Cozadinos v Dempster
[2009] FMCA 265
•27 March 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COZADINOS v DEMPSTER & ANOR | [2009] FMCA 265 |
| INDUSTRIAL LAW – Application for civil penalty – breach of applicable provisions – breaches admitted – agreed penalty – considerations as to penalty. |
| Workplace Relations Act 1996 (Cth) ss.789, 790, 807(1), 807(2), 809 |
| FSU v Commonwealth Bank (2005) 224 ALR 467 CPSU v Telstra (2001) 108 IR 228 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 Kelly v Fitzpatrick (2007) 166 1R 14 CFMEU v Coal and Allied Operations Pty Ltd (No.2) (1999) 94 IR 231 Commonwealth Bank of Australia v FSUA [2007] FCAFC 18 Standen v Feehan (No.2) [2008] FCA 1574 Rojas v Esselte Australia Pty Ltd (No.2) [2008] FCA 1585 Wells v Locorno Management Pty Ltd [2008] FCA 1034 Alfred v Lanscar [2007] 167 IR 320 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 Australian Competition and Consumer Commission v IPM Operations Maintenance Loy Yang Pty Ltd (No.2) [2007] FCA 11 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 |
| Applicant: | MICHELLE COZADINOS |
| First Respondent: | MICHAEL DEMPSTER |
| Second Respondent: | RICHARD HENRY |
| File Number: | MLG 971 of 2008 |
| Judgment of: | O’Sullivan FM |
| Hearing date: | 27 March 2009 |
| Date of Last Submission: | 27 March 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 27 March 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jacobs |
| Solicitors for the Applicant: | Clayton Ultz |
| Counsel for the First and Second Respondents: | Mr Sayer |
| Solicitors for the First and Second Respondents: | Slater & Gordon |
ORDERS
The Court orders that:
It is declared that the First Respondent breached section 789 of the Workplace Relations Act 1996 (Cth) (“the WR Act”) in respect of Mr Alan Gray and Mr Peter Mayne for the reasons set out in the Statement of Agreed Facts as filed with the Court.
Pursuant to section 807(1) of the WR Act, a penalty of $1,000 is imposed on the First Respondent for his breach of section 789 of the WR Act, such penalty to be paid into Consolidated Revenue within 21 days of the date of this Order.
It is declared that the Second Respondent breached section 790 of the WR Act in respect of Mr Adam Lucas for the reasons set out in the Statement of Agreed Facts as filed with the Court.
Pursuant to section 807(1) of the WR Act, a penalty of $1,000 is imposed on the Second Respondent for his breach of section 790 of the WR Act, such penalty to be paid into Consolidated Revenue within 21 days of the date of this Order.
The proceeding is otherwise dismissed.
There be no order for costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 971 of 2008
| MICHELLE COZADINOS |
Applicant
And
| MICHAEL DEMPSTER |
First Respondent
| RICHARD HENRY |
Second Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
By application filed 8 August 2008 Michelle Cozadinos (“the applicant”) sought declarations and the imposition of penalties against Michael Dempster (“the first respondent”) and Richard Henry (“the second respondent”).
These proceedings concern an application alleging conduct in breach of the freedom of association provisions of the Workplace Relations Act 1996 (Cth) (“the WR Act”) at a building site in Victoria in July and August 2007.
As events transpired the Court was only asked to consider what penalities ought be imposed on the respondents for reasons that will shortly become clear.
The application
The application as filed on 8 August 2008 sought the following orders:
“1.A declaration that the First Respondent contravened s.789 of the Workplace Relations Act 1996 (Cth) (“WR Act”) by taking action on 27 July 2007 against:
(a)Mr Alan Gray; and
(b)Mr Peter Mayne
with intent to coerce them to become members of the Construction, Forestry, Mining and Energy Union (“CFMEU”).
2.The imposition upon the First Respondent of a penalty pursuant to s.807 (1) of the WR Act for his contravention of s.789 of the WR Act.
3.A declaration that the First Respondent contravened s.790 of the WR Act on 27 July 2007 by making false or misleading representation to Mr Gray and Mr Mayne that they had an obligation to be, or become, members of the CFMEU.
4.The imposition upon the First Respondent of a penalty pursuant to s.807(1) of the WR Act for his contravention of s.790 of the WR Act.
5.A declaration that the Second Respondent contravened s.790 of the WR Act on 3 August 2007, by making a false or misleading representation to Mr Adam Lucas that he had an obligation to be, or become, a member of the CFMEU.
6.The imposition upon the Second Respondent of a penalty pursuant to s.807(1) of the WR Act for his contravention of s.790 of the WR Act.
7.An order that any penalty or penalties be payable into the Consolidated Revenue Fund.
8. An order for costs.
9. Such further or other orders as to the Court may seem just.”
After the application was filed and it had been fixed for a hearing, the parties attended a mediation where it is common cause they were able to reach an agreement in relation to certain declarations and penalties that ought be imposed. The parties then filed a statement of agreed facts with the Court in November 2008 which is Annexure A to these reasons.
On that basis the parties agreed and there were orders made for the matter to proceed to a penalty hearing only in March 2009.
At the hearing on 27 March 2009, the applicant was represented by Mr Jacobs of counsel, and the respondents by Mr Sayer.
The applicant relied on:
·statement of agreed facts filed 14 November 2008 (marked exhibit “A1”);
·outline of submissions filed 26 May 2009 (marked exhibit “A2”); and
·minute of proposed consent orders (marked exhibit “A3”).
The respondents relied on:
·outline of submissions filed 27 March 2009 (marked exhibit “R1”).
Background
There are no issues in terms of background as to the various formal matters such as the appointment of the applicant or her capacity to bring these proceedings. The background to this matter is set out in the statement of agreed facts as follows:
“4. The applicant is and was at all relevant times:
(a)an Australian Building and Construction Inspector appointed pursuant to s.57 of the Building and Construction Industry Improvement Act 2005 (Cth) (“BCII Act”); and
(b)entitled, pursuant to s.73(4) of the BCII Act and s.807(1) of the WR Act, to bring this proceeding seeking orders pursuant to s.807 of the WR Act.
5. The First Respondent was at all times:
(a)employed by Merkon Constructions Pty Ltd ("Merkon"); and
(b)pursuant to clause 8 of the Merkon Constructions and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008, the employee representative on the site referred to at paragraph 7 below.
6.The Second Respondent was at all relevant times employed by Merkon as the "site peggy" on the site referred to at paragraph 7 below.
7.Merkon was at all relevant times the Head Contractor undertaking the refurbishment of the World Trade Centre site at Siddley Street, Melbourne ("the site").
8. For the purposes of ss.5 and 73(4) of the BCII Act, at all relevant times Merkon and its employees performed "building work" at the site.
Particulars
Merkon and its employees performed the following activities at the site:
(i) the construction, alteration, extension or restoration of buildings, structures or works that form, or are to form, part of the land;
(ii) the installation in buildings, structures or works of fittings forming, or to form, part of land; and
(iii) operations part of, or preparatory to, or for rendering complete, work covered by (i) and (ii) above.
9. Further, Merkon was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employer; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
10. The First Respondent was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employee; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
11. The Second Respondent was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employee; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
12.AAA Passive Fire Services Pty Ltd ("Passive") was at all relevant times:
(a)a corporation carrying on the business of providing fire protection and prevention services; and
(b)required by Merkon, pursuant to a contract entered into between Merkon and Passive, to carry out building work at the site essentially consisting of fire spraying beams at the site.
13. Further to sub-paragraph 12(b) above:
(a)for the purposes of s.5 of the BCII Act, the work which Passive was required by Merkon to perform at the site was at all relevant times building work;
Particulars
Passive was required to perform:
(i) the installation of fire protection systems in the building, structures or works at the site; and
(ii) operations part of, or preparatory to, or for rendering complete, work covered by (i) above.
(b)for the purposes of s.4 of the BCII Act, Passive was at all relevant times, a building employer; and
(c)for the purposes of ss.4 and 73(4) of the BCII Act, Passive was at all relevant times, a building industry participant.
14. At all relevant times Passive employed:
(a) Mr Alan Gray as an applicator;
(b) Mr Peter Mayne as a labourer; and
(c) Mr Adam Lucas as a labourer.
Contraventions
Annexure A to these reasons set out the agreed contraventions at paragraphs [15]-[25] as follows:
“The First Respondent’s contravention
15.At about 7.00am on or about 27 July 2007, Mr Gray and Mr Mayne, for the purposes of being inducted on to the site:
(a) attended at the induction room at the site; and
(b) spoke to the First Respondent in the induction room.
16.During the discussion referred to at sub-paragraph 15(b) above, the First Respondent used words that promoted and encouraged Union membership and that conveyed the impression to Mr Gray and Mr Mayne, that Mr Gray and Mr Mayne had to be, or become members of the CFMEU to work on the site (the “representation”)[1]. Mr Gray and Mr Mayne felt that as a consequence of the words used by the First Respondent they had no choice but to join the Union if they wanted to work on the site.
[1] The words were, or were to the effect, that if Mr Gray and Mr Mayne were not members of the union (referring to the CFMEU) they could not work on the site.
17.Soon after the discussion referred to at sub-paragraph 15(b) and 16 above, Mr Gray and Mr Mayne left the site and did not return to work at the site of 27 July 2007.
18.Neither Mr Gray or Mr Mayne were inducted at the site on 27 July 2007.
19.Later on 27 July 2007, Mr Gray attended at the offices of the CFMUE at 500 Swanston Street Carlton South, and became a CFMEU member.
20.On 27 July 2007, the First Respondent was aware that Mr Gray and Mr Mayne were employees of a sub-contractor which was required to complete work for Merkon on the site.
21.By making the representation the First Respondent took action in breach of section 789 of the WR Act.
The Second Respondent’s contravention
22.At about 7.00am on 3 August 2007 Mr Gray and Mr Lucas, for the purposes of being inducted on to the site:
(a) attended at the induction room at the site; and
(b) spoke to the Second Respondent in the induction room.
23.During the discussion referred to at sub-paragraph 21(b) above:
(a)the Second Respondent asked Mr Lucas for his union card and asked Mr Lucas whether he was a financial member of the union (referring to the CFMEU);
(b)Mr Lucas said to the Second Respondent that he was not a member of the union and
(c)the Second Respondent used words that promoted and encouraged Union membership and that conveyed the impression to Mr Lucas that he had to be, or become, a member of the CFMEU to work on the site[2].
24.Soon after the discussion referred to at sub-paragraph 22(b) and paragraph 23 above, Mr Lucas left the site.
25.As the statement made by the Second Respondent to Mr Lucas, conveyed the impression to Mr Lucas and Mr Lucas had to be, or become a member of the CFMEU to work on the site, the statement was false or alternatively, misleading.”
[2] The words were, or were to the effect, that Mr Lucas had to leave the site.
The relevant provisions of the WR Act
In terms of the relevant provisions of the WR Act, these are essayed in exhibit “A2” at paragraphs [14]-[17].
Section 789 of the WR Act provides:
“(1)A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person or a third person:
(a)to become, or not become, an officer or member of an industrial association; or
(b)to remain, or cease to be, an officer or member of an industrial association.
(2) Subsection (1)is a civil remedy provision.”
Section 790 of the WR Act provides:
“(1)A person must not make a false or misleading representation about:
(a)another person’s obligation:
(i) to be, or become, an officer or member of an industrial association; or
(ii) not to be, not to become or to cease to be, an officer or member of an industrial association.
(b)another person’s obligation to disclose whether he or she, or a third person, is, or has been, an officer or member of an industrial association or of a particular industrial association; or
(c)the need for another person to be, or not to be, an officer or member of an industrial association, or of a particular industrial association, in order for the person to obtain the benefit of an industrial instrument.
(2)Subsection (1) is a civil remedy provision.”
Those subsections are in Part XVI of the WR Act which is titled “Freedom of Association”. Section 807(1) which is also in that Part provides:
“(1)The Court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil remedy provision of this Part:
(a)an order imposing a pecuniary penalty on the defendant;
(b)an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;
(c) any other order that the Court considers appropriate.”
In the context of proceedings brought under this Part, section 809 of the WR Act erects a statutory presumption which provides:
“(1) If:
(a)in an application under section 807 relating to a person’s conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b)for the person to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person proves otherwise.”
The maximum penalty that can be applied in relation to penalty proceedings for a contravention of this Part on an individual respondent is $6,600 (see section 807(2)).[3]
[3] See paragraph 17 of exhibit “A2” of the Applicant’s outline of submissions on penalty
Approach to penalty proceedings
The principles that should be applied in the approach to penalty proceedings such as the matter before the Court were not in dispute. Exhibit “A2” essayed those provisions at paragraphs [18]-[20] as follows:
“18.The factors relevant to the imposition of a pecuniary penalty in an industrial context, will usually include the following:
(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 or not the breaches were deliberate;
(f)Whether the party committing the breach had exhibited contrition;
(g)Whether the party committing the breach had taken corrective action;
(h)Whether the party committing the breach had cooperated with the enforcement authorities;
(i)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements;
(j)The need for specific and general deterrence; and
(k)The application of the "totality principle": see Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [18]-[68] inclusive, Kelly v Fitzpatrick [2007] FCA 1080 per Tracey J at [14], Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 246 ALR 35 at [59]-[60] per Graham J and [89] per Buchanan J.
19.Those factors are, however, merely a guide, rather than a “rigid catalogue of matters for attention”: Australian Ophthalmic Supplies at [91] per Buchanan J, A & L Silvestri Pty Ltd v CFMEU [2008] FCA 466 at [6] per Gyles J. The Court is ultimately required “… 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”: Australian Ophthalmic Supplies at [91] per Buchanan J.
20.In CFMEU v Coal and Allied Operations Pty Ltd (No.2) (1999) 94 IR 231 at [7]-[8], Branson J identified an additional consideration as relevant to the assessment of penalty in freedom of association proceedings, namely, the need in the circumstances, for the protection of industrial freedom of association (albeit in the context of a contravention of Part XA of the WR Act as it existed prior to the amendments made by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth)) ("the Pre-Reform Act").”
At paragraph [5] of exhibit “R1” the respondents accepted those principles. In Standen v Feehan (No 2) [2008] FCA 1574 at [14] it was said:
“14.In CFMEU v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, Branson J considered the circumstances which might be taken into account when assessing a penalty under s 298U of the Act. She said at [8]:
The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court my appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:
(a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act).
(b) Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act.
(c) Where more than one contravention of Pt XA is involved, whether the various contraventions are properly send as distinct or whether they arise out of the one course of conduct.
(d) The consequences of the conduct found to be in contravention of Pt XA of the Act.
(e) The need, in the circumstances, for the protection of industrial freedom of association.
(f) The need, in the circumstances, for deterrence.”
In Rojas v Esselte Australia Pty Limited (No 2) [2008] FCA 1585 at [64]. the Court referred to the decision in C.F.M.E.U v Coal Allied Operations Pty Ltd (No.2) (1999) 94 IR 231 and the considerations enumerated therein and said at [65]:
“65 Although "check lists" of the above kind are a useful starting point in determining whether a penalty ought to be imposed, and if so the level of such penalty, at the end of the day the task of the Court is to fix a penalty that pays appropriate regard to the contraventions that have occurred: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith[2008] FCAFC 8; (2008) 165 FCR 560 at [91]. Moreover, as the Full Court noted in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 at [60], while general guidance as to the appropriate penalty may be obtained through an analysis of comparable cases, it remains necessary for the Court to give careful consideration to the circumstances of the case before it (see also Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at [12] per Gray J).”
In light of those principles the parties in the context of their submissions approached the matter on the basis of the following relevant factors.
The nature and extent of conduct
In terms of the nature and extent of the conduct the applicant's submissions in exhibit “A2” at paragraphs [9] and [24] to [26] were as follows:
“9.In respect of the First Respondent’s contravention, the following matters are then admitted:
(a)at about 7.00am on 27 July 2007, Mr Gray and Mr Mayne, for the purposes of being inducted onto the site, attended at the Induction Room at the site, and spoke to the First Respondent in the Induction Room [15];
(b)during the relevant discussion, the First Respondent said to Mr Gray and Mr Mayne, that if they were not members of the Union (referring to the CFMEU) they could not work on the site. The First Respondent thereby used words that promoted and encouraged Union membership, and that conveyed the impression to Mr Gray and Mr Mayne, that they had to be, or become, members of the CFMEU to work on the site. As a consequence of what the First Respondent said, Mr Gray and Mr Mayne felt that they had no choice but to join the Union if they wanted to work on the site [16];
(c)shortly after the relevant discussion, Mr Gray and Mr Mayne left the site and did not return to work at the site on that day. Neither Mr Gray nor Mr Mayne were inducted at the site on 27 July 2007 [17 – 18];
(d)later on 27 July 2007, Mr Gray attended at the offices of the CFMEU at 500 Swanston Street, Carlton South, and became a CFMEU member [19]; and
(e)on 27 July 2007, the First Respondent was aware that Mr Gray and Mr Mayne were employees of a sub-contractor which was required to complete work for Merkon on the site [20].
…
24.The Applicant refers to paragraph 9 above.
25.In order for work to progress at the site, Passive was required to fire spray beams at the site. The First Respondent was aware that Mr Gray and Mr Mayne were employees of a sub-contractor which was required to complete work at the site. However, as a consequence of the First Respondent’s representation, Mr Gray and Mr Mayne were not inducted on the site on 27 July 2007 and did not work on the site on that day. Later that day, Mr Gray became a CFMEU member.
26.The Applicant further refers to paragraph 10 above. As a consequence of the Second Respondent’s misleading statement, Mr Lucas left the site.”
The respondents submissions at paragraphs [9]-[13] were:
“9.It is accepted that the conduct in question is serious. The conduct, however, took place in circumstances where the Respondents did not derive, nor did they seek to derive, personal gain.
10.The whole of the judgments of Burchardt FM cited at paragraphs 27. and 28. of the AOSP are currently under appeal. Orders are being sought that the judgements, and the orders made arising from the judgements, be set aside. Given the uncertainty attached to these judgements, it is submitted that the Court should exercise caution in relation to the observations of Burchardt FM as cited by the Applicant as to the seriousness of the conduct.
…
11.The Applicant submits (paragraph 18. AOSP), and the Respondent accepts, that the nature and extent of any loss or damage sustained as a result of the breaches is a relevant consideration.
12.There is no material before the Court to suggest that either Merkon or Passive (including its employees; Messrs Gray, Mayne and Lucas) sustained any loss or damage as result of the admitted contraventions.
13.The conduct was also limited in duration (one day in each case). There is no material before the Court to suggest that employees of Passive were subsequently prevented from returning to the site or that Passive was unable to, or prevented from, meeting its contractual obligations to Merkon (as set out at paragraph 8.(c) AOSP).”
In terms of whether the conduct was deliberate, the applicant made submissions at paragraph [30] of exhibit “A2” that:
“30.In this case the contraventions were deliberate; that is, they did not arise from a mistake or a misunderstanding. The deliberate nature of the breaches also weighs in favour of a significant penalty.”
The need in the circumstances for the protection of freedom of association
In terms of the need to protect freedom of association, the applicant's submissions were set out at paragraph [31] of exhibit “A2” as follows:
“31.The WR Act recognises the fundamental importance of freedom of association: see [12 – 13] above. In directing Mr Mayne, Mr Gray and Mr Lucas that they could not work on the site unless they became CFMEU members, the First and Second Respondents frustrated the ability of those persons to perform their work, and compromised their right to choose whether or not they wish to be members of a particular union. Employees of sub-contractors on building sites should be free to determine for themselves whether or not they become union members. As Burchardt FM said in Stuart-Mahoney (No.3):
‘… The scheme of the WR Act in relation to freedom of association has been deemed important by Parliament, as reflected in the provisions designed to ensure that it obtains and the penalties provided for its breach” ([6]).’
The respondents, in submissions, acknowledged the importance of the right to freedom of association in the WR Act.
Deterrence
In terms of deterrence, the applicant's submissions were at paragraphs [33] to [34] of exhibit “A2” and were:
“33.In Australian Competition and Consumer Commission v IPM Operations Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 at [66] Young J said:
‘Deterrence has two aspects: specific deterrence and general deterrence. Specific deterrence refers to the need to deter the contravening party from a further contravention of the TPA. General deterrence refers to the need to deter others in the community by showing the seriousness with which the Court considers such contraventions: see Leahy (No 3) at 308 [35] per Goldberg J. For a penalty to achieve these objectives, it must be imposed at a meaningful level, consistent with the other considerations that must be taken into account in determining the appropriate level of penalty.’
34.Even though, in this case, specific deterrence is not a significant factor in respect of penalty (see [43] – [45] below), general deterrence is of critical significance. It is important that building industry participants are deterred from taking action similar to that taken by the Respondents: Stuart-Mahoney (No. 3) at [38], Cruse v CFMEU at [9]. As Finkelstein J noted in CPSU v Telstra Corporation Ltd (2001) 108 IR 228 at 231:
‘Even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law’s disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct” (also see Kelly v Fitzpatrick at [28]).’
The respondents' submissions at paragraphs [16] to [19] of exhibit “R1” were:
“16.Whilst the need for general deterrence is recognised, such deterrence can be achieved not only by means of the imposition of a penalty but by other means as well. To the extent that other means can be shown to achieve general deterrence in the present case, a low to moderate penalty is warranted.
17.The Respondents submit that the consent declarations referred to at paragraph 7. (above) will serve a deterrent purpose.
18.There is significant deterrence in the bringing of the proceeding itself: See Ponzio –v- B & P Caelli Constructions Pty Ltd & Others [2007] FCA 1221 at [25], [31], [34] and [35]; Ponzio –v- B & P Caelli Constructions Pty Ltd & Others [2007] FCAFC 65 at [138] and [164] per Jessup J; Pine v Expoconti Pty Ltd [2005] FCA 1434 Kenny J at [15] – [16]; Pine v Casello Constructions Pty Ltd [2005] FCA 1854 North J at [9]; Ponzio v D and E Air Conditioning Pty Ltd [2005] FCA 964 North J at [20], [29] and 30]; Furlong v Maxim Electrical Services (Aust) Pty Ltd (No 3) [2006] FCA 1705 Marshall J at [20].
19.Further, the achievement of a negotiated outcome at an early stage in this case, is an advantage to the regulator, the Australian Building Construction Commission. It has the effect of releasing resources that may otherwise have been devoted to this matter and allowing those resources to be used in pursuit of other suspected contraveners which, in turn, increases deterrence. (see Mobil at [55].)”
I note given the decisions referred to above that deterrence in the context of these sorts of proceedings is achieved not only by way of a penalty but also by bringing proceedings and the making of declarations.
Whether there had been similar previous conduct
In terms of similar previous conduct, the applicant's submissions were at paragraphs [36] through to [38] of exhibit “A2” that:
“36.The First Respondent has no prior contraventions of either the BCII Act or the WR Act: Agreed Statement of Facts at [28].
37.The Second Respondent also has no prior contraventions of either the BCII Act or the WR Act: Agreed Statement of Facts at [29].
38.The fact that, in respect of each Respondent, the contravention is a “first offence”, supports the imposition of a moderate penalty.”
Other mitigating factors
In terms of contrition, the applicant submitted at paragraphs [39]-[40] as follows:
“39.The First Respondent and the Second Respondent have each:
(a)acknowledged the importance of the right to freedom of association; and
(b)committed to observe the right to freedom of association: Agreed Statement of Facts at [26] and [27].
40.This factor is important here. It suggests that specific deterrence is not a significant factor in respect of the assessment of penalty. It supports the imposition of a moderate penalty.”
In terms of cooperation the applicants submissions were at paragraph [41] of exhibit “A2”:
“41.The First and Second Respondents have each admitted to their contravention at an early stage of the proceeding: Agreed Statement of Facts at [28] and [29]. This has significantly reduced the costs associated with the prosecution of the proceeding, and has spared the Applicant’s witnesses the inconvenience and stress of giving evidence. This is a factor which weighs in favour of a moderate penalty.”
The respondents' as is clear from exhibit “R1”, adopted the submissions of the applicant in relation to each of the three above mentioned mitigating factors.
Agreement on Penalty
The position of the parties before the Court was set out at Annexure A to these reasons at paragraph [32] was:
“32.The parties agree that the appropriate penalties to be imposed are as follows:
(a)on the First Respondent, a penalty of $1,000 in respect of the contravention of section 789 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund;
(b)on the Second Respondent a penalty of $1,000 in respect of the contravention of section 790 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund.”
At paragraph [21] of exhibit “A2”, the applicant referred to decisions of the Federal Court, including the decision of Jessup J in Wells v Locarno Management Pty Ltd [2008] FCA 1034 and the decision of Buchanan J in Alfred v Lanscar [2007] FCA 1001 and said:
“21.In cases where parties have agreed on proposed penalties, the Court is not bound to impose those penalties but will do so if it is satisfied that the proposed penalties fall within “the permissible range”: Hills v Sutton [2007] FCA 2033 at [7] per Tracey J, Wells v Locarno Management Pty Ltd [2008] FCA 1034 at [23] per Jessup J, Alfred v Lanscar [2007] 167 IR 320 at [15] per Buchanan J. In this respect, the “permissible range” of penalties refers to a range “which would be permitted by the Court, that is, a range within which the penalty is neither manifestly inadequate nor manifestly excessive”: Wells at [23] per Jessup J. As Jessup J said in Wells:
‘The predictability involved in the resolution of penal proceedings in accordance with a pre-trial agreement reached by the parties is something which should, as a matter of public policy, be regarded as beneficial’ (ibid).
The applicant made submissions to the effect that it was readily apparent, having essayed the relevant factors in terms of penalty in this matter that the agreed penalty was within the permissible range.[4]
[4] See paragraphs [22] to [23] of exhibit “A2”
In paragraph [6] of exhibit “R1”, the respondents adopted paragraphs [19] to [21] of exhibit “A2” and also referred to the decision of the Federal Court in Minister for Industry, Tourism and Resources v Mobil Oil [2004] FCAFC 72 noting in particular the comments at paragraph [53] as follows:
“6.The Respondents agree with the observations contained in paragraphs 19. to 21. (inclusive) of the AOSP. In relation to paragraph 21. of the AOSP the Respondents also refer to Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 (“Mobil”). It is noted that, notwithstanding the parties’ agreement, the responsibility for determining the appropriate penalty remains with the Court. In Mobil, the proper approach was explained by Branson, Sackville & Gyles JJ at [53] as follows:
‘...
(iii) There is a public interest in promoting settlement of litigation…
(iv)The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty….
(vi) 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. It will be appropriate if within the permissible range.’ (emphasis added)
In Standen v Feehan (No.2) (supra) at paragraphs [10] to [13] it was said:
“10.In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 290-291, Burchett and Kiefel JJ (with whom Carr J generally agreed) discussed the question of the Court’s role on fixing the quantum of penalty in circumstances where the parties had indicated a range within which a civil penalty ought to be imposed. The decision has been more recently considered in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41 and the Court distilled the proposition which emerged from the reasoning in NW Frozen Foods 71 FCR 285 at [51]:
The following propositions emerge from the reasoning in NW Frozen Foods:
(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.
(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more “subjective” matters.
(v) 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.
(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at the 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. It will be appropriate if within the permissible range.
11.In addition to those propositions, the Court determined that there were five further factors to which regard ought to be had. Four of those are relevant to this proceeding. First, that the regulator’s resources will be saved which would allow the regulator to detect other contraventions which would increase the deterrent aspect of the penalty. Secondly, the Court is not required to limit itself to considering whether the penalty is within the permissible range. The Court may wish to take that approach but the Court could address the appropriate range of penalty independently of the parties’ proposed figure. Thirdly, the regulator should always justify any discounted penalty to which the regulator has agreed. Lastly, if the Court is of the opinion that the penalty is inappropriate, it may then be appropriate to allow the parties to withdraw their consent to the proposed orders and for the matter to proceed as a contested hearing.
12.After discussing a number of authorities at first instance, the Court concluded that there was noting to warrant a departure from the principles which had been identified in NW Frozen Foods 71 FCR 285.
13.It was appropriate, therefore, for the parties to agree upon a range and submit that range to this Court for its consideration.”
Conclusion
In light of the above considerations I have to determine the appropriate penalty. I accept the principles referred to by the parties should guide the consideration of the appropriate penalty in this matter and that as Buchanan J in Alfred v Lanscar (supra) at paragraph [11]:
‘“It is not necessary, in the light of the parties’ agreement that breaches have occurred in the terms suggested, to undertake any separate analysis of the legal elements of those offences”
I also accept as was said in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at paragraph [53]:
“...
(iii) There is a public interest in promoting settlement of litigation…
(iv)The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty….
(vi) 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. It will be appropriate if within the permissible range.” (emphasis added)
The agreed position of the parties at Annexure A to these reasons makes clear that on 27 July 2007 the first respondent made a representation that breached section 789 of the WR Act and left the affected persons with the impression that they had no choice but to join a union.
The agreed position of the parties at Annexure A to these reasons also makes clear that on 3 August 2007 the second respondent made statements that conveyed the impression to the affected persons they had to be a union member to work on the site. That conduct is, as was said by Mr Jacobs for the applicant in submissions, “a serious infraction of the right of freedom of association” contained in the WR Act.[5]
[5] See paragraph [25] of exhibit “A1” of the Statement of Agreed Facts
As counsel for the applicant said the agreed conduct of the respondents frustrated the ability of the affected persons to work on the two days in question and the agreed contraventions infringed their right to choose and their right to freedom of association contained in the WR Act.
The maximum penalty provided for in section 807 of the WR Act for an individual is, as has been referred to earlier, 60 penalty units, resulting in a maximum penalty in relation to each of the contraventions here of $6,600 or a total in excess of $13,000.
In light of the parties submissions on the relevant factors in considering the appropriate penalty and:
·assessing the level of seriousness of the contraventions;
·the contrition expressed by the first and second respondents;
·the early admissions;
·the full cooperation of the respondents;
·the agreed facts obviating the need for a full hearing;
·there being been no prior contraventions;
·the applicant indicating through her Counsel that the commitment of the respondents to observe the right of freedom of association influenced her agreement on the penalties;
I am satisfied penalties arrived at by agreement of the parties are within the permissible range.
For the reasons set out above I make the orders set out at the beginning of these reasons for decision.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of O’Sullivan FM
Associate: Rachelle Lombardo
Date: 27 March 2009
Annexure A
IN THE FEDERAL MAGISTRATES’ COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
No. MLG971 of 2008
MICHELLE COZADINOS Applicant
and
MICHAEL DEMPSTER
First Respondent
and
RICHARD HENRY Second Respondent
STATEMENT OF AGREED FACTS
Admitted contraventions
In the Application, the Applicant ("Ms Cozadinos") seeks, inter alia, the following relief:
(a)A declaration that the First Respondent contravened s.789 of the Workplace Relations Act 1966 (Cth) ("WR Act").
(b)The imposition upon the First Respondent of a penalty pursuant to s.807(1) of the WR Act for his contravention of s.789 of the WR Act.
(c)A declaration that the Second Respondent contravened s.790 of the WR Act.
(d)The imposition upon the Second Respondent of a penalty pursuant to s.807(1) of the WR Act for his contravention of s.790 of the WR Act.
(e)An order that any penalty or penalties be payable into the Consolidated Revenue Fund.
The First Respondent ("Dempster") admits that, by reason of his conduct on 27 July 2007, he contravened Section 789 of the Workplace Relations Act.
The Second Respondent ("Mr Henry") admits that, by reason of his conduct on 3 August 2007, he contravened Section 790 of the Workplace Relations Act.
Agreed facts
The Applicant is and was at all relevant times:
(a)an Australian Building and Construction Inspector appointed pursuant to s.57 of the Building and Construction Industry Improvement Act 2005 (Cth) ("BCII Act"); and
(b)entitled, pursuant to s.73(4) of the BCII Act and s.807(1) of the WR Act, to bring this proceeding seeking orders pursuant to s.807 of the WR Act.
The First Respondent was at all relevant times:
(a)employed by Merkon Constructions Pty Ltd ("Merkon"); and
(b)pursuant to clause 8 of the Merkon Constructions and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008, the employee representative on the site referred to at paragraph 7 below.
The Second Respondent was at all relevant times employed by Merkon as the "site peggy" on the site referred to at paragraph 7 below.
Merkon was at all relevant times the Head Contractor undertaking the refurbishment of the World Trade Centre site at Siddley Street, Melbourne ("the site")
For the purposes of ss.5 and 73(4) of the BCII Act, at all relevant times Merkon and its employees performed "building work" at the site.
Particulars
Merkon and its employees performed the following activities at the site:
(i)the construction, alteration, extension or restoration of buildings, structures or works that form, or are to form, part of the land;
(ii)the installation in buildings, structures or works of fittings forming, or to form, part of land; and
(iii)operations part of, or preparatory to, or for rendering complete, work covered by (i) and (ii) above.
Further, Merkon was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employer; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
The First Respondent was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employee; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
The Second Respondent was at all relevant times:
(a)for the purposes of s.4 of the BCII Act, a building employee; and
(b)for the purposes of ss.4 and 73(4) of the BCII Act, a building industry participant.
AAA Passive Fire Services Pty Ltd ("Passive") was at all relevant times:
(a)a corporation carrying on the business of providing fire protection and prevention services; and
(b)required by Merkon, pursuant to a contract entered into between Merkon and Passive, to carry out building work at the site essentially consisting of fire spraying beams at the site.
Further to sub-paragraph 12(b) above:
(a)for the purposes of s.5 of the BCII Act, the work which Passive was required by Merkon to perform at the site was at all relevant times building work;
Particulars
Passive was required to perform:
(i)the installation of fire protection systems in the building, structures or works at the site; and
(ii)operations part of, or preparatory to, or for rendering complete, work covered by (i) above.
(b)for the purposes of s.4 of the BCII Act, Passive was at all relevant times, a building employer; and
(c)for the purposes of ss.4 and 73(4) of the BCII Act, Passive was at all relevant times, a building industry participant.
At all relevant times Passive employed:
(a)Mr Alan Gray as an applicator;
(b)Mr Peter Mayne as a labourer; and
(c)Mr Adam Lucas as a labourer.
The First Respondent's contravention
At about 7.00am on or about 27 July 2007, Mr Gray and Mr Mayne, for the purposes of being inducted on to the site:
(a)attended at the induction room at the site; and
(b)spoke to the First Respondent in the induction room.
During the discussion referred to at sub-paragraph 15(b) above, the First Respondent used words that promoted and encouraged Union membership and that conveyed the impression to Mr Gray and Mr Mayne, that Mr Gray and Mr Mayne had to be, or become, members of the CFMEU to work on the site (the "representation")[6]. Mr Gray and Mr Mayne felt that as a consequence of the words used by the First Respondent they had no choice but to join the Union if they wanted to work on the site.
[6] The words were, or were to the effect, that if Mr Gray and Mr Mayne were not members of the union (referring to the CFMEU) they could not work on the site.
Soon after the discussion referred to at sub-paragraph 15(b) and 16 above, Mr Gray and Mr Mayne left the site and did not return to work at the site on 27 July 2007.
Neither Mr Gray or Mr Mayne were inducted at the site on 27 July 2007.
Later on 27 July 2007, Mr Gray attended at the offices of the CFMEU at 500 Swanston Street Carlton South, and became a CFMEU member.
On 27 July 2007, the First Respondent was aware that Mr Gray and Mr Mayne were employees of a sub-contractor which was required to complete work for Merkon on the site.
By making the representation the First Respondent took action in breach of section 789 of the WR Act.
The Second Respondent's contravention
At about 7.00am on 3 August 2007 Mr Gray and Mr Lucas, for the purposes of being inducted on to the site:
(a)attended at the induction room at the site; and
(b)spoke to the Second Respondent in the induction room.
During the discussion referred to at sub-paragraph 21(b) above:
(a)the Second Respondent asked Mr Lucas for his union card and asked Mr Lucas whether he was a financial member of the union (referring to the CFMEU);
(b)Mr Lucas said to the Second Respondent that he was not a member of the union; and
(c)the Second Respondent used words that promoted and encouraged Union membership and that conveyed the impression to Mr Lucas that he had to be, or become, a member of the CFMEU to work on the site.[7]
[7] The words were, or were to the effect, that Mr Lucas had to leave the site.
Soon after the discussion referred to at sub-paragraph 22(b) and paragraph 23 above, Mr Lucas left the site.
As the statement made by the Second Respondent to Mr Lucas, conveyed the impression to Mr Lucas that Mr Lucas had to be, or become a member of the CFMEU to work on the site, the statement was false, or alternatively, misleading.
Other matters
The First Respondent:
(a)acknowledges the importance of the right to freedom of association; and
(b)commits to observe the right to freedom of association.
The Second Respondent:
(a)acknowledges the importance of the right to freedom of association; and
(b)commits to observe the right to freedom of association.
The First Respondent:
(a)has no prior contravention of either the BCII Act or the WR Act; and
(b)has admitted to the contravention of s. 789 of the WR Act at a very early stage of this proceeding.
The Second Respondent:
(a)has no prior contravention of either the BCII Act or the WR Act; and
(b)has admitted to the contravention of s. 790 of the WR Act at a very early stage of this proceeding.
The matters referred to in paragraphs 26 and 28 above are mitigating factors to be taken into account in imposing an appropriate penalty on the First Respondent.
The matters referred to in paragraphs 27 and 29 above are mitigating factors to be taken into account in imposing an appropriate penalty on the Second Respondent.
Agreement on penalty
The parties agree that the appropriate penalties to be imposed are as follows:
(a)on the First Respondent, a penalty of $1,000 in respect of the contravention of section 789 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund;
(b)on the Second Respondent a penalty of $1,000 in respect of the contravention of section 790 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund.
Date: November 2008
.................................................................
Tim Honey
Legal Manager Southern
Australian Building and Construction Commission
.................................................................
Michael Dempster
.................................................................
Richard Henry
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