Cozadinos v CFMEU
[2009] FMCA 272
•7 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COZADINOS v CFMEU & ANOR | [2009] FMCA 272 |
| INDUSTRIAL LAW – Contraventions of BCII Act and Workplace Relations Act – consideration of matters relevant to penalty. |
| Building and Construction Industry Improvement Act 2005 Workplace Relations Act 1996 |
| Canturi v Sita Coaches Pty Ltd [2002] FCA 349 Kelly v Fitzpatrick [2007] FCA 1080 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 A. & L. Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 Temple v Powell [2008] FCA 714, (2008) 173 IR 189 Director of Public Prosecutions v Johnston (2004) 10 VR 85 Alfred v Wakelin (No 1) [2008] FCA 1455 Cahill v Construction, Forestry, Mining and Energy Union (No 3) [2009] FCA 52 Veen v R (No 2) (1988) 164 CLR 465 |
| Applicant: | MICHELLE COZADINOS |
| First Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Respondent: | CRAIG JOHNSTON |
| File Number: | MLG 372 of 2008 |
| Judgment of: | Burchardt FM |
| Hearing date: | 2 March 2009 |
| Date of Last Submission: | 15 April 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 7 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr P.M. O'Grady |
| Solicitors for the Applicant: | Minter Ellison |
| Counsel for the Respondents: | Mr C.W. Dowling |
| Solicitors for the Respondent: | Slater & Gordon |
ORDERS MADE 7 MAY 2009
That a penalty of $5,000 be imposed on the First Respondent for its contravention of the Building and Construction Industry Improvement Act 2005 declared by the Court in this proceeding.
That a penalty of $4,600 be imposed on the Second Respondent for his contravention of the Building and Construction Industry Improvement Act 2005 declared by the Court in this proceeding.
NOTATION: These orders have been amended pursuant to rule 16.05(2)(e) of the Federal Magistrates Court Rules2001 on 22 May 2009 to reflect the deletion of the amount “$7,000” and insert amount “$4,600” in Order 2.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 372 of 2008
| MICHELLE COZADINOS |
Applicant
And
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION AND ANOR |
Respondents
REASONS FOR JUDGMENT
The issue now before the Court is what penalties, if any, I should impose upon the Respondents for the contraventions of the Building and Construction Industry Improvement Act 2005 (Cth) ("BCII Act") and the Workplace Relations Act 1996 (Cth) ("WR Act") that I have declared occurred on 10 December 2008.
The maximum penalties that may be imposed upon the Construction, Forestry, Mining and Energy Union (“CFMEU”) are $110,000 (BCII Act) and $22,000 (WR Act). The maximum penalties that may be imposed upon Mr Johnston are $33,000 (BCII Act) and $6,600 (WR Act).
For the reasons that follow, I have determined penalties should be imposed on the CFMEU in the sum of $5,000 and upon Mr Johnston in the sum of $7,000, for contraventions of the BCII Act.
Why impose Penalties under the BCII Act and not the WR Act
I accept that s 735 of the WR Act means that I have no power to impose penalties under both acts. I accept, however, the applicant’s submission that the BCII Act is the appropriate legislation under which to consider penalties.
Section 735 of the WR Act is in the following terms:
“If a person is ordered to pay a pecuniary penalty under a civil remedy provision in respect of particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth Law in respect of that conduct.”
Section 735 was inserted by Act 153 of 2005 and commenced operation on 27 March 2006.
This was relevantly after the introduction of the BCII Act 113 of 2005.
Nonetheless, the BCII Act was, as is notorious, introduced following a Royal Commission specifically to address findings of various forms of unlawful conduct in the building industry. Fines at higher levels than those obtaining in other legislation were inserted into that Act, one might reasonably infer, to give particular emphasis to the objects set out in s 3 of the BCII Act. Section 38 of the BCII Act prohibits unlawful industrial action.
Section 494 of the WR Act prohibits industrial action before the nominal expiry day of collective agreements or workplace determinations.
Albeit that the definitions of industrial action are not identical, it is self evident that conduct that contravenes s 38 of the BCII Act will often also contravene s 494 of the WR Act, as indeed it could in this case.
The submissions of the Respondents would have it that in any circumstance where there is a contravention of the WR Act giving rise to a civil penalty, then all other legislation is necessarily excluded.
That seems to me to be most unlikely to have been Parliament’s intention. The BCII Act was introduced with heavier penalties specifically for the building industry and had Parliament intended to ensure that the BCII Act should be subject to the provisions of the WR Act, I have no doubt the Parliament would have said so.
I note that in a decision wholly concerned with the WR Act, but concerning circumstances where several penalties could be imposed, Ryan J said in Canturi v Sita Coaches Pty Ltd [2002] FCA 349 at [84]
“It may be that, in certain cases of double penalty like the present, an Applicant should be allowed to elect which of the two available provisions should be applied. That suggestion has particular force where, as here, one provision (s 298U) confers, in addition to the power to impose pecuniary penalties, a power to order payment of compensation to, or the reinstatement of, an affected employee. However, in the present case, because, as noted in the preceding paragraph, the maximum penalties prescribed for each type of contravention are the same, no useful purpose would be served by requiring such an election.”
That decision clearly pre-dated the introduction of s 735 and involved different legislation but the tenor of his Honour’s remarks seems to me, with respect, to be a useful guidance here.
Here, there are two different pieces of legislation which on the facts in this case both attract operation. I accept the submission of the Applicant that if the Court makes no order requiring the Respondents to pay a pecuniary penalty for the contraventions of s 494 of the WR Act then s 735 has no work to do.
In the ultimate, the point can be stated shortly. The BCII Act is the appropriate one under which to consider penalties in this case. That is because the BCII Act was created specifically for the building industry and this is a building industry case.
The Applicable Law
There is a growing body of authority as to the approach that should be taken in cases such as these. Kelly v Fitzpatrick [2007] FCA 1080 is often referred to, subject to the qualifications set out in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (“Ophthalmic Supplies”) per Buchanan J at [91]. I have had regard to those authorities but would add reference to the following observation of Gyles J in A. & L. Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 (“Silvestri”), at [6]:
“A number of authorities discuss the factors to be taken into account in fixing a penalty, many of them borrowing from related fields, including the criminal law. It is sufficient to refer to the recent case of Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 as an example. However, the discretion is at large. There are no mandatory statutory criteria and it is wrong to regard factors seen as relevant by one court as statutory criteria. Indeed, lists of factors can confuse an essentially straightforward task and lead to over-elaborate reasoning.”
I have endeavoured to bear those observations in mind and hopefully to apply them in formulating these reasons for judgment.
Considerations Relevant to the Assessment of Penalty in this Particular Case
In my view, the matters that are relevant are as follows:
a)the contravening conduct was short, both in terms of the time it took to take place and in the time it had any effect. Mr Johnston's argument with the site supervisor was short and it took him just a few moments to tell Mr Grenfell not to drive the forklift and for Mr Johnston to abstract the keys. The conduct, done out of mischief and/or malice as I have already found, inconvenienced the truck driver, Mr Dubberley, who had to go away for several hours and then return and deliver his truckload of goods, but did not cause any identifiable loss or more than a relatively small waste of time on his part;
b)Mr Johnston was the shop steward for the CFMEU and it is clear that the actions he took were actions he took as he saw it in the performance of his duties as a union officer. His own evidence was to the effect that he stuck up for Mr Grenfell against Mr Gordon in that capacity;
c)notwithstanding (b) it is clear that no other officer of the CFMEU knew of what Mr Johnston was doing or had any role in its occurring.
Putting the matter in the round, this was a stupid and unnecessary interruption to the ordinary processing of work occasioned by Mr Johnston's witting and deliberate conduct. His conduct was wilful, arrogant and insouciant as to his proper obligations, both as an employee and as a shop steward. As I found in my earlier judgment, he was playing games.
Nonetheless, on any view, this isolated spat would have to be said in all the circumstances to approach the lowest end of contraventions that would be likely to occur under the BCII Act.
Prior Contraventions
Although prior contraventions are self-evidently a relevant matter to be taken into consideration, much of the parties' submissions involved this question and it is for this reason that I deal with it separately. Once again, this is an area in which there is a developing field of authority. The remarks of Le Miere J in Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 (“Leighton Contractors”) have, it seems to me, been somewhat qualified by the subsequent observations of Tracey J in Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 at [44].
Further, the remarks of Dowsett J in Temple v Powell [2008] FCA 714, (2008) 173 IR 189 are also relevant. At [64], his Honour said:
“The respondent submitted that "… contraventions of industrial legislation per se should not be taken into account when assessing prior conduct. What should be relevant is prior breaches of provisions which contain the same elements in the case under consideration.” I do not accept that proposition. On the criminal side, it has never been suggested that only previous convictions for offences similar to that charge are relevant to sentence. Rather, a sentencing court looks to the general record of conduct of the relevant offender, his or her attitude to the law as disclosed by such conduct, apparent attempts at rehabilitation and similar considerations. Repeated conduct of a particular kind may lead to an identified need to prove some particularly persuasive form of deterrent against similar future misconduct.”
The parties were not in agreement as to the number of prior contraventions of the relevant legislation effected by the CFMEU. I do not think it is necessary for me to enter into a detailed analysis of the competing assertions made in this regard. I note that the CFMEU acknowledges at least one prior contravention (see paragraph 22(a) of the respondents' submissions). I also note the observations of Gyles J in Silvestri at [11]-[13], and in particular at [13]:
“I agree that the classes of case identified are the most relevant, but I do not agree that the other cases are irrelevant. Ultimately, union officials will act in accordance with the policies of the union. An official of one geographic or industry branch will observe the manner in which policies are applied by the federal body in relation to other branches. These various cases illustrate that the federal body has not been effective in ensuring that officials act in accordance with the law.”
While that of course informs my general view of the CFMEU's prior history, in this particular case such history must be approached with considerable caution, bearing in mind that the actions of Mr Johnston were clearly a frolic of his own. I have endeavoured to balance these considerations.
So far as Mr Johnston is concerned, he has no record of prior infraction of the BCII Act (or for that matter the WR Act) but his general history of compliance with the law is well illustrated by the decision of the Court of Appeal in the Skilled Industries run-through case (Director of Public Prosecutions v Johnston (2004) 10 VR 85) and by the other cases referred to by the Applicant at paragraph 19 of her written submissions
The Extent to which the CFMEU should be Penalised, bearing in mind that its Responsibility for Mr Johnston's Actions is Vicarious Only
This question has been addressed by Jagot J in Alfred v Wakelin (No 1) [2008] FCA 1455 at [40] and is echoed in the decision of Kenny J in Cahill v Construction, Forestry, Mining and Energy Union (No 3) [2009] FCA 52 at [34]-[37].
In my opinion the BCII Act provides for what has been described as accessorial liability. Prima facie, therefore, Parliament has seen fit to make the conduct of the individuals the conduct of the union. The extent to which accessorial liability should be visited upon the CFMEU will depend on the particular circumstances of the case. That is a matter going more to the quantum of penalty, if there is to be any, rather than to lead, as I took the Respondents to submit, to an outcome where the CFMEU should face no responsibility whatever.
Contrition
The CFMEU has expressed no contrition.
In my view, Mr Johnston has not expressed any meaningful contrition either. His affidavit, which was sworn on 23 February 2009, is carefully crafted. He accepts the finding of the Court in this matter but that does not mean anything more than that he has read it and accepts that that is what it says. As I pointed out to counsel for the Respondents during the proceeding, that statement is not to be taken to mean that Mr Johnston accepts that the finding is right or that he would in any way trammel his right of appeal. It would in any event be entirely inappropriate to seek to make him do so.
No apology has been offered to Mr Gordon or Mr Dubberley by Mr Johnston. Mr Johnston's observation that "I am sorry that the events of 19 March 2007 have caused the expense of so much time and money by the First Respondent and others" is scarcely unequivocal evidence that he now acknowledges his conduct. That is scarcely surprising, however, when one bears in mind that to make such an acknowledgment would involve acknowledging the untruthful evidence that I have found him to have given.
The Need for Specific and General Deterrence
In Alfred v Wakelin (No 1) at [29]-[31], Jagot J reviewed some of the authorities dealing with the necessity for general deterrence. I respectfully adopt her Honour's observations and the observations in the cases to which her Honour therein refers.
Albeit that Mr Johnston's conduct was a frolic of his own, committed without any prior or contemporaneous knowledge on the part of the CFMEU other than himself, it is important that it be brought home to the CFMEU that contravention of the provisions of the BCII Act as has occurred in this instance must not occur. In the circumstances, I consider that a penalty of $5,000.00 for contravention of the BCII Act should be imposed. This penalty balances all the relevant competing factors to which I have referred above.
In the case of Mr Johnston, there is an obvious need for specific deterrence. Mr Johnston's record shows that he is a person upon any view who has a chequered history in regard to compliance with the law more generally. This does not of course mean that any heavier penalty should be imposed upon him than would otherwise be the case (Veen v R (No 2) (1988) 164 CLR 465).
The penalty I propose of $7,000.00 (BCII Act) falls to be considered against the potential applicable maximum of $33,000.00. It reflects both the undesirability of Mr Johnston's conduct and the various mitigating factors to which I have referred.
The Capacity to Pay
I have no doubt that the CFMEU will be able to pay the penalty that I have in mind to impose.
Mr Johnston's affidavit shows that he has net weekly pay of $1650 and savings of several thousand dollars in the bank. I am satisfied that he will be able to pay the penalty that I intend to impose.
Totality Principle
The totality principle requires the Court at the end of a process where it is establishing penalties for more than one contravention of legislation to, as it were, take a final step back and ensure that the overall result is appropriate and not excessive (see Ophthalmic Supplies per Gray J at [23], per Graham J at [71] and Buchanan J at [102]).
The totality principle does not arise because I am not imposing penalties for more than one contravention of legislation.
In the circumstances of this case I am satisfied that the penalties I propose are indeed appropriate.
Conclusion
Penalties will be imposed on the Respondents in the amounts indicated. I will hear the parties as to any ancillary matters.
I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Deputy Associate
Date: 7 May 2009
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