Construction, Forestry and Maritime Employees Union v JW Land Construction Pty Ltd (No 3)
[2024] FedCFamC2G 944
•24 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Construction, Forestry and Maritime Employees Union v JW Land Construction Pty Ltd (No 3) [2024] FedCFamC2G 944
File number: CAG 47 of 2021 Judgment of: JUDGE BINGHAM Date of judgment: 24 September 2024 Catchwords: INDUSTRIAL LAW – FAIR WORK – applicant seeks penalties and costs – contraventions of ss 502 and 503(1) of the Fair Work Act 2009 (Cth) found by liability judge – single course of conduct – contraveners responsible for right of entry – lack of contrition – penalties imposed – declarations appropriate – not unreasonable to reject offer - no order as to costs Legislation: Fair Work Act 2009 (Cth) ss 502, 503, 512, 546, 556, 562, 570 and 793
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 141
Work Health and Safety Act2011 (ACT) ss 117, 118 and 134
Cases cited: A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466
Australian and International Pilots Association v Qantas Airways (No 3) (2007) FCA 879
Australian Building and Construction Commissioner v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (The Australian Paper Case) (No. 2) [2017] FCA 367
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Competition and Consumer Commission v Reckiit Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25
BGC POS Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 74
Construction Forestry Maritime Mining and Energy Union v Australia Building and Construction Commissioner [2019] FCAFC 201
Construction Forestry Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574
Construction, Forestry and Maritime Employees Union v JW Land Construction [2024] FedCFamC2G 145
Construction, Forestry and Maritime Employees Union v JW Land Construction (No 2) [2024] FedCFamC2G 328
Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Constructions [2022] FCA 992
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited (No 3) [2018] FCA 1395
Forster v Jododex Australia Pty Ltd [1972] 127 CLR 421
Liu v Stephen Grubits & Associates [2019] FCAFC 24
McDonnell v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; (2007) 164 FCR 591
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285
Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107
Trade Practices Commission v CSR Ltd [1990] FCA 762
Division: Division 2 General Federal Law Number of paragraphs: 74 Date of last submissions: 27 August 2024 Date of hearing: 31 July 2024 Place: Sydney Counsel for the Applicant: Mr Boncardo Solicitor for the Applicant: Construction, Forestry, Maritime and Energy Union Counsel for the Respondents: Mr Seck Solicitor for the Respondents: Holman Webb Lawyers ORDERS
CAG 47 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CONSTRUCTION, FORESTRY, MARITIME AND ENERGY UNION
Applicant
AND: JW LAND CONSTRUCTION PTY LTD
First Respondent
SCOTT HENNING
Second Respondent
MATTHEW HOOPER
Third Respondent
ORDER MADE BY:
JUDGE BINGHAM
DATE OF ORDER:
24 SEPTEMBER 2024
THE COURT DECLARES THAT:
1.The Second Respondent Scott Henning (Mr Henning) contravened s 502(1) of the Fair Work Act 2009 (Cth) (FW Act) on 18 March 2021 by intentionally hindering and obstructing Luke Poskus (Mr Pokus), who was a permit holder exercising rights in accordance with Part 3-4 of the FW Act at a site occupied by the First Respondent JW Land Construction Pty Ltd (JW Land) known as ‘Founders Lane’ at Currong Street in the Australian Capital Territory (Founders Lane Site).
2.Mr Henning contravened s 503(1) of the FW Act on 18 March 2021 by taking action with the intention of giving the impression and/or being reckless as to whether the impression was given that an occupier of premises could delay or otherwise not permit a permit holder to exercise rights under ss 117-118 of the Work Health and Safety Act 2011 (ACT) (WHS Act) where the occupier had ‘closed out’ a contravention of the WHS Act prior to the entry occurring in circumstances where such a thing was not authorised by Part 3-4 of the FW Act.
3.The Third Respondent Matthew Hooper (Mr Hooper) contravened s 502(1) of the FW Act on 18 March 2021 by intentionally hindering and obstructing Mr Poskus, who was a permit holder, exercising rights in accordance with Part 3-4 of the FW Act at the Founders Lane Site.
4.Mr Hooper contravened s 503(1) of the FW Act on 18 March 2021 by taking action with the intention of giving the impression and/or was being reckless as to whether the impression was given that an occupier of premises could delay or otherwise not permit a permit holder to exercise rights under ss 117-118 of the WHS Act:
(a)unless and until an inspector attended the premises in circumstances where such a thing was not authorised by Part 3-4 of the FW Act; and
(b)where the suspected contraventions had previously been investigated by another permit holder in circumstances where such a thing was not authorised by Part 3-4 of the FW Act.
5.By reason of the operation of s 793 of the FW Act, JW Land contravened s 502(1) of the FW Act on 18 March 2021 by intentionally hindering and obstructing Mr Poskus, who was a permit holder, exercising rights in accordance with Part 3-4 of the FW Act at the Founders Lane Site.
6.By reason of the operation of s 793 of the FW Act, JW Land contravened s 503(1) of the FW Act on 18 March 2021 by taking action with the intention of giving the impression and/or was reckless as to whether the impression was given that an occupier of premises could delay or otherwise not permit a permit holder to exercise rights under ss 117-118 of the WHS Act:
(a)where the occupier had ‘closed out’ a contravention of the WHS Act prior to the entry occurring in circumstances where such a thing was not authorised by Part 3-4 of the FW Act;
(b)unless and until an inspector attended the premises in circumstances where such a thing was not authorised by Part 3-4 of the FW Act; and
(c)where the suspected contraventions had previously been investigated by another permit holder in circumstances where such a thing was not authorised by Part 3-4 of the FW Act.
THE COURT ORDERS THAT:
7.Mr Henning pay a pecuniary penalty of $3,330.00 in respect of his contraventions of ss 502(1) and 503(1) of the FW Act to the Applicant.
8.Mr Hooper pay a pecuniary penalty of $3,330.00 in respect of his contraventions of ss 502(1) and 503(1) of the FW Act to the Applicant.
9.JW Land pay a pecuniary penalty of $33,300.00 in respect of its contraventions of ss 502(1) and 503(1) of the FW Act to the Applicant.
10.No order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BINGHAM:
On 22 February 2024 in Construction, Forestry and Maritime Employees Union v JW Land Construction [2024] FedCFamC2G 145 (Liability Judgment) Judge Neville found that Mr Scott Henning and Mr Matthew Hooper contravened ss 502(1) and 503(1) of the Fair Work Act 2009 (Cth) (FW Act); and by virtue of s 793 of the FW Act, JW Land Construction (JW Land), the employer of Mr Henning and Mr Hooper, had also contravened the FW Act. On 15 April 2024 Judge Neville lamented the manner in which the proceedings had been managed by the parties which resulted, due to his imminent retirement, in him being unable to hear the penalty proceedings: Construction, Forestry and Maritime Employees Union v JW Land Construction (No 2) [2024] FedCFamC2G 328 (Interim Judgment) at [1] to [3]. The proceedings that came before me on 31 July 2024 (Penalty Hearing) primarily concerned the imposition of penalty arising from the contraventions found by Judge Neville in the Liability Judgment together with the ancillary matters arising from that judgment namely the making of declarations and costs (Penalty Proceedings).
AGREED FACTS
The agreed facts set out below in paragraphs [2] to [10] are taken from the Agreed Statement of Background Facts provided by the parties for the purposes of the Penalty Hearing pursuant to my Orders dated 10 July 2024.
The Construction, Forestry and Maritime Employees Union (CFMEU) is a trade union registered under the Fair Work (Registered Organisations) Act 2009 (Cth). It employs organisers who are issued with entry permits under s 512 of the FW Act and s 134 of the Work Health and Safety Act 2011 (ACT) (WHS Act). It carries out its functions and purposes in relation to its members and potential members via, amongst other things, its organisers who hold permits under the FW Act and the WHS Act.
JW Land is a development business that operates principally in Canberra and Melbourne.
JW Land had the following income:
(a)financial year ending 30 June 2023: $21,721,842.
(b)financial year ending 30 June 2022: $62,463,848.
(c)financial year ending 30 June 2021: $76,670,774.
The CFMEU commenced proceedings on 9 December 2020 against JW Land and Mr Henning which was allocated file number CAG54/2020 alleging contraventions of s 502(1) by JW Land and Mr Henning. Those proceedings were resolved on 20 October 2021, with JW Land Construction admitting that it contravened s 502 of the FW Act on 30 October 2020 by way of a consent declaration.
Mr Henning was at the time of the contravening conduct the subject of the Liability Judgement:
(a)a Site Manager employed by JW Land;
(b)responsible for managing, by himself or with others, right of entry including at the JW Land site at Founder’s Lane where the contraventions occurred; and
(c)someone who, at the time of the contravening:
(i)had a knowledge of the rights and obligations of permit holders; and
(ii)had experience managing right of entry.
Mr Hooper was at the time of the contravening conduct the subject of the Liability Judgment:
(a)a Project Manager employed by the JW Land; and
(b)responsible for managing, by himself or with others, right of entry including at the JW Land site at Founder’s Lane where the contraventions occurred;
(i)someone who, at the time of the contravening;
(ii)had a knowledge of the rights and obligations of permit holders; and
(iii)had experience managing right of entry.
Mr Luke Poskus was at the time of the contravening conduct an organiser employed by the applicant and the holder of entry permits issued under s 512 of the FW Act and s 134 of the WHS Act.
Mr Josh Bolitho was at the time of the contravening conduct an organiser employed by the applicant and the holder of entry permits issued under s 512 of the FW Act and s 134 of the WHS Act.
AGREED ISSUES TO BE DETERMINED BY THE COURT
I have extracted the agreed issues from the Agreed Statement of Factual and Legal Issues filed by the parties. The parties agreed that the following matters were to be determined by the Court:
A. Penalties
1.Does s 556 of the Fair Work Act 2009 (Cth) operate to mean that the Court cannot impose more than one penalty on each of the respondents for their respective contraventions of s 502(1) and 503(1) of the FW Act?
2.What penalties should be imposed on the respondents for their contraventions?
B. Declaratory relief
3.Should declarations be made in the form proposed by the applicant in its submissions made on 24 June 2024 and, if not, what revisions or amendments should be made to the applicant’s proposed declarations?
C. Costs
4.Did the respondents engage in an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act in not accepting the applicant’s offer on 2 November 2022 which caused the applicant to incur costs?
5.If the answer to (5) is ‘yes’, should the respondents be ordered to pay the applicants costs incurred from the time of the expiry of the offer?
6.If the answer to (6) if ‘yes’, should costs be awarded on the indemnity basis and/or should a lump sum costs order be made?
7.Did the respondents engage in an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act which caused the applicant to incur costs in relation to their conduct in:
a.failing to file and serve affidavits and amended defences immediately at the conclusion of the applicant’s case on 30 March 2023 in compliance with the Court’s orders;
b.but serving their affidavits on the Applicant on 30 March 2023 at 6:35PM and 6:44PM; and
c. serving amended defences at 8:15PM on 30 March 2023.
8.If the answer to (7) is ‘yes’, should the respondents be ordered to pay the applicants costs thrown away on 31 March 2023?
9.If the answer to (8) if ‘yes’, should costs be awarded on the indemnity basis and/or should a lump sum costs order be made?
10.Did the respondents engage in an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act which caused the applicant to incur costs in relation to their conduct in resisting the question of the costs thrown away on 31 March 2023 being determined on 30 March 2023 and seeking that the question be adjourned and the parties put on affidavits and submissions?
11.If the answer to (10) is ‘yes’, should the respondents be ordered to pay the applicants costs of the application for costs in relation to 31 March 2023?
12.If the answer to (11) if ‘yes’, should costs be awarded on the indemnity basis and/or should a lump sum costs order be made?
The issues referred to in Issues 7 to 12 were matters before me during the Penalty Hearing. The parties agreed that the application by the CFMEU for costs thrown away as a result of the adjournment of a hearing on 31 March 2023 in the liability proceedings is otiose if I were to make a costs order in favour of the CFMEU with respect to the Penalty Proceedings. If I determine that the usual rule with respect to costs in FW Act matters should apply, issues 7 to 12 can be determined on the papers.
I now turn to the issues to be determined as identified by the parties.
APPLICATION OF SECTION 556 OF THE FW ACT
A.1 Does s 556 of the Fair Work Act2009 (Cth) operate to mean that the Court cannot impose more than one penalty on each of the respondents for their respective contraventions of ss 502(1) and 503(1) of the FW Act?
It is uncontroversial as between the parties that the following contraventions were found by Judge Neville in the Liability Judgment.
(a)Mr Henning – contravened s 502(1) of the FW Act.[1]
(b)Mr Hooper – contravened s 502 (1) of the FW Act.[2]
(c)JW Land – contravened s 502(1) of the FW Act by reason of the operation of s 793 of the FW Act.[3]
(d)Mr Hooper – contravened s 503(1) of the FW Act.[4]
(e)Mr Henning – contravened s 503(1) of the FW Act.[5]
(f)JW Land – contravened s 503(1) by reason of the operation of s793 of the FW Act.[6]
[1] Construction, Forestry and Maritime Employees Union v JW Land Construction [2024] FedCFamC2G 145 (Liability Judgment), [171].
[2] Liability Judgment, [171].
[3] Liability Judgment, [185].
[4] Liability Judgment, [180].
[5] Liability Judgment, [180].
[6] Liability Judgment, [185].
The parties disagreed on the issue as to whether s 556 of the FW Act applies to the contraventions found in the Liability Judgment.
The Respondents submitted that s 556 applies because the conduct comprising the contraventions of ss 502(1) and 503(1) of the FW Act are in relation to the same 'particular conduct'. The effect being, that the conduct giving rise to the contravention of s 503 was, in the Respondents submissions, a subset of the s 502(1) contravention and as such should be treated as a single contravention for each of the Respondents.
The CFMEU submitted that the contraventions were separate and particular courses of conduct and the Respondents are wrong to contend that the actions formed part of the same particular conduct, because:
(a)The conduct constituting the s 502(1) contraventions involved the delay for a period exceeding 40 minutes by Mr Henning and Mr Hooper where each of them delayed and obfuscated for the purpose hindering or obstructing Mr Poskus from exercising his entry rights.
(b)The conduct constituting the s 503(1) contraventions consisted of Mr Henning and Mr Hooper making representations or giving the impression that Mr Poskus’ entry rights could be delayed for the purpose of waiting for an electrical inspector and that there were no rights of inspection where contraventions had been investigated by another permit holder.
(a)The representations and implications were found to be intentional or at “least reckless” by Judge Neville.
The CFMEU accepted that the s 503 conduct occurred in the course of Mr Poskus being delayed and the exercise of his rights being hindered and frustrated.
Undoubtedly the conduct of Mr Hooper, Mr Henning and consequently JW Land, gives rise to liability for penalty under two (2) provisions of the FW Act. I have considered Judge Neville’s findings in the Liability Judgment and the particular conduct that has given rise to the contraventions, namely the “constituent acts or omissions that the wrong doer has committed – that is, what he or she or (it) actually did”.[7] It is my view that the representations made and impressions given by Mr Hooper and Mr Henning that constituted the s 503(1) contraventions, were elements in the particular conduct that constituted the s 502(1) contraventions namely the intention to hinder or obstruct Mr Poskus. In these circumstances I find that s 556 must be given effect with respect to the contraventions identified including the contraventions by JW Land.
[7]Construction Forestry Maritime Mining and Energy Union v Australia Building and Construction Commissioner [2019] FCAFC 201, [26]; Australian Building and Construction Commissioner v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (The Australian Paper Case) (No. 2) [2017] FCA 367, [40].
The answer to Issue A.1 is Yes.
A.2 What penalties should be imposed on the Respondents for their Contraventions?
The general principles in respect of the imposition of penalties are well-settled. The Court’s discretion is that large[8] and is informed by the particular circumstances of the contravention.[9] The Court’s task is to “determine” what is the “appropriate” penalty in the circumstances of a particular case.[10] It is not to apply “a rigid catalogue of matters” as if it were a “legal checklist”.[11]
[8] A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 (Giles J), [6].
[9] Trade Practices Commission v CSR Ltd [1990] FCA 762 (CSR), [55].
[10] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson), [19].
[11] Pattinson, [19] referring to the list of factors in CSR.
The penalty the Court imposes must “strike a reasonable balance between deterrence and oppressive severity”.[12] In Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson), the plurality referred to the requirement as “some reasonable relationship between the theoretical maximum and the final penalty imposed. This relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravener and by others.[13]
[12] Pattinson, [41].
[13] Pattinson, [10] referring to Australian Competition and Consumer Commission v Reckiit Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25, [156] and NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285, [293].
When imposing a penalty under s 546 the Court must act “fairly and reasonably for the purpose of protecting public interest by deterring future contraventions of the Act.”[14]
[14] Pattinson, [48].
The Respondents list the “French Factors”[15] as matters that I should take into account when considering the appropriate penalty. The High Court in Pattinson cautioned against having regard to this list of possible relevant considerations as a checklist. Both the CFMEU and the Respondents made submissions that relate to those factors they say I should take into account when determining an appropriate penalty that has the requisite deterrent effect.
[15] See CSR.
The contravening conduct occurred in circumstances where permit holders attended the Founders Lane site on 17 March 2021 exercising entry rights under ss 117 and 118 of the WHS Act. During the inspection electrical boards were investigated with some being found to be non-compliant. The inspection was not completed on 17 March 2021. Both Mr Henning and Mr Hooper were aware that the inspection had not been completed and had been present during the 17 March inspections. Mr Henning was aware that the inspection would continue on 18 March 2021. Mr Poskus attended the Founders Lane site on 18 March 2021 to continue the inspection that had commenced on 17 March 2021.
Mr Henning and Mr Hooper were part of a cohort of persons responsible for right of entry on the Founder’s Lane site. Both Mr Henning and Mr Hooper were aware, by reason of their responsibilities regarding right of entry, that they could not refuse, delay or impede the exercise of a permit holder’s rights to investigate suspected contraventions, even in circumstances where another permit holder had investigated the same or similar contraventions.[16]
[16] Respondents’ Outline of Submissions filed 19 July 2024 (Respondent’s Outline of Submissions), [35].
The CFMEU submitted that the conduct constituting the s 502(1) contraventions involved delay for a period exceeding 40 minutes. The Respondents submitted that the period of conduct was relatively short and the delay was between 17 to 32 minutes. The conduct in which Mr Henning and Mr Hooper engaged in was not a “mere delay” as submitted by the Respondents but for a “considerable period of time” as found by his Honour Judge Neville.[17]
[17] Liability Judgment, [169].
The conduct constituting the s 503(1) contraventions involved Mr Henning representing to Mr Poskus that the investigation had been completed or “closed out” the day before. The conduct engaged in by Mr Hooper involved Mr Hooper giving an impression that an electrical inspector was required on site and that the suspected compliance issues had been investigated by other permit holders and therefore Mr Poskus could be delayed or not permitted to exercise his rights as a permit holder. His Honour Judge Neville found that the representations and impressions were “quite reckless and needlessly so”.[18]
[18] Liability Judgment, [179].
The contravening conduct must be also considered in the context of the objectives of the statutory provisions. His Honour Justice Wigney in Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Constructions [2022] FCA 992 (Richard Crookes) observed that ss 501 and 502 of the FW Act are part of a scheme of provisions relating to right of entry with one of the objectives of this scheme of provisions being to ensure the health and safety of workers and workplaces.[19] His Honour went on to state at [174]:
Contraventions of ss 501 and 502 of the Fair Work Act by an employer are, by their very nature, objectively serious, particularly where entry to the premises was sought to investigate suspected contraventions relating to the safety of workers and the workplace in question. As a general proposition, higher penalties are likely to be appropriate to secure effective deterrence, particularly general deterrence, in circumstances where the mischief to which the civil penalty provision in question is directed is serious. In the case of ss 501 and 502 of the Fair Work Act, it “must be made clear to employers that they are not entitled to deny access to their premises to union officials who are exercising lawful rights of entry under the [Fair Work] Act”: Construction, Forestry, Mining and Energy Union v Safety Glass Pty Ltd [2010] FCA 989 at [23].
[19] Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Constructions [2022] FCA 992 (Richard Crookes), [173].
His Honour’s observations apply equally to section 503(1) as it is a provision within the scheme in Part 3-4 Division 4 – Prohibitions of the FW Act.
The contraventions related to inspections that took place pursuant to the WHS Act. Some electrical panels inspected on 17 March 2021 had been found to be non-compliant. The seriousness of the contraventions in the context of this case should not be down played because they related to a delay or hindrance of between 17 to 40 minutes or because there was no financial or economic damage caused to the CFMEU or Mr Poskus. The contraventions by Mr Henning, Mr Hooper and JW Land are, as described by Justice Wigney in Richard Crookes, by their very nature serious.
It is submitted by the CFMEU that the damage suffered by Mr Poskus was a disruption and hindrance in a real and practical sense in that Mr Poskus had his plans for the day disturbed. Mr Poskus was eventually permitted to enter the site to undertake the inspection and could consequently get on with his day.
Neither Mr Hooper nor Mr Henning have been found to have contravened the FW Act in the past. This reflects well on Mr Hooper and Mr Henning.
On 20 October 2021 JW Land admitted a contravention of s 502(1) in the proceedings CAG54/2020. The admitted contravention points to a need for a higher penalty to promote specific deterrence with respect to JW Land’s future conduct. Mr Henning was a named respondent in CAG54/2020. No findings were made against Mr Henning nor did Mr Henning admit to contraventions.
JW Land is a property development company that operates in Canberra and Melbourne and predominately builds residential properties including high rise complexes.[20] It has 23 employees engaged on a full-time basis and otherwise engages sub-contractors.[21]
[20] Affidavit of Nicholas Haralambous affirmed 7 May 2024 and filed 10 May 2024 (Haralambous Affidavit), [6].
[21] Haralambous Affidavit, [7].
It is an agreed fact that JW Land had the following trading income for the financial years 2021, 2022 and 2023 of $76,670,774, $62,463,848 and $21,721,842 respectively. Mr Haralambous was asked in cross examination what JW Land’s trading income was in the financial year ending 2024 and conceded that it would have been slightly more than the 2023 financial year. JW Land made a net loss in the 2023 financial year of $599,810 and has assets of $2,302,021. On the material before me, JW Land appears to be a reasonably well-resourced medium sized business. The penalty imposed on JW Land must be significant enough to deter future like conduct and not just simply an amount considered the price of doing business. A penalty imposed on JW Land that is in the range suggested by the Respondents would have little or no deterrent effect as it is so low that it would be considered the price of doing business.
Mr Haralambous was asked in cross examination whether JW Land would pay any penalty imposed upon Mr Henning and Mr Hooper on their behalf. In response to that line of questioning he gave evidence that this had not been discussed and that JW Land would most likely pay the penalty if it were imposed. I have taken into account the personal and financial circumstances of Mr Henning and Mr Hooper when imposing a penalty that would deter them from engaging in like conduct again.
His Honour Judge Neville found that the conduct engaged in by Mr Henning and Mr Hooper was part of a “charade” to seek to prevent the exercise of right of entry rights. It is submitted by the Respondents that they “did not engage in the contraventions deliberately and did not know that what they were doing was unlawful”.[22] This submission is inconsistent with the findings made by His Honour in the Liability Judgment. Further, both Mr Hooper and Mr Henning were senior managers on the Founders Lane site namely the Project Manager and Site Manager respectively. They were experienced in and responsible for managing right of entry issues. The conduct engaged in, the representations made, and the impressions given were deliberate acts. Mr Henning and Mr Hooper were responsible for the corporate culture of the Founders Lane site. I consider that in these circumstances a higher penalty for the purpose of deterring any such future conduct is necessary.
[22] Respondent’s Outline of Submissions, [42].
Mr Haralambous and Mr Henning were cross examined regarding the apologies contained in their respective penalty proceeding affidavits. Mr Haralambous conceded in cross examination that an apology was included in his affidavit in an attempt to reduce the penalty that may be imposed on JW Land and that JW Land had not otherwise apologised to the CFMEU for the conduct. Mr Henning conceded that he had no intention of apologising to the CFMEU but that he was sorry for the contraventions. Mr Hooper’s affidavit did not contain an apology. He stated that he regretted the events of 18 March 2021. I have formed a view that JW Land, Mr Haralambous, Mr Hooper and Mr Henning were all sorry that His Honour had found that the conduct engaged in on 18 March 2021 contravened the FW Act but were not willing to apologise or express remorse for the conduct engaged in. This lack of contrition tends toward a higher penalty to deter future like conduct.
Neither Mr Hooper nor Mr Henning were disciplined by JW Land for engaging in the contravening conduct. Mr Hooper is no longer an employee of JW Land. Mr Henning and Mr Hooper have attended training on right of entry obligations. I asked Counsel for the Respondents if there was any evidence that JW Land had engaged in a programme of education for all employees. I was directed to paragraph [18] of Mr Haralambous’ affidavit where he attested that there was right of entry training for employees. There was no evidence as to the content of that training nor was there any information regarding who delivered the training.
Taking into account all the relevant facts and circumstances, and the circumstances in which the contraventions took place, applying s 556 of the FW Act and the totality principle “so as to ensure that the overall penalty imposed is not oppressive or disproportionate in the sense that it is greater than necessary to achieve the object of deterrence”, on balance, I consider the following pecuniary penalties appropriate:
(a)Mr Henning for contravention of ss 502(1) and 503(1):$3,330.00.
(b)Mr Hooper for contravention of ss 502(1) and 503(1): $3,330.00.
(c)JW Land for contravention of ss 502(1) and 503(1): $33,300.00.
B. DECLARATORY RELIEF
3. Should declarations be made in the form proposed by the Applicant in its submissions made on 24 June 2024 and if not what revisions or amendments should be made to the Applicant’s proposed declarations?
The CFMEU seeks declaratory relief with respect to the contraventions found by Judge Neville. The principles that apply to the grant of declaratory relief in cases such as this one are well-settled.[23]
[23] Richard Crookes, [210], referring to Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited (No 3) [2018] FCA 1395, [74]-[76].
The Court has the power to make declarations under section 141 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and/or section 562 of the FW Act.[24]
[24] Forster v Jododex Australia Pty Ltd [1972] 127 CLR 421, at 437–438.
The Respondents takes a neutral position on the making of declarations.
I am obligated to satisfy myself that the making of the declaration is appropriate. I am satisfied that the questions are not hypothetical or theoretical in that the CFMEU has a real interest in raising the issue and that there is a proper contradictor. I agree with the submission from Counsel for the CFMEU that the CFMEU has a real interest in the relief sought in that its permit holder Mr Poskus was wronged. The declarations sought will deter others from contravening the provisions in question.[25]
[25] Richard Crookes, [213].
The declaratory relief sought is appropriate as it will serve to record the Court’s disapproval of the contravening conduct by JW Land, Mr Henning and Mr Hooper.
The answer to issue B.3 is Yes, the Declarations as sought by the CFMEU in paragraphs [1] to [10] of the proposed orders will be made.
C. COSTS
4. Did the Respondents engage in an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act in not accepting the Applicant’s offer on 2 November 2022 which caused the Applicant to incur costs?
Section 570 of FW Act operates as an “express limitation on the broad discretion to award costs”.[26]
[26] Liu v Stephen Grubits & Associates [2019] FCAFC 24, [7] and [10].
Whether the Respondents have engaged in unreasonable acts or omissions requires the Court to undertake an objective analysis of the Respondents’ conduct: Australian and International Pilots Association v Qantas Airways (No 3) (2007) FCA 879 at [32].
Whether the Respondents have “crossed the threshold’ with respect to their conduct or in the conduct of the litigation will depend on the particular circumstances of the case: Construction Forestry Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574 at [28].
When undertaking an objective analysis of the Respondents’ conduct the Court must be satisfied that the following two criteria have been fulfilled before exercising a discretion to award costs against the Respondents, namely: the Respondents have engaged in an unreasonable act or omission; and the unreasonable act or omission of the Respondents resulted in the Respondents incurring costs: McDonnell v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; (2007) 164 FCR 591 at [21] to [26]; Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221 at [166].
The power under s 570(2) is generally to be exercised cautiously: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6]. The policy reason for caution so far as Respondents are concerned, is to ensure that they are free to pursue arguable legal and factual responses to the claims: Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107 at [64].
On 20 October 2021 the proceedings were issued by the CFMEU against the Respondents. On 21 January 2022 the matter first came before the Court and was referred to mediation. The Mediation took place on 16 June 2022. On 7 October 2022 the CFMEU filed its evidential case which included video footage of the incident that gave rise to the contraventions. On 5 August 2022 the liability aspect of the matter was set for a three (3) day hearing commencing 29 March 2023.
An offer to settle the liability proceedings was made by the CFMEU on 2 November 2022 (Offer).[27] The Offer was in the following form:
[27] Affidavit of Rosalind Read filed on 19 April 2024, [10] and Annexure “RR-4”.
That being the case, the Applicant is prepared in an endeavour to resolve and obviate the need for a hearing on liability, to resolve the proceedings and all claims against the Respondents arising out of the incidents the subject of the proceedings on the following basis:
The Respondents respectively admitted to the following contraventions of the FW Act:
Scott Henning contravened s 502(1) of the FW Act on 18 March 2021 by intentionally hindering and/or obstructing Luke Poskus, who was a permit holder, exercising rights in accordance with Part 3-4 of the FW Act.
By operation of s 793 of the FW Act, Henning’s words and conduct constituting his contravention of s 502(1) of the FW Act and his state of mind in relation to those words and conduct are taken to have been JW Land’s in the circumstances described, JW Land contravened s 502(1) of the FW Act.
Matthew Hooper contravened s 502(1) of the FW Act on 18 March 2021 by intentionally hindering and/or obstructing Luke Poskus, who was a permit holder, exercising rights in accordance with Part 3-4 of the FW Act.
By operation of s 793 of the FW Act, Hooper’s words and conduct constituting his contravention of s 502(1) of the FW Act and his state of mind in relation to those words and conduct are taken to have been JW Land’s in the circumstances described, JW Land contravened s 502(1) of the FW Act.
The balance of the Applicant’s claim against JW Land and Messrs Henning and Hooper be dismissed; and
The admitted contraventions be referred to a penalty hearing before Judge Neville; and
There be no order as to costs, with the intent that each party bear their own costs of the proceedings.
[…]
In the event the offer is rejected and the applicant succeeds on establishing more contraventions than those subject of this offer, we put you on fair notice that we will rely on this correspondence for the purposes of making an application of costs under s 570(2)(b) of the FW Act against your clients if the matter proceeds to hearing and the Applicant achieves a result in the proceedings that is at least as good as the outcome detailed above.
The CFMEU’s Offer was open for seven (7) days after which time the Offer would lapse. The Offer provided the Respondents an opportunity to seek further time to consider the Offer. That further time to consider the Offer was at the discretion of the CFMEU. I have no evidence before me that the Respondents acknowledged or otherwise replied to the 2 November 2022 Offer.
The Liability Hearing commenced on 29 March 2023. On 30 March 2023, Mr Henning and Mr Hooper waived their claims to privilege at the conclusion of the CFMEU’s evidence. The proceeding was adjourned to allow the filing of evidence and an Amended Defence. The Affidavits of Mr Henning and Mr Hooper together with an Amended Defence were provided to the CFMEU outside of business hours. The CFMEU applied for an adjournment of the liability hearing. The Respondents consented to the adjournment and the hearing was adjourned part heard and was listed for further hearing on 12 May 2023. On 30 May 2023 the Court ordered that an agreed transcript of the audio from the video footage be provided to it by 2 June 2023. A transcript was provided but it was not agreed in totality.
His Honour Judge Neville made the following comments regarding the conduct of the liability proceedings in the Interim Judgment:[28]
The “liability hearing” in this matter took place in March and May 2023. Regrettably, final submissions were regularly delayed, with multiple extensions of time sought. The final submissions were ultimately filed on 9th October 2023. Judgment was delivered on 22nd February 2024, with multiple contraventions of the Fair Work Act 2009 (Cth) (“the FW Act”) being established by the Applicant against the Respondents.
At the hearing on 12th May 2023, Counsel for the parties were advised, indeed cautioned, of the need to be mindful of my retirement in mid-2024, which necessitated that any “penalty hearing” occur in sufficient time for the judgment in that aspect of the matter to be finished well before the said retirement.3 Counsel gave relevant assurances. Alas, because of further delays and the likely unavailability of both Counsel and, significantly, of a witness for the Respondents[…]
[…]
For my part, despite every caution, and regular encouragement to all the lawyers involved (which includes very experienced Counsel), the conduct of the matter has too often been too meandering”
[28] Construction, Forestry and Maritime Employees Union v JW Land Construction (No 2) [2024] FedCFamC2G 328, [1]–[3].
The CFMEU relied on the fact that prior to making the offer it had filed all its evidence including video footage of the incident that gave rise to the contraventions. The CFMEU asserted that it should be entitled to its costs, setting aside the issue as to whether those costs should be ordered on an indemnity basis, by reason of the fact that had the offer of 2 November 2022 been accepted the Respondents would not be exposed to penalties for contravention of s 503(1) of the FW Act. The CFMEU contended that the video footage together with the CFMEU’s evidence and submissions should have made it plain to the Respondents the “untenability” of their defence.
The Respondents submitted that there was a proper legal and factual foundation for their defence. With respect the s 502(1) allegations the CFMEU needed to show that Mr Poskus reasonably suspected that there were contraventions of the WHS Act and that Mr Hooper and Mr Henning intentionally hindered or obstructed Mr Poskus from exercising his rights. With respect to the s 503(1) contraventions the onus was on the CFMEU to establish that Mr Henning and Mr Hooper engaged in conduct or created the impression alleged and that conduct or impression had been intentional or reckless. The Respondents’ contended that they were entitled to test the CFMEU’s evidence.
It was further submitted by the Respondents that factually:
(a)There was a sufficient basis for them to assert that the conduct that founded the allegations of hinderance or obstruction was not intentional and as such the state of mind of Mr Henning and Mr Hooper was relevant.
(b)That it was open to them to test whether there was there was delay and if there was a delay whether any delay impacted negatively on Mr Poskus.
The Respondents’ also contend that there was a legal contest as to the application of BGC POS Pty Ltd v Construction, Forestry, Maritime, Mining & Energy Union [2019] FCA 74 to the circumstance of the case whether there was conflicting authorities.
I accept the submissions of the Respondents as to why the Offer made by the CFMEU on 2 November 2022 was not accepted. Their defence was not devoid of merit and this was not a situation where there was no prospects of success. The Respondents were entitled to test the evidence. I find that conduct of the Respondents namely, not accepting the Offer of 2 November 2022, was not unreasonable in all the circumstances.
The answer to question C.4 is No. I dismiss the CFMEU’s application for costs of the liability proceedings.
31 MARCH COSTS APPLICATION
The cost application in relation to 31 March 2023 was not before me on 31 July 2024. Both Counsel agreed at the Penalty Hearing that:
(a)The 31 March Cost Application became otiose if I determined that the CFMEU was entitled to costs with respect to the liability proceedings; and
(b)Should I be against the CFMEU on the issue of costs of the liability proceeding that the 31 March Costs Application could be determined on the papers.
As I am against the CFMEU on its application for costs of the liability proceedings I will now consider the application made by it regarding the costs thrown away because of the adjournment on 31 March 2023.
In the Agreed Statement of Factual and Legal Issues the parties identified the issues to be determined by me with respect to 31 March Costs Application.
Did the Respondents engage in an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act which caused the Applicant to incur costs in relation to their conduct in:
a. failing to file and serve affidavits and amended defences immediately at the conclusion of the Applicant’s case on 30 March 2023 in compliance with the Court’s orders;
b. but serving their affidavits on the Applicant on 30 March 2023 at 6:35PM and 6:44PM; and
c. serving amended defences at 8:15PM on 30 March 2023.
Ms Read of the CFMEU advised my Chambers by email on 27 August 2024 that the parties conferred and had identified the documents upon which the parties relied for the purpose of the 31 March Costs Application. The following documents were relied upon by the parties:
(a)Affidavit of Rosalind Read filed 1 May 2023.
(b)Affidavit of Rosalind Read filed 26 May 2023.
(c)Affidavit of Alicia Mataere filed 26 May 2023.
(d)Applicant’s submission filed 14 April 2023.
(e)Respondent’s submissions filed 26 May 2023.
(f)Applicant’s reply submissions filed 26 May 2023.
I have considered the material referred to in the note of 27 August 2024 in arriving at my decision on costs thrown away on 31 March 2023.
The principles pertaining to an award of costs pursuant to s 570(2) have been set out in paragraphs [48] to [52]. I do not intend to repeat them.
Mr Henning and Mr Hooper exercised their right to privilege and waived that right after the conclusion of the CFMEU’s evidential case. At approximately 11:00 am on 30 March 2023 for the purpose of the Mr Henning and Mr Hooper putting on affidavit material and the filing of an Amended Defence. The matter was adjourned to 31 March 2023. I accept that the affidavits filed on behalf of Mr Henning and Mr Hooper were provided to the CFMEU after 5:00pm on 30 March 2023 namely 6:35pm and 6:44pm and that the Amened Defence was provided at 8:15pm. There were no directions or orders regarding the filing of material.
It was contended by the CFMEU that provision of material by the Respondents after hours prejudiced its ability to obtain instructions and necessitated an adjournment. There was no evidence as to why Mr Poskus or Mr Bolitho could not be contacted by telephone for the purpose of seeking further instructions on the affidavits. Mr Bolitho was an employee of the CFMEU and there is no reason why the CFMEU could not have excused him from his usual duties for the purpose of providing instructions. There was no evidence that Mr Poskus remained in Canberra after the adjournment at 11:30am or was otherwise uncontactable. The paragraphs upon which further instructions were required were not identified in the material of the CFMEU.
I can see no reason why Counsel for the CFMEU was not in a position to cross examine the witnesses on 31 March 2023 after hearing a day of cross examination of his own witness. It must have been evident to the CFMEU what the Respondents’ case was from the cross examination. The adjournment was at the request of the CFMEU.[29] The adjournment was consented to by the Respondents.
[29] See the Notations of the Orders of Judge Neville dated 31 March 2023.
I do not believe that there was an unreasonable act or omission on behalf of the Respondents’ that caused the CFMEU to incur costs. The answer to each of the questions posed in C7 is No. I dismiss the application made by the CFMEU for costs thrown away on 31 March 2023.
CONCLUSION
Declarations in the form sought by the CFMEU should be made in respect of the contraventions by JW Land, Mr Henning and Mr Hooper of ss 502(1) and 503(1) of the FW Act. Pecuniary penalties order in the amount of $33,300.00 with respect to JW Land, $3,330.00 with respect to Mr Henning and $3,330.00 with respect to Mr Hooper should be made with respect of the contraventions The penalties imposed upon JW Land, Mr Henning and Mr Hooper are to be paid to the CFMEU.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bingham. Associate:
Dated: 24 September 2024
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