Commonwealth v Reid

Case [2018] FCA 579

FEDERAL COURT OF AUSTRALIA

Commonwealth v Reid [2018] FCA 579

File number: NSD 1606 of 2017
Judge: FLICK J
Date of judgment: 27 April 2018
Catchwords: EDUCATION – penalties – where the Respondent fabricated VET qualification certificates which were used to apply for employment – where the Respondent made false representations that he held VET qualifications when applying for employment – where Respondent admitted contraventions – consideration of principles to be applied in determining quantum of penalty – whether limited financial circumstances of contravener of relevance
Legislation: National Vocational Education and Training Regulator Act2011 (Cth) ss 2A, 3, 125, 131, 137, 141
Cases cited:

Australian Building and Construction Commissioner v Ingham (No 2) [2018] FCA 263

Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247, [2006] ATPR 42-091

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, (2008) 165 FCR 560

Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205

Comcare v Linfox Australia Pty Ltd [2015] FCA 61, (2015) 144 ALD 593

Commonwealth of Australia v Restar [2016] FCA 657

Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, (2015) 258 CLR 482

Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213

Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 4) [2017] FCA 580

Federal Commissioner of Taxation v Arnold (No 2) [2015] FCA 34, (2015) 324 ALR 59

Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53

Kelly v Fitzpatrick [2007] FCA 1080, (2007) 166 IR 14

Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27, (2014) 97 ACSR 412

Date of hearing: 10 April 2018
Date of last submissions: 12 April 2018
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Category: Catchwords
Number of paragraphs: 45
Counsel for the Applicant: Mr T M Begbie
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the Respondent: Mr A Hoare
Solicitor for the Respondent: Karsas Lawyers

ORDERS

NSD 1606 of 2017
BETWEEN:

THE COMMONWEALTH OF AUSTRALIA

Applicant
AND:

ANDREW SCOTT REID

Respondent

JUDGE:

FLICK J

DATE OF ORDER:

27 APRIL 2018

THE COURT DECLARES:

1.That in the period 2 December 2015 to 11 April 2016, the Respondent (Mr Reid) contravened s 131(1) of the National Vocational Education and Training Regulator Act 2011 (Cth) (the “VET Act”) on 20 occasions because he created or otherwise obtained 4 bogus VET qualifications in his own name concerning Management, Project Management, Marketing and Local Government Administration and:

(a)provided each of the 4 bogus VET qualifications to a company providing recruitment and human resources services to local governments (namely, Jupiter Corporation Pty Ltd) and purported to hold each of the 4 bogus VET qualifications as a legitimate VET qualification; and

(b)on 4 separate occasions, provided each of the 4 bogus VET qualifications to…

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AGLC
Commonwealth v Reid [2018] FCA 579
Case
[2018] FCA 579
Decision Date

CaseChat Overview and Summary

In the matter of Commonwealth v Reid, the Commonwealth sought penalties against Mr Reid for fabricating vocational education and training (VET) qualifications and using them to apply for various employment positions. The Federal Court was required to determine the appropriate penalty for Mr Reid’s actions and whether his financial circumstances should be taken into account. Mr Reid admitted to creating or obtaining four bogus VET qualifications and falsely representing that these were legitimate qualifications on multiple occasions. The court found that even if Mr Reid's financial circumstances made it difficult for him to pay the penalty, it should not prevent the court from imposing a penalty that serves the purposes of general deterrence and upholding the integrity of the VET system.

The court held that the penalty should be set at $75,705, acknowledging that this amount may be a significant burden for Mr Reid but necessary to achieve the objectives of deterrence and upholding the integrity of the VET system. The court also granted the Commonwealth declaratory relief and ordered Mr Reid to pay costs in the sum of $70,000. This decision reinforces the importance of maintaining the integrity of the VET system and the role of penalties in deterring similar conduct in the future.

Orders

Orders of the court

1. The Respondent is to pay to the Commonwealth a pecuniary penalty of $75,705 pursuant to s 137 of the National Vocational Education and Training Regulator Act 2011 (Cth) for the contraventions described in the above declarations.

2. The Respondent is to pay the costs of the Applicant in an agreed sum of $70,000.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Although little is known as to Mr Reid’s financial circumstances, it may nevertheless be inferred that a penalty – even at that reduced amount – will certainly serve as a very real deterrence to him and also serve as a deterrent to all those in the same or similar position. Even if it were to be inferred that payment of the penalty may render Mr Reid insolvent, such a prospect “must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined”: Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at [11], [2006] ATPR 42-091 at 44,564 per Heerey, Finkelstein and Allsop JJ. Any inability to pay a penalty is a factor of “limited relevance”: Registrar of Aboriginal and Torres Strait Islander Corporations v Matcham (No 2) [2014] FCA 27 at [250], (2014) 97 ACSR 412 at 443 per Jacobson J. See also: Clean Energy Regulator v MT Solar Pty Ltd [2013] FCA 205 at [147] to [149] per Foster J; Restar at [43] to [45] per Flick J; Federal Commissioner of Taxation v Arnold (No 2) [2015] FCA 34 at [200] to [204], (2015) 324 ALR 59 at 104 to 105 per Edmonds J. CONCLUSIONS Mr Reid should be ordered to pay a single penalty in the sum of $75,705 in respect to his contraventions. Section 141(4) of the VET Act is the source of authority for the making by this Court of “a single order to pay a pecuniary penalty for all the contraventions”. The Commonwealth is also entitled to the declaratory relief substantially in the form set forth in the Originating Application. This Court may make declarations upon the basis of an agreed statement of facts (Comcare v Linfox Australia Pty Ltd [2015] FCA 61 at [11], (2015) 144 ALD 593 at 596 to 597 per Flick J; Restar at [28] per Flick J), as is the course pursued in the present proceeding. It was agreed that Mr Reid should pay costs in the agreed sum of $70,000.THE COURT DECLARES:1.That in the period 2 December 2015 to 11 April 2016, the Respondent (Mr Reid) contravened s 131(1) of the National Vocational Education and Training Regulator Act 2011 (Cth) (the “VET Act”) on 20 occasions because he created or otherwise obtained 4 bogus VET qualifications in his own name concerning Management, Project Management, Marketing and Local Government Administration and:1.1 provided each of the 4 bogus VET qualifications to a company providing recruitment and human resources services to local governments (namely, Jupiter Corporation Pty Ltd) and purported to hold each of the 4 bogus VET qualifications as a legitimate VET qualification; and1.2 on 4 separate occasions, provided each of the 4 bogus VET qualifications to a prospective employer (namely, Central Queensland University) and purported to hold each of the 4 bogus VET qualifications as a legitimate VET qualification. 2.That in the period 2 December 2015 to 11 April 2016, Mr Reid contravened s 125 of the VET Act on 20 occasions because he created or otherwise obtained 4 fabricated qualifications in his own name concerning Management, Project Management, Marketing and Local Government Administration. Mr Reid provided them to Jupiter Corporation Pty Ltd on 1 occasion and Central Queensland University on 4 occasions, and on each occasion falsely represented that each of the 4 qualifications was a legitimate VET qualification issued to him by a registered training organisation.3.That in the period 14 April 2014 to 16 May 2016, Mr Reid contravened s 125 of the VET Act on a total of 57 occasions by making 12 job applications and representing in each that he held multiple VET qualifications when in fact he did not hold those VET qualifications as follows: 3.1On 15 April 2014, he applied to Jupiter Corporation Pty Ltd for a role in Local Government and falsely represented that he held 10 VET qualifications concerning Local Government, Information Technology, Workplace Education, Business Administration, Public Administration, Frontline Management and Sports Coaching.3.2On 22 May 2014, he applied to Central Queensland Institute of TAFE for the position of Training Business Manager and falsely represented that he held 4 VET qualifications concerning Local Government and Information Technology.3.3On 3 March 2015, he applied to Central Queensland University for the position of Coordinator, Counselling Careers & International Student Support and falsely represented that he held 4 VET qualifications concerning Local Government and Information Technology.3.4On 3 March 2015, he applied to Central Queensland University for the position of Commercial Manager and falsely represented that he held 7 VET qualifications concerning Local Government, Information Technology, Business Administration, Public Administration and Frontline Management.3.5On 16 March 2015, he applied to Central Queensland University for the position of Marketing Officer and falsely represented that he held 7 VET qualifications concerning Local Government, Information Technology, Business Administration, Public Administration and Frontline Management.3.6On 2 December 2015, he applied to Jupiter Corporation Pty Ltd for a role in Local Government and falsely represented that he held 3 VET qualifications concerning Local Government. 3.7On 17 December 2015, he applied to Central Queensland University for the position of Coordinator, Counselling, Careers & International Student Support and falsely represented that he held 4 VET qualifications concerning Information Technology and Local Government.3.8On 17 December 2015, he applied to Central Queensland University for the position of Discipline Manager – Hospitality & Early Childhood and falsely represented that he held 4 VET qualifications concerning Information Technology and Local Government.3.9On 3 February 2016, he applied to Central Queensland University for the position of Deputy Director – Facilities and falsely represented that he held 4 VET qualifications concerning Information Technology and Local Government.3.10On 18 March 2016, he applied to Central Queensland University for the position of Government Relations Adviser and falsely represented that he held 4 VET qualifications concerning Information Technology and Local Government.3.11On 11 April 2016, he applied to Central Queensland University for the position of Head of Campus Noosa and falsely represented that he held 4 VET qualifications concerning Information Technology and Local Government.3.12On 16 May 2016, he applied to Central Queensland University for the position of Business Coordinator and falsely represented that he held 2 VET qualifications concerning Information Technology and Local Government. AND THE COURT ORDERS THAT:1.The Respondent is to pay to the Commonwealth a pecuniary penalty of $75,705 pursuant to s 137 of the National Vocational Education and Training Regulator Act2011 (Cth) for the contraventions described in the above declarations.2.The Respondent is to pay the costs of the Applicant in an agreed sum of $70,000.

Ratio Decidendi

Legal Principle Established

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