Federal Court of Australia

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Titan Cranes Case) [2022] FCA 774

ORDERS

THE COURT ORDERS THAT:

1.    The document titled “List of Material Relied on by the Applicant” be placed on the Court file.

2.    The respondents’ objections to the affidavit of Warren Roy Read be placed on the Court file.

3.    The parties bring in short minutes of order to give effect to the reasons of judgment delivered today by 23 June 2022.

4.    The proceeding be adjourned to 9:30am on 24 June 2022.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

LOGAN J:

1    There is a widely known idiom, “The end justifies the means”. Authorship of that is frequently attributed to the Italian renaissance diplomat and philosopher, Niccolò Machiavelli, in his work, “The Prince”. Although that work most certainly reflects the ruthlessness pregnant in the idiom, the idiom itself does not in terms appear in that work.

2    Much earlier in time, it is possible to find in the Roman poet Ovid’s work, Heroides, which translates as “The Heroines”, in about 10 BC, the phrase, “exitus acta probat” which, rendered in English is, “the outcome justifies the deeds”. That might be thought to be the origin of the idiom, although read in the context of that work, that particular thought is challenged because, in context, it is apparently being used in an opposite way.

3    In any event, in a society such as ours, which is governed by the rule of law, the adoption of unlawful means to achieve an end, however worthy, is corrupting of that worthy end. It is also deeply subversive of our whole social compact.

4    These thoughts were provoked strongly by the circumstances of the present case. Those circumstances have become the subject of admissions by the respondents on the pleadings as they stand amended. The following is a summary of the facts as they emerge from the pleadings in light of the admissions.

5    In January 2021, a Mr Matt Schatz was employed by a labour-hire company, Redwood Construction Services’ Pty Ltd (Redwood), at a construction project known as the Brisbane Racecourse Project. He there was undertaking responsibilities as a dogman. He was also considered by the respondent union, The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), to have experience and expertise in workplace health and safety.

6    Sometime in the week in which 4 January 2021 fell, a Mr Beau Seiffert, an organiser with the union, contacted a Mr Gregory Weston, the chief operating officer of Titan Cranes & Rigging Pty Ltd (Titan Cranes). Titan Cranes was a subcontractor providing cranes at the Brisbane Racecourse Project site, and other sites to which I shall make reference shortly. Redwood was a supplier of labour to Titan Cranes. Mr Seiffert said to Mr Weston words to this effect:

It’s Beau from the CFMMEU. We have issues with the CPB job –

that is, I should interpolate, a reference to the Cross River Rail Project –

and need Matt –

that’s Mr Schatz –

moved to the project. There was a safety incident involving the crane in December.

7    To this, Mr Weston replied that Mr Schatz would be moved once he was finished at the Brisbane Racecourse Project. Mr Seiffert again said that the CFMMEU wanted Mr Schatz moved to the Cross River Rail Project.

8    Some time on the morning of 12 January 2021, Mr Warren Read, who was then the Queensland operations manager for Redwood, met with Mr Seiffert and a CFMMEU delegate, Mr Murdoch, at the 80 Ann Street Project. Titan was also at that site, the supplier of cranes. The 80 Ann Street Project is what is now a building occupied by Suncorp, directly opposite the Ann Street entrance to Brisbane City Hall.

9    In the course of that meeting, Mr Seiffert said words to the effect that if a CFMMEU delegate was not appointed as health and safety representative at the Cross River Rail Project, then there would be “issues” for other Titan Cranes projects. Mr Read said words to the effect that he did not want problems with the projects, but there was no reason for the workers to not go back to work, and they needed to. Mr Seiffert stated words to the effect that the workers would not be going back to work. Mr Read said words to the effect:

So you’re indicating to me that you will not allow them to go back to work until you’ve got a confirmed answer that we will place that person into the health and safety representative position on the site –

that person being Mr Schatz. Mr Seiffert responded with words to the effect of “yeah” or “yes”. Mr Read stated words to the effect that the decision was out of his hands.

10    On 12 January 2021, six employees of Redwood were rostered to work at the 80 Ann Street Project, and to commence work at 5.30 am. Those employees did not perform any crane work on that day. Instead, they spent the day reviewing safe work method statements and discussing safety issues. Those Redwood workers were instructed by the CFMMEU to remain in the shed and not go back to work. Mr Murdoch was the instigator of this stoppage.

11    Whilst Mr Murdoch and the Redwood employees at the 80 Ann Street Project asserted that various safety issues existed, those issues had been unchanged since the project commenced in October 2020, but they had not previously been relied upon as a basis to cease work.

12    On 13 January 2021, six Redwood employees were again rostered to work at the 80 Ann Street Project, commencing at 5.30 am. Those employees attended for work, but did not perform any crane work. Instead, continuing as the day before, to review safe work method statements with Mr Murdoch.

13    Mr Murdoch has admitted that his conduct in organising the stoppages of work at the 80 Ann Street Project, on 12 and 13 January 2021, was intended to coerce Titan Cranes and Redwood to move Mr Schatz to the Cross River Rail Project, and there allocate him the duties of health and safety representative.

14    Also on 12 January 2021, two Redwood employees were rostered to work at the 444 Queen Street Project, starting at 6 am. That project was then in the course of the construction adjacent to the old Customs House, a very large building. The two Redwood employees attended for work, but did not perform any crane work on that day. Instead, those employees were directed by Mr Warren Rapata, another union delegate, to stay in the sheds. There they remained until they were told by Mr Rapata, at 2 pm that day, that they could leave.

15    The following day, 13 January 2021, two Redwood employees were again rostered for work at the 443 Queen Street Project. Those employees attended for work, but did not perform any crane work. Once again, that was because they had been directed by Mr Rapata to stay in the sheds. Mr Rapata admits that his actions were intended to coerce Titan Cranes and Redwood to move Mr Schatz to the Cross River Rail Project, and there allocate him the duties of health and safety representative.

16    On 13 January 2021, Redwood sought orders from the federal conciliation and arbitration commission, presently known as the Fair Work Commission (Industrial Commission), that the Redwood employees mentioned return to work on 14 January 2021. The Industrial Commission made orders in those terms. The CFMMEU consented to those orders being made.

17    On 14 January 2021, the Redwood employees did return to work at each of the 80 Ann Street Project and 443 Queen Street Project sites. At that stage, the alleged safety issues raised on 12 January 2021, in respect of the 80 Ann Street Project, had not been resolved.

18    In evidence, by way of annexures to an affidavit of Mr Joseph Kennedy of the respondents’ solicitor’s firm, is a notice under the Workplace Health and Safety Act 2011 (Qld) (WHSA) in relation to the Cross River Rail Project, and a prohibition notice in relation to an incident at that project site on 17 December 2020. Inferentially, the reference in January 2021, in the conversation between Mr Seiffert and Mr Weston involving a crane in December, is the same as that the subject of the prohibition notice issued under the WHSA. Also annexed to Mr Kennedy’s affidavit are notices under the WHSA in respect of the 80 Ann Street site, the 443 Queen Street Site and the Brisbane Racecourse Project site, which include notices dated 14 January 2021.

19    Section 52(c) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (the Act) provides that:

52    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:

(a)    …

(c)    allocate, or not allocate, particular duties or responsibilities to a building employee or building contractor; or

(d)    …

20    The individual respondents, namely, Mr Seiffert, Mr Murdoch and Mr Rapata, have admitted that they contravened that particular provision of the Act. The effect of that Act is that those five admitted individual contraventions are also contraventions of the Act by the CFMMEU.

21    A contravention of s 52 is subject to what the Act terms a “Grade A civil remedy provisions”: see s 81(2). A Grade A civil remedy is the more serious of the two penalty types for which the Act provides, the other being a “Grade B civil remedy”.

22    The maximum contravention penalty for a Grade A civil remedy provision, such as s 52, is 1000 penalty units if a defendant is, as is the CFMMEU, a body corporate and otherwise, it is 200 penalty units. Thus, the individual respondents here are subject to a maximum, in respect of each contravention, of 200 penalty units.

23    As at January last year, the effect of s 4AA of the Crimes Act 1914 (Cth) was that the amount of a penalty unit was $222. By process of mathematics, that yields the following individual maximum contravention penalties: for Mr Seiffert, $44,400; for Mr Rapata, $88,800; and for Mr Murdoch, $88,800. For the CFMMEU, the maximum contravention penalty is, in relation to Mr Seiffert’s conduct, $222,000, for Mr Rapata’s conduct, $444,000, and for Murdoch’s conduct, $444,000. In all, then, the total of the maximum penalties applicable to the CFMMEU is $1,110,000.

24    Those maximum contravention penalties are, at the very least, a yardstick by reference to which one approaches the assessment of penalty in the circumstances of this particular case. It is also necessary now to set out the whole of s 81 and s 84 of the Act:

81    Penalty etc. for contravention of civil remedy provision

(1)    A relevant court, on application by an authorised applicant, may make one or more of the following orders relating to a person (the defendant) who has contravened a civil remedy provision:

(a)    an order imposing a pecuniary penalty on the defendant;

(b)    an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;

(c)    any other order that the court considers appropriate.

Note:    An authorised applicant may not be able to make an application for an order if there is an enforceable undertaking in force or a compliance notice has been given (see subsections 98(4) and 99(5)).

Maximum penalty for civil remedy provisions

(2)    The maximum pecuniary penalty is:

(a)    for a Grade A civil remedy provision--1,000 penalty units if the defendant is a body corporate and otherwise 200 penalty units; and

(b)    for a Grade B civil remedy provision--100 penalty units if the defendant is a body corporate and otherwise 20 penalty units.

Injunctions

(3)    The orders that may be made under paragraph (1)(c) include:

(a)    injunctions (including interim injunctions); and

(b)    any other orders that the court considers necessary to stop the conduct or remedy its effects, including orders for the sequestration of assets.

(4)    If the contravention is a contravention of section 46 or 47 (unlawful industrial action and picketing prohibited), then the power of the court to grant an injunction restraining a person (the defendant ) from engaging in conduct may be exercised:

(a)    whether or not it appears to the court that the defendant intends to engage again, or to continue to engage, in conduct of that kind; and

(b)    whether or not the defendant has previously engaged in conduct of that kind; and

(c)    whether or not there is an imminent danger of substantial damage to any person if the defendant engages in conduct of that kind.

Pecuniary penalties

(5)    A pecuniary penalty under paragraph (1)(a) is payable to the Commonwealth, or to some other person if the court so directs. It may be recovered as a debt.

(6)    In determining a pecuniary penalty under paragraph (1)(a), the court must take into account all relevant matters, including:

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

(b)    the nature and extent of any loss or damage suffered because of the contravention; and

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

(d)    whether the person has previously been found by a court (including a court in a foreign country) to have engaged in any similar conduct.

(7)    The Consolidated Revenue Fund is appropriated for the purposes of a debt due to a person other than the Commonwealth in relation to a penalty under paragraph (1)(a).

84    Multiple contraventions

(1)    A relevant court may make a single civil penalty order against a person for multiple contraventions of a civil remedy provision if proceedings for the contraventions are founded on the same facts, or if the contraventions form, or are part of, a series of contraventions of the same or a similar character.

(2)    However, any pecuniary penalty imposed must not exceed the sum of the maximum penalties that could be ordered if a separate pecuniary penalty were ordered for each of the contraventions.

25    In my view, both individually as well as in respect of the CFMMEU, s 84(1), is attracted in the circumstances of this case. That is because the contraventions are, or are part of, a series of contraventions of the same or a similar character. It does not follow from this, nor was it submitted, that the effect of s 84(1) is to reduce the maximum penalty to but a maximum penalty as if but one contravention had occurred. Rather, the individual maximum penalties remain subject to the stricture for which s 84(2), provides.

26    That, though, is not the end of considering the impact of there being here a series of contraventions of the same or a similar character. As Moore, Middleton and Gordon JJ held in Construction, Forestry, Mining and Energy Union v Cahill (2010) 184 IR 461, at [39]:

… a course of conduct or the one transaction principle is not a concept peculiar to the industrial context. It is a concept which arises in the criminal context generally and one which may be relevant to the proper exercise of the sentencing discretion. The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is “the same criminality” and that is necessarily a factually specific enquiry. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.

[emphasis in original]

27    Whether that one transaction principle is applicable here was controversial between the parties, but that controversy really depends on the level of abstraction at which one views the conduct which occurred. There was but one overall end for the admitted coercive conduct. That was, as the union wished, forthwith to cause the transfer of Mr Schatz from the Brisbane Racecourse Project site to the Cross River Rail Project site. The means by which that aim was sought to be implemented were Mr Seiffert’s threat, and then the withholding of crane work at each of the 80 Ann Street and 443 Queen Street Project sites on each of 12 and 13 January 2021.

28    In effect, there was here what might be regarded as a worthy end of concern about safety at the Cross River Rail Project site, which was sought to be achieved by ends which were completely unlawful, coercive threats which were made manifest by withholding of crane work. So I am disposed to view this as one overall stratagem manifested at different sites. To do that does not in any way diminish, though, the overall gravity of what occurred. The CFMMEU chose, through particular agents, to manifest its unlawfulness at more than one site. Necessarily, that entailed a comprehensive targeting of Titan Cranes and its labour-supplier, Redwood.

29    Penalisation, in my view, must therefore reflect not just an acknowledgement of an overall stratagem, but also that multi-site quality of the unlawful coercion. Were I just to penalise on the basis of a stratagem, that would not recognise the site specific impacts of the stratagem on two days at each of 80 Ann Street and 443 Queen Street. Hence, my view that the question of whether there is but one transaction is very much dependent on the level of abstraction through which one views the facts as they occurred.

30    The Commissioner has submitted that the appropriate penalties in the present case should be as follows:

(a)    In relation to Mr Seiffert, between $30,000 and $35,000, against the maximum of $44,400.

(b)    Against Mr Rapata, between $30,000 and $40,000, against a maximum of $88,800.

(c)    Against Mr Murdoch, between $30,000 and $40,000, against a maximum of $88,600.

(d)    Against the CFMMEU:

(i)    in relation to Mr Seiffert’s conduct, $222,000, the maximum as I have already mentioned;

(ii)    in relation to Mr Rapata’s conduct, between $350,000 to $400,000, against a maximum of $444,000; and

(iii)    and in relation to Mr Murdoch’s conduct, between $350,000 and $400,000, against a maximum of $444,000.

31    The CFMMEU for its part, and the individuals for their part, submit that penalties in this range would be excessive. There are particular reasons for that submission, which it will be necessary to canvass in some detail. Before so doing, it is necessary to make reference to one feature of the Commissioner’s submissions that I found incongruous, having regard to the particular ranges submitted in respect of the union’s responsibility for the conduct of Mr Rapata and Mr Murdoch.

32    If it were not already clear from my judgment in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) (2018) 265 FCR 208 (Broadway on Ann), and the judgment of Tracey J in that case, I need no persuading as to the overarching importance of deterrence in respect of penalisation in this type of case, or the relevance in that regard of a history of unlawful conduct. Were there, however, any doubt in relation to the overarching importance of deterrence, and the relevance of a history of unlawful conduct, that is most emphatically put to rest by the recent judgment of the High Court in Australian Building and Construction Commissioner v Pattinson (2022) 96 ALJR 426 (Pattinson). In the joint judgment in that case, at [9], it is stated:

… Under the civil penalty regime provided by the Act, the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act. In that context, the penalties fixed by the primary judge were appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind by Mr Pattinson, the CFMMEU and others. They represented a reasonable assessment of what was necessary to make the continuation of the CFMMEUs non-compliance with the law, amply demonstrated by the history of its contraventions, too expensive to maintain.

33    But for certain moderating factors which I see present in this case, and having regard to the history revealed in the far too many examples which are tabulated in the annexures to the Commissioner’s submissions, and by “far too many” I do not mean far too many examples cited, as opposed to far too many present, I should unhesitatingly, in this case, have imposed the maximum penalty not only on the CFMMEU, but on each of the individuals. The time when enough was enough in relation to compliance with the law of the land by this union, its immediate predecessor, and for that matter, others in history and its officials, has well and truly passed.

34    Equally, however, there are moderating factors. In Pattinson, a majority of the High Court in the joint judgment recalled that an earlier majority of that court, in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640, at [66], had approved a statement by a Full Court of this Court in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249, at [62], that a civil penalty:

… must be fixed with a view to ensuring the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business.

35    In Broadway on Ann, I adopted that in the context of industrial law, by observing that it must not be the case that a contravener regards a contravention of industrial law just as attracting an acceptable cost of doing industrial business.

36    Also in Pattinson, the High Court at [18] referred, with approval, to a judgment given by French J (as his Honour then was) in this Court, in which his Honour set out various factors pertinent to the assessment of a pecuniary penalty. The Court stated:

18    In CSR, French J listed several factors which informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value:

“The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:

1.    The nature and extent of the contravening conduct.

2.    The amount of loss or damage caused.

3.    The circumstances in which the conduct took place.

4.    The size of the contravening company.

5.    The degree of power it has, as evidenced by its market share and ease of entry into the market.

6.    The deliberateness of the contravention and the period over which it extended.

7.    Whether the contravention arose out of the conduct of senior management or at a lower level.

8.    Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

9.    Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.”

[footnote references omitted]

37    Also in Pattinson, the Court, in the joint judgment, made plain that there remains a sentencing discretion. The court stated at [46] and [47]:

46    It does not follow, as the Full Court suggested and as the CFMMEU argued in this Court, from the rejection of the Full Court’s “notion of proportionality” that s 546 must be taken to require the imposition of a penalty approaching the maximum in relation to any and every contravention by a recidivist offender. It is important to recall that an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a “one off” result of inadvertence by the contravenor rather than the latest instance of the contravenor’s pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a union official, or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.

47    The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors of the kind adverted to by French J in CSR. For example, where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.

[citations omitted]

38    An aggravating factor in this case, in my view, is that the conduct concerned was not without economic loss. The precise nature and extent of that loss is not possible to quantify. However, as Dowsett and Rares JJ observed in their joint judgment in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458, at 475 – 476, in circumstances where a site had been blockaded so work could not be performed, and where the action of blockading had been intended to injure a party substantive loss to someone was an inevitable consequence.

Inevitably, closing down crane work on two major construction sites in inner-city Brisbane carried with it, at the very least, an opportunity cost type loss. Site cranes, as a matter of ordinary observation and experience of life, move goods continuously from ground level to other floors, and between floors. The impact on workflow of ceasing crane work for two days must have been significant.

39    What then of moderating or mitigating factors? I found it helpful in considering these to reflect upon what I had said in Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444 (North Goonyella), in relation to the origins of trade unionism in the United Kingdom, and derivatively, from the United Kingdom, in terms of our heritage, in Australia. In that case, I traced the history of trade unionism from the Tolpuddle Martyrs’ Case, more accurately termed R v Lovelass & Ors (1834) 172 ER 1380, through to modern times.

40    It is a feature of our contemporary federal industrial legislation that trade unions, industrial organisations, are not, if registered, unlawful assemblies in restraint of trade. They are lawful organisations in our society. As I observed in North Goonyella, at [35]:

35    Of course, with the benefit of recognition as lawful organisations comes great responsibility for trade unions and those who hold office in trade unions. Over time, a number of commissions of inquiry, State and Federal, have exposed practices where the privilege of recognition of trade unions has been abused, or where those who hold office within unions have abused a privileged position. I refer in this regard to the report of the Royal Commission into Alleged Payments to Maritime Unions by the Honourable J.B. Sweeney, the reports of the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union by Mr F. Costigan QC, the report of the Royal Commission into the Activities of the Australian Building Construction Employees’ and Builders Labourers’ Federation by the Honourable J.S. Winneke, and the various reports by Mr Cooke QC into the Activities of Particular Queensland Unions. Because there are cases presently before the courts, it is neither necessary nor in any way appropriate to give more contemporary examples than those one will find within those Royal Commission reports of occasions when the privilege has been abused.

41    To that list might be added, aptly, the report of the Honourable Trevor Cole RFD QC, in relation to the building industry.

42    But these respondents have acknowledged their contraventions. The case is not one which has proceeded to trial. That acknowledgement was a sequel to mediation before a registrar of this Court. I do not accept, as was submitted for the Commissioner, that there needs to be an expression of contrition for such an acknowledgement to be a moderating factor. In itself, the admissions have saved much time, trouble and expense both to the Commissioner as well as to the judicial branch, in respect of what would have been a lengthy trial.

43    The acknowledgements of contravention were not made at the earliest possible opportunity. The evolution of the pleadings is eloquent proof of that. But they were made. And they were made before it was necessary for affidavit or other evidence to be prepared and filed. Moreover, I am persuaded that the acknowledgements do carry with them, in the overall circumstances, an element of understanding on the part of the CFMMEU and the individual respondents that their conduct was not just unlawful, for that it certainly was, but completely unacceptable in a society governed by the rule of law.

44    The reason why I hold that view is apparent in an affidavit made by Mr Brian Lacy AO, which was read on behalf of the CFMMEU. Mr Lacy is a distinguished Australian. He held particular responsible positions, in his youth, in Defence Signals, in which necessarily he must have been invested with a high degree of trust and confidence in respect of our nation’s most sensitive national security classified material. He was admitted to the Bar in later life, with a particular expertise in industrial law. His postnominal AO bespeaks a high recognition in our national honour system. He served a term as a senior deputy president of the Industrial Commission’s predecessor, the Australian Industrial Relations Commission. Moreover, he held, at what must have been a difficult time, the highly responsible position of Administrator of the Christmas Island and Cocos and Keeling Islands territories of the Commonwealth.

45    Mr Lacy was commissioned by the CFMMEU, via its industrial officer, to give very particular training indeed to each of the individual respondents about their industrial law responsibilities. There was some controversy as between the parties about what was or was not relevant or admissible in Mr Lacy’s affidavit. As to that, though, I hold exactly the same view as did Snaden J, who was also the beneficiary of like evidence from Mr Lacy, in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Monash Freeway Widening Case) (No 2) [2021] FCA 1101 (the Monash Freeway Widening Case). His Honour observed, at [49] – [59], as follows:

49    The respondents led evidence in the form of an affidavit affirmed on 7 April 2021 by Mr Brian Lacy AO. Parts of that affidavit were objected to in ways to which I shall shortly come; but, in summary, it attested to some training that the Union engaged Mr Lacy AO to provide to its officials, including Simpson, concerning the nature and limits of the rights of entry conferred by part 3-4 of the FW Act. That training, it was said, reflects some effort on the part of the respondents (and in particular the Union) to understand the limits of those statutory powers and to ensure that they are not breached in the future.

50    Mr Lacy AO is a barrister and a former presidential member of what is now the Fair Work Commission. He is well known to and well respected by those who have practiced in the field of industrial law over recent decades. His expertise undoubtedly extends to the nature and limits of the rights of entry conferred by part 3-4 of the FW Act. The Commissioner did not contend otherwise.

51    By a report that he provided to the Union after conducting his training session with Simpson, Mr Lacy AO recorded that:

(1)    he met with Simpson on 18 January 2021 for the purposes of administering that training;

(2)    that meeting lasted for approximately 65 minutes;

(3)    during their session, he explained to Simpson why his conduct at the Eumemmering Creek Site on 29 and 30 April 2017 offended ss 499 and 500 of the FW Act;

(4)    further, he explained to Simpson why his conduct at the Gate 3 Site on 9 May 2017 contravened s 500 of the FW Act;

(5)    during and/or as a result of the training that he undertook, Simpson:

(a)    agreed that “…it is important that he [Simpson] has a good knowledge and understanding of his responsibilities and obligations under industrial and work health and safety laws”;

(b)    stated that he appreciated the opportunity to undertake training in order that he might “…better understand those responsibilities and obligations”;

(c)    appeared, to Mr Lacy’s AO observations and from comments that he (Simpson) made during their discussions (but upon which Mr Lacy AO did not elaborate), to understand “…why his conduct contravened sections 499 and 500 of the FW Act”;

(d)    struck Mr Lacy AO as “…contrite about the events of April/May 2017 and genuinely committed to compliance in future”; and

(e)    appeared to understand “…the steps he needs to take to ensure he does not contravene right of entry provisions in future”.

52    Before preparing his report, Mr Lacy AO “…read, understood and complied with[,] and agree[d] to be bound by the [Federal Court of Australia] Expert Evidence Practice Note (GPN-EXPT)”.

53    Attached to Mr Lacy’s AO expert report was correspondence that the Union sent to him on 22 December 2020, by which it requested that he provide training to Simpson. Amongst other things, that correspondence recorded that:

(1)    the Union wished to retain Mr Lacy AO to provide to Simpson training “…about his responsibilities and obligations under workplace laws”;

(2)    the purpose of that training was “…to ensure Mr Simpson understands and has a good knowledge of his responsibilities and obligations under applicable industrial and work health and safety laws, to assist him to comply with these laws in future”;

(3)    the Union wished “…to ensure that Mr Simpson has sufficient knowledge to facilitate his compliance with the law in the future”;

(4)    Mr Lacy AO was asked, in particular, to focus upon the circumstances of this case and:

(a)    why Simpson’s conduct on 29 and 30 April 2017 was found to have contravened ss 499 and 500 of the FW Act;

(b)    why Simpson’s conduct on 9 May 2017 was found to have contravened s 500 of the FW Act; and

(c)    what steps Simpson needs to take in future “…to ensure that contraventions of ss 499 and 500 do not occur”;

(5)    Mr Lacy AO was requested to prepare a report in respect of the training provided to Simpson; and

(6)    any report so prepared would be provided to the court in connection with the penalty hearing that took place on 28 April 2021.

54    The Commissioner objected to the passages of Mr Lacy’s report that purported to record Simpson’s state of mind or the matters that he appeared, to Mr Lacy, to “understand”. He submitted that those observations were expressions of opinion that did not fall within Mr Lacy’s AO field of expertise and that the court should take no account of them. Broadly, those objections were fairly advanced. To the extent that Mr Lacy AO purported to state in his report what he thought Simpson understood or believed, he trespassed beyond his acknowledged expertise and, respectfully, little if anything can be made of his opinions. To the extent that his observations were products of what Simpson told him, they are admissible under s 66A of the Evidence Act 1995 (Cth) as exceptions to the rule against hearsay. It is difficult to ascertain into which category some of Mr Lacy’s AO observations fall. They are of limited, if any, assistance presently.

55    It doesn’t much matter. Respectfully, the Commissioner’s objections are largely a distraction. The state of Simpson’s knowledge or understanding after having completed his training is one thing; his apparent willingness to undertake it speaks also to the deterrent effect that the setting of penalties in the present case must strive to achieve. Likewise, it is clear from the brief given to Mr Lacy AO that the Union, having orchestrated the training, should be understood to have exhibited a desire to ensure that Simpson and its other organisers conduct themselves lawfully in the future.

56    The Commissioner urged the court to approach the training provided by Mr Lacy AO with some caution. It was, he said, comprised of a single, hour-long training session and was, on the documentation available, designed and intended to assist the Union in proceedings such as this one. He described it as an exercise in self-interest.

57    With respect, that is undoubtedly so; but so to observe is not to acknowledge any relevant want of sincerity on the respondents’ part. The respondents were entitled to take steps to educate themselves with a view to ensuring, first, that they in future avoid the predicament in which they currently find themselves; and, second, that they (and the Union, in particular) can demonstrate why penalties to be imposed upon them in the present circumstances needn’t be as high as they might otherwise need to be (for example, in the Union’s case, because the attitude of belligerence that its history of statutory non-compliance demonstrates is ameliorated, at least to some extent, by a contemporary willingness to ensure that its officials adhere to the requirements of the law).

58    It may be that history vindicates the Commissioner’s scepticism that the union’s poor record of compliance with the right of entry provisions of part 3-4 of the Fair Work Act continues unabated, and that the training provided by Mr Lacy is exposed over time as something of a stunt designed to dupe the court into imposing lower penalties than might otherwise have been thought appropriate. If that occurs, it might well serve as a circumstance of which future courts take account in assessing the level of penalty necessary to deter repetition of statutory misconduct.

59    For now, however, I do not share the Commissioner’s cynicism. The training that Mr Lacy AO has administered can only be seen as a welcome development, and as one that reflects well on the union for organising it and on Mr Simpson for agreeing to take it. It reflects an acknowledgment, on the respondents’ part, of wrongdoing – of a problem requiring corrective action. It weighs against other considerations, most obviously, the union’s poor history of statutory contravention, which, in the balance, inform the deterrent effect that the court must strive to achieve through the imposition of penalties in this case.

46    Making due substitution for the reference by Snaden J, in the passage quoted to Mr Simpson, to the individual respondents in this case, and due amendment of relevant dates, I respectfully agree with everything that his Honour has stated in relation to the evidence of Mr Lacy and regard it as exactly applicable in the present case.

47    Once again, in the present case, the training which Mr Lacy has administered to each of Mr Seiffert, Mr Murdoch and Mr Rapata can only be seen as a welcome development, or perhaps more aptly, a further welcome development. It is a development that reflects well on the CFMMEU for organising it, and it reflects well on Mr Seiffert, Murdoch and Rapata for agreeing to undertake it. I accept it reflects an acknowledgement on the part of both the individual respondents, as well as the CFMMEU of a problem requiring corrective action. As in the case before Snaden J, it weighs against other considerations, once again, and most obviously, the CFMMEU’s shameful history, as I once observed in Broadway on Ann, of statutory contravention.

48    As in the Monash Freeway Widening Case, that consideration does inform the achievement of a deterrent effect that the Court must strive to achieve through the imposition of pecuniary penalties.

49    What all those moderating and also aggravating effects yield, in the overall circumstances, is in the end, as has been observed, a matter for “instinctive synthesis”. I do wish, however, to make it plain that it is no part of the penalties that I am going to impose in any way to seek to discourage the CFMMEU from legitimate concerns about workplace health and safety, which has historically, and remains to this day, a legitimate role for a trade union.

50    What is not legitimate, and must be penalised to the point of pain, if necessary, is the adoption of unlawful means to achieve a perceived worthy end in relation to workplace health and safety. There are laws in this country, State and Federal, which are directed to the subject of workplace health and safety. If they are not thought sufficient, the way in which, in a society governed by the rule of law, that sufficiency is enhanced is through the political, and then parliamentary, process.

51    Historically, trade unions have sought to achieve just such an end through the promotion of change via the political process. The Australian Labor Party, as a matter of history, is a manifestation of the trade union movement in the political arena.

52    It is by such lawful means that workplace health and safety can be enhanced.

53    As to penalties, it was additionally sought, in respect of Mr Seiffert, that an order be made that the penalty imposed on him not be the subject of indemnification by the CFMMEU, and more generally, I shall deal with that after having quantified the penalties that I impose.

54    Taking all of the foregoing into account, and acting under s 84 of the Act, the penalties which I impose are as follows:

(a)    In respect of Mr Seiffert, $30,000.

(b)    In respect of Mr Rapata, $30,000.

(c)    In respect of Mr Murdoch, $30,000.

55    In respect of the CFMMEU, and also acting under s 84, I impose one penalty in the amount of three quarters of a million dollars, $750,000.

56    I feel constrained in relation to the CFMMEU to give some indication as to components. That is particularly because I do not accept that it is appropriate to impose the maximum penalty on the CFMMEU in respect of its responsibility for Mr Seiffert’s conduct. There is, in my view, an incongruity between recognising, as the Commissioner’s submissions did, a moderating effect in respect of the CFMMEU’s responsibility for Mr Rapata and Mr Murdoch’s conduct, and not affording the same recognition in respect of Mr Seiffert’s conduct. Were I imposing individual amounts in respect of the CFMMEU, I would impose:

(a)    $150,000 in relation to Mr Seiffert’s conduct; and

(b)    $300,000 each in relation to responsibility for Mr Rapata and Mr Murdoch’s conduct.

Those particular amounts, in relation to Mr Rapata and Mr Murdoch’s conduct, reflect an impact at two different sites on two days. However, as I have stated, I intend to impose but one penalty, mainly, $750,000.

57    In relation to Mr Seiffert, I have taken into account that, unlike Mr Rapata and Murdoch, he does have a history of contravening other industrial legislation. That history concerns the non-compliance with permissible entry by permit to work sites. It was the subject of particular reference by Rangiah J in the Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Toowoomba Bypass Case) [2021] FCA 1128 and, as his Honour’s judgment at [114] reveals, was the subject of a finding of an honest but mistaken belief as to Mr Seiffert’s rights. There is a finding also of a contravention on his part by Collier J in the Australian Building and Construction Commissioner v Construction, Forestry, Maritime Mining and Energy Union (Bruce Highway Caloundra to Sunshine Upgrade Case) (No 2) (2019) 292 IR 259, but that, as yet, is the subject of reserved judgment in respect of penalties. These types of conduct do indicate that Mr Seiffert was no stranger to encounters with a need to comply with industrial law. But he has not, in terms, been found to have contravened an industrial law concerning coercion. I have taken into account his history in assessing penalty. More persuasive for me even than that history, however, was his conduct in January 2021. I find it difficult, if not impossible, to accept that he could have had any reasonable conception at all that the coercion he was threatening was in any way lawful. And the coercion that was threatened and made manifest was serious. Hence, my earlier observation that, but for moderating factors, I would have unhesitatingly imposed maximum penalties.

58    I come then to whether or not to make an order which would prevent indemnification.

59    That there is power to make such an order is clear enough, if only by analogy, from the High Court’s judgment in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 (Non-indemnification Case). The provision under consideration in that case was s 546(1) of the Fair Work Act 2009 (Cth). If anything, in my respectful view, the position in relation to an ability to make an order that there be no indemnification in respect of an individual is made even more clear by s 81(1)(c), in its provision for the court to make such other order as is appropriate. It may very well be, in light of that, that there is no need to read into s 81(1)(a) an implication of a power to make such an order.

60    As is apparent in the joint judgment in the Non-indemnification Case in the High Court, the purpose in preventing indemnification is to bring home, by way of deterrence, the “sting” or burden of penalisation individually.

61    Contrary to the submissions made for Mr Seiffert, I do not accept that mere exposure to personal liability, which is a sequel to the making of a penalty order, is in itself sufficient. There is a qualitative difference between engaging in unlawful conduct in the sure and certain knowledge that a well-resourced principal will pay whatever penalty is attracted, and having the burden of non-indemnity from that principal in relation to unlawful conduct.

62    It seems to me, necessarily, to follow from the breadth of the power which either exists by implication from s 81(1)(a), or is there in any event in s 81(1)(c), that the question of prohibition of indemnification is not an all or nothing subject. It is, in my view, lawfully possible partially to prohibit indemnification if, in the particular circumstances of a given case, that it is more apt to achieve the end of deterrence, but also to recognise moderating influences. In this case, as I have already mentioned, Mr Seiffert’s acknowledgement of contraventions, and his participation in training, is a moderating influence. I do, however, consider it necessary that there be some burden or sting in terms of non-indemnification by the union.

63    The Commissioner went so far as to seek orders that would prevent what the Commissioner termed in his amended originating application as “crowd funding”, or the like. That may be difficult to enforce and, in any event, it would prevent even a close relative, if Mr Seiffert is in financial distress, from providing some assistance. It is difficult, on the material to hand, to understand Mr Seiffert’s financial position, as it is, for that matter, in respect of other respondents. That is because that has not been exposed by evidence. Nonetheless, he is a salaried officer of the CFMMEU, so I infer that, whilst he is being paid according to law, that is not what one might term a princely salary.

64    In my view, the appropriate order is in terms of paragraphs 17(a) and (b) of the orders sought by the Commissioner, which would prevent, either directly or indirectly, indemnification as to 50% of the penalty imposed by the CFMMEU, but not prevent others from assisting Mr Seiffert if so disposed. Indeed, it may well be that the ends of deterrence and understanding of penalisation to achieve deterrence would be brought home more broadly by not prohibiting that type of assistance.

65    The individual respondents each sought 90 days within which to make payment. The terms of s 81 are such that the Court has power to make such an order. I grant 90 days for payment.

66    I note as well that the CFMMEU and the Commissioner are agreed that there should be an order for costs made against the CFMMEU in the sum of $12,500.

Associate:    

Dated:    1 July 2022

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