FEDERAL COURT OF AUSTRALIA

Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Tao [2024] FCA 292

ORDERS

THE COURT DECLARES THAT:

The contraventions

1.    The First Respondent contravened s 245AS(1) of the Migration Act 1958 (Cth) (the Act) on 6 July 2017, 8 August 2017, 6 September 2017, 4 January 2018 and 18 October 2018 by:

(a)    on or about 6 July 2017 and 6 September 2017, making payments to the Second Respondent in return for the Second Respondent agreeing to sponsor visas for overseas workers to work in the Second Respondent’s fruit growing and packing business in Tatura, Victoria;

(b)    on or about 8 August 2017, making a payment, and on or about 4 January 2018, offering to make a payment, to the Third Respondent in return for the Third Respondent agreeing to sponsor visas for overseas workers to work in the Third Respondent's orchard business in Shepparton, Victoria; and

(c)    on or about 18 October 2018, offering to make a payment to another person in return for the occurrence of a sponsorship-related event.

2.    The Second Respondent contravened s 245AR(1) of the Act on or about 6 July 2017 and on or about 6 September 2017 by receiving payments from the First Respondent in return for the occurrence of a sponsorship-related event.

3.    The Third Respondent contravened s 245AR(1) of the Act on or about 8 August 2017 by receiving a payment from the First Respondent in return for the occurrence of a sponsorship-related event.

THE COURT ORDERS THAT:

4.    Pursuant to s 486R(3) of the Act, the First Respondent pay to the Commonwealth a pecuniary penalty in the amount of $100,000 for the contraventions of the Act declared in paragraph 1 above, to be paid in 4 (four) instalments of $25,000, commencing 28 days from the date of this order then at 6-monthly intervals.

5.    Pursuant to s 486R(3) of the Act, the Second Respondent pay to the Commonwealth a pecuniary penalty in the amount of $20,000 for the contraventions of the Act declared in paragraph 2 above, to be paid 28 days from the date of this order.

6.    Pursuant to s 486R(3) of the Act, the Third Respondent pay to the Commonwealth a pecuniary penalty in the amount of $20,000 for the contravention of the Act declared in paragraph 3 above, to be paid 28 days from the date of this order.

7.    The parties bear their own costs of the proceeding.

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

REASONS FOR JUDGMENT

ANDERSON J:

INTRODUCTION

1    By Originating Application and Concise Statement both dated 22 October 2021, the applicant (Minister) claimed that the first respondent, Mr Chunjia (“Terry”) Tao offered and provided money in return for the second and third respondents, Mr Gerard Alampi and Mr Joseph Rullo, respectively, sponsoring visas for Mr Tao’s clients by employing them in their respective businesses.

2    The claims also concern the conduct of Mr Alampi and Mr Rullo in accepting the money offered by Mr Tao. Further, it is separately claimed that Mr Tao’s conduct in offering money to Mr Frank de Bruyn (which was ultimately not paid) in return for Mr de Bruyn sponsoring visas for Mr Tao’s clients through employment in his business.

3    The Minister alleges that by Mr Tao offering and providing money to Mr Alampi and Mr Rullo and offering money to Mr de Bruyn, he contravened s 245AS(1) of the Migration Act 1958 (Cth) (the Act). The Minister also alleges that Mr Alampi and Mr Rullo both separately contravened s 245AR(1) of the Act by accepting the money offered by Mr Tao.

4    The parties have resolved to settle the claims made by the Minister against each of the respondents, Mr Tao, Mr Alampi and Mr Rullo. To that end, in accordance with s 191(3)(a) of the Evidence Act 1995 (Cth), for the purpose of the proceeding, the parties have agreed that the relevant facts and admissions are those contained in the Statement of Agreed Facts and Admissions dated 4 March 2024 (SAFA). On the basis of the facts and admissions contained in the SAFA, Mr Tao, Mr Alampi and Mr Rullo admit, and the Minister agrees, the contraventions set out in paragraph 34 of the SAFA.

5    The parties jointly submit that penalties in the following amounts are appropriate:

(a)    $100,000 for Mr Tao;

(b)    $20,000 for Mr Alampi; and

(c)    $20,000 for Mr Rullo.

6    The parties jointly submit that the above penalties are appropriate as they will achieve the twin objectives of specific and general deterrence, having regard to the nature and seriousness of the contravening conduct whilst not being oppressive.

7    The respondents acknowledge their contravening conduct, and as part of their regret for that, have agreed with the Minister to admit the alleged contraventions and agree a penalty to reflect their conduct.

8    The core conduct giving rise to the contraventions may be summarised as follows:

(a)    between 2017 and 2018, Mr Tao made payments and offers of payment to Mr Alampi and Mr Rullo (totalling $9,000 and $13,000 respectively) and offered to make payment to Mr Frank de Bruyn (Mr de Bruyn) (on the condition Mr de Bruyn provided evidence of his business operations), in return for an agreement for those persons to sponsor visas for overseas workers;

(b)    in July and September 2017, Mr Alampi received payment from Mr Tao for their agreement, and Mr Tao received $40,000 from the visa applicants in relation to those sponsorship applications;

(c)    in August 2017, Mr Rullo received the first payment from Mr Tao for their agreement. After receiving advice from his accountant expressing concerns about the arrangement, he returned the sum to Mr Tao’s associate, Jessie Wang. Mr Rullo refused to accept the second offer of payment. Mr Tao received $20,000 from the visa applicants in relation to those sponsorship applications; and

(d)    in 2018, Mr Tao made an offer to pay Mr de Bruyn $20,000 in relation to sponsorship applications. That offer was conditional on Mr de Bruyn providing evidence of his business operations and withdrawn when Mr de Bruyn did not provide that evidence.

9    The particular contraventions alleged, and now accepted, are:

(a)    five contraventions of s 245AS(1) of the Act (offering to provide or providing a benefit) by Mr Tao;

(b)    two contraventions of s 245AR(1) of the Act (asking for or receiving a benefit) by Mr Alampi; and

(c)    one contravention of s 245AR(1) of the Act by Mr Rullo,

each of which occurred during the period 6 July 2017 to 18 October 2018 (Relevant Period).

BACKGROUND

10    During the Relevant Period, Mr Tao was a Registered Migration Agent and owned the migration agency Creating Century Group Pty Ltd, which operated from Melbourne.

11    Over the course of 2017 and 2018, Mr Tao contacted or met with each of Mr Alampi, Mr Rullo and Mr de Bruyn (separately and unrelatedly) and offered to pay each of them certain sums of money (and made payments to Mr Alampi and Mr Rullo) in exchange for them agreeing to sponsor visa applications of Chinese nationals, on the basis that those individuals were employed in the businesses of Mr Alampi, Mr Rullo and Mr de Bruyn. Each offer is taken in turn below.

Alampi payments

12    First, on or around 6 July 2017, Mr Tao contacted Mr Alampi by telephone and offered him $33,000 for each Chinese national skilled worker that Mr Alampi employed in his fruit growing and packing business in Tatura, Victoria (Prima Fresh Pty Ltd), and provided visa sponsorship. Mr Tao also offered to pay Mr Alampi a deposit of $3,000 before Mr Alampi employed and sponsored the Chinese nationals.

13    On or around 6 July 2017, Mr Alampi accepted Mr Tao’s offer. Under the agreement, Mr Tao made two payments to Mr Alampi totalling $9,000: the first was the $3,000 deposit on 6 July 2017; and the second was $6,000 on 6 September 2017 (Alampi Payments).

14    After the $3,000 deposit was paid, Mr Alampi began employing Chinese nationals referred by Mr Tao. In total, Mr Alampi employed four Chinese nationals between 7 July 2017 and 15 December 2017. Shortly after each of these individuals was employed, Mr Tao caused visa sponsorship applications for Subclass 187 visas to be submitted for them, stating they were employed at Prima Fresh Packers Pty Ltd, a related entity of Prima Fresh.

15    Mr Tao received $40,000 in total from the visa applicants for arranging the visa applications, being $10,000 for each applicant.

Rullo payments

16    Second, on or around 8 August 2017, Mr Tao agreed to pay Mr Rullo $35,000 for each Chinese national skilled worker Mr Rullo employed in his orchard business in Shepparton, Victoria (F&M Rullo Pty Ltd and Country Harvest Pty Ltd) and for whom he sponsored a visa application.

17    Mr Tao made one payment and one offer to make payment to Mr Rullo. The payment was on or around 8 August 2017 for $10,000, (which Mr Rullo ultimately returned to Mr Tao’s associate, Ms Jessie Wang) and the offer to make payment was made on or around 4 January 2018 for $3,000, however Mr Rullo did not accept this offer (Rullo Payments).

18    After the payment was made, Mr Tao caused visa sponsorship applications for Subclass 187 visas to be submitted for two Chinese nationals on 21 September 2017 and 1 February 2018. While Mr Rullo did not go on to employ these individuals in his business, he did provide documentation to support visa sponsorship. Employment contracts between the two visa applicants and F&M Rullo and Country Harvest (as relevant) were submitted as part of the visa sponsorship applications.

19    Mr Tao received $20,000 in total from the visa applicants for arranging the visa applications, being $10,000 for each applicant.

de Bruyn offer

20    Last, on 18 October 2018, Mr Tao offered Mr de Bruyn $20,000 for each individual for whom Mr de Bruyn sponsored a visa. That offer was conditional on Mr de Bruyn providing financial statements and Business Activity Statements in relation to his business operations and was withdrawn by Mr Tao when Mr de Bruyn did not provide the relevant financial documents.

21    The individuals proposed to be sponsored by Mr de Bruyn were Chinese nationals and family members of investors through whom Mr Tao had offered to arrange finance for Mr de Bruyn’s businesses located in Ravenswood, Tasmania. Under Mr Tao’s offer, Mr de Bruyn was required to employ the individuals and the $20,000 payments to Mr de Bruyn would be staged, with the first $2,000 paid upon agreement (de Bruyn Offer).

22    Ultimately, no payment was made and no sponsorship application was submitted under the de Bruyn Offer.

Objects and structure of the Act

23    One of the objects of the Act is to regulate, in the national interest, the coming into, and presence in, Australia of non-citizens: s 4(1) of the Act.

24    The relevant civil penalty provisions in this matter are ss 245AR(1) and 245AS(1) of the Act. They are contained in Subdivision D (Offences and civil penalties in relation to sponsored visas) of Division 12 (Offences etc. in relation to entry into, and remaining in, Australia) of Part 2 (Arrival, presence and departure of persons) of the Act.

25    Section 245AR(1) prohibits a person from asking for or receiving a “benefit” from another person in return for the occurrence of a “sponsorship-related event”. A person will contravene s 245AR(1) even if the sponsorship-related event does not occur: s 245AR(2).

26    Section 245AS(1) prohibits a person from offering to provide, or providing, a benefit to another person in return for the occurrence of a sponsorship-related event. A person will contravene s 245AS(1) even if the sponsorship-related event does not occur: s 245AS(2).

27    “[B]enefit” is defined in s 245AQ for the purposes of ss 245AR and 245AS as including a payment or other valuable consideration (paragraph (a)). “[S]ponsorship-related event” is defined in s 245AQ as meaning, among other things, where a person agrees to be, or does not withdraw his or her agreement to be “an approved sponsor in relation to an applicant or proposed applicant for a sponsored visa” (paragraph (d)) or where a person employs a person “to work in an occupation or position in relation to which a sponsored visa has been granted, has been applied for or is to be applied for” (paragraph (i)).

28    An order of contravention of ss 245AR(1) and 245AS(1) may only be made where, in general terms, the alleged contravening conduct occurs wholly or partly in Australia: s 245AW(1).

APPROACH TO ORDER SOUGHT BY AGREEMENT

29    The High Court has observed that, in civil proceedings (including civil penalty proceedings), there is considerable scope both for the parties to agree on the facts, consequences and appropriate remedy and for the court to be persuaded that the remedy proposed is “an appropriate remedy”: Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [57].

30    Consistent with this approach, a court can make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate: Commonwealth v Director at [57]; Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [71]; Australian Securities and Investments Commission v MobiSuper Pty Ltd [2021] FCA 855 at [28].

31    The principles relevant to agreed penalties were set out in the joint reasons in Commonwealth v Director (approved in earlier cases such as NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285; [1996] FCA 1134; and Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72).

32    There is an important public policy involved in promoting predictability of outcome in civil penalty proceedings. The practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers. Such predictability of outcome “encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention”: Commonwealth v Director at [46] and [79] (French CJ, Kiefel, Bell, Nettle and Gordon JJ; Keane J agreeing).

33    Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty that the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty. The court asks “whether their proposal can be accepted as fixing an appropriate amount” and for that purpose the court must satisfy itself that the submitted penalty is appropriate: Commonwealth v Director at [48] quoting NW Frozen Foods at 291 (Burchett and Kiefel JJ).

34    The regulator in a civil penalty proceeding is not disinterested. That consideration supports, rather than detracts from, the propriety of the court receiving joint submissions as to facts and penalty and imposing the proposed penalty if persuaded that it is appropriate. It is the function of the relevant regulator to regulate the industry in order to achieve compliance. Accordingly, it is to be expected that the regulator will be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance, albeit that such submissions will be considered on their merits in the ordinary way: Commonwealth v Director at [60] citing NW Frozen Foods at 290-295 (Burchett and Kiefel JJ).

35    The principles in Commonwealth v Director and in NW Frozen Foods and Mobil Oil, were canvassed by the Full Court in Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission (2021) 284 FCR 24 at [124]-[131] (Wigney, Beach and O’Bryan JJ).

36    Relevantly, the Full Court said as follows:

(a)    In considering whether the agreed and jointly proposed penalty is an appropriate penalty, it is necessary to bear in mind that there is no single appropriate penalty. Rather, there is a permissible range of penalties within which no particular figure can necessarily be said to be more appropriate than another. The permissible range is determined by all the relevant facts and circumstances. An agreed and jointly proposed penalty may be considered to be “an appropriate penalty if it falls within that permissible range”: Volkswagen at [127].

(b)    The court should generally recognise that an agreed proposed penalty is most likely the result of compromise and pragmatism on the part of the regulator and reflects the regulator’s considered estimation of the penalty necessary to achieve deterrence and the risks and expenses of the litigation had it not been settled: Volkswagen at [129].

(c)    If the proposed penalty falls within the permissible or acceptable range, the public policy consideration of predictability of outcome will generally provide a compelling reason for the court to accept the proposed penalty: Volkswagen at [131]. Further, the court will not depart from the submitted figure “merely because it might otherwise have been disposed to select some other figure” if it is within the permissible range: Commonwealth v Director at [47], quoting NW Frozen Foods at 291.

37    The above principles are not confined to agreed pecuniary penalties but apply equally to agreement on other forms of relief: Australian Competition and Consumer Commission v Econovite Pty Ltd [2003] FCA 964 at [11] (French J) quoting Trade Practices Commission v Milreis Pty Ltd (No 2) (1978) 32 FLR 234 at 243. The High Court’s conclusions as to the desirability of acting upon agreed penalties in Commonwealth v Director were made in the context of its broader recognition that civil penalties are but one of numerous forms of relief which regulators may pursue as civil litigants: see Commonwealth v Director at [24], [57]-[59], [63], [103], [107].

THE PENALTY JOINTLY SOUGHT

38    Under s 486R(1) and (2) of the Act, the Minister may apply to an eligible court, within six years of the alleged contravention, for an order that a person alleged to have contravened ss 245AR(1) or 245AS(1) pay the Commonwealth a pecuniary penalty. The Federal Court is included within the definition of eligible court under s 5(1) of the Act.

39    If the court is satisfied that the person has contravened ss 245AR(1) or 245AS(1), the court may order the person to pay to the Commonwealth such pecuniary penalty as the court determines to be appropriate: s 486R(3).

40    As noted, Commonwealth v Director highlights the desirability of, and the strong public interest in, imposing pecuniary penalties jointly proposed by the parties, subject to the court being satisfied that they are appropriate. The submissions below address the appropriateness of the penalty jointly proposed by the parties.

Factors relevant to penalty

41    Section 486R(6) of the Act provides that in determining the pecuniary penalty, 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 Department has taken any administrative action against the person in relation to the conduct constituting the contravention or any similar conduct; and

(e)    whether the person has been issued with an infringement notice under regulations made for the purposes of section 506A of the Act in relation to the conduct constituting the contravention or any similar conduct; and

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

Applicable principles

42    The foundational penalty principles were recently distilled by the High Court in Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450 and summarised by this Court in Australian Securities and Investments Commission v GetSwift Ltd [2023] FCA 100.

Purpose and factors relevant to the assessment of civil penalties

43    Subject to the statutory scheme in question, the primary (if not sole) purpose of a civil penalty is the promotion of the public interest in compliance with the provisions of the Act in question by the deterrence of further contraventions of that Act: Pattinson at [9]; GetSwift at [37].

44    In 1991, in Trade Practices Commission v CSR Ltd [1991] ATPR 41-076; [1990] FCA 521. French J (as he then was) described deterrence as the “principal, and I think probably the only, object” of the imposition of a civil penalty and referred to the “primacy of the deterrent purpose in the imposition of [a] penalty”: CSR at 52,152.

45    Possible relevant considerations, not intended to be a “rigid catalogue”, were summarised by French J in CSR as follows (French factors):

(a)    The nature and extent of the contravening conduct.

(b)    The amount of loss or damage caused.

(c)    The circumstances in which the conduct took place.

(d)    The size of the contravening company.

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

(f)    The deliberateness of the contraventions and the period over which it extended.

(g)    Whether the contravention arose out of the conduct of senior management or at a lower level.

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

(i)    Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the [Act in question] in relation to the contravention: CSR at 52,152-53; GetSwift at [39].

46    Justice French (as he then was) described the factors he identified, not as freestanding factors detached from the overriding concern with deterrence, but as factors that may inform the “assessment of a penalty of an appropriate deterrent value”: CSR at 52,152; see also Pattinson at [44].

47    The French factors are not exhaustive of the matters that the Court may consider: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at [101]. The Court may draw upon principles that have been developed in and considered relevant to the assessment of penalty in other Australian civil penalty cases. For the most part these have their genesis in the French factors. Each factor either goes to the objective nature and seriousness of the offending conduct or otherwise concerns the particular circumstances of the defendant in question. The additional factors include:

(a)    the financial position of the contravener;

(b)    whether the contravener has engaged in similar conduct in the past;

(c)    whether the contravening conduct was systematic, deliberate or covert.

48    More recently, in Pattinson, the primacy of deterrence, and the differences between the exercise of fixing a civil penalty and the exercise of criminal sentencing, was the subject of renewed and detailed consideration by the High Court. Relevantly, Pattinson affirms or establishes the following principles:

(a)    The primary, if not sole, purpose of a civil penalty is the promotion of the public interest in compliance with the provisions of the relevant Act by the deterrence of further contraventions of that Act: Pattinson at [9], [15] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).

(b)    One manifestation of this overriding principle is that a civil penalty must be fixed with a view to ensuring that the penalty is not such as to be regarded as “an acceptable cost of doing business”: Pattinson at [17], citing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at 265 (Keane CJ, Finn and Gilmour JJ). Persons engaged in trade and commerce must be deterred from the “cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention”: Singtel Optus at 266; GetSwift at [41].

(c)    Unlike the criminal law, retribution, denunciation and rehabilitation have no part to play in fixing civil penalties. In particular, in fixing a civil penalty, it is an error to take into account “a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention”: Pattinson at [10], [16], [31], [39], [51].

(d)    The French factors from CSR are “possible relevant considerations”, not a “legal checklist”, and, where relevant, they inform an assessment of a penalty of “appropriate deterrent value”: Pattinson at [18]-[19], [47]. The High Court added that, “to the extent that some of the factors listed by French J in CSR might be said to echo retributive theories, his Honour also made clear that those factors were relevant only to the extent they related to deterrence”: Pattinson at [44]. As this court has put it, Pattinson makes clear that the factors “are important insofar as they inform the remedial response necessary to secure the objects of deterrence”: GetSwift at [40]. An appropriate civil penalty is one that “strikes a reasonable balance between oppressive severity and the need for deterrence”: Pattinson at [46]; see also at [41]. The Full Federal Court has recently described this statement in Pattinson as “the proscription on oppression articulated by the High Court”: Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (2023) 297 FCR 438 at [142] (Bromberg, Moshinsky and Bromwich JJ).

49    In Australian Securities and Investments Commission v Commonwealth Bank of Australia, (2018) 128 ACSR 289 at [62], Beach J observed:

The need for specific deterrence is informed by the attitude of the contravener to the contraventions, both during the course of the contravening conduct and in the course of the proceedings. And the need for general deterrence is particularly important when imposing a penalty for a contravention which is difficult to detect.

50    In Pattinson at [47], the High Court observed that the “penalty that is appropriate to protect the public interest by deterring future contraventions of the [relevant Act] may also be moderated by taking into account other factors of the kind adverted to by French J in CSR”, and gave the examples of:

(a)    where those responsible for a contravention express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty to protect the public interest by deterring future contraventions because no more would be necessary to incentivise the contravener to remain mindful of their remorse and their public expressions of that remorse to the court, and

(b)    where the occasion in which a contravention occurred is unlikely to arise in the future, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.

51    The proposition that “a reasonable balance” must be struck between “oppressive severity” and “the need for deterrence” expressly contemplates that some modification of the penalty thought necessary to give effect to the latter may in some circumstances be appropriate to prevent the former. As O’Bryan J recently put it: “[i]t is a question of balancing the need for deterrence against the need to avoid an oppressive penalty”: Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd [2023] FCA 256 (ANZ) at [64]. In this respect, the High Court’s repeated references in Pattinson to the penalty “reasonably” necessary to deter further contraventions should be noted: Pattinson at [9], [10], [45], [59], [61], [69].

52    The Court should have regard to the above principles, focusing on deterrence as the “touchstone” and having appropriate regard to totality in the end. This approach is “apposite in the light of Pattinson, and is more faithful to that decision than a checklist-like analysis”: GetSwift at [66]. The evident purpose of the civil penalty regime in the Act makes clear that the deterrence approach applies in the imposition of civil penalties for contraventions of the Act.

Instinctive Synthesis

53    The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the contravener, and making a value judgment as to what the appropriate penalty is in the light of the protective and deterrent purpose of a pecuniary penalty. This process involves an “intuitive” or “instinctive synthesis” of all relevant factors, similar in nature to the judicial process involved in determining a sentence for a criminal offence as explained by the High Court in Markarian v The Queen, (2005) 228 CLR 357, but appropriate to the distinction between the sentencing task and the resolution of civil penalty proceedings: see Commonwealth v Director at [56]-[57].

54    The Full Court described this process of “instinctive synthesis” in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25 at [44] (Jagot, Yates and Bromwich JJ) as an “integrated and holistic approach, requiring the weighing up of all relevant factors into a final result”. It is an “inexact science, not subject to rigidity in approach but guided by well-accepted factors”: Australian Securities and Investments Commission v AMP Financial Planning Pty Ltd (No 2) (2020) 377 ALR 55 at [159] (Lee J).

Loss or damage suffered as a result of the contravention and indicia of profit or benefit

55    The assessment of loss as a result of, or benefit derived from, contraventions is but one of the factors to be weighed up as part of the process of instinctive synthesis in setting a penalty: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312 at [509]-[552].

Other relevant matters going to specific deterrence

56    As the High Court made clear in Pattinson, the “circumstances of the contravener”, and not just the “circumstances of the contraventions”, will often be highly relevant to specific deterrence. As their Honours said at [60]: “Indeed, in some cases, the circumstances of the contravener may be more significant in terms of the extent of the necessity for deterrence than the circumstances of the contravention.”

57    In this case, while Mr Tao maintains that he was not aware that his conduct was in contravention of the Act, Mr Tao was a migration agent who should have had specific knowledge of the visa application process. The Court should have regard to a person in his position when considering the appropriate penalty to achieve deterrence: While the Minister considers those particular matters to be relevant to both specific and general deterrence, Mr Tao only accepts that they are relevant to general deterrence.

Other relevant matters going to general deterrence

58    As Middleton J observed in Australian Securities and Investments Commission v Healey (No 2) (2011) 196 FCR 43 at [7]: “the quantity of punishment in the context of general deterrence can never be absolutely determined by any standard or invariable rule: in the end, the measurement is reached by considering what appears to be the best to prevent future contraventions”.

59    In Pattinson, the High Court repeatedly emphasised that the deterrence to which a civil penalty is directed is deterrence of future contraventions “of a like kind”: Pattinson at [9], [10], [50] and [61]. This suggests that the correct, or at least initial, frame of reference for general deterrence in this case is to consider what is required to deter future contraventions of s 245AR(1) and 245AS(1) of the Act in circumstances such as the present case.

Course of conduct, parity and totality principles

Course of conduct principle

60    The course of conduct principle may apply where there is a sufficient interrelationship in the legal and factual elements of the acts or omissions constituting the contravening conduct. In these circumstances, the court may, in its discretion, penalise the acts or omissions as a single course of conduct: Australian Securities and Investments Commission v MLC Nominees (2020) 147 ACSR 266 at [128].

61    The course of conduct and totality principles were recently summarised by Katzmann J in Australian Securities and Investments Commission v Westpac Banking Corporation (2022) 158 ACSR 647 at [80]-[81]. as follows:

The principle requires that in such a case consideration should be given to whether the contraventions arise out of the same course of conduct or the one transaction in order to determine whether it is appropriate that a “concurrent” or single penalty should be impose for the multiple contraventions: Yazaki at [234]. Even if the course of conduct principle is applicable, however, a judge is not obliged to apply the principle if the resulting penalty does not reflect the seriousness of the contraventions: Cahill at [39]; Yazaki at [235]. It may also be appropriate for the Court to fix a single penalty where the precise number of contraventions cannot be ascertained; where the number is so large that the fixing of separate penalties is not feasible; or where there is such a large number of relatively minor related contraventions such that the contraventions “are most sensibly considered compendiously”: ABCC v CFMEU at [149].

Finally, where multiple contraventions are imposed, the Court is required to aggregate the total sums and review the aggregate amount in order to consider whether it reflects what is “just and appropriate” and if not to adjust the penalties accordingly. This is known as the “totality principle” and was also developed in the context of criminal sentencing. See, for example, ABCC v CFMEU at [116]–[120], [140].

Parity Principle

62    While a direct comparison of penalties imposed in past cases will often be of little utility where the facts significantly differ, this does not mean that penalties imposed in other cases can never be relevant. Comparables may give the Court some broad guidance: Australian Competition and Consumer Commission v Multimedia International Services Pty Ltd (2016) 243 FCR 392 at [123] (Edelman J); ANZ at [72], Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) (2018) 260 FCR 68 at [69] (Allsop CJ, Davies and Wigney JJ).

Totality Principle

63    In determining the appropriate penalty for multiple contraventions, the Court will generally have regard to the “totality principle” as a “final check” of whether the cumulative total of the penalty is just and appropriate, and not excessive, having regard to the totality of the relevant contravening conduct: See Australian Securities and Investments Commission v Westpac Banking Corporation [2019] FCA 2147 at [272], [308] (Wigney J); ANZ at [68]. Such a check enables the Court to consider whether the final penalty is in proportion to the nature, quality and circumstances of the conduct involved: ANZ at [68].

Application of principles to the agreed facts of this case

64    Having regard to the matters in s 486R(6) of the Act and the principles above, the parties submit that the penalties set out in paragraph 5 above are appropriate for the following reasons.

Nature and extent of the contraventions and the circumstances in which they occurred

65    In relation to Mr Tao, he approached Mr Alampi, Mr Rullo and Mr de Bruyn effectively unsolicited and made offers and agreements that were expressly in contravention of s 245AS(1) of the Act. The conduct occurred over the course of 18 months – from mid 2017 to late 2018. In that period Mr Tao made offers to pay significant amounts in return for Mr de Bruyn, Mr Alampi and Mr Rullo employing and sponsoring his clients, respectively $20,000, $33,000 or $35,000 per individual. Mr Tao ultimately made payments totalling $19,000 to Mr Alampi and Mr Rullo, and as a result at least four of his clients were employed (four were employed by Mr Alampi, two had employment contracts with Mr Rullo) and six applied for sponsorships.

66    For Mr de Bruyn, Mr Tao offered to pay him $20,000 for each individual Mr de Bruyn employed and sponsored. That offer was conditional on Mr de Bruyn providing evidence of his business operations and withdrawn by Mr Tao when Mr de Bruyn did not provide that evidence.

67    Mr Tao ultimately received $60,000 for his conduct in arranging or seeking to arrange these agreements. This is a significant sum. In the course of receiving this money, Mr Tao has harmed the proper functioning and integrity of Australia’s sponsored migration program and caused costs to be incurred by the Commonwealth in investigating and prosecuting the contraventions.

68    For Mr Alampi and Mr Rullo, whilst Mr Alampi was careless in not confirming the credentials of Mr Tao and while they did not ultimately accept a significant amount of money from Mr Tao (and in circumstances where Mr Rullo returned $10,000) it is not irrelevant to the circumstances of the conduct that they had agreed to sponsor and employ Mr Tao’s clients in exchange for $33,000 and $35,000 (respectively) per individual who was sponsored. Such conduct undermines the objects of the Act and must be met with a penalty that provides sufficient specific and general deterrence.

Previous administrative action or found to have engaged in similar conduct

69    The Department has not taken any administrative action against any of Mr Tao, Mr Alampi or Mr Rullo in relation to the conduct constituting the contravention or any similar conduct. Nor have any of the Respondents previously been found by a court under the Act to have engaged in similar conduct.

70    While there are no previous findings of similar conduct, Mr Tao’s conduct occurred over an extended period of time, from 2017 until late 2018. It was of a repeated nature, where he made offers to three different individuals and agreements were concluded with, and payments made to, two of those individuals.

Nature and extent of any loss or damage suffered because of the contravention

71    As noted above, Mr Tao received $40,000 in relation to the sponsorships made by Mr Alampi, and received $20,000 in relation to the sponsorships made by Mr Rullo. Mr Alampi received $9,000 and Mr Rullo received $10,000 (which Mr Rullo subsequently returned).

72    In respect of each Respondent, the appropriate penalty must be fixed with a view to ensuring it is not regarded as “an acceptable cost of doing business”: Pattinson at [17], citing Singtel Optus at 265. Put another way, the penalty must serve the primary purpose of a civil penalty, being deterrence, and in that way be fixed as reasonably necessary to deter further contraventions of the Act and represent a reasonable assessment of what was necessary to make the continuation of the offender’s non-compliance with the law too expensive to maintain: Pattinson at [9].

Number of contraventions and maximum penalty per contravention

73    Section 486R(5) prescribes the method for determining the maximum penalty that can be awarded. For an individual, the maximum amount must not be more than the amount specified in the civil penalty provision: s 486R(5)(b).

74    During the Relevant Period, a contravention of ss 245AR(1) or 245AS(1) of the Act was 240 penalty units. The value of a penalty unit, as fixed under s 4AA(1) of the Crimes Act 1914 (Cth) and subject to indexation under s 4AA(3), was, relevantly, $210 for the period between 1 July 2017 and 2018.

75    Where a person has engaged in multiple contraventions of a civil penalty provision, the Court may make a single civil penalty order against a person for those contraventions where they are founded on the same facts or if the contraventions form or are part of a series of contraventions of the same or similar character: s 486V(1) of the Act. However, the penalty must not exceed the sum of the maximum penalties that could be ordered if a separate penalty were ordered for each of the contraventions: s 486V(2) of the Act.

76    Here, five contraventions occurred (variously caused by each Respondent):

(a)    on 6 July 2017 and 6 September 2017 for the Alampi Payments;

(b)    on 8 August 2017 and 4 January 2018 for the Rullo Payments; and

(c)    on 18 October 2018 for the de Bruyn Offer.

77    Accordingly, the maximum penalty that could be imposed:

(a)    for Mr Tao is $252,000 (five contraventions of s 245AS(1));

(b)    for Mr Alampi is $100,800 (two contraventions of s 245AR(1)); and

(c)    for Mr Rullo is $50,400 (one contravention of s 245AR(1), noting Mr Rullo did not accept the 4 January 2018 payment).

78    While the Court will ordinarily have regard to the maximum penalty prescribed by the legislature, the majority in Pattinson considered that it is “but one yardstick that ordinarily must be applied” and should ordinarily be treated as “one of a number of relevant factors to inform the assessment of a penalty of appropriate deterrent value”: Reckitt Benckiser at [155]-[156], quoted with approval by the High Court in Pattinson at [53]-[54].

Course of conduct

79    In relation to Mr Tao, as noted above, he has engaged in five contraventions of the Act. However, given that there is a sufficient interrelationship in the legal and factual elements of the contravention for Mr Tao’s conduct in relation to the Alampi Payments and the Rullo Payments (both of which comprised two payments to Mr Alampi and Mr Rullo), they should be treated as two courses of conduct.

80    For Mr Alampi and Mr Rullo, the same analysis applies: the conduct is sufficiently close such that these payments should comprise two courses of conduct.

81    The result is that the Court should apply the course of conduct rule to impose a penalty for Mr Tao’s conduct in relation to three courses of conduct (for the Alampi Payments, the Rullo Payments and the de Bruyn Offer), Mr Alampi’s conduct for the Alampi Payments and Mr Rullo’s conduct for the Rullo Payments.

Current provisions are untested

82    The current civil penalty provisions under examination are untested. While penalties imposed in other cases are never irrelevant, and may give the Court some broad guidance, the differences in the facts and circumstances which underlie different cases mean there is usually little to be gained by comparing the penalties imposed in other cases where the facts – and legislation – differ to that presently before the Court: Multimedia at [123] (Edelman J), Flight Centre at [69] (Allsop CJ, Davies and Wigney JJ).

83    In this respect, Beach J in Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [77] stated that:

[I]t is appropriate to consider the question of parity. But in all but the co-offender scenario or analogues thereof it is conceptually problematic to look at penalties in other cases to calibrate a figure in the present case when all that one has from the other cases are single point determinations produced by opaque intuitive synthesis. Deconvolution analysis of the single point determinations in order to work out the causative contribution of any particular factor is unrealistic.

84    Ultimately, the consistency that is sought is “consistency in the application of the relevant legal principles, not some numerical or mathematical equivalence”: Hili v The Queen (2010) 242 CLR 520 at [18] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); Lacey v Attorney-General (Qld) (2011) 242 CLR 573 at [54] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); Barbaro v The Queen (2014) 253 CLR 58 at [40]-[41] (French CJ, Hayne, Kiefel and Bell JJ).

DISPOSITION

85    I am satisfied, for the reasons jointly advanced by the parties, that it is appropriate, in all the circumstances identified above that the Court order a penalty of:

(a)    $100,000 for Mr Tao;

(b)    $20,000 for Mr Alampi; and

(c)    $20,000 for Mr Rullo.

86    In arriving at the above penalties, I have, consistent with authority, employed an intuitive synthesis based on all of the factors set out above and having regard to the parties involved and the public interest in giving effect to agreements as to penalty and am, in all the circumstances, satisfied that the proposed penalties are appropriate.

87    I note that the proposed penalty against Mr Tao is subject to a payment plan. I am satisfied, in light of the agreed facts and admissions, that ordering Mr Tao to pay the penalty over the course of 24 months from the date of order will not undermine the specific and general deterrent effects of the penalty. Moreover, I am satisfied that it will ensure the penalty is not greater than what is necessary to achieve deterrence, and thereby gives effect to the “proscription on oppression” in Pattinson.

DECLARATIONS JOINTLY PROPOSED

88    The Court has a wide discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth), confined by considerations which mark the boundaries of judicial power: Australian Securities and Investments Commission v Mitchell (No 3) (2020) 148 ACSR 630 at [7] (Beach J).

89    This Court has recognised the utility of declarations which set out the particular liability found and the basis for the penalties ordered: see Australian Securities and Investments Commission v Axis International Management Pty Ltd (2009) 178 FCR 485 at [26]-[43] (Gilmour J) and the cases cited there. Declarations may be appropriate to record the Court’s disapproval of the conduct, assist the Minister in carrying out the duties conferred on him by the Act, assist in clarifying the law, and make clear to other would-be contraveners that such conduct is unlawful: see Axis International at [26]-[31], [42] (Gilmour J); Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [77]-[79] (Gordon J). Notwithstanding any agreement between the parties in respect of proposed declarations, it is for the Court to decide whether declaratory relief is appropriate: Australian Securities and Investments Commission v MLC Nominees (2020) 147 ACSR 266 at [109] (Yates J).

90    I am satisfied that the preconditions for declaratory relief, as explained by the High Court in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438 (Gibbs J) and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581–582 (Mason CJ, Dawson, Toohey, Gaudron JJ) are established here.

91    First, there is a real and not a hypothetical question. There is a direct and important question that will be answered by the declarations as to whether Mr Tao, Mr Alampi and Mr Rullo contravened ss 245AR(1) and 245AS(1) of the Act. For the reasons stated in paragraphs 7 to 34 of the SAFA, I am satisfied that each of the respondents has contravened the respective provisions.

92    Second, the Minister has an obvious and legitimate interest in seeking the declarations, given the responsibilities with which he is charged.

93    Third, there is a proper contradictor. Mr Tao, Mr Alampi and Mr Rullo, as the individuals that are proposed be declared to have contravened the law, have always had an interest in opposing the relief. Although they have now made admissions and agree to the declarations sought, they have done so on advice and, in the case of Mr Tao, after actively defending the proceeding for some time: Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378 at [30]-[33] (Greenwood, Logan and Yates JJ).

94    Finally, the utility of the declarations is not in doubt. They would assist in discharging the objective of general deterrence: see generally Axis International at [26]-[31] and [42] (Gilmour J); Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [77]-[79] (Gordon J); Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union (2007) ATPR 42-140 at [6] (Nicholson J) and the cases there cited.

COSTS

95    The parties agree to bear their own costs of the proceedings.

DISPOSITION

96    For the reasons given above, I have made the orders sought by the parties.

Associate:

Dated:    26 March 2024