financial report for those years, and providing, presenting and lodging the “full report” required under the RO Act). The statutory returns for the 2006-07, 2007-08 and 2008-09 financial years had been lodged; but they would later be rejected, requiring resubmission.

    As had been the case for at least the preceding 12 months, the WA Branch had not allocated any additional personnel to the task of finalising the outstanding statutory returns: Mr Allanson continued to consult from time-to-time and Ms Papantoniou continued to assist him, all the while continuing to perform her day-to-day duties until her resignation in April 2012. Given the history of reporting non-compliance and the correspondence that had been exchanged with Fair Work Australia, Mr Olson ought to have – and a reasonable branch secretary in the circumstances would have – retained and allocated additional resources to the task. In failing to do so, Mr Olson conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 7 – failure to properly resource preparations in July 2012

65    The Commissioner alleges that:

    Between April and July 2012, Mr Olson and Mr Allanson traded multiple emails with Ms Gillian Jowett-Blinman (the auditor for the WA Branch and the WA Union) concerning preparation of the 2009-10 and 2010-11 statutory returns. By 20 June 2012 – when Ms Jowett-Blinman commenced a period of leave – there remained a lengthy list of matters to which the WA Branch’s auditors had requested that attention be given.

    Nearly four weeks later, that list had yet to be addressed. It does not appear that any (or any substantial) work had been directed to the preparation of the 2010-11 general purpose financial report, let alone the 2011-12 material (which, by that stage – July 2012 – was also in play). The 2009-10 and 2010-11 statutory returns remained long overdue.

    Again, Mr Olson did not retain or allocate additional personnel or resources to the outstanding tasks. A reasonable person in the position of Secretary of the WA Branch would have done so. By not doing so, he conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 8 – failure to properly resource preparations in November 2012

66    The Commissioner alleges that:

    On 4 October 2012, Mr Olson spoke to Mr Pfeiffer about the WA Branch’s 2009-10, 2010-11 and 2011-12 statutory returns. He undertook to lodge those returns in draft form during the first week of November 2012. The first week of November came and went. Draft returns were not filed.

    Mr Allanson appears to have remained the only person whose engagement by the WA Union and the WA Branch (sporadic though it was) was focused solely on its financial accounts. He took leave of “a couple of weeks…in late October until early November [2012]”. It is apparent that, when he returned in November 2012:

      (a)    the WA Branch’s general purpose financial reports for the 2009-10 and 2010-11 financial years remained unprepared; and

      (b)    the deadline by which the 2011-12 general purpose financial report was (with other material) due to be provided was only a few weeks away.

    Again, Mr Olson did not retain or allocate additional personnel or resources to those tasks. A reasonable person in the position of Secretary of the WA Branch would have done so. By not doing so, he conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 9 – failure to properly resource preparations in December 2012

67    The Commissioner alleges that:

    On 14 December 2012, Ms Jowett-Blinman advised Mr Olson (amongst others) that she would be on leave from later that day until 17 January 2013. At the time of giving that advice, none of the statutory returns for the 2009-10, 2010-11 or 2011-12 financial years were completed or in a state that they could be lodged in draft form. It was apparent that they would not be until the new year – after (and, in the case of the 2009-10 and 2010-11 material, well after) the statutory deadlines for their preparation, provision and presentation had passed.

    That notwithstanding, Mr Olson still took no action to increase the resources dedicated to completing the 2009-10, 2010-11 and 2011-12 statutory returns. Again, he ought to have done so. By not doing so, he conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 10 – failure to properly resource preparations in January 2013

68    The Commissioner alleges that:

    By correspondence dated 4 January 2013, Mr Olson received notice that the Fair Work Commission had commenced an investigation into the WA Branch’s apparent non-compliance with reporting obligations under the RO Act.

    Ten days later, Ms Jowett-Blinman returned from leave and sent Mr Olson (and also Mr Allanson) a 19-point list of matters that required attention in order that the WA Branch’s 2009-10 statutory return might be completed. Between then and the end of January 2013, Mr Olson, Mr Allanson and Ms Jowett-Blinman exchanged some emails related to the provision of that information. Those exchanges apparently did not enable completion of the WA Branch’s 2009-10, 2010-11 or 2011-12 statutory returns.

    On 31 January 2013, Mr Olson received further correspondence from the Fair Work Commission relating specifically to the WA Branch’s 2011-12 statutory return. By that correspondence, the WA Branch was given until the end of February to lodge its 2011-12 statutory return, failing which its failure to do so would “…be referred to the General Manager with a recommendation to widen the [existing] investigation to include the 2012 financial report”. On that same day, Mr Olson spoke again to Mr Pfeiffer and undertook (again) to provide the Fair Work Commission with a draft of the WA Branch’s 2009-10 statutory return forthwith and a draft of the equivalent material for the 2010-11 financial year within a week.

    At the time of his doing so, the WA Branch’s 2009-10, 2010-11 and 2011-12 statutory returns were outstanding.

    A reasonable WA Branch secretary faced with those circumstances would have:

(a)    realised that the WA Branch’s ongoing non-compliance with its reporting obligations required urgent attention; and

(b)    immediately retained and allocated additional personnel to the task of correcting that non-compliance.

    Mr Olson, however, appears to have done neither (and certainly not the latter). By so acting, he conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 11 – failure to properly resource preparations in February 2013

69    The Commissioner alleges that:

    Throughout the first weeks of February, Mr Olson continued to field (and, in some cases, responded to) requests from the WA Branch’s auditors for information relating to the outstanding statutory returns.

    A meeting of the ANMF’s Federal Executive later that month resolved (amongst other things) to:

(a)    “call upon the Western Australian Branch Secretary and Branch Council to take all necessary steps to urgently rectify shortcomings in its compliance with reporting obligations under the Fair Work (Registered Organisations) Act”; and

(b)    “call upon the Western Australian Branch Secretary and Branch Council to ensure full and prompt disclosure in writing is made to the [Federal Union’s] Federal Secretary and Federal Executive by close of business 8 March 2013 of the subject matter and progress of the Fair Work Commission Investigation commenced on 3 January 2013 into the Branch”.

    By this time, the WA Branch had missed the deadline by which Mr Olson had undertaken to provide to the Fair Work Commission, in draft form, its statutory returns for the 2009-10 and 2010-11 financial years. Preparation of the WA Branch’s 2011-12 general purpose financial report had not materially commenced. All three remained outstanding by the end of February 2013.

    Those matters notwithstanding, very little (if anything) appears to have changed vis-à-vis the resources directed toward the preparation of the outstanding material: Mr Allanson and Ms Jowett-Blinman continued to exchange emails about it, but no additional resources were retained or allocated to that end.

    It is apparent that the completion of the then-outstanding statutory returns was not treated with anything like the urgency that it should have been. By neglecting to properly resource that task, Mr Olson conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 12 – failure to properly resource preparations in March 2013

70    The Commissioner alleges that:

    In early March 2013, Mr Olson exchanged further correspondence with Mr Pfeiffer regarding the WA Branch’s 2009-10 and 2010-11 statutory returns. As he had done in October 2012 and January 2013, Mr Olson again undertook to provide those in draft form, this time by Friday, 8 March 2013. He also indicated that the 2011-12 statutory return would “…not be too far behind the other two”.

    On 8 March 2013, Mr Olson undertook to lodge final, approved versions of the WA Branch’s 2009-10 and 2010-11 statutory returns on 22 March 2013. The following week, the Fair Work Commission formally extended the scope of its investigation to include the WA Branch’s non-completion of its 2011-12 statutory return. On 21 March 2013, it rejected the general purpose financial reports that the WA Branch had filed (or purported to file) for the 2006-07, 2007-08 and 2008-09 financial years.

    Throughout March 2013, Mr Olson, Mr Allanson and Ms Jowett-Blinman continued to exchange correspondence concerning preparation of the outstanding statutory returns (namely, those pertaining to the 2009-10, 2010-11 and 2011-12 financial years). However, no additional resources were directed to their completion.

    Again, the preparation of the then-outstanding material was not treated with anything like the urgency that it should have been. By neglecting to properly resource that task, Mr Olson conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 13 – failure to properly resource preparations in May 2013

71    The Commissioner alleges that:

    Despite Mr Olson’s undertaking of 8 March 2013, the WA Branch’s statutory returns for 2009-10 and 2010-11 were not finalised and lodged with the Fair Work Commission by 22 March 2013.

    Throughout April and May of 2013, little if any progress was made to their finalisation, or to the preparation of the equivalent material for 2011-12. As had long been the case, there were email exchanges as to that between Mr Olson, Mr Allanson, Ms Jowett-Blinman and Mark Lester (also from the WA Branch’s auditors, Maxim Hall Chadwick). By the end of May 2013, the WA Branch’s 2009-10, 2010-11 and 2011-12 statutory returns remained outstanding.

    Given the history – not only the most recent history (including the undertaking that Mr Olson gave on 8 March 2013) but also the lengthier and sorrier history dating back at least three years – the indifferent, casual quality of that progress is astounding. The preparation of the then-outstanding material was not treated with anything like the urgency that it should have been. By neglecting to properly resource that task, Mr Olson conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

Alleged Contravention 14 – failure to properly resource preparations in July 2013

72    The Commissioner alleges that:

    In late May or early June 2013, Mr Allanson took a period of leave. He returned to the WA Union offices on Tuesday, 11 June 2013. He and Ms Randi Terkildsen – who replaced Ms Papantoniou after her resignation – continued to field and respond to requests for information from the auditors in respect of the 2009-10 and 2010-11 financial years. Initial versions of those statutory returns were lodged with the Fair Work Commission on 10 July 2013. It does not appear that the 2011-12 statutory return had been progressed in a material way by then.

    In June 2013, Ms Jowett-Blinman – who, until then, had been the main point of contact between the WA Branch and its auditors (for whom she worked) – ceased her employment (or partnership). Additionally, in July 2013, Ms Terkildsen was hospitalised and required several weeks’ leave.

    Again, Mr Olson did not respond to those circumstances with anything approximating the urgency that he ought to have. He again did not allocate additional resources to the completion of the outstanding statutory returns. By not doing so, he conducted himself with a degree of care and diligence below that which was required of him by s 285(1) of the RO Act.

The Commissioner’s alternative case against Mr Olson

73    The Commissioner puts an alternative case against Mr Olson.

74    This case is put quite independently of the 14 separate contraventions alleged by the Commissioner. It is contended that, if not on each of those 14 separate occasions, then generally during the period from July 2010 to July 2013, Mr Olson ought to have taken steps to increase the resources to facilitate the earliest possible lodgement of the WA Branch’s outstanding statutory returns.

75    It is contended this is so because, if not on all 14 occasions, it ought to have dawned upon Mr Olson throughout the period that the WA Branch’s reporting delinquency required drastic and urgent attention well in excess of what he was giving it.

76    It is argued by the Commissioner that Mr Olson’s failure to recognise and act upon that need – again if not on each of the occasions to which the Commissioner’s pleading refers, then generally – involved a deficit of care and attention relative to that which s 285(1) of the RO Act required.

Mr Olson’s responses to the 14 alleged contraventions

Alleged Contravention 1– failure to allocate proper resources in July 2010

77    Mr Olson’s response to the first alleged contravention is that:

    No particulars have been pleaded by the Commissioner as to what the proposed additional resources ought to have been. In fact there is no evidence before the Court as to what the additional resources ought to have been or precisely how much they ought to have been increased by, and what difference, if any, this would have made to the reports being completed. Furthermore, the Commissioner now seeks to go beyond the alleged contravention in his pleadings from “increasing resources” to assert that there was a failure to allocate “proper” resources, a completely different proposition.

    The alleged contravention is arbitrary and artificial. Contrary to the requirements that there be an assessment of the overall circumstances, the alleged contravention is one based on a selective, fragmented, and incomplete picture of the circumstances of the organisation. In the absence of the proper context, it looks back with hindsight and says “this is what should have occurred”.

    Nowhere in his pleadings does the Commissioner refer to any requirement for “proper” resources. Even if he had, there is no evidence of what “proper” resources might have been.

    It is also without doubt that the facts on which the Commissioner bases the alleged contravention have been disputed.

    As at July 2010, the Commissioner had condoned the lateness of the reports for 2006, 2007, 2008 and 2009. No action for enforcement or prosecution had been initiated. There was a lack of any practical or demonstrated concern by the Commissioner about the 2006, 2007, 2008 and 2009 reports, as indeed is apparent with respect to late reports going back as far as 1999, and this is of major significance to Mr Olson’s defence.

    It is one thing for the Commissioner to complain in 2015 about the lateness of the 2010, 2011 and 2012 returns, but another thing entirely to criticise Mr Olson’s conduct when the attitude of the Australian Industrial Registry at the relevant time had been to practically and effectively let the statutory obligations for the previous four years (and beyond) pass without undue fuss. The reality is that at the time, in July 2010, the regulator was not particularly bothered about the lateness of the returns. This is not to suggest that the lateness of the reports might, as a result, be treated lightly. Nor was it. However, it is a relevant consideration that despite many years of late reports, no enforcement nor prosecution occurred until very late and after the issues were already undergoing rectification.

    In May, July and November 2009, Mr Olson had communicated with Mr Pfeiffer of the Australian Industrial Registry to let him know what was happening and at no time in these exchanges was there any suggestion of either prosecution or enforcement for the late reports. Mr Olson’s conduct in July 2010 has to be considered in the relevant context.

    It is also apparent that, at this time, plans had commenced for the preparation of the 2007 and 2008 audits.

    There had already been issues identified by Mr Olson and raised with CA Management and the national office of CA Management; a lot of work had been done by Mr Olson to make arrangements to get the finances and the reports in order; employed accountants had failed to get the reports in on time; and Mr Olson made the decision to go back to using an administration membership officer, with assistance from CA Management, to get the accounts in order and the audits done.

    Resources had in fact at this time already been increased. Mr Quinn was replaced with Ms Papantoniou, who had studied accounting in her degree course and was fully trained in all areas of management and administration; and was initially employed fifty per cent of her time in memberships doing the finances; she was actually doing finance work from the beginning of her employment; she received training and a handover before Mr Quinn left his employment; she and another staff member, Ms  Terkildsen, had received training in the use of the software; and this occurred before Mr Quinn’s departure.

    Giving due consideration to the circumstances, it is denied that a reasonable person in Mr Olson’s position in the organisation’s circumstances and who had the same responsibilities “would have increased the resources dedicated to preparing the 2010 report so that it could be lodged with the Fair Work Commission by 14 January 2011”. Nevertheless, resources had in fact been increased prior to the time of the alleged contravention. From the evidence, clearly Mr Olson had been trying to get the finances in order for some time at this stage.

    Mr Olson relies on the additional matters pleaded in his further amended defence and of which there has been evidence provided in the proceedings. Specifically:

(a)    No prosecution had occurred for any previous late statutory reports.

(b)    The WA Branch accounts were always done after the WA Union accounts.

(c)    The auditors prepared the financial reports in sequence.

(d)    There had been difficulties with CA Management in the past but a replacement could not be offered by the national Attaché representative.

(e)    Staff had access to CA Management and were directed to use them as required.

(f)    Mr Allanson was in the office a lot more after than before the Attaché problem.

(g)    Mr Allanson was a highly specialised senior consultant able to fix the Attaché problems.

(h)    Mr Olson relied on CA Management, in particular Mr Allanson, in conjunction with the auditors, in particular Ms Jowett-Blinman, to not only fix the problems but also to get the accounts in a proper state going forward, and in the best interests of the organisation. That goal was ultimately achieved.

(i)    Mr Olson’s position was that of elected official in the organisation with nursing and other qualifications but no finance qualifications and with significant additional obligations to members to provide and expand services, deliver enterprise bargaining outcomes, and manage a rapidly expanding organisation.

    The reports for 2010, 2011 and 2012 were not late as at July 2010. Nor was there an Attaché problem at this time and nothing to indicate there would be any problem.

    The Commissioner’s characterisation of Mr Olson’s best estimates as “promises that ultimately remained unfulfilled” is an unfair characterisation; objectionable; and unsupported by the evidence. Mr Olson’s evidence was that these estimates were genuinely given in his hope of them being met. It is evident from Mr Allanson’s evidence that the process took longer than expected and at a couple of points it seemed they were close to finalisation but then it took longer than expected. Mr Olson gave estimates to Mr Pfeiffer as best he could on the information he was given himself by Mr Allanson and Ms Jowett-Blinman.

    The Commissioner’s suggestion that more (and/or) better qualified people should have been engaged, should be rejected. It is simply the case that more resources had been allocated.

    In July 2010 Mr Olson was involved in a public sector wage campaign and other significant duties. He explains the circumstances at July 2010 in his affidavit, and at this time he began to increase reliance on CA Management.

    There was no event to “jolt” anyone at this time.

    Ms Papantoniou was a business graduate who had studied accounting. She admitted she was trained in all areas of management and administration. She was told to contact Mr Allanson without hesitation for assistance. She never complained of needing more help or training. She took on the finance role after Mr Quinn left. She had a contract that incorporated half administration work. She received training in Attaché. Ms Terkildsen also received training. Ms Papantoniou started doing finance work very soon after commencing work including being in charge of invoices and credit card receipts. She accepted the position as Finance and Administration Officer. She had access to Mr Allanson when needed and did so. She agreed she was doing important work that would lead to the creation of proper records for the ANMF. Prior to Mr Quinn’s departure she was doing bank reconciliations.

Alleged Contravention 2 – failure to properly resource preparations in October 2010

78    Mr Olson contends:

    This second alleged contravention is that a reasonable person in his position in the organisation’s circumstances and who had the same responsibilities “would have immediately engaged [Mr] Allanson (or one or more additional persons) to work on fixing the Attaché problem so that the 2010 report could be lodged on time”, and it is not the “failure to properly resource preparations in October 2010” as set out in the outline of submissions of the Commissioner.

    The alleged contravention relates to the time at which it was identified that there had been a problem with the Attaché software: October 2010. At this time, discussions occurred about what could be done and a plan was put in place to fix the problems. It could not be implemented immediately, but there was no urgency for an immediate fix, in the context of the condonation of prior late reports from 2007 to 2009.

    The alleged contravention is based on a patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence. There has been no proper examination by the Commissioner of the full circumstances with respect to the Attaché problem and the significance of the problem and more importantly how to fix it has been completely overlooked and misunderstood by the Commissioner.

    The facts relevant to the alleged contravention have been denied and are incorrect. Furthermore, it is contended that the Commissioner was aware of the Attaché problem but chose to leave it out of his case.

    Based on the ongoing condonation of the late reports identified, there was no requirement on Mr Olson’s part for urgency. Further, he quite reasonably spoke with Mr Pfeiffer about the delays and communicated his expectations of what the progress was and would be with respect to the reports (as outlined above). Again, there was no sign of any urgent need for a prosecution or any enforcement action from the regulator.

    Giving due consideration to the circumstances, it is incorrect to say that a reasonable person in Mr Olson’s position in the organisation’s circumstances and who had the same responsibilities “would have immediately engaged [Mr] Allanson (or one or more additional persons) to work on fixing the Attaché problem so that the 2010 report could be lodged on time”.

    Mr Olson relies on the additional matters in his further amended defence and the following evidence:

(a)    A significant problem arose with the Attaché software.

(b)    There were discussions between Mr Allanson and Mr Olson about fixing the Attaché problem.

(c)    A proposal as to how to fix the problem was offered by Mr Allanson.

(d)    Mr Olson relied on Mr Allanson to fix it.

(e)    Mr Allanson was not able to come in until January 2011.

(f)    The problems with the accounts had to be fixed before the financial reports could be prepared correctly, contrary to the view expressed by Christopher Patrick Enright.

(g)    By January 2011 Mr Allanson attended to start work on the Attaché problem as well as to assist the auditors with getting the information out of Attaché for the audits for 2007, 2008 and 2009.

(h)    The Attaché problems took longer than expected, it was considered that finalisation was close at a couple of points but then it took longer.

(i)    CA Management, as the experts, were consulted about how to fix the problems and how to ensure the problems were fixed, that accurate reports could be prepared, that the financial reporting could be addressed and that measures could be put in place to prevent such errors from occurring again.

(j)    Ms Jowett-Blinman had direct knowledge of the Attaché problem from testing herself.

(k)    The advice provided to Ms Terkildsen and Mr Allanson by Ms Jowett-Blinman was that the audits would not be done until the account issues were fixed.

(l)    There was significant expenditure in the use of the auditors and CA Management over the period of alleged contraventions to fix the problems to the amount of approximately $760,000.

    It is important to note in relation to alleged contravention 2 that in October 2010, attempts were made to arrange for Mr Allanson to come and fix the Attaché problem he had identified but he was not available until January 2011. Mr    Olson considered he had no option but to stay with CA Management. Mr Allanson was the only person who could extract the information for the auditors.

    The documents in exhibit 2, volume 1, tabs 30, 31 and 32 taken on their own are unclear. The reason for Mr Allanson coming in in January 2011 was amended from the task of fixing Attaché to, in addition, assisting the auditors with the audits. The emails in these documents relate to Mr Allanson’s attendance to assist with the audits.

    There is an abundance of evidence that the Attaché problem was a significant problem, and that it had a massive impact on the financial returns. In fact, Ms Jowett-Blinman accepted that she had opined that the Attaché problem was the only reason for the WA Branch’s compliance issues.

    The auditors prepared the accounts and any time they spent on this as well as doing the audits was clearly additional resources.

Alleged Contravention 3 – failure to properly resource preparations in February 2011

79    Mr Olson contends:

    The third alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would, at February 2011, have “increased the resources dedicated to preparing the 2010 report so that it could be lodged as soon as possible”. It is not the “failure to properly resource preparations” as now is contended in the Commissioner’s outline of submissions.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence. There has been no proper examination of the full circumstances with respect to the Attaché problem by the Commissioner and the significance of the problem and more importantly how it could have been fixed has been completely overlooked and misunderstood by the Commissioner. The documentary evidence has been presented in a manner that is most unfair. He denies the facts alleged.

    As evidenced by tab 30 of the Commissioner’s tendered documents, Mr Olson had expressed concerns to the auditors and instructed them to sort out the earlier reports. The WA Branch reports had to be done after the WA Union reports; and each year’s reports had to be finished before the next one could be done.

    There was still no sign of any particular fuss by the Commissioner. It continued to condone the lateness of the reports. It is not suggested that the situation was not serious, it was. But, by this stage clearly Mr Olson had instructed those with the ability and skills to get the returns done, to do exactly that. This conduct was entirely reasonable. Not only this, he had engaged Mr Allanson to work on the Attaché issues and more specifically, the work required for the audits which would necessarily precede the finalisation of the returns, and relied on Mr Allanson and the auditors to do the work.

    He denies that any delays occurred in relation to the provision of information to the auditors.

    One of the propositions put by the Commissioner in his case was that there were delays in the provision of information to the auditors. By evidence presented largely in exhibit 6 and other documents in exhibit 15, it is evident though that responses were provided in a timely way. Furthermore and without it being a matter of blaming anyone, it is also evident that Ms Jowett-Blinman herself was responsible for some delays in the finalisation of the audits. When evidence of delays she caused was put to her she was unable to contradict it.

    Nevertheless, Ms Jowett-Blinman accepted that she herself had previously stated that the Attaché problem was the only reason for the delays with the financial returns for 2010, 2011 and 2012. Furthermore, she did not make any recommendation to the WA Branch that additional resources be engaged when she had the opportunity to do so.

    As to the assertions that instructions were not able to be obtained in the Commissioner’s submissions, there is ample evidence on the documents of timely responses being provided to the auditors’ questions and the contention should be rejected that there was a problem of this type.

    There is also evidence from both Mr Olson, Mr Allanson, and Ms Jowett­ Blinman that communications between them were not all in the form of emails. See also the summary of events in Mr Olson’s affidavit.

    There is insufficient evidence of the circumstances at the time for the Court to be able to conclude that Mr Olson would have been “jolted” in any way to urgently increase resources. There simply was not the urgency the Commissioner now asserts there was. To the extent the Commissioner says there was, he is incorrect.

    The Commissioner’s case proceeds as if there was no Attaché problem that needed to be rectified, and to the extent that it does so, it misunderstands the circumstances entirely.

Alleged Contravention 4 – failure to properly resource preparations in July 2011

80    Mr Olson contends:

    The fourth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased the resources in July 2011. The Commissioner pleads no specific particulars.

    The Commissioner has not pleaded a “failure to properly resource preparations in July 2011” as he contends for in his submissions.

    There has been no proper examination of the full circumstances with respect to the Attaché problem by the Commissioner, and the significance of the problem and more importantly how it could have been fixed has been completely overlooked and misunderstood by the Commissioner. It is worth mentioning again at this juncture that the documentary evidence has been presented in a manner that is most unfair.

    Alleged contravention 4 continues to be denied. Again the “urgency” contended for by the Commissioner is overstated and out of proportion to the reality of the circumstances at the time; clearly this sense of urgency did not exist for the Commissioner at the time.

    In reply to the Commissioner’s submissions, Mr Allanson came in whenever he was available. It is really beside the point whether he was there “sporadically”, full-time, or part-time. Mr Olson had already by this stage decided to stay with CA Management and follow Mr Allanson’s advice, reasonably, as he was the expert. Ms Papantoniou was directed to assist, and relieved of other duties. He had used the maximum available resources to correct the Attaché problem.

    There is absolutely no evidence put by the Commissioner to suggest that it would have been apparent to Mr Olson that the resources were inadequate. Again, this notion of “adequacy” arises and is at odds with the Commissioner’s pleaded case. It is an artificial proposition unsupported by any evidence and with no basis in the Commissioner’s pleadings. In any event it cannot be said that the resources were inadequate when they were the maximum available.

    There had been some delays at this time by Ms Jowett-Blinman; and the auditors were liaising with the Fair Work Commission.

    The reality is that there was not anyone else to be able to be brought in. They would have required training in Attaché. Special expertise was required. Mr Olson had in the past even attempted to engage his personal accountant without success.

    There is no evidence put by the Commissioner to assist to identify where these proposed additional, “adequate” resources were to come from. And of course whoever they were, they would need to be expert in Attaché. An analogy is that if you have a plumbing problem with a leaking tap and it is not fixed by your plumber, you may think of replacing the plumber. The problem here, though, applying the same analogy, is that the plumber would need to have expertise with the particular type of tap, in this case replace “plumber” with “accountant” and “leaking tap” with “Attaché”. Of course it would in fact be a preferable option to stay with the professional with relevant expertise to get the problem solved and solved properly. You need the Attaché plumber.

Alleged Contravention 5 – failure to properly resource preparations in January 2012

81    Mr Olson contends:

    The fifth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the 2010 and 2011 reports in January 2012.

    The Commissioner has not pleaded a “failure to properly resource preparations in January 2012” as he contends for in his outline of submissions.

    There are no particulars provided for this alleged contravention and it continues to be denied.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    Furthermore, by January 2012 resources had been increased and work was being done to correct the Attaché issues and lodge accurate accounts.

    There has been no proper examination of the full circumstances with respect to the Attaché problem by the Commissioner and the significance of the problem and more importantly how it could have been fixed and this issue has been completely overlooked and misunderstood by the Commissioner. It is worth mentioning again at this juncture that the documentary evidence has been presented in a manner that is most unfair.

    In response to the Commissioner’s submissions, it should be noted that the Attaché problem was an evolving one, as is evident from exhibit 2, tab 97. The words of Mr Allanson in that email are telling. “2009/10 has been a horrible task”. “It’s all very messy and taking a lot of time to sort it out”. “I have spent some time with Ioanna trying to ensure these issues are corrected in the 2011- 2012 database”. “The main areas of ‘mess’ are the fixed assets and the GST records”. “Will be here 2 - 3 days per week at least until we are on top of it all”. Clearly these words indicate the significance of the problems with Attaché and the work continuing towards their resolution.

    Again the Commissioner overlooks that any time from Mr Allanson is additional time and therefore additional resources towards the problem.

    Notwithstanding the Attaché problems and Mr Allanson’s obvious interest in fixing them, Mr Olson could not control his or any other external consultant’s leave and it is unreasonable to criticise him in this respect.

    Ms Jowett-Blinman in cross examination accepted that between 2010 and 2013 there was a progressive increase in the auditing staff who were involved with the preparation and then audit of the accounts. Clearly, this is also an additional resource.

    If the Commissioner contends that there ought to have been a cumulative increase in resources, this contention should be rejected.

    It appears to be the Commissioner’s case that the only resources he contends for (illusory as they are), that would satisfy his arguments, are those that could get the returns in on time, at that time, and there is simply nothing in the Commissioner’s case to support this.

    Nor is there any evidence from the Commissioner that this would have made any difference.

Alleged Contravention 6 – failure to properly resource preparations in April 2012

82    Mr Olson contends:

    The sixth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the 2010 and 2011 reports in April 2012. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    It is apparent from the Commissioner’s proposed documents at tabs 30, 92 and 93 that the auditors had carriage of the communications with Mr Pfeiffer between December 2010 and March 2012. Mr Olson undertook inquires in March 2012 and relied on those doing the work, the auditors, to negotiate a timetable for the lodgement of the returns. There was no sense of imminent prosecution or enforcement, and the Commissioner continued to condone even more late reports. In fact, communications with Mr Pfeiffer were more concerned, as was Mr Olson, with getting things up to date. All the while, work continued on in relation to the rectification of the problems with the accounts and audits as soon as they could possibly be done.

    In response to the Commissioner’s submissions, it should be noted that Mr Olson gave his best estimate to Mr Pfeiffer of the timetable based on advice he obtained from his advisors.

    Note also that Mr Olson himself had not been in touch with Mr Pfeiffer since December 2010. The auditors had been dealing with him.

    Clearly Mr Olson’s expectations as set out in his timetable were sent on to Ms Jowett-Blinman. And Mr Olson’s affidavit explains that it was on the first working day after his timetable proposal that the returns were lodged.

    The response to this lodgement was benign. That response is reflective of the communications between Mr Olson and Mr Pfeiffer, polite, benign, and with no sense of concern or urgency. At this time there had been five years of late returns and no sign or indication of any prosecution by the Commissioner.

     On the very same day, Mr Olson rearranged staff to accommodate and assist the ongoing audits.

    Clearly at this stage the additional resources of Mr Allanson and Ms Jowett­Blinman and her ever increasing team were getting on with fixing the accounts.

    In this period there was a loss of 12 staff.

Alleged Contravention 7 – failure to properly resource preparations in July 2012

83    Mr Olson contends:

    The seventh alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in July 2012. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations at that time.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    By this stage, work was continuing in accordance with the plan, to get the reports done as soon as possible. Mr Olson continued to rely on the assistance and expertise, which he did not have himself, of Mr Allanson and the auditors to bring the accounts up to date; he was never asked for additional resources. The condonation continued, with no action for the late reports for financial years 2006, 2007, 2008, 2009, 2010 and 2011. There was no prosecution, no enforcement, and no investigations into the circumstances. He could not control the holiday plans of the auditors nor of Mr Allanson. Things were going according to plan – the plan remained to get the problems sorted out and the accounts up to date.

    At this stage a decision had been made and the decision did not change.

    Giving due consideration to the circumstances, it is incorrect to say that a reasonable person in Mr Olson’s position in the organisation’s circumstances and who had the same responsibilities would do what the Commissioner asserts.

    In response to the submissions of the Commissioner, it is evident from exhibit 2, volume 3, tab 139 that a large amount of information required related to matters that Mr Allanson alone could answer, that is, fixed assets and business activity statements, both of which had been particularly difficult to fix.

    By July 2012, Mr Allanson continued to work on the fixed assets.

    Whilst Mr Olson could not control the timetable of either Mr Allanson or Ms Jowett-Blinman, there is no question that by this stage, Ms Jowett-Blinman, Mr Allanson, Binni Shah, Annie Zhang, Orla Clancy, Cameron Povey, and Ms Terkildsen were all working on fixing the accounts and audits.

    The Commissioner cannot seriously contend that additional resources were not added.

Alleged Contravention 8 – failure to properly resource preparations in November 2012

84    Mr Olson contends:

    The eighth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in November 2012. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations at that time.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    Importantly and as evidenced, communications between Mr Olson and Mr Pfeiffer were based upon a timetable he pressed for and was advised could be achieved by the experts doing the work. There was still no prosecution, no investigation, and no sign of any. Work continued as best it could to get the problems resolved and the accounts up to date.

    In response to the Commissioner’s submissions, throughout May, June, July, August, September and October work continued by the auditors and Mr Allanson on fixing the problems.

    Clearly Mr Olson had hoped at this time to have drafts by November 2012, and he had communicated to Mr Allanson that he wanted drafts by November 2012.

    Work continued on the accounts.

    Contributing to the issues confronting Mr Olson during the period August 2012 to March 2013 was a bitter industrial dispute with the Western Australian state government including a parking campaign for members.

    Nevertheless, Mr Olson was aware that a team of five auditors was to be coming in January 2013.

Alleged Contravention 9 – failure to properly resource preparations in December 2012

85    Mr Olson contends:

    The ninth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in December 2012. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    Mr Olson continued to rely on the assistance and expertise, which he did not have himself, of Mr Allanson and the auditors to bring the accounts up to date – he was never asked for additional resources. The condonation continued, and there was no action for the late reports for financial years 2006, 2007, 2008, 2009, 2010 and 2011. There was no prosecution, no enforcement, and no investigations into the circumstances. He could not control the holiday plans of the auditors nor of Mr Allanson. Things were going according to plan – the plan remained to get the problems sorted out and the accounts up to date. It is artificial to suggest that because one of the people engaged to work on these issues was going away, you bring in someone else. The reality was, the resources had been increased and that included the additional time and resources of Mr Allanson and the auditors.

    It is trite to say that Mr Olson could not control the leave of Ms Jowett-Blinman. Even if she was going on leave, the course ought not properly be changed. Other staff would have required training. Previous accountants had not been able to manage it.

Alleged Contravention 10 – failure to properly resource preparations in January 2013

86    Mr Olson contends:

    The tenth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in January 2013. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    By January 2013, a vast amount of work and resources had been invested into getting the accounts in order. There is no evidence that the fact of an investigation by the regulator would make the process happen any quicker. Nevertheless, additional resources had been added, directed towards getting the accounts up to date.

    In response to the Commissioner’s submissions, exhibit 2, volume 3, tab 150 contains an email from Mr Allanson, including the following words: “Still battling with 2010-11 as it was an equally large mess (as 2009-10). I have had a brief look at 2011-2012 and it looks a lot nicer and of course 2012-13 is progressing very well with Randi now on top of the day to day processing ...”.

    The email is evidence that the Attaché problem continued to have an effect on the accounts and the statutory returns for the WA Branch even at this stage in January 2013.

    Clearly by his phone call to Mr Pfeiffer, Mr Olson took the issue very seriously and was also aware that there would be a team of auditors coming in January 2013 to work on the audits.

    In this knowledge he gave his best estimate to Mr Pfeiffer as to when the reports would be done.

    Progress was being made and it was not appropriate to change course at this stage.

Alleged Contravention 11 – failure to properly resource preparations in February 2013

87    Mr Olson contends:

    The eleventh alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in February 2013. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    Again, even though the Federal Executive of the ANMF called for urgent lodgement, the work had to be done by those who had been engaged to complete it, as best and as fast as they could to get it done properly. Again there is no evidence to support the contention that this would have made the financial returns happen any quicker.

    It is important to note that in the first weeks of February 2013, there was a significant industrial campaign going on for the 15,000 members in the public sector involving industrial action.

    Nevertheless, work continued on the accounts with Mr Olson, entirely reasonably, relying on Mr Allanson and numerous auditors to get the work done.

    The additional resources had been arranged as recommended and a steady course followed to get the accounts in order.

    By this stage there were numerous auditors also engaged.

Alleged Contravention 12 – failure to properly resource preparations in March 2013

88    Mr Olson contends:

    The twelfth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in March 2013. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    But in March 2013, a very significant event occurred, the regulator rejected the 2007, 2008 and 2009 reports (an unprecedented rejection given prior reports had all been the same). This naturally took attention away from the finalisation of the reports and the regulator’s staff even advised Mr Olson to consider waiting before lodging the 2010 and 2011 reports, having regard to the rejection of the earlier reports.

    Importantly, after the letter from Ms Joanne Fenwick was received, it had to be dealt with including discussions with the auditors and redoing the entire account preparation, presentation and lodgement procedure which itself took time.

    All communications with Mr Pfeiffer were done after consultation with those charged with doing the work. Mr Olson gave timetables; they were not followed.

    In response to the Commissioner’s submissions, it must be noted that Mr Olson spoke with Mr Pfeiffer to keep him up to date.

    Work continued on the accounts.

    On 20 March 2013, Mr Olson received an email from Mr Sam Lynch. This email said: “You may wish to await further correspondence on how best to prepare the reports prior to their lodgement”.

    The email refers to the investigation of the late reports by the Commissioner of the 2010, 2011 and 2012 years.

    Notwithstanding any other suggestions from the Commissioner that the reports be lodged, here is clear evidence of Mr Olson being told to wait before lodging them. There is no other explanation for the content of the email.

    Whilst it is correct that the letter referred to in the email arrived the next day, the consequences of that letter had ramifications for the lodgement of the 2010, 2011 and 2012 years, in that the recommendations made by Ms Fenwick had to be discussed with the auditors, and then with Ms Fenwick, and then any amendments to the accounts had to be made and then the accounts had to be audited again and then had to follow the required steps prior to lodgement. Those steps are able to be viewed on the back page of exhibit 2, volume 1, tab 13 and require the financial report to be prepared; a committee of management meeting to consider them; an audit to be done; the auditor’s report to be provided to the reporting unit; the report to be provided to members; and then the report to be presented again to a committee of management report all before lodging.

Alleged Contravention 13 – failure to properly resource preparations in May 2013

89    Mr Olson contends:

    The thirteenth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in May 2013. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    Mr Olson’s conduct can hardly be described as indifferent or casual.

    The roadblock of concerns raised by Ms Fenwick in relation to the 2007, 2008, and 2009 reports, combined with Mr Lynch’s recommendation that Mr Olson await further correspondence before lodging the 2010, 2011 and 2012 reports and the required action as a result of Ms Fenwick’s concerns (new accounts to be prepared; new audits to be done) did not stop work continuing and it is incredulous that the Commissioner fails to appreciate that now there were eight people in addition to whatever help Mr Olson himself could provide, working on the accounts – clearly additional resources.

Alleged Contravention 14 – failure to properly resource preparations in July 2013

90    Mr Olson contends:

    The fourteenth alleged contravention is that a reasonable person in the position of Mr Olson in the organisation’s circumstances and who had the same responsibilities would have increased resources in relation to the lodgement of the returns in July 2013. It is not, as contended for in the Commissioner’s submissions, the “proper resourcing” of preparations.

    The alleged contravention is based on the patchwork of witness evidence the Commissioner has been able to present and the selective presentation of documentary evidence.

    From 2013 onwards, the Attaché software has been replaced. All reports have been lodged on time. The reports from 2017 are progressing well and will also be on time. CA Management are still used and the staff allocations for doing the accounts that allow the reports to be in on time is one half of one full-time equivalent with CA Management used on a consultancy basis.

    Clearly on the evidence, significant progress had been made, resulting in the 2010 and 2011 reports being lodged on 10 July 2013. This can only be viewed as progress in light of the problems that had been experienced with Attaché. By this time, the WA Branch was almost finished with the installation of Triumph software to replace Attaché.

    As to Ms Terkildsen’s illness, refer to Mr Olson’s affidavit. It was not clear how long she would need off. She returned and then fell sick again.

Mr Olson’s response to the alternative case

91    Mr Olson submits that the evidence shows that steps were taken and resources were increased and, in effect, that his responses to the 14 separate allegations answer the alternative case put.

92    As to alleged “undertakings”, Mr Olson submits:

    The optimistic best estimates provided by him to Mr Pfeiffer fall short of “promises” or “undertakings” and should be characterised properly as best estimates.

    Mr Olson continued to rely on his advisors in circumstances where the problems that had initially been identified took longer to resolve than initially anticipated.

    Mr Olson clearly kept in communication with Mr Pfeiffer, and continually informed himself of progress.

    In no way was Mr Olson negligent; he had relied and was entitled to rely on the persons he had engaged who had appropriate expertise.

    There is no evidence whatsoever of any lack of sincerity on Mr Olson’s part and no basis for such accusations.

93    As to purported “reasons” attributed to him, Mr Olson contends:

    The assertion made by the Commissioner that the finances were not a priority for Mr Olson cannot be accepted, as it is baseless.

    Mr Olson was neither an accountant nor an auditor and had a range of duties to attend to in his position as elected Secretary.

    The holiday units were clearly a priority due to members’ concerns raised. It is not for the Commissioner to question what Mr Olson was doing, or what his responsibilities were. They are simply part of the mix of the relevant circumstances. But of course Mr Olson was not only attending to the holiday units but also his other responsibilities and he could not do the finance work himself. It is nonsense to suggest he could do anything himself by being in the office.

    Mr Olson also had other matters including the industrial campaigns to attend to. It is not for the Commissioner to offer judgement on Mr Olson’s duties; they are his duties howsoever they became such. They are obviously included in the circumstances.

    Mr Olson’s duties including the members’ holiday units were by no means farcical. They were clearly real issues. Nevertheless, Mr Olson was contactable and available at all times when in Margaret River by phone and email.

    Realistically, not being an accountant or an auditor, it is difficult to see, when all things are considered, how Mr Olson can be criticised for attending to his other duties including addressing the risk of the holiday units making a loss when he had engaged and relied on professional advisors to deal with the accounting issues.

    The proposition that the financial preparations were a chore is rejected entirely and is baseless. There is no evidence of this at all.

    Mr Olson was wary (or gun shy) of standing over anyone or applying pressure to staff or engaged professionals as a result of previously having been alleged to have bullied staff, resulting in him being charged and having a case brought against him by Worksafe WA in 2007, which failed. Furthermore he was reluctant to upset those he was relying on to do the work for fear of losing them.

    There is no evidence whatsoever that Mr Olson failed to give the accounting issues the focus he should have.

    The accounts were a priority for Mr Olson, and when it was suggested to him that they were not, his response was that the proposition was “outrageous”. He took it very seriously. It was a priority, and he was desperate to get it done. He gave that impression to others.

    When it was put to him that he had no sense of urgency, he replied that “there was always urgency”.

Consideration

94    In regarding the submissions made by the Commissioner and Mr Olson in respect of each of the alleged 14 separate contraventions and the alternative case point, it is convenient at the outset to deal with a number of discrete points common to each, or most, of Mr Olson’s responses.

95    It is also important to find, at the outset, that the primary facts upon which the Commissioner has based each of the 14 separate contraventions that are alleged, are not contentious. What is contentious is whether Mr Olson’s explanations for why the lodgement of statutory returns in the relevant period support a finding that he was not in contravention of s 285(1).

96    For example, as at July 2010 the WA Branch had three years’ worth of statutory returns outstanding from 2007 to 2009.

97    Also that in July 2010, the deadlines for doing what was required with the statutory return for the most recent financial year, 2009-10, and its lodgement with the Fair Work Commission, were only a few months from expiry.

98    Further, that at best, the audit of the then draft 2006-07 return was only partially complete and the audits of the returns for 2007-08 and 2008-09 appear not even to have commenced.

99    On top of that, there is no disputing that Mr Quinn, the then Finance Manager, had given notice of resignation as of that point and that soon after Ms Papantoniou was assigned to perform part of the role that Mr Quinn vacated.

100    Similarly the primary facts underlying each of the alleged contraventions 2-14, as set out above at [60]-[72], are not in contention and indeed are established by the evidence, and I proceed on that basis. As I have just said, the question is whether Mr Olson’s explanations for why the WA Branch was late in lodging the relevant returns mean he did not contravene s 285(1).

101    While the Commissioner’s pleading endeavours to break down the three financial years concerned into 14 particular occasions upon which a reasonable branch secretary should have allocated further resources to cause things to be done, I consider it is the failure of Mr Olson, over the whole of the three year period, to ensure the timely preparation and lodgement of the statutory returns, that constitutes a single contravention. Thus I find the alternative case put by the Commissioner is made out.

The pleading point

102    When it comes to Mr Olson’s response that the justification for delays and failures to lodge statutory returns on time are to be found in the evidence, the question is what is the proper construction or understanding of what he did, and in particular, why and on what basis he acted at material times.

103    The first response provided by Mr Olson to each of the 14 alleged contraventions falls, in one place or another, under the category of no particulars having been provided by the Commissioner and the Commissioner seeking, in the final submissions, to go beyond the pleaded contravention of failing to “increase resources” to a complaint of failing to allocate “proper” resources. It is suggested the latter constitutes a completely different proposition to the former.

104    In my view, appropriate particulars of allegations pleaded were provided to Mr Olson by the Commissioner where they were requested. In any event, the case put, including the materials provided for the purposes of the hearing more than adequately outlined the detail of the case being put against Mr Olson. There is nothing in that complaint.

105    Nor, in my view, is there anything in the complaint that the substance of the case pleaded against Mr Olson in respect of each of the 14 alleged contraventions changed at any material time from before the commencement of the trial to the end of the trial. There is no material difference to the two propositions put as to the failure to increase resources, to enable what needed to be done, to be done, or the failure to allocate “proper” resources to ensure that everything that needed to be done was done, to enable the statutory returns that were long outstanding, and needed to be lodged in each of the relevant financial years, to be completed.

106    Those “pleading points” raised by Mr Olson are therefore rejected.

The “selective” case point

107    The second general response made by Mr Olson, which may also be immediately dealt with and rejected, is the generalised complaint that the alleged contraventions are arbitrary and artificial and are reliant upon selective, fragmented and an incomplete picture of the circumstances of the organisation and in each case involves looking at what happened with hindsight.

108    That is more in the nature of a submission having regard to the evidence and not a complaint that can be judged separately as a standalone proposition. It may be that Mr Olson can make out that submission on the facts.

109    However, as a more general proposition, I should say that if the complaint is intended to suggest that the regulator has unfairly brought a proceedings against Mr Olson and, as a forensic exercise, has chosen only to present some information while withholding other information and, as a model litigant, has failed its duties in the prosecution of the case against Mr Olson, then I have seen nothing in the presentation of the case and the nature of the evidence adduced at trial, to support it.

110    Indeed, the materials before the Court are quite voluminous. There will always be circumstances, particularly in relation to a regulator prosecution, where some materials that one party or another believes were overlooked, may be produced.

111    I reject the proposition, to the extent to which it is pressed, that the regulator has unfairly maintained the proceeding, particularly at trial, against Mr Olson in such a way as to constitute anything like an abuse of process.

112    This second generalised response is therefore rejected in relation to each of the 14 alleged contraventions.

The “condonation” point

113    The third general response put to both the 14 separate contraventions alleged and the alternative case, is that at all material times, from the commencement of the three year period in July 2010, the regulator condoned the delays for which the WA Branch was responsible in causing the lodgement of the statutory returns and that it thereafter continued to condone the delays and failure to lodge the required statutory returns.

114    I reject this response out of hand.

115    I have set out in my opening observations some references to the condonation issue. I take it to be a point put to support a submission that, if the attitude of the regulator at material times is properly taken into account, then a reasonable branch secretary would not have acted with any greater expedition in causing the statutory returns to be lodged, than Mr Olson actually took.

116    As a matter of fact, I reject the submission that the regulator was guilty of any condoning of the delays or the failure to lodge the statutory returns when and as required.

117    In his submissions on this topic Mr Olson complains that the Commissioner waited until such time as the WA Branch reports were up to date before commencing a prosecution.

118    He further submits that the reality is that a number of standard bureaucratic letters were sent to him with no follow up for years and that he experienced a facilitative, not punitive, approach from Mr Pfeiffer. He says he had no impression of pressure from Mr Pfeiffer. He refers to correspondence which he says shows the tenor of the communications.

119    He also submits that a lack of attention to enforcing the regulatory requirements is well understood. (I note in passing that Mr Olson made certain submissions about events post-dating the issues in this case at [109] and [110] of his reply submissions. For that reason, I do not regard them.)

120    He referred to some communications as merely friendly reminder letters.

121    In my view, Mr Olson has misconstrued, perhaps because of his own idiosyncratic approach to his dealings with the regulator, what the regulator was communicating to him at material times.

122    By contrast, as the Commissioner submits, Mr Olson’s interactions with Mr Pfeiffer and the correspondence he received and sent in connection with the reporting defaults, paint a clear picture. Mr Olson’s ongoing failure to rectify the faults was putting the WA Branch in danger of legal proceedings.

123    The Commissioner reasonably refers to Mr Olson’s evidence in cross-examination at transcript pp 188-189.

124    In short, I accept that Mr Olson’s position at material times was that, unless he was given an ultimatum that proceedings were to be commenced against him, then he was not being under any relevant pressure from the regulator to meet the regulatory requirements of filing the statutory returns.

125    While it is the case that not until January 2013 were steps taken to investigate or prosecute contraventions of the WA Branch’s reporting obligations, that is a long way from saying the regulator condoned those contraventions.

126    Mr Olson received many communications, some of them described as friendly reminders or not, that made it clear that the WA Branch was in non-compliance.

127    I consider that the regulator did not, at any time, condone the WA Branch’s non-compliance with the need to file the statutory returns. Mr Olson has chosen to interpret a lack of formal prosecution as condonation of the delinquency. No reasonable branch secretary of the WA Branch in such circumstances could have considered that the regulator was not insisting on the need to comply with the obligation to file the statutory returns; or that, in effect, Mr Olson could set his own timetable as to when those documents should be filed. The simple position is that, at all material times, the WA Branch remained under a formal obligation to lodge its statutory returns.

128    I reject entirely the proposition that at any time during the relevant three year period a reasonable branch secretary could have proceeded on the basis that there was no question of the WA Branch being in non-compliance of its reporting obligations because the regulator had effectively condoned that continuing position.

129    To find otherwise or to think otherwise involves a complete misconstruction and misunderstanding of what the regulator said and did at material times.

130    I thus reject the condonation argument in relation to each of the 14 alleged occasions of contravention and the alternative case put.

Findings as to the events from July 2010 to July 2013.

131    In my view, the regulator at all material times both before and after July 2010, was doing its best to cajole Mr Olson to meet the statutory deadlines. It may be said that it took a “line of least resistance”, at least initially, in the hope that the statutory returns would be filed sooner rather than later. By July 2010, Mr Olson still had not caused the returns to be filed. At that point Mr Quinn left the organisation. Mr Olson needed a competent person or competent people to take on the task. They could have been employed internally within the organisation, or sourced from outside it, as consultants.

132    What happened is that Mr Quinn was not replaced by someone with skills like his. Rather, Ms Papantoniou was brought in to perform some of those exercises. Despite Mr Olson’s assertions to the contrary, she did not have the professional qualifications or the professional experience needed to do the job that Mr Quinn had previously performed.

133    The suggestion that someone who had taken one accounting subject in a tertiary course, but otherwise had worked in an entirely different customer related area before being asked to take on bookkeeping duties, should be treated as appropriately skilled, to replace Mr Quinn – as Mr Olson effectively contends in the case of Ms Papantoniou – beggars belief and must be discounted.

134    As the evidence to be referred to later indicates, when Mr Allanson was soon enough engaged as an external consultant to help solve the Attaché and related problems, it was a lack of training and a lack of protocols within the organisation that were identified by him as reasons why Ms Papantoniou effectively pressed the wrong button that caused the batch problem within the Attaché system, that needed to be resolved in order to help get the statutory returns in order and lodged.

135    The submission that Ms Papantoniou and Ms Terkildsen had received all the training they needed, effectively to replace Mr Quinn, is without foundation.

136    In my view, it does not involve any hindsight to see that, as of July 2010, Mr Olson failed to realise, as a reasonable branch secretary would have, that the time for serious action had arrived to get the WA Branch’s reporting issues in order, and to allocate proper resources to get the required statutory returns completed without further delay. I accept the submission made on behalf of the Commissioner that the time had arrived in July 2010 for Mr Olson to realise that a “business as usual” approach to dealing with the financial matters leading to the completion of financial statements and the filing of statutory returns, which characterises the period prior to July 2010, was not good enough. There were three years’ returns outstanding as of that time. Mr Quinn had left the organisation. The people Mr Olson assigned within the WA Branch to undertake the tasks that Mr Quinn was previously responsible for, were not appropriately skilled or trained to complete the tasks he had undertaken. A more substantive and realistic response to the challenges then facing the WA Branch was called for. For whatever reason, that was not provided.

137    While Mr Olson was undoubtedly busy attending to industrial matters, a reasonable branch secretary exercising his responsibilities would have done more to allocate resources to get the statutory returns completed and made this a first order priority; which Mr Olson did not do.

138    I do not doubt that Mr Olson believed he would be given more time by the regulator to get the WA Branch’s house in order. But, in my view, that was but his subjective belief and not one that a reasonable branch secretary, in all the circumstances of the WA Branch, was entitled to adopt. The patience of the regulator plainly had been tested. The time for action had arrived and while Mr Olson does not seem to have recognised that, a reasonable branch secretary in the circumstances would have.

139    I will deal below with Mr Olson’s “defences” of reliance on others and his exercising of “business judgement”. I do not find them made out.

140    Then in October 2010, Mr Olson was alerted to the Attaché batching problem. Mr Olson’s response is that discussions about the Attaché software problem did occur in October 2010 and a “plan” was put in place to fix the problems, but it could not be implemented immediately.

141    He says that it is incorrect to say that a reasonable branch secretary in the WA Branch’s circumstances at that time would have immediately engaged Mr Allanson or one or more additional persons to work on fixing the Attaché problem so the 2010 report could lodged on time.

142    In my view, having regard to the overall WA Branch, a more significant response to the situation was required to the reporting challenge than proceeded and Mr Olson gave to it. The Attaché issue, on top of the loss of Mr Quinn, required a well-developed strategy, but it received but a tepid one from Mr Olson. He appears to have considered that the regulator would accord all the time he needed to eventually resolve the default in lodging returns.

143    In my view, objectively speaking, a reasonable branch secretary, in the circumstances of the WA Branch at that point, given the existing problems in meeting the statutory return lodgement requirements for the three previous reporting years, would have moved to deal with that issue as a first priority. There was no employee at that point with the knowledge and experience to give sensible advice and recommendations about the Attaché problem. Something should have been done much sooner than it was. Bringing in Mr Allanson to advise and help as of December 2010/early 2011, was too delayed a response.

144    In my view, the evidence shows that Mr Olson, as of February 2011, was adopting, as previously put, a “business as usual” approach. Questions from the auditor were being raised and responded to with anything but urgency.

145    Mr Allanson had been brought in in early 2011, for a period, to work on the Attaché issue, and to oversee the work of Ms Papantoniou and others.

146    In the circumstances I consider that Mr Olson was entitled, once Mr Allanson was engaged, to await the steps being undertaken by Mr Allanson to resolve the Attaché problem. A reasonable branch secretary would have so acted. I accept Mr Allanson’s evidence as to the reasonableness of the options he then considered available to dealing with the Attaché and the batching problem.

147    At that very point, had Mr Allanson been able to resolve the Attaché issues, perhaps the then issues that had constrained the ability to lodge the statutory returns on time might have been significantly advanced. The fact that they were not resolved for some time does not mean that steps being taken, as of February 2011, were inadequate.

148    The trouble is, however, that the substantive problem with completing the statutory returns was merely put “on hold” at this point; and continued on following the expiration of Mr Allanson’s primary engagement in early January to early March 2011.

149    As a result, by the period from March through July 2011, with Mr Allanson only engaged on an occasional basis, and Ms Papantoniou continuing to provide some assistance while continuing her bookkeeping tasks, the time had arrived, without doubt, for Mr Olson to retain additional personnel, either internally within the organisation, or from external sources (such as, or like a Mr Allanson), but he did not do so.

150    I do not discount at all the factors that led to the Attaché problem. But to accord to the Attaché batching problem the significance that Mr Olson seeks to attach to it, is to overstate that problem and how a reasonable branch secretary in the circumstances of the WA Branch, would have set about resolving that problem. The batching issue was capable of resolution, but it was not resolved for some two further years when another software system was obtained to replace Attaché.

151    The Commissioner’s case is, and I accept, that rather than allow the situation to move along in the way that he managed it, it should have been more obvious than ever to Mr Olson that he needed to deploy additional resources as of July 2011 to ensure the 2009-10 general purpose financial report and the pending deadline in relation to the equivalent material for the 2010-11 financial year could be completed and prepared in a timely manner.

152    As of January 2012, Mr Olson contends resources had been increased and work was being done to correct the Attaché issues and to lodge accurate returns. He says that the full circumstances surrounding the Attaché problem and its significance and how it could have been fixed have been overlooked and misunderstood by the Commissioner.

153    In my view, however, as of January 2012, the failure of Mr Olson, the Branch Secretary, to ensure that adequate resources had been allocated for the timely preparation and lodgement of the various outstanding and impending statutory returns, remained current. He needed at this point urgently to deploy additional resources to overcome the identified problems that he had faced for some time.

154    To state as much is not to discount that there were difficulties with the Attaché system. But as I have stated above, Mr Olson seeks to lay the blame, effectively, at the feet of the Attaché system and, in effect, to contend that his duty, as Branch Secretary, to cause the required work to be done and the statutory returns to be lodged, was suspended while Mr Allanson – now working part-time – endeavoured to resolve it. I reject any such proposition.

155    The fact of the matter is that Mr Olson continued at this point to fail to direct sufficient resources to the problems facing the WA Branch in order to get those issues resolved as a first priority issue, given how long-standing the difficulties were, as a reasonable branch secretary in my judgement would have done.

156    As of April 2012, the auditors had been communicating with Mr Pfeiffer, at the regulator and, from Mr Olson’s perspective, they were undertaking a timetable for lodgement of the returns. He says there was no sense of imminent prosecution or enforcement, and the Commissioner “continued to condone even more late reports”. He says that Mr Pfeiffer was more concerned, as he was, with getting things up to date. He says everything was being done that could “possibly be done” to get the accounts and audits into order.

157    I do not accept Mr Olson’s explanation for the continued delay in the proper resourcing of preparations for the 2010 and 2011 reports in April 2012.

158    At this point, the problems with resourcing and completing the required returns that I have found, continued.

159    Mr Olson’s attempt to transfer responsibility for the delays to the auditors is unfounded. He continued to have the responsibility to cause them to be prepared, presented and lodged. His “defence” in this regard is an attempt to abdicate his personal responsibility, as Branch Secretary, to ensure the timely lodgement of the returns, to the auditors.

160    By this time, I consider that Mr Olson, as before, subjectively believed that he was being “allowed” by the regulator to complete the required returns according to his own timetable.

161    It was not an approach that a reasonable branch secretary, in the circumstances of the WA Branch, would have taken. Mr Olson misread the circumstances such that he believed there was no “urgency” and the regulator was not requiring more urgent action of him than he was providing.

162    The substantive justification for delay put forward by Mr Olson in relation to the preparation of the 2010-11 general purpose financial report, and the other statutory returns that were then due and outstanding, is that work was continuing in accordance with his “plan” to get the reports done as soon as possible and that he continued to rely on the assistance and expertise of Mr Allanson and the auditors to bring the accounts up to date. He says he was “never asked for additional resources”.

163    Mr Olson also relies on continuing “condonation” by the regulator of the late reports for the financial years from 2006 through to 2011. As I have found above, there was no such condonation.

164    As to the “plan” to get the 2009-10 and 2010-11 reports done and the reliance upon Mr Allanson and the auditors, as I have pointed out above, these are but instances of Mr Olson abdicating his responsibility to Mr Allanson, in particular, and the auditors, to some extent, in more recent years.

165    While it was entirely expected that the auditors would complete their responsibilities as auditors, and that Mr Allanson within his remit as an external adviser would attend to financial duties, without supervision, it fell to Mr Olson as the Branch Secretary of the WA Branch, as a reasonable branch secretary would have done, to view the circumstances overall, appreciate that the obligation to prepare, present and lodge returns had not been completed for many years as at this date, and realise that the difficulties preventing that from being done were still extant.

166    A reasonable branch secretary would have addressed the need for additional resources, possibly both internal and external, to ensure that the work that needed to be done was approached as a first order requirement. Mr Olson seems to have adopted the approach that the job would eventually be completed, and that the regulator did not really mind when it was completed. As I have found that, in my view, involved a serious misreading of the situation. A reasonable branch secretary in the WA Branch’s circumstances would not have so acted.

167    Mr Olson’s defence of inaction as of November 2012, is that communications between him and Mr Pfeiffer were “based upon a timetable [he] pressed for” and he was advised the work could be achieved by the experts doing the work.

168    Mr Olson again primarily relies on there being “no prosecution, no investigation, and no sign of any” as a reason why he should be excused from compliance with the duties imposed on him as Branch Secretary under the RO Act.

169    Again I fully reject that defence. Mr Olson had no proper basis upon which to think that the regulator was condoning his delays. Any proper assessment of the sequence of dealings with the regulator shows, as I have said above, that the regulator, early on, to some extent may be taken to have opted for a “line of least resistance” in the hope that Mr Olson would cause the required returns to be lodged sooner than later. Then there was the threat of prosecution. The negotiations and discussions with Mr Pfeiffer occurred in that context. There was no condonation of Mr Olson’s delays.

170    As to Mr Olson’s continued reliance on the experts, Mr Allanson continued to be involved in assisting the WA Branch to complete its financial statements and statutory returns. However, the issue in November 2012 was no different from what it had been in the earlier relevant time periods. The delays with the filing of the various returns remained. So did the need, in November 2012, for Mr Olson to cause proper resources to be allocated, as a first order priority, to preparations of the returns. The need to do this remained unaffected by industrial campaigning.

171    Mr Olson also seeks to justify his inaction by saying Mr Allanson did not ask for more resources. Mr Olson was the Branch Secretary. I consider that a reasonable branch secretary in the circumstances of the WA Branch, as they had developed to this point, would have been approaching the question of the continued delays in quite a different way from that in which Mr Olson approached the question. Mr Olson’s subjective assessment was that in the circumstances he would not and should not be penalised for any further delays. His assessment of the position of the regulator was unrealistic. A reasonable branch secretary would have moved to allocate significant resources to ensure the WA Branch’s affairs as a priority without further delay.

172    As of December 2012, the need for accounts and returns to be completed and lodged in a timely fashion was only becoming more urgent by the month, and yet Mr Olson did nothing substantive about remediating the situation.

173    It must have been apparent to him that his earlier “plan” was not resulting in the completion of the tasks at hand.

174    As in each of the previous relevant periods, the subject of the earlier contravention allegations, the situation had, in effect, only got worse by this time.

175    With Ms Jowett-Blinman going on leave with the statutory returns since 2009-10 not completed, as the Commissioner submits, one would expect that a branch secretary, in the circumstances of the WA Branch, would again realise that this was a significant time in which further resourcing was required in order to get the job done – not to be put off in her absence.

176    In January 2013, Mr Olson was given notice that the Fair Work Commission had commenced an investigation into the WA Branch’s apparent non-compliance with its reporting obligations. Mr Olson says he considered that sufficient work and resources had been invested into getting the accounts into order and the fact of an investigation was not going to enable that process to be completed any sooner.

177    In my assessment, however, in January 2013 the situation was such that this was a critical reminder, or should have been another reminder and would have been to a reasonable branch secretary, that additional resources were required by way of additional personnel to ensure the ongoing non-compliance with the reporting obligations could be addressed as a matter of urgency.

178    As before, however, Mr Olson took the view that the work was being done, mainly by Mr Allanson, and nothing further was required. This was an inadequate response by any measure.

179    In February 2013, the Federal Executive of the ANMF called for urgent lodgement by the WA Branch. Mr Olson says the work had to be done by those who had been engaged to complete it, as best and fast as they could get it done properly.

180    The simple fact of the matter was that there was continuing non-compliance at this point. When that resolution was passed by the Federal Executive, it was yet another clarion call to action and for Mr Olson to get the jobs required done by deploying further resources by way of personnel to complete the tasks which had been outstanding for so long. A reasonable branch secretary in the circumstances of the WA Branch would have recognised this, notwithstanding Mr Allanson’s continuing engagement and the industrial campaigning activities of Mr Olson.

181    In March 2013, the regulator rejected the 2007, 2008 and 2009 “draft” returns. Mr Olson says this caused an unexpected and “unprecedented” obstacle in getting the required work on all reports completed and returns lodged.

182    However, the delays and the reasons for them up to that point must be taken into account, cumulatively, such that as of early March 2013 the conduct of Mr Olson in not applying appropriate resources up to that date continued to apply at this point and help explain why amendments became necessary.

183    Nonetheless, even though the accumulated failures continued to be relevant at this point in March 2013, no doubt the rejection of the 2007, 2008 and 2009 reports did further delay the work that was then being undertaken. Taking all factors into account, this particular event may be considered something out of the ordinary, such that a reasonable branch secretary in the circumstances of the WA Branch could not reasonably be called to account for contravention of s 285(1) by reason of such circumstances.

184    By the end of May 2013, however, and given the overall history of non-compliance with the lodgement of returns required under the RO Act, the failure to lodge the returns according to the undertaking given by Mr Olson was conduct in continuing breach of s 285(1).

185    In short, the preparation of the then-outstanding returns plainly was not treated with anything like the urgency that it should have been. A reasonable branch secretary in the circumstances of the WA Branch would have acted urgently to meet the required undertaking.

186    The situation in July 2013 remained the same as in May 2013. The 2011-12 return in particular had not been lodged.

187    The substantive defence advanced by Mr Olson to the continuing default, is that from 2013 onwards the Attaché software had been replaced and all reports thereafter were lodged on time.

188    That, however, is no answer to the question posed, namely, that as of July 2013, while the 2009-10 and the 2010-11 returns were lodged, the 2011-12 return had not been progressed in a material way at that time.

189    Given everything that had occurred up to this point, taking everything into account that had preceded it, Mr Olson continued to fail as of July 2013 to respond with the urgency that a reasonable branch secretary in the circumstances of the WA Branch would have responded, to allocate additional resources to completing the outstanding statutory returns.

190    It is no answer to say that from 2013 onwards, the Attaché software was replaced and all reports have since been lodged on time.

191    I have indicated at various points above that I consider Mr Olson has made more of the Attaché issue than it warrants. He has in many respects, leaving aside the question of condonation by the regulator, sought to lay the fault for his default in lodging statutory returns at the feet of the Attaché software.

192    While there is no doubt there was an issue in the sense that there were around 1,500 transactions that were not properly entered on the electronic system prior to July 2010, neither the evidence of Mr Olson, nor, in my opinion, that of Mr Allanson, substantially explains why it should have taken more than a few months, at the most, to reverse and correctly re-enter into the Attaché system the affected transactions.

193    Nor is there any proper explanation, in my view, having regard to the evidence given, why the 2009-10 and 2010-11 statutory returns were not initially filed until July 2013.

194    I accept the submission made on behalf of the Commissioner that while Mr Allanson brought some skill to the accounting tasks that needed to be completed for the statutory returns to be filed, he was far from being a full-time consultant, dedicated to that task. Schedule 1 to the closing submissions of the Commissioner, the content of which I accept, discloses that Mr Allanson’s engagement between July 2010 and July 2013 oscillated. He worked more hours in January and February 2011 than he had done in previous months. Thereafter, his hours varied, between as many as 92.5 hours in February 2011 to none in September 2011 and without any obvious pattern.

195    Mr Olson relies on the engagement of Mr Allanson, in particular, to show that Mr Allanson’s engagement over the course of three years from July 2010 “increased”. I accept the Commissioner’s submission that in some months it actually decreased.

196    I have little doubt that Mr Allanson’s involvement in the process by which the Attaché problem was to be solved and the accounting needs of the WA Branch were to be met so that the outstanding statutory returns could be filed, was helpful. But, the evidence far from satisfies me that Mr Olson, by deploying Mr Allanson, did all that could have been expected from a reasonable branch secretary, to get the statutory returns completed earlier than they were.

197    I accept the Commissioner’s submissions that, on the evidence, more could have been done, in a shorter period, to resolve the batching problem – that is to say the Attaché issue – and to ensure the outstanding statutory returns were filed at a much earlier time.

198    Ultimately, the Attaché system was abandoned and a new system introduced. Exactly why that replacement arrangement took so long to achieve is not adequately explained by the evidence adduced by Mr Olson.

The “business judgement” defence

199    Mr Olson contends that there were a number of business judgements he made, a number of them preceding the three year period the subject of this proceeding that explain and justify his conduct, so that s 285(2) should apply to excuse him from a finding that he contravened s 285(1).

200    He identifies the occasions of business judgements as follows:

(1)    In 2001, a decision to employ an accountant to oversee financial matters and to deal with the statutory returns.

(2)    In 2008, after prolonged difficulties with the accounts, Mr Olson made the decision to revert to having an “administration officer” deal with the accounts with assistance from CA Management.

(3)    After having issues with CA Management, “decided to stick with them” after consultation with the national head of Attaché and being unable to get a replacement.

(4)    In 2009, made a decision to focus on getting the accounts and transactions and Attaché processing working correctly so the accounts would ultimately be correct.

(5)    During May and June 2009, made the decision to arrange for the auditors to come in and get the reports for 2007 and 2008 up to date.

(6)    In early 2010, decided to provide additional resources to Mr Quinn to skill up another half-time equivalent officer as backup for Attaché.

(7)    In March 2010, decided to employ Ms Papantoniou for that purpose.

(8)    Also in 2010 decided to:

(a)    send both Ms Papantoniou and Ms Terkildsen for training in Attaché;

(b)    authorise the expenditure to allow the work being done by the auditors to get the late returns for 2007, 2008 and 2009 brought up to date;

(c)    rely on Mr Allanson more than had been done during the first half of 2010, to come in more than before to attend to training and Attaché issues;

(d)    replace to Mr Quinn with Ms Papantoniou when Mr Quinn resigned; and

(e)    instruct Ms Papantoniou to contact Mr Allanson as required.

(9)    In October 2010, after the Attaché problem was identified, decided to rely on Mr Allanson’s advice as to how the problem could be rectified.

(10)    Continued thereafter to rely on both Mr Allanson and Ms Jowett-Blinman, along with her colleagues from the auditors Maxim Hall Chadwick, to get the issues sorted out and the reports up to date and rearranged staffing to facilitate continuous improvements.

(11)    Then oversaw the expenditure of approximately $760,000 on the rectification of the accounting issues, including getting the reports up to date and ultimately correct.

(12)    Replaced Attaché with Triumph.

201    I have set out at the commencement of this judgment the terms of s 285(2) of the RO Act.

202    In my view, the business judgement defence does not apply in the circumstances of this case, for two reasons.

203    I am not satisfied that any of the “judgements” on which Mr Olson relies relate to the WA Branch’s operations. They are about the failure to meet the obligation to file statutory returns on time.

204    In any event, as the Commissioner submits, a number of the judgements alleged to have been made concern the period prior to the three year period relevant to this case, when Mr Olson says that he took steps to ensure the financial accounting processes of the WA Branch were in order.

205    Perhaps the most important of the suggested business judgements was in relation to advice of CA Management that Mr Allanson should be engaged for a period to deal with the Attaché problem. I accept the submission made by the Commissioner that Mr Allanson did not work full-time with a view to resolving that problem for six weeks. The invoices from CA Management have already been referred to which falsify that proposition.

206    Mr Allanson worked on the task but his evidence, as the Commissioner submits, does not disclose that he was working to any particular deadline or timetable set by Mr Olson. It appears he was not even aware that the WA Branch was in default of its reporting obligations.

207    I also accept the submission made by the Commissioner that the focus of attention at the point Mr Allanson was engaged was how to best address the accounting crisis that had consumed the WA Branch for some years, and was intensified as a result of the Attaché issue. There is no evidence that Mr Olson explored the measures required to address the WA Branch’s reporting defaults and how then, and in the future, they were to be resolved. In that regard, I accept the submission that there were no measures that he considered and decided not to take.

208    Rather, the evidence shows that Mr Olson simply failed to act, to address urgently steps that needed to be taken to bring the WA Branch into compliance with its reporting obligations. There is no evidence that any measures were considered and ruled out. As the Commissioner puts it, there was no conscious evaluative decision.

209    Rather, in my judgement, what happened is that Mr Olson appreciated that he needed to obtain higher level, skilled accounting and Attaché usage advice in order to improve the capacity of the WA Branch to comply with its reporting obligations. To that end he brought in Mr Allanson with the hope that he would be able to resolve and improve the situation. But he did this with his own subjective understanding or belief in mind that the regulator was “condoning” the historic non-compliance with the reporting obligations, and would continue to do so. Mr Olson plainly maintained that the condonation over the course ensuing three years, in relation to which the allegations in this proceeding relate, was an important explanation of his actions and decision-making. In short, the WA Branch, under Mr Olson’s direction, “muddled along”. There was no “plan” to resolve the issue. Measures were not put up from which a particular measure was rejected and others selected. There was a generalised belief, by Mr Olson, that by the steps he had taken, particularly by engaging Mr Allanson, the Attaché problem would be resolved, the accounting protocols adopted within the WA Union and the WA Branch would be improved, and compliance with the statutory reporting obligations would eventually be achieved.

210    I am not satisfied that s 285(2)(c) of the RO Act has any application in the circumstances of this case.

The question of reliance on Mr Allanson and others

211    I have also noted the question of Mr Olson’s asserted reliance on others. I have referred to the relevant of s 292 above. As I have there indicated, I take the submissions made by Mr Olson to amount to this. That in determining whether a reasonable branch secretary would have done any different from what he did, account should be taken of the fact that he took advice and acted upon the advice of others, in particular, that of Mr Allanson, and the auditors to a lesser extent.

212    However, as the Commissioner reasonably submits, and I accept, there is no evidence to support a contention that at unidentified points in time after late 2010, Mr Olson considered whether to, for example, bring in a firm of accountants to take over from Mr Allanson and immediately prepare, either with Attaché or in some other way, the statutory returns that were outstanding. The evidence rises no higher than that Mr Olson never changed his mind about how best to address the Attaché issue or about how the preparations of the WA Branch’s returns should be left to Mr Allanson and the auditors. In short, Mr Olson did not take ownership of the obvious problem with non-compliance with the reporting obligations, as a reasonable branch secretary in the then circumstances of the WA Branch would have done.

213    In my view, during the course of the relevant three year period, Mr Olson laboured under an obligation to interrogate the success of his “plan” to remedy the reporting defaults. He simply failed to do this, and left to Mr Allanson and the auditors the tasks of doing so in the belief that eventually statutory returns would be prepared and lodged.

Findings of contraventions

214    I find that, on the alternative case put by the Commissioner, Mr Olson contravened s 285(1) of the RO Act throughout the period from July 2010 to July 2013 by his failure to cause the WA Branch to meet its statutory reporting obligations under the RO Act.

Should Mr Olson’s contraventions be excused?

215    Section 315 of the RO Act provides as follows:

315  Relief from liability for contravention of civil penalty provision

(1)      In this section:

eligible proceedings:

(a)      means proceedings for a contravention of a civil penalty provision; and

(b)      does not include proceedings for an offence.

(2)  If:

(a)      eligible proceedings are brought against a person or organisation; and

(b)      in the proceedings it appears to the Federal Court that the person or organisation has, or may have, contravened a civil penalty provision but that:

(i)      the person or organisation has acted honestly; and

(ii)      having regard to all the circumstances of the case, the person or organisation ought fairly to be excused for the contravention;

the Court may relieve the person or organisation either wholly or partly from a liability to which the person or organisation would otherwise be subject, or that might otherwise be imposed on the person or organisation, because of the contravention.

(3)      If a person or organisation thinks that eligible proceedings will or may be begun against them, they may apply to the Federal Court for relief.

(4)      On an application under subsection (3), the Court may grant relief under subsection (2) as if the eligible proceedings had been begun in the Court.

216    Mr Olson submits that if he is found to have contravened the RO Act in any respect, then the Court should relieve him from liability of contravention of the civil provisions under subs (2) on the basis that he has “acted honestly”.

217    In that regard, he submits that it is not in dispute that he has at all times acted honestly and so, if it is considered that any breach of duty on his part has occurred, he ought fairly to be excused from it.

218    It will be noted, however, it is not merely a matter of a person having “acted honestly” that enlivens the power of the Court to relieve a person wholly or partly from any such liability, there is also the question whether the Court, having regard to all the circumstances of the case, considers the person ought fairly to be excused for the contravention.

219    The Commissioner submits, in relation to Mr Olson’s submission, that he should not be excused from liability. The Commissioner notes Mr Olson was an experienced and sophisticated officer of a large, well-resourced organisation, for whose operation he was responsible; that he exercised a significant level of control and power over the business of the WA Branch; and, by his own account, did not want for energy. These points are well made.

220    In my view, it is not appropriate to excuse Mr Olson for the contravention I have found. While the Court should not seek to delineate all of the circumstances in which the power to relieve a person from liability for contraventions should be exercised, the circumstances of this case show a continuing contravention over the relevant three year period to cause the required statutory returns to be lodged. The contravention is not merely a passing or insignificant one, not requiring sanction under the RO Act.

221    The failure to comply with the reporting obligations under the Act are, for the reasons adverted to at [18] above, of considerable significance to the effective operation of the RO Act. Persons who exercise effective control of organisations in the manner that Mr Olson did, at material times, should not be encouraged to think that the reporting obligations can be treated lightly, such that they can easily expect to be excused for their contravention of their obligations. Here, the three year period of the failure of Mr Olson to ensure that the WA Branch got its statutory return obligations in order, should not, in my judgement, be excused in all the circumstances of the case.

222    I would, therefore, not make any order under s 315 of the RO Act relieving Mr Olson of his contraventions of the RO Act that I have found.

Declarations, orders and penalties

223    I will now hear from all the parties as to the appropriate terms of the declarations to be made and on the questions of penalties and costs.

Associate:

Dated:    13 November 2018