Australian Building and Construction Commissioner v Hanna and Anor (No.2)
[2017] FCCA 1904
•11 August 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER v HANNA & ANOR (No.2) | [2017] FCCA 1904 |
| Catchwords: INDUSTRIAL LAW – Accessorial liability – First Respondent admits contravention of s.500 Fair Work Act 2009 (Cth) – effect of s.793 Fair Work Act 2009 (Cth) for Second Respondent – permit holder – effect of s.550 Fair Work Act 2009 (Cth) – can a person be a party to their own acts – Second Respondent found to be involved in the contraventions of the First Respondent. |
| Legislation: Fair Work Act 2009, ss.45, 484, 500, 550, 793 |
| Cases cited: Australian Building and Construction Commissioner v McDermott (No.2) [2017] FCA 797 |
| Applicant: | AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
| First Respondent: | DAVID HANNA |
| Second Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| File Number: | BRG 98 of 2016 |
| Judgment of: | Judge Vasta |
| Hearing date: | 9 August 2017 |
| Date of Last Submission: | 9 August 2017 |
| Delivered at: | Brisbane |
| Delivered on: | 11 August 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr C J Murdoch QC and Mr S Mackie |
| Solicitors for the Applicant: | K +L Gates |
| Counsel for the Respondents: | Mr C A Massy |
| Solicitors for the Respondents: | Hall Payne |
ORDERS
THE COURT DECLARES:
That in the exercise or attempted exercise of purported rights under s.484 Fair Work Act 2009 (Cth) (“FW Act”) by Mr Hanna, pursuant to s.550(1) of the FW Act, the Second Respondent engaged in an improper manner by:
(a)entering the Project without having given a notice of entry under s.487 of the FW Act;
(b)remaining on the premises despite requests to leave;
(c)when asked if he had a right of entry permit, responded by raising his hand with his middle finger extended and saying that he did not need one;
(d)squirted water at a person validly engaged to work on the Project, which struck the person's face, shirt and mobile phone;
(e)stating "Take that phone away or I'll fucking bury it down your throat, you ask me if you want to take a picture of me, you ask me"; and
(f)using an employee's swipe card to swipe out a number of employees engaged on the Project, the effect of which was that the occupier of the premises did not have a record of which employees had left the premises and which had not.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 98 of 2016
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
Applicant
And
| DAVID HANNA |
First Respondent
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 25 May 2017, I imposed penalties upon the First Respondent because of his breaches of s.500 of the Fair Work Act 2009 (Cth) (“the FW Act”). The Second Respondent is alleged to have committed the same acts as the First Respondent because of liability founded under the FW Act. The Second Respondent refutes this.
The Actions of the First Respondent
In short compass, the First Respondent, Mr Hanna, went to the construction site at “Broadway on Ann” on 10 February 2015 purportedly in exercise of his rights under s.484 of the FW Act. He did not give prior notice and refused to obey the directions of the site managers. He engaged in improper conduct which resulted in 6 breaches of s.500 of the Act.
The First Respondent was, at the time, the divisional president of the Second Respondent.
The Applicant had pleaded that the Second Respondent was liable for the actions of the First Respondent because of the effect of s.793 of the FW Act. Alternatively, the Applicant relied upon vicarious liability at common law or the effect of s.550 of the FW act.
The Legislation
Section 500 of the FW Act reads as follows:
“500 Permit holder must not hinder or obstruct
A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.
Note 1: This section is a civil remedy provision (see Part 4‑1).
Note 2: A permit holder, or the organisation to which the permit holder belongs, may also be subject to an order by the FWC under section 508 if rights under this Part are misused.
Note 3: A person must not intentionally hinder or obstruct a permit holder, exercising rights under this Part (see section 502).”
It is clear that this section applies only to “permit holders” and unless someone is a permit holder, the section has no application. It differentiates between the “permit holder” and “the organisation to which the permit holder belongs”.
Section 793 of the FW Act reads as follows:
“793 Liability of bodies corporate
Conduct of a body corporate
(1) Any conduct engaged in on behalf of a body corporate:
(a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and
(b) that the person had that state of mind.
Meaning of state of mind
(3) The state of mind of a person includes:
(a) the knowledge, intention, opinion, belief or purpose of the person; and
(b) the person’s reasons for the intention, opinion, belief or purpose.
Disapplication of Part 2.5 of the Criminal Code
(4) Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.
Note: Part 2.5 of the Criminal Code deals with corporate criminal responsibility.
(5) In this section, employee has its ordinary meaning.”
This section is utilised as an evidentiary device to ensure that corporations have appropriate liability which then furthers the aims of the FW Act.
In this case, there is no doubt that the First Respondent was an official of the Second Respondent and that the exercise of power under s.484 of the FW Act was within the scope of the authority of the First Respondent in his role with the Second Respondent.
The decision in Australian Building and Construction Commissioner v McDermott (No.2) [2017] FCA 797
On 17 July 2017, Charlesworth J delivered her decision in Australian Building and Construction Commissioner v McDermott (No.2) [2017] FCA 797. Without going too far into the ratio decidendi of the matter, the Court found that, because s.500 related to “permit holders”, the provisions of s.793 could not be used to deem liability for a breach of s.500 upon anyone who was not a “permit holder”. The Second Respondent is a body corporate and cannot be a “permit holder”. Only a real person can be a “permit holder”.
Whilst I am not absolutely convinced as to the correctness of this ruling, I am by no means convinced that it is “plainly wrong”. Both sides have urged me to proceed upon the basis that the ruling is correct.
Her Honour also found that liability of the Second Respondent could not be established upon the common law principle of vicarious liability. Again, both parties have asked me to proceed upon the basis that this ruling, too, is correct.
Does s.550 of the Fair Work Act 2009 (Cth) make the Second Respondent liable?
Section 550 of the FW Act reads as follows:
“550 Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.”
Whilst s.793 of the FW Act deems the actions of an individual to be the actions of a body corporate, this section is different. This section can make liable persons who did not actually do any act that would constitute a breach, in much the same way that an accessory is liable for the actions of a principal.
The Second Respondent submits that there has to be a point of differentiation between the principal entity and the accessorial entity for s.550 to come into play. In other words, the Second Respondent submits that one cannot be a party to one’s own actions.
At paragraph 121 of the McDermott (supra) decision, the Court said:
“121. To the extent that it is necessary to show that CFMEU involved itself in some tangible way in the contraventions of its officials, there is no reason why s 793 should not facilitate proof of that requirement. Section 793 is premised on an accepted fiction that a body corporate is a separate legal entity from those who participate in it: Salomon v A Salomon & Co Pty Ltd [1896] UKHL 1; [1897] AC 22. Accepting that fiction, it does not matter that the deemed physical acts of the secondary participant are the same acts in fact engaged in by the primary contravener. CFMEU did not make any submission to the contrary. Accordingly, the physical acts of Mr McDermott and Mr Cartledge are, in each instance, taken also to be the acts of CFMEU. That is sufficient to demonstrate CFMEU’s participation in each contravention.
Can a person be an accessory to their own actions?
Whilst Her Honour noted that the CFMEU did not submit to the contrary in that case, the Second Respondent, CFMEU, have submitted to the contrary before me. The Second Respondent has referred to Mallan v Lee (1949) 80 CLR 198 where, at 215, Dixon J said:
“I see no difficulty in accepting the proposition that, when a person or a company is guilty under s. 230 of an offence of understating income in a return, another person who, with knowledge of the relevant facts, prepared the return would be a person who had aided the person or company in committing the offence, with the result that such a person would, by reason of s. 5 of the Crimes Act, be "deemed to have committed that offence," and be punishable accordingly. When under a statute a person is to be deemed to have done something which he has not in fact done the result is that he is to be treated by a court engaged in the interpretation and administration of the law as having incurred the consequences of that which he is deemed to have done for the purposes for which the "statutory fiction is to be resorted to" - Ex parte Walton; In re Levy (1881) 17 Ch D 746 : and see Muller v. Dalgety & Co. Ltd. [1909] HCA 67; (1909) 9 CLR 693, at pp 696, 704 . The purpose of s. 5 of the Crimes Act is to make it possible for a person to be prosecuted for an offence against another law of the Commonwealth and to be punished as for that offence.
“On the interpretation I have given to s. 230 (1), for more than one reason s. 5 of the Crimes Act cannot apply to a public officer so as to make him an accessory to the offence of the company. In the first place, the public officer's act on behalf of the company making it an offender ipso facto amounts to a substantive offence on his part under s. 230 (1). In the second place, the sub-section makes him the actor, the principal, for whose guilty conduct the company is responsible vicariously. It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts.”
It is this “inversion of the conceptions” upon which the Second Respondent relies to illustrate that a person cannot be an accessory to their own acts. However, in Hamilton v Whitehead (1988) 166 CLR 121 at page 128, the High Court said :
“In our opinion, the submission is plainly right. Counsel for the respondent sought to gain some comfort from the words of Dixon J. in Mallan v. Lee. But, as we have sought to explain, the inversion of which His Honour spoke has no application here. The company is not vicariously liable for the actions of the respondent. The company is the principal offender and the respondent is charged as an accessory. Franklyn J. thought that it was ‘wrong and oppressive’ to prosecute the respondent for the identical acts and decisions as were relied on as the acts of the company. There is nothing conceptually wrong in such a course since ‘is a logical consequence of the decision in Salomon's case that one person may function in dual capacities’.”
In The Queen v. Goodall (1975) 11 SASR 94, Bray C.J. discussed what his Honour described as: "... some sort of metaphysical bifurcation or duplication of one act by one man so that it is in
law both the act of the company and the separate act of himself as an individual" (at p 100) and expressed his conclusion as follows (at p 101):"... my view is that the logical consequence of Salomon's Case ... is that the company, being a legal entity apart from its members, is also a legal person apart from the legal personality of the individual controller of the company, and that he in his personal capacity can aid and abet what the company speaking through his mouth or acting through his hand may have done."
We agree with this view.
There is no doubt that it is unusual to consider that a person is an accessory to their own actions. But that is because there is usually no need to consider such a state of affairs because, in such a situation, the person is liable as a principal offender and that is sufficient.
There is nothing in the wording of s.550 that would preclude a principal contravener also being involved in a contravention. That much was made clear in Hamilton (supra). In fact, it is on this basis that many “prosecutions” launched by the Fair Work Ombudsman (“FWO”) come before the Courts.
Applications by the Fair Work Ombudsman
The manner in which such applications made almost invariably revolves around an employer underpaying employees and thus contravening s.45 of the FW Act. The employer is usually a body corporate and so usually assumes the status as First Respondent. Any real persons involved in the contravention are added as Respondents.
This concept is best illustrated by an example. Blake Enterprises Pty Ltd was a body corporate who runs a restaurant. It has 5 employees. Don Blake was the sole director and shareholder of the body corporate. By virtue of s.793 of the FW Act, Don was a person “whose conduct engaged in within the scope of his actual or apparent authority, was conduct engaged in” by Blake Enterprises. Don is a person whose “state of mind was the state of mind of” Blake Enterprises “for conduct engaged in within the scope of his actual or apparent authority”.
Don has made a decision to pay his employees a flat rate of $10.00 an hour. The Modern Award under which the employees should be employed, has a minimum rate of $18.00 an hour plus provision for penalty rates and the loading rates.
Blake Enterprises has therefore contravened s.45 of the FW Act.
Because Don knew that Blake Enterprises was bound by its obligations under the FW Act, Don had “actual knowledge of” and “was an intentional participant” in the contravention. Therefore, Don is involved in the contravention pursuant to s.550(1).
In that example, both Blake Enterprises Pty Ltd and Don Blake are liable for the contravention. This is notwithstanding that the actions of Don are the actions of the company.
In this way, it does not matter that the deemed physical actions of Blake Enterprises are the same acts in fact engaged in by Don; they are both liable for the contravention.
I cannot find any authority where the reasoning of the FWO has been challenged. It may be that this point has never been argued and has just been accepted by Respondents to actions taken by the FWO. But it seems to me, that the acceptance of such a conclusion by parties in such proceedings is because the conclusion is both logical and correct.
Applicability to this case
On the argument mounted by the Second Respondent in this case, Don could never be liable for the contravention. The Second Respondent would submit that this conclusion is contrary to the observations of Dixon J in Mallon v Lee (supra). But Mallon (Supra) turned on the issue of vicarious liability. That is not the case here. The liability is founded because of s.550.
The starting point is what was said in Salomon’s case (supra) and the resulting “fiction” of the status of a body corporate so that one person may function in dual capacities. Then what was iterated by the Court in Hamilton v Whitehead (supra) is a logical consequence. Applying that logic to s.550, leads to the conclusion that Her Honour reached in McDermott, namely that “it does not matter that the deemed physical acts of the secondary participant are the same acts in fact engaged in by the primary contravener”.
Having gone through the authorities, I cannot find anything that would suggest that such a conclusion was either wrong or illogical.
Conclusion
I find that, pursuant to s.793, the state of mind of the Second Respondent was the state of mind of the First Respondent. I find, pursuant to s.550(2)(c), the Second Respondent was knowingly concerned in the contraventions of the First Respondent and therefore involved in the contraventions of the First Respondent.
Therefore pursuant to s.550(1), the Second Respondent is taken to have contravened the FW Act. This means that the Second Respondent is liable to pecuniary penalties for those six contraventions.
I declare that the Second Respondent has contravened s.500 of the FW Act as particularised in paragraphs 41 to 46 of the Amended Statement of Claim.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Vasta
Date: 11 August 2017
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