CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION and JASON DEANS v KAREN STUART-MAHONEY
File number(s):
VID 957 of 2008
Judge:
RYAN J
Date of judgment:
8 February 2011
Catchwords:
INDUSTRIAL LAW – appeal from Federal Magistrates Court – civil penalty proceedings – whether there was action or threat of action having prejudicial effect on employment – whether onus of negativing proscribed reason reversed by s 809 of the Workplace Relations Act1996 (Cth)
EVIDENCE – application of s 140 of theEvidence Act 1995 (Cth) – whether pleaded allegation sufficiently established by the evidence – whether inference of contravening conduct more probable than other available inferences
PECUNIARY PENALTIES – appeal from Federal Magistrates Court – whether pecuniary penalties imposed for contravention of ss 789 and 790 of the Workplace Relations Act 1996 (Cth) were excessive
Legislation:
Workplace Relations Act 1996 (Cth) ss 789, 790, 797, 809 Evidence Act1995 (Cth) s 140 Building, Construction and Industry Improvement Act 2005 (Cth)
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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The appeal was heard by the Full Court of the Federal Court of Australia, comprising Mansfield CJ, Allsop P, and Weinberg J. The appeal arose from the Federal Magistrates Court's decision that the appellants, Construction, Forestry, Mining and Energy Union (CFMEU) and Deans, had contravened sections 789, 790 and 797 of the Workplace Relations Act 1996 (Cth). The CFMEU and Deans were ordered to pay pecuniary penalties. The CFMEU and Deans appealed the decision, and the appeal was allowed in part. The Court set aside certain orders of the Federal Magistrates Court and varied others. The Court held that the Federal Magistrate erred in finding that Deans had contravened section 797 of the Act in respect of Galea, as the evidence did not support such a finding. The Court also held that the pecuniary penalties imposed were excessive.
The central legal issues before the Court were whether there was action or threat of action having a prejudicial effect on employment, whether the onus of negativing a proscribed reason was reversed by section 809 of the Workplace Relations Act 1996 (Cth), and whether the pecuniary penalties imposed were excessive. The Court considered the evidence and found that there was no action or threat of action having a prejudicial effect on employment in respect of Galea. The Court held that the onus of negativing a proscribed reason was not reversed by section 809 of the Act, and the evidence did not support a finding that Deans had contravened section 797 of the Act in respect of Galea. The Court also found that the pecuniary penalties imposed were excessive and varied the orders of the Federal Magistrates Court accordingly.
Orders
Orders of the court
1. The appeal be allowed in part.
2. Paragraph 2 of the Order of the Federal Magistrates Court of 4 August 2008 and paragraphs 2, 3 and 5 of the Order of 27 October 2008 be set aside.
3. Paragraph 6 of the Order of 27 October 2008 be varied by substituting for the words “of each of the sums referred to in paragraphs 4 and 5” the words “of the sum referred to in paragraph 4” and for the word “penalties” the word “penalty”.
4. Paragraph 7 of the Order of 27 October 2008 be varied by deleting the references to paragraphs 2 and 4.
5. The appeal be otherwise dismissed.
Note:
Background
Background to the litigation
Given the short compass of the appeal, it is unnecessary to rehearse in detail the facts which have been extensively set out in the Liability Judgment at [13]-[58]. The following summary is sufficient for an understanding of how the questions now falling for determination have arisen. Background facts On the morning of 12 September 2006, Mr George Galea (“Galea”) and Mr Scott Gallagher (“Gallagher”), both employees of a labour hire agency called Direct Hire Services, arrived at a work site in Parkville, Melbourne. The second appellant, Deans, in his dual capacity as the occupational health and safety delegate elected by the employees on the site and CFMEU shop steward, conducted on that morning an induction to the site for Galea, Gallagher and at least three other workers. Galea and Gallagher were inducted at the same time as the other workers and were required to fill out induction forms which, amongst other things, required the workers to state any union affiliation and financial status. Both Galea and Gallagher were members of the CFMEU. However, at that time Galea was unfinancial and Gallagher thought that he was an unfinancial member of the CFMEU. Galea and Gallagher did not commence work at the site until they had regularised their financial status with the CFMEU. Deans spoke to Galea and Gallagher separately from the other three workers. Gallagher was asked by Deans why he had not filled out the induction form in full. Gallagher explained that, whilst he had previously been a financial member of the CFMEU, he had not worked on a CFMEU site for a number of months and was unsure whether or not he was financial. Gallagher volunteered to pay his membership fees and become financial instantly. Gallagher then proceeded to commence work on the site. Galea had also failed to complete that part of the induction form which sought an indication of whether or not he was a financial union member. A conversation took place between Deans and Galea, the substance of which remains the central subject of dispute in this matter. Following the conversation with Deans, Galea left the site, travelled to the CFMEU office in Carlton and there reached an agreement to become a financial member of the CFMEU. He then returned to work at the site. The length of time he was at the CFMEU office was one of the facts in issue. Following a request for an interview by the Australian Building and Construction Commission (“ABCC”), on 27 February 2007 Galea made a statutory declaration, stating that he had been delayed by Deans in starting work on 12 September 2006 because he was not a financial member of the CFMEU. He made a further statutory declaration when interviewed on 29 March 2007 by investigation officers of the ABCC. Ms Karen Stuart-Mahoney (the respondent in this appeal), in her capacity as an ABCC inspector appointed under the Building, Construction and Industry Improvement Act 2005 (Cth), alleged that the appellants had, amongst other things, contravened s 797 of the WR Act in respect of Galea and Gallagher by preventing them from commencing work until they had regularised their financial status as members of the CFMEU.
Evidence
Evidence Before The Court
In considering the issues on appeal to this Court, I have taken into account the necessity properly to consider and give due weight to the learned Federal Magistrate’s findings and conclusions. It is clear from the relevant authorities that I should only set aside his findings of fact if, having weighed the conflicting evidence and drawn my own inferences and conclusions, I am persuaded that his Honour’s findings and conclusions are erroneous.Galea’s evidence To commence an assessment of the evidence of a particular witness, as his Honour did with that of Galea at [84] of the Liability Judgment, with the undifferentiated observation that the evidence is “not likely to be helpful” raises a doubt about the probative value of any of that evidence. Thus, as I have suggested at [61] below, it was open to his Honour to have rejected the whole of Galea’s evidence. However, his Honour was prepared to accept some of Galea’s evidence because it was “given with a measure of conviction”. It is not entirely clear whether he considered that Galea’s evidence, summarised at [84(a)-(f)] of the reasons quoted at [8] above had been given with greater conviction when Galea provided his statutory declarations, when giving evidence-in-chief, or during cross-examination. In this Court Mr Dalton contended that the “measure of conviction” was an attribute of the testimony given by Galea in the witness box. Be that as it may, the summary at [84(a)-(b)] of his Honour’s reasons, is more properly to be regarded as a recital of matters which were not in dispute or went to Galea’s state of mind on the morning of 12 September 2006. None of the matters identified at [84](a) to (f) of his Honour’s reasons bore directly on the central question of what had been said or done by Deans on that morning. The knowledge imputed to Galea that he was unfinancial to a very large extent, equally made available the inference that he was disposed voluntarily to come to some accommodation about the arrears to avoid embarrassment or the opprobrium of Deans or the CFMEU or the CFMEU members who were to become his workmates on the site. In the second place, the fact that Galea was asked by Deans to remain and discuss his union dues does not compel the inference that Deans would not have allowed him to start work unless they were paid. Another available inference was that Deans merely wished to emphasise the undesirability of Galea’s remaining unfinancial. That is consistent with the absence of evidence that the extent of Galea’s unfinanciality was ever communicated to Deans before the telephone call to the Union office and with Deans’ evidence that, when he next saw Galea after his visit to the Union office, Galea was on site and had commenced work. It is also noteworthy that Deans’ request “to remain and discuss his union dues” was also made of Gallagher in respect of whom, it was found, there had been no contravention of s 797(3). Similarly, the fact that Galea had been out of work for some time and “needed the work” went solely to his state of mind and the likelihood that he would respond positively to a threat of the kind imputed to Deans. There was no evidence that Deans had any knowledge that Galea had been out of work or for how long. Nor, apart from Galea’s disclosure that he was unfinancial to an unspecified extent, was there anything to suggest that Deans knew, or thought, that Galea desperately needed the money which he would earn from working on the site.
Decision
Reasons for decision
Although it is not a subject of this appeal, it is important to note that the learned Federal Magistrate had also been required to make findings in relation to a Mr Wayne Gauci (“Gauci”). Gauci had arrived at the site on the same morning as Galea and Gallagher but was not a member of the CFMEU. There was an exchange between Deans and Gauci, the substance of which was in dispute before the learned Federal Magistrate. His Honour found that Deans had contravened s 789 and s 790 of the WR Act by preventing Gauci from working on that day by reason of the fact that he was not a member of the CFMEU. Gauci gave evidence on affidavit that he had met both Galea and Gallagher who “appeared to be furious” that they could not start work because they were not financial members of the CFMEU. The relevance of Gauci’s evidence is discussed at [66]-[68] below. By their further amended notice of appeal filed 15 February 2010 the appellants abandoned their appeal against so much of the Liability Judgment as related to the contraventions of ss 789 and 790 of the WR Act in respect of Gauci.THE LIABILITY JUDGMENT The prosecution was conducted in the Federal Magistrates Court in Melbourne before Burchardt FM over three days on 12, 13 and 16 June 2008, almost two years after the alleged contraventions of the WR Act, and the Liability Judgment was delivered on 4 August 2008. The trial raised a number of issues which are not the subject of this appeal, including alleged contraventions of the WR Act in relation to Gauci. Of relevance to this appeal is the following conclusion reached by the learned Federal Magistrate at [3] of the Liability Judgment;Deans did conduct himself in such a fashion as to contravene ss.789 and 790 of the Act in respect of Mr Gauci. I further accept that Mr Deans contravened s.797 of the Act in respect of Mr Galea. I have also concluded that Mr Deans did not contravene s.790 of the Act in respect of both Mr Galea and Mr Gallagher and did not contravene s.797 of the Act in respect of Mr Gallagher. His Honour obviously had serious reservations about Galea’s evidence. He allowed Galea to be cross-examined by Counsel for the applicant because the earlier statutory declarations made by Galea on 27 February 2007 and 29 March 2007 had been inconsistent with his evidence-in-chief at the hearing. Consequently, there were conflicting accounts of how and why Galea had been delayed in commencing work on the morning of 12 September 2006. However, after reviewing the evidence before him, his Honour concluded that, although Deans had not contravened s 797 of the WR Act in relation to Gallagher, he had contravened that section in relation to Galea because Galea had been “made to go and sort out his financial status before he was allowed to start work” (Liability Judgment at [102]). [Emphasis added]. In reaching this conclusion on the alleged contravention, the learned Federal Magistrate explained as follows at [82] to [89] of the Liability Judgment, the use which he made of the inconsistent evidence of Galea:[82]Mr Galea's evidence involved an all-too-obvious endeavour at one and the same time to resile from and distance himself from and even deny the truthfulness of his statutory declarations while on the other hand maintaining that he had not made a false and misleading declaration by signing them. I permitted Counsel for the applicant to cross-examine Mr Galea, notwithstanding that Mr Galea was his witness, because of inconsistencies between the statutory declarations and his evidence-in-chief.[83]It is noteworthy that, although under that cross-examination Mr Galea proceeded to agree with a number of propositions put to him by Counsel for the Applicant consistent with his earlier statutory declarations, he resiled again from most of it when he was cross-examined by Counsel for the Respondents.[84] The forensic practice of calling witnesses known to be likely to be uncooperative is obviously a high-risk one. It is a matter for the ABCC as to how it conducts its cases. But where you get a witness like Mr Galea who will say, unfortunately, pretty much whatever the person cross-examining him wants to hear, their evidence is in many ways not likely to be helpful. The aspects of the evidence of Mr Galea that I am prepared to accept, because they were given with a measure of conviction absent from the rest of his evidence and also because they make commonsense, are as follows:a)Mr Galea knew he was not a financial union member when he went to the site, because his arrears were over $1,000.00 and he must have been well aware that he had not paid any money to the union for a long time;b)as a long-time union member, he would have been well aware of the periodicity of union dues and the necessity to pay them;c)Mr Galea was asked to remain and discuss his union dues by Mr Deans — that was the purport of his evidence;d)Mr Galea had been out of work for some time, and to quote him (P-77) he "needed the work";e)Mr Galea left the site to go to the union office, and described himself as distraught (P-78);f)he was at the union office until about 12.00 pm, which was the time he had originally estimated (P-79).[85]Examples of Mr Galea's desire to ingratiate himself with the Second Respondent and/or to resile from his earlier statement are:a)At P-65 where he, unresponsively, volunteered that he had been intimidated when making his first statement to the ABCC;b)At P-65 where he said, in cross-examination by Counsel for the Respondents, that he "felt intimidated by the large gentleman that was there with Ms Stuart and was saying what they wanted to hear virtually" and that he "I’ve got a memory like a sieve";c)At P-68, he said he felt nervous when interviewed on 29 March 2007, and inferred that this might be interrelated with the presence of the “large gentleman” who had attended in February;d) At P-71 where he said he was a proud member of the union.[86]These statements are in part unbelievable. First of all, the second statutory declaration provided by Mr Galea took place when he was interviewed by two women, the large ex-policeman who had interviewed him the first time not being there.[87]Second, if — and this is the picture for which the Respondents contend — Mr Galea was a proud union member, so desperate to be up to date in his union fees that he happily disappears from the site for a number of hours, was correct, there is no earthly reason why he would be distraught; rather, he would be happily fulfilling a function that he was keen to do.[88]The truth is, as I find, that Mr Galea was not financial, that Mr Deans made it plain to him that he would have to sort his financiality out before he was allowed to start and that it took him some three-or-so hours to do so, and that this distressed him because he lost money that he badly needed as a result.
Ratio Decidendi
Legal Principle Established
I shall deal separately with each relevant ground of appeal set out in the appellants’ Further Amended Notice of Appeal filed with the leave of the Court on 15 February 2010. Was there error constituted by having regard to irrelevant considerations? The appellants contend that the learned Federal Magistrate erred by having regard to the following considerations which they claim were irrelevant or erroneous:(a)that Deans knew full well that his conduct did indeed breach the WR Act (Penalty Judgment at [5]);(b)that the CFMEU supported the second respondent at all points up to and including the judgment (Penalty Judgment at [29] and [37]);(c)that Deans has not suffered any kind of obloquy or retribution or harm as a result of evidence he gave to the Court (Penalty Judgment at [36]);(d)that the lack of contrition or remorse by the CFMEU and Deans was an aggravating matter (Penalty Judgment at [5(c)] and [30]). In relation to (a), I cannot discern any error of the kind described in House v The King. The appellants contend that, as Deans’ knowledge of whether he had contravened the WR Act was never put to him at trial, it is not proper to draw such an inference in the consideration of penalties. In my view, his Honour did no more at [5(a)-(b)] of the Penalty Judgment than emphasise that the contraventions which he found had been deliberate or intentional. The fact that it was not put to Deans at trial whether he knew that he had acted in breach of the WR Act, did not make it erroneous for the learned Federal Magistrate to draw a relevant inference from his findings as to Deans’ state of mind. It was within the broad sentencing discretion to draw such an inference when considering the assessment of penalty. Moreover, attention was drawn by Counsel for the respondent to this exchange during the cross-examination of Deans at trial;At all relevant times on 12 September 2006 you well knew that it was not a requirement or an obligation on any worker to be a member of any union, including the CFMEU, before they could work on the site, correct? --- CorrectIn similar vein, Deans acknowledged under cross-examination about the conversation between himself and Gauci that;I asked if he was a member of the union and he said to me, “It’s not the law and I don’t have to be in the union” and I said to him, “Well, there are benefits of being in the union” and he said “it’s not the law…”I therefore accept that it was open on the evidence for his Honour to find that Deans was aware that the contravening conduct was unlawful and that this was a relevant factor to take into account when fixing penalties. The appellants suggested that [29] and [37] of the Penalty Judgment reflect some error on the learned Federal Magistrate’s part in regarding the CFMEU’s support of Deans as relevant to the assessment of penalties. Mr Borenstein SC contended that there is no principle of sentencing which allows a penalty to be increased because the accused or respondent has contested the case and put the prosecutor to proof. In response to this contention I was referred to A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 (“Silvestri”), per Gyles J, on which Counsel for the respondent said that the learned Federal Magistrate had specifically relied. In Silvestri, Gyles J observed, at [12];…the CFMEU chose to actively defend the conduct of Lane to the end, notwithstanding the overwhelming evidence marshalled against his version of events. Furthermore, it is hardly sensible to view this incident as the wildcat actions of an aberrant official. Lane acted with other officials in his actions in relation to this building site. Notwithstanding the complaints to the Union in this case, Lane acted in a generally similar manner in relation to another site a short time later. There is a long and well-documented history of unlawful activity by union organisers and delegates in the building industry in Australia that Counsel for the CFMEU acknowledged, but submitted that there has been a considerable change in culture over recent years. This makes it desirable that any return to the bad old days be appropriately penalised.
