Construction, Forestry, Mining and Energy Union v Class 1 Form Pty Ltd
[2016] FCCA 3223
•21 December 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CONSTRUCTION, FORESTRY, MINING & ENERGY UNION & ANOR v CLASS 1 FORM PTY LTD & ANOR | [2016] FCCA 3223 |
| Catchwords: INDUSTRIAL LAW – Determination of penalties in relation to contraventions of Fair Work Act 2009 (Cth) – default judgment entered previously against Respondents who later in the proceeding did not seek to set aside that judgment – issues of delay in the Respondents’ filing of material. |
| Legislation: Fair Work Act 2009 (Cth), ss.50, 545, 546, 547, 557(1), (2) & (3) |
| Cases cited: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (2001) ATPR 41-815 Australian Ophthalmic Supplies Limited v McAlary-Smith (2008) 165 FCR 560 Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (2016) 326 ALR 476; 255 IR 87 Kelly v Fitzpatrick (2007) 166 IR 14 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 |
| First Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Applicant: | PETER KAIN |
| First Respondent: | CLASS 1 FORM PTY LIMITED |
| Second Respondent: | ELIAS TALEB |
| File Number: | CAG 34 of 2015 |
| Judgment of: | Judge Neville |
| Hearing date: | 4 July 2016 |
| Date of Last Submission: | 4 July 2016 |
| Delivered at: | Canberra |
| Delivered on: | 21 December 2016 |
REPRESENTATION
| Solicitor/Advocate for the Applicant: | Mr A Neilson |
| Solicitors for the Applicant: | Slater & Gordon, Sydney |
| Counsel for the Respondent: | Mr S Hausfeld |
| Solicitors for the Respondent: | Legal on London, Canberra |
ORDERS
If the compensation owing to the Second Applicant has not been paid pursuant to Orders 3, 4 and 5 of Orders dated 2 May 2016, these amounts are to be paid to the Second Applicant within 28 days of the date of these Orders.
Pursuant to section 546(1) of the Fair Work Act 2009, the First Respondent pay a pecuniary penalty of $18,000 for the Contraventions set out in Order 1 (a) – (f) of Orders dated 2 May 2016.
Pursuant to section 546(1) of the Fair Work Act 2009, the Second Respondent pay a pecuniary penalty of $12,000 for the Contraventions set out in Order 2 of Orders dated 2 May 2016.
The penalties set out in Orders 2 and 3 are to be paid to the First Applicant within 42 days of the date of these Orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAG 34 of 2015
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
First Applicant
| PETER KAIN |
Second Applicant
And
| CLASS 1 FORM PTY LIMITED |
First Respondent
| ELIAS TALEB |
Second Respondent
REASONS FOR JUDGMENT
Introduction
Formally, this Application seeks Declarations and Orders that arise out of contravention proceedings under the Fair Work Act 2009 (Cth) (“the FW Act”). The Applicant contends that ss.50, 545, 546 and 547 of the FW Act are the provisions relevant to the matters before the Court.
Procedurally, matters were not, and are not, as straight-forward as they might otherwise be. That is so because of the following procedural and other history of the proceeding.
Procedural History
The Application and Statement of Claim were filed on 26th May 2015.
A Notice of Address for Service was filed on behalf of the Respondents on 14th August 2015. On 31st August 2015, Orders were made by consent that provided a time-table for the filing of a Response, and a Reply by the Applicants, with the matter adjourned to 26th October 2015. On this occasion the Respondents were legally represented.
The parties approached the Court to make Orders in Chambers to provide for a revised timetable regarding the filing of material by way of Response and Reply. Those Orders were made on 27th October 2015 in Chambers.
On 30th November, the solicitors for the Respondents mentioned the matter by consent. The matter was adjourned to 8th February 2016. There were general indications that the parties were seeking to resolve the matter by consent.
On 5th February 2016, the Respondents’ solicitors withdrew from the matter.
On 8th February 2016, the Second Respondent appeared on his own behalf; Orders were made for the Respondents to file a Defence. Ultimately, a “Response” (not a Defence) was filed not until 10th June 2016.
On 4th April 2016, with lawyers present for both parties (solicitors for the Respondents appeared essentially on an amicus basis because no Notice of Address for Service had then been filed). Orders were made on this occasion that again provided for the Respondents to file a Defence to the Statement of Claim within 14 days (the last date for filing was specified in the Orders as close of business on 18th April 2016). The Orders also provided that if nothing was filed in compliance with the Orders, default judgment would be entered in favour of the Applicant. The Applicant’s costs were reserved.
On 2nd May, the Court noted that no material had been filed in accordance with the Orders dated 4th April. On that occasion Orders were made that provided a timetable for (a) the Applicants to file and serve a joint affidavit that addresses issues of “liability”, and (b) for all parties to file written submissions in relation to penalty.
The Orders on that date also “declared” (although formally styled “orders”) that the First Respondent had contravened s.50 of the FW Act in relation to the failure to pay Mr Kain, in accordance with specified clauses of the relevant collective agreement between the parties. The “Orders” further provided for “declarations” in relation to breaches by the Second Respondent of the matters the subject of the s.50 contraventions, contrary to s.550(1) of the FW Act. Other breaches of s.545 were also declared on that occasion, which led to Orders in relation to the payment of compensation to Mr Kain, specified in those Orders. The total amount payable to Mr Kain, pursuant to these Orders, was $16,366.33.
In notations to the Orders made on 6th June 2016, the following was stated (with Counsel appearing on behalf of the Respondents):
A. Previous Orders of this Court have directed the Respondents to file Response material, e.g. the Orders of 31st August and 27th October 2015, and 8th February 2016 (on this occasion, the Respondents were personally present in Court). The Respondents have failed to comply with any of these Orders. As at the date of these Orders, there remains no Response filed by any of the Respondents;
B. The Respondents have previously had highly experienced solicitors earlier in the proceedings, and still no substantive documents have been filed at any time in this matter on their behalf;
C. As of today, the Respondents have new solicitors formally on the record acting for them, although informally the same firm had been acting for the Respondents on previous occasions including in April and May 2016;
D. On 2nd May 2016, following the Respondents’ continued failure to comply with Court Orders, and in particular the notice given to them on the face of the Orders made on 4th April 2016, default judgment was entered against them in relation to liability
Orders sought by the Applicants
The Applicants sought Orders and declarations as set out in the document styled “Proposed Declarations and Orders” annexed to the Outline of Submissions, filed 6th June 2016.[1] These were as follows:
[1] These Orders and Declarations were ultimately and formally made pursuant to the Respondents being in default of previous Orders.
The Court declares:
1) The First Respondent has contravened:
a) s 50 of the Fair Work Act 2009 (Cth) by failing to pay to Mr Peter Kain an ordinary hourly rate of pay consistent with that of a CW5--employee employed pursuant to Clause 1.1 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
b) s 50 of the Fair Work Act 2009 (Cth) by failing to pay to Mr Peter Kain casual loading in accordance with Clause 11.3 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
c) s 50 of the Fair Work Act 2009 (Cth) by failing to pay to Mr Peter Kain the correct amount of combined disability allowance in accordance with Clause 1.5 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
d) s 50 of the Fair Work Act 2009 (Cth) by failing to pay to Mr Peter Kain the correct fares and travelling allowance in accordance with Clause 1.2 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
e) s 50 of the Fair Work Act 2009 (Cth) by failing to pay to Mr Peter Kain the correct amount of superannuation in accordance with Clause 1.3 and 14 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
f) s 50 of the Fair Work Act 2009 (Cth) by failing to pay amounts due to Mr Kain at a time consistent with Clause 44 of the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016.
2) The Second Respondent was involved in, within the meaning of subsection 550(2) of the Fair Work Act 2009 (Cth), the First Respondents contraventions set out in 1 (a), (b), (c), (d), and (e) above and is therefore taken to have contravened that provision within the meaning of Section 550(1) of the Fair Work Act 2009 (Cth).
The Court orders:
3) Pursuant to s 545 of the Fair Work Act 2009 the First Respondent and Second Respondent jointly and severally pay Mr Peter Kain an amount of $13,338.61 in compensation for the contraventions set out in 1 (a), (b ), ( c) above.
4) Pursuant to s 545 of the Fair Work Act 2009 the First Respondent and Second Respondent jointly and severally pay Mr Peter Kain an amount of $423.43 in compensation for the contraventions set out in 1 (d) above.
5) Pursuant to s 545 of the Fair Work Act 2009 the First Respondent and Second Respondent jointly and severally pay to the superannuation fund known as CBUS (on behalf of Mr Kain) an amount of $2,604.29 in compensation for the contravention set out in 1(e) above.
6) Pursuant to s 546(1) of the Fair Work Act 2009, the imposition of a pecuniary penalty upon the First Respondent for each of the contraventions set out at 1(a) (b.), (c), (d), and (e) in the amount of [INSERT AMOUNT].
7) Pursuant to s 546(1) of the Fair Work Act 2009, the imposition of a pecuniary penalty upon the Second Respondent for each of the contraventions set out at 1 (a) {b), (c), (d), and (e) m the amount of [INSERT AMOUNT].
8) Pursuant to s 546(3)(b) of the Fair Work Act 2009, that the whole of any pecuniary penalty imposed on the First and Second Respondent be paid to the First Applicant.
9) Pursuant to s 547 of the Fair Work Act 2009, interest in respect of the amounts of compensation specified under paragraphs 3-5 above in the total amount of $1,025.03 payable to Mr Kain.
10) That the amounts ordered in in Order 3, 4, 5 and 9 be paid within 28 days of these orders.
11) That the amounts ordered in Order 6 and 7 be paid within 28 days of these orders.
12) Such further or other orders as the Court deems fit.
The Applicants also annexed their calculations of the interest they allege is owing to Mr Kain.
Orders sought by the Respondents
There has been no document filed by the Respondents that outlines the Respondents’ Orders sought in relation to penalties.
Submissions by the Applicants
The Applicants filed an Outline of Submissions in Court on 6th June 2016. These extensive submissions are as follows (footnotes omitted):
INTRODUCTION
1) On 26 May 2016, the First and Second Applicants (collectively. 'the Applicants') commenced proceedings against the. First and Second Respondents (collectively 'the Respondents') in respect of underpayment of employee entitlements and other related matters pursuant to either the Class 1 Form Pty Ltd/CFMEU Collective Agreement (ACT) 2013-2016 ('the Agreement').
2) The contraventions relate to one employee - the First Applicant in the proceedings, Mr Peter Kain ('Mr Kain') who was employed by the First Respondent under the control and direction of the Second Respondent as a carpenter on and from August 2013 until about September _2013 and thereafter between November 2013 until June 2014 ('Employment Period').
3) The First Respondent ('Class 1') is a company providing formwork and carpentry services within the Australian Capital Territory. The Second Respondent ('Mr Taleb') is knowledgeable and experienced in the running of Class 1. Mr Taleb was knowledgeable and experienced regarding the Agreement. Mr Taleb was, at all material times, responsible for the overall management and affairs of Class 1.
4) The Agreement was made pursuant to the Fair Work Act ('FW Act'). The Agreement came into force on 26 March 2013. The Agreement has a nominal expiry date of 1 March 2016. At all material times, Class 1 was bound to comply and observe the terms of the Agreement.
5) During the Employment period, the Agreement regulated the terms and conditions upon which Mr Kain was to be employed and paid by Class 1. Mr Kain was at all material times
a) employed by Class 1;
b) performing work in the Australian Capital Territory;
c) employed within the classification CW5 which is a classification recognised by the Agreement; and
d) a member or eligible to be a member of the First Applicant.
CONTRAVENTION - FAILURE TO PAY CORRECT WAGES
6) During the Employment Period, Mr Kain was employed as a casual employee. The Agreement provided that Mr Kain was to be paid, as a CW5, at the base rate of $35.80 in the period before 1 March 2014 and $37.59 thereafter. Class 1 contravened Clause 1.1 of the Agreement by paying Mr Kain an amount of $35.40 per hour instead of a rate of $35.80 until 1 March 2014 and $37.59 thereafter.
7) The failure to pay wages in accordance with the Agreement caused loss and damage to Mr Kain and undermined the integrity of the Agreement thus causing damage to the CFMEU.
CONTRAVENTION - FAILURE TO PAY CASUAL LOADING
8) Mr Kain as a casual employee was entitled to a casual loading of 25% on top of his base rate of pay. Class 1 contravened Clause 11 .3 of the Agreement by failing to pay Mr Kain a casual loading of 25% on top of his base rate of pay consistent with Clause 11.3 of the Agreement.
9) The failure to pay a casual loading in accordance with the Agreement undermined the integrity of the Agreement thus causing damage to the CFMEU.
CONTRAVENTION - FAILURE TO PAY CONSOLIDATED DISABILITY ALLOWANCE
10) Clause 18 of the Agreement provides that all employees shall be entitled to the payment of an allowance known as the Consolidated Disability Allowance ('CDA'). The rate of the CDA is set out in 1.5 of the Agreement.
11) The amount of the CDA payable was $2.54 until 1 March 2014 and rising to $2.66 thereafter.
12) Class 1 paid to Mr Kain an amount in purported satisfaction of the CDA. However, the amount paid was not sufficient to discharge the full obligation of the CDA and accordingly, by failing to make payment in full satisfaction of the CDA, Class 1 contravened Clause 18 and 1.5 of the Agreement.
13) The failure to pay CDA in accordance with the Agreement undermined the integrity of the Agreement thus causing damage to the CFMEU.
CONTRAVENTION - FAILURE TO PAY TRAVELLING ALLOWANCE
14) Clause 1.2 of the Agreement sets out that an employee covered by the Agreement shall be entitled to a payment $35.11 per day in the period to 1 April 2014 and at the rate of $36.87 thereafter as a travel allowance ('TA'). Mr Kain was only paid travelling allowance at the rate of $33.44 per day.
15) The amount paid by Class 1 was not sufficient to discharge its full obligation under the Agreement and accordingly, by failing to make payment in full satisfaction of the TA, Class 1 contravened Clause 1.2 of the Agreement.
16) The failure to pay TA in accordance with the Agreement undermined the integrity of the Agreement thus causing damage to the CFMEU.
CONTRAVENTION - FAILURE TO PAY APPROPRIATE SUPERANNUATION AMOUNT
17) Clause 14 of the Agreement mandates the payment of superannuation. Clause 14 of the Agreement sets out a definition of ordinary time earnings to include casual loading and CDA. As Mr Kain was not paid a correct amount in satisfaction of those entitlements it follows that there has been an underpayment of superannuation payments required to be made pursuant to Clause 14.1 (as reflected in Clause 1.3 of the Agreement).
18) The amount paid by Class 1 was not sufficient to discharge its full obligations under the Agreement and accordingly, by failing to make payment in full satisfaction of superannuation, Class 1 contravened Clause 14.1 and 1.3 of the Agreement.
19) The failure to pay superannuation in accordance with the Agreement undermined the integrity of the Agreement thus causing damage to the CFMEU. Further and in addition the failure to pay correct superannuation undermines the integrity of the Australian retirement system.
CONTRAVENTION - FAILURE TO PAY WAGES ON TIME
20) Clause 44 of the Agreement provides that payments due under the Agreement (i.e. wages and allowances) shall be paid not later than the cessation of ordinary hours of work on a Thursday of each working week.
21) Mr Kain was not paid, on several occasions, wages on or before a Thursday of each week in contravention of Clause 44 of the Agreement. To assist the Court a table has been prepared reflecting the day upon which payment was made. The table was formed following a review of the bank account records of Mr Kain.
22) By failing to pay monies due on or before a Thursday of each week the Respondent contravened a term of the Agreement, namely Clause 44 of the Agreement.
THE APPROACH OF THE COURT ON PENALTY
Standing under the FW Act
23) The Applicants have standing to bring these proceedings in so far as they relate to contraventions of the Agreement (and thus Section 50 the FW Act) pursuant to subsection 539( 4) of the FW Act.
24) Subsection 546(1) of the FW Act enables an eligible court, including this Court, to impose a penalty in respect of a contravention of a civil remedy provision. Section 50 of the FW Act is a civil remedy provision.
Principles relevant to determining penalty
25) The Applicant submits that the following principles should be taken into account in determining the question of the appropriate penalty.
26) First the Court is to identify the separate contraventions involved. Each breach of an obligation is a separate contravention.
27) Secondly, the Court should consider whether the breaches arising in the first step constitute a single course of conduct under subsection 557(1) of the FW Act.
28) Thirdly, to the extent that two or more contraventions have common elements, this should be taken into account in determining what is an appropriate penalty in all the circumstances of each contravention. The Respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the Respondents did.
29) Fourthly the Court should consider the appropriate penalty for the single breaches and, if relevant, each group of contraventions, taking into account of all the relevant circumstances.
Grouping of contraventions - Course of conduct
30) The Applicants accept that the Respondents are entitled to the benefit of the course of conduct provisions in relation to the repeated contraventions by the Respondents.
31) The Applicants submit that Section 557 of the FW Act has application. Although there are multiple contraventions alleged (e.g. the failure to pay on time occurred over a sustained period) the Respondents are entitled to the benefit of Section 557 of the FW Act so that it is only liable for:
a) One contravention for the failure to pay correct wages;
b) One contravention for the failure to pay the CDA;
c) One contravention for the failure to pay the TA;
d) One contravention for the failure to pay superannuation; and
('Underpayment Contraventions')
e) One contravention for failing to pay on time.
Grouping of contraventions - common element
32) It is open to the Court to group separate contraventions together where the contraventions may be said to overlap with each other or involve the potential punishment of the respondents for the same or substantially similar conduct. This principle was recognised in Fair Work Ombudsman v Total Project Marketing Pty Ltd (in liquidation) and ors [2014] FCCA 451 at [84]:
Whereas s.557 (1) requires the Court to treat multiple contraventions of the same provision as one contravention in the circumstances set out in that section, there is also a discretion to further aggregate the contraventions to the extent that two or more contraventions have common elements that should be taken into account when considering what is an appropriate penalty in all the circumstances for each contravention or course of conduct.
33) The Applicants submit that the common element considerations do not arise in these proceedings because each of the Underpayment Contraventions arise from a failure to pay different entitlements. The operation of Section 557 has operated in these proceedings to stop the Respondents being penalised more than once in relation to the same conduct and the Applicant submit there is no further requirement to further aggregate those contraventions.
Maximum penalty
34) The total maximum penalty which could be imposed upon the First Respondent is $306,000 and the Second Respondent is $61,200. This is calculated on the basis of contraventions with the maximum penalty for each contravention for Class 1 being $51,000 and for Mr Taleb $10,200.18
FACTORS RELEVANT TO PENALTY
35) A non-exhaustive list of factors relevant to the imposition of penalty was usefully summarised by Mowbray FM in Manson v Harrington Corporation Pty Ltd t/as Pangaea Restaurant and Bar ('Pangaea'):
a) the nature and extent of the conduct which led to the contraventions;
b) the circumstances in which that conduct took place;
c) the nature and extent of any loss or damage sustained as a result of the contraventions;
d) whether there had been similar conduct by the Respondents;
e) whether the contraventions were properly distinct or arose out of one course of conduct;
f) the size of the business involved;
g) whether the contraventions were deliberate;
h) whether senior management was involved in the contraventions;
i) whether the party committing the contraventions has shown contrition; and
j) whether the party committing the contraventions has taken corrective action;
Nature and extent of the conduct
36) The contraventions in this matter are serious.
37) Mr Taleb was a person who was deeply involved in the management of Class 1. Mr Taleb was someone who was involved in the negotiation and approval of the Agreement. It can be taken that Mr Taleb must have reasonably known of the requirements imposed by the Agreement.
38) The denial of entitlements to an employee is a serious matter. The fact that it has taken approximately three years from the time of the first denial of entitlement to reach this stage has resulted in a serious loss to Mr Kain. It is not for Mr Kain to show some special or unique damage so as to justify the seriousness of the contraventions. The fact that Mr Kain has been denied basic entitlements at all is, of itself, serious enough to warrant the firm intervention by the Court.
Circumstances in which it took place
39) Mr Kain was a skilled employee who had agreed to provide his services. He was being asked to provide his services in circumstances where he was not being paid correctly. There is no suggestion that his performance was deficient.
40) The Respondents have obtained the full benefit of the skill and diligence of Mr Kain whilst underpaying · him entitlements. That the Respondents were able to obtain benefit from Mr Kain whilst at the same time contravening the law ought to warrant the firm intervention of the Court.
Nature and extent of the loss
41) There has been an underpayment to Mr Kain of $16, 789.80. This may appear to be a relatively modest amount in the context of other matters which come before the Court. However, 'it is important to note that a small amount to one may be a large amount to another and it is important to note that this matter involves ·the contravention of an Agreement that was freely entered thus aggravating the contravention.
Any similar previous conduct
42) The Respondents have not been subject to previous findings of the Court.
Whether the breaches were distinct or arose out of one course of conduct
43) This has been addressed previously in these submissions.
Size of the business enterprise
44) There is no evidence before the Court relating to the financial position of Class 1.
45) However, the simple fact that Class 1 might be considered to be a small business does not mean that it should be subject to a lesser penalty. In Workplace Ombudsman v Saya Cleaning, the Court held:
... the First Respondent is a small company and, I infer, has very few assets. However as Justice Tracey said in Kelly v Fitzpatrick:
No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to make the .failure by imposing an appropriate monetary sanction. Such a sanction must be imposed at a meaningful level.
Whether the breaches were deliberate
46) There is no evidence from the Respondents to suggest that it was deliberate or otherwise. The Court can be satisfied that it was deliberate on the basis that Class 1 entered into the Agreement willingly. Class 1 facilitated the approval of the Agreement. Mr Taleb was central to the negotiation, approval and subsequent implementation of the Agreement.
47) The Court can be satisfied that the conduct was deliberate or at the very least reckless. In circumstances of either deliberate or reckless conduct then the appropriate penalty range would trend to the high range.
Whether senior management was involved
48) Mr Taleb was involved and he was responsible for the management of Class 1. Mr Taleb was responsible for the compliance with workplace laws by Class 1.
Contrition
49) There is no evidence of contrition or remorse. In fact the Respondents have refused to participate in the proceedings although on various occasions have suggested that they would. The Respondents were originally represented and then self-represented and then partially represented by Mr Laria who kept informing the Court about the difficulties he was having confirming his instructions.
50) The Court can be satisfied that there is no contrition by the Respondents.
Corrective action
51) There is no evidence of any rectification steps being taken by the Respondents. The Court should consider that there is a real potential for similar conduct to occur again should it not send a strong message to the Respondents as to the inappropriateness of their behaviour.
The need for specific and general deterrence
52) There is a need for specific deterrence in this matter due to the fact that the Respondents:
a) have participated in the proceedings, then withdrawn, then suggested they would participate and then doing nothing other than delay the resolution of the proceedings;
b) shown no contrition as to the conduct alleged;
c) permitted a situation to occur whereby Mr Kain has been denied payment of his entitlements as a result of their actions before this Court;
d) deliberately or at best recklessly engaged in the contraventions alleged.
Penalty range
53) The Applicants submit that the penalties imposed, for each contravention, being 6 in total should be in the mid. The total penalty which can be imposed is set out $306,000 on Class 1 and $61,200 on Mr Taleb.
54) In considering the penalty to be imposed the Court should have regard to the totality principle and determine whether the total penalties to be imposed are an appropriate response to the conduct which is not oppressive or crushing.
Proposed declarations and orders
55) Attached to these submissions are draft declarations and orders which the Applicants seek be made. The Applicants have also taken the liberty of preparing an interest Calculation which is also attached to these submissions.
56) The Applicants seek that any pecuniary penalties be payable to the First Applicant as the 'usual order' of the Court pursuant to Section 546(3).
Submissions by the Respondents
The Respondents filed in Court on 4th July 2016 a document titled “Respondents’ (late but brief) Submissions re Penalty”. For completeness I note that these submissions were some two months late according to the Orders made on 2nd May 2016. The description given by the Respondents to their submissions may be an apposite characterisation of many things in this proceeding, not least the conduct that has beset the Respondents, and in turn the Applicants and the Court. The Respondent’s quite brief submissions were as follows (it will be seen that the submissions confirm/admit [only] three separate contraventions; it was unclear whether there was an attempt to “group” the contraventions. In the absence of relevant clarity and particularity the Court cannot and will not speculate.):
1) Paragraph references are, unless otherwise indicated, to those of the Applicants' submissions of 6 June 2016. Much of those submissions is accepted.
2) In the context of a default judgment, great care must be taken that any inferences from declarations made are those which are the only logically possible inferences.
3) Respondents accept the applicable penalty unit is $170: ¶34.
4) Respondents say 3 separate contraventions:
a) wages (amount & time) (especially since the pleaded delays in payment were generally short and possibly technical);
b) allowances (casual loading, CDA and travel): if all remuneration had been considered to be wrapped into one payment then all allowances could have been wrapped together and make a single breach; and
c) superannuation.
5) On this basis total [maximum] penalties would be: individual=$30,600 & corporation=$153,000.
6) Breaches were by no means at the more severe end of possibilities. Breaches involved just one employee (¶2), over a relatively short time period, for a relatively modest amount of money and with no suggestion of complete failure to pay wages.
7) There is relevant corrective action by way of the court ordered compensation, plus interest, which has been ordered against both respondents jointly and severally. The wrong has been righted!
8) In terms of deterrence, it is relevant that the First Respondent is a one shareholder company owned and managed by the Second Respondent. All penalties essential will come from the one pocket. General and specific deterrence requirements could be met by a penalty not exceeding the compensation payable.
9) Similarly, in terms of the totality principle, it is relevant that all penalties will come from the one pocket. It is also relevant that the respondents have already suffered the “penalty” of their own legal costs and a costs order for the last appearance. In the circumstances of this case, penalties should not in total exceed the compensation ordered.
I should also note that two affidavits were filed by the Respondents’ solicitor which sought to explain, to a certain degree, reasons for the delay in filing material on behalf of the Respondents. Accepting that his task was not an easy one, in my respectful view, the material in these two affidavits, filed 10th June and 1st July 2016, did not take the issues of delay all that far.
Indeed, on 4th July 2016, the Solicitor for the Applicant briefly submitted that the affidavits filed on behalf of the Respondents did not relevantly or adequately explain the many and significant delays, and non-compliance, by the Respondents. This is in circumstances where the Court accepts that the Respondent’s current lawyer took over the matter in early June this year.
Also on 4th July, Counsel for the Respondents made further submissions in support of the brief written submissions earlier noted. He confirmed that the Respondents accepted and did not seek to disturb the earlier entered default judgment against them. Accordingly, submissions were being made only in relation to penalty. In this regard it was submitted that by definition a default judgment did not permit the Court to make findings or draw inferences that would otherwise be permitted because relevant evidence was untested. He also contended that because the First Respondent was a single shareholder company it was important that this relevant fact was properly taken into account by the Court particularly in relation to the issue of general deterrence. I simply note that these matters were canvassed in the late-filed written submissions filed on behalf of the Respondents.
Legal Principle & Consideration
For current purposes, it is sufficient to highlight and have regard to relevant principle drawn primarily from three cases: Kelly v Fitzpatrick, Australian Ophthalmic Supplies Limited v McAlary-Smith (“McAlary-Smith”), and the relatively recent decision of Bromberg J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (“ABCC”).[2]
[2] Kelly v Fitzpatrick (2007) 166 IR 14; Australian Ophthalmic Supplies Limited v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2012] FCA 189.
In Kelly v Fitzpatrick, at [14], Tracey J outlined a range of “non-exhaustive” considerations in relation to penalty. They are:
a) The nature and extent of the conduct which led to the breaches.
b) The circumstances in which that conduct took place.
c) The nature and extent of any loss or damage sustained as a result of the breaches.
d) Whether there had been similar previous conduct by the respondent.
e) Whether the breaches were properly distinct or arose out of the one course of conduct.
f) The size of the business enterprise involved.
g) Whether or not the breaches were deliberate.
h) Whether senior management was involved in the breaches.
i) Whether the party committing the breach had exhibited contrition.
j) Whether the party committing the breach had taken corrective action.
k) Whether the party committing the breach had cooperated with the enforcement authorities.
l) The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
m) The need for specific and general deterrence.
In McAlary-Smith, among many matters addressed in the instructive judgments of each member of the Full Court, Buchanan J cautioned, at [21], against using any single list of considerations in a prescriptive or restrictive manner.
In ABCC, Bromberg J said, admittedly in a slightly different legislative context, at [19] – [23]:
[19] The relevant considerations required for an assessment of the appropriate penalty to be imposed for a breach of the BCII Act have been discussed at length by this Court: see Stuart- Mahoney v CFMEU [2008] FCA 1426 at [40] (Tracey J); Temple v Powell [2008] FCA 714; (2008) 169 FCR 169 at [56]- [78] (Dowsett J); Cahill v CFMEU (No 4) [2009] FCA 1040 at [9]- [10] (Kenny J).
[20] As the parties have proposed an agreed penalty to be imposed in these proceedings, the relevant question for the Court is whether that agreed penalty is “appropriate in all the circumstances”: Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] (Branson, Sackville and Gyles JJ) where the Full Court adopted the reasoning of Burchett and Kiefel JJ (with whom Carr J agreed) in NW Frozen Foods Pty Ltd v ACCC [1996] FCA 113; (1996) 71 FCR 285 at 298-299.
[21] In Mobil at [51], the Full Court listed the principles enunciated in NW Frozen Foods including that:
· it is the Court’s responsibility to determine the appropriate penalty ;
· determining the quantum of a penalty is not an exact science;
· there is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy;
· the view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty ;
· in determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case;
· where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so in the circumstances of the case;
· where the parties have jointly proposed a penalty , it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement;
· the question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case;
· in answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure; and
· it will be appropriate if within the ‘permissible range’.
[22] The ‘permissible range’ of penalties refers to that range that would be permitted by the Court, which is neither manifestly inadequate nor manifestly excessive, and only where the agreed penalty falls outside the permissible range should the court depart from the figure agreed by the parties: see Wells v Locano Management Pty Ltd [2008] FCA 1034 at [23] (Jessup J); Ponzio v B & P Caelli Constructions [2007] FCAFC 65; (2007) 158 FCR 543 at [129] (Jessup J) and Alfred v CFMEU [2011] FCA 556 at [68] (Tracey J).
[23] The CFMEU contended, and I agree, that the following principles should also inform the exercise of the Court’s discretion:
(a) Proportionality: that any penalty imposed should not exceed that which is appropriate or proportionate to the gravity of the contravention found proven in the light of its objective circumstances: Hoare v the Queen [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). See also the Veen v The Queen (No 1) [1979] HCA 7; (1979) 143 CLR 458 at 467-468 (Stephen J) and 482-483 (Jacobs J) and 495 (Murphy J); Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472 (Mason CJ, Brennan, Dawson and Toohey JJ), 485-486 (Wilson J), 490-491(Deane J) and 496 (Gaudron J). This approach has been adopted in relation to contraventions of the BCII Act: Stuart v CFMEU [2010] FCAFC 65; (2010) 185 FCR 308 at [30] (Moore J).
(b) Parsimony: the Court must ensure that it imposes the minimum term consistent with the attainment of the relevant purposes of sentences taking care that the punishment is only for the crimes before the Court: R v Valentini [1980] FCA 133; (1980) 48 FLR 416 at 420 (Bowen CJ, Muirhead and Evatt JJ).
(c) Penalty maximum: that the maximum penalty should be reserved for the worst type of contravention: Veen v The Queen (No 2) at 478 (Mason CJ, Brennan, Dawson and Toohey JJ); Stuart v CFMEU at [30] (Moore J).
In the recent High Court decision of Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, the majority judgment of French CJ, Keifel, Bell, Nettle and Gordon JJ affirmed the above principles in relation to civil penalties.
At [26] – [32], the Court held as follows (citations omitted):
[26] NW Frozen Foods was concerned with a civil penalty proceeding brought by the Australian Competition and Consumer Commission ("the ACCC") under s 76 of the Trade Practices Act. As already noted, s 76 provided that, if the court were satisfied that a person had contravened or attempted to contravene a provision in Pt IV of the Act, the court could order the person to pay the Commonwealth a pecuniary penalty not exceeding a specified sum that the court determined to be appropriate having regard to all relevant matters. The provision thus placed responsibility on the shoulders of the court to determine the penalty, having regard to all relevant matters.
[27] The Full Court observed that, because the effects of a contravention on the functioning of markets and other economic consequences were likely to be among the most significant relevant considerations in the determination of penalty, the court would be assisted by the views of the ACCC. Hence, as had earlier been accepted by Sheppard J in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 4 (“Allied Mills”), the Full Court held that it was not inappropriate for the parties to present the facts and analysis of market effects in the form of agreed statements and for the ACCC and the contravener to make joint submissions as to the appropriate level of penalty.
[28] The Full Court further observed that, given the public interest in promoting the negotiated resolution of civil penalty proceedings, and that the fixing of the quantum of penalty is not an exact science, the task of a court in setting a pecuniary penalty was not necessarily to ask itself whether it would independently have come to the precise quantum proposed by the parties. Rather, the court should determine whether the parties' proposal could be accepted as fixing an appropriate penalty. Burchett and Kiefel JJ explained the reasons for that as follows :
“There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case."
[29] Thereafter, the approach thus sanctioned in NW Frozen Foods was routinely followed until the matter was revisited by the Full Court in Mobil Oil.
[30] As appears from the latter decision, the need for reconsideration of the issue arose from obiter reservations expressed by Finkelstein J and Weinberg J in decisions at first instance. In Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (“ABB Transmission”), Finkelstein J had observed that consent might be coerced and therefore that the absence of a trial might lead to injustice. He had also posited that, because most matters were resolved without a full hearing on the merits, it was becoming more difficult for a court to determine whether an agreed penalty was appropriate. In Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (“Colgate”), Weinberg J had stated that agreed submissions as to a specific penalty figure were, in his view, undesirable because he found it difficult to conceive of parties proposing a pecuniary penalty so much beyond the permissible range of penalties that a court would depart from the proposed penalty submission and, hence, that there was a danger of the court being seen to “rubber stamp” decisions taken by the body charged with investigating and prosecuting contraventions. Weinberg J had also suggested that it would be preferable for parties to submit a range of penalties instead of an agreed figure.
[31] In Mobil Oil, the Full Court rejected those concerns as unfounded. Taking them in turn, their Honours observed that when and if a poorly resourced respondent were party to a joint penalty submission, the court should scrutinise the submission and supporting statement of facts with particular care to ensure, so far as possible, that the statement of facts was accurate and the contravener's will had not been overborne. In reality, there was no particular shortage of reported cases in which the question of penalties had been fully agitated in a contested hearing. In any event, each case depended on its own merits and, as NW Frozen Foods demonstrated, if a judge considered that previous cases provided insufficient guidance for the case to be determined, he or she was free to act on that view. Contrary to the supposed improbability of a judge departing from an agreed penalty submission, Wilcox J had only recently done just that in Australian Competition and Consumer Commission v FFE Building Services Ltd: in effect rejecting an agreed penalty submission of $1.5 million and imposing in its place a penalty of more than twice that amount. Contrary, moreover, to the supposed danger of the court being perceived as a “rubber stamp” for agreed penalty submissions, NW Frozen Foods required the court always to form its own view about the appropriate range of penalties. Finally, there would be little advantage in limiting parties to an agreed range as opposed to an agreed figure. A better way of reinforcing the court's responsibility to determine an appropriate penalty was for the court to scrutinise the material presented to it carefully and satisfy itself that it was sufficient to determine whether the agreed penalty was appropriate.
[32] By way of explication, the Full Court added five observations, in substance as follows:
(1) As noted in Allied Mills and NW Frozen Foods, the rationale for giving weight to a joint submission on penalty rests on the saving in resources for the regulator and the court, the likelihood that a negotiated resolution will include measures designed to promote competition and the ability of the regulator to use the savings to increase the likelihood of other contraveners being detected and brought before the courts.
(2) NW Frozen Foods does not mean that a court must commence its reasoning with the penalty proposed by the parties and then limit itself to a consideration of whether the penalty proposed is within the range of permissible penalties. That is one option, but another is to begin with an independent assessment of the appropriate range of penalties and then compare it with the proposed penalty.
(3) The decision in NW Frozen Foods represented a correct application of the approach enunciated by Sheppard J in Allied Mills[37]. As Sheppard J stated, the court is not bound by the figure suggested by the parties. Rather, the court has to satisfy itself that the submitted penalty is appropriate while acknowledging that, uninformed by the agreed penalty submission, the court might have selected a slightly different figure[38]. That approach is correct in principle and it has been cited with approval by the High Court of New Zealand in Commerce Commission v New Zealand Milk Corporation Ltd[39].
(4) The decision in NW Frozen Foods is consistent with the imperative recognised in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd[40] that the regulator should explain to the court the process of reasoning that justifies a discounted penalty.
(5) The decision in NW Frozen Foods allows for the following possibilities:
(a) if the court is not satisfied that the evidence or information offered in support of an agreed penalty submission is adequate, it may require the provision of additional evidence, information or verification and, if that is not forthcoming, may decline to accept the agreed penalty;
(b) if the absence of a contradictor inhibits the court in the performance of its task of imposing an appropriate penalty, the court may seek the assistance of an amicus curiae or an individual or body prepared to act as an intervener;
(c) if the court is not prepared to impose the penalty proposed by the parties, it may be appropriate to allow the parties to withdraw their consent and for the matter to proceed on a contested basis.
The High Court ultimately rejected the Full Court’s reasoning, commenting at [46] – [49] that (citations omitted):
[46] The Full Court's reasoning in this matter should be rejected. Middleton J and McKerracher J were correct in their view that there is an important public policy involved in promoting predictability of outcome in civil penalty proceedings and that the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers. As was recognised in Allied Mills and authoritatively determined in NW Frozen Foods, 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.
[47] Weinberg JA's criticisms in Ingleby of NW Frozen Foods and Mobil Oil did not anticipate the reasoning in Barbaro. As was earlier emphasised, Barbaro was concerned with submissions as to the available range of sentences in criminal proceedings, in the sense described in Everett. That range refers to the spread which notionally separates the indeterminate points beyond which a court of criminal appeal is persuaded that a sentence is so manifestly excessive or inadequate as to be affected by error of principle. In contrast, NW Frozen Foods and Mobil Oil were concerned with the very different conception applicable to civil penalty proceedings that, because fixing the quantum of a civil penalty is not an exact science, there is a permissible range in which “courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another” [67]. It is only in that latter sense and only to that extent that the court will not depart from the submitted figure “merely because it might otherwise have been disposed to select some other figure” [68].
[48] NW Frozen Foods and Mobil Oil do not suggest that the task of a judge faced with an agreed civil penalty submission is to determine whether the submitted penalty is “wholly outside” the “range of penalties reasonably available” or that the court is “bound to impose [an agreed] penalty irrespective of whether it is considered appropriate” [69]. To the contrary, as was emphasised in Mobil Oil, those cases make plain that the court is not bound by the figure suggested by the parties. The court asks “whether their proposal can be accepted as fixing an appropriate amount” [70] and for that purpose the court must satisfy itself that the submitted penalty is appropriate.
[49] Nor is it “pious” to suppose that judges will do their duty, as they have sworn to do, and therefore reject any agreed penalty submission if not satisfied that what is proposed is appropriate. It would be a travesty of justice if that were not the case. It may be presumed that a judge will do his or her duty according to the oath of office. The public may have confidence that it will be so.
In the light of the authorities to which I have referred and the principles contained in them, I note the following.
First, in general terms, the Court accepts the submissions of the Applicants. They properly refer to relevant principle, and equally so to the relevant facts that have given rise to the Application.
Secondly, in much more summary terms, but unfortunately without reference to relevant authority, the Respondents’ submissions outline the considerations that are said to determine penalties that are very much more modest than those sought by the Applicants. In general terms, the Respondents’ submissions have as their primary focus or reference point for the determination of penalty the amount of “compensation” to be paid to the Second Applicant. The Respondents contend that any penalty should not exceed the amount of compensation to be paid to the Second Applicant.
Thirdly, in the light of the facts outlined earlier in these reasons, and having regard in particular to the considerations outlined by Tracey J in Kelly v Fitzpatrick, and to those set out by the Full Court of the Federal Court in the separate decisions in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission in 1996, and more recently Australian Ophthalmic Supplies Limited v McAlary-Smith in 2008, in my view, the following matters are the most relevant in determining the appropriate penalty.
The Respondents are entitled to the benefit of s.557(1) of the FW Act, which enables a court to treat two or more contraventions of a civil remedy provision referred to in subsection (3), as constituting a single contravention, subject to the terms of s.557(3). In the present matter, the Respondents will be considered and treated as being liable for one contravention in relation to each of the following: (i) failure to pay the correct wages, (ii) failure to pay the consolidated disability allowance, (iii) failure to pay the correct travel allowance, (iv) underpayment of superannuation, and (v) failure to pay wages on time.
Pursuant to Orders [and Declarations] made on 2nd May 2016, there were six contraventions determined in relation to the First Respondent (Order 1(a) – (f)), and one contravention in relation to the Second Respondent (Order 2). Compensation to the Second Applicant was set out in Orders 3 – 5, which sums totalled $16,366.33.[3] Contrary to these Orders, in their written submissions, the Respondents contended that there were [only] three separate contraventions. The Orders of 2nd May having been made, and not challenged by way of appeal or otherwise, the Respondents cannot now contend for a lesser number of contraventions. Indeed, it is unclear on the face of the written and oral submissions whether the Respondents sought to “group” the contraventions into three in number. In such circumstances of lack of clarity and particularity, the Court cannot and should not speculate what the intention of the Respondents was.
[3] The Applicant’s say in written submissions (par.41) that the amount of compensation payable to Mr Kain totalled $16,789.80. I have taken the amounts due to him to be as set out in the Orders of 2nd May 2016.
As the First Applicant stated in written submissions (par.34):
The total maximum penalty which could be imposed upon the First Respondent is $306,000 and the Second Respondent is $61,200. This is calculated on the basis of 6 contraventions with the maximum penalty for each contravention for Class 1 being $51,000 and for Mr Taleb $10,200.18.
The Respondents contended in written submissions that the maximum penalty for an individual is $30,600, and for a corporation, $153,000.
I accept the Applicants’ submission that the denial of entitlements to an employee is a serious matter. I also accept that it has taken a number of years for the matter to be determined. Mr Kain was a skilled employee; the Respondents benefitted from those skills but did not honour the relevant payments due to him under the collective agreement.
It is accepted that there is no evidence of any previous proceedings involving the Respondents. It seems also to be acknowledged, despite there being no relevant evidence before the Court, that the business of the Respondents is not a large enterprise.
As to “deliberateness” of the breaches, not only because of the modesty of the business but also because Mr Taleb was its principal, the Court must be able to assume, at least, that there was some relevant knowledge of the responsibilities of the Respondents to its workers generally, to the Second Applicant in particular, as well as the responsibilities under the Agreement. I note that Mr Taleb’s signature is on the Agreement (which is annexed to Mr Kain’s affidavit, filed 17th May 2016, at annexure PPK 3).
There is nothing before the Court to suggest that the Respondents are contrite in relation to any of the contraventions. This is particularly so in circumstances where Mr Taleb appeared before the Court but took no subsequent action to progress the resolution or finalisation of the matter. The same is true in relation to the lack of evidence of relevant corrective action taken by the Respondents.
In my view, the Court should have regard to considerations of general and specific deterrence. In this regard, the Respondents note that, because the First Respondent is a single shareholder company that is managed by Mr Taleb, essentially all penalties “will come from the one pocket.”
I accept the Respondents’ general submission that the breaches were at the lower end of the scale, accepting that from Mr Kain’s perspective, this would very likely not be his view. True it is that he was paid some wages but it was less than prescribed under the Agreement.
I also recall the importance of the “totality principle”, which Tracey J described in Kelly v Fitzpatrick (at [30]) as “… designed to ensure that the aggregate of penalties imputed is not such as to be oppressive or crushing.” In this regard, I note that the Applicant’s submissions were that the appropriate penalties that to be imposed should be ‘mid-range.’ In oral submissions, the Applicants said that a “mid-range” figure for an individual would be somewhere between $10,000 – 18,000, and a mid-range figure for the corporate Respondent would be approximately $20,000 - $30,000.
In my view, a proper “characterisation” of the so-called “range” of penalty is that, rather than “mid” as suggested by the Applicants, it is in fact more appropriately characterised as at the lower end of the so-called “range”.
Finally, I remind myself of the instruction from Graham J in McAlary-Smith, where his Honour said, at [54] (emphasis added):
The ultimate control on the judicial sentencing discretion is the requirement that the sentence be proportionate to the gravity of the offence committed. In pursuit of other sentencing purposes, a judge may not impose a sentence that is greater than is warranted by the objective circumstances of the crime. Both proportionality and consistency commonly operate as final checks on a sentence proposed by a judge (per McHugh J in Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 (‘Markarian v The Queen’) at [83]; see also Veen v The Queen (No. 2)[1988] HCA 14; (1988) 164 CLR 465 at 472).
Also in McAlary-Smith, Buchanan J said, at [91]:
… At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations…
In his detailed discussion in Markarian regarding sentencing and a trial judge’s “instinctive synthesis” in determining an appropriate penalty, McHugh J said, at [65]:[4]
Unfortunately, discretionary sentencing is not capable of mathematical precision or, for that matter, approximation. … There is no magic number for any particular crime when a discretionary sentence has to be imposed.
[4] Markarian v The Queen (2005) 228 CLR 357.
And further, at [78], his Honour said:
No one suggests that the judicial robe carries in its seams the wisdom of Solomon, but judicial experience in sentencing is a skill to be respected by the community and other judges. Repeated exercise in synthesising sentencing factors can only hone the instinct required to translate such factors into just numerical outcomes.
In all of the circumstances, and having regard to the principles outlined above, in my view the appropriate penalty that should be imposed upon the First Respondent is $18,000; and for Mr Taleb a penalty of $12,000.
For completeness, if the entitlements owing to the Second Applicant and which were the subject of the Court’s Orders dated 2nd May 2016 have not been paid, they are to be paid to Mr Kain within 28 days of the date of these Orders.
In relation to the penalties now ordered, they are to be paid to the First Applicant within 42 days of the date of these Orders.
I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 21 December 2016
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