FEDERAL COURT OF AUSTRALIA
Australian Building and Construction Commissioner v Menon [2020] FCA 1418
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- Case
- [2020] FCA 1418
- Decision Date
CaseChat Overview and Summary
The court had to determine the appropriate penalties for the contraventions, considering factors such as the nature, character, and seriousness of the conduct; the loss and damage caused; the deliberateness of the conduct; and the history of contravention. The court also had to decide whether the contraventions occurred in a single course of conduct, which could impact the penalty calculation. The overarching principle in setting penalties was deterrence, but the penalties had to be proportionate to the specific contraventions in question.
The court found that the contraventions were serious and deliberate, with a demonstrated disregard for the law. The court acknowledged the need for deterrence but also emphasised the importance of proportionality. The court found that the contraventions did not occur in a single course of conduct but were separate incidents. Based on the seriousness of the conduct and the need for deterrence, the court imposed penalties on Mr Menon, Mr Taylor, Mr Cummins, and the CFMMEU. The penalties ranged from $2,200 to $40,000 per contravention, with the total penalties reflecting the seriousness of the conduct and the need for deterrence.
The final orders required Mr Menon, Mr Taylor, and Mr Cummins to pay specified penalties for their contraventions, and the CFMMEU to pay penalties for its liability as an accessory and under section 793. The penalties were to be paid within 28 days, and there was no order as to costs.
Orders
Orders of the court
Mr Menon’s contraventions
17. Mr Menon pay a penalty of $2,400 in respect of his first s 500 contravention.
18. Mr Menon a penalty of $3,000 in respect of his second s 500 contravention.
19. Mr Menon pay a penalty of $2,800 in respect of his third s 500 contravention.
20. Mr Menon pay a penalty of $2,500 in respect of his fourth s 500 contravention.
21. The CFMMEU pay a penalty of $30,000 in respect of the CFMMEU’s first contravention.
22. The CFMMEU pay a penalty of $40,000 in respect of the CFMMEU’s second contravention.
23. The CFMMEU pay a penalty of $35,000 in respect of the CFMMEU’s third contravention.
24. The CFMMEU pay a penalty of $40,000 in respect of the CFMMEU’s fourth contravention.
Mr Taylor’s contraventions
25. Mr Taylor pay a penalty of $3,000 in respect of his first s 500 contravention.
26. Mr Taylor pay a penalty of $2,200 in respect of his second s 500 contravention.
27. The CFMMEU pay a penalty of $30,000 in respect of the CFMMEU’s fifth contravention.
28. The CFMMEU pay a penalty of $25,000 in respect of the CFMMEU’s sixth contravention.
Mr Cummins’ contraventions
29. Mr Cummins pay a penalty of $3,500 in respect of his 14 May 2018 s 500 contravention.
30. Mr Cummins pay a penalty of $2,800 in respect of his 15 May 2018 s 500 contravention.
31. The CFMMEU pay a penalty of $35,000 in respect of the CFMMEU’s seventh contravention.
32. The CFMMEU pay a penalty of $35,000 in respect of the CFMMEU’s eight contravention.
Other orders
33. The pecuniary penalties referred to in Orders 17 to 32 above be paid to the Commonwealth of Australia within 28 days.
34. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The ABCC also alleged that the CFMMEU is liable as an accessory for each of the above contraventions pursuant to s 550 of the Act, and the CFMMEU accepted that that was so. The submissions proceeded on the basis that the CFMMEU is liable pursuant to both ss 550 and 793 and that no distinction need be drawn between these distinct bases of liability. Declarations The ABCC submitted that the Court should issue declarations as to each of the contraventions identified above. He submitted that declarations of contraventions are particularly appropriate in a case like the present which proceeds on the basis of formal admissions rather than on the basis of findings following a trial. In such cases, the declarations serve the purpose of identifying the conduct for which the Court imposes the penalties. The respondents did not, in substance, oppose the making of the declarations sought by the ABCC. I am satisfied that the making of declarations is appropriate in the present case even though penalties will also be imposed on the respondents. It is common for declarations to be made in circumstances of the present kind. Doing so serves a number of purposes, including providing a formal pronouncement by the Court of the nature of the contravention involved, and by providing a statement of the Court’s denunciation of the conduct. In some circumstances, declarations can also serve an educational purpose.Penalties Subject to consideration of a submission made by the ABCC concerning the application of the principle of proportionality, the principles concerning the fixing of penalties in circumstances of the present kind are settled. Counsel for the ABCC referred in his submissions to the summary by the Full Court in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non‑Indemnification Personal Payment Case) [2018] FCAFC 97; (2018) 264 FCR 155:[19]… Of particular significance is the recognition that deterrence (general and specific) is the principal and indeed only object of the imposition of a penalty – to put a price on contravention that is sufficiently high to deter repetition by the contravener and others who might be tempted to contravene the Act … Retribution, denunciation and rehabilitation have no part to play.[20]Relevant factors in the overall assessment of penalty were helpfully listed by French J in CSR. They have been adopted in many cases. For present purposes, they can be restated as follows: the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition. [21]The seriousness of the contravention and other features of the conduct which may be seen as relevant to it (here, the seriousness of interruption of a concrete pour, the seriousness of the threats of repetition, the deliberateness of the contravening of the Act, and the exhibited apparent sense of impunity in undertaking contravening conduct) find their place in understanding the degree of deterrence that is necessary to be reflected in the size of the penalty …[22]The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions … Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.(Citations omitted)