FEDERAL COURT OF AUSTRALIA

Registered Organisations Commissioner v Australian Nursing and Midwifery Federation (No 2) [2018] FCA 2004

ORDERS

THE COURT DECLARES THAT:

1.    For the purposes of these orders:

(a)    "Complying Report", in respect of any given financial year, means either:

(i)    a Full Report; or

(ii)    a concise report of the kind described by s 265(1)(b) of the Fair Work (Registered Organisations) Act 2009 (Cth) (RO Act);

(b)    "Full Report", in respect of any given financial year, means a report of the kind described by s 265(1)(a) of the RO Act;

(c)    "GPFR", in respect of any given financial year, means a general purpose financial report of the kind described by s 253(2) of the RO Act; and

(d)    "WA Branch" means the Western Australian Branch of the first respondent.

2.    The first respondent, by the WA Branch's failure to prepare a GPFR for the financial year ending 30 June 2010:

(a)    as soon as practicable after 30 June 2010; and, in any event,

(b)    prior to 29 November 2014,

contravened s 253(1) of the RO Act.

3.    The first respondent, by the WA Branch's failure to provide to its members copies of a Complying Report for the financial year ending 30 June 2010:

(a)    on or before 10 December 2010; and, in any event,

(b)    prior to 5 December 2014,

contravened s 265(5) of the RO Act.

4.    The first respondent, by the WA Branch's failure to present, either to a general meeting of its members or to a meeting of its committee of management, a Full Report for the financial year ending 30 June 2010:

(a)    on or before 31 December 2010; and, in any event,

(b)    prior to 18 December 2014,

contravened s 266(1) of the RO Act.

5.    The first respondent, by the WA Branch's failure to prepare a GPFR for the financial year ending 30 June 2011:

(a)    as soon as practicable after 30 June 2011; and, in any event,

(b)    prior to 29 November 2014,

contravened s 253(1) of the RO Act.

6.    The first respondent, by the WA Branch's failure to provide to its members copies of a Complying Report for the financial year ending 30 June 2011:

(a)    on or before 10 December 2011; and, in any event,

(b)    prior to 5 December 2014,

contravened s 265(5) of the RO Act.

7.    The first respondent, by the WA Branch's failure to present, either to a general meeting of its members or to a meeting of its committee of management, a Full Report for the financial year ending 30 June 2011:

(a)    on or before 31 December 2011; and, in any event,

(b)    prior to 18 December 2014,

contravened s 266(1) of the RO Act.

8.    The first respondent, by the WA Branch's failure to prepare a GPFR for the financial year ending 30 June 2012:

(a)    as soon as practicable after 30 June 2012; and, in any event,

(b)    prior to 20 February 2015,

contravened s 253(1) of the RO Act.

9.    The first respondent, by the WA Branch's failure to provide to its members copies of a Complying Report for the financial year ending 30 June 2012:

(a)    on or before 10 December 2012; and, in any event,

(b)    prior to 4 March 2015,

contravened s 265(5) of the RO Act.

10.    The first respondent, by the WA Branch's failure to present, either to a general meeting of its members or to a meeting of its committee of management, a Full Report for the financial year ending 30 June 2012:

(a)    on or before 31 December 2012; and, in any event,

(b)    prior to 4 March 2015,

contravened s 266(1) of the RO Act.

11.    The second respondent – as secretary of the WA Branch, and by his failure to ensure the timely preparation, circulation and lodgement of the reports that are the subject of declarations 2 to 10 above – failed to exercise his powers and discharge his 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 Australian Nursing and Midwifery Federation’s (ANMF) circumstances; and

(b)    occupied the office of WA Branch Secretary of the ANMF, and had the same responsibilities within the WA Branch as the second respondent,

and, by that failure, contravened s 285(1) of the RO Act.

THE COURT ORDERS THAT:

1.    The first respondent shall pay a pecuniary penalty of $4,400 in consequence of the contraventions described in declarations 2 to 4 above.

2.    The first respondent shall pay a pecuniary penalty of $4,400 in consequence of the contraventions described in declarations 5 to 7 above.

3.    The first respondent shall pay a pecuniary penalty of $20,450 in consequence of the contraventions described in declarations 8 to 10 above.

4.    The second respondent shall pay a pecuniary penalty of $6,630 in consequence of the contravention described in declaration 11 above.

5.    The penalties imposed in accordance with orders 1 to 4 above shall be paid to the Commonwealth of Australia within 28 days of these orders.

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

REASONS FOR JUDGMENT

BARKER J:

1    In my judgment in Registered Organisations Commissioner v Australian Nursing and Midwifery Federation [2018] FCA 1735, I found that, on the alternative case put by the Registered Organisations Commissioner, Mr Mark Olson, as the Secretary of the WA Branch of the Australian Nursing and Midwifery Federation (ANMF) contravened s 285(1) of the Fair Work (Registered Organisations) Act 2009 (Cth) (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.

2    As explained in that judgment, the ANMF had earlier admitted the contraventions of the RO Act alleged by the Commissioner against it.

3    In this judgment I deal with the question of the penalty to be imposed against each respondent.

4    In this judgment I use the same abbreviated expressions concerning the parties and the legislation and other matters that are used in the primary judgment.

5    Following the delivery of the primary judgment, I invited the parties to make submissions about the terms of declarations to be made in the proceedings and about penalties and costs.

6    As to the question of declarations, the parties agree that the declarations proposed by the Commissioner in the Applicant’s Minute of Proposed Orders to Reflect Judgment filed with its written submissions on penalty, are appropriate. I consider those declarations of contraventions by the respondents are appropriate and I will make them.

7    As to pecuniary penalties, the Commissioner submits that the ANMF should:

    pay a pecuniary penalty of $4,400 in consequence of the contraventions described in paras 2 to 4 of the minute;

    pay a pecuniary penalty of $4,400 in consequence of the contraventions described in paras 5 to 7 of the minute; and

    pay a pecuniary penalty of $20,450 in consequence of the contraventions described in paras 8 to 10 of the minute.

8    As against Mr Olson, the Commissioner submits a penalty of between $7,140 and $8,670 should be imposed.

9    In respect of all pecuniary penalties, the Commissioner seeks an order that they be paid to the Commonwealth of Australia within 28 days of the orders.

10    The ANMF specifically agrees with the Commissioner’s propositions concerning the appropriate penalties and reasons for them as submitted by the Commissioner.

11    Mr Olson, in many respects, accepts the penalty submissions made by the Commissioner concerning him, but submits that the appropriate pecuniary penalty in his case should be in the sum of $4,500.

12    In substance, the Commissioner and the ANMF have come to an agreement about the terms of the relief and pecuniary penalties that should be imposed against the ANMF. My task, in these circumstances, is to decide whether the Court should, in effect, sanction that agreement. In broad terms, if I consider that the proposed pecuniary penalties are within an acceptable range, having regard to the admitted contraventions, then I will make orders as agreed.

13    It remains, however, to consider precisely what pecuniary penalty should be imposed against Mr Olson by reason of his contravention on the material facts and having regard to the submissions made by the relevant parties.

Are the agreed pecuniary penalties to be imposed on the ANMF appropriate?

14    The ANFM has admitted nine contraventions concerning ss 253(1), 265(5) and 266(1) in respect of its failure, for the financial years ending 30 June 2010, 2011 and 2012, to prepare and circulate to its members financial reports for the WA Branch in accordance with the requirements of those provisions of the RO Act.

15    At these material times, the maximum number of penalty units increased by amendments to the RO Act.

16    As a result, in respect of the ANMF:

(1)    for the 2009-10 and 2010-11 reporting periods the maximum penalty that could be imposed was $11,000, being 100 penalty units at $110 per unit for each of the six admitted contraventions relevant to those periods; and

(2)    for the 2011-12 reporting period, a maximum penalty in the sum of $33,000, being 300 penalty units at $110 per unit, for each of the first two of the three admitted contraventions in that period; and $51,000, being 300 penalty units at $170 per unit, for the third admitted contravention in that period.

17    As noted above, the Commissioner and ANMF have reached an agreed position in relation to the penalties that those parties submit as being appropriate in the circumstances. Those penalties are said to be based upon there being three contraventions relating to each of the reporting periods, with a single penalty attributed to each period, as explained below.

18    I accept the submissions made on behalf of the Commissioner and accepted by the ANMF (and indeed Mr Olson) that principles governing the Court’s discretion in imposing pecuniary penalties have been discussed in many cases and are well-established. See generally Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2017] FCAFC 159 at [569].

19    Civil penalties are included in statutory regimes for the purpose of protecting or advancing particular aspects of the public interest and, in particular, the public interest in compliance with regulatory regimes. See The Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506; [2015] HCA 46.

20    It is also accepted that assessment of penalty is not an exact science. See NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commissioner (1996) 71 FCR 285 at 290; [1996] FCA 1134; and Commonwealth v Director, Fair Work Building Industry Inspectorate at 504. It is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision, neat arithmetic algorithm or simple mechanical process. See Pearce v The Queen (1998) 194 CLR 610 at 624; [1998] HCA 57.

21    Rather, penalty is to be assessed by an intuitive or instinctive synthesis. See Re HIH Insurance (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler and Others (2002) 42 ACSR 80 at [140]; [2002] NSWSC 483; and Wong v The Queen (2001) 207 CLR 584 at 611; [2001] HCA 64.

22    The Court’s task is to take account of all of the relevant factors and to arrive at a single result which takes due account of them all. This involves taking into account the objective circumstances of the contravention and subjective factors relating to the contravener.

23    It is accepted that careful regard must also be paid to the maximum pecuniary penalty set for each contravention because they have been legislated for, and comparison between the worst possible case and the case before the Court considered, and in that regard used as a yardstick to be taken and balanced with the other relevant factors. See Markarian v The Queen (2005) 228 CLR 357 at 372; [2005] HCA 25.

24    The principal, and probably the only, object of civil penalties is to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the relevant law. See Commonwealth v Director, Fair Work Building Industry Inspectorate at 506.

25    Even though there may be no indication that a respondent will contravene a civil penalty provision in the proximate future, a penalty must be imposed that will act as a reminder to the respondent and the community of the consequences of the admitted contraventions, and this will often be the most significant factor in determining penalty in a particular case. See Australian Competition and Consumer Commission v Telstra Corporation Ltd (2010) 188 FCR 238 at 273; [2010] FCA 790. This can be so even where no loss is caused to the public by the contravention. See Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [57]; [2012] FCAFC 20.

26    It is in these circumstances that factors relevant to the imposition of penalties should be considered, which in this case include the range of factors I will now set out.

Nature and extent of contravening conduct and circumstances in which it took place

27    The entirety of the contraventions which were alleged by the Commissioner against the ANMF are admitted.

28    The ANMF has fully cooperated with the Commissioner and has agreed to the imposition of the penalties.

29    The contraventions by the ANMF are derivative in nature. That is, by the operation of s 305(3) of the RO Act, the contraventions by the WA Branch of the ANMF are taken to be contraventions by the ANMF.

30    The Commissioner submits and the ANMF agrees that, although this does not reduce the ANMF’s culpability, the contraventions and penalty should nonetheless be viewed in that light.

31    In that regard the ANMF, through the WA Branch, was obliged:

(1)    by s 253(1) of the RO Act, as soon as practicable after the end of each financial year, to cause a general purpose financial report to be prepared in relation to the financial year;

(2)    by s 265(5), to provide copies of either a full report or a concise report to members in relation to each financial year, by 10 December following; and

(3)    by s 266(1), to present the full report to a general meeting of members or a meeting of the committee of management, by 31 December following.

32    In respect of each of these three reporting periods the WA Branch failed to meet the deadlines. In fact, the deadlines were missed by a significant period of time and had been since 2006. In relation to the preparation of the general purpose financial reports, the 2009-10 and 2010-11 reports were not prepared until 29 November 2014; and the 2011-12 report was not prepared until 20 February 2015.

33    The failures of the WA Branch to comply with its obligations and the consequent contraventions by the ANMF are admitted by it.

34    These parties also agree that the obligation to prepare the reports required by the RO Act is an important matter in the administration of an organisation registered under the RO Act, such as the ANMF. This is undoubtedly so. See General Manager of the Fair Work Commission v Musicians’ Union of Australia [2016] FCA 302 at [5]. Unless the responsible officers of reporting units take the steps that they are expected to take to comply with the law, 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 organisations. See General Manager of Fair Work Australia v Health Services Union [2014] FCA 970 at [86].

35    The parties concerned agree that the wrongdoing here occurred in the administration of an organisation formed to secure and advance the interests of its members in their working lives, in the sense discussed in the Musicians’ Union case at [23].

36    In my view, as the Commissioner and the ANMF accept the making, keeping and lodging of financial reports are not mere trivial or technical obligations. A failure to prepare, circulate and lodge records as required strikes at the very foundation of a regulatory scheme designed to ensure that registered organisations are managed appropriately and transparently.

37    The ANMF accepts that, by s 305(2)(w) and s 305(2)(zd) of the RO Act, the ANMF is liable for the imposition of penalties as a consequence of its failure to comply with its statutory reporting obligations under the Act.

Any loss or damage sustained

38    The Commissioner submits, and the ANMF agrees, as do I, that the effect of the conduct was that, for an extended period of time, information about the financial position of the WA Branch was withheld from members of the ANMF and other persons.

39    It is the case, however, that this conduct has not caused any specific loss or damage as a consequence of the admitted contraventions.

Any similar previous conduct

40    Although the Commissioner does not submit that the respondents have been found to have contravened any similar provisions previously, the Commissioner does submit that their contraventions must be viewed in light of their conduct which spanned the three reporting periods prior to the periods in question.

41    In this regard, the presentation, provision and lodgement of the WA Branch’s statutory returns for the financial years ending 30 June 2007, 2008 and 2009 also occurred later than was required. In fact, the WA Branch failed to lodge its required reports for six financial years from 1 July 2006 to 30 June 2012 on time.

42    The ANMF contends that whilst as a matter of fact the reports were not lodged on time, it would be unsafe for the Court to have regard to that matter in circumstances where it had no knowledge of the circumstances which led to the failure to lodge and whether or not each of the respondents might have available either a defence or a significant case pursuant to s 315 of the RO Act. I note this submission. It is, however, not a matter of great moment in the circumstances.

Size of the enterprise/capacity to pay a penalty for contravention

43    The Commissioner and the ANMF agree that the ANMF is a large, sophisticated union with substantial resources. There is no evidence of any incapacity to pay a penalty. The capacity of the ANMF to pay is properly to be inferred. About these matters there is no issue.

Deliberateness

44    The Commissioner and the ANMF accept that all of the contraventions in the present case in relation to the ANMF, arise from its derivative liability under the RO Act.

45    I accept that the contraventions were not deliberate. It is not submitted by the Commissioner, for example, that the respondents had a specific intention to wilfully contravene their obligations.

Involvement of senior management

46    The Commissioner submits that the contraventions in this case involved senior management, given Mr Olson was the WA Branch Secretary. He held important duties and powers, including being responsible for keeping the proper books of account and other financial records, and being responsible for the preparation and certification of progress reports and financial statements.

47    The ANMF submits that the Court should be wary of putting a significant emphasis on the involvement of senior management in circumstances where the very nature of the offences is directed to the conduct of senior management, with consequential derivative liability. It says that the fact that senior management is involved cannot in those circumstances justify a higher penalty or a more serious view of the offences when the offence itself has, as a constituent part, the involvement of senior management.

48    While I understand the submission made on behalf of the ANMF, the simple fact is that the contravention for which the ANMF is responsible was a contravention caused by a person in senior management and that contravention, of itself, must be assessed. I agree that an additional penalty, in effect, should not be added to the ANMF’s pecuniary penalty because Mr Olson was Branch Secretary.

Contrition, corrective action and cooperation

49    The Commissioner submits and the ANMF agrees, as do I, that the ANMF has fully cooperated with the Commissioner since the commencement of this proceeding. It made full admissions as to liability at the earliest opportunity. By making such admissions, the ANMF saved the Commissioner and the Court significant public resources by avoiding the need for a contested trial. The penalties proposed against the ANMF should properly reflect this consideration.

50    I also note, as the Commissioner points out, that the attempts that the ANMF Federal Executive made in early 2013 to seek compliance by Mr Olson should be taken account of. In my reasons I accepted that in February 2013, the Federal Executive called for urgent lodgement of the statutory reports by Mr Olson and passed a resolution to that effect at its February meeting.

51    The ANMF adds that the Federal Executive had, since at least August 2012, resolved to strengthen the mechanisms by which responsibility for accounts and the filing thereof was to be achieved. In its submissions, it sets out the range of steps it has adopted which include the giving of additional functions to the Finance Advisory Committee which has been renamed the Finance and Risk Management Advisory Committee.

52    I also note that in the affidavit of Ms Annie Butler, filed by the ANMF, some explanation is provided for the circumstances in which the enforcement proceedings were not taken in respect of the conduct the subject of these proceedings.

53    I also note that the ANMF has established institutional arrangements to ensure future compliance by all reporting units.

54    The conduct of the ANMF in these various respects is commendable.

Specific and general deterrence

55    The Commissioner has made quite specific submissions concerning specific and general deterrence, with which the ANMF agrees.

56    As set out above, both factors are of primary importance to the determination of civil penalties.

57    The importance of deterrence has been recognised in such decisions as General Manager of the Fair Work Commission v McGiveron [2017] FCA 405, and before that in General Manager of the Fair Work Commission v Thomson (No 4) [2015] FCA 1433.

58    It is accepted and I accept that the ANMF remains a large and prominent union. Mr Olson remains as the Branch Secretary of the WA Branch. Despite the commendable corrective actions taken by both, there remains a need for specific and general deterrence in this case. Both respondents, as others affected by the RO Act, must be left with the clear understanding that the obligations imposed on them under the RO Act must be taken seriously.

Assessment of penalties against the ANMF

59    I refer to what I said about assessment of penalties in McGiveron at [26]-[27], with which the Commissioner and the ANMF agree:

26    …

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

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

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

60    The Commissioner notes, and I generally accept, that where two offences arise as a result of the “same conduct” or “related conduct” the Court may have regard to the course of conduct principle as one of the principles guiding the exercise of its sentencing discretion; this principle represents “a tool analysis” which the Court is not necessarily compelled to use. See Construction, Forestry, Mining and Energy Union and Another v Cahill (2010) 269 ALR 1 at [39] and [41]; [2010] FCAFC 39 (Middleton and Gordon JJ).

61    The single course of conduct in “one transaction” sentencing principles were considered in Construction, Forestry, Mining and Energy Union and Another v Williams (2009) 262 ALR 417 at [14]-[19]; [2009] FCAFC 171. The Court there held that the question of whether there was a course of conduct to be penalised as one offence is anterior to the application of the totality principle.

62    The course of conduct principle is not a rule of law as such, but a sentencing practice which it is open to a sentencing judge to adopt. It is a principle which informs the exercise of the Court’s discretion with respect to penalty. Of significance, in agreed penalty cases, is whether the parties contemplate that the contraventions be dealt with separately. See Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at 400-401 (Stone and Buchanan JJ).

63    I accept the submission made by the Commissioner that it may sometimes be appropriate to impose a penalty in respect of each category of contravention. However, cases of apparent “course of conduct” must still be considered carefully. It is not necessarily the case that a “failure of process” which has an impact at different times, upon different people, at different locations or involving different staff of a respondent must be treated in a global way, though the totality principle may still apply. See Australian Competition and Consumer Commission v Telstra at 276-277.

64    It is apparent that the course of conduct principle has been applied in cases under the RO Act such as in McGiveron, Thomson (No 4) and Musicians’ Union.

65    In the present case, the Commissioner and the ANMF submit that there were three separate courses of conduct in relation to the ANMF:

(1)    the contraventions arising from the failures to comply with ss 253(1), 265(5) and 266(1) for the 2009-10 reporting period;

(2)    the contraventions arising from the failures to comply with ss 253(1), 265(5) and 266(1) for the 2010-11 reporting period; and

(3)    the contraventions arising from the failures to comply with ss 253(1), 265(5) and 266(1) for the 2011-12 reporting period.

66    I agree that they are appropriately classified as three separate courses of conduct, by reference to each distinct reporting period, in this case.

67    As to the appropriateness of imposing a single penalty in respect of a number of contraventions, the parties agree that a single penalty can, where agreed, be imposed in respect of multiple contraventions linked to the same course of conduct. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Another (2017) 254 FCR 68 at 99-100; [2017] FCAFC 113, the Full Court considered a number of the authorities to ascertain the circumstances, if any, in which a single penalty may be imposed in respect of multiple contraventions said to have arisen from a single course of conduct and observed that:

In an appropriate case…the Court may impose a single penalty for multiple contraventions where that course is agreed or accepted as being appropriate by the parties. It may be appropriate for the Court to impose a single penalty in such circumstances, for example, where the pleadings and facts reveal that the contraventions arose from a course of conduct and the precise number of contraventions cannot be ascertained, or the number of contraventions is so large that the fixing of separate penalties is not feasible, or there are a large number of relatively minor related contraventions that are most sensibly considered compendiously. As revealed generally by the reasoning in Commonwealth v Director, FWBII, there is considerably greater scope for agreement on facts and orders in civil proceedings than there is in criminal sentence proceedings.

68    The parties submit, and I accept, that it follows from this that where there is an agreement between the parties, it may be appropriate for the Court to fix a single penalty in respect of multiple contraventions.

69    The Commissioner and the ANMF submit that in the circumstances of this case, the Court ought, to endorse the position that these parties have agreed, namely that the penalties should be approached on the following basis:

(1)    for the contraventions of ss 253(1), 265(5) and 266(1) for the 2009-10 reporting period, there be one contravention with a single maximum penalty of $11,000 (which might be called contravention one);

(2)    for the contraventions of those provisions for the 2010-11 reporting period, there be one contravention with a single maximum penalty of $11,000 (contravention two); and

(3)    for the contraventions of those provisions for the 2011-12 reporting period, there be one contravention with a single maximum penalty of $51,000 (contravention three).

70    These parties note that the totality principle operates as a final check to ensure that the penalties to be imposed on the contravener, considered overall, are just, fair and appropriate having regard to the totality of the contravening conduct involved. This principle operates as a “final overall consideration”. See Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd and Others (1997) 145 ALR 36 at 53; [1997] FCA 450. I accept that that principle must apply here as well.

71    It is in these circumstances that the Commissioner and the ANMF submit that the following penalties are appropriate:

(1)    for contravention one: $4,400;

(2)    for contravention two: $4,400; and

(3)    for contravention three: $20,450.

72    In my view, these proposed penalties, properly reflect the nature of the contravening conduct involving the ANMF over the period and in each reporting period.

73    They reflect 40% of the maximum penalties available for each of the three contraventions as formulated.

74    The higher penalty for contravention three properly reflects the significantly increased penalties that applied to contraventions occurring during that latter period.

75    In my view, the penalties are neither manifestly inadequate nor manifestly excessive.

76    Importantly, the total of those penalties, $29,250, is not an insignificant sum and should have an appropriate specific deterrent quality and also send a message more generally to persons in like positions to the ANMF, by way of general deterrence, that there is a price to be paid for allowing contravention of the RO Act reporting requirements.

77    The penalties also reflect the maximum penalties that are available, taking into account all relevant factors.

78    I consider it appropriate to impose pecuniary penalties in the terms proposed by the Commissioner and the ANMF.

79    There will be orders accordingly.

What pecuniary penalty should be imposed on Mr Olson?

80    In the case of Mr Olson I found, as set out above, that Mr Olson contravened s 285(1) of the RO Act as a result of his conduct between July 2010 and July 2013.

81    The Commissioner submits that as Mr Olson’s liability traversed a period during which there was an increase to the maximum penalty, the higher maximum penalty should be applied.

82    The Commissioner submits that having regard to the increases in the relevant penalty units over the relevant period, as discussed above in relation to the ANMF, it follows that the maximum penalty for Mr Olson’s contravention should be considered in the sum of $10,200, being 60 penalty units at $170 per unit.

83    While there is, as noted above, an agreed position as to penalty outcome between the Commissioner and the ANMF, there is no agreed position between the Commissioner and Mr Olson. However, Mr Olson accepts a number of the submissions concerning the assessment of penalty made on behalf of the Commissioner, including as to the relevant penalty assessment principles.

84    As to the applicable maximum penalty, Mr Olson accurately notes that:

(1)    For the period prior to 29 June 2012, the maximum was limited to $2,200.

(2)    For the period after 29 June 2012, and before 29 November 2012, the maximum penalty was $6,600.

(3)    For the period after 28 December 2012, the maximum penalty was $10,200.

85    Mr Olson submits that given his contravention covers the period from July 2010 to July 2013, it is appropriate for the Court to take into account the fact that the penalties throughout the period increased substantially from a maximum of $2,200 to a maximum of $10,200.

86    Mr Olson submits that having regard to the facts: the maximum penalty of $2,200 applied to a contravention in the period up to 29 June 2012, a period of 23 months; the maximum penalty of $6,600 applied up to 29 November 2012, for a period of five months; and the maximum penalty of $10,200 applied up to July 2013, for a period of seven months.

87    He therefore points out that the maximum penalty of $2,200 applied for the majority of the time of the contravention. By contrast, the higher penalty of $10,200 was in effect only for a relatively short period at the end of the total three year period in question.

88    Mr Olson notes that the “mean average” of the maximum penalty applicable over the period was $6,333.33.

89    He submits that a lower penalty applied during the time of the contravention is a consideration that the Court can take into account in assessing the appropriate penalty in relation to him, with a view to ordering a lower penalty than that which has been sought by the Commissioner.

90    He submits that, having regard to the differing maximum penalty regime over the period, he should receive a pecuniary penalty of $4,500.

91    This sum, Mr Olson submits, addresses the need for punishment and deterrence, specific and general, and is proportionate to the gravity of his contravention.

92    When it comes to the question of the factors that should be taken into account, the Commissioner and Mr Olson make the following submissions.

Nature and extent of contravening conduct and circumstances in which it took place

93    The Commissioner accurately notes that in contrast to the ANMF, as set out above, the substantive allegations against Mr Olson were wholly contested at trial.

94    The Commissioner submits the obligations imposed on Mr Olson to take the steps necessary to ensure the WA Branch complied with its obligations were critical and necessary to ensure that members of the ANMF and the regulator did not risk being deprived of an effective means of understanding, detecting and responding to any issues that might arise in connection with the management of the registered organisation.

95    The Commissioner says the nature and circumstances of Mr Olson’s conduct were continuous over a number of years. As Branch Secretary he was obliged to undertake the steps required to lodge the relevant statutory returns. He was aware of his obligations. His failure resulted in the statutory returns being lodged extremely late.

96    The Commissioner submits that far from accepting responsibility for his conduct, Mr Olson advanced multiple excuses for his union’s defaults, including:

(1)    blaming the regulator for “condoning” the lateness of the relevant statutory returns;

(2)    contending that appropriate personnel were employed to undertake the work required, when they were not;

(3)    attempting to transfer responsibility to the auditors; and

(4)    laying the fault at the feet of the Attaché software.

97    The Commissioner submits Mr Olson’s contravention was not an isolated incident and was found to have occurred over three reporting periods, and in fact, had occurred for six financial years. It occurred in the context of repeated reminders by the regulator of the need for compliance.

98    The Commissioner submits that Mr Olson’s suggestion that this somehow amounted to the regulator condoning the non-compliance was rejected by the Court, as indeed it was, in strong terms. The Commissioner notes the observations made by the Court concerning the state of affairs as of July 2010, October 2010, throughout early 2011, January 2012, April 2012, November 2012, December 2012, January 2013, February 2013, May 2013 and finally as of July 2013, all of which showed, as the Court found, that the WA Branch under Mr Olson’s direction had “muddled along” with no “plan” to resolve the issue of non-compliance with its statutory reporting obligations.

99    The Commissioner also points to the Court’s finding that Mr Olson’s contravention was “not merely a passing or insignificant one”.

100    Mr Olson does not make submissions that fall specifically under this factor, but does submit that the WA Branch statutory reporting obligations have been complied with each year consistently since 2013.

101    His submissions as to the now compliant situation are such that he submits repetition is unlikely and compliance has now been secured. I will return to the questions of deterrence, specific and general, below.

102    Generally speaking, however, Mr Olson, to his credit, does not seek to put a further gloss on the Court’s findings in the primary judgment.

103    Indeed, in his written submissions and in his affidavit filed with his submissions he says that he acknowledges the judgment concerning his contravention. He says he regrets the contravention and is sorry about it. He adds that:

With the benefit of the Court’s reasons for judgment he has reflected on the events surrounding the WA Branch’s statutory reporting obligations during the period July 2010 and July 2013 and appreciates now that he could have done more to ensure compliance in the relevant period.

Any loss or damage sustained

104    The Commissioner submits that the effect of Mr Olson’s conduct was that, for an extended period of time, information about the financial position of the WA Branch was withheld from members of the ANMF and other persons but does not submit that this has caused any specific loss or damage.

105     Mr Olson submits that there has been no loss or damage in this respect. His contravention can be distinguished from other contraventions of s 285(1) that the Court has dealt with, where loss or damage was suffered by the organisation: such as Thomson (No 4).

Any similar previous conduct

106    As in the case of the ANMF, the Commissioner says that although he does not submit that the respondents, including Mr Olson, have been found to have contravened any similar provisions previously, their contraventions must be viewed in light of their conduct which spanned three reporting periods prior to the periods in question and the fact that the WA Branch failed to prepare, provide, present or lodge the required reports for six financial years from 1 July 2006 to 30 June 2012 on time.

107    Mr Olson, in his written submissions, does not contest those propositions.

Size of enterprise/capacity to pay a penalty for contravention

108    Mr Olson accepts that he will need to pay a penalty and is able to pay his penalty, noting that a lower penalty outcome is sought by him than that proposed by the Commissioner.

109    Mr Olson submits that the proposed penalty submitted by him may be considered high when looking at the penalties over the period in question and “is almost double” that applicable for the majority of the period of the contravention. He says it is proposed to be so because he takes the contravention very seriously.

Deliberateness

110    The parties accept that Mr Olson’s contravention was not deliberate. He had no specific intent to wilfully contravene the obligations. I consider that to be correct.

Contrition, corrective action and cooperation

111    While the Commissioner notes the ANMF cooperated fully with the Commissioner at all material times, the Commissioner says the situation with Mr Olson could not be more different.

112    Mr Olson, the Commissioner says, expressed no contrition, until he filed his recent affidavit, and has provided no cooperation throughout the proceeding. The Commissioner was put to proof on all matters of substantive liability resulting in a four-day trial and substantial evidence having to be led. The Commissioner notes that Mr Olson’s defences at trial were wholly rejected by the Court.

113    The Commissioner submits that instead of accepting responsibility, Mr Olson also contended that the fault lay in other quarters, something that the Court rejected.

114    As to the question of contrition, Mr Olson, as noted above, says that he has reflected on the judgment and regrets the contravention and is sorry about it. He appreciates now that he could have done more to ensure compliance in the relevant period. He says he should not be penalised for not cooperating in circumstances where the Commissioner sought, but did not achieve, a finding against him of 14 contraventions of s 285(1).

115    As to corrective action, Mr Olson says that since the contravention, he has ensured the WA Branch’s compliance with the statutory reporting obligations since 2013. This has included changing the accounting software. He also sets out in his affidavit and submissions corrective steps taken to ensure that the problems that were encountered will not be repeated.

116    The Commissioner submits the Court should have little, if any regard, for Mr Olson’s recent expression of regret.

117    I accept that Mr Olson does regret the conduct that led to the contravention and is sorry for it. But, for the reasons advanced by the Commissioner, it is really a little too late to be a factor that should lead to some “discount” on the otherwise appropriate penalty.

Assessment of penalty against Mr Olson

118    I have set out above the factors to be taken into account in assessing penalty and also the penalty assessment principles, in the course of discussing the appropriate penalty to be imposed on the ANMF.

119    In addition to those factors, the Commissioner submits that the penalty against Mr Olson should reflect an observation I made at [221] of the primary judgment:

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.

120    The Commissioner submits that although a single contravention was made out against Mr Olson, in addition to overarching considerations of deterrence, the prolonged and repeated nature of that contravention must be reflected in the penalty imposed.

121    For that reason, the Commissioner contends that, considering all of the circumstances, the Court should impose penalty against Mr Olson of between $7,140 and $8,670. It would reflect between 70% and 85% of the maximum and would not be manifestly excessive or manifestly inadequate.

122    As noted above, Mr Olson submits that an appropriate penalty is $4,500.

123    I take into account the fact that the penalty maximum increased during the period. I do not fully accept, however, Mr Olson’s submission that because the contravention of a continuing nature occurred for a more substantial time during the first period, that the penalty should be materially reduced on that account. To take that approach would be, in the present circumstances, to take too much of a mathematical or mechanistic approach to sentencing and to pay insufficient regard to the seriousness of the contravention that occurred over a three year period and, in a practical sense, got worse as each reporting period passed.

124    There is no doubt that the contravention is serious. While Mr Olson now, to his credit, says words to the effect that he now recognises the error of his ways, the fact is that the contravention continued for three years, and indeed had been the subject of non-compliance for three years before that. I do not impose a penalty on account of that earlier period. That earlier period demonstrates, however, as my primary judgment indicates, how important it was at all material times in the relevant three year period for Mr Olson to get the WA Branch’s reporting affairs in order. Therefore, there should be no mathematical reduction according to time periods in which particular maximum penalties applied.

125    Nonetheless, I take into account that the penalty I impose should reflect the fact that at material times there was a lower penalty, in the first period, of $2,200, in the second period of $6,600 and in the final period, $10,200. In the final event, I consider that a pecuniary penalty of $6,630 should be imposed. While this represents about 65% of the maximum for the final period of $10,200, it is not calculated on that basis, but recognises that a lower maximum applied for the first two periods of the contravention.

126    So, calculating the penalty in these terms takes account of the differing penalty rates in the different periods. But it also seems to me properly to reflect the seriousness of the contravention. Notwithstanding that I accept that Mr Olson is very unlikely to contravene the reporting obligations again, particularly by reason of the corrective actions taken in the WA Branch, an appropriate specific deterrent is required in his case given the laxity of Mr Olson’s approach to the reporting obligations at material times. Additionally, a strong message must be sent to others in his position who might be inclined to treat lightly, as Mr Olson did, the reporting obligations imposed by the RO Act.

127    I would therefore impose a pecuniary penalty against Mr Olson in the sum of $6,630.

Conclusion and final orders

128    There will be declarations and orders as set out above in the orders page.

Associate:

Dated:    14 December 2018