FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Aldi/Altona North Case) (No 2) [2019] FCA 1667

File number:

VID 458 of 2016

Judge:

BROMBERG J

Date of judgment:

11 October 2019

Catchwords:

INDUSTRIAL LAW – admitted contraventions of s 348 of the Fair Work Act 2009 (Cth) (“Act”) which provides that a person must not organise or take or threaten to take any action to coerce another person to engage in industrial activity – admitted contraventions of s 346(c) of the Act which provides that a person must not take adverse action against another person because the person does not or is not or proposes not to engage in industrial activity – making of declarations – principles relating to imposition of pecuniary penalties – the relevance of previous contraventions by the respondents of industrial legislation to the penalty to be imposed – proportionality of penalty to contravening conduct – general deterrence – specific deterrence – whether a single course or multiple courses of conduct – principle of totality – whether a personal payment order should be imposed on the second respondent.

Legislation:

Fair Work Act 2009 (Cth), ss 346, 347(b)(iv), 348, 539, 546(1) 556

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Cardigan Street Case) [2018] FCA 957

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Bay Street Case) (2018) 260 FCR 564

Australian Building and Construction Commissioner v Construction Forestry, Maritime, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) (No 2) [2019] FCA 973

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The QLD Infrastructure Case) (2017) 254 FCR 68

Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (No 2) [2018] FCAFC 117

Date of hearing:

19 March 2019

Registry:

Victoria

Division:

Fair Work Division

National Practice Area:

Employment & Industrial Relations

Category:

Catchwords

Number of paragraphs:

52

Counsel for the Applicant:

Mr M Follett

Solicitor for the Applicant:

Australian Government Solicitor

Counsel for the Respondents:

Mr R Reitano

Solicitor for the Respondents:

Slater & Gordon Lawyers

ORDERS

VID 458 of 2016

BETWEEN:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

AND:

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

First Respondent

DREW MACDONALD

Second Respondent

JUDGE:

BROMBERG J

DATE OF ORDER:

11 October 2019

PENAL NOTICE

TO: THE CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION AND DREW MACDONALD

 

IF YOU (BEING THE PERSON BOUND BY THIS ORDER):

(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

 

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

THE COURT DECLARES THAT:

1.    On 5 December 2014, the Second Respondent contravened:

(a)    section 348 of the Fair Work Act 2009 (Cth) (“FW Act”) when he parked a vehicle across the only vehicle access entrance to 302-330 Millers Road, Altona North, Victoria (“Altona North Site”) and otherwise prevented any vehicles from entering the Altona North Site, with intent to coerce Magellan Projects Pty Ltd (“Magellan”) to comply with a lawful request to make an enterprise agreement;

(b)    section 346 of the FW Act when he took adverse action against Magellan by parking a vehicle across the only vehicle access entrance to the Altona North Site and otherwise preventing any vehicles from entering the Altona North Site, because Magellan had engaged in industrial activity by not complying with a lawful request to make an enterprise agreement.

2.    On 8 December 2014, the Second Respondent contravened:

(a)    section 348 of the FW Act when he parked a vehicle across the only vehicle access entrance to the Altona North Site and otherwise prevented any vehicles from entering the Altona North Site, with intent to coerce Magellan to comply with a lawful request to make an enterprise agreement; and

(b)    section 346 of the FW Act when he took adverse action against Magellan by parking a vehicle across the only vehicle access entrance to the Altona North Site and otherwise preventing any vehicles from entering the Altona North Site, because Magellan had engaged in industrial activity by not complying with a lawful request to make an enterprise agreement.

3.    The First Respondent contravened:

(a)    section 348 of the FW Act on 5 December 2014 by reason of the conduct of the Second Respondent referred to in declaration 1(a);

(b)    section 346 of the FW Act on 5 December 2014 by reason of the conduct of the Second Respondent referred to in declaration 1(b);

(c)    section 348 of the FW Act on 8 December 2014 by reason of the conduct of the Second Respondent referred to in declaration 2(a);

(d)    section 346 of the FW Act on 8 December 2014 by reason of the conduct of the Second Respondent referred to in declaration 2(b);

THE COURT ORDERS THAT:

1.    The First Respondent pay the following pecuniary penalties:

(a)    $40,000 in respect of its contravention of s 348 of the FW Act dealt with in declaration 3(a); and

(b)    $40,000 in respect of its contravention of s 348 of the FW Act dealt with in declaration 3(c).

2.    The Second Respondent pay the following pecuniary penalties:

(a)    $6,000 in respect of his contravention of s 348 of the FW Act dealt with in declaration 1(a); and

(b)    $6,000 in respect of his contravention of s 348 of the FW Act dealt with in declaration 2(a).

3.    The Second Respondent pay the penalties required by Order 2 personally in that he not, whether before or after the payment of those penalties:

(a)    seek to have or encourage the First Respondent in any way whatsoever, directly or indirectly, to pay to him or for his financial benefit in any way whatsoever, any money or financial benefit referable to the payment of the penalties, whether in whole or in part; and

(b)    accept or receive from the First Respondent in any way whatsoever, any money or financial benefit referable to the payment of the penalties, whether in whole or in part.

4.    The Applicant serve these orders on:

(a)    the First Respondent in accordance with rule 10.04 of the Federal Court Rules 2011 (Cth); and

(b)    the Second Respondent in accordance with rule 10.01 of the Federal Court Rules.

5.    The pecuniary penalties referred to in Orders 1 and 2 be paid to the Commonwealth of Australia within 28 days.

6.    There be no order as to costs.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    The applicant (“Commissioner”) seeks declarations of contraventions of ss 346 and 348 of the Fair Work Act 2009 (Cth) (“FW Act”) by each of the respondents and that pecuniary penalties be imposed for those contraventions.

2    By a further amended defence of the first and the second respondents dated 6 August 2018 (“Defence”) the second respondent (“Mr MacDonald”) has admitted the contraventions of ss 348 and 346 of the FW Act in relation to conduct which occurred on each of 5 and 8 December 2014. The first respondent (“CFMMEU”) has admitted Mr MacDonald was at all relevant times an officer of the CFMMEU. The CFMMEU has admitted that by the conduct of Mr MacDonald it contravened ss 348 and 346 of the FW Act on each of 5 and 8 December 2014.

3    Sections 346 and 348 of the FW Act relevantly provide as follows:

346    Protection

A person must not take adverse action against another person because the other person:

(a)    is or is not, or was or was not, an officer or member of an industrial association; or

(b)    engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or

(c)    does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g).

Note: This section is a civil remedy provision (see Part 4-1).

348    Coercion

A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.

Note: This section is a civil remedy provision (see Part 4‑1).

4    The Court’s power to impose pecuniary penalties is conferred by s 546 (1) of the FW Act. That section is in the following terms:

546    Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

5    At the time of the admitted contraventions the maximum penalty that might be imposed for each contravention by Mr MacDonald was $10,200. The maximum penalty that might be imposed for each contravention by the CFMMEU was $51,000.

The parties to the proceeding and other entities

6    The following facts are admitted.

7    The applicant is a statutory appointee of the Commonwealth. Under s 539 of the FW Act the applicant is a person with standing and authority to bring these proceedings against each respondent.

8    The CFMMEU (formerly known as the Construction, Forestry, Mining and Energy Union) is and was at all relevant times an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth). The CFMMEU was at all material times the registered owner of Vehicle 1BV8QI (“vehicle one”).

9    At all relevant times Magellan Projects Pty Ltd (“Magellan”) was engaged under a contract for services with ALDI Stores (a Limited Partnership) (“ALDI) to perform building work at 302-330 Millers Road, Altona North, Victoria (“Site) and was the head-contractor on the Site. Magellan employed employees and various subcontractors to perform building work at the Site. Magellan was an “independent contractor” engaged under a “contract for services” for the purposes of item 7 in s 342(1) of the FW Act. Magellan was not covered by any enterprise agreement made in accordance with Pt 2-4 of the FW Act (“EBA), which also covered the CFMMEU.

10    At all material times, Melbourne Precast Concrete Nominees Pty Ltd (“MPC”) was engaged under a contract for services with Magellan to perform building work at the Site, including the installation of precast concrete panels.

Events prior to 5 December 2014

11    In or around early November 2014, Mr MacDonald had a telephone conversation with Magellan’s Managing Director, Mr Hendrik Welleman where he requested that Mr Welleman meet with him to discuss Magellan making an EBA with the CFMMEU. Mr Welleman responded that Magellan was not interested in making such an EBA. Mr MacDonald requested that Mr Welleman contact him in the future to discuss Magellan making an EBA with the CFMMEU.

12    On approximately 12 November 2014, Mr MacDonald had a telephone conversation with Mr Welleman. Mr MacDonald again requested that Magellan make an EBA with the CFMMEU. Mr Welleman said to Mr MacDonald that Magellan would not make an EBA with the CFMMEU. Mr Macdonald said to Mr Welleman words to the effect of “I wish you good luck cause there will be trouble”.

13    Magellan did not comply with Mr MacDonald’s requests during the telephone conversations or at any time thereafter.

Blockade at the site on 5 December 2014

14    On 5 December 2014 several employees of MPC attended the Site with a mobile crane and truck to install some precast concrete panels. At approximately 6:00 am, Mr Macdonald parked vehicle one across the access entrance to the Site, preventing vehicular access to and egress from the Site. Approximately five minutes after parking vehicle one, Mr MacDonald said to the Magellan Site Manager, Mr David Pettitt, words to the effect of, “no panels going up today”. From at least 6:45 am, a brown Ford Territory (“second vehicle”) was parked across the Site entrance, preventing vehicular access to and egress from the Site. Mr MacDonald and a Mr Duggan, also an official of the CFMMEU, stood around the first and second vehicles with other persons who were not working on the Site.

15    At approximately 6:45 am a truck containing an excavator, a truck containing a bobcat and an MPC truck carrying the precast concrete panels to be installed at the Site that day were prevented from entering the Site by the first and second vehicles.

16    As a consequence of vehicular access to the Site being impeded, building work scheduled on the Site for that day, including the installation of precast concrete panels by MPC, structural steel work and concrete preparation work could not be undertaken.

Blockade at the site on 8 December 2014

17    On 8 December 2014, prior to 6:50 am, Mr MacDonald parked vehicle one across the Site entrance, preventing vehicular access to and egress from the Site. Mr MacDonald was present at the Site and standing around vehicle one with other persons who were not working on the Site. At approximately 6:45 am, various vehicles of subcontractors contracted to work on the Site, including a truck containing a bobcat and a truck containing an excavator, were prevented from entering the Site by vehicle one. As a consequence of the above action, building work scheduled on the Site for that day, including excavation and form work for a concrete pour and structural steel work could not be undertaken.

18    The Commissioner alleged that Mr MacDonald took the action he did on each of 5 December and 8 December 2014 with the intention of negating the choice of and thereby coercing Magellan to engage in industrial activity within the meaning of s 347(b)(iv) of the FW Act by complying with the “lawful request” of the CFMMEU. Those “lawful requests” were alleged to be the requests that Magellan make an EBA with the CFMMEU as referred to at [11] and [12] above. It was further contended that the action of Mr MacDonald was unlawful, illegitimate or unconscionable. For those reasons the Commissioner contended that Mr MacDonald contravened s 348 of the FW Act on each of 5 and 8 December 2014.

19    Furthermore, and in relation to the contraventions of s 346 of the FW Act, the Commissioner alleged that Mr MacDonald took adverse action against Magellan within the meaning of Item 7(c) of s 342(1) of the FW Act. It was alleged that Mr MacDonald took action that had the effect, directly or indirectly, of prejudicing Magellan in relation to either or both of the contracts for services that Magellan had with ALDI and MPC. It was alleged that the adverse action taken by Mr MacDonald was taken for the reason, or for reasons including the reason that Magellan engaged in industrial activity within the meaning of s 347(b)(iv) of the FW Act. On that basis, the Commissioner alleged a contravention of s 346 of the FW Act on each of 5 and 8 December 2014. All of those allegations are admitted by both Mr MacDonald and the CFMMEU.

20    Those admissions entail an acceptance that Magellan’s refusal of the request that it make an EBA with the CFMMEU involved it engaging in industrial activity within the meaning of 347(b)(iv) of the FW Act. Left to my own devices, I would not have come to the conclusion that the refusal by an employer to make an enterprise bargaining agreement with a registered organisation of employees would constitute the employer engaging in industrial activity within the meaning of s 347(b)(iv). I discuss the proper construction of s 347(b)(iv) in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Bay Street Case) (2018) 260 FCR 564 at [21]-[73]. As is there recorded, there is authority for a contrary construction of s 347(b)(iv) to that which I prefer. I do not regard that contrary construction as plainly wrong. Consequently, I will apply that construction of s 347(b)(iv). The fact that the respondents did not contest the construction relied upon by the Commissioner is a further reason why that construction should be applied.

FINDINGS

21    For all those reasons, I find that:

(1)    On 5 December 2014, Mr MacDonald contravened:

(i)    section 348 of the FW Act when he parked a vehicle across the only vehicle access entrance to the Site and otherwise prevented any vehicles from entering the Site, with intent to coerce Magellan to comply with a lawful request to make an enterprise agreement; and

(ii)    section 346 of the FW Act when he took adverse action against Magellan by parking a vehicle across the only vehicle access entrance to the Site and otherwise preventing any vehicles from entering the Site, because Magellan had engaged in industrial activity by not complying with a lawful request to make an enterprise agreement.

(2)    On 5 December 2014, by the conduct of Mr MacDonald referred to above, the CFMMEU contravened:

(i)    section 348 of the FW Act; and

(ii)    section 346 of the FW Act.

(3)    On 8 December 2014, Mr MacDonald contravened:

(i)    section 348 of the FW Act when he parked a vehicle across the only vehicle access entrance to the Site and otherwise prevented any vehicles from entering the Site, with intent to coerce Magellan to comply with a lawful request to make an enterprise agreement; and

(ii)    section 346 of the FW Act when he took adverse action against Magellan by parking a vehicle across the only vehicle access entrance to the Site and otherwise preventing any vehicles from entering the Site, because Magellan had engaged in industrial activity by not complying with a lawful request to make an enterprise agreement.

(4)    On 8 December 2014, by the conduct of Mr MacDonald referred to above, the CFMMEU contravened:

(i)    section 348 of the FW Act; and

(ii)    section 346 of the FW Act.

DECLARATIONS

22    The Commissioner submitted that the Court should make declarations of the contraventions of ss 346 and 348 of the FW Act by each of the respondents. The making of those declarations was not opposed by the respondents.

23    It is appropriate that declarations be made to that effect. The making of declarations has an educative value and it is appropriate to formally record the basis upon which the proceeding has been resolved.

PENALTY

The contentions of the parties

24    The Commissioner submitted that the Court should impose two maximum penalties for the CFMMEU, one for the conduct on 5 December 2014 and one for the conduct on 8 December 2014. The Commissioner also submitted that the Court should impose two penalties towards the high to very high end of the maximum for Mr MacDonald, one for the conduct on 5 December 2014 and one for the conduct on 8 December 2014.

25    In contrast, the respondents submitted that the appropriate penalty that should be imposed on the CFMMEU and Mr MacDonald is a mid-range penalty. The respondents also submitted that, by operation of s 556, the Court could either issue a single penalty on each of the respondents, or the Court could treat the contraventions of ss 348 and 346 on each day as constituting a single contravention of each provision and moderate the penalty to avoid double punishment under the course of conduct principle.

26    The Commissioner sought that a personal payment order be made in relation to Mr MacDonald. The respondents submitted that this application should be refused.

Applicable principles

27    The general principles relevant to the imposition of penalties under the FW Act are well settled and were not in contest. In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Cardigan Street Case) [2018] FCA 957 at [48]-[54] I surveyed the authorities and set out the applicable principles for the imposition of penalties pursuant to s 546(1) of the FW Act:

[48]    Section 546(1) of the FW Act provides no express guidance in relation to the determination of an appropriate pecuniary penalty in respect of the contravention of a civil remedy provision under the FW Act. The section simply says that the Court may make an order imposing a pecuniary penalty the Court considers is appropriate.

[49]    However, the authorities provide substantial guidance. The purpose of a civil penalty is primarily, if not wholly, protective to promote the public interest in compliance: Commonwealth of Australia v Director of the Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the Agreed Penalties Case) at [54]-[55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ). This objective is achieved by putting a price on contraventions that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene. Both specific and general deterrence are important considerations: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 (the QLD Infrastructure Case) at [98] (Dowsett, Greenwood and Wigney JJ).

[50]    In relation to specific deterrence, it has been frequently observed that a pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an “acceptable cost of doing business”: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [66] (French CJ, Crennan, Bell and Keane JJ); Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63] (Keane CJ, Finn and Gilmour JJ). On the other hand, general deterrence is directed at sending a message to a broader audience that contraventions of the kind under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at [32] (Lindgren J).

[51]    The fixing of a pecuniary penalty involves the identification and balancing of all the considerations relevant to the contravention and the circumstances of the respondent, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purposes of a pecuniary penalty. This process has been described as an “instinctive synthesis” akin to that undertaken in criminal sentencing: Markarian v The Queen (2005) 228 CLR 357 at [51] (McHugh J); QLD Infrastructure Case at [100].

[52]    A non-exhaustive list of the considerations that may be relevant when fixing a pecuniary penalty is conveniently set out in the QLD Infrastructure Case, where the Full Court identified those considerations that relate to the objective nature and seriousness of the offending conduct, and those that concern the particular circumstances of the respondent in question in the following terms:

[103]    The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.

[104]    The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.

[53]    In determining the appropriate penalty, the Court must also give consideration to the maximum penalty for the contravention. As the Full Court observed in the QLD Infrastructure Case at [106], there are at least three reasons for this: first, that the legislature has legislated for the maximum penalty as an expression of the legislature’s policy concerning the seriousness of the prescribed conduct; second, that it permits comparison between the case under consideration and the worst possible case (where the maximum penalty can be treated as the penalty appropriate for the worst possible case); and third, that the maximum penalty provides a “yardstick” which should be taken and balanced with all the other relevant factors.

[54]    While giving appropriate significance to the principle of deterrence, the amount of the penalty should also be proportionate to the contravention and should not be so high as to be oppressive: Trade Practices Commission v Stihl Chainsaws (Aust) Pty Ltd (1978) ATPR 40-091 (Smithers J) at 17,896; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 293 (Burchett and Kiefel JJ); QLD Infrastructure Case at [107].

28    The parties were in contest in relation to the application of the proportionality principle expressed at [54] of the Cardigan Street Case (as set out above) and its interaction with a compelling need to take into account a contravener’s prior contraventions. I recently dealt with that issue in Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972 at [26]-[30] as follows:

[26]    Three Full Courts of this Court have recently emphasised the importance of determining a penalty which is proportionate to the contravening conduct in the context of any need to take into account a contravener’s prior contraventions.

[27]    In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97, Allsop CJ, White and O’Callaghan JJ observed (at [22]):

The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen [No 2] [1988] HCA 14; 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.

[28]    Relying on the Non-Indemnification Personal Payment Case and the reasons of Bromwich J in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126, Allsop CJ, Collier and Rangiah JJ said the following in Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191 (at [176]):

It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases.

[29]    Endorsing the observations in the Non-Indemnification Personal Payment Case quoted above at [28], Besanko and Bromwich JJ (with whom Reeves J agreed) in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56 at [339]-[348] elaborated upon the applicable principles by emphasising that:

    a court in imposing civil penalties is entitled to have regard to prior contravention in the exercise of its discretion, but not so as to permit such a history to be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the contravention that is being considered;

    the role of any past contravention should be no more than a prism through which to view the instant contravention;

    where past contraventions manifest an ongoing attitude of disobedience to the law, the heightened need for deterrence may indicate that a more severe penalty is warranted for the instant contravention;

    nonetheless, the penalty must still fall within the applicable range that is otherwise considered appropriate for the instant contravention.

[30]    The well settled principles most recently expressed in Parker call for a structured approach to the imposition of a penalty on a contravener with a history of contraventions, the object of which is to ensure that the contravener does not “suffer the fate of being sanctioned anew for past contraventions” (at [341]). First, the Court must, identify the applicable range of penalties for that contravention without regard to the contravener’s prior history of contraventions. Having done that, the Court should then take into account that history in assessing where, within the applicable range, the penalty should fall.

29    Further, in Australian Building and Construction Commissioner v Construction Forestry, Maritime, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) (No 2) [2019] FCA 973 at [36]-[37], I explained the course of conduct and totality principles, each of which is here relevant. I adopt the reasoning there set out:

[36]    I need to also address the course of conduct and totality principles. The relevant authorities in relation to the common law course of conduct principle were also recently discussed in Parker (see at [267]-[288]). That principle recognises that where there is an interrelationship between the legal and factual elements of two or more contraventions, care must be taken to ensure that the contravener is not punished twice for what is essentially the same wrongdoing.

[37]    The following passage, in relation to the totality principle, from Mill v The Queen (1988) 166 CLR 59 at 63 (quoting with approval from Thomas, Principles of Sentencing (2nd Ed 1979) at 56-7, references omitted from the quote) was applied by the court in Parker (at [297]):

The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is ‘just and appropriate’. The principle has been stated many times in various forms: ‘when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong[’]; ‘when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences’.

The Court in Parker further noted in relation to the above (at [298]) that [t]here is no particular formula or form of words by which a judge must conduct the necessary review.’

30    Section 556 of the FW Act provides that where a person is ordered to pay a pecuniary penalty under a civil remedy provision “in relation to particular conduct”, the person is not liable to be ordered to pay a pecuniary penalty under a different provision of a law of the Commonwealth in relation to that conduct. The parties accept that s 556 applies on the facts of this case to mean that only one penalty can be imposed on each respondent with respect to each day’s contravening conduct. That is one penalty for the conduct on 5 December 2014 and one penalty for the conduct on 8 December 2014. Mr MacDonald’s conduct that constituted the adverse action for the purposes of s 346 involves conduct which is essentially a necessary ingredient of the conduct in contravention of s 348. As s 348 has an additional ingredient of intending to coerce, I will treat s 348 as the lead contravention in relation to which a penalty should be imposed.

31    As the principles to which I have referred require, the factors that bear upon the objective nature and seriousness of each of the contraventions need to be considered. I accept that the contravening conduct on 5 December 2014 should be regarded as objectively serious. The conduct was deliberate and, I would infer, engaged in by Mr MacDonald in the knowledge that it was unlawful. The conduct included an intention to coerce and coercive conduct is to be regarded as serious. As a result of Mr MacDonald’s conduct, access to the Site was impeded and building work scheduled on the Site for that day, including the installation of precast concrete panels by MPC, structural steel work and concrete preparation work could not be undertaken.

32    Whether any loss was suffered by MPC or by Magellan was not the subject of any direct evidence. The Commissioner did not seek to adduce evidence quantifying any economic loss suffered by those persons. I am, however, prepared to draw an inference that some loss was suffered although I presume that if the loss occasioned had been extensive, the Commissioner would have led direct evidence of it.

33    The countervailing factors are that the conduct occurred at a single site, was limited in time, involved no aggression or violence and on the evidence before me, if loss or damage was occasioned, I am unable to infer that it was extensive.

34    On balance, I would regard the contravention as at the mid-level of the range in relation to its seriousness.

35    In relation to the CFMMEU’s contravention by reason of Mr MacDonald’s conduct on 5 December 2014, all of the factors just referred to are to be taken into account but additionally, there is one other factor which I regard as increasing the level of seriousness of the contravention. The Commissioner contended that the contravention involved senior officials of the CFMMEU. Although Mr MacDonald himself is not a senior official, I consider that the evidence before me permits an inference that the senior leadership of the CFMMEU or more particularly the Construction and General Division (Victoria/Tasmania Divisional Branch) of the CFMMEU (“Divisional Branch”) of which Mr MacDonald is an official, condoned the contravening conduct of Mr MacDonald and was therefore involved in that conduct. I have come to that view on the same basis as I did in the Cardigan Street Case at [82]-[86]. The evidence of the kind to which I there refer, is also available here and permits the same inference to be drawn.

36    On that basis, I consider that in terms of its seriousness, the contravention by the CFMMEU is at the higher end of the scale.

37    In terms of the seriousness of the contravention, the very same conclusions are appropriate to be made in relation to the contraventions on 8 December 2014. The applicable considerations are the same. The only significant difference between the conduct on 8 December and that on 5 December is that the nature of the work on the Site that could not be performed was different. However in terms of the consequent loss or damage, there is no basis for inferring any disparity. Accordingly, in terms of its seriousness, I assess the contravention by Mr MacDonald to be at the mid-range of the scale and the contravention by the CFMMEU to be at the higher end of the scale.

38    I turn then to consider the second category of factors helpfully summarised in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The QLD Infrastructure Case) (2017) 254 FCR 68 at [104] (Dowsett, Greenwood and Wigney JJ). That category concerns the particular circumstances of the contravener. Neither Mr MacDonald nor the CFMMEU have exhibited any contrition or remorse for the contravening conduct. The need for specific deterrence is not thereby diminished. There was, however, substantial cooperation by the respondents which is a matter relevant to mitigation. Although the trial of the proceeding did involve the parties in expense and inconvenience associated with the need to resolve a threshold issue which need not be further detailed, once that was done, the respondents essentially admitted all of the conduct asserted against them and their cooperation served to contain the extent of the litigation. I give some weight to this consideration.

39    Mr MacDonald is an experienced official of the CFMMEU and remains an employed official of that organisation. As an ongoing employee, specific deterrence remains relevant.

40    To effectuate the need for specific deterrence, the penalty that ought to be imposed should be meaningful and, by reference to Mr MacDonald’s capacity to pay, the penalty should have significance. Beyond the fact that Mr MacDonald remains in employment, there is no evidence as to his financial capacity. I will assume that Mr MacDonald’s financial capacity is that of an average working person and that a meaningful penalty is a penalty that would have significance to such a person. In contrast, there is evidence before me about the financial means of the CFMMEU and even if I were only to take into account the revenue and net assets of the Divisional Branch, the CFMMEU has the financial capacity to pay very substantial pecuniary penalties.

41    The Commissioner relied upon a history of contravening conduct in relation to each of Mr MacDonald and the CFMMEU. Not all of that contravening conduct may be characterised as involving prior contraventions committed before the contraventions here being considered occurred. The weight to be accorded to prior contraventions which have been the subject of judgment and penalty and those that have not and the relevance of contraventions occurring after the present contraventions was discussed by me in the Laverton North and Cheltenham Premises Case at [71]-[72]. I adopt the reasoning that flows from those observations:

[71]    Prior contraventions are relevant to the need for specific deterrence. As was said by Mason CJ, Brennan, Dawson and Toohey JJ in Veen at 477-8 the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed because it is relevant to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law.’ An attitude of disobedience of the law demonstrated by the contravener’s prior history of contraventions, will inform the extent of deterrence necessary to address the level of disobedience demonstrated by those prior contraventions. Contraventions of the law committed prior to the instant contravention will, as King CJ explained in R v McInerney (1986) 42 SASR 111 at 113, be:

more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies.

[72]    In addition to its reliance on prior contraventions of industrial laws, the Commissioner also sought to rely on contraventions committed after the instant contraventions. Contraventions of industrial laws which post-date an instant contravention are unable to reliably say much at all about the contravener’s “continuing attitude of disobedience of the law” at the time of the commission of the instant contravention. Why some weight ought to be given to contraventions of that kind was not explained by the Commissioner. That some weight can be given to contraventions of that kind is suggested by Tracey J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Footscray Station Case) [2017] FCA 1555 at [48]. I would accept that for the purpose of demonstrating that the instant contravention is not “an uncharacteristic aberration”, a contravention which post-dates the instant contravention may be taken into account. However, to give such contraventions potency in assessing an appropriate penalty for the instant contravention bears the risk that the contravener will be punished twice.

42    Mr MacDonald has the following history of prior contraventions of industrial laws which are set out below chronologically with an indication of when the penalty was imposed and by reference to the dates on which the instant contraventions occurred:

Date of contravention

Provision contravened

Number of contraventions

Penalty

Date penalty imposed

27 October 2010

S 38, Building and Construction Industry Improvement Act 2005 (Cth) (“BCII Act”)

1

$2,500

7 October 2013

11 November 2010

S 38, BCII Act

1

$2,500

7 October 2013

20 February 2014

S 500, FW Act

1

$1,800

21 June 2019

21 February 2014

S 500, FW Act

1

$500

21 June 2019

27 February 2014

S 500, FW Act

2

$10,000

21 December 2017

27 February 2014

S 499, FW Act

1

21 December 2017

5 March 2014

S 500, FW Act

2

$5,500

21 June 2019

43    In relation to the CFMMEU and in particular the Divisional Branch, the evidence put before the Court of contraventions of industrial laws was essentially the same as that which was before the Court in the Laverton North and Cheltenham Premises Case. The observations and conclusions there made are apposite:

[76]    The CFMMEU, and in particular the Divisional Branch, has an appallingly long history of prior contraventions of industrial laws. The Commissioner relied on a document setting out that prior history, the accuracy of which was not challenged by the CFMMEU. The Commissioner’s analysis shows that the CFMMEU has regularly been involved in the contravention of provisions of the FW Act or the BCCII Act which have attracted pecuniary penalties. The document shows that the CFMMEU has been ordered to pay very significant penalties in relation to those contraventions including many very close to (or at) the maximum available penalty. The document and the updating of it, records over 140 proceedings in which penalties for contraventions of industrial laws dating back to 1999 were imposed. Many if not most of those cases involve multiple contraventions. Over 100 of those cases deal with contraventions that occurred prior to the contraventions here being dealt with. It appears that around 65 of the cases involved the Divisional Branch and around 55 of those cases concerned multiple prior contraventions which occurred prior to the instant contraventions. There can be no doubt that the CFMMEU, through the Divisional Branch, has a significant antecedent history of prior contravening conduct which supports the need for deterrence, particularly specific deterrence. That consideration must loom large in the fixation of appropriate penalties.

44    In the Laverton North and Cheltenham Premises Case, I also made further observations about why a compelling need for specific deterrence in relation to the CFMMEU was there demonstrated. Again, on the evidence before me, the same observations are apposite:

[77]    In relation to specific deterrence I also take into account that, despite the admissions made by the respondents in relation to the instant contraventions, there is no evidence before me of the CFMMEU taking any compliance action to counsel, educate or inform MacDonald or Long in order to prevent the reoccurrence of contravening conduct by them in the future. Nor is there any evidence before me of any compliance regime ever put in place by the CFMMEU to address its long history of prior contraventions. As I said in the Cardigan Street Case at [85] ‘[t]he absence of any evidence of compliance systems within the CFMMEU is particularly alarming given the heavily critical comments of the CFMMEU made by this Court in many cases over recent years’. As I also there said at [86] [a]n organisation faced with a litany of contraventions over an extended period of time, which repeatedly incurs not only significant financial penalties but also pointed judicial criticism, would necessarily put in place measures to change the cultural or normative conduct of the contravening behaviours of its officers and employees’ unless such behaviour was condoned by the senior leadership of the organisation. That inference, made in the Cardigan Street Case, is equally available here. All of that is demonstrative of a compelling need for specific deterrence.

45    There was some suggestion made in the submissions of the Commissioner that Mr MacDonald should be associated with the same modus operandi of the CFMMEU in terms of its exceedingly large number of prior contraventions. In so far as that contention sought to suggest that the history of the CFMMEU’s contraventions is relevant to the assessment of the appropriate penalty for Mr MacDonald, I reject that submission for the same reasons I rejected a similar submission in the Cardigan Street Case at [64].

46    Prior to recording my conclusions as to the quantum of penalties to be imposed, there are two further matters I should deal with.

47    The respondents contended that the Court should treat the conduct on both 5 and 8 December 2014 as constituting a single course of conduct. It was accepted that s 557 of the FW Act had no application but it was contended, and I accept, that the common law course of conduct principle may nevertheless apply. I accept some interrelationship between the legal and factual elements of the contraventions on each day. As I have already recorded, essentially the same conduct was repeated on the two days in question. However, the fact that the same conduct occurred twice does not mean that it involves only one instance of wrongdoing. In my view, the overlap between the conduct on the two days in question is best dealt with through the totality principle rather than the two instances of conduct being regarded as a single course of conduct. Some small moderation of the penalties to be imposed is appropriate and I will address that through the totality principle.

48    Secondly, the Commissioner contended that the Court should make a personal payment order in respect of the penalties to be imposed on Mr MacDonald.

49    The order for personal payment which is sought has been framed in accordance with the order made by the Full Court (Allsop CJ, White and OCallaghan JJ) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (No 2) [2018] FCAFC 117. The order sought would require Mr MacDonald to pay the penalty imposed by the Court personally and not to seek or encourage the CFMMEU to pay to him any money or provide any financial benefit referable to the payment of the penalty, and additionally, not accept or receive from the CFMMEU any money or financial benefit referable to that payment.

50    In the Laverton North and Cheltenham Premises Case, I extensively considered the circumstances in which it may be appropriate to make a personal payment order. A personal payment order was made against Mr MacDonald in that case. My observations, which need not here be repeated, are set out at paragraphs [87]-[94]. The unique circumstances upon which I there relied are equally present in this case. It was not here contested that Mr MacDonald had never previously personally paid a penalty imposed on him for contravention of industrial laws. For those reasons, I consider that a personal payment order should be made in respect of the penalties imposed on Mr MacDonald.

51    On the basis of the considerations I have described including the totality principle, I will impose the following penalties:

Date

Mr MacDonald

CFMMEU

5 December 2014

$6,000

$40,000

8 December 2014

$6,000

$40,000

Total:

$12,000

$80,000

52    I will make orders and declarations reflective of these reasons.

I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

Associate:

Dated:    11 October 2019